Will Buyers Give Trump A ‘Thumbs Down’ In Florida?
A pair of reports on Donald Trump from Florida. “Donald Trump’s handyman special is No. 1 on Forbes magazine’s list of “Most Expensive Homes in the U.S. 2006. Trump paid $41 million at a bankruptcy auction for the 18-bedroom French Regency-style mansion, now in the final stages of renovation. Its $125 million price tag is a record asking price for a U.S. residence, ‘and perhaps the world,’ Forbes notes.”
“Trump says he won’t accept a penny less than his asking price.”
“Perhaps that belligerent stance is what lands The Donald at the bottom of American Affluence Research Center’s recent poll of the wealthiest 10 percent of U.S. households”
“The Trumpster was the only businessman to receive negative ratings from the rich, 60 percent of the sample rated him thumbs-down.”
From the Sun Sentinel. “In a departure from his large endeavors, Trump has announced plans to build the Trump Las Olas Beach Resort, a $100 million condo-hotel with just 95 units on Fort Lauderdale beach.”
“Partnering with Trump will be Stuart Kessler. Kessler’s targeting buyers from the Northeast as well as Canadians, South Americans and Europeans and said Trump’s name will be a boost to sales. ‘It lends a tremendous amount to the value of the property,’ Kessler said. ‘Everybody wants to have a piece of Trump.’”
“Kessler expects the project to help spur redevelopment in the Fort Lauderdale beach area. ‘Right now that end of town seems to have all the T-shirt shops, and the project will start to improve that section,’ he said.”
“Many in the brokerage community seem to be bullish on this project. ‘It is high-end and opulent,’ said Jeff Kahn, a broker. But Kahn questioned whether potential buyers will pay top dollar on a stretch of the beach that has not yet been fully redeveloped.”
“‘With all of the efforts to revitalize Fort Lauderdale, it will be interesting to see if the potential buyers find this particular location enticing enough for the price,’ he said. ‘I’m sure the developer has done its studies, but I don’t see all of these buyers.’”
Also from the first link:
‘Do you want to go to the Caribbean? Or would you rather give the money to your real estate agent? The answer is obvious: We love our real estate agents, right?’
‘Maybe not, say Stephen Dubner and Steven Levitt, who now write a column for The New York Times. ‘More than 1.2 million belong to the National Association of Realtors, which the U.S. Department of Justice accused in a recent lawsuit of behaving like a cross between a cartel and a mafia, hoarding access to home-sale databases and harassing competitors who dared to offer discounted commissions,’ Dubner and Levitt wrote in a recent column.’
‘Two of those agents who offer discount commissions, charged $750 to list a home, $50 an hour to show a home and $250 to negotiate and close the deal.’
‘Thanks largely to the Internet, agents like these are the wave of the future, Dubner and Levitt say — and commission-based agents are dinosaurs. Strong words. But today’s customer can get most of the information needed to buy or sell a home on the Internet, they point out. That’s one of the reasons the National Association of Realtors so zealously guards its listings.’
‘For those who doubt, Dubner and Levitt point to two other professions: travel agents and stock brokers. The Internet put most of them in unemployment lines, they claim. Most people will no longer be willing to pay thousands of dollars for services they can perform themselves simply by turning on their computers, the authors say.’
Uh oh, Mr Income Stream might have something to say about this…
lol, so do I, but I’ve been down that road.
Nah, I don’t have much of anything to say it’s the Freakanomics A$$hat consider the source. He has about as much credibility with me as David Lereah with a real estate bear. Get a sexually charged word for your title throw around the n-word and the KKK or something equally offensive in your text and viola you have a bestseller. Says more about the stupidity of the general masses more than anything. They call call this guy an economist sure if you get your stock news out of the funny papers. Putting on your tinfoil hat and quoting this guy and his comments about R.E. Agents going the way of travel agents to me is the same as the morons who go around saying there’s no more land and real estate only goes up. His assine analysis of the crack dealer making only 3.30 an hr was pure comedy. I guess he doesn’t read the news much of young kids getting caught with large amounts (thousands of dollars) of cash on them or he’s lead a very sheltered life as a landlord who owns or has owned a few ghetto palaces I can tell you he’s very far from the truth. Then he brillantly spews something about crack dealers living with their mothers. Could it have something to do with Econ 101 supply and demand or better yet could it have something to do with the RICO Act and other money laundering laws. Or could it be something as simple as contract law which doesn’t allow Adults to enter into contracts with children. I mean really how many landlords are going to rent a $3,000.00 dollar a month condo in Manhattan to a 14-16 yr old kid making $10k to 15K a month and your not reading about his father everyday in the newspapers who happens to be cosigning for him. Simply idiotic his youth and apparent lack of exposure to real life is very apparent. I guess his claim to fame is getting 12 teachers fired in Chicago for his analysis of some test scores. Getting 12 people to sit in a room silently for longer than 30 secs. is a task of major proportions. Coordinating them for this task I look higher for the real culprits. I begin to wonder about Scooter Libbey/ Dick Cheney scenarios. Where underlings take the fall for the real aSShats. Then you have morons who had the audacity to put his book on college summer reading lists. If I was paying tuiton for my child to go to one of those schools I would remove my child immediately. To give any credence to anything he has to say that has any relevance to your financial future is like watching Beavis and Butthead for insight on Foreign Policy.
Whether it is a few 100k on a bubble house or 14.99 for a bestseller written by an obvious idiot the adage of a fool and his money are soon parted applies to the followers of this guy just like it does for the bulls.
LoL guess I had a little bit to say after all.
‘Two of those agents who offer discount commissions, charged $750 to list a home, $50 an hour to show a home and $250 to negotiate and close the deal.’
Let me state again, I am a huge proponent of fee based real estate. These fees… seem reasonable.
Let’s see…
$750 (1st listing)
20*$50 (Two open houses)=$1000
Add in a pair of sign flippers $10/hr*40hr=$400. Lets call it $500
Closing process: $250
I’m sure there will be $1000 in misc fees.
So a total of: $750+$1000+$500+$250+$1000=$3,500
Gee, That’s only 1% of a 350k home…
And they say 64% of buyers find their home. So you know (like I) they’ll start using fixed fee buyers agents to get a refund of that 75% of the 3% commision.
I think the days of getting $42k for selling a $700k home are almost over. I expect the Typical transaction fee will be $7k to $10k and stop being a percentage.
Imagine that… and eventually you know that the MLS is going to be made open.
That DOJ lawsuit is only the tip of the iceberg. I expect class action lawsuits agains the NAR and local realtors to be the #1 growth industry in the downturn.
Neil
Instead of parroting stupidity, you should really spend a few minutes researching what the DOJ’s lawsuit is all about. Class Action Lawsuits against NAR and Local Realtors. LMAO whatever your snuffing while your typing take a break it’s killed too many brain cells.
HB’s being taking out and SHOT today. Most at 52 week lows
Looks like AGE is on top of things?!?!:
Standard Pacific cut to hold by AG Edwards - MarketWatch.com
And there was much rejoicing. I’m back above water on this round of PUT purchases.
Shares of Hovnanian Enterprises (HOV : Hovnanian Enterprises, Inc.
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HOV30.78, -1.58, -4.9%) lost almost 5% to $30.84 on Monday. The move came after the Red Bank, N.J., home builder filed with the Securities and Exchange Commission earlier for the sale of up to $350 million in senior notes. In addition, fellow home builder Standard Pacific Corp. (SPF : Standard Pacific Corp.
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Get up to 50 free trades at TD AMERITRADE.SPF28.14, -1.86, -6.2%) issued a disappointing outlook on Friday, prompting a broad sell-off in the industry. Other weak stocks in the group included Pulte Homes (PHM : Pulte Corporation
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And taken again tomorrow and shot again… and the day after… and…
It’s about time. I was starting to wonder if they were immortal, given the recent resiliance of their share prices in the face of a steady barrage of terrible news for the new home market. Of course, I expect that once the current spate of bad news settles down, share buybacks will be used to kick their prices back up again (and to lure a few more sheep into becoming the latest hosing bubble bagholders). But the long-term trend of these bubble stocks seems on track ever since last August to revert to fundamental value (which is still far lower than current prices, IMO).
hello from germany,
the very high volume an the hb is worth mentioning.
(phm normal volume 2.80 mio today 5.85 mio.)
Does anybody here know nybody who might know someone who “wants to have a piece of Trump”?
His creditors, each time he goes bankrupt. Trump’s not a particularly smart or saavy man. He’s just reckless and has been able to bail himself out each time by marketing his name. Any one of us would be living in a homeless shelter if we acted as reckless as him.
“Partnering with Trump will be Stuart Kessler. Kessler’s targeting buyers from the Northeast as well as Canadians, South Americans and Europeans and said Trump’s name will be a boost to sales. ‘It lends a tremendous amount to the value of the property,’ Kessler said. ‘Everybody wants to have a piece of Trump.’”
What a remarkably dumb comment. Joe Couchpotato may be awed enough by Trump to blow a few grand on a “Real Estate Wealth Expo” ticket, but anyone who’s rich enough to conceivably spend $125m on a home probably thinks he’s a pompous idiot. And even if they did have some respect for him, I’m sure it wouldn’t be enough make them spend tens of millions too much on a property. I can imagine the guy bragging to his billionaire friends, “Sure, I got ripped off, but I got ripped off by Trump!“
Maybe Mr. Trump’s business will go bankrupt again like 1990.
David
http://bubblemeter.blogspot.com
Trump is no stranger to failed RE deals..
MARKET WATCH; Where’s The Cash, Mr. Trump?
June 17, 1990, Sunday
By FLOYD NORRIS (NYT); Financial Desk
Late Edition - Final, Section 3, Page 1, Column 1, 495 words
Is Donald a deadbeat? Is Donald a deadbeat? Donald J. Trump’s failure to come up with a measly $30 million to pay bondholders at Trump’s Castle, which he bought five years ago on amazingly generous, less-than-no-money-down, credit terms, is far from the final chapter of the Trump saga….
grim
Northern NJ RE Bubble
I’ve been gone from Ft Lauderdale for a decade, but didn’t Las Olas used to be the ritzy part of town? Has the rest of the beach really “redeveloped” past it?
(For the unaware: Just west of the Intercoastal along Las Olas Blvd are a series of small islands (man-made I assume) that contain huge mansions that have direct deep-water access to the Intercoastal and the ocean (Government Cut going out to the ocean is just around the bend). Deep-water dockage equals top-top-dollar… for those CEOs/ball players that want to dock their massive yacht right in their backyard there’s no other choice.
Las Olas blvd is ritzy, however, the beach area is still pretty divey there (t-shirt shops, dive bars, etc). The road goes right next to the beach, so you can’t have a nice hotel on the sand, and since it’s public with ample parking, there are all sorts of interesting types hanging out. As far as high-end beachfront condos, there are several new, very very very $$$$ ones going up just north of Las Olas including the St. Regis, W, and another Trump property. There are also a number of very high end buildings that have literally just opened along the rive downtown, as the city tried to move a lot of development away from the beach.
I’m AMAZED that Trump is looking to do another condo project, as the flippers are starting to get desperate in the newly opened buildings. I know someone that bought his condo-converted apartment for $500K and decided to move 6 mos later, but found that 45 out of 300 units are currently for sale. The sheer volume of new construction isn’t close to Miami, but it’s been amazing. Currently there is something like 11+ months supply in the city, and people I know involved in RE are starting to freak out. I really don’t understand what Kessler is thinking. Also, Related just started selling another super-high end building in downtown/las olas after a protracted court fight. I’m not optimistic that it’ll get built, however.
i was in fort lauderdale this morning. on a1a there are at lest 10 new high risers. i dont know how long it will take to build them, but the market is so saturated with condos, it will take 10,000 new residents to move down here. this weekend the sun-sentinel mentioned that 1,000 people are moving in but 400 are moving out . people are tired of the crazy prices for homes that fall apart after a cat 1 storm. with all of the insurance cost, it takes months for claims to be filled. our taxes are not going no where. (infrastructure is no good). and the cost of living so high, you spend more time working than living.
‘It lends a tremendous amount to the value of the property,’ Kessler said. ‘Everybody wants to have a piece of Trump.’”
Value = 10x yearly rent. Are these places going to rent more because they were owned by the Trumpster ? Will they in 5 or 10 years when everyone has forgot who Trump was or after he has gone bankrupt, again ?
Slightly off-topic, but his planned condo building in Tampa looks to be stalled, considering that the purported “completion date” is 2007. Last week there were a few construction workers on the site to give the appearance of activity, but otherwise absolutely nothing is happening. I want that lane of Ashley Drive back.
I read somewhere that Trump was having a hard time obtaining financing for the project. Given Trump’s track record stiffing creditors, I wouldn’t want to put my job on the line approving his loan, regardless of profit potential. Of course if Trump stiffs the bank, a lot more jobs than my own would be lost for a loan that size. This has happened in the past before with Trump. It happened to a little fibergall producing company in NW Pennsylvania that made the minarets that adorn Trump’s Taj Mahal. The minarets are made of fiberglass. It was a big deal to the company and the town that they would be contributing to the casino. In the end, Trump never paid his bill, instead went into bankruptcy (this was around 1989 or 1990), was discharged, and the company went out of business not too long after that. They took too much of a hit from the Taj Mahal deal.
“Trump says he won’t accept a penny less than his asking price.”
Another stuck flipper who can’t afford to lower the price.
“You’re backrupt!”
“You’re bankrupt!”
Another fool who does not realize that the market sets sale prices, not sellers.
ready to join the house boycott, then go here
http://www.boycotthousing.com/home.aspx
After all grass roots movements are quite handy agents of change.
“Trump says he won’t accept a penny less than his asking price.”
If wish I was so rich that I had $124,999,999.99 to offer him just to see him choke on his own words.
Of course, that may be what he’s trying for! There are a lot of people who would like to take on the Donald and win: “I beat Trump! I got the place for $120,000,000″. Meanwhile Trump walking to the bank with the $120 mil… “You sure got me, didn’t you?”
totally OT but an interesting monday tidbit..
http://www.oregonlive.com/business/oregonian/index.ssf?/base/business/1149303322123920.xml&coll=7
I’ve been wondering if these insurance companies are waking up to the fact that their return assumptions may be “optimistically” high and are therefor cutting out those covergages that are catostrophic to bring things back into balance / profitability.
“I’ve been wondering if these insurance companies are waking up…”
Oh yeah. I work for a very large insurer and we have been seriously reducing our exposure not just in Florida, but in all coastal areas. This has been going on for several years, and just accelerated after Katrina. My understanding is that Lloyds is doing most of the coastal underwriting.
Rents going up in San Diego?
I’m not buying it. It would be good for me… but there is just too much supply out there right now.
You can’t see the sidebar table in the online version of the story which accompanies the print edition version of this article, but as usual, the story zeros in on the YOY figures, deliberately ignoring more current evidence. The table confirms that, at least for however they compiled their averages, while the YOY rents are up, the rental rates actually fell from Fall 2005 to Spring 2006 for each category of housing discussed (studio / one BR / two BRs / three or more BRs).
This article seems to reflect the SD Union Tribunes heavy reliance on real estate advertising (I pitch about five pounds worth of housing listings with each weekend edition of the paper); the intended message seems to be “buy now, or watch your rents go up by 10% a year forever.”
I believe the table is consistent with a different version of the story than the article promotes. It looks like rents went up with the final blowout in SD purchase prices late last year, and now that the market is tanking (50% increase in used home for-sale inventory since Jan 1, 2006), rents are softening along with the supply glut in the owner-occupied market. This story is conjectural at this point, but the fact that rents have declined, not risen, since Fall 2005 suggests that prospective buyers should bide their time, as rents are going down, not up.
That makes a helluva lotta sense Stucco.
And it makes sense. I think renters have been given a sense of powerlessness recently — even more so than usual. Landlords have also been part of an exciting real estate investment racket. The landlords may have been able to just tell renters, “you’re rent went up.” That won’t stick.
Wait for the “1st month free!” ads to show up in Craigslist.
Wow, what great journalism. I am so proud of the Union Tribune. Glad that I do not waiste my money with a subscription. They have not ran a story on the housing market for months. When things were exploding around here they would print a article a week on how great the housing market was.
Does anyone really care what Trump the Carnival Barker says or does?
I already posted this in the funniest ads topic, but it is too indicative of the Florida condo bubble not to have it up top for comment.
Ok, this is slightly off-topic - but i read in the news today that a couple died - they smothered in helium after climbing into a balloon that was advertising condos for sale in Lutz, Florida. It’s tragic, but maybe the weirdest/funniest bubble/ballon story I’ve heard yet. You could make a lot of really bad jokes about this in relation to the housing bubble.
Somewhat off topic, but in relation to the “credit bubble” oft cited on this site, I present the following “eye opener”
———————–
TAIPEI (Reuters) - Kathy Chen is an accessories shopowner in Taiwan struggling to pay huge credit card debts on a modest income. She is the new breed of “credit card slave.”
Hundreds of thousands of Taiwan’s credit card holders have racked up mountains of debt, undermining consumer sentiment and underlining the risks facing export-led Asian economies that are trying to crank up domestic consumption as an engine of growth.
Besides Taiwan, where American Express stopped issuing credit cards this year due to rising defaults, Thailand and China are among those that have tightened supervision to avoid the experience of
South Korea, where the bursting of a consumer credit bubble badly winded the economy in 2004-2005.
“I wanted to commit suicide because I was at a loss what to do to my credit card debts,” said Chen, echoing the sentiments of a growing number of desperate borrowers.
She is trying to keep up payments on the T$5 million (US$157,233) she owes banks on a monthly income of only T$20,000 ($633).
Ack… URL is actually
http://news.yahoo.com/s/nm/20060519/lf_nm/financial_taiwan_creditcards_dc
or
http://tinyurl.com/j9hs5
I don’t think that’s even possible. Even if the interest is only 5%, that’s higher than monthly income.
Time to give up. Don’t kill yourself, just go bankrupt and stick the banks with the debt. They need to learn responsible lending practices.
WTF? Responsible lending practices? No one is holding a gun to these peoples heads, just like here in the US it’s all about who has the coolest cellphone, car, etc. Yes, credit card cos. are avaricious but there is such a thing as responsible use of credit, just not peacticed much anymore IMO>
Hey, maybe Bush is on to something with his plan to spread American values.. Our enemies will bankrupt themselves without having to step foot on foreign soil.
Suggest we stay away from a discussion of the possibility that for the past 6 years the American currency may have been used as a weapon to prevent a future war. I would rather the politics stayed out of this blog (ref - Berkley craze on another topic today). Best to stay away from it.
http://www.financialsense.com/fsu/editorials/jain/2006/0603.html
good read
I’m starting to think that the big shock could be a major RE public company going bankrupt. I don’t know which one,or when, but a huge bubble will have huge busts.
Those wondering when would be a good time to get back into the market should watch out for when the Donald declares bankruptcy (or at least when his creditors offer him the necessary forebearance to enable him to avoid doing so). That will be one good indication that the bubble has finally popped.
speaking of trump, they’re filming “the appentice” in my office this week.
i’m looking forward to the catering banquet that accompanies these events.
Where is that cereal?
the program shifts to L.A. for an episode. i suppose i can’t leak out too much info and i still can’t tell if we have a lock on it.
all their pre-production guys were swarming through our bldg this morning.
I heard that Trump Las Vegas has start price of $1200/sq-ft.
How people can justify paying such a high price for an apartment? AND on top of that there are enormous association and tax fees.
Is it status symbol or what! I am missing something here.
“Trump says he won’t accept a penny less than his asking price.”
“Perhaps that belligerent stance is what lands The Donald at the bottom of American Affluence Research Center’s recent poll of the wealthiest 10 percent of U.S. households”
“The Trumpster was the only businessman to receive negative ratings from the rich, 60 percent of the sample rated him thumbs-down.”
From the Sun Sentinel. “In a departure from his large endeavors, Trump has announced plans to build the Trump Las Olas Beach Resort, a $100 million condo-hotel with just 95 units on Fort Lauderdale beach.”
“Partnering with Trump will be Stuart Kessler. Kessler’s targeting buyers from the Northeast as well as Canadians, South Americans and Europeans and said Trump’s name will be a boost to sales. ‘It lends a tremendous amount to the value of the property,’ Kessler said. ‘Everybody wants to have a piece of Trump.’”
————————–
Trump can go screw himself! And I dare you to pass my comment on to him on nat’l TV! Bastard doesn’t deserve all that value and money. He’s an idiot, plain and simple.
Stephanie Ellison
Supporter of Margaret Cho’s Assassin Comic Routine