Real Estate Crash thread

[Rontele]

Well... If you would have had an "attorney" review the contract you might not have had this issue?

Sorry, sometimes just can't help myself. In my experience here in our market, the lighting and flooring are usually done as "allowances" and depending on buyers choices, they could owe more (or expect a refund - not often happens). Must not have been the case there?

Well, that is part of the problem. The contract states that it is included as a fixture in the house, but they let us pick the lighting giving us "x" as the budgeted amount (nothing in writing).

What ended up happening is that we picked some things, the developer picked others, our selections not blowing the allowance, but theirs being the source of the overage. Plus, they think we should cover the sales tax of the total cost of the lighting.

The thing is that the unit next door (which isn't sold yet) has nearly the same exact lights (except for a ceiling fan in the master bedroom, which I've said I'd pay for) and they won't be stuck paying the overages because it will come included with the contract price of the house.

We'll work something out. I'd expect them to at least cover half the cost of the overage (only a few hundred bucks)

[timvwcom]

We'll work something out. I'd expect them to at least cover half the cost of the overage (only a few hundred bucks)

I'd guess this approach will work fine... They have incentive to keep you happy as well as close the deal.

Enjoy the new place!!! When is the first party?

[ColMan]

I agree with that. There is a triplex on the 1800 block of Sherman that was just poorly conceived. They absolutely ruined the opportunity they had to put up a well designed duplex on a corner lot.

Our duplex fits in well with the changes happening in the 'hood. Incidentally, the developer of our property also developed the property next door as well as one on Washington and another on Pennsylvania. The floor plan is great, with no wasted and nothing but good, practical, and useable space. Plus, there is minimal lawn for upkeep, but a nice patio in the back for privacy.

I think I know the one you are talking about as my sister-in-law lives on the 1900 block of S Sherman.

Sounds like a nice pad. Guessing that the addition of a dog is next?

[Rontele]

I think I know the one you are talking about as my sister-in-law lives on the 1900 block of S Sherman.

Sounds like a nice pad. Guessing that the addition of a dog is next?

You should just walk by that place on Sherman. The living room is entirely useless and you'd have to be totally fucking nuts to buy the center unit.

The only thing good about it is that the side units have ridiculously awesome rooftop decks with mountain views.

No dog anytime soon. The future-Mrs.Rontele has severe allergies.

[Spats]

Spats, you're a fucking kook who rides a recumbent bike, but that doesn't mean I don't disagree with you on everything (just most things)

I suggest you read Chernow's book on the House of Morgan.

And you're a toolbox -- but after all, you did invent the London Broil, and I respect that

Thanks for the recommendation: I'll pick it up.

[Rontele]

And you're a toolbox -- but after all, you did invent the London Broil, and I respect that

Thanks for the recommendation: I'll pick it up.

Its a $$$$$ book.

[skier666]

When I see data reporting the median from the major metropolitan areas, I always think of how cities are broken down into very different neighborhoods. Take SF for example. Data for SF usually includes the SF Bay Area....which geographically is very diverse. SF proper, has so many different neighborhoods, that they act as separate cities themselves. So, I wouldn't take the median to mean much in places like SF. Look for the EXACT neighborhood and find out how much stuff has been selling.

EX. In our neighborhood (North Beach) a guy sold his brand new (2006-7 constructed) 2 BDR condo for approx $950K, paid approx $850K. Mind you, his place also went on the market a couple weeks AFTER all the subprime shit went down. Its a matter of supply and demand. Looking around our place its all 1906 Victorian style buildings. To be in a new building, is some nice security for the future.

Another person just listed 1,000 sq/ft, 1 BDR unit for $850K last week. I think this one should be a better indicator on the current market. I'll let you guys know what happens.

At the end of the day, the old rule of thumb seems to work...location, location, location.

[DisArray]

Housing prices in Weber county (Ogden) are up 20% over this time last year.

You mean the three houses that were bought by the Utah Real Estate association?

[Greydon Clark]

Spats, I was with you for a bit, but then you said…

The reason they can do this is because people don't understand money. Hint: if you didn't vote for Ron Paul, you don't either.

[meatdrink9]

You mean the three houses that were bought by the Utah Real Estate association?

For the majority of the state your sentiment is correct (so many inflated numbers), but Ogden actually went up in value and volume last year. Granted, the volume was only up by a few houses, but still pretty unbelievable given the current mess. Most of the rest of the state claimed that prices went up too.... meanwhile their volume went to absolute shit. Even in Ogden things are slower this year. More homes sitting on the market much longer. You better better price it well if you want to unload it.

[Benny Profane]

http://www.nytimes.com/2008/03/27/bu...nted=1&_r=1&hp

Equity Loans as Next Round in Credit Crisis

"The result is a nation that only half-owns its homes. While homeownership climbed to record heights in recent years, home equity — the value of the properties minus the mortgages against them — has fallen below 50 percent for the first time, according to the Federal Reserve."

[enlosandes]

My mortgage guy told me 2 months ago second loans are on there way out becuase with all the defaulting going on, the 2nd place loans were getting shafted. Makes sense, but still sucks.

[mcsquared]

I don't quite know what to make of that statistic. If there are two houses and one is owned free and clear and the other one was just bought with an 80/20 then there is only 50% equity in those two houses. I don't know if that makes any statement about the fitness of the the market in one way or another.

Article from this mornings paper: City Condo Prices: Sky's the limit!!
http://www.denverpost.com/breakingnews/ci_8709780

However, anybody who spends $700/ft to live in a condo obviously has more money than sense.

[Stu Gotz]

Banks have come to the horrible realization that a lot of borrowers have realized they can default on a second lien without risking foreclosure.

[Rontele]

I don't quite know what to make of that statistic. If there are two houses and one is owned free and clear and the other one was just bought with an 80/20 then there is only 50% equity in those two houses. I don't know if that makes any statement about the fitness of the the market in one way or another.

Article from this mornings paper: City Condo Prices: Sky's the limit!!
http://www.denverpost.com/breakingnews/ci_8709780

However, anybody who spends $700/ft to live in a condo obviously has more money than sense.

I just read that article too. I don't get living right in downtown, but that is just me. Where do you grocery shop?

If I had to hear one more time that the Glass House is THE place to live, I was going to puke.

I'm happy I had to pay less than $200/ft

[CUBUCK]

I just read that article too. I don't get living right in downtown, but that is just me. Where do you grocery shop?

If I had to hear one more time that the Glass House is THE place to live, I was going to puke.

I'm happy I had to pay less than $200/ft

There is something to be said for being able to walk to work, movies, coors field dinner, bars, etc etc while still having a car to access the mountains and yes you pay more for that. As they continue to build out more residential in downtown and get rid of those surface parking lots you are going to see alot more restaurants, grocery stores, dry cleaners etc etc and you will end up with a much more vibrant city that doesn't shut down at 6pm.

*I did buy a new condo downtown recently but not in glass house

[mcsquared]

I just read that article too. I don't get living right in downtown, but that is just me. Where do you grocery shop?

If I had to hear one more time that the Glass House is THE place to live, I was going to puke.

I'm happy I had to pay less than $200/ft

I agree with what Cubuck said. Living downtown isn't for everybody. But being able to walk downtown and to movie theatres, bars, restaurants is where it is at. I live just west of Riverfront park at the top of that hill and have been watching the development for quite a while. And part of why I bought where and when I did. Although not really my style either, it is going to be huge. Right at the central hub of all the transportation and within walking distance of everything. Lots of retail and other shops are going to go in. They are going to be building a grocery store in the near future and right now there is a vitamin cottage at 15th and platte which gets lots of business. I hope they get every dollar they are asking for. Because if they start getting 700/ft plus HOA fees of $2-3/ft/year I got a place just up the hill that has a large yard and a oversized 3 car garage that I'll let go for 750k

When gas prices double, and then double again, living within walking distance of all that stuff is going to be the place to be. And it is kind of a perfect storm for them right now. Baby boomers who are downsizing and young dinks like yourself are all competing for the same properties right now and have the greatest amount of disposable income.

[liv2ski]

Another person just listed 1,000 sq/ft, 1 BDR unit for $850K last week. I think this one should be a better indicator on the current market. I'll let you guys know what happens.

At the end of the day, the old rule of thumb seems to work...location, location, location.

I have read more than once that this time the high end market is holding up value/percentage wise better than the starter home market. Reason is, starter homes over the last 4-5 years were bought with little to no money down. A $1M+ home likely had at least 20% down on average. Which deal is easier to walk from and who has more dough to sit out a declining market? Not to mention it is the little guys that normally had to buy over their heads just to get into the great investment known as real estate. Now the market is correcting, everything costs more due to inflation, they are not getting raises to keep up with their monthly expenses, when they bought the home they did a Stated Income loan (because they didn't really qualify) and now they can't refi because Stated loans are history for the most part and they still don't qualify for a full doc loan. Lucky the index most of these loans are tied to has come way down in the last 6 months, or the average loan would be adjusting to 7.50%+ rather than 5.50% now.
Lots of people painted themselves into a corner over the last 5 years and if you have the cash, you may be able to pick up some good values for a long term hold in the next year.

[Rontele]

I agree with what Cubuck said. Living downtown isn't for everybody. But being able to walk downtown and to movie theatres, bars, restaurants is where it is at. I live just west of Riverfront park at the top of that hill and have been watching the development for quite a while. And part of why I bought where and when I did. Although not really my style either, it is going to be huge. Right at the central hub of all the transportation and within walking distance of everything. Lots of retail and other shops are going to go in. They are going to be building a grocery store in the near future and right now there is a vitamin cottage at 15th and platte which gets lots of business. I hope they get every dollar they are asking for. Because if they start getting 700/ft plus HOA fees of $2-3/ft/year I got a place just up the hill that has a large yard and a oversized 3 car garage that I'll let go for 750k

When gas prices double, and then double again, living within walking distance of all that stuff is going to be the place to be. And it is kind of a perfect storm for them right now. Baby boomers who are downsizing and young dinks like yourself are all competing for the same properties right now and have the greatest amount of disposable income.

Don't get me wrong, I love downtown Denver and my hope is what CUBUCK said: that the surface parking lots will disappear giving way to more buildings, with better restaurants, etc. Everyone who lives in the City and county benefits from that.

But I just don't see you getting TONS of value currently downtown. Our place isn't cheap, but for the same price downtown we would have probably only gotten something half the size.

And admittedly, I live a stones throw from two different light rail station, which negates the walking advantages to some extent.

[mcsquared]

Don't get me wrong, I love downtown Denver and my hope is what CUBUCK said: that the surface parking lots will disappear giving way to more buildings, with better restaurants, etc. Everyone who lives in the City and county benefits from that.

But I just don't see you getting TONS of value currently downtown. Our place isn't cheap, but for the same price downtown we would have probably only gotten something half the size.

And admittedly, I live a stones throw from two different light rail station, which negates the walking advantages to some extent.

Yea, I understand what you are saying. But I think the idea is that instead of downtown being a place you visit, it is a place you live. And sure your place would be half the size, but just think. You could have gotten some place twice the size of the place you are buying if you bought in westminster or parker. But you wouldn't do that because who wants to live way the fuck out there and be surrounded by strip malls and be hobbled by having to drive everywhere? The value will get there. It is going be less about square footage and more about amenities. If I was a single guy in my 20's I would be looking at the glass house right now. I would get a puppy and be up to my armpits in nubile easily impressed females with belly rings. But as a married guy in my 30's I think more about taxes, CD ladders and health insurance.

[Rontele]

Yea, I understand what you are saying. But I think the idea is that instead of downtown being a place you visit, it is a place you live. And sure your place would be half the size, but just think. You could have gotten some place twice the size of the place you are buying if you bought in westminster or parker. But you wouldn't do that because who wants to live way the fuck out there and be surrounded by strip malls and be hobbled by having to drive everywhere? The value will get there. It is going be less about square footage and more about amenities. If I was a single guy in my 20's I would be looking at the glass house right now. I would get a puppy and be up to my armpits in nubile easily impressed females with belly rings. But as a married guy in my 30's I think more about taxes, CD ladders and health insurance.

LOL. That puppy park is full of women asking to be slayed. The other thing is that I work downtown and need to get away sometimes

[timvwcom]

If I was a single guy in my 20's I would be looking at the glass house right now. I would get a puppy and be up to my armpits in nubile easily impressed females with belly rings. But as a married guy in my 30's I think more about taxes, CD ladders and health insurance.

Liar!

[meatdrink9]

It's good to hear the Downtown Denver properties doing so well. I've got two houses on the fringe of that area (there are very cool lofts a few blocks to the west, north and east of the homes and more being built all the time). I'll just keep holding on. If I just got 175 a sq ft for either property I'd make out like a bandit.

[rideit]

I have read more than once that this time the high end market is holding up value/percentage wise better than the starter home market.

Here the 'Starter Home' market is the strongest sector, IMO.
But a 'starter home' costs $350K, so...

[Nobody Famous]

Banks have come to the horrible realization that a lot of borrowers have realized they can default on a second lien without risking foreclosure.

Another interesting insight. Was discussing this very scenario recently with some beer buddies. They claimed the same thing, but isn't the collateral for the second mortgage the home itself, ... in theory the equity in the home above what is owed on the original mortgage. Which if that goes underwater the collateral becomes the good paying habits of the borrower?.

And we came up with this scenario. Suppose some in suburban NJ or Long Island got a second mortgage a few years back. He used the cash to buy into a second vacation/mountain home, or ever a condo in the mountains. So he has managed to transfer the equity in the 2nd home into his primary residence. But neither the 2nd home/condo nor primary residence can be sold quickly, and even if they could they have lost value. What happens in this case on a default?