Real Estate Crash thread

[skier666]

Hopefully they cut the mortgage interest deduction....I'm sure that would do wonders to the current market climate.

http://online.wsj.com/article/SB1000...889337142.html

[4matic]

Roubini. Doom doom doom

Roubini gets pwned:

James Altucher: I Was Right On The Stock Market, And Roubini Was Wrong:

http://www.cnbc.com/id/38105326/S_P_...0_Stock_Picker

SP was 1022 on this interview. almost 1200 now.

The latest from Roubini the Fraud:

Germany, doom doom doom. Meanhile: German Dax at 5 year highs:

http://www.bloomberg.com/news/2010-1...l-reports.html

"The German economy is nowhere near pre-crisis levels yet," Roubini told Capital on Monday. "The current growth rate may look good on paper, but that is mainly a statistical effect."

[Benny Profane]

Roubini gets pwned:

James Altucher: I Was Right On The Stock Market, And Roubini Was Wrong:

http://www.cnbc.com/id/38105326/S_P_...0_Stock_Picker

SP was 1022 on this interview. almost 1200 now.

The latest from Roubini the Fraud:

Germany, doom doom doom. Meanhile: German Dax at 5 year highs:

http://www.bloomberg.com/news/2010-1...l-reports.html

"The German economy is nowhere near pre-crisis levels yet," Roubini told Capital on Monday. "The current growth rate may look good on paper, but that is mainly a statistical effect."

Jesus fucking Christ. Listen, I'll say it one more time, He's an academic macroeconomist who gets asked every now and then where he thinks one asset class, corporate equities, will be in the somewhat near future, and, he shouldn't, but he answers wrongly. You shouldn't even care wtf he predicts as far as that's concerned. But, anyway, find me two or three who have been right during the same period. I mean, fairly consistently over the last five years. Yeah, I thought so. How about all the V shaped recovery mofos who saturated the airwaves just last year? Line them up and let them repeat their idiocy.

[XXX-er]

Hopefully they cut the mortgage interest deduction....I'm sure that would do wonders to the current market climate.

http://online.wsj.com/article/SB1000...889337142.html

Y'all are aware we don't get that up here ?

how does it work ?

[Benny Profane]

Y'all are aware we don't get that up here ?

how does it work ?

People who rent help pay the mortgages of people who go into debt for a home.

[XXX-er]

I knew you could write off interest down there but I don't know the mechanics of how it works

so do you get to write off ALL the interest paid on a mortgage payment?

isnt most of the monthly payment in the early years of a mortgage the interest ?

wouldnt folks be more interested in maximizing the tax deduction than paying off their mortgage ?

good for tax writes offs in good times/rising market , bad when the market goes for a shit and you are left holding the bag ?

[Benny Profane]

I knew you could write off interest down there but I don't know the mechanics of how it works

so do you get to write off ALL the interest paid on a mortgage payment?

isnt most of the monthly payment in the early years of a mortgage the interest ?

wouldnt folks be more interested in maximizing the tax deduction than paying off their mortgage ?

good for tax writes offs in good times/rising market , bad when the market goes for a shit and you are left holding the bag ?

correct.


There is talk of eliminating it, but it won't make it past the doors of academia. The barely breathing housing market would be put six foot under for a very long time if that happened.

[skier666]

Ghirardelli retail nears foreclosure

San Francisco Business Times
Date: Friday, October 29, 2010, 10:09am PDT

The shops at Ghirardelli Square are being taken back by their lender, Royal Bank of Scotland, after a standoff with the developer.

Michael Geller, a spokesman for Royal Bank of Scotland, confirmed that the bank is foreclosing on the property, but declined to comment further.

Todd Chapman, CEO of Ghirardelli Square owner JMA Ventures, said that JMA is current on all debt service and has never missed a payment. The issue, according to JMA’s carefully worded statement, is that RBS is preventing JMA from exercising two extensions that remain on the $55 million loan.

http://www.bizjournals.com/sanfranci...reclosure.html

Why is this interesting? JMA owns Homewood & Alpine Ghettos.

[liv2ski]

Y'all are aware we don't get that up here ?

how does it work ?

On your primary home you can deduct the interest and property taxes paid to reduce your taxable income.
Rental properties, you complete a schedule E that lists all income (rent) minus all expenses (including depreciation). You normally have a lose in the early years which may reduce your taxable earnings.
Frankly, I like the Canadian way better for two reasons. 1) People are not looking at the tax write off to justify a bigger payment and 2) I have been told there are no capital gain taxes when you sell.
I am not sure if that was just on a primary or rentals too.

[4matic]

Ghirardelli retail nears foreclosure



http://www.bizjournals.com/sanfranci...reclosure.html

Why is this interesting? JMA owns Homewood & Alpine Ghettos.

Perhaps those are the liabilities that prevented the refi of Ghirardelli?

[retirwntm]

very hard to divine what the full situation is from a few paragraphs but the only details that offer any insight to me are:

“The break relates to a technical covenant as opposed to a monetary breach,” Chapman said. “We’re trying to buy it back, and it’s not working out.”

what this intimates is that while JMA claims they've been paying the requisite principal and interest on the $55 million loan to RBS, one or multiple financial covenants were tripped, which puts the deal in to a technical default. usually, in these cases, if the bank or bank group finds the default a minor problem, the borrower is charged a fee and the deal is amended. if there are more serious problems, the bank / group escalates. this would seem to be the latter. unless RBS sees more value in the property (which seems unlikely given CRE issues in general, but who knows on this property in specific), i'd think if JMA could have found a way to buy out the debt, RBS would have let them be on their merry way.

a very speculative read based on very limited details .02...

[Hugh Conway]

i'd think if JMA could have found a way to buy out the debt, RBS would have let them be on their merry way.

Dunno about that, RBS certainly wasn't willing to with Liverpool. Hardball everywhere

[powder11]

Frankly, I like the Canadian way better for two reasons. 1) People are not looking at the tax write off to justify a bigger payment and 2) I have been told there are no capital gain taxes when you sell.
I am not sure if that was just on a primary or rentals too.

In Canada, primary homes with rental suites get the best of both worlds. You can write off the interest on the percentage of your rental and still avoid capital gains on the sale. Straight up rentals get whacked with capital gains, but you can write off the mortgage interest.

[Cono Este]

My friend Omar, my local petroleum and tobaco rep, lost his house to foreclosure.

He paid 250k for it, then borrowed another 480k when it went up leaving him with a payment of 5k. He runs a gas mini market!

Before I felt sorry for him i asked/told him he was a net winner!

How sad. barf.

[XXX-er]

In Canada, primary homes with rental suites get the best of both worlds. You can write off the interest on the percentage of your rental and still avoid capital gains on the sale. Straight up rentals get whacked with capital gains, but you can write off the mortgage interest.

IME the suite in the basement was a good way to go , the place doesnt get fucked up if you choose tenants wisely and they are lesss likely to fuckup if you are always there to watch them

you also are supposed to pay tax on the rental income

[XXX-er]

So last night on CBC news they did a story on canadians buying up foreclosed homes in the US

25 % of the forclosed homes in the US are being bought by canadians except the paperwork of the forclosure may not have been done right ... the canadians may not own the US homes they thot they bought

http://www.cbc.ca/video/#/News/Featu.../ID=1631878670

[Hugh Conway]

So last night on CBC news they did a story on canadians buying up foreclosed homes in the US

too bad their aren't enough of you cretins

[XXX-er]

Ya,Canada your biggest trading partner , a foreign country with a huge land mass which is bigger than the excited states but only has the population of california and 90% of those people live within 100miles of the canada US border ... I just hope they all stay there eh?

But the excited staes is canada's biggest trading partner so maybe we could just ship ya all dem frenchies hell we'll even give ya Celine Dion eh?

maybe you can get the brits or some other white/english speaking/not fussy about bad food /relatively benign focus group to buy into the game ?

and then the brits could hate the frenchies ?

just sayin

[frozenwater]

This shocked the hell out of me.

House across the street, nice place - good location went for sale 3 years ago for 215k, didn't sell and was taken off the market.

Early this summer it hit the MLS for 150k on short sale, was on a few weeks and taken off, story was her parents bailed her out.

For sale sign back up today, went to the MLS and it is on for 115k short sale.

Holy fuck.

This is absolutely destroying my homes value.

[grrrr]

Slipping and sliding. That $175,000 house was taxed at $205,000 last year, and Zillow still thinks it's worth $260,000. I think it'll sell for $149,000, unless the market REALLY tanks.

[365wp]

We bought our place from the bank in May for $100k less than its sell price in 2004. Another foreclosure up the street just went for $100k less than our house, and it's 1k sqft bigger. It had pipes burst and the pool needs a liner, but still.

What's crazy is apparently somebody offered the bank $200k more than the recent sell for the place up the street and the bank turned them down. lol.

These deals are outliers, though, at least where we are. We looked at a short sale that was $350k or so eight months ago. It's still on the market. Nice house, great shape, main road. Anything in the $350k range was on a busy road or needed a bunch of work. We made an offer on our house after it had been on the market 29 days and there were two backup offers within days. The last three sales on the street in years have all been foreclosures that went fast. Weird.

Two months after we closed, my mortgage broker sent me an e-mail and we're refinancing at zero cost and nothing rolled in to the loan to lower the payment by $100. These are crazy times.

[Toadman]

This shocked the hell out of me.

House across the street, nice place - good location went for sale 3 years ago for 215k, didn't sell and was taken off the market.

Early this summer it hit the MLS for 150k on short sale, was on a few weeks and taken off, story was her parents bailed her out.

For sale sign back up today, went to the MLS and it is on for 115k short sale.

Holy fuck.

This is absolutely destroying my homes value.

This same scenario is going on in my neck of the woods too. House was auctioned off down the street a few weeks ago. Don't know if it sold or not. Probably just picked up by the bank. Several houses have been coming on then going off the market. It's the same thing every time. House goes up for sale. A few weeks go by. A Price Reduced sign goes up. A few weeks go by, and the for sale sign comes down, and the for rent sign goes up. A few weeks go by, a moving van shows up. Six months later a moving van shows up, the people move out. A few weeks later a for sale sign goes up. Repeat. Have seen this for 2 years now on at least 3 different houses in my 'hood.

[meatdrink9]

This shocked the hell out of me.

House across the street, nice place - good location went for sale 3 years ago for 215k, didn't sell and was taken off the market.

Early this summer it hit the MLS for 150k on short sale, was on a few weeks and taken off, story was her parents bailed her out.

For sale sign back up today, went to the MLS and it is on for 115k short sale.

Holy fuck.

This is absolutely destroying my homes value.

Short sales are often advertised at insanely low prices just to get an offer in. If the Realtor doesn't have an offer he can't approach the bank to negotiate the short sale. It's rare to see the shockingly low price short sales actually go anywhere. The bank does the numbers and if they'd make more foreclosing that's the route they take. The short sales aren't hurting your value unless they sell at that price. Only actually sold properties count in comps.

However, when we tried to sell our home in Farmington all of our competition was all these crazy short sales. Using my super MLS all access pass I saw what these people had paid for their homes in the past. All were at least 6 figures upside down on a short sale. Sometimes as much as 200K. The bank is going to foreclose and do better rather than eat that much loss, but it does make the market a mess as they clog up the system as buyers think they're going to get these crazy deals and sit waiting forever for the bank to approve them.

If I were them I'd walk and mail in the keys rather than do a short sale that upside down. You're done with it in a foreclosure. In a short sale your credit still gets fucked only slightly less, but you can get 1099'd for the deficiency (pay taxes as though it's earned income), or have a deficiency judgment which you make payments on, or there is also the possibility that if anytime in the next 6 years you're back on top of things financially the bank can still come after you. You also hose your neighbors trying to sell a little less as you don't have a home on the market at a crazy low price that all buyers write offers for when in reality will never actually get approved by the bank.

[Hutch]

If I were them I'd walk and mail in the keys rather than do a short sale that upside down. You're done with it in a foreclosure.

There is a 90-day period during which the lender can file an action for a deficiency judgment in the amount of the difference between the amount owed and the fair market value of the property on the date of the foreclosure. Many larger mortgage lenders are not pursuing these, but they could, and smaller banks typically will if the difference between the property value and the outstanding balance is significant enough to justify paying legal fees.

[montanaskier]

This is from a local real estate agent but good info anyway.




As you can see, 2010 is really establishing itself as a year of recovery. Although we have only closed merely half the volume of 2007 (record breaking year), we are at least close to doubling 2009's total volume. With a reduction in pricing across the board, this is truly the best time in nearly 20 years to buy in the Vail Valley. I hope to see you this winter season.



YTD - September, 30
1992 $ 149,798,400.00

1993 $ 181,351,833.00
1994 $ 236,744,175.00
1995 $ 230,709,006.00
1996 $ 290,072,960.00
1997 $ 417,159,999.00
1998 $ 484,626,560.00
1999 $ 562,432,486.00
2000 $ 743,597,910.00
2001 $ 620,869,816.00
2002 $ 710,723,013.00
2003 $ 600,352,694.00
2004 $ 823,418,148.00
2005 $ 997,868,148.00
2006 $ 1,081,061,640.00
2007 $ 1,403,177,280.00
2008 $ 1,073,717,348.00
2009 $ 406,049,266.00
2010 $ 745,539,238.00
Average $ 611,873,926.78

I know that the condo place where I live has 2 in foreclosure and a couple of more that are just for sell and all are MASSIVELY cheaper than what I paid. Hope I don't need to move in the next 5 years or so.