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Friday, September 25, 2009
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49 comments:
So I saw these two yesterday and it made me really wonder about how delusional some people are. The start price of both of these houses was identical, yesterday they were only 10% different, although they dropped the price 100K yesterday so they are now 20% different. I just can't imagine spending that much on a TH...
http://franklymls.com/FX7120340
http://franklymls.com/FX7126690
Another remodeling question for you all:
Anyone had a walk-up or egress window installed in an otherwise sealed basement?
Two houses we looked at have nice basements, but are basically fire-traps. We'd like to finish them (or at least have that option). I have no clue how much that job would be. $2k? $20k?
Thanks.
link
More on shadow inventory:
Henry Fishkind, an Orlando-based housing economist, says some banks tell him they “are holding back [foreclosed-home] inventory” to avoid depressing prices any more than necessary. “It’s in their interest” to avoid flooding the market, and regulators haven’t forced them to do so, he says. That suggests that the backlog of homes headed for foreclosure will be stretched out over several years. That will be less disruptive to the housing market, Dr. Fishkind says but may mean that it takes longer for financial institutions to shed dud assets and regain the health required to extend new credit.
I know some people have poopooed the idea that the banks could be consciously doing this, but this doesn't surprise me one bit. Still, I less regard this as manipulation of the market than I do what the govt is doing with their stupidly low rates and the tax credit bribe.
More on SAIC:
The WP is running an article that says only 100 people are actually transferring from Sand Diego to McLean.
This is from the San Diego Tribune:
The company said only 20 positions are slated to be transferred from San Diego to McLean as part of the headquarters move. Those relocations should be completed by summer 2010, and the workers have been notified.
Correct me if I'm wrong, but if the Tribune numbers are correct, Tim Kaine just paid $425,000 for each employee to transfer.
Note: The other 1100 or so positions are contract positions. Meaning, SAIC will need to grow its business 6.4% over the next three years to get the $8.5M from Virginia.
Kaine was rolled.
Kevin-
I know of 5 homes right off the top of my head (LoCo & PWC) that are Foreclosures that have been sitting empty now for over a year.
Yes, the Banks can hold them off the Market to get a higher price.
But, how high will that price be if the house is full of Black Mold & the siding is rotting off??
(F)SP: depending on the grade, a basement egress windows costs around $5,000. An egress window I did in Arlington had to go down about 7 feet from the typical, small basement window. For basement remodels, Arlington Co. requires them and I think Fairfax Co. might also. Also, Fairfax Co. has requirements on ceiling heights for finishing basements.
For Hayfield Grad: no one was talking about "the incident" yesterday.
contrarian, you can do better than that. That article makes it sound like the housing market is in a slump. Slump? Like I said, from you we expect something more like a
cataclysm
catastrophe
cave-in
crackup
disintegration
or such.
Please try harder next time.
housebuyer,
It's for those who like a luxury home, but don't want to contract the yardwork themselves.
But you know those "9 ceilings" are hard to beat...
(I can't imagine spending that much on a home, period, so who am I to talk?)
spunky said...
"Yes, the Banks can hold them off the Market to get a higher price."
Right, but this seems so futile. Sure, you don't want them all on the market at once, but how long can they let the water build up behind the dam? From another source, same topic:
I don’t agree that any of these reasons are the real reason why banks aren’t foreclosing.
Banks make more money by NOT foreclosing on homes. Banks are dragging out the foreclosure process for their own selfish reasons. Until the day they foreclose, the amount of money owed to them is an asset…sure, it’s an asset that isn’t paying interest payments…but it is still an asset. The day they foreclose, a $400,000 asset could become a $150,000 asset and a $250,000 loss.
Multiply that loss by 10, 20, or even 30 times leverage and there are several million dollars worth of new loans that the bank can’t make.
Faulty government programs and doctored accounting rules have produced the fiasco before us: There are roughly 4 million homes that should be foreclosed on but they won’t be any time soon. This enormous can is continuing to get kicked down the road.
Economists are predicting a recovery. They say that our various programs are making an impact. In reality, all they’ve done is kick our can of reckoning a little further down the road.
link
We have heard this explanation before as well, and it does sound like the most likely (and complicated AND futile) reason. What happens if these rules change. Did the fed's announcement on Wednesday in any way set the stage for the banks to realize these losses sooner, hence dump them in the near future?
"Contrarian said...BTW, what makes you all think D.C. won't be affected when we have millions of foreclosures nationwide?"
Who said it wont be affected? Absent the foreclosures, the market could snap back at a 8-10% clip, fulfilling roberts fantasy. However, WITH the foreclosures the market will only recover at a 1-2-3% clip - as VA investor, CRT and Cara suggest.
Heres a serious question, why does "affected" necessarily mean it "keeps going down" to you? Why can it not be matters of degree?
"Contrarian said...To support CRT's argument, they would have to print hundreds of trillions of dollars (M1 currency) and they simply aren't going to do that."
HOOOOOLD UP there Contrarian. Forgetting for a moment your argument in this thread was "foreclosures" (that is til I assume you saw my point and switched to your end all be all deflation), I am curious as to what you just said here.
If I recall correctly when CRT initially pointed out the direct handout of $$ to people would cause inflation, YOU DENIED that this was even hypothetically possible, in that it would prove your argument that "deflation is UNSTOPPABLE" was false.
Are you now admitting that if the government did what CRT said, that deflation would not be this unstoppable force which no human being could possibly subvert? In sum are you admitting that your prior argument was wrong???
Cara,
Remember this REO I posted before? It's back on the market. Since it stayed UC only for about a week I'm guessing it's the inspection...
No way the bank would disclose the issues, even if my agent nudge nudge, wink wink the LA, right? I just hate to start the process not knowing what to expect.
TBW,
I understand they don't get the money if they don't "create" the jobs, but in SAIC's normal business operations they can probably meet this goal
Does CSC get $8.5k if they create 1200 jobs. Does any other company? Just because they moved 20 people? How is that a good deal for the state? And how is that fair to other companies creating jobs?
anielarke,
Thanks. I got one contractor get back to me today and said $8k and I had read a thread on a builder forum that said $4k, so that's good to know. Definitely worth it as part of a full basement remodel, considering the usable sqft you add.
contrarian
don't buy in too hard to unfunded medicare and SSA
obligations. The feds can change the rules so that
"Medicare requires a 20 dollar copay for all visits,
that would slash billions off as people stop
over using medicine. Medicare could invoke productivity measures, and stop paying for
medical errors. "
" SSA can change entry ages. If they reset the
retirement age to 70, from 65, that's about it.
the who system will be fine.
"Contrarian...You honestly think they are going to print another $798 trillion in currency? 400 times today's amount? 800 times last years amount? Really?"
To give you a direct answer NO. I do not believe they will (especially given how deflation seems to be in check as shown in this graph but thats another story that you wont answer).
http://1.bp.blogspot.com/_P6hcLu1z9Nw/Sox5IUwFGfI/AAAAAAAAAm4/F6mamndMoe0/s1600-h/infll.gif
Now that I have directly answered your question, lets see if you can finally answer the question you have avoided for 6 months:
I looked up the initial debate and it has never ever been a question of "will". CRT said they wont do it now, I say they wont do it now, no one on gods green earth says they will do it now.
The remaining question is "can". Specifically, CAN they print enough money to stop deflation? CAN they turn on the printing press and add a bunch of zeroes to the dollar and drop it from helicopers? CAN they turn us into zimbabwe and risk a invasion with china?
Under the elliott wave deflationary argument NOTHING CAN STOP THE WAVE. You have said as much yourself -- no action by any individual human being or group can stop this supernatural force of nature.
Yet by your (seemingly) own admission, you now suggest that if (not that they "will" but "if") they do what CRT said deflation would stop dead in its tracks.
So I ask you again, a direct question which I assume you shall again, seek not to answer or just run away from:
IF THEY PRINT 800 TRILLION, 1,000 TRILLION, WHATEVER -- CAN DEFLATION BE STOPPED?
contrarian said: "There are $700 trillion in derivatives...Got that, The Anonymous? $1.7 trillion in currency, versus more than $800 trillion in liabilities."
I will assume your post is an innocent mistake. The $700 trillion your article refers to is the notional amount of those derivatives and is not only NOT debt, but it is NOT even a meaningful number.
The notional amount refers to the number of currency units, shares, bushels, pounds, or other units specified in a derivative instrument, not to the current value of the bet being made based on the notional amount.
For example, you and I enter into a derivative contract whose value fluctuates based on the GDP of Canada. Our agreement is that I pay you $1 if Canadian GDP is above $1.3 trillion in 2009 and you pay me $1 otherwise.
Notional value of this derivative: about $1.3 trillion
Actual maximum liability by either party of this derivative: $1.
Do you understand now why your inclusion of the notional amount of derivatives was meaningless and why it should not be included in a calculation of "liabilities" of anyone?
pat said...
"SSA can change entry ages. If they reset the retirement age to 70, from 65, that's about it. the who system will be fine."
First off, no, the system will not be fine. That helps, but in no way solves the problem.
Second, good luck getting the AARP to not fight that tooth and nail. It simply doesn't matter our survival depended on it, they would fight it.
I wouldn't be surprised if this is 1200 employees
There are a lot of people that can take credit for the development of Fairfax County. I know Jack Herrity did. For me, #1 would be the guy that got Dulles Airport.
Here are the categories from that Forbes analysis you posted yesterday.
BUSINESS COSTS RANK 20
LABOR RANK 3
REGULATORY ENVIRONMENT 2
ECONOMIC CLIMATE 18
GROWTH PROSPECTS 12
QUALITY OF LIFE 1
I don't see anything about incentives. I'm skeptical of the entire idea. Why not apply all of that to lowering the corporate tax rate or on transportation or other items on this list.
I'm not even sure we need an economic development authority in Fairfax County or at the state level.
I think the Hilton deal is almost more of a confidence booster than SAIC. Seemingly, Hilton could have gone to a number of metro areas. I would think access to an international airport would be very high on the list. If they were playing MD against VA, I hope VA knew it had a much stronger hand. Corporate welfare is the correct word.
What about that CSC deal? Does CSC send someone to Richmond and Annapolis? But, notice CSC isn't "creating" jobs, most are just moving from one contractor to the other.
That is why I am pleased to say that we are resuming operations in the Washington, D.C. metro market. We suspended operations previously as part of our strategy of generating cash and lowering overhead but maintained a foothold in the region through our customer service operations and have high quality land assets to start building on. The region is a top 10 market that is beginning to demonstrate stability and aligns perfectly with the development of our growth platform in the Southeast.
I really didn't find any other interesting quotes in here:
KB Homes Earnings Call
TBW: Texas property tax is a round 3%. That's a real killer.
"how about:
impending doom, or
implosion?"
contrarian,
You are not a contrarian, you are just another perma bear.
A true contrarian would have sensed the intense pessimism in both the real estate and stock market early this year and would have taken advantage of it. Many have made huge returns in the stock market since March (I'm up over 1,000%) and were able to buy property at very distressed levels 6-12 months ago, while you probably had your money hidden in your bunker waiting for Armageddon.
I'm not saying that the correction in the real estate is over. In fact I think another leg down could happen in the coming months/years. However, I am saying that you'll never get rich being a perma bear.
David: You are right about the perma bears. They will always have their savings but they will never have the wealth those savings could have generated were they used at the right time.
Robert: Beyond KB Homes, Stanley Martin is really the company to watch locally. They made a big stragegic move to develop Shirlington Crest at a time when no one was doing major building in Arlington, condos four blocks across Four Mile Run were turning into rentals and everyone thought they were crazy to build in a part of Arlington less than a half mile from the infamous Green Valley. They did exceptional market research, found a gap in the market for new townhouses, and have done very well. I have been trying to buy some of the older duplexes around the area, but the owners have been told that Stanley Martin is just going to keep assembling land and they are justifiably waiting for a better deal. What Stanley Martin did at Shirlington Crest is worth a PhD dissertation in urban planning.
MM
If an inspection has been done, and that was the reason the contract was voided, then the bank has knowledge of the defects and MUST disclose them to you. As in they are legally required to. Whether you could find them out before putting in the offer is another question. But it's in their best interest to get a contract and keep a contract, not have it fall in and out multiple times. So, if an inspection is the reason, then yes, your agent should be able to get that report from the LA.
There are many other reasons the contract could have fallen out though. How do you know the buyer didn't suddenly lose their job?
And really, I don't see what's so bad about having to do your own inspection, you'll want one of your own anyway. Walking through a home with a knowledgeable inspector is great!! If they find things that you hadn't factored into your contract price, then ask for a subsidy for their repair/replacement that you'll do yourself after purchase.
Thanks for the post. I had been looking for something related and found your web site in the process.. I will definitely be back for more.
home remodeling northern Virginia
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