Gambling In A Legal Way
Readers suggested a topic on gambling. “Weekend topic suggestion: Get rich or die tryin’?”
A reply, “Do you have any big ideas which you could develop and sell to the masses?”
One said, “My idea is for a razor with 6 blades instead of 5. It’s extra better. Also I have an idea for a Kardashian with an even bigger booty.”
And finally, “I have nothing left with which I am willing to gamble, and for that reason….. I’m out.”
The Democrat & Chronicle. “The city’s tax foreclosure auction Friday at the Edgerton Community Center offered up about 530 properties from across the city and welcomed 350 bidders — both highs in recent years. These are not major developers but rather most are micro-investors, snatching up one or two properties at a time to renovate and rent. They choose houses having only an exterior or drive-by inspection to go on, making decisions based on the look, location and if it has a good roof.”
“‘Sometimes you are pleasantly surprised. And sometimes you are like, ‘Wow,’ said Joe Macko of Spencerport, who bid alongside his son and ended up with six properties — including a 2½-story on Agnes Street for $7,000. ‘I guess that is some of the fun of it; you are kind of gambling but in a legal way.’”
“Rocco Stebbins has been coming to these auctions for 12 years and owns about 40 properties; his father has been coming since before Stebbins was born. More than an hour later, he had yet to win a property. ‘They’re overbidding,’ Stebbins said after seeing houses go for more than $30,000. ‘I got houses next door I’ll sell them for half that. People get caught up.’”
“‘Anything that’s decent is going for money the houses aren’t worth,’ said Chris Cataldo of Irondequoit, who has been in the real estate investment business for three decades. ‘There’s more new faces. That’s because of all the TV shows (in which) you buy a house and get rich.’”
The Los Angeles Times. “Redfin recently asked 1,900 prospective home buyers nationwide what they planned to do with their old house when they bought a new one. As you’d expect, the majority said they would sell. But 39% said they’d rent it out. In Western markets like Los Angeles that have seen big price growth lately, the percentage was even higher. With the tenant covering the note, they can build equity — especially if home prices continue to rise. ‘It’s a market-based decision,’ said said Trevor Henson, managing partner at First Light Property Management in Manhattan Beach. ‘They know they can get really high rents right now. If I’m locked in on a 30-year fixed [mortgage] at 4%, and if home values are going up, it can make a lot of sense.’”
“Many of the new landlords are affluent and financially savvy, said Ellen Haberle, Redfin’s real estate economist. They’re not necessarily in it for the long haul, but they see a chance to profit right now. The wait-and-see approach is common, Haberle said. The conditions that make renting attractive could easily change. If rents fall or home prices rise enough, selling could be the smarter play. ‘These amateur landlords aren’t people who are doing this for a living,’ she said. ‘They just kind of happened into this opportunity.’”
Arizona Newzap. “The Phoenix housing market has been enjoying a renaissance of sorts since the 2011 recovery, but the latest real estate report from Arizona State University is showing a significant and sustained downturn to single-family-home sale prices. February 2014, which is the latest data available, marks the first time the median single-family-home sales price went down for a second month in a row since the 2011 housing rebound, the ASU report shows.”
“Phoenix-area home prices started rising quickly after hitting a recession low point in September 2011. Price increases began slowing down in July, with the market experiencing two monthly drops in the median single-family-home sales price this January and February — totaling about 5 percent. In February, the percentage of residential properties bought by investors was down to 20 percent from the peak of 39.7 percent in July 2012, the report states.”
“Walt Danley of Walt Danley Realty expects better numbers as the marketplace finds its new normal. ‘I think we are doing OK. I think at the end of 2013 we had a very strong January and February, but when we got into typically our selling season things have slowed down. I know that inventory is up year over year; in Paradise Valley we are about 21 percent above the number of active listings in inventory, but that inventory is not abnormal,’ Mr. Danley said. “What is abnormal is the lack of buyer demand.’”
“Mr. Danley says he has noticed a ‘lack of sense of urgency in the buyer pool. It has been a long time since I can remember buyer expectations and seller expectations so dramatically different,’ he said. ‘The reality is the market has shifted to a buyer’s market.’”
“‘We have changed from a seller’s market to a definite buyer’s market,’ said Robert Joffe of Prudential Arizona Properties. Mr. Joffe says the only thing investor buys did for the overall Phoenix housing market was make people feel better about the market itself. He says it had little to do with the overall health of the marketplace. ‘The only thing it does or the role it (investor activity) plays is in the amount of sales that happen,’ he pointed out. ‘They (investors) help the news, which makes everyone feel very good about things. It just helped everyone feel good, but I don’t think everyone believed that everyone was able to buy into it.’”
FYI, as soon as I get a box from FedEx, hopefully today, my desktop computer is headed off to rehab for a little over a week and my posts here will be more limited.
See if they’ll send a bunch of supersized coroplast boxes for trashing out all these empty stinky shacks. You hold the door, I’ll do all the heave-hoe-ing.
What is real estate investing if not high-stakes gambling?
And it works out much better for the gambler if the stakeholders are other people besides himself. That’s the nice thing about Megabank, Inc’s “too big to fail” business model:
- Heads, they win.
- Tails, everyone else is screwed.
Hasn’t the international banking cartel pretty much made deflation illegal? Hence rents can never fall, by decree of the banking establishment. (Never mind Japan over the past quarter century — that was a fluke!)
‘No bidders surfaced at Wednesday’s foreclosure auction of the Wiederhorn mansion, meaning the 25,000-square-foot home reverts to CitiMortgage, the lender owed $4.3 million on the house. The minimum bid had been set at $3.36 million, but there were no takers at the Multnomah County Sheriff’s auction in Northeast Portland.’
‘Controversial business executive Andrew Wiederhorn poured millions of dollars into the house. Wiederhorn has since relocated to Beverly Hills. The house is vacant.’
‘The Wiederhorn house went up for bid along with 18 other homes at the Multnomah County Sheriff’s Department office in Portland. It offers a reminder the foreclosure wave that swept through the state after the housing industry crash and recession is still not over. The number of foreclosure auctions conducted by the Sheriff’s Office has actually skyrocketed in the last year.’
‘The annual number of foreclosure auctions handled by Multnomah County deputies has gone from one to four a month in normal times to 87 a month so far this year.’
“Now we’re suddenly in the real estate business, ” said Francis Cop, a records coordinator for the department. “It’s sad. A lot of people are losing their homes.”
‘The financial industry put many foreclosures on hold for a couple years while it figured out how to proceed after certain court decisions and the advent of state and federal programs aimed at helping prevent foreclosures.The uncertainty has since eased, which has led to the present surge of auctions.’
‘Cop said a majority of the homes he auctions are still woefully underwater — meaning the homeowner owes more on the mortgage than the house is worth. That seems to also have been the case with Wiederhorn. He owed more than $4.3 million on his house.’
‘CitiMortgage, the lender on the property, put a starting bid on the property a million dollars less than what it was owed, apparently in recognition that it would never get the full $4.3 million.’
‘Wiederhorn tried to sell the place in 2011 for $5.7 million. At the time, he said it was less than half what he had put into the house. There were no takers then either.’
the” housing industry crash and recession is still not over.”
It was merely suspended. For all intents and purposes, it’s still in the third inning.
“It was merely suspended. For all
intents and purposesintensive purposes, it’s still in the third inning.”There. I fixed it so the shills would understand it.
“The Phoenix housing market has been enjoying a renaissance of sorts since the 2011 recovery, but the latest real estate report from Arizona State University is showing a significant and sustained downturn to single-family-home sale prices. February 2014, which is the latest data available, marks the first time the median single-family-home sales price went down for a second month in a row since the 2011 housing rebound, the ASU report shows.”
Isn’t it interesting how, despite economic decoupling, Phoenix home prices are tumbling at about the same time as those in many markets across the Pacific Ocean in China?
Warning signs of trouble in China’s markets
By David Ignatius, Published: April 10, 2014
China’s financial markets seem to be signaling trouble, as a government crackdown on corruption and loose credit begins to bite and jittery local investors scramble for safety.
…
Signs of trouble abound: A report last week by the China Index Academy noted that real estate sales during the first quarter of this year in China’s four biggest cities were more than 40 percent below the levels of a year ago. To sell property and raise cash, developers are said to be cutting prices sharply in some smaller cities. According to Anne Stevenson-Yang, a Beijing economist who blogs for the Financial Times, 40 percent price cuts have been offered by developers in Changzhou and Qinhuangdao, and developers in Ningbo, Wuxi and Suzhou have offered discounts of up to 40 percent.
…
40% discounts are a good place to start, but many Chinese properties need a 95% reduction in price to get to where they are affordable. Yes, 95%.
In Phoenix a big flock of Canadians did a lot of buying the last couple of years. Also perhaps Blackstone. They hope people like me who still live in apartments will take an interest in rentingg a SFH. while noise issues could be less in SFHs, rent prices could be higher and the time you take to spend keeping the place up is time it takes you away from biking or skiing in Northern Az.
I was just checking on SFHs that are no larger than 1300 square feet. The hope would be that it would come with an attached garage. Well very few of those in Phoenix. You would find them in the oldest sections and run down.
‘A London town hall is threatening to impose huge fines on “buy-to-leave” investors who snap up properties but then let them stand empty for years. Islington is the first local authority in the capital to propose such aggressive measures against those owning the growing number of “ghost apartments” - usually foreign buyers.’
‘The trend is particularly pronounced in the City Road area, where they claim no one is on the electoral roll in as many as half of homes in some recent schemes. Last year, officials discovered that 11 overseas owners of flats in the Bezier block, on Old Street roundabout, were renting them on “short-term” holiday lets at £200 a night in breach of planning rules.’
‘James Murray, the council’s executive member for housing, said: “In Islington, as across London, it’s harder and harder for people to find somewhere they can afford to live. At the same time, expensive new housing is being built, often sold off-plan overseas, and then left to stand empty. “It’s galling for Londoners, and outrageous in the middle of a housing crisis. We desperately need more affordable housing. We cannot stand by as homes sit there empty as investments.”
‘The Great Australian Dream of owning a home is so deeply ingrained in society that pretty much nothing will stop us. It doesn’t seem to matter how much property prices rise and how much we have to borrow to get into the market, we’re going to do it.’
‘Even when prices for everyday goods aren’t outrageous, we convince ourselves they are. Even when we manage to avoid a recession, unlike almost all comparable countries, we’re dirty on things.’
‘Little wonder. Everything looks expensive when you’re hundreds of thousands of dollars in debt just because you want to keep a roof over your head. In the past few days we’ve seen the latest tables in the paper setting out just how much average house prices have been rising. If you own a property or are paying one off, it makes for great reading. Naturally your eye runs to your suburb, you look at the figures and punch the air: the price of houses is going up way more than inflation. You’re getting richer! But are you?’
‘If property prices are going up everywhere, everybody else is getting richer too, if “richer” is in fact the appropriate word. You can sell your house but you’ll have to buy another that’s also worth a lot more than it used to be, like the one you’ve just sold.’
‘Unless you want to live under a bridge or move to a part of the world with either worse houses or fewer amenities than the one you’re already in, you’re going to struggle to capitalise on the supposed property bonanza.’
‘And yet, most of us subscribe to this illusion, doing whatever it takes to get on to the merry-go-round and expecting it to take us somewhere. I readily admit to signing up a long time ago.’
‘The property boom might bust, which would be terrible of course. But bubble or not, what’s happening is bad enough. The astronomical prices that new entrants to the property market have to pay are great news for the banks but not so great for the rest of us. All that money that goes into property can’t go into more productive investment.’
‘And for those who hop on to that housing merry-go-round in an economy where contract-based employment is becoming the norm, a lifetime of complaining about the price of everything except property awaits. Because we’re all getting rich, right?’
Renting is less than half the cost of buying in Australia too.
The deal about renting is that it requires a lot of discipline to rent for two or three decades while being on both a marriage strike and a real estate strike. But the discipline is handsomely rewarded. By renting, I have been able to invest my savings over the years into several diverse assets, such as stock index funds, treasury bills, intermediate term municipal bonds, savings bonds, and physical precious metals. My dividends on stocks and my income from my securities pays for all my rental costs and more. And I have a lot of freedom. What’s not to like?
As Ben says, when an asset class keeps going up and you feel richer, to sell that asset and buy back in means you still buy at possibly too high a price. Unless you diversify into assets whose cycles are very uncorrelated with each other. Gold and cash. Stocks and short term treasuries. Cash and REITs.
Bill, you’ve pulled the sled as hard as any husband and father, but it’s only loaded with you.
You know very well, each of us has our own comfort level of net worth. Some people would think they could never retire if they had my net worth. Those are the ones who grew up in cities such as Westwood, Santa Monica, San Francisco. Others would think they had abundance if they had my net worth.
I pulled the sled hard, but you cannot put a measurement on how much effort I did. You are not me. That said, I am one of the people who enjoys watching his net worth accumulate, more than spend it on “things” I had friends in the past who had that Sam ideal. They lived cheap, took indulgences, but not to the extent that they would fritter away their gains. My greatest joy is having zero debt and knowing all my needs are paid for by my dividends and investment income.
“knowing all my needs are paid for by my dividends and investment income.”
My new goal.
Funny, all of my needs are paid for by my investment income. Have been for about 20 years. But I don’t usually make a big deal about it.
‘In 2007, Congress adopted a law that spared those homeowners from being taxed on the amount of the loan that was forgiven. But that tax break expired in December, and now the forgiven debt can be counted as income by the IRS.’
‘Stella Thompson said she is looking at a $30,000 tax bill on her Seattle area home. After Thompson and her husband separated a few years ago, they fell behind on their mortgage payments. This month, with their lender’s approval, they sold their house for $85,000 less than they owe on the loan. Had the tax break been in place, they would not owe taxes on the forgiven debt. Now, they might.’
“That’s a real hardship,” said Thompson, 55, who moved out of the house in 2011 and rents a duplex. “I live paycheck-topaycheck and barely get by financially.”
‘Nancy Ryan, a bankruptcy attorney in Fairfax, Va., said one of her clients is preparing to file for bankruptcy to avoid the tax hit. The client bought a condominium in Centreville, Va., for $250,000 eight years ago. He recently lost his job, stopped paying his mortgage and received approval to sell his home for $94,000 less than he owes on it, Ryan said.’
‘If he goes through with a sale now, he would be liable for about $25,000 in taxes next April, Ryan said. “We’re waiting to see what Congress will do,” Ryan said. “If they don’t renew the tax break, he’ll file for bankruptcy protection and then go through with the short sale.”
‘If the short-sale option falls through, he will most likely lose his home to foreclosure, Ryan said. But his financial troubles won’t end there. Under Virginia law, his lender can go after him for the difference between what his home brings in foreclosure and the amount he still owes on his mortgage. And if the bank does not go after him for that amount, the IRS will tax it.’
‘Homeowner Darrell Pena took the plunge, but he is second-guessing the decision. After Pena lost his job in 2008, he rented his Connecticut home to a young couple and took a job in Texas. But the renters left last year. Unable to find new tenants, he opted for a short sale because he owes more than the house is worth.’
‘Pena said he has a potential buyer and expects the deal to close next week. “But now we’re told we could get a tax bill for $30,000,” Pena said. “Looking back, the easiest thing would have been to let our house go into foreclosure.”
I never understood why owning a home should qualify a household for tax-free debt forgiveness income.
Meanwhile folks who work for a paycheck are taxed through the nose, at least in Taxifornia. Small wonder a record percentage of Americans are simply staying out of the workforce!
The labor force participation rate hits all time lows affecting college grads
Dan Harris
NY Economic Policy Examiner
April 6, 2014
On Sunday April 6, 2014 I had the pleasure of interviewing a recent college graduate and discussing the current economy and job market.
“My father talks about the good old days when a President named Ronald Reagan presided over what my father calls the ‘Reagan Recovery’”, says Anthony Harris a recent entrant into the job market. Harris went on… “One can only pray for a job market created by that type of economic recovery in today’s world, where it appears that politicians will lie about everything and ignore the masses after getting elected.” and “many of my peers are occupying parks and looking for handouts, partly because of the difficulty in obtaining gainful employment.”
Harris from Long Beach, New York who went back to school to earn a BS in Criminal Justice has been confronted with a lack luster job market where many of his contemporaries are having a tough time finding employment. “The news says that the unemployment rate is declining but I don’t see it” said Harris.
Today’s employment numbers are a mixed bag. While administration proponents tout the drop in unemployment rates to 6.7%, the underlying reality of a labor force participation rate at lows not seen for more than 30 years tells the real story.
In a recent report by the Bureau of Labor Statistics shows that the current the labor force participation rate is steady at 63.2%, a number not seen since the economic malaise under the administration of Jimmy Carter.
…
“…what my father calls the ‘Reagan Recovery…”
Unfortunately the Reagan Recovery was established on the foundation of liberalized credit aka easy money.
It was coincident to the buying down of FedRes interest rates at a minimum.
“I never understood why owning a home should qualify a household for tax-free debt forgiveness income.”
Exactly, but that pesky little detail hasn’t figured much into the Bubble 2.0 mentality…and Congress extending the debt forgiveness clause for several years didn’t help…the tradition that debt forgiveness was taxable income could have, and should have been, part of the cleansing process to bring some sanity back to the market.
Heh; I went through a foreclosure back in 2000, when you staggered away from a foreclosure and right into a large tax bill. We didn’t talk about it back then; foreclosure was a shameful thing. I credit that (pun intended) for why I was renting an apartment and sitting on cash when 2008 rolled around.
Every financial mistake can be a critical, if expensive, lesson. It’s unfortunate when people get accustomed to reading the Cliff Notes. It bites them in the ass in the long run.
It sounds as though continued massive federal tax giveaways to home owners is a sure thing on Capitol Hill.
You have to love the way Kenneth Harney spins the federal tax giveaway of mortgage debt forgiveness income into an entitlement! Wouldn’t it be better for everyone if taxes were “forgiven” on something of productive value, rather than for debt donkeys defaulting on their mortgages?
Tax benefits for homeowners look uncertain as Senate and House take different tacks
By Kenneth R. Harney, Published: April 10 | Updated: Friday, April 11, 4:45 AM
…
Now for the bumps: The full Senate must still pass the so-called “extenders” bill containing the housing provisions. That vote could happen relatively soon — this spring — or could be put on a back burner based in part on the level of urgency the Senate leadership detects from the House side.
And here’s the message Majority Leader Harry Reid (D-Nev.) is certain to get from the House’s most influential tax legislator, Ways and Means Committee Chairman Dave Camp (R-Mich.): Cool it. We’re not rushing. Camp says he’s more interested in reforming the entire federal tax code for the long haul rather than reapproving tiny pieces of it year after year.
He wants to look at the 50-odd special-interest tax benefits in the extenders bill — one by one — to determine whether they merit a place in the code. Among the breaks he plans to evaluate apart from the housing-related ones: Should the federal tax code provide financial subsidies to owners of racehorses? TV and film producers? Auto racetracks? Rum producers in the Caribbean?
He’s got a point. Are all the now-expired tax subsidies for niche groups and industries, which sometimes cost billions of dollars in lost revenue to the Treasury, cost-effective? Do they benefit the economy as a whole, or are they simply sops to well-shod lobbies? If they can be justified on the merits, fine, we’ll keep them. If not, they should disappear.
To achieve this analysis, Camp plans to conduct months of hearings and markups — a challenge given Congress’s already tight pre-election schedule. At the end of the process, it’s likely there will be fewer special-interest tax benefits in the House’s bill than the Senate’s. Republicans may also insist that whatever short-term special-interest provisions are approved be offset by revenue-raising measures — cutbacks in tax benefits — elsewhere in the code.
How well will homeowner benefits such as mortgage debt forgiveness, mortgage insurance premiums and energy-conservation deductions stand up to Camp’s planned rigorous evaluation?
It depends. At one level, mortgage debt forgiveness tax relief looks like a solid bet to make it into any final package. Since its enactment in 2007, it has helped thousands of owners who, often through no fault of their own, faced staggering tax bills on what amounts to phantom income: money the tax code says they “earned” simply because a mortgage lender decided to subtract it from the principal debt the owner owed on the loan.
To illustrate, say the value of your home dropped sharply, not because you failed to keep it in good repair but because the economy went into deep recession. Your employer cut back on your work hours and you found it increasingly difficult to make full, on-time payments on your mortgage. To help you past these problems, your lender agreed to reduce the amount you owed as part of a loan modification. It canceled $80,000 of your debt. Without the protection of the 2007 mortgage forgiveness relief provisions, the IRS could demand more than $22,000 in income taxes on the $80,000 your lender wrote off — “income” you never pocketed and probably don’t have on hand.
Mortgage forgiveness debt relief has strong bipartisan support in the Senate and some support in the House. But if Camp and the Republican majority demand “pay-fors” elsewhere in the code as the price of retaining it — the estimated revenue “cost” of this provision alone is $5.4 billion over 10 years — negotiations could get complicated.
Ditto for mortgage insurance premium deductions and home energy conservation. The political odds in an election year still favor their survival, but it’s likely to get messy along the way.
“You have to love the way Kenneth Harney spins the federal tax giveaway of mortgage debt forgiveness income into an entitlement!”
+1 But “spin” [is] Kenneth Harney’s primary employment.
Paradise Valley, AZ- Very exclusive area where Stevie Nicks and other icons live. That’s not your normal mainstream area to have an increase in listings at 21%. Just say’in… What’s the real story on the increase in listings? Those folks aren’t too worried about housing profits.
“What’s the real story on the increase in listings?
Excess, empty and defaulted inventory. No different than anywhere else.
This says 31%.
http://www.movoto.com/paradise-valley-az/market-trends/#city=&time=1Y&metric=Inventory&type=-1
‘Those folks aren’t too worried about housing profits’
I’ve heard that a million times. PV had the largest fall in prices in all of greater Phoenix a few years ago.
That statement reminds me of when I first started doing foreclosure work. Back then, most jobs involved a house in pre-foreclosure. Often, I’d be asked to contact the listing agent (they were always for sale, hoping to get out). Being the early days of the foreclosure wave, the agents hated what was going on; they were going to lose the listing, but were in the spot of being an intermediary. (If it was a FSBO, I’d have to call the FB themselves).
Anyway, I’m asked to contact this UHS about a vacant house. The usual stuff, are the utilities on, can she facilitate a lock on a secondary door? She informs me I must be mistaken, as Mr. Biggs is very wealthy and could pay cash for this house many times over. I double checked and let her know payments were not being received on this vacation house. She then calls Mr Biggs, and then dejectedly called me and said, ‘go ahead and change the locks, he’s walking away from the house’.
“She informs me I must be mistaken, as Mr. Biggs is very wealthy and could pay cash for this house many times over.”
Dumb, ignorant, stupid, KnowNothing realtor.
It just occurred to me this post could just as well have been titled, “Lessons learned and forgotten in the housing bubble.”
One; gambling on houses is risky, as houses are illiquid “investments”.
Two: people who are gambling on houses tend to walk away when they find themselves underwater.
Any other lessons learned and forgotten?
Yeah…. All the arrogant housing $hit-talk used to substantiate and detract from what we know now was grand fraud back at the peak is once again a part of the Liars Club members lexicon.
Three: People who can’t repay their bad real estate gambling debt often get made whole by government bailouts which force the losses onto those who had no desire to participate in the mania.
‘often get made whole by government bailouts’
I haven’t seen this in the foreclosure biz. I do see houses sit empty for years without being foreclosed, and some drag it out and get cash for keys. These stories of people living for many years without getting kicked out are usually in places like Florida, Maryland or California. States that coddle deadbeats and the lenders are happy to go along because they use it to dribble out their inventory. For the most part, the actual foreclosures themselves are tales of woe. I’ve seen the little notes the families make to each other, left behind. Even messages scrawled on the walls they were leaving. And signs of lots of anger.
I wasn’t referring to bailouts of foreclosed households; rather the bailouts of the too-big-to-fail financial institutions which made the crazy loans that fueled the crisis.
“For the most part, the actual foreclosures themselves are tales of woe. I’ve seen the little notes the families make to each other, left behind. Even messages scrawled on the walls they were leaving. And signs of lots of anger.”
+1 I’d like to see this side of the housing story on 60-minutes.
‘Those folks aren’t too worried about housing profits’
Which folks? Not the all-cash Canadian and Chinese investors, I’m sure. Why would they even bother snapping up U.S. investment properties if not to profit from them?
“Mr. Biggs is very wealthy and could pay cash for this house many times over. I double checked and let her know payments were not being received on this vacation house.”
Heh heh heh…
“She then calls Mr Biggs, and then dejectedly called me and said, ‘go ahead and change the locks, he’s walking away from the house’.”
+1 Mr Biggs is wealthy because he knows when to fold. Suckers.
Ben & All
Thanks for the lessons. I guess it comes down to your values. I’m old school. Thanks for the nudge.
I’m the type that gets the change for the $20, when I give the cashier a $10, and does the right thing, and informs them they made an error. Living like a sleaze ball just isn’t my style.
Nope. Just a mostly-white neighborhood in Phoenix.
‘There’s an undeniable second boom underway in the tech sector, and the consequences, both positive and negative, are rippling throughout the San Francisco Bay Area with special force. Protests focused on the negative effects of tech companies have become increasingly common in recent months, and they’re getting personal. This morning, protestors who say they’re being evicted by a Google lawyer protested in front of the property he owns. It’s the third gathering to target a specific Google employee.’
‘It isn’t immediately clear what Halprin’s intentions are for the property, since under the Ellis Act he should be legally barred from renting out the units for several years. “I do not intend to turn this into condos,” Halprin told a reporter, as he let construction workers in. “You can talk to my attorney.”
‘From Mission Local: He declined, however, to talk about his intentions or to explain why he was evicting all of the tenants. He suggested that he will live in the building, perhaps the entire complex, but that was unclear. His only options would be to combine all of the units, leave them empty or to sell units as tenants-in-common.’
‘Demonstrations against the grip on San Francisco held by wealthy technology workers took a personal turn on Friday with protesters taking aim at a Google lawyer they say personifies the tensions being stirred by abundant tech money.’
“When you put a face on it, it suddenly becomes more real,” Erin McElroy, an organizer at Eviction-Free San Francisco, said of what she views as a technology-driven housing crunch.’
Funny how that works. Texas; oil driven housing crunch. Florida: investor driven housing crunch. New York: foreigner driven housing crunch. Orange County; Chinese driven housing crunch. Phoenix; Canadian driven housing crunch - OOPs! Its a crashin!
Lesson learned but forgotten from the housing bubble: all sorts of new-paradigm type justifications will be invented to explain why locals can’t afford houses.
‘…a technology-driven housing crunch.’
Should we conversely expect the next tech stock bust to precipitate another technology-driven housing crash?
Oops…tech stocks are already crashing again!
Dotcom crash fears wipe £20bn off FTSE
By Ben Martin, and Katherine Rushton
9:28PM BST 11 Apr 2014
London shares drop as investors take fright at plunge in Nasdaq
The Nasdaq board in Times Square advertises Facebook which is set to debut on the Nasdaq Stock Market today.
In the US, Facebook was among the fallers on Friday Photo: GETTY
Fears of a new dotcom crash gained momentum on Friday, wiping £20.2bn off the value of the FTSE 100.
The leading index tumbled 1.2pc to 6,561.7 and the mid-cap FTSE 250 slumped 1.6pc to 15,898.37, as British investors grew increasingly concerned about being caught in a tech bubble.
Their anxieties were fuelled by a rout in the American stock markets on Thursday, when the Nasdaq stock exchange, favoured by technology companies, suffered its worst fall since November 2011.
US tech stocks continued their decline on Friday, with shares in Facebook, Google and Twitter all sliding between 1pc and 3pc.
In London, tech shares were sold-off particularly aggressively. Microchip designers Arm Holdings and Imagination Technologies lost 4.5pc and 5.8pc respectively.
…
Exclusive Paradise Valley, AZ Housing Prices Plunge 15%; Demand Collapses 11% YoY
http://www.movoto.com/paradise-valley-az/market-trends/
http://www.zillow.com/local-info/AZ-Paradise-Valley-home-value/r_29973/#metric=mt%3D30%26dt%3D1%26tp%3D4%26rt%3D8%26r%3D29973%26el%3D0
Paradise Valley Today, Foreclosure Alley Tomorrow
Remember….. Current asking prices of resale housing are 250% higher than long term trend.
Foreclosure Alley Today!
‘Paradise Valley Foreclosures 293 results
http://www.zillow.com/paradise-valley-phoenix-az/foreclosures/
I think this is from 2010:
‘In 2008, it looked as if Paradise Valley, the wealthiest, most exclusive community in Arizona, had neatly side-stepped the foreclosure crisis. Only 38 foreclosures were recorded in this 16-square-mile town that year. Indeed, the median home price for resale detached homes reached an all-time high of $2 million in mid-2008, according to MDA DataQuick, even as values plummeted elsewhere.’
“People were buying up million-dollar homes, tearing them down and rebuilding them,” says Jay Butler, director of the Arizona Real Estate Center at Arizona State University’s W.P. Carey School of Business.
‘Last year, the bottom dropped out. Like many other luxury-home markets, Paradise Valley joined the foreclosure crisis late: As the economy worsened, companies lost clients and executives lost bonuses or jobs. Affluent residents ran through their savings and credit. And banks, once reluctant to foreclose on major depositors, started taking estates back. People began talking of “simplifying their lifestyle.”
‘By the end of 2009, the number of foreclosures had tripled to 114, with an additional 315 notices of trustee sale filed, according to the Information Market, a data provider. In most cities, this paltry number wouldn’t even cause a ripple in the real-estate market. But in this tiny town of about 7,700 homes — owned by celebrities, politicians and businessmen such as Muhammad Ali, Alice Cooper, Dan Quayle, Mike Tyson and Peter Sperling — these foreclosures landed with a thud.’
‘The attitude of most people — even those in the real-estate business — was that economic hardship “doesn’t happen here,” says Jon Wall of JM Wall Development, a Phoenix custom homebuilder that was also building in less expensive parts of town.’
‘He says he knew the market was in serious trouble when the list of 12 build-to-suit projects he had been contracted for in Paradise Valley all went up in smoke, as buyers couldn’t find financing. Suddenly, nothing was moving.’
‘He sold his last spec home there in late 2008, taking a major price reduction and barely squeaking out a profit. Others weren’t so lucky. “We were crying the blues,” he says. “But a lot of (spec home builders) shut their doors and went under.”
http://realestate.msn.com/article.aspx?cp-documentid=23875607
“Foreclosure Alley Today!”
Is that anything like Tornado Alley?
Landlording is a business, just like restauranting. Or home improvement contracting.
Your success is not determined by imagining an unending stream of smart, tidy 800+ FICO professionals. It’s determined by how you deal with the adversities.
And how well you know the value of a dollar.
Adversities including failure to foresee a collapse in the real estate market bubble?
“an unending stream of smart, tidy 800+ FICO professionals”
Reporting for duty!
“Reporting for duty!”
+1 Never ever had a 30-day late in 40+yrs on my FICO report.
Why would anyone with a decent credit record buy at a point when Subprime Sam is handing out mortgages in amounts north of $500K like candy to people with weak credit histories?
See page 8:
http://www.lpsvcs.com/LPSCorporateInformation/CommunicationCenter/DataReports/MortgageMonitor/201402/MortgageMonitorFebruary2014.pdf
Low credit scores don’t get you the kind of debt that it used to…
Do you think that’s what is contributing to collapsing demand for housing?
In what cities will you find the most mortgage deadbeats still occupying the foreclosure? You guessed it!
Underwater Cities: San Jose CA, Washington DC, New York
http://www.realtytrac.com/images/reportimages/occupied_REOs_top_metros.png
Lol, Rochester is on the list. High up, I may add.
And why not? If the deadbeats move out, and the banks take ‘em back, and then the houses sell at market, everyone loses. The whole system is TBTF.
It’s like musical chairs… as long as the music never stops, it’s all good.
wow, 30k for a house in roh-cha-chester- I though HA would be happy
Don’t sweat it. Your shanty isn’t far behind.
Full of lead, with squirrels in the attic, chit backing up in the basement, $6k tax bill, etc.
In the 90’s these houses rented for $500-800 and artists/bands and cat ladies inhabited them. A lot of awesome porchin’ happened.
Does Rochester now have yoga neckbeard hippies with fixed- gear bikes thirtsy for craft beer? If so, these places could go for $3,760/mo. easy.
I just figured it out… Rochester needs legal weed.
Legal weed is the new Indian Casino.
“In the 90’s these houses rented for $500-800 and artists/bands and cat ladies inhabited them. A lot of awesome porchin’ happened.
Does Rochester now have yoga neckbeard hippies with fixed- gear bikes thirtsy for craft beer? If so, these places could go for $3,760/mo. easy.”
+1 You exhibit an interesting perspective; glad you’re posting.
That is funny .
BTW, Unkle Roger, a popular local DJ in Rochester, who I loved and spent some time with, was gunned down collecting rent. His killer remains unknown.
http://www.democratandchronicle.com/article/20121015/NEWS01/310150018/Unkle-Roger-homicide-cold-case
“…gunned down collecting rent.”
The risk of someone gunning you down is one of the hidden costs of landlording.
“Rent man”
http://picpaste.com/pics/769b86de20bfabda5f5897afdacd1f82.1397439801.jpg
Brilliant graphic