August 27, 2007

ABC Nightline says the P word... "Panic"

Great series on the housing crash underway on Nightline. Here's their story about the condo panic in Miami - "Fools Gold". You're going to see 50%+ drops in real home prices (not "median", but "real" or "marked to market" price) in some of these bubble cities folks - no matter what the government, realtors on commission or the NAR tell you.


Also check out the expose on the mortgage lending meltdown here.

The MSM is good at one thing - reporting on the dead bodies at crime scenes. Too bad they weren't there when the crime was going on.

Real Estate Fool's Gold
Condo Fever in Miami Brings Profits, Then Panic

You can't miss the flocks of cranes that hover over Miami's skyline. They were hatched by a condo fever that seized the city and fueled what is now the biggest construction boom in the country.

Not long ago the only thing going up faster than buildings in Miami was the prices -- and Lucy Blanco wanted in

"It was going up so rapidly that I was fearful that if it went any higher I could not afford it anymore," she said. "So I needed to get it while it was still at a price I could afford…before it went out of my range.
"If we don't hurry up and buy something now," she said, "we're never going to be
able to buy anything."

In February 2006, Blanco bought a preconstruction one-bedroom unit in a condo community called Quantum on the Bay. She paid $465,000. Today, however, Blanco estimates the property is worth $100,000 less than what she agreed to pay.

44 comments:

Anonymous said...

I love it that people think they are going to be priced out forever. Where does this thinking come from? I guess 99% of American Sheeple consider forever to be a few years.

Anonymous said...

Lucy Blanco

Lucy Blanco

Quantum by the Bay

Quantum by the Bay

What more can I say?

What more can I say?

DinOR

Anonymous said...

Good thing she wasn't priced out forever

democrats r idiots said...

Democrat idiots want to bail that dopey woman out.

Anonymous said...

Don't believe it. A realtor called in on a talk show and said that he has not sold a home in months. So, he called the homeowners and suggested that they lower the prices. In 100% of the cases, the owners refused. They still believe that they will get the big money because they saw their neighbor get it in 2004/05. They don't realize that the party is over and think that some fool will eventually buy their property. This is what is going to cause our economy to slide into a recession/depression. Stagnation is already here, and lay-offs are a reality. But the homeowner will be the last to realize the truth. Greed is still in vogue.

Anonymous said...

Saw Kendra Todd on Fox Business block this morning. I'm convinced she needs an exorcism.

k.w. - southern ca. said...

What we see in Florida will also hit some of the many over-inflated areas of Southern Ca.

No one - who has recently house debted - wants to admit this will happen, but it most certainly will.

So many people had (and still have) this false notion that residential housing just keeps going up-and-up-and-up.

We're now at the point that so many house debters have priced themselves right out of the house they are living in without even realizing it.

Out at the peak said...

Who would be next in line to afford it at a higher price? That's the easiest question that I asked myself. And it set panic in my chest back in Q3 2005 (to get out). People need to learn how to think through things.

stuckinthecity said...

The MSM is good at one thing - reporting on the dead bodies at crime scenes. Too bad they weren't there when the crime was going on.
------------------


It is because they were being paid to look away with ad $$. Now that the $$ are gone so is their loyalty.

Anonymous said...

“Jones, a prognosticator often cited by Realtors’ groups, told agents that rashly approved mortgages, the worst of which he dubbed ‘time-bomb loans,’ would help keep the Florida housing market hobbled until 2009.”

“‘If you think it’s bad now, you haven’t heard the end of this,’ Jones said to audible groans from Realtors who’d enjoyed earlier pep talks from the likes of Gov. Charlie Crist.”

“Jones blamed a get-rich-quick ethos that drew gamblers into the housing market and encouraged bankers to make risky loans on the assumption the good times would roll forever. ‘What is the difference between flipping real estate in Florida and playing craps in Vegas?’ Jones said. ‘You get free drinks in Vegas.’”

“Jones described prospective home buyers as buzzards circling fresh highway roadkill, waiting for prices to fall further. He urged Realtors to speed up the process by confronting sellers with the reality of a glut that’s left 41,000 homes on the market in the Tampa Bay area alone.”

“‘We’ve got to sober up sellers,’ Jones said. ‘I don’t care what you paid for it.’”

Anonymous said...

http://www.petitiononline.com/bailout/petition.html

Support against a bailout!

Anonymous said...

By February '06, when Blano bought her overpriced condo, the bust was already underway and every RE agent in the country knew it.

In fact, I believe 20/20 (and Nightline?) had already done a little RE Bust expose by then, focusing on Florida condos.

Moral of the story: too many Americans believed their lying RE Agents back then. Some still do!

Sorry Blano, should have done your homework, Buyer Beware!

Anyway, thank God prices are finally correcting. Overpriced RE is a nightmare for all involved, buyers, lenders, and would-be sellers who now can't sell because they're stuck in the past.

Anonymous said...

Hey Keith heres a video youll like and they put u in the credits at the end!

http://tinyurl.com/yrbn5j

Anonymous said...

Not only that, it may be that we are truly headed for a worldwide depression....

http://tinyurl.com/yo5oyv

http://tinyurl.com/yw4aw7

Harleydog said...

If I speculate and make money, I am brilliant. If I lose I hire a lawyer, whine and claim I was swindled. Land of the free, home of the litigious.

Anonymous said...

Jim Cramer talking about bull dozing housing developments.

"Or maybe they just think that anything short of an FDR-era Agricultural Adjustment Act for homes, where we bulldoze whole housing projects instead of cornfields to get price stability, just won’t work."

Link below
http://tinyurl.com/2sn4bz

k.w. - southern ca. said...

As Peter Schiff mentioned -

"The market is going to drop,
I don't care where you are,
there is no safe place you can be"

"Year's of inventory, and the prices are going to collapse,
there is no way around it."

edwards for president said...

fight the foreclosures

http://tinyurl.com/ypgsjt

FlyingMonkeyWarrior said...

http://condovultures.com/index.php

HAHAHHAHAHA
Condo Vultures Realty, HAHAHAHAHAHA

Note Orlando Sentinel Story's are only posted for two weeks from the date of publishing.

Snippet:

Big real-estate slowdown spurs legion of condo opportunists

Maya Bell | Sentinel Staff Writer
August 26, 2007

MIAMI - The condo vulture loves raw concrete floors. They smell of desperation.

And desperation is what Peter Zalewski's newest venture feasts on.

Tinyurl: http://tinyurl.com/ytgyqd

Anonymous said...

The economic meltdown is already underway and not just in housing, it will affect all of the US economy. Forget housing, the next thing is going to be civil unrest in America.

Anonymous said...

Sept 1929

Anonymous said...

http://www.nytimes.com/2007/08/26/business/26housing.html?pagewanted=1&_r=1&hp

WOW!

the other trader said...

World wide DEPRESSION?
maybe in the U.S., but I doubt anywhere else. I'm sure there will be other countries feeling the slowdown, but THUS IS A CREDIT CRUNCH!!!
It has spilled over into the housing market first.
Why the housing first? Well, that is where most of the mal-investments are.
Next up? Credit Cards. Either the major carriers will up the interest,lower the limits, or both. (CC Companies have already raised rates, even for their BEST customers. I have not received a 0% CC solicitation in the last few months.)
Imagine no more credit cards?
What will people do?

The credit that is leaving the U.S. still exists, and will be thrown elsewhere. That will sustain growth for many countries. (BRIC comes to mind).
Most people think this is a housing bust, but it is a credit crunch.

The already lopsided real estate market is just the first to feel it.

So I must regress, worldwide depression? no.
U.S.'s Second Great Depression? probably.

so true said...

"reporting on dead bodies at crime scenes"

HA! that about sums it up perfectly

Anonymous said...

Keith gotta read this one!

http://tinyurl.com/yqdoh5

Anonymous said...

Just thought I would share. I was channel surfing last night and I came across the Suze Orman show. The caller was a recent condo buyer, I think in Florida someplace, and the value of her condo went down by about $50k. She can't sell, and can't rent it. Her ARM is resetting. She was desperate for help and decided to call the show.

Too bad she didn't decide to become a bitter renter. I couldn't imagine renting would have cost more that $50k over the last couple of years, and therefore would have been better off. Never to mention taxes, dues, and financing that extra $50k. Who knows whats in store for the market in the near future. The summer is over and with it the prime buying season. Also tighter restrictions on lending.

Markus Arelius said...

Southern California (Orange County) appears to be solid as a rock people. Where is the correction here?

3 bed, 2.5 baths coming on the market every date at a measly $675,000!

Need I remind you also that the median gross income is $67,000!??

$67,000, for the love of God!!!

These homesellers (desperate homedebtors) are all smoking crack!

Anonymous said...

"This is what is going to cause our economy to slide into a recession/depression."

No, I blame the renters who simply refuse to play fair and buy a home.

Anonymous said...

No need to fear. The Democrats will bail out everybody. Free houses and free healthcare.

Mr.Mortgage said...

A Distorted View:Existing Home Sales.
http://www.thegreatloanblog.blogspot.com/

Out at the peak said...

I checked out some new model home developments on Sunday in Sonoma County, CA. The first place I went to was the only place with notable foot traffic. They had a nice promotion going on with giveaways (something involving a limo); they want your contact information at any cost.

One of the reps opened up a new bottle of champaign and exclaimed, "This better be empty by the time I get back." I just had orange juice instead. I wouldn't want to get drunk and make the worst purchase of my life.

These were McMansions, and overall, they were nice.

The day just got crazier as agents got more and more desperate. One guy totally lost it. He knew what people were saying about the housing market, but he will do anything to make a sale. "I've bought cars for people. I've paid off their credit cards. I'll put plasma TVs in every room. I won't just shave $20K off the price, I'll put that $20K to pay down your interest so that you can 'save' $700-$800 a month." He even knows people are saying it's a stupid time to buy. He was coaching a scenario where someone calls you stupid for buying. "But do you remember all those credit card bills we had? They are all gone." "Things are really going to turn around in Feburary/March. The market consolidation needed to happen. I've worked in this business for seven years, I've seen bad times before."

My girlfriend was so scared that we had to hop the fence to avoid seeing him a second time after looking at the models.

Anonymous said...

So I must regress, worldwide depression? no.
U.S.'s Second Great Depression? probably.


Uhhhh. . . the US is about 40% of all consumption in the world. The only reason sclerotic economies like France and Japan aren't in cataclysmic recessions is that US consumers keep buying the stuff they build that they cannot sell at home.

Americans have been buying using cheap, easy credit. When that credit runs out, no more buying. Adios American consumption -- which will drop by half or more. Adios Japanese, French, German, Chinese and Canadian economies. Adios global economy, hello global recession.

Anonymous said...

I wouldn't touch Florida's real estate market even with Casey Serin's d*ck.

Anonymous said...

Still getting zero percent cards just last month no fees one year free money. A good credt score does wonders. (32 years of good credit. Agree though the worse is yet to come. Massive layoffs so the fat cats keeep thier 100 million jobs. Civil unrest ? as probable as the 1964 riots. Except this will be multi cultrual poor rioting. Cops will be outnumbered. National guard is all in IRAQ. Better own a waepon.

Garth said...

Keith,

Sorry, but I fear your economic illiteracy is showing. "Real" in this case means "adjusted for inflation" by which I mean that as this fiasco drags out over 5+ years and as true inflation runs around 4-6% per annum (as opposed to the crap the gov't publishes) the "nominal" (non inflation adj price -- i.e. published price) hit won't seem so bad

dude said...

As George Bernard Shaw once wrote, "We learn from history that we learn nothing from history"...
And so it goes with our weekend memory mentality. In this current age more people are asking "who has it better, Shiloh or Suri"(MSN), than are asking more pertinent questions, such as, what does fiscal resposibility have to do with me and my immediate need for self gratification.

Anonymous said...

The Ground Zero of the housing mess

50% OFF BEAZER`s NEW HOME PRICE !!!!!!!!

Aug.27: Just how bad is it for homebuilders right now? CNBC’s Jane Wells reports from a Beazer development in Beaumont, Calif.
CNBC

Watch this video: http://video.msn.com/v/us/msnbc.htm?f=00&g=0961374f-410c-46f8-982b-57ad12e0402d&p=Source_CNBC&t=s55&rf=http://www.msnbc.msn.com/id/20461630/&fg=

Anonymous said...

*

Housing debacle makes the


C B S evening news!

Anonymous said...

The USA consumes 25-30% of all manufactured goods in the world. If we go we take pretty much the whole ball of wax with us.

TM said...

The credit that is leaving the U.S. still exists

No, it doesn't. The crunch is happening in Europe and Asia is set up for a bust too.

Who bought so many securities full of crap CDOs and is so heavily invested in a free-falling dollar? Who is experiencing massive overproduction and stock and property bubbles? Who's economy is driven overwhelmingly by the spending of the American consumer?

China. Don't be looking to them to keep the world economy afloat.

Anonymous said...

Europe and Australia Central Banks are infusing capital into those institutions dumb enough to buy into the CDO market the US was pimping.
Now, does any reasonable, intellegent, reader believe they will be quick to purchase any of our future debt, particullary if we lower interest rates on that debt?

Shakster said...

ABnbcbsnfokt can drop dead.

Anonymous said...

Anonymous said...
So I must regress, worldwide depression? no.
U.S.'s Second Great Depression? probably.

Uhhhh. . . the US is about 40% of all consumption in the world. The only reason sclerotic economies like France and Japan aren't in cataclysmic recessions is that US consumers keep buying the stuff they build that they cannot sell at home.

Americans have been buying using cheap, easy credit. When that credit runs out, no more buying. Adios American consumption -- which will drop by half or more. Adios Japanese, French, German, Chinese and Canadian economies. Adios global economy, hello global recession.

August 27, 2007 11:03 PM

----------------------

What's to stop the Europeans and Asians from just printing money and distributing it to their populace so that they can pick up the "hard work" of doing the consuming that the bankrupt Amerikans won't be doing? After all, the US has been paying for all those imports with potentially worthless IOUs anyway. The Chinese, for one, are a long way from having a plasma screen in every home... and they'll be building out their infrastructure regardless of what happens to the American economy. Same thing goes for India, the second most populous country in the world.

Anonymous said...

Markus Arelius said...
Southern California (Orange County) appears to be solid as a rock people. Where is the correction here?

3 bed, 2.5 baths coming on the market every date at a measly $675,000!

Need I remind you also that the median gross income is $67,000!??

$67,000, for the love of God!!!

These homesellers (desperate homedebtors) are all smoking crack!

August 27, 2007 5:05 PM

-----------------------

Case-Shiller for June shows a 4.1% YOY decline for LA/OC and a 7.3% YOY decline for SD. Add in a reasonable estimate of inflation and you've got real (inflation adjusted) home prices in Southern Craplifornia dropping by 10%+ on a YOY basis. It's just that a watched pot never boils -- home prices don't drop as rapidly as the price of pets.com stock...

The few homes that are selling are selling for well below the crack-smoking fantasy asking prices.