Property Grunt

Monday, June 28, 2010

A real estate market for Doomsday

As a child of the cold war, I remember watching The Day After, which gave me nightmares and even to this day the movie scares the crap out of me.

When the Iron Curtain fell which signaled the end of the cold war, I figured that Nuclear War was something that was left to Sci Fi films.

Nope. Y2K came along. And went.

Everything is honk dory right? Not after 9/11.

Below is a segment from Nightline , about luxury survival condos.

What should raise a couple of eyebrows is when a developer who specializes in these shelters is asked if he is being paranoid. He asks if the government is paranoid because they have been feverishly building these shelters in the last ten years. And he knows this because they use the same engineers.

Three things we can learn from this.

1. Fear never leaves.

2. Fear has a market.

3. Real estate can manifest itself in the oddest of places.

Monday, June 21, 2010

Just checking in.

Made a break out of town.

Hi folks. It has been a awhile. I have been taking care of some personal business so I have been unable to blog and I think it will be awhile before I can pop in regularly. Before I leave, I would like to comment on this article.

Housing Market Slows as Buyers Get Picky

This is really oversimplifying the situation which is surprising since this was published in the New York Times.

This real estate market is f**ked up for a variety of reasons which include sellers, lenders, foreclosures and the economy. To simply place the blame on one group is just plain stupid.

Which leads me to my next completely unscientific gut feeling. We are going to get hit again by the real estate market. The cause will be the consequences of the double dip and it will also be caused by something that none of us saw coming.

And then it will another decade or so to sort that out.

Monday, June 14, 2010

Take My Breath Away.

There is nothing like a graph from Calculated Risk to take your breath away.

Friday, June 11, 2010

"If I didn't know it was me,'' he says, "I would have been the one digging out the pitchforks and torches and knocking on my door.''

What did you expect? A parade?

In a previous entry, I covered the NYT article about people taking advantage of going into foreclosure. Well apparently these idiots are now pissed off about all the attention they are getting.

Florida Couple Upset At NY Times Mortgage Article

"If I didn't know it was me,'' he says, "I would have been the one digging out the pitchforks and torches and knocking on my door.''

Alex Pemberton

Even the subject of the article admits he understands why people are pissed off at him. So why should they be upset about the storm of negative comments they are getting? Do they think that people would hoist them on their shoulders and parade them all over town?

The Pemberton and Reboyras gamed the system and are now reaping the benefits. But by admitting what they have done in public they have only themselves to blame for the backlash.

They are either ignorant, stupid or just don't care about their surroundings. What they should have done is shut the f**k up. Because by announcing what they did is tantamount of eating an ice cream cone in front of a group of starving children.

In times like this, good fortune, and I use the term loosely for what Pemberton and Reboyras did, is not something one should show to the world. Because one person's cause for joy is another person's cause for resentment. And there is a lot of resentment in the world.

If you got something good going. Keep it to yourself.

Wednesday, June 09, 2010

Your bag

To the a$$$holes of the subway, having a very large bag does not justify you letting to swing around and hit other people while on the train.

Sooner or later your bag is going to touch someone who has a very low threshold for physical contact and they will touch you back. And not in a good way.

Monday, June 07, 2010

Same s**t. Differnt Day.

No need to explain.

This is the latest New York Times article on the difficulties of finding an apartment.
How to Be a Brainy Renter

I have discussed this topic ad nauseum in the past and all I have to say is that the clock is ticking on the viability of rental brokers due to the arms race to circumvent the rental broker.

With the current state of the economy, money is very tight and that is not a good thing for rental brokers as I have indicated in this interview with Joyce Cohen

Affording the Broker's Fee

It happens all the time where people have to choose between covering the fee or the capital outlays for renting an apartment. Whether they don't have the money or just don't want to give it up, this current economic climate does not give them any incentive to pay up.

Of course the broker are not to crazy about that. So what does broker do? Kill the deal. I'm serious. They cut their nose to spite their face. If they can't get theirs, why should anyone else.

Do landlords care about this? It depends on the landlords. If the landlord has armies of qualified renters knocking down their doors, they are not going to care. If the bank is knocking on their doors asking about the rent roll, it is likely they will be pissed at their broker.

What will determine how much of a haircut rental brokers will get is if they are acting as a barriers of entry for landlords because they are unable to collect their fees. Once that happens, the s**t is really going to hit the fan.

That is when these alternative sites will start to pick up more steam and then someone decides to pull a Firefox and create a free site that lists all the rental buildings in Manhattan. Which is entirely feasible. All the information is out there and all it takes is a couple of programmers, a case of red bull and renter's rage to consolidate it all in a site that is accessible to the public. When that day comes, there will be blood on the streets.

Tuesday, June 01, 2010


Everyone has it.

The article below is about owners who have stopped paying their mortgages and are not worried about it. In other words they are engaging in another variety of strategic default.

Owners Stop Paying Mortgages, and Stop Fretting


Let me list the reasons why this is possible.

1. Banks are in the lending business not the real estate business. They are not landlords. The last thing a bank wants to do is take over a property because it costs too much to manage it and get rid of it.

2. The foreclosure process is not an immediate. Even before the meltdown, there were always a ton of hoops a lender had to go through to foreclose on a house.

3. Banks are overwhelmed by the copious amount of homeowners in default. They obviously did not have the proper system set up to deal with it.

4. The new regulations in foreclosure is making the process more difficult for lenders.

5. People are pissed as f**k.

There is a massive state of rage amongst the have nots about being screwed over. And a lot of them have been.

Blacks in Memphis Lose Decades of Economic Gains

Two years ago, his doorbell rang, and two men from Wells Fargo offered to consolidate his consumer loans into a low-cost mortgage.

“I thought, ‘This is great! ’ ” Mr. Banks says. “When you have four kids, college expenses, you look for any savings.”

What those men did not tell Mr. Banks, he says (and Ms. Thomas, who studied his case, confirms), is that his new mortgage had an adjustable rate. When it reset last year, his payment jumped to $1,700 from $1,200.

This is just one of millions of stories of people being taken of advantage of. And there are millions of stories of people making really bad life decisions.

Nobody gives a damn now. Who can blame them?