Real Estate Crash thread

[Eldo]

An ideal situation here in Canada for people wanting to leave the rat race behind. Residential real estate prices in the big cities are still at or near historic highs, while recreation properties in most areas have dropped by up to 30 per cent (with the exception of a few places like Whistler).

I sold my house in Calgary earlier in the year and recently bought a small condo to live in on the mountain at Kimberley, B.C., a nice community with a mid-size family ski resort (2,500' vertical and 1,800 acres of terrain).

The previous owners of the condo was a couple from Florida who (from the way negotiations went) were obviously desperate to sell.

Still adjusting to the small town pace of life, but enjoying the lifestyle so far. And really looking forward to being ski in/ ski out this winter instead of driving five hours total every ski day. Although I still plan to road trip to other hills, I doubt I'll be doing 15,000 km a year for skiing anymore.

[LeeLau]

Congrats eldo on the move! Foreclosure lists of secondhomes areas are nice and thick in the OK area

[Eldo]

Thanks Lee. I am pretty happy about the change of scenery. Nice to step out the door and see forests and mountains, rather than concrete and various gang members shooting it out in the local shopping centre parking lot.

I'd like to also buy some land in the north Shuswap before prices go back up, if they ever do, to have a place near a lake for the summers.

[Hugh Conway]

Nice upgrade in life Eldo, hope it's a good winter for you.

[f2f]

eldo, how much cheap AB beer should i bring to gain a spot on your couch this winter?

[liv2ski]

Although I still plan to road trip to other hills, I doubt I'll be doing 15,000 km a year for skiing anymore.

Good for you Eldo, now your livin my dream. I just try and console myself that I am lucky to live at the beach where I do, can go surfing any time there are waves and only have to drive about 10,000 miles a year to get my season ski fix in Enjoy your winter.

[meatdrink9]

Here's a rough edit that shows some of what I've been doing with residential property in Ogden. I was asked to do this to help promote an upcoming rental website. This is still the rough cut, but so far I like where it's headed. Participating in the ad felt like a win/win:

http://vimeo.com/29582597
pw: rentler2011

[Cono Este]

If youve got the cash and credit now, buying a rental property is a sweet deal. The way banks are appraising property, they are basically asking for 40% down. That is whats killing the country right now.

[reganized]

Looking at the prices in Boston, would you feel this way?

If youve got the cash and credit now, buying a rental property is a sweet deal. The way banks are appraising property, they are basically asking for 40% down. That is whats killing the country right now.

[liv2ski]

If youve got the cash and credit now, buying a rental property is a sweet deal. The way banks are appraising property, they are basically asking for 40% down. That is whats killing the country right now.

CE, the banks have 0 input on appraised values, nor does anyone else in the deal anymore. The appraisers love that no one can say shit to them anymore regarding value. I see lots of N/O loans with 20-25% down. You just have to qualify. My advice, look at properties where 75% of the monthly rent covers the new PITI payment. The less you have to put down to achieve that, the better and try not to buy in a war zone.

[liv2ski]

wsjlogo.gif
http://finance.yahoo.com/loans/artic...mod=loans-home

"Joseph Reilly lost his vacation home here last year when he was out of work and stopped paying his mortgage. The bank took the house and sold it. Mr. Reilly thought that was the end of it.

In June, he learned otherwise. A phone call informed him of a court judgment against him for $192,576.71.

It turned out that at a foreclosure sale, his former house fetched less than a quarter of what Mr. Reilly owed on it. His bank sued him for the rest.

The result was a foreclosure hangover that homeowners rarely anticipate but increasingly face: a "deficiency judgment."

Forty-one states and the District of Columbia permit lenders to sue borrowers for mortgage debt still left after a foreclosure sale. The economics of today's battered housing market mean that lenders are doing so more and more.

Foreclosed homes seldom fetch enough to cover the outstanding loan amount, both because buyers financed so much of the purchase price—up to 100% of it during the housing boom—and because today's foreclosures take place following a four-year decline in values.

"Now there are foreclosures that leave banks holding the bag on more than $100,000 in debt," says Michael Cramer, president and chief executive of Dyck O'Neal Inc., an Arlington, Texas, firm that invests in debt. "Before, it didn't make sense [for banks] to expend the resources to go after borrowers; now it doesn't make sense not to."

Indeed, $100,000 was roughly the average amount by which foreclosure sales fell short of loan balances in hundreds of foreclosures in seven states reviewed by The Wall Street Journal. And 64% of the 4.5 million foreclosures since the start of 2007 have taken place in states that allow deficiency judgments.

Lenders still sue for loan shortfalls in only a small minority of cases where they legally could. Public relations is a limiting factor, some debt-buyers believe. Banks are reluctant to discuss their strategies, but some lenders say they are more likely to seek a deficiency judgment if they perceive the borrower to be a "strategic defaulter" who chose to stop paying because the property lost so much value.

In Lee County, Fla., where Mr. Reilly's vacation home was, court records show that 172 deficiency judgments were entered in the first seven months of 2011. That was up 34% from a year earlier. The increase was especially striking because total foreclosures were down sharply in the county, as banks continued to wrestle with paperwork problems that slowed the process.

One Florida lawyer who defends troubled homeowners, Matt Englett of Orlando, says his clients have faced 20 deficiency-judgment suits this year, up from seven during all of last year.

Until recently, "there was a false sense of calm" among borrowers who went through foreclosure, Mr. Englett says. "That's changing," he adds, as borrowers learn they may be financially on the hook even after the house is gone.

In Mr. Reilly's case, "there's not a snowball's chance in hell that we can pay" the deficiency judgment, says the 39-year-old man, who remains unemployed. He says he is going to speak to a lawyer about declaring bankruptcy next week, in an effort to escape the debt. The lender that obtained the judgment against him, Great Western Bank Corp. of Sioux Falls, S.D., declined to comment.

Some close observers of the housing scene are convinced this is just the beginning of a surge in deficiency judgments. Sharon Bock, clerk and comptroller of Palm Beach County, Fla., expects "a massive wave of these cases as banks start selling the judgments to debt collectors."

Fucking ouch. You better check with an attorney to see if your loan is subject to the deficiency judgement and hold off on filing BK until you see if the bank is coming after you with a deficiency judgement.

[Atomic Vomit]

Barclays seeing "triple dip" in housing prices...

http://www.dsnews.com/articles/barcl...ces-2011-10-14

Article says they predict another 6 to 7 percent, but think 15 to 20 percent more unlikely. My personal "let it tank-o-meter" (sold by Benny USA) says the 15 to 20 percent is a more likely bet.

[Benny Profane]

You gotta love this new protest thing....



As far as that "triple dip" prediction thing, well, here's the real problem: http://www.calculatedriskblog.com/20...entory-at.html

The millions and millions of people who, technically, aren't near REO, but really really want to sell. Someday.

[13]

I don't have time to wade through 72?! pages, so I'll just post this and hope it's not a re-run:

http://www.miamiherald.com/2011/10/1...mes-could.html

Check out the map. It may be an eye-opener for some of you.

[meatdrink9]

I listed a very nicely remodeled 2/1 brick home, with a new roof, new furnace, hardwood floors, stainless appliances, stone counters etc... a month ago for under $70K. I've had 1 call. Last night I dropped the price to $65K. I'm blown away by how dead the SFR market is. We're into the house roughly $42K and we'll rent for $650 so the returns will still be great, but I definitely expected more than 1 call. On the other hand larger commercial deals have been moving pretty quick. 5 of my last 7 deals have been commercial. I listed ~6 acres of land last Friday for just under $500K and I think I have a buyer on the hook already.

PS, I am stoked on the Occupy Wall Street movement. I really hope it goes somewhere.

[liv2ski]

I don't have time to wade through 72?! pages, so I'll just post this and hope it's not a re-run:

http://www.miamiherald.com/2011/10/1...mes-could.html

Check out the map. It may be an eye-opener for some of you.

Interesting map. Some areas that I read were hardest hit in CA and AZ were only around 26-33 months inventory, where as other spots in Wyoming were much higher. Long story short, many areas likely have a ways to fall in values before this mess is resolved. Cool map. Thanks for the link.

[Nobody Famous]

What does the collective say about the downward revision of home sales estimates over the past three to four years?

"NAR ... over-estimated home sales by 14.3% between 2007 and 2010, meaning that 2.9 million fewer homes sold during those years than thought earlier. "

Link: http://online.wsj.com/article/SB1000...419917484.html

[Benny Profane]

http://blogs.reuters.com/felix-salmo...ic-of-the-day/

[liv2ski]

^^^^Benny, Iceman gets pissed when we post this negative nelly shit up. You better stop it or he will start stalking your posts too.

What does the collective say about the downward revision of home sales estimates over the past three to four years?
Link: http://online.wsj.com/article/SB1000...419917484.html

Baaaaaawaaaahaaaaaa. All the books are cooked. It is the new Amerikan normal to do so as in, "if your not cheating your not trying".

[Benny Profane]

Wha, wha, whatdidIsay?

[Bobby Stainless]

The real estate market is officially in the shitter.



Ill take the one giving the thumbs up!

[liv2ski]

^^^ I karumba!!!!

[powder11]

The funny part in all of this is that I recently refinanced my mortgage and am now paying almost a third less every month because interest rates are almost NOTHING and the bank even tried to offer us more money with the deal. I didnt take any, but I thought those days were over.

[jfost]

... tried to offer us more money with the deal. I didnt take any...

ummm did you not learn anything in the last few years? If you get this chance, TAKE THE $$$!!! Always take the $ really...

[LeeLau]

The funny part in all of this is that I recently refinanced my mortgage and am now paying almost a third less every month because interest rates are almost NOTHING and the bank even tried to offer us more money with the deal. I didnt take any, but I thought those days were over.

Canadian banks are weird. They keep offering to extend my LOC and offer me new loan products even though I never draw any of it down and have never expressed any interest in drawing any. Meanwhile clients who are trying to start a new business get the runaround on a tiny startup loan that they're willing to secure with other assets. It's plain dumb.