Real Estate Crash thread

[khakis]

Who knows if this will actually go anywhere, but it's a pretty cool idea

http://money.cnn.com/2009/12/29/news...tune/index.htm
http://www.hantzfarmsdetroit.com/

that is freakin cool. Wonder if you could ever make the numbers work to buy a block and grow red pine

Speaking of slums, wonder what the castle laws are like in Michigan?

[Spats]

Who knows if this will actually go anywhere, but it's a pretty cool idea

http://money.cnn.com/2009/12/29/news...tune/index.htm
http://www.hantzfarmsdetroit.com/

It would be even cooler if the people who have already been urban farming for years could get the same tax exemptions as the rich guy who knows jack shit about it but thinks he can make a big profit on building a subdivision.

[khakis]

yeah maybe he should, like, get some help from the Michigan State ag extension service or something

By the way, khakis must have gotten his latest issue of This Old House Magazine yesterday too. Because I was pondering similar things.

checked it out last night...that neighborhood looks cool, but I think a big old industrial building downtown would be cooler

[Tye 1on]

a REO track home in a vegas suburb is the last thing I want to buy. They can bulldoze those for all I care.

Vegas will come back. Maybe not to levels of the last decade, but, never underestimate the capacity for Americans to spend whatever money they have to have adult fun.

Just starting down this road. Looking at REO's between Strat/Sahara and downtown. I think Vegas will have a slow but strong rebound, with much better growth in the downtown/affordable gaming properties. Would sure appreciate any words of wisdom, feel free to PM, thanks...

[LaBelle23]

The wife and I are in the process of closing on a house in Evergreen, CO. We looked at around 20 houses. Everything from new listings, to short sales, foreclosures, bankruptcies, and even some on the market off and on for over two+ years. By all appearances, the market in Evergreen is a bit sheltered in regards to home prices. I don't think there has been a big downfall, with prices holding about where they would have been 4-5 years ago. So long as an owner has held for that length of time, they aren't going to lose their shirt. Also noticed quite a few homes being flipped, and some very good candidates for flipping.

Final purchase prices was more than 25% off of the intial listing price in Summer 2008. Financing has been very easy for us to do lack of any debt and available cash for 20+% down; we've been able to get mortgage agents to compete for our business.

My family has lived there 20 years now, so with a little broader perspective on the area, yes it has been a little more sheltered, but it has taken a big hit. Our house was worth 3x what it was purchased for in '91 3 years ago, but judging from the comps on the street that have sold lately it is down to 2x in value (about $250K less). They want to sell, but can't bring themselves to it yet. You said you paid 25% less than what the house was originally listed for which would support this.

[GeoMatt]

My family has lived there 20 years now, so with a little broader perspective on the area, yes it has been a little more sheltered, but it has taken a big hit. Our house was worth 3x what it was purchased for in '91 3 years ago, but judging from the comps on the street that have sold lately it is down to 2x in value (about $250K less). They want to sell, but can't bring themselves to it yet. You said you paid 25% less than what the house was originally listed for which would support this.

And for more comparrison, we are moving into the area from Ft. Collins. When we came up here a over a year ago, we decided to rent. Obviously a wise decision. We live in what I've been told was a very desireable nieghborhood that was built in the last 5-7 years. Initial home prices started in the $380-600k range during the build up; however, with more than 4 houses on the market on our street, some in foreclosure, we have seen water-front homes go for under $300k (~40% loss in 5 years) in the current market.

[365wp]

Just take your down payment directly to Vegas and throw it down on roulette.

The bank came down $13k to $416k on the foreclosure we were trying to buy. I don't think we're going to go any higher, it needs floors, bathrooms and a kitchen.

[Benny Profane]

Just starting down this road. Looking at REO's between Strat/Sahara and downtown. I think Vegas will have a slow but strong rebound, with much better growth in the downtown/affordable gaming properties. Would sure appreciate any words of wisdom, feel free to PM, thanks...

Cash is King, from what I read. Location, location, location. Make sure it's walkable to a lot of things. Be careful of new towers with little occupancy - buildings like that have to be 80% full to make it work.

[skier666]

^^^^^

Don't forget college towns, they have jobs.

[Benny Profane]

Foreclosure mystery: Why can't conservative Utahns afford their mortgage?
Utah missed the big property run-ups in California and elsewhere, but it's No. 5 in foreclosures, according to a new RealtyTrac study.

By Laurent Belsie
posted February 11, 2010 at 11:35 am EST

What is it about Utahns?

During the housing bubble, they led the nation in bankruptcies. Now that the bubble is bust, they're among the top states in foreclosures. A RealtyTrac report released Thursday showed they had the fifth-highest foreclosure rate among the states, with 1 in 231 homes receiving a foreclosure notice in January. That's nearly double the national rate and not far from No. 4 Florida's rate of 1 in 187.

The US foreclosure rate actually fell 10 percent from December's level – and Utah was down nearly 12 percent – but RealtyTrac suggested they could surge again in coming months if last year's pattern holds true.

It's relatively straightforward why the housing bubble walloped Florida and the other Big Four foreclosure states (Nevada, Arizona, and California). Home prices there more than doubled since 2000 and people who stretched to buy those homes were pummeled when real estate values plummeted.

But Utah homes rose only half that much during the decade. What's going on in Utah?

"It's a lot of younger people who spent way, way beyond their means, absurd amounts of money trying to keep up with their folks," says one Utah resident who helps counsel financially troubled families at his church. They're "cool, nice, wonderful people, but an awful lot of them don't know how to spend money very wisely."

In mid-decade, when Utah was tops in bankruptcies, various commentators pinned the blame on Mormon religious and cultural practices, such as tithing, creating large families, buying homes at a young age, and as one critic put it: "the pressure in Mormonism to be, or at least appear, financially successful as proof the Lord is blessing them."

Indeed, Mormons in 2004 had a bankruptcy rate that was approaching twice that of the national average. But a 2007 study by two Harvard Law School graduates found that rates among non-Mormons in Utah were even higher, suggesting that religion, if anything, was restraining bankruptcies.

So what's causing it? The Harvard researchers suggested it might have to do with low wages and high medical costs. Another research project pointed out that two-thirds of bankruptcy filers in Utah had at least one dependent child, twice the national average.

"Due to the large size of Utah families, it would invariably place Utah among the top 15 states in bankruptcy filings," writes Jerry Basford, professor of personal finance at the University of Utah, in an e-mail.

Last year, a study by two Brigham Young researchers attributed a big part of the problem to garnishment laws. Because Utah makes it easy for lenders to garnish the wages of borrowers who don't pay up, people are more likely to file for bankruptcy to avoid companies automatically taking part of their paychecks, the researchers said. The study also pointed to the high number for repeat filers for bankruptcy and the effect of having a large proportion of young, middle-class people earning $30,000 to $60,000 a year as reasons for Utah's bankruptcy surge.

Having lots of young people in your population is a good thing for an economy unless, for whatever reason, they decide to buy homes they can't really afford.

[montanaskier]

MAYBE...MAYBE about to have a 3rd or 4th contract on our house..I can't remember at this point. Another rent to own deal hoping to close in 6 months or so. We'll see. At least someone is going to rent it. We'll see.

[mock vomit]

MAYBE...MAYBE about to have a 3rd or 4th contract on our house..I can't remember at this point. Another rent to own deal hoping to close in 6 months or so. We'll see. At least someone is going to rent it. We'll see.

GOOD LUCK... again!!!

[ass-to-mouth]

Wife and I were talking about Detroit last night. Never been, but there are supposed to be some unbelievable historic buildings downtown. Any chance of Detroit ever recovering economically?

After checking out these pictures, I would have to say not in our lifetime.

http://www.flickr.com/photos/detroit...7601861458499/

[khakis]

After checking out these pictures, I would have to say not in our lifetime.

http://www.flickr.com/photos/detroit...7601861458499/

wow...have been looking through those off and on all day. Some really incredible images there. So sad...

[Benny Profane]

Wife and I were talking about Detroit last night. Never been, but there are supposed to be some unbelievable historic buildings downtown. Any chance of Detroit ever recovering economically? Albeit at a much-contracted level? Though it would suck to fly into town to check on an investment property and find a bunch of bums squatting there, warming up over a fire they built from your crown moulding.

This should interest you. My take is, forget about those This Old House downtown nightmares, and think about something here, which is, after all, the place where all the money from downtown moved over the last few decades and is now in trouble. Yeah, yeah, the prices are high, but, really, wait a year or two.

http://detnews.com/article/20100215/...for-homebuyers

[mtndave]

The Shadow Inventory Of Troubled Mortgages Could Undo U.S. Housing Price Gains

http://www.standardandpoors.com/rati...=1245206147429

[khakis]

This should interest you. My take is, forget about those This Old House downtown nightmares, and think about something here, which is, after all, the place where all the money from downtown moved over the last few decades and is now in trouble. Yeah, yeah, the prices are high, but, really, wait a year or two.

http://detnews.com/article/20100215/...for-homebuyers

suburbs (even nice, old ones) are part of the reason for this mess...I believe in a longer-term trend toward centralization

[liv2ski]

I read this today and pretty much agreed with his analysis.
http://www.oftwominds.com/blogfeb10/...sing02-10.html
Prices are determined by supply and demand. The current illusion of "recovery" has been fueled by two massive manipulations of the market: the supply has been artificially limited by the withholding of distressed homes in the "shadow inventory," and the demand has been artificially juiced by stupendous "socialist" government pumping via subsidies, guarantees, backstops and purchases/ownership of "private" markets.

The next phase shift down will be triggered by market forces responding to the asymmetry between supply (high and rising) and demand (low and falling). It doesn't take any more houses coming on the market to trigger the next leg down; it will only take a decline in demand as the pool of bottom fishers is exhausted and potential buyers realize the "recovery" was purely government-orchestrated illusion.

[Moeghoul]

The 250,000 and less has bottomed, the 250,000-750,000+ is the next shoe to drop. The ship is still sinking.

[GiBo]

Typical strategic default senario here:
http://www.sfgate.com/cgi-bin/articl...MNAO1C7TT1.DTL

But it's the comments that I find fascinating. Being someone who would greatly benefit from a strategic default, but choose not to for moral reasons that are feeling more and more ambiguous, I find the two camp's (walk or not walk) banter interesting.

It seems that there are two moralities: business and personal. While they use to be closer to the same, over time, the business morality has gotten blurry- to where bottom line trumps everything and a person's word or handshake is only as good as the deal. Once the deal sours, all bets are off in the business world.

Businesses walk on commitments all the time if they don't make financial sense any more. So what? This makes it OK? Do we really want the morals used in big business to be used by individuals? It seems most people say yes. At least in the case of mortgages and banks.

But I'm wondering, is this a special case or slippery slope? Is this just people's anger at the current situation and they are lashing out at the banks? It just seems odd to me how many people think it's perfectly fine to walk away from a commitment.

[cramer]

Typical strategic default senario here:
http://www.sfgate.com/cgi-bin/articl...MNAO1C7TT1.DTL

But it's the comments that I find fascinating. Being someone who would greatly benefit from a strategic default, but choose not to for moral reasons that are feeling more and more ambiguous, I find the two camp's (walk or not walk) banter interesting.

It seems that there are two moralities: business and personal. While they use to be closer to the same, over time, the business morality has gotten blurry- to where bottom line trumps everything and a person's word or handshake is only as good as the deal. Once the deal sours, all bets are off in the business world.

Businesses walk on commitments all the time if they don't make financial sense any more. So what? This makes it OK? Do we really want the morals used in big business to be used by individuals? It seems most people say yes. At least in the case of mortgages and banks.

But I'm wondering, is this a special case or slippery slope? Is this just people's anger at the current situation and they are lashing out at the banks? It just seems odd to me how many people think it's perfectly fine to walk away from a commitment.

I commented on that arcticle earlier today.

i dont know, id probably had walked too. The person who bought my house paid 500+K for it. I paid 200+K. he'd be 300K in the whole if he had stayed. My house would have to more than double in value for him to have even been even. I just dont see the point of paying that monthly when its worth jack squat now. The good news is i got a newer house for less than i was paying in rent. I'm glad the market imploded.

[GiBo]

See, this is what I mean: "don’t see the point of paying that monthly when its worth jack squat now." When did "because you agreed to" stop being the answer to that? There just seems to be a double morality on this. If I borrowed $500 from you to buy some skis, but took a nasty core shot on the skis the first week- devaluing them- and then came to you and said: "They're only worth $300 now. Here take them. I'm out." You'd say I was an a-hole. But if I do that to the bank I'm financially astute.

[Hutch]

I hear from borrowers all the time as a justification for strategic defaulting that "the government will cover the bank's loss anyway, who cares?" Setting aside for the moment whether or not this is true (to some extent it certainly is, at least with conforming loans on primary residences), is it better or worse to rip off the US Government or a bank?

In Utah, strategic defaulting is far more difficult than in California, because the banks can and do pursue post-foreclosure deficiencies on primary residences if the deficiency is large enough.

[cramer]

See, this is what I mean: "don’t see the point of paying that monthly when its worth jack squat now." When did "because you agreed to" stop being the answer to that? There just seems to be a double morality on this. If I borrowed $500 from you to buy some skis, but took a nasty core shot on the skis the first week- devaluing them- and then came to you and said: "They're only worth $300 now. Here take them. I'm out." You'd say I was an a-hole. But if I do that to the bank I'm financially astute.

What business does the bank have giving out a half million dollar loan in the first place. Yes, a half a million fucking dollars. For a 1850 sq ft, 3br 2 ba starter home??? I think everyone who bought a house from 2004-2007 is an idiot and the banks are even stupider for handing out loans to these people. My wife and i make a combined 100K+ and no fucking way id pay a HALF MILLION DOLLARS for a STARTER house and any one with some common fucking sense should have known that too. The banks are no better in this mess and they got a fucking bailout. If they dont want to modify these peoples loan, then fuck them. They can have their condo sit for a year or 2 with no money coming in and end up selling at the modified loan price. Stupid if you ask me.

[GiBo]

I still don't get it. I mean I get the numbers, but every one knew the deal going in. Why should the bank eat it? Or the gov?

I was divorced around '04. My ex bought me out of the old house and I had a wad of cash for a down. I needed a house so I bought one. I could afford it then and can now. Yet I still have people telling me I'm stupid for not walking- it's a bussiness decision bla, bla, bla...