Real Estate Crash thread

[retirwntm]

Oh, really.

OK, tell me how in the world they can put any sort of market value on residential real estate right now right here. And, you know very well that good bank bad bank shit never happened, because, they didn't know and still don't know what their so called assets are worth, as per my first sentence. Let's not go near the games they're playing with CRE. Nobody has a clue to CDS exposure, because they probably have instructed a VP not to tell them just in case they're asked in front of Congress or a similar tribunal in the future, and have to lie. They're just fucking floating on a pool of shit, and raising a drink every day to Hank Paulson, Timothy Geithner, and Ben for paying their bonus, again.

Its great to have conspiracy theorists and big bank free radicals like you, BP. But some of the things you say are purely dartboard conjecture.

1. Residential: it's the largest problem for the largest commercial banks. But what does market value matter? If a bank has a loan, it is either performing or NPL. If its performing, the bank collects principal and interest. If its an NPL, it needs to be written down.

Is there a game going on here WRT inventory, NPLS, and foreclosure? Of course. That game is called survival. Or detente. For owner of loan and property at times. It took Japan a dozen or so years to write down most debts. The same process will happen in the US. Some banks are zombies due to resi. BAC is never going to earn its way out. Could all the banks be insolvent if some draconian measure were instituted that said all loans must be written down to market ASAP or some other rule. YES. BAC would be first dead. This is the whole Taibbi premise. It's also a MAD scenario. People and banks are hopelessly intertwined.

Recent conference calls with JPM & WFC led to them admitting they are now starting to recognize and write down HELOC losses as sympathetic default rates (correlation is almost 1) on first lien mortgage and corresponding HELOCS or other second liens.

2. Good bank / bad bank happened at problem banks. Period. There is so much proof it's not worth arguing. Google Citi Holdings for example. Now again, just because you ring fence these bad assets does not mean they somehow disappear. But they are written down or sold off over time.

3. CRE is the same as resi only on a much smaller scale. Most CRE deals were structured shorter term so either have come back to or will come back to market sooner. What games are they playing specifically? If CRE is overhung, it's either written down or it's picked off by specialist property management groups at cheap prices from banks that shouldn't have been apprenticing in CRE in the first place. But the process is happening - these deals are being sold off and the banks have already taken massive hits on much of it. There's not that much left at inflated values.

4. Every bank knows its net CDS exposure per counterparty and then all risk is rolled up and reported as total market risk. These risk reports are released to CFO's and CEO's. They are discussed. At risk meetings. I've sat on them with Bob Diamond and Ellen Alemany, weekly. Whether any regulating body yet knows the overall picture of all those puzzle pieces is a genuine on going issue from an overall regulatory concern.

Most of the banks have settled multiple suits with different agencies already, and CEO's aren't having to appear before Congress every month. That already happened.

Sure, when the crisis went down, the banks were saved and a lot of greedy fuckers were saved and continue to survive and thrive.

[retirwntm]

Come on, Hugh. I don't work in banking anymore and never loved what I did when I did it. I'm no apologist for a gaggle of cocksuckers. But there are some facts that get completely either spun or entirely ignored. That's when I like to check in, even if that means someone so experienced as yourself calls me a fluffer for the industry.

[cramer]

I'd argue the only major unknown now at the big banks is legal. For instance, how much is BofA on the hook for all it's and Countrywide's collective pos mortgages should there ever be a class action suit or continued investigations and fines by state and US AG's the DOJ, etc.

They arent on the hook for shit. They've shelled out a good 20 billion over the last 9 qtrs. Paid us taxpayers back, sold off a ton of shit and shored themselves up. Class action because people made stupid decisions? Isn't going to happen. The only thing that is going to happen and has been happening is bofa mopping up the mess of a company they bought. Once the fog settles, they will own the largest portfolio of loans in america and its already taking off again on the west coast.

There is a cycle out here. Believe it or not, california is that fucking great of a state to live in. Will we see prices we saw before, NO. Will we see our houses jump up 100K, Yes, we will see them rise over the long run. Its not a myth ladies, this is the best area pretty much on the planet to live in. Beach, mountain, cities, hookers and blow. Where else you gonna live and get that within a couple hours? There's a reason its expensive to live here. My .02 is well, location and weather.

[powder11]

Benny's conjecture get's pwn'ed!

[LeeLau]

BIS has a decent recap about the size of derivatives exposure - its still alarmingly large especially the Euro banks. I don't want to sully this thread with actual facts so won't bother posting the links. Don't want Benny fucktard's head to explode

[LegoSkier]

There is a cycle out here. Believe it or not, california is that fucking great of a state to live in. Will we see prices we saw before, NO. Will we see our houses jump up 100K, Yes, we will see them rise over the long run. Its not a myth ladies, this is the best area pretty much on the planet to live in. Beach, mountain, cities, hookers and blow. Where else you gonna live and get that within a couple hours? There's a reason its expensive to live here. My .02 is well, location and weather.

All the nice features here doesn't make it any less depressing that I make nearly six figures and still can't afford a closet (ok, maybe a closet in ghetto Oakland or Hayward). And now that maybe I am nearing having some decent cash for a down payment on a lower end house I have to worry about shit for inventory and competing with all cash investors who suddenly decided investing in Bay Area rental properties is the new thing to do. Problem is here or SD is pretty much all there is for Biotech and SD is way too far from Tahoe.

[4matic]

All the nice features here doesn't make it any less depressing that I make nearly six figures and still can't afford a closet (ok, maybe a closet in ghetto Oakland or Hayward). And now that maybe I am nearing having some decent cash for a down payment on a lower end house I have to worry about shit for inventory and competing with all cash investors who suddenly decided investing in Bay Area rental properties is the new thing to do. Problem is here or SD is pretty much all there is for Biotech and SD is way too far from Tahoe.

I lived in San Mateo for 15 years. Hayward now.. Peninsula is really nice but, do you take advantage of the lifestyle? I miss the peninsula but I'm happy with my house for less than half the price in Hayward area. I moved here so I didn't have to commute fwiw.

[liv2ski]

SD is way too far from Tahoe.

And Tahoe is way to far from the fun surf in San Diego, so I content myself with many days at the beach and 30 in the snow at Mammoth and a hand full in Tahoe and Utah each season. Of all the cities I have been to, San Diego still wins for an over all great place to be. But ya, you really need to like surfing to make that claim.

[cramer]

And Tahoe is way to far from the fun surf in San Diego, so I content myself with many days at the beach and 30 in the snow at Mammoth and a hand full in Tahoe and Utah each season. Of all the cities I have been to, San Diego still wins for an over all great place to be. But ya, you really need to like surfing to make that claim.

You'll be hard pressed to find anyone who has lived in SD that isnt trying to move back to SD. at least up here in the bay area. I've meet person upon person who is either from or lived down there and they loved it down there. You arent the first or id imagine the last that has told me its the best place they've lived in. Alot of these peeps have lived all over, so I know their opinion counts.

[meatdrink9]

Some local RE news and actually ski related as well. Powder Mountain sold to Summit Series for 40 mil. Could be interesting on a few levels.

http://www.betabeat.com/2012/03/01/s...lion-03012012/

[H0G]

Turn key, and decent properties in Denver are ON FIRE right now. I showed some buyers 6 properties last monday, by Friday, there was only 1 left. Properties are disappearing in a hurry. Our supply is down 40% and there are bidding wars going on. If you are in the metro area and are thinking of selling, seriously consider it.

[Hugh Conway]

Some local RE news and actually ski related as well. Powder Mountain sold to Summit Series for 40 mil. Could be interesting on a few levels.

http://www.betabeat.com/2012/03/01/s...lion-03012012/

Definitely interesting. Should be good for your neck of the woods investment wise if things work out.

[Shredhead]

That's a big if. I bet they loose their ass!

[liv2ski]

That's a big if. I bet they loose their ass!

I am with you. $40 Million for Pow Mo? Shit, I hope they already have the zoning approval to build the luxury condos, more lifts and the airport next door.

[meatdrink9]

The mountain got tired of the county and became its own city to try and push development further. There's been some creative problem solving up there. It will be interesting to see what happens. Big development has been rumored for years. I might actually ski there from time to time if they put a lift on James peak.

[CS]

All the nice features here doesn't make it any less depressing that I make nearly six figures and still can't afford a closet (ok, maybe a closet in ghetto Oakland or Hayward). And now that maybe I am nearing having some decent cash for a down payment on a lower end house I have to worry about shit for inventory and competing with all cash investors who suddenly decided investing in Bay Area rental properties is the new thing to do. Problem is here or SD is pretty much all there is for Biotech and SD is way too far from Tahoe.

It isn't just the Bay area. In Fresno/Clovis we are trying to get into a bigger place with a couple acres and there is just no inventory. Any inventory that there is is either way out of our price range or one that just get's bid up by cash investors looking to flip, so we get hosed. Perfect example was a cool place out in the country on 5 acres with a basement (unheard of around hear). Timing for us was off and a couple weeks before we had the money ready on our side a guy picked it up dirt cheap, is putting $100k into and and is going to ask double what he paid. Awesome.

[Benny Profane]

That's a big if. I bet they loose their ass!

Well, I doubt they'll make any money. But it seems to be a boys club of geeky rich tech kids, so a million ain't that much to each of them. Sorta a tech nerd Yellowstone Club. The question might be, why would they jump on a plane and drive a few hours from SLC airport to essentially nowhere when Tahoe is so much closer to those people, with a scene already built in? Is there a restaurant anywhere close to that place that would appeal to millionaires?

[meatdrink9]

Is there a restaurant anywhere close to that place that would appeal to millionaires?

I'm working on leasing that space this morning. And I'm opening a bar that I think would appeal to that crowd. However, all of this has been in the works since last August so it's not something that was done based on the sale of Powder Mountain, but rather the overall shift in demographics for the area the past 4 years or so.

[Shredhead]

Meat: Your doing good things in the area. I am sure you'll do well and be an asset to the valley. I appreciated your help, but I just have too many friends in the RFV and I knew in my heart, that's were they'll end up planting me in the ground.

Pow Mow's a nice hill, but they need to replace almost all of the infrastructure. These guys don't seem like they have the pockets or the expertise, to finish a project of this magnitude.

[AKPogue]

Meat: Your doing good things in the area. I am sure you'll do well and be an asset to the valley. I appreciated your help, but I just have too many friends in the RFV and I knew in my heart, that's were they'll end up planting me in the ground.

Pow Mow's a nice hill, but they need to replace almost all of the infrastructure. These guys don't seem like they have the pockets or the expertise, to finish a project of this magnitude.

Why do they need to replace it?

[Shredhead]

Why do they need to replace it?

Because it's really old?

[meatdrink9]

Shreadhead, no worries. I agree with the state of Pow Mow. I had a free ticket there a couple of years ago and ended up leaving by 11 am (on a 8" pow day). If you made a turn you came to a stop. Too flat. I worked there in high school and it was fun, but it lacks sustained vert/steeps. I think the place could be interesting if James Peak gets a lift. I am interested to see what these guys do with the area. It seems like a cool group people and I hope their entrepreneurial spirit will spill out into other ventures in the local area.

[AKPogue]

Because it's really old?

It still works doesn't it? I actually like the place like that.

[iceman]

Accidentally clicked on page 1 instead of the current page...this thread has been going on for six fucking years! Not quite sure what to make of that.

[Rontele]

Accidentally clicked on page 1 instead of the current page...this thread has been going on for six fucking years! Not quite sure what to make of that.

Benny needs to get a life and stop delivering pizzas.