Before, There Was A Frenzy
The Orlando Sentinel reports from Florida. “In one of the surest signs that the home-rental business is going corporate, the area’s biggest new landlord has started bundling rent checks from tenants and selling them as securities on Wall Street. The sale this month by Blackstone Group means that Wall Street investors are banking on tenants paying their rents on time. ‘They’re trying to manage huge portfolios of properties in widespread areas, and that’s difficult to do on a large scale. But they are on the waning side of their acquisitions,’ said Scott Hampton, owner of Hampton & Hampton Leasing and Management Inc. ‘They have literally been buying everything they bid on — sight unseen. You can only do that for so long.’”
“‘The securitization piece is the most dangerous piece of this buy-to-rent trend in the short term because it means the investors have a potentially insatiable appetite for more properties and are willing to bid more to successfully acquire them, which can inflate home prices,’ said Daren Blomquist, VP of RealtyTrac.”
“First-time foreclosure filings in Metro Orlando rose 38 percent from September to October, according to RealtyTrac. Florida as a whole saw an increase of 36 percent in first-time filings. One possible explanation is that some homeowners have exhausted their savings and have no home equity left to tap for expenses such as medical bills and car repairs. They may feel forced to delay making mortgage payments, said Mark Soskin, an economics professor at the University of Central Florida. ‘More people are living paycheck to paycheck,’ he said. ‘They used to have home-equity loans to fall back on. … A lot of the things they used to be able to use to get out of a problem in the short or medium term are now the kinds of things that throw them over the edge.’”
The Sun Sentinel. “The number of foreclosed homes scheduled for the auction block in October skyrocketed by 76 percent in Palm Beach County compared with a year ago, according to RealtyTrac. Many banks have waited for a rebound to unload properties. ‘Bankers are like anyone else: They don’t want to sell in a declining market,’ said South Florida bank analyst Ken Thomas, who said some foreclosed properties are actually selling for a profit now. So far, their auctioning off foreclosed properties hasn’t dampened the strong surge in home prices in Broward and Palm Beach counties, Thomas said. He hopes that trend continues, and that the banks don’t flood the market with homes.”
“More Palm Beach County home sellers are lowering their asking prices, another indication that the housing market has softened, a new report shows. Eighteen percent of homes for sale countywide in October had price cuts, compared with 12 percent in May, according to Redfin. A quarter of the Broward County homes for sale last month had reduced prices. ‘The clamor has diminished a little bit – the icing came off the cake,’ said Douglas Rill, broker with Century 21 America’s Choice in West Palm Beach. ‘Before, there was a frenzy, but now buyers are taking more time to think about things.’”
“‘I’ve seen sellers try to get record prices, but they’re not accomplishing their goals,’ said Michael Citron, an agent in northwestern Broward County. ‘Buyers are not taking back the market, so to speak, but they’re also not paying higher than what market value should be.’”
The Miami Herald. “The Southeast Florida Regional Climate Change Compact, a joint effort of four county governments, calculates the area could lose as much as $4 billion in taxable real estate with a one-foot rise in sea level. Nicole Hernandez Hammer, program manager of the Climate Change Initiative at FAU, is amazed developers don’t appear to worry about rising seas. ‘Look at Sunny Isles, with those giant cranes, building these lavish structures that are essentially at sea level.’”
“Congressional legislation last year required major increases in flood insurance premiums, which for decades have been subsidized. That means that ground-level homes in the Keys could see their premiums increased from $2,500 to $30,000, reports the Florida Keynoter — costs that could quickly drop real estate prices.”
“Plantation attorney Mitchell Chester warns that property sellers could eventually be sued if they don’t warn prospective buyers — ’starting now’ — that the property is endangered by rising sea level. A warning might scare away some buyers — but not all. Peter Harlem, an FIU researcher, points out that Miami boomed in the 1920s when developers sold swamp land to buyers who hadn’t seen it. Perhaps, Harlem suggests, that could happen again. ‘You know, about a third of America … doesn’t believe [in] climate change. That’s a sure market to sell to.’”
From WPTV. “It is the largest house in Boca Raton and it is up for sale. Realtors are having a tough time moving the nearly $13 million home, so they are offering a unique ‘freebie’ to help drive the sale home. The owner of the home is throwing in a rare, $500,000 Rolls-Royce Phantom. Senada Adzem, the Boca Raton Realtor selling the home, said it is not that easy to sell the residence, especially when the housing market has taken a dive in Florida. ‘As you can imagine, we’ve had a really rough six or seven years and even the ultra wealthy were not spending money,’ said Adzem.”
seasonal?FL usually grows pop in wnter……….
Here is a case study for a Blackstone deal in Sacramento, now offered by Invitations Homes for lease:
http://www.invitationhomesforrent.com/apartments/ca/rocklin/5740-river-run-cir/index.aspx
They paid $256,000 last September. Put $30,000 into the deal. 1890 SF. Rent for $1995/mon or $24,000/year.
Subtract:
10% vacancy (already a year behind, while the fixed the mold)
8% management (Blackstone won’t work for free you know)
$5,000/year taxes, insurance, maintenance.
NOI: $14,700 on costs of $286,000 = 5.15% ROI
Could be worse, but should be better. Zillow says the property is now worth $326,856, but you would chew up $25,000 in selling costs, so perhaps a net gain today of another 5% upon sale.
It seems like the whole process is one big circular mess, designed to get Blackstone some fee income. No one else will see much income, with all the loads for asset and property management, plus securitization fees, acquisition fees, disposition fees, etc., etc., etc.
Here’s Phoenix:
388 Homes near Phoenix, AZ
http://www.invitationhomesforrent.com/apartmentsforrent/searchlisting.aspx?txtCity=Phoenix,AZ&cmbBeds=-1&cmbBaths=-1&cmb_PetPolicy=Indifferent&cmbSort=Miles^ASC&cmbNumResults=25&Sort=Miles&Order=ASC&sPageSize=25&PgNo=1&
These guys are so screwed.
They paid $150/sq ft for run down houses in CA too….. with borrowed money. And with the fact that prices resumed declining in CA as your link indicates, can you say doubled screwed?
Realistically, the CA houses appraise at maybe $40/sqft…. so they over paid by 275%.
Do you think they realize it yet?
Burdbrain ® says:
“…..CA houses appraise at maybe $40/sqft…”
You add nothing to the discussion here.
Right now, the same model house is selling down the street for $340,000 ($180/SF).
Go away Burdbrain ® …..twitter around on someone else’s blog. You demean the discussion on the HBB.
$180/sq eh?
Kind of like your $90k water meters.
1737 E Illini, Phoenix.
Paid $99,000 a year ago, probably $10,000 in repair and carry while making ready for rental……
Rent: $925/mon, $11,100/year
NOI after Expenses: $6,700
ROI = 6.138% Could be worse, but not great.
Zillow says the value is $105,000 today. With selling costs, they would be upside down about $15,000 today. They will have to rent the property for 3-years with no vacancy, just to break even.
You are right Ben, these guys look screwed….or perhaps it will be their investors who will look screwed as Blackstone will be the screwer with fees and management.
“..Zillow says..”
LMFAO. Get real, poser.
USCPB, I am just reporting what I see. That is real. You have the address, provide a basis for value as you see it.
Jingle is in a win-win situation in this thread.
If houses sell for higher than the Zillow estimate, then that contradicts the idea of houses are overpriced. But if house prices are lower than the Zestimate, then Blackstone will never be able to make money by selling the house for appreciation. So Jingle is right that playing landlord and selling rental backed securities is not a great business model — at least not for a hedge fund accustomed to making 10-12% easy money at a trading desk. I wonder how Blackstone feels about earning their 8% the old fashioned way — by providing actual goods and services.
I was quite surprised to read that investors will be clamoring for more RBS and re-ignite buying. In 2006, MBS investors were accustomed to 10% appreciation and booking juicy amortized principle and interest payments.* And they’re going to have an “appetite” for RBS at an ROI at 5-6%?? Oh come on. If that’s the profit margin, they may as well invest in a grocery store or a dry cleaners.
This is going to go sideways. But at least they fixed up some houses. I had occasion to stop in to Home Depot at lunchtime on a Friday and it was mobbed with small-time contractors picking up a lot of drywall and molding and interior doors.
————–
*Whether the amortized payments were actually made, or if the FB made the “option” payment but was booked as amortized as “deferred interest” anyway.
Jingle is an underwater donkey. Just like you.
Foreclosures UP UP UP!
“… some homeowners have exhausted their savings and have no home equity left to tap for expenses such as medical bills and car repairs.” … “A lot of the things they they used to be able to use to get out of a problem in the short or medium term are now the kind of things that throw them over the edge.”
No dollar shall be allowed to escape. Not a single one.
Nobody put a gun to their head and forced them to sign on all of the dotted lines on that thick stack of mortgage papers.
“‘The securitization piece is the most dangerous piece of this buy-to-rent trend in the short term because it means the investors have a potentially insatiable appetite for more properties and are willing to bid more to successfully acquire them, which can inflate home prices,’ said Daren Blomquist, VP of RealtyTrac.”
Isn’t this the exact business plan?
What I don’t get is, why do da boyz who concoct this kind of scheme assume they won’t eventually get nailed by the DOJ for dumping crappy securities onto the clueless? As of yesterday there is a precedent for levying fines on selling crappy assets.
It’s called full disclosure. It’s okay to screw them if you first disclose to them that you intend to screw them.
wall street pays off the big boys so they can peddle their securities to gullable investors.
See Mr. Banker’s post yesterday about laying off a few congressmen.
The bad news for JPMorgan Chase: They need to pay a $13 billion settlement.
The good news for them: Mom and Pop get to kick in just over half of the settlement proceeds ($7 billion is tax deductible).
JPMorgan Chase Will Pay $13 Billion In Record Settlement
by November 19, 2013 3:03 PM
In a settlement deal, JPMorgan Chase has agreed to pay some $13 billion in fines and other payments related to mortgages and mortgage securities that helped cause the financial crisis that began in 2007.
In a settlement deal, JPMorgan Chase has agreed to pay some $13 billion in fines and other payments related to mortgages and mortgage securities that helped cause the financial crisis that began in 2007.
Mark Lennihan/AP
In an agreement settling many U.S. claims over its sale of troubled mortgages, JPMorgan Chase will pay a record $13 billion, in a deal announced by the Tuesday. The plan includes a $4 billion payment for consumer relief, along with a payment to investors of more than $6 billion and a large fine.
The latest updates on this story are at the bottom of this post. We’ve also added a few key points to the main post.
“The settlement does not absolve JPMorgan or its employees from facing any possible criminal charges,” the Justice Department says.
At $13 billion, the JPMorgan settlement is a record amount paid by one corporation to the federal government. The figure is nearly triple the $4.5 billion in fines and penalties paid by BP over the 2010 Gulf of Mexico oil spill (the BP figure doesn’t include restitution and other claims made by individuals and businesses, a process that is ongoing).
More than half of the record settlement amount will be tax-deductible, the banking giant said in a conference call Tuesday.
“It’s our understanding that the $2 billion penalty will not be tax-deductible,” JPMorgan Chief Financial Officer Marianne Lake said, “but that the remaining $7 billion of compensatory payments will be deductible for tax purposes.”
…
JPMorgan Chase brought in nearly $24 billion in revenue last quarter, but it still reported a net loss of $400 million, widely attributed to legal fees. The company’s settlements since January add up to at least $20 billion.
- $13 billion: The investment company is expected to reach a settlement Tuesday related to its risky mortgage-backed securities (already done).
- $4.5 billion: Several days ago, the company agreed to pay investors — including 21 major institutions — for the faulty securities.
- $1 billion: In September and October, it paid to end investigations into the botched financial transactions of traders in London that cost the company more than $6 billion.
- $389 million: In September, the bank refunded money to 2.1 million credit-card customers and paid a fine after allegedly misleading and overcharging them.
- $300 million: In September, it resolved an insurance lawsuit, splitting payment with Assurant Inc.
- $410 million: In August, it settled allegations that it manipulated U.S. energy markets.
- $842 million: In June, it agreed to forgive debt owed to it by Jefferson County, Ala., where the company’s securities deals led to the county’s bankruptcy in 2011.
- $8.5 billion: In January, 10 banks, including JPMorgan, split a settlement related to wrongful home foreclosures.
- $9.2 billion: The company’s legal fees from its third quarter this year
- Federal investigations continue into its hiring practices in Asia and its relationship to Bernie Madoff’s financial Ponzi scheme.
-Emily Siner
Whac says:
“….The good news for them: Mom and Pop get to kick in just over half of the settlement proceeds ($7 billion is tax deductible)…..”
What makes you think JPM is in the 50% tax bracket?
“What makes you think JPM is in the 50% tax bracket?”
The article I posted makes me think it.
Because the fines are not painful enough*. If the fines bring more pain than the crime brings benefit, they will stop. I haven’t seen anybody go to jail from JPMorgan, Lehman, Citibank, Bear Stearns, Countrywide, BofA, WaMu, GMAC, Wells Fargo, etc., have you? Big time financial crime pays. If you steal something from 7-Eleven, however, you’re going to the big house.
*See recent JPMorgan settlement.
“It is the largest house in Boca Raton and it is up for sale. Realtors are having a tough time moving the nearly $13 million home, so they are offering a unique ‘freebie’ to help drive the sale home. The owner of the home is throwing in a rare, $500,000 Rolls-Royce Phantom.”
I guess if you are worried about the maintenance bill on the $500,000 ‘freebie,’ then you aren’t in the market for the $13 million home.
Didn’t Billy Mayes drive a Phantom around Florida?
“The Southeast Florida Regional Climate Change Compact, a joint effort of four county governments, calculates the area could lose as much as $4 billion in taxable real estate with a one-foot rise in sea level.”
Isn’t storm surge, or even heavy rains a more immediate and tangible threat to these sea-level developments?
I dunno but if you’ve got your hopes pinned on a piece of worthless dirt and a house on it within 50 miles of the coast, you’re going to have the disappointment of your life.
Yes, especially in Miami Beach. There was an excellent article in Rolling Stone about this. Miami has been ranked the number-one city in the world for potential flood-related property damage, heavy rains are a problem, and it’s not like the last hurricane was generations ago either. Of course, just like everything else in this culture where we can see the precipice, we have decided to hit the gas rather than braking or turning around.
http://tinyurl.com/kc6jv53
“Bankers are like anyone else: They don’t want to sell in a declining market…”
That right there is one of the keystones of this bizarre suspended animation of the housing bubble. Normally a banker “wants” to clear a depreciating asset off the books as quickly and efficiently as possible, so as to cut losses. Zombie banks.
“Somebody” must have changed the rules of the game to make keeping a depreciating asset on the books as long as possible an attractive alternative.
“Attractive” as an iron lung is attractive?
“…iron lung…”
Beats the alternative.
….. rotting from the inside out with one foot on a banana peel and the other in the grave…. just like millions of mortgage payers.
If I clear the assets off my books then I have to realize any losses.
If I can keep them on my books then I can make believe that there are no losses.
Plus …
If I am stingy about releasing them into the market so as to be put up for sale then this will help keep inventory tight. And tight inventory, coupled with the driving force of trying to stimulate demand brought about by my starving realtor friends (my lackeys), will help keep up prices, and keeping up prices will help me in my effort to remain solvent.
You are not solvent. You are a lying zombie.
Nobody is solvent. If you haven’t noticed your citizenship is tied to a 17 Trillion albatross.
‘Home sales were down in October for the core Orlando market, and the median sales price decreased 1 percent from September, a new report shows. Compared to a year ago, short sales showed the biggest decline. In October, members of the association closed 349 sales of “underwater” houses — a decline of 55 percent from a year earlier. Foreclosure sales dropped 20 percent, and “traditional sales” of non-distressed residential properties declined 22 percent from a year earlier.’
‘As evidenced by an increasing number of “for sale” signs throughout the area, the inventory of listings increased for the seventh consecutive month. The number of houses listed for sale in the core market during October was 9,470 – about 1,300 more houses listed than in October 2012.’
‘A sales agent in Gainesville said uneven consumer confidence is limiting the real estate recovery. “Our market has definitely slowed in the last six weeks,” said Gary Thomas, owner of RE/MAX Professionals, with 26 agents in Gainesville and Lake City.’
“That’s pretty normal this time of year, but I think consumer confidence and the job market are the biggest problems right now,” he said. “The government shutdown didn’t help.”
‘He said many would-be first-time buyers are still on the sidelines, and builders are not producing as many units as fast as they once did. “Everybody thought we wouldn’t have this seasonal dip because demand had picked back up,” Thomas said.”
‘For a sales agent in Ocala, a smaller city located between Gainesville and Orlando, October sales also sputtered. “Up until about a month ago, I was feeling fantastic. We had doubled our production from last year, and we were on a roll,” said Barbara Cernera, a resale agent with Decca Real Estate Corp. who sells primarily in retirement communities. “Then we hit a brick wall, which might have had to do with the government shutdown.”
‘As evidenced by an increasing number of “for sale” signs throughout the area, the inventory of listings increased for the seventh consecutive month. The number of houses listed for sale in the core market during October was 9,470 – about 1,300 more houses listed than in October 2012.’
That reminds me of something I haven’t seen around San Diego in previous Novembers: Open house signs are up in the area every weekend.
Isn’t this a rather odd time of year to be trying to unload an overpriced house on unsuspecting buyers?
“‘He said many would-be first-time buyers are still on the sidelines,”
They’re still in Middle School.
They’re probably getting credit card offers in the mail already.
100k sold house, booked at full value of 30year loan at 300k, leveraged at a conservative 10x, that’s 3,000,000 as a booked asset…On a 50k house.
To liquidate the foreclosure means,sometime down the road, whacking $2,950,000 from your perceived value (perceived by stock buyers).
THAT’S why you hold on to depreciating”asset”.
If you’re a bank, sure.
If you’re a dumb.borrowed.money wage earner holding onto a melting ice cube?
You’re screwed.
“On a 50k house.”
Which may have already been bulldozed by now.
Blighted Cities Prefer Razing to Rebuilding
Gabriella Demczuk/The New York Times
Destroying in Order to Build: As the populations of many former industrial cities dwindle, buildings are being razed rather than raised to better position the cities for growth.
By TIMOTHY WILLIAMS
Published: November 12, 2013
BALTIMORE — Shivihah Smith’s East Baltimore neighborhood, where he lives with his mother and grandmother, is disappearing. The block one over is gone. A dozen rowhouses on an adjacent block were removed one afternoon last year. And on the corner a few weeks ago, a pair of houses that were damaged by fire collapsed. The city bulldozed those and two others, leaving scavengers to pick through the debris for bits of metal and copper wire.
“The city doesn’t want these old houses,” lamented Mr. Smith, 36.
For the Smiths, the bulldozing of city blocks is a source of anguish. But for Baltimore, as for a number of American cities in the Northeast and Midwest that have lost big chunks of their population, it is increasingly regarded as a path to salvation. Because despite the well-publicized embrace by young professionals of once-struggling city centers in New York, Seattle and Los Angeles, for many cities urban planning has often become a form of creative destruction.
“It is not the house itself that has value, it is the land the house stands on,” said Sandra Pianalto, the president and chief executive of the Federal Reserve Bank of Cleveland. “This led us to the counterintuitive concept that the best policy to stabilize neighborhoods may not always be rehabilitation. It may be demolition.”
Large-scale destruction is well known in Detroit, but it is also underway in Baltimore, Philadelphia, Cleveland, Cincinnati, Buffalo and others at a total cost of more than $250 million. Officials are tearing down tens of thousands of vacant buildings, many habitable, as they seek to stimulate economic growth, reduce crime and blight, and increase environmental sustainability.
A recent Brookings Institution study found that from 2000 to 2010 the number of vacant housing units nationally had increased by 4.5 million, or 44 percent. And a report by the University of California, Berkeley, determined that over the past 15 years, 130 cities, most with relatively small populations, have dissolved themselves, more than half the total ever recorded in the United States.
The continuing struggles of former manufacturing centers have fundamentally altered urban planning, traditionally a discipline based on growth and expansion.
Today, it is also about disinvestment patterns to help determine which depopulated neighborhoods are worth saving; what blocks should be torn down and rebuilt; and based on economic activity, transportation options, infrastructure and population density, where people might best be relocated. Some even focus on returning abandoned urban areas into forests and meadows.
“It’s like a whole new field,” said Margaret Dewar, a professor of urban and regional planning at the University of Michigan, who helped plan for a land bank in Detroit to oversee that city’s vacant properties.
In all, more than half of the nation’s 20 largest cities in 1950 have lost at least one-third of their populations. And since 2000, a number of cities, including Baltimore, St. Louis, Pittsburgh, Cincinnati and Buffalo, have lost around 10 percent; Cleveland has lost more than 17 percent; and more than 25 percent of residents have left Detroit, whose bankruptcy declaration this summer has heightened anxiety in other postindustrial cities.
The result of this shrinkage, also called “ungrowth” and “right sizing,” has been compressed tax bases, increased crime and unemployment, tight municipal budgets and abandoned neighborhoods. The question is what to do with the urban ghost towns unlikely to be repopulated because of continued suburbanization and deindustrialization.
“In the past, cities would look at buildings individually, determine there was a problem, tear them down and then quickly find another use for the land,” said Justin B. Hollander, an urban planning professor at Tufts University. “Now they’re looking at the whole DNA of the city and saying, ‘There are just too many structures for the population we have.’ ”
Cleveland, whose population has shrunk by about 80,000 during the past decade to 395,000, has spent $50 million over the past six years to raze houses, which cost $10,000 each to destroy, compared with $27,000 annually to maintain.
…
I bet almost no one in those Rust Belt cities in 1950 foresaw what would happen. And I bet few people currently living in Los Angeles, Phoenix or Las Vegas think their cities might shrink to that degree or greater.
While I agree with the demolitions, I disagree that urban cores are unlikely to be repopulated because of continued suburbanization. It is the suburbs that will become the slums of the future.
“I bet almost no one in those Rust Belt cities in 1950 foresaw what would happen.”
Exactly.
And it happens quickly. Today’s go-to location is tomorrows Buffalo or Detroit.
‘ It is the suburbs that will become the slums of the future.’
How would that go down?
Because the suburbs, especially the distant ones, depend on cheap and plentiful energy. And it’s not going to be available in 2050.
Once gas isn’t cheap the market will answer the demand.
Look at electric cars, and other new technologies.
Biotech is currently in the stage of “home brew computer club.”
Also, I don’t know about you but I want land, and not to live in an apartment with connected walls.
“I want land’
don’t do it.
“Look at electric cars…”
Yes, the electric just gets delivered. No need for gas there!
“Markets will answer the demand” is magical thinking. You might as well do a rain dance or a human sacrifice and expect the gods to provide. In the long run, nature always wins. Once we run certain nonrenewable natural resources down below a level where continued growth is impossible, this entire ideology will end with extreme prejudice. We’re going to be very surprised at what we’re not able to do. And we also may be surprised at what we can do, although those accomplishments are not going to take the form of a miracle technological fix.
Ethan, good luck.
I would bet money that when they demolish old smaller single family homes, they will choose the city blocks worth saving and build… you guessed it, “mixed use” condos and townhomes. You know, live here work here shop here.
The millenials are going the opposite way of the Greatest Generation. They value a good coffee shop over a back yard.
“And I bet few people currently living in Los Angeles, Phoenix or Las Vegas think their cities might shrink to that degree or greater.”
I haven’t been to PHX except for changing planes at the airport.
But I can definitely point out huge differences between LA, a megalopolis with a massive blighted inner city at the core, and Las Vegas, a smallish gambling and entertainment strip surrounded by a sprawling sea of recently constructed McMansion tract home developments.
The commonality is that both are headed for the same bulldozer scenario as the Rust Belt cities.
A little more QE3 mortgage market stimulus, please…
Markets More: Existing Home Sales U.S. Housing
Existing Home Sales Tumble
Mamta Badkar
11 minutes ago
REUTERS/Jessica Rinaldi
Existing home sales fell 3.2% month-over-month in October to an annualized pace of 5.12 million units.
This was worse than expectations for a 2.9% month-over-month to an annualized pace of 5.14 million units.
This was the second straight monthly decline.
September’s number was left unchanged to show a 1.9% MoM fall to 5.29 million units the previous month.
“The erosion in buying power is dampening home sales,” Lawrence Yun, NAR chief economist said in a press release. “Moreover, low inventory is holding back sales while at the same time pushing up home prices in most of the country. More new home construction is needed to help relieve the inventory pressure and moderate price gains.”
The national median existing-home price was up 12.8% on the year to $199,500.
…
It was also a 9 month low, SA.
Good thing they bulldozed the a big forest to build more McMansions that few can afford. I was getting worried for a bit I may not be able to buy a place!
Then I drive by and see the presage signs. “From the $600’s”.
I’m out
Aren’t you DC area? Those $600K homes must be in the outer burbs. Any new builds closer in are townhomes. For $600K.
“Then I drive by and see the presage signs. “From the $600’s”. I’m out”
What? I love that house! Plus the schools. The kids are three and one. They’re going to grow up! WHAT?! Suzanne researched this! We can do this. Okay Are you kidding? Did you see the size of that garage?
You’re “all in,” or the bird’s legs are welded shut!
These ruses by donkeys are hilarious.
“Peter Harlem, an FIU researcher, points out that Miami boomed in the 1920s when developers sold swamp land to buyers who hadn’t seen it. Perhaps, Harlem suggests, that could happen again.”
________________________________/
“Perhaps” it could happen again? It happened during the bubble, all the time. That sort of scam is a feature of Florida.
‘Florida: A sunny place for shady people!’
‘Superstar architect Zaha Hadid went all the way for the developer of her downtown Miami condo tower: Her firm designed the sales center. You can bet your sweet bippy this is no ordinary condo sales office. Not for $1 million.’
‘If you must know, units in the Hadid tower, which is scheduled to start construction in mid-2014, start at $5 million.’
Could that interior of the sample unit be more cold and sterile and unwelcoming?
None of these condos, at least in the design conception, ever look like the kind of place you’d like to come home to after a long day, or eat a family meal, or play with your kids, or even just sit on the balcony with a drink and watch the sun set. I get that people who can afford a $5 million unit are not like me, but I can’t believe that anyone really finds that kind of design compelling.
Actually, it’s the sales center! It looks like the headquarters of the villain in a Bond film.
On the subject of shade, in my Tampa neighborhood a huge old tree is being removed so that the lot might accommodate a McMansion. Something that lasted 150 years is being replaced by something that might last 20 years, with a mortgage that might be defaulted on in 5 years. Really disgusting.
‘The National Association of Realtors said on Wednesday that sales of previously owned homes fell 3.2 percent last month to an annual rate of 5.12 million units. The NAR said a combination of high home prices and increased mortgage rates was hurting affordability. The trade group said the rate of newly constructed homes is disappointing and hampering the broader housing market recovery.’
From the comments:
‘Inventory is flat for a few reasons, time of year is one, and yet sellers get the best deals now, when inventory is low, all the realtors I spoke to when I put my house on the market last year told me to get it on the market in Jan or Feb. The second reason is buyers all think that every house right now is owned by someone in financial trouble and they low-ball you. This was my fourth house, so it was not my first rodeo. My house was listed at $229500 in the NY metro area in a village with great schools and low taxes. I had idiots offer $190K. I didn’t even both to counter. It sold for close to list. This is not the same market as 2005, things move more slowly, buyers ahve time to think and research. That doesn’t mean the homeowner is giving the house away.’
‘I don’t know what goof-ball realty firms are supplying this data, but they obviously must live in NYC, DC, or San Francisco. Sure as heck not representative of most of the country.’
‘I’m sorry. But this is another #$%$ story to me. I live in Orange City, FL which is on the outer north edge of Orlando and 24 miles away from Daytona. Within 1000 yards of my house there is 11 homes that are for sale and most have been empty for the last three years that I know for sure. The area is $75,000 to $250,000 priced homes, which most have swimming pools and it is a quiet area and new schools and a very low crime rate. Why, if there is a shortage of listings are these homes setting empty??? Because the banks have prices on the homes that are what the prices were before the collapse. There is no shortage, just greed.’
I hope the genius above doubled down and bought a $500,000 house in a nice NY village with “low taxes”. And paid asking.
sales off 3.2 - is that seasonally adjusted?
Sales of single family homes declined 4.1 percent, while condominium sales rose 3.3 percent.
whoops convert to condo= unafordability
‘California home sales declined for the third straight month in October, while San Diego’s home sales increased by 9.7 percent from September, according to the California Association of Realtors (CAR). San Diego home sales were down 8.1 percent in October from October 2012. In that same time period, the median price of an existing, single-family detached home fell 2.7 percent from $490,130 in September to $477,130 in October.’
‘Statewide, closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 401,170 units in October, according to information collected by CAR. Sales in October were down 2.7 percent from a revised 412,260 in September and down 11.1 percent from a revised 451,090 in October 2012. The statewide sales figure represents what would be the total number of homes sold during 2013 if sales maintained the October pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.’
‘The recent jump in interest rates, coupled with the run-up in home prices since the beginning of this year, lowered housing affordability. As such, many buyers are considering more affordable options such as condos and townhomes, especially in the San Francisco Bay Area, where there is a greater abundance of these property types,” said CAR Vice President and Chief Economist Leslie Appleton-Young. “As housing demand has cooled off in recent months, however, the statewide median price is finally showing some signs of stability.’
Again, when prices rise it’s recovery. When they fall it’s stabilizing.
I thought rising prices were an ‘improvement’?
equity is a beautiful thing, thank you ben bernake.
Leave it to a California realtor like Lester Appleton Yun to yammer reality distorting BS designed to provide cover for a corrupt organization like car and nar.
Falling Housing Prices in CA-CHECK
Collapsing Housing Demand in CA-CHECK
Deliberate obfuscation and distortion of the truth by car-CHECK
‘DESERT HOT SPRINGS, Calif. — This financially troubled city declared a fiscal emergency Tuesday in an effort to avert a second federal bankruptcy filing. If no action is taken, the city of 27,000 people near Palm Springs will run out of money by March, officials said.’
‘The city previously filed for bankruptcy in 2001 after a legal judgment. Three other California cities sought Chapter 9 bankruptcy protection last year in the aftermath of the economic downturn, pension costs and the loss of state redevelopment funds.’
‘Desert Hot Springs, a modest bedroom community known for its boutique spas and hotels, expects to take in nearly $14 million in revenue during this fiscal year while spending $20 million. The city has already slashed its non-sworn workforce by 66 percent in the past eight years but has been overspending for several years.’
Some comments:
‘San Diego is not far from BK. They just had mayoral elections, and failed to elect the only candidate (Mike Aguirre) running for fiscal responsibility. Now they face a runoff election in February between a Republican and a younger Democrat, either way the city will head to a BK. Cities are stuck with debts, but voters can move across city boundaries to avoid taxes. So the middle-class leaves and the poor remain. The poor pay less or no taxes, so the city must recover revenue through traffic citations and fees.’
‘How about we elect some politicians that understand it is dangerous, bordering on wicked and extremely foolish to assume the future will be flush with taxpayer money. (1) After defined benefit pensions are be replaced with defined contribution plans, the pension problem goes away.
(2) People need to stop thinking future taxpayers should pay for the stuff they want right now. State and local governments should not be allowed to borrow money, period. Do the above two very wise things and there will never be another bankruptcy or significant financial problem.’
‘all of the time you hear the excuse the expected revenue was less than we anticipated. well hell, why not make your budget smaller to begin with. then when the cash comes in, then you can spend within your means. this is the thought process that most americans have now. credit cards maxed out, bills that cant be paid and so much more. ATTENTION…. not all americans can live like the rich and famous. only the rich and famous can. couples buying huge houses, the latest cars, biggest tv, and everything has to be the best. it is great at first, but then the bills start rolling in and the couples blame each other. and lose everything. try just living within your means. you can not spend more than you make.’
The entire state of California isn’t that far from complete collapse. Everything there is price fixed and as we’ve seen before, price fixing works….. until it doesn’t…. all hell breaks loose. We’ve seen on a small scale, (orange county) but when the state finally comes apart, and it will, it’s going to something to watch.
Prepare for it.
‘DESERT HOT SPRINGS, Calif. — This financially troubled city declared a fiscal emergency Tuesday in an effort to avert a second federal bankruptcy filing. If no action is taken, the city of 27,000 people near Palm Springs will run out of money by March, officials said.’
Was up in the area last month as a chaperone on a high school trip with my son and some of his schoolmates. I have to say the economy seemed much less than vibrant. I ventured into a couple of stores to try to buy myself a pair of shoes, on the false assumption prices up there would be lower than around San Diego. What I saw were higher prices and empty stores — I was literally the only customer in the places I visited.
I decided not to buy than to pay the $20 premium for purchasing a pair of shoes in Palm Springs.
Maybe someone already posted this link…
DO YOU TRUST REALTORS???
http://www.latimes.com/business/money/la-fi-mo-most-distrust-real-estate-agents-20131113,0,7049086.story?track=rss#axzz2lEN1rTCR
No question RE agents are like anybody else who are solely paid by commission. They get desperate to buy or sell and they always talk out of both sides of their mouth.
They of course contributed to the crash, if a unsuspecting client was not well informed most of them take total advantage to get the sale or listing.
The industry is like a cartel, they control the commission rate, they can control a comp of a neighborhood, they can covertly not show houses because of built in prejudice.
The regulations are rarely enforced, because local gov’ts like the property tax dollars a sale generates, often they get away with very suspect practices.
I wish 60 minutes would do a sting on them to show how they control and operate in a region or neighborhood.
We’re gonna do a sting on you.
‘A few years ago, it was boom time in India. The economy was awash with capital and investors were salivating at the prospect of a nation with a young population and a growing aspirational middle class. For many entrepreneurs, whatever their background and experience, opening a business school seemed like a golden investment opportunity.’
“The education market got seduced,” says Ajit Rangnekar, dean at the Indian School of Business, one of the most respected institutions in the country. “A whole lot of opportunists and, as always, some charlatans started all sorts of business schools … thinking this is now the magic mantra to make money.”