The problem:
It feels very shaky in the good ole USA. The economists and elected officials are scratching their heads; running out of stimulus ideas, tax tricks, and money. It feels like the Fed, the Treasury, Congress, etc. are lost - or at least "at a loss" for how to revive the economy. Of course the housing market is still in the headlines and as a busy broker I can confirm that it feels like fewer and fewer people are qualifying as buyers; over 3 years of severe declines and this last month produced some dire statistics. Other markets are even more worrying - like the US Gov't Bond market, which continues to rally to new price highs and yield lows every day. Lots of cash on mega cap balance sheets, but bankruptcy for small and medium sized businesses; which drive growth. More people that I am meeting are genuinely worried about the very near future (economically). State and local government underfunded and overpriced pensions is the main topic of the private sector dismay. I think the new normal may be a harsh reality here. I am reading about a lot of people that are going through what has already happened to millions of others; elimination of entire markets and severely diluted opportunity.
The solution:
Put the brakes on the cascading decline in property prices which will revive entrepreneurs and small business markets everywhere. Millions of Americans that have jobs, decent income, but low credit scores should be allowed to refinance their homes even with lower credit scores. This will help stall and stop the foreclosure and short sale nightmare that is continuing to put downward pressure on prices. The Banking system needs this reprieve to mend personal credit and heal the Banks. Right now someone with good income but not great credit (millions) are being forced to strategically default on their homes because prices have dropped so far and banks refuse to allow them to refinance or borrow because of bogus credit scores. If these people were allowed to refinance at the new rates and prices, it would put a floor under prices and allow the market and economy to grow again (the banks are ending up with the depreciated asset/home anyway). Each new foreclosure and short sale puts tremendous downward pressure on prices and is creating a death spiral. This is not capitalism at work. This death spiral can be stopped if the government would encourage banks to change the way they are approaching this new reality. Right now the banks are applying an old technique to a dramatically different problem and environment. Just allowing people with incomes and low or no credit to refinance across the board would get the economy steaming in the right direction again. It is a much better solution than having the banks continue to take property from people with prospects.
Tuesday, August 24, 2010
Sunday, August 22, 2010
For Sale: Michael Jackson’s Last Residence
The Holmby Hills, CA home where Michael Jackson died is up for sale. The 7-bedroom, 13-bathroom mansion that superstar entertainer Jackson rented is on the market for $28,995,000 — that’s about $9 million less than the original asking price of $38 million back in 2008. With a price decrease of almost $10 million, this could be a dream-come-true for a wealthy MJ fan. But, don’t get too excited – TMZ mentions that any interested buyers must go through an “extensive pre-qualifying check” before they can even enter the home. In other words, the paparazzi and looky loos are not invited.
The French Chateau estate is located in the prestigious Holmby Hills area of Los Angeles and was leased to Jackson at the time of his death, reportedly for $100,000 per month. However, it is unknown if it was actually Jackson who was on the other end of the rental agreement. Jackson lived here while he rehearsed for his “This Is It” tour.
The mansion is on 1.26 acres and includes a theater, wine cellar with tasting room, an elevator, 14 fireplaces, a spacious spa with gym, a large swimming pool and according to the listing on Zillow, has beautifully landscaped gardens and a guest house.
According to TMZ, the mansion is owned by Roxanne and Hubert Guez (he is the CEO of Ed Hardy fashions). Guez first tried to rent the property for $300,000/month and then listed it for $38 million back in 2008.
The French Chateau estate is located in the prestigious Holmby Hills area of Los Angeles and was leased to Jackson at the time of his death, reportedly for $100,000 per month. However, it is unknown if it was actually Jackson who was on the other end of the rental agreement. Jackson lived here while he rehearsed for his “This Is It” tour.
The mansion is on 1.26 acres and includes a theater, wine cellar with tasting room, an elevator, 14 fireplaces, a spacious spa with gym, a large swimming pool and according to the listing on Zillow, has beautifully landscaped gardens and a guest house.
According to TMZ, the mansion is owned by Roxanne and Hubert Guez (he is the CEO of Ed Hardy fashions). Guez first tried to rent the property for $300,000/month and then listed it for $38 million back in 2008.
Monday, May 17, 2010
Prices up and Coachella Valley home sales rise in early 2010
Debra Gruszecki • The Desert Sun • May 17, 2010
The California Desert Association of Realtors today reported that the average home price in the Coachella Valley rose 16 percent in the first three months of 2010. Sales rose 17 percent.
Greg Berkemer told The Desert Sun that's a sign the market continues to show a gradual improvement toward recovery.
He believes prices rose because the lowest price houses are selling first, making remaining inventory a little more pricey.
"It means sellers with higher value homes are moving into a better position in the market,'' he said.
The first quarter data shows 2,471 homes and condos sold, compared with 2,111 in the first part of 2009.
The average sale price was $290,952, up from $250,864 in the first part of 2009, according to a report from Real Data Strategies.
The positive news though isn't meant to be construed that prices will sizzle soon.
Berkemer says in a story we'll report Tuesday, "We're on the right path ... but it's still a rocky road."
Prices still are a long way off from where they were in 2008.
While it is an improvement, the average sale price in the first part of 2008 was $486,694.
The California Desert Association of Realtors today reported that the average home price in the Coachella Valley rose 16 percent in the first three months of 2010. Sales rose 17 percent.
Greg Berkemer told The Desert Sun that's a sign the market continues to show a gradual improvement toward recovery.
He believes prices rose because the lowest price houses are selling first, making remaining inventory a little more pricey.
"It means sellers with higher value homes are moving into a better position in the market,'' he said.
The first quarter data shows 2,471 homes and condos sold, compared with 2,111 in the first part of 2009.
The average sale price was $290,952, up from $250,864 in the first part of 2009, according to a report from Real Data Strategies.
The positive news though isn't meant to be construed that prices will sizzle soon.
Berkemer says in a story we'll report Tuesday, "We're on the right path ... but it's still a rocky road."
Prices still are a long way off from where they were in 2008.
While it is an improvement, the average sale price in the first part of 2008 was $486,694.
Monday, April 26, 2010
Building permits on the rise across California
Debra Gruszecki • The Desert Sun • April 26, 2010
Total housing starts are up for the third month in March across California, signaling that the worst of the housing downturn may be over, the California Building Industry Association said Monday.
Building permit activity in Riverside and San Bernardino counties rose 45 percent. To the California Building Industry Association, the numbers are a sign the worst of the housing downturn may be over.
“We’re off to a great start this year,’’ said Liz Snow, CBIA’s president and chief executive officer. “Housing starts are up in all categories for the first quarter of the year’’ over the same time frame in 2009.
Statistics compiled by the Construction Industry Research Board show that permits were pulled for 3,714 total housing units in March - 4 percent more than March 2009 and 7 percent more than February.
Permits issued for single-family homes - 2,231 - rose across the state by nearly 17 percent, from March 2009 and nearly 24 percent from February.
In Riverside and San Bernardino counties, the 525 single-family home permits issued in March represented a 45 percent increase over activity in March 2009 when 362 permits were issued. The number of permits issued since February also went up 9 percent.
Ben Bartolotto, research director for CIRB, said new housing is clearly on the upswing, although the extent that the gains are sustainable and the magnitude of the gains are uncertain.
CIRB is still forecasting a modest recovery for 2010 with permits being pulled for 52,000 units.
The recently enacted state tax credit for homebuyers should help to sustain the gains in construction, Snow added. “These numbers are a breath of fresh air, and tax credit should help capitalize and build on this momentum,” she said.
Total housing starts are up for the third month in March across California, signaling that the worst of the housing downturn may be over, the California Building Industry Association said Monday.
Building permit activity in Riverside and San Bernardino counties rose 45 percent. To the California Building Industry Association, the numbers are a sign the worst of the housing downturn may be over.
“We’re off to a great start this year,’’ said Liz Snow, CBIA’s president and chief executive officer. “Housing starts are up in all categories for the first quarter of the year’’ over the same time frame in 2009.
Statistics compiled by the Construction Industry Research Board show that permits were pulled for 3,714 total housing units in March - 4 percent more than March 2009 and 7 percent more than February.
Permits issued for single-family homes - 2,231 - rose across the state by nearly 17 percent, from March 2009 and nearly 24 percent from February.
In Riverside and San Bernardino counties, the 525 single-family home permits issued in March represented a 45 percent increase over activity in March 2009 when 362 permits were issued. The number of permits issued since February also went up 9 percent.
Ben Bartolotto, research director for CIRB, said new housing is clearly on the upswing, although the extent that the gains are sustainable and the magnitude of the gains are uncertain.
CIRB is still forecasting a modest recovery for 2010 with permits being pulled for 52,000 units.
The recently enacted state tax credit for homebuyers should help to sustain the gains in construction, Snow added. “These numbers are a breath of fresh air, and tax credit should help capitalize and build on this momentum,” she said.
Thursday, January 14, 2010
Ritz-Carlton Gets Deadline From Rancho Mirage
By Kate McGinty, The Desert Sun
December 4, 2009
The long-awaited Ritz-Carlton in Rancho Mirage must open for business by June 2011, the City Council decided Thursday.
Under a new operating contract with the hotel, which was approved 4-0, the city laid out details of a modified financing agreement and set a new deadline for the hotel to open for business.
The Ritz-Carlton, in the Santa Rosa Mountains at the top of Frank Sinatra Drive, must open its doors by June 30, 2011.
The hotel — which is “coming back to life”— plans to pick up construction by March to make that happen, project attorney Emily Hemphill said.
“I think finally I can stand here and tell you we are making significant progress,” she said.
The previous hilltop hotel, The Lodge, shut down in August 2006 to be renovated into the Ritz-Carlton. The city estimated it would raise at least $1.2 million in annual transient occupancy tax.
Construction came to an abrupt halt last year, though, after Lehman Brothers Holdings Inc., a major investor, filed for bankruptcy.
That left about 80 percent of the project complete and more than 200 people without jobs.
Now, the hotel is on the cusp of clearing its debt on the project and an equity partner is buying the lender note, Hemphill said.
The hotel will next secure a construction loan, which Hemphill estimated could be about $50 million.
Construction is then expected to take about seven months, City Manager Pat Pratt said.
Hemphill was optimistic the hotel could open ahead of schedule.
“I don't think it would be very long. My guess is if we could get started in the first quarter of the year, that we would be open for the subsequent season,” she said.
Councilman Dana Hobart said Rancho Mirage residents and the rest of the Coachella Valley have eagerly awaited the opening, and its progress is a sign the valley can flourish.
“The completion of this project will be evidence to all of the world that the Palm Springs valley is a tourism destination that is a vibrant destination, regardless of world and national distress,” he said.
December 4, 2009
The long-awaited Ritz-Carlton in Rancho Mirage must open for business by June 2011, the City Council decided Thursday.
Under a new operating contract with the hotel, which was approved 4-0, the city laid out details of a modified financing agreement and set a new deadline for the hotel to open for business.
The Ritz-Carlton, in the Santa Rosa Mountains at the top of Frank Sinatra Drive, must open its doors by June 30, 2011.
The hotel — which is “coming back to life”— plans to pick up construction by March to make that happen, project attorney Emily Hemphill said.
“I think finally I can stand here and tell you we are making significant progress,” she said.
The previous hilltop hotel, The Lodge, shut down in August 2006 to be renovated into the Ritz-Carlton. The city estimated it would raise at least $1.2 million in annual transient occupancy tax.
Construction came to an abrupt halt last year, though, after Lehman Brothers Holdings Inc., a major investor, filed for bankruptcy.
That left about 80 percent of the project complete and more than 200 people without jobs.
Now, the hotel is on the cusp of clearing its debt on the project and an equity partner is buying the lender note, Hemphill said.
The hotel will next secure a construction loan, which Hemphill estimated could be about $50 million.
Construction is then expected to take about seven months, City Manager Pat Pratt said.
Hemphill was optimistic the hotel could open ahead of schedule.
“I don't think it would be very long. My guess is if we could get started in the first quarter of the year, that we would be open for the subsequent season,” she said.
Councilman Dana Hobart said Rancho Mirage residents and the rest of the Coachella Valley have eagerly awaited the opening, and its progress is a sign the valley can flourish.
“The completion of this project will be evidence to all of the world that the Palm Springs valley is a tourism destination that is a vibrant destination, regardless of world and national distress,” he said.
Report: California foreclosures drop in December
from the LA Times:
Notices of default dropped 17.5% compared with November and 32.5% on a daily average basis, according to the report by ForeclosureRadar.com.
The drop in foreclosures appears to reflect an easing in activity by banks and other lenders hoping to avoid delivering disheartening news to troubled buyers and shutting people out of their homes during the holiday season, said the website, which is based in Discovery Bay, Calif.
Mortgage titans Fannie Mae and Freddie Mac suspended foreclosures for part of last month through Jan. 3, and Citigroup Inc. also said it would suspend some foreclosures and evictions for part of last month through Jan. 17.
“The dramatic drop in foreclosure activity may have been a Christmas gift to homeowners,” Sean O’Toole, chief executive of ForeclosureRadar.com, said in a statement. “Given rising mortgage delinquencies, it is becoming increasingly clear that foreclosure activity no longer fully represents market realities.”
Foreclosure sales were canceled at an increasing rate in December, but only by 3.5% on an average daily basis. That was much smaller than anticipated by analysts at ForeclosureRadar.com, given the push by the Obama administration to make trial loan modifications under its Home Affordable Modification Program permanent.
-- Alejandro Lazo
Notices of default dropped 17.5% compared with November and 32.5% on a daily average basis, according to the report by ForeclosureRadar.com.
The drop in foreclosures appears to reflect an easing in activity by banks and other lenders hoping to avoid delivering disheartening news to troubled buyers and shutting people out of their homes during the holiday season, said the website, which is based in Discovery Bay, Calif.
Mortgage titans Fannie Mae and Freddie Mac suspended foreclosures for part of last month through Jan. 3, and Citigroup Inc. also said it would suspend some foreclosures and evictions for part of last month through Jan. 17.
“The dramatic drop in foreclosure activity may have been a Christmas gift to homeowners,” Sean O’Toole, chief executive of ForeclosureRadar.com, said in a statement. “Given rising mortgage delinquencies, it is becoming increasingly clear that foreclosure activity no longer fully represents market realities.”
Foreclosure sales were canceled at an increasing rate in December, but only by 3.5% on an average daily basis. That was much smaller than anticipated by analysts at ForeclosureRadar.com, given the push by the Obama administration to make trial loan modifications under its Home Affordable Modification Program permanent.
-- Alejandro Lazo
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