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All Of A Sudden, It Shut Down. What Can We Do? No One Wants It To Happen Like This

A report from My Sun Coast in Florida. “Some possible bad news for Florida homeowners right now. Florida is seeing more foreclosures than all but two other states. Last month was up 23-percent over May of 2018. Loan officer David McLaughlin says one of the contributing factors to foreclosures is that wages in Florida have remained the same over the years.”

“‘Insurance and taxes continue to go up, so when people budgeted for a home 3-5 years ago, all of a sudden when things get higher, they may have a second mortgage, people are taking equity lines out,’ said McLaughlin. But McLaughlin says one of the biggest reasons for the increase in foreclosures is home affordability. ‘So many home borrowers are being stretched into homes or neighborhoods that are a little higher than they usually can afford.'”

From The Tribune in California. “Jack Hardy, president of Century 21 Hometown Realty in Arroyo Grande, said he’s sold homes for San Luis Obispo County’s median price, although housing markets differ greatly based on location. The market is very good now, but price sensitive, Hardy said. Sellers must price their homes competitively if they don’t want them to languish without a buyer. ‘If you price it correctly, it’ll sell pretty quickly,’ he said.”

“‘The lowest interest rates in nearly a year and a half, no doubt, have elevated housing demand as monthly mortgage payments have become more manageable to home buyers in general,’ CAR President Jared Martin said. ‘The state’s housing market remains soft, however, as home sales continue to lag behind last year’s level for more than a year now.'”

The Orange County Register in California. “More than 500 Southern California real estate agents have been scrambling to find a new employer after Century 21 Beachside and Coldwell Banker Beachside announced plans to shut down by the end of June. Tom Denny, owner of a 10-office operation stretching from San Clemente to Rancho Cucamonga, said that ‘after three decades in the real estate business, I have decided that it is time to retire,’ according to a statement provided by Realogy Holding Corp., the parent company for both Century 21 and Coldwell Banker.”

“No other details were provided. And while the reasons may be strictly personal, as Denny maintains, the Beachside closure could be the first of many rumblings in the real estate industry as a housing market cool-down continues into a second year. Southern California home sales have declined year-over-year in 17 of the past 22 months, CoreLogic figures show. Transactions this year so far are down 11%, falling to the lowest level since 2008.”

“In Orange County, where the cool-down is most pronounced, home sales dollar volume fell to a 10-quarter low of $49.5 billion during the first three months of this year, Real Data Strategies figures show. The average since the fall of 2016 was $52.3 billion per quarter. ‘It hasn’t happened yet at any scale,’ said Real Data Strategies President Pat Veling. ‘But if it continues in this vein, it’s going to cause … more mergers, acquisitions and failures.'”

“Agent Helen Reed said the news came as a shock to her. ‘I thought the company was running pretty good, and all of a sudden, it shut down,’ said Reed. ‘What can we do? We are agents. There are tons of brokers, (but) no one wants it to happen like this.'”

The Real Deal on New York. “A second anonymous buyer snapped up a pad at Vornado Realty Trust’s 220 Central Park South in recent months, as the limestone tower nears completion. The residential condominium, named Villa 6 by the developer, was purchased for $39 million, according to property records filed this month. Vornado took a small price cut on the unit, which was initially listed for $45 million.”

From Westword in Colorado. “After years of sky-high prices and bidding wars, the Denver real estate market has moderated in recent months, giving first-time home buyers their best odds in ages of scoring a pad of their own. As evidence, note that the number of homes listed for sale at under $250,000 is rising — and several are being marketed for actual occupation rather than demolition.”

“Many of the six entries in our first roundup spotlighting Denver homes on sale for less than a quarter-million, published in May 2018 and drawing from the Homesnap website, suggested that the owners were simply trying to unload them for the land value alone and walk away as quickly as possible. One listing warned: ‘Current owner has minimal to no knowledge of property and no seller’s property disclosure will be provided.'”

“Our August 2018 sequel showed a further tightening at the low end of the market. Only four stand-alone houses on the site were going for less than $250,000, with the least expensive of them boasting not a single photo. Instead, the visual on the listing was a pic of Westwood Park, probably because a Google Maps image of the actual structure from the previous year showed it boarded up and surrounded by weeds.”

“Of the other three August 2018 properties, two of them were on the same block in the Montclair neighborhood and prompted the warning ‘not for the faint of heart.’ And the description of the third, in Villa Park, began with the admission: ‘Structural issues, not suitable as a flip.'”

“In contrast, Homesnap currently features eight single-family homes for under $250,000 (plus two others for exactly that price). One of them — 4768 High Street, pictured above — boasts no description whatsoever, suggesting a mindset of ‘You pays your money and you takes your chances.’ And while the second-cheapest listing includes the words ‘flip’ and ‘scrape,’ the rest focus on fixer-upper potential.”

“Number 6: 4655 Fillmore Street, $239,900. Listed: 92 days ago for $295,000 (dropped $10,000 on June 7, 2019). Description: ‘New roof, windows, insulation. Vacant, EZ show. The property has access from the alley. Brokers, please read: Proof of funds with offers, hard-money lender letters not acceptable, verified funds only. All measurements are approximate…. Sewer issue.”

“Number 2: 2510 West Amherst Avenue, $220,000. Listed: Two days ago. Description: ‘It’s a BEAST! This home is priced well below market value and ready to become the beauty of your dreams. Fix and rent or fix and flip, scrape and rebuild — you decide what works best for you. This property is being sold strictly ‘AS -IS,’ so don’t even think about asking for repairs or concessions. Strong preference will be given to high and hard earnest money delivery and waiving inspection, so do your due diligence before submitting. Lastly, don’t waste our time or yours with below list offers. Cash, non-contingent offers only with quick closing and sixty-day post occupancy will be placed on top of the pile.”

“Number 8 (tie): 871 South Vrain Street, Price: $240,000. Listed: 29 days ago Description: ‘Exciting opportunity in up and coming area of Westwood. HUD homes are ‘Sold As Is.’ Furnace and water heater are missing.”

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This Post Has 61 Comments

  1. ‘871 South Vrain Street, Price: $240,000. Listed: 29 days ago Description: ‘Exciting opportunity in up and coming area of Westwood. HUD homes are ‘Sold As Is.’ Furnace and water heater are missing’

    Every day now, foreclosures are creeping into the picture.

    1. Dollar dumps, gold jumps to key resistance at 1360 on FOMC outlook. How long before the next hammer of Thor smash on precious metals? Options expiration 6/25. My guess….Friday 6/21.

  2. ‘Insurance and taxes continue to go up, so when people budgeted for a home 3-5 years ago, all of a sudden when things get higher, they may have a second mortgage, people are taking equity lines out’

    I track foreclosures. I see more reverse mortgages and HELOC’s all the time. The REIC doesn’t want people to remember how many refinance loans were walked away from last decade.

    ‘But McLaughlin says one of the biggest reasons for the increase in foreclosures is home affordability. ‘So many home borrowers are being stretched into homes or neighborhoods that are a little higher than they usually can afford’

    Now just how is this possible? We’ve heard a million times (even from our local trolls) that loans are air-tight and solid. How could anyone be loaned more than they can pay back?

    It’s happening.

    1. There are very good reasons for the historic DTI’s, LTV’s, house price to rents, incomes, and related cap rates for investors. It’s what’s affordable by real people on Main St., and not some grossly distorted reality manufactured via central banks and financialization from The Emerald City.

      Where the heck is Senator Running Deer and the defender of the little guy, the CFPB? (crickets). Yeah, that’s what I thought. Too few opportunities for graft and corruption.

      1. Yeah, in the SLO article, the UHS tells us prices have never been higher. (So what’s with the price warning for sellers?) And trolls will say “loans are suuuuper! But what about incomes? There’s no magic loan that makes these prices stick.

        1. “But what about incomes?”

          That [is] the problem in SLO, incomes. You are employed at the Men’s Colony prison, one of the colleges or the K12 school system collecting family benefits and a living wage. Otherwise you’re probably flipping burgers or getting your ash slapped waitressing alcoholic beverages. The local philosophy is too “green” to attract any real industry, but I’m sure that MMT will lift all boats there!

          1. The local philosophy is too “green” to attract any real industry ??

            Your not watching closely enough. Recent IPO says your assumption is incorrect.

        1. The elderly victim, you mean. Yet another innocent victim of predatory lending.

          O Fauxahontus, where art thou?

          1. Some of these old people are or were pretty slick. I was in a Chinese buffet in Westchester County in NY about 20 years ago (maybe more) and we were seated next to four old people. One old guy told the rest he was still collecting his dead wife’s social security. The other three were shocked. He said “I’m 80. What are they going to do to me?”

          2. Some of these old people are or were pretty slick.

            Calling Tresho for his experience.

            I have had younger family members whose parents are physically at the point where they are about to pass on and who are receiving social security. On a rare occasion I have seen these younger individuals pressure their ailing parents to refuse palliative care and engage in any sort of treatment to lengthen they lives (even though it is clear they don’t want it nor is it indicated). Come to find out that a handful of these adamant “do whatever it takes to save mom/dad” are confiscating their parents’ social security and don’t know what to do once the money runs out.

          3. Usually the primary caregiver child dependent can also receive SSDI funds too, so combine the parent’s check and there’s probably a real wage.

    3. nope, they take out money HELOC’s cause “they feel so good about the future and being able to pay it off” says, Kevin Mccarthy.

  3. ‘I thought the company was running pretty good, and all of a sudden, it shut down,’ said Reed. ‘What can we do? We are agents. There are tons of brokers, (but) no one wants it to happen like this.’

    via GIPHY

    1. “‘But if it continue$ in this vein, it’s going to cause … more merger$, acquisition$ and failure$.’”

      $ = plural noun$
      1. (grammar) A type of noun; a word that can be used to refer to multiple $helter.$hack.$ales person$, $helter.$hack airbox place$, $helter.$hack furni$hing thing$, $helter.$hack re$eller qualitie$ …

      1. That’s exactly what I was wondering. Why not just sell to another broker or get one or two of the current agents to become brokers? Why just close?

        1. The guilt likely drove this used home dealer to abandon all ties with setting his victims up for imminent failure. You have to be really cold hearted to be in real estate Mabye his conscious caught up with him

  6. “‘Insurance and taxes continue to go up, so when people budgeted for a home 3-5 years ago, all of a sudden when things get higher, they may have a second mortgage, people are taking equity lines out,’ said McLaughlin. But McLaughlin says one of the biggest reasons for the increase in foreclosures is home affordability. ‘So many home borrowers are being stretched into homes or neighborhoods that are a little higher than they usually can afford.’”

    But but but rent only goes up and mortgage stay the same?

      2. Not here. Was in one place for 7 years, rent increased once by $25. Was in next place 3 years, rent never went up. Been where we are now 3 years and rent has yet to go up. When there is building like crazy and lots of landlords desperate for tenants, most landlords will rarely if ever raise rent… at least here. This is a city, for anyone who wants to know, and no we don’t have an rent control regulations. It’s just that builders have gone ham building like crazy, and no one wants to raise rent on steady reliable paychecks (i.e. current on-time renters).

  7. “Many of the six entries in our first roundup spotlighting Denver homes on sale for less than a quarter-million, published in May 2018 and drawing from the Homesnap website, suggested that the owners were simply trying to unload them for the land value alone and walk away as quickly as possible. One listing warned: ‘Current owner has minimal to no knowledge of property and no seller’s property disclosure will be provided.’”

    Come on first-time buyers! What a great deal!!!! You get to buy $250K for the LAND!!!!! BUY NOW or BE PRICED OUT FOREVER

    1. $360K (reduced $25K *yesterday*) for this lot in 80210:

      https://www.zillow.com/homes/for_sale/Denver-CO-80210/land_type/130288658_zpid/93287_rid/pricea_sort/39.711808,-104.894715,39.641388,-105.035306_rect/12_zm/

      I was looking at houses and condos for sale on Zillow in Durango, CO last weekend. There isn’t much of an economy there but buying with cash and not having a mortgage, even with a pay cut, could still be a better standard of living than in Dumver.

      It’s been nine+ years, I just don’t want to be here anymore…

  8. “Even in the best of times, brokerages are continuously looking for ways to streamline expenses.”

    “The real estate industry has incredibly low margins,” said Rich Cosner, a former broker now working as a brokerage consultant. “The brokers pay very high commission levels to the agents, yet the brokers maintain the expenses of the offices themselves. Therefore, when the industry sales slide, it typically has a negative impact on the brokers already low margins.”

    Wait until TECH iBuyers trend goes full blown stupid! WE techie got billions to waste spend!

    1. “We’re squeezing down our offices into more creative office space where agents don’t have proprietary space, but they do get private space,” Deasy said. “I don’t think bricks and mortar are a necessary component of a brokerage.”

      Deasy Penner and Podley isn’t alone. Most brokers are looking for ways to reduce their square footage, Cosner said.

      “They are not renewing leases or are reducing square footage when they do,” he said.

      DING!!!!! Commercial real estate crash NEXT!!!

    2. “The real estate industry has incredibly low margins,”

      I don’t believe that. Those brokers could be living the easy life as very high commission level agents any time they wanted. Yet for some reason they would much rather be living on those “incredibly low” margins obtained from their team of agents. Wonder why that is? If they weren’t known for being so honest I would suspect that there might be more to the story.

  10. “From The Tribune in California. ‘Jack Hardy, president of Century 21 Hometown Realty in Arroyo Grande, said he’s sold homes for San Luis Obispo County’s median price, although housing markets differ greatly based on location.”

    Indeed. Arroyo Grande does mean “big ditch,” after all. Meanwhile, along the Santa Barbara coast (75 minutes south of Arroyo Grande), median selling prices now firmly exceed their previous (2006) highs, despite grumblings among would-be home sellers and the local REIC that the market has been a bit “flat” this year.

    Barb
    Santa Barbara Bubble
    sbBubble.com

    1. They must hire some of the most incompetent people in america… You have no clue what trigger words will get you suspended and there is not recourse but to have 2 or 3 or more accounts…..I can understand violence racial hate etc, but they have e been on ban a conservative kick for a long time and its getting worse. Look how long it took them to ban Farrakhan…. but no minority seems to get booted. all the blame white supremacists are running rampant on FB… Guess he was FB token………..

  12. I live in South Florida, and it will always be a tale of two cities. Those with money, and those who want to look like they do. When the economy stalls, the wealthy and NY SALT transplants will be fine….the pretenders will get wiped out.

  13. We dropped our little one off yesterday to play with cousins while mom and dad had a day at the amusement park. Sister-in-law and husband live in a nice area close to “Silicon Slopes” but they live in a small Casita in the in-laws. They have been married almost 7 years and have been living rent free for 5 of those years. They have two kids and neither of them are college educated. They are the best people, but they strike me as the epitome of the non-knowledge workers who are being displaced by higher earners in a city that no longer works for them.

    1. We dropped our little one off yesterday to play with cousins while mom and dad had a day at the amusement park.

      Lagoon?

      Sister-in-law and husband live in a nice area close to “Silicon Slopes” but they live in a small Casita in the in-laws. They have been married almost 7 years and have been living rent free for 5 of those years. They have two kids and neither of them are college educated. They are the best people, but they strike me as the epitome of the non-knowledge workers who are being displaced by higher earners in a city that no longer works for them.

      What do they do? Some kind of home/property/construction maintenance and housewife? I have mixed feelings on people like that. I grew up with them and respect that they got caught by surprise back in the 90s or so but these days I would expect them to start adapting a little more. I realize LDS culture makes that tricky.

      1. Lagoon

        Bingo.

        Some kind of home/property/construction maintenance and housewife?

        Bingo again. Welding and stay-at-home mom.

        1. “Lagoon”

          I’ll never forget riding the loop coaster there and realizing someone ahead of us had severe motion sickness and was vomiting while not enjoying the ride.

          1. Yikes! Lagoon has morphed into a pretty decent amusement park. Between their new rides I am very impressed.

  16. Low sales volume doesn’t upset anyone sitting pretty and having breakfast with the Pacific Ocean breeze. The dividends and yields are what the old money really cares about.

  18. “Consumer debt is growing to worrisome levels …

    total U.S. consumer debt hit $14 trillion in the first quarter of 2019, surpassing the roughly $13 trillion of leverage accumulated in credit cards, auto loans and mortgages and other debt back in 2008, when those souring loans and securities pegged to them helped to send global markets into a tailspin”

    https://www.marketwatch.com/story/us-consumer-debt-is-now-breaching-levels-last-reached-during-the-2008-financial-crisis-2019-06-19

    2. Tax added sugar and earmark it for health insurance. Illegal immigrants will definitely cover the cost if the added sugar on Jarritos is high enough.

  22. Any other HBBers looking to move to a smaller city? Downsize your consumption? Upsize your savings?

    1. looking to move to a smaller city?

      I already did long time ago. Now spending those savings in retirement. It’s good to have savings.

    2. “…looking to move to a smaller city?”

      Done, est. 1998 in E. Washington, Columbia Basin.

    4. Any other HBBers looking to move to a smaller city?

      Nope, still raking in the big bucks in the big city while I can, before going oil city in a few years

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