It's sad (and yet so predictable) to watch the end of a classic Ponzi scheme. The insiders and first-in are out, and it's the last-in and suckers who are left holding the bag. Here's the stories of some bag-holders in San Diego when the music stopped:
Sherry Sangan is a Realtor with Prudential California Realty who lives and lists in University City. She said the past couple of years have been tough for sellers in all but the best University City condo projects.
"I have buyers who bought two years ago over in Lucera (a condo conversion project) that are getting less right now to sell it than they paid, and that doesn't include our commissions," said Sangan.
"They're getting killed," she added.
Adam Rappoport, a Realtor who has a number of clients in University City, said he's heard a few horror stories from condo owners in the area. Though his clients preferred that their story not be told directly, Rappoport said he knows of a number of people who bought their condo or condo conversion within the last three years and have since run into trouble on their loan repayments.
Buyers were simply expecting prices to carry on increasing, Rappoport said; when the market stagnated, they have found themselves unable to re-finance and therefore getting burned.
"Because of the financing vehicle they took, now not only can they not sell it for what they hoped to get for it, but they're probably a good $20,000 below the price that they bought it for, and they're going to have to pay commissions and closing costs on top of that," Rappoport said.
March 10, 2006
San Diego condo converstions - "They're getting killed"
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7 comments:
Let's bring the blog up to date with the following:
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I'd say it was sometime in 2002 that I started to read articles talking about rising values in condos, and how they were turning out to be good investments.
I knew then, we were coming close to the top. I would not have said at that time if it would be 2002, 2003, or 2004... but I knew it would not be long in the scheme of things.
Condos are ALWAYS the last boat to rise in the tide and the first to sink.
I remember the same thing happening in Ocean City MD about 30 years ago. High-rise condos were selling to the well-heeled and investors for $75K (big money back then). Young RE "geniuses" were becoming instant millionaires. Two years later the same units were being auctioned by the banks for $12K.
The Greater Fool theory has survived all these years, and human nature hasn't changed one bit.
Nothing beats a good blogging trip, but I think I have to get back to work on my own real estate sites. May as well stop on a high note, which your blog seems to be. Thanks for the read. Visit my site if you have a chance.
internet affiliates - I had a nice exploration on this site. I will return again with more comments.
This is an excellent blog. Keep it going.You are providing
a great resource on the Internet here!
If you have a moment, please take a look at my seller financing site.
Have a great week!
On 9/7/2006, Keith issued his "Housing Manifesto", declaring that he is "rooting for an epic housing collapse, a disastrous recession, the collapse of the stock market, a complete replacement of our current partisian leadership, a questioning of our country's current economic model, and a severe and historic financial meltdown......Period."
How has the market reacted to his call for change?
9/7/2006 Keith issues Housing Manifesto
9/8/2006 11,392.11 Dow up 60 points
9/11/2006 11,396.84 Dow up 5 points
9/12/2006 11,498.09 Dow up 101 points
9/13/2006 11,543.32 Dow up 45 points
For those playing at home, that is 4 days out of 4 that the market has gone up since Keith rooted for its epic collapse. Oh yeah, Keith's beloved Gold and Oil are in the crapper.
God Bless America
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