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The Culmination Of A Litany Of Bad Decisions And Lousy Luck

A report from the Seattle Times in Washington. “Seattle-area homebuyers have a bit of good news as the middle of the housing market continues to come down from what one local housing economist calls last summer’s ‘sugar high.’ April’s median price of a single-family home in King County dipped to $690,000, down a substantial 4.8% or $35,000 from the April figure last year, according to the Northwest Multiple Listing Service.”

“April’s decline was even more dramatic in the condo market.
In King County, the median price for a condo unit fell 9.6% in April over the same period a year ago, to $403,750. ‘Buyers definitely have more room to negotiate,’ said David Palmer, a listing specialist with Redfin who covers Seattle and King County. Palmer said he has seen ‘some condo buildings downtown where units are upside down’ — that is, where the likely selling price is less than the owner paid.”

“The largest part of the market — the middle — showed definite cooling. In the Ballard/Greenlake/Greenwood area, for example, April’s median price fell 9.5%, to $783,000. In West Seattle, the median price fell 6.3%, to $657,000. In Juanita-Woodinville, it fell 7.2%, to $730,900.”

The Orange County Register in California. “Homebuying in Newport Beach, Laguna Beach and Costa Mesa fell 27.2% percent in what was Orange County homebuying’s slowest start to a year since 2009. Not only did CoreLogic stats show the lowest countywide sales count for any first three months of a year since the Great Recession, it was the third-slowest-selling first quarter in the real estate tracker’s database that dates to 1988.”

“At the community level, sales rose in only one-sixth of Orange County’s 83 ZIP codes. With the slump, prices fell countywide, too, down 2.1% in a year. Newport Beach 92660: $1,528,000 median, down 17.1% in a year. Newport Beach 92662: $3,400,000 median, down 18.1% in a year.”

The Connecticut Post. “April 2019 was a big month for celebrity real estate in Connecticut. In one month, three major stars made headlines. Musician Paul Simon put his New Canaan, Conn. estate on the market for $13.9 million. The Wall Street Journal reported that that is 16 percent less than Simon paid for it in 2002.”

Rapper 50 Cent finally sold his Farmington, Conn. mansion after 12 years. The 51,657-square-foot residence sold for $2.9 million, according to the Wall Street Journal. That’s an 84% discount from its original list price of $18.5 when it hit the market in 2007. It had languished there, undergoing price cut after price cut.”

“‘It was just priced too out of whack,’ said luxury real estate broker Dolly Lenz of the original price tag. ‘There’s never been a house there that’s sold for anywhere near that number.'”

The Washingtonian. “Does anyone want Kevin Plank’s house? The Under Armour CEO has been trying to unload his Georgetown home for more than a year. Its initial asking price: an eyebrow-raising $29.5 million. Even with a recent price drop, that’s above $2,000 a square foot—almost triple the median price-per-square-foot for a Georgetown abode.”

“May 2013: Plank buys the 12,200-square-foot 34th Street residence for $7.85 million. 2015: Plank overhauls the property, adding a nearly $1-million, 22,000-pound marble grand staircase. February 2018: That must have been a heck of a redecoration. Plank privately lists the home for $29.5 million—almost $22 million more than he paid for it.”

“March 2019: With no buyer after 12 months, Plank knocks millions off the price. Now the 14 bathrooms, whiskey cellar, and 34-foot ballroom will set you back only $24.5 million.”

From Crain’s New York Business. “A large site in Washington Heights sent its would-be developer into a downward spiral will finally be sold at auction in the coming months. The property, at 33-35 Overlook Terrace, will be brought to auction in about three months, the site’s owner, his lawyer and other sources confirmed. The entity that owns it plunged into bankruptcy last year, after Rutherford ‘Ruddy’ Thompson failed to turn the site into pricey condominiums. It was the culmination of a litany of bad decisions and lousy luck that left Thompson’s life in tatters.”

“More than $30 million of debt against the property is held by Amalgamated Bank. It remains unclear what a bidder will pay for the site and whether it will be enough to make the lender whole.”

“The saga helped wreck Thompson’s finances and personal life and caused other collateral damage. In a conversation with Crain’s, Thompson claimed he has been financially ruined by the development and is being evicted from his apartment on the Upper West Side where he said he is in arrears on his rent by about $100,000.”

“‘If I don’t get any proceeds from this sale, I’ll have absolutely nothing,’ Thompson said. ‘No place to live. No money.'”

This Post Has 67 Comments
  1. ‘Thompson claimed he has been financially ruined by the development and is being evicted from his apartment on the Upper West Side where he said he is in arrears on his rent by about $100,000…’If I don’t get any proceeds from this sale, I’ll have absolutely nothing…No place to live. No money’

    Still no bubble NYC?

      1. “At the community level, sales rose in only one-sixth of Orange County’s 83 ZIP codes. With the slump, prices fell countywide, too, down 2.1% in a year. Newport Beach 92660: $1,528,000 median, down 17.1% in a year. Newport Beach 92662: $3,400,000 median, down 18.1% in a year.”

        Where is Chris “No Bubble” Thornberg??????

    1. I started feeling so bad I had to dive deeper into this shack salesman’s story:

      To scrape by, Thompson, who is 69, said he has begun working as a residential broker in the city, handling rental listings that pay him a few thousand dollars in commissions here and there.

      He remains bitter about the circumstances surrounding his downfall, including the bank’s decision to pull funding on the $95 million construction loan it extended to him over a decade ago. Thompson won a court case in 2014 against Amalgamated, which found that the bank had improperly withdrawn funding for Thompson’s loan. But the bank appealed that decision and Thompson accrued over $1 million in legal fees pursuing the case. In the process, his wife left him, two of his three children moved to California, he had a pair of heart attacks and he had to sell his Westchester home at a loss to avert foreclosure.

      Thompson previously tried to sell the site on Overlook Terrace and claims he secured an offer for nearly $40 million. A deal, however, never materialized and last August, Thompson threw the site into bankruptcy as a last-ditch effort to block a foreclosure auction that was to have been held the next day.

      Thompson said he is still working to secure a buyer for the property and hopes to remain on as a partner in any future development.

      “If I can get someone in as my partner and we bid $29 million and win this site, we’ll make $80 million developing it,” Thompson said.

      From making the big bucks to economic failure and his family leaving him. Greedbcan be a real b!tch mr Thompson!

    2. ’If I don’t get any proceeds from this sale, I’ll have absolutely nothing…No place to live. No money’

      Good. That’s what greedheads who try to flip shelter deserve.

  2. ‘he has seen ‘some condo buildings downtown where units are upside down’ — that is, where the likely selling price is less than the owner paid’

    ‘The largest part of the market — the middle — showed definite cooling. In the Ballard/Greenlake/Greenwood area, for example, April’s median price fell 9.5%, to $783,000. In West Seattle, the median price fell 6.3%, to $657,000. In Juanita-Woodinville, it fell 7.2%, to $730,900’

    But redfin, which has shoveled hundreds of millions into shack flogging, assured us the bottom was in! And the Seattle Times (which has a new RE writer – cough!) has been similarly upbeat. Wa happened to my shortage Seattle?

    1. its apparently been sunny for the past few weeks – thats the excuse for no-body attending open houses. Swear-to-god i heard that —- people dont make major decisions if it is sunny

  3. ‘Homebuying in Newport Beach, Laguna Beach and Costa Mesa fell 27.2% percent in what was Orange County homebuying’s slowest start to a year since 2009. Not only did CoreLogic stats show the lowest countywide sales count for any first three months of a year since the Great Recession, it was the third-slowest-selling first quarter in the real estate tracker’s database that dates to 1988’

    This is all you really need to know and it’s been headed this way for well over a year. Sales and inventory. Forget about price. It lags and says very little about where you are headed.

    Texas numbers are out: the Dallas Morning News is quiet as a mouse.

  4. ‘Musician Paul Simon put his New Canaan, Conn. estate on the market for $13.9 million. The Wall Street Journal reported that that is 16 percent less than Simon paid for it in 2002’

    17 years of bubble gone. And it’s probably been a couple of years since the New Canaan guberment voted to ban for sale signs. “The whole town’s for sale” they said.

  5. Once again ….. another place I’ve been watching is Bainbridge Island. Selling fast there. It’s maddening. Doesn’t even give you time to buy a plane ticket.

    1. On the other thread you said you have an itch to move back to CA. Bainbridge Island’s climate and vibe are absolutely nothing like CA. BI is vastly overrated. There’s very little to do there and you’ll end up taking a ferry over to Seattle a lot.

    2. Your vitamin “D” spectrometer$ needle has quite the sunshine $cale!

      $an Clemente, CA … Bainbridge I$land, WA

  6. You know the BUST is real when millionaires and billionaires are trying to bail and jump ships!

    1. “cru$hing.hou$ing.lo$$es.”

      Chri$.Thorn.in.yer.$ide.berg’$ rebuttal:

      Job$!, job$!, job$!, … No unemployment, no Hou$ing Bubble$ !

  7. Come for the Denver, stay for the Seattle:

    “Marijuana is already permitted, mushrooms could soon be low on Denver’s priority list, and if the governor puts pen to paper like expected, using harsh drugs won’t be enough to land someone in prison in Colorado.

    Under a newly passed bill , dealers would still be punished with a felony, but all other single-use drug possession charges would be a misdemeanor.”

    https://www.thedenverchannel.com/news/politics/polis-likely-to-sign-bill-defelonizing-single-use-drug-possession-for-schedule-i-and-ii-substances

    1. “mushrooms could soon be low on Denver’s priority list,…”

      my lil’ Brother, violent when he consumes alcohol, a laughing 4year old when he consumes schrooms … “all results are local”

  8. “…In Juanita-Woodinville, it fell 7.2%, to $730,900.”

    Calling “redmondjp!” Of course he’s nowhere to be found now that his BS is exposed.

    1. Calling “redmondjp!” Of course he’s nowhere to be found now that his BS is exposed.

      Or perhaps because he/she’s personally attacked for things he/she never said… I always found what redmondjp said to be accurate, living in the same part of town…

  9. 2015: Plank overhauls the property, adding a nearly $1-million, 22,000-pound marble grand staircase.

    A million dollar……….staircase? Geez, if I had that kind of money to redecorate I’d think the staircase would be pretty low on my list.

    1. But think of how it would transform you by the time you get upstairs. Endorphins, etc. Same when you’re coming down.

    2. “A million dollar$……….$tairca$e?”

      He mighta had better sale$ results iffin’ he’d up$caled it with an $izeable inve$tment on a impre$$ive outdoor Pizza oven.

      1. Done and dusted. Their new streaming service will blow Netflix and Amazon out of the water, as it will be offered free on any iOS device, thereby increasing sales of those devices as well. A masterstroke by Tim Cook, which will see Apple become the first trillion dollar company, to further double within a year to $2T. That would put the stock price at around $450 – and that’s without any buybacks. A buyout of Netflix will come sooner rather than later. Eventually, Apple will own all media, Amazon all retail, and Taco Bell all restaurants.

  10. Why do we freak out at the notion of student debt being forgiven somehow?
    “Too Big To Fail” was OK, and Jamie D still makes >$31 mill a yr.
    Farmers got $12 bill this year.
    Amazon gets a tax refund

    seems like the free-shet line is huge.

      1. I don’t either, but nothing wrong with trying to make it better. College was affordable when I graduated in the 90’s and I paid my loans back.
        Just make it better, no free lunch. Gov can stop guaranteeing loans as a start. Dont let the banks rip everyone off and then bail em out.

        1. Jamie Dimon gets a raise to $31 million after JPMorgan’s record year 2018.
          JP Morgan Penalty for abuse and fraud total since 2000: $30,089,755,661

          too big to fail!

      2. The design for something like this would have to be well-thought-out and it would have to be coupled with really stringent regs on debt to students and, more importantly, on institutions that are loading up students with unservicable debt in the future so we don’t repeat the same mistakes. The bible talks about a debt jubilee where the debtors shall go free

        What about once the student has paid off the amount of the loan, including debt and interest, the loan is forgiven? Maybe each student is eligible for the same amount of debt forgiveness after X number of years. There should be a way to do this right.

        1. a way to do this right

          Start by stop doing what caused the problem in the first place.

        2. What about once the student has paid off the amount of the loan, including debt and interest, the loan is forgiven?

          What is there to forgive if the loan is paid off (including debt and interest)?!

          Equally concerning as student debt but rarely discussed is the extent to which our public colleges/universities are educating foreign nationals because they pay higher tuition.

          1. My point is that some student loans end up paying significantly more than the loan amount because of interest and the large amount. If we could just say that for some subset of the student population that they would just have to pay back the loan (e.g. no interest) that might be a good first-step. It doesn’t wipe out the debt completely, but still would offer some relief so might be a good compromise.

        3. A way to do this right is to not have the government and the student loan business. How colleges and private bank should make the loans. That way when kids don’t pay them back because they made badd decisions and loans were extended on badd decisions the tax pair donkey who’s been plumbing his whole life does matter pay for some kid to play pretend adult at college for 6 years.

          1. “That way when kids don’t pay them back…”

            Unfortunately it’s the minority cohort(s) that tend not to repay their any of their loans. They come from households that don’t really understand long-term financial obligations. “They’re living in the now,” a co-worker would say.

          2. I pretty much agree with you on this. The only quibble I have is that we have to deal with the world as it is now, not as how it should be. So move in the direction you are talking about, but deal with the matter at hand.

            Any student debt solution should involve not just forgiving any student debt, but putting measures in place to penalize institutions that give students debt that they end up not repaying. Some of the blame should be put on reckless student borrowers, but some also should be put on the lenders that enable this frivolity. It takes two to tango after all.

      3. “How does this work, exactly?”

        Only the STEMs will have to repay their loans… because they can.

    1. The good news is that it could put an end to the ridiculous cult of personality that is the real estate industry. At worse, everyone is going to get lowballed and ripped off.

    2. The housing market often seizes up during periods of rapid change, as buyers and sellers struggle to agree on prices. Instant buyers, with their emotionless algorithms, could get the market moving again by accepting lower prices for houses held in inventory and thus setting benchmarks for other sellers.

      I think they don’t yet understand that it’s not the buyers unwilling to pay lower prices that lock up the market. It’s the sellers that can’t lower the prices and need to be foreclosed.

  11. As I have been preaching all along, the YOY stat, which has been used to mask several months of individual downturn, would come back to bite the pontificators in the but.

    Well it is beginning to happen in some areas, and will happen in many others soon that are later on the appreciation/depreciation curve.

    My guess is that the will soon be lots of shock and awe. Wonder what Sir Larry will be saying then? Still an inventory shortage? Not for looong.

    Press will eventually start asking tougher questions and the mirage will unravel. Just a replay of 2007. Get ready.

    1. Whats the rush to declare a top? There is for sure seasonality in the prices, so year over year takes that out. There will be years of “down” before the bottom. I think it is definitely started in my area, already 10% ish off the peak.

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