Posted on 08/11/2009 4:47:21 AM PDT by TigerLikesRooster
Volume of 'subdivision' vacant lots overwhelms banks
Some fire-sale prices on have dipped to 20 to 30 cents on the dollar
By Paul Donsky
The Atlanta Journal-Constitution
12:00 p.m. Saturday, August 8, 2009
You think it’s hard selling a house these days? Try unloading a subdivision.
And not just any subdivision, but one with few if any completed homes and a weedy patch where the swim-and-tennis center was planned.
That’s the reality many Georgia banks find themselves in amid a foreclosure crisis that has claimed not only individual homes but also entire failed developments.
These idled, “zombie” subdivisions can be found across metro Atlanta, but they’re most prevalent in outer-ring suburban areas. Selling them has proven tough, with some properties sitting on the market for months on end without even a nibble.
The fallout has been stark.
(Excerpt) Read more at ajc.com ...
Ping!
Sounds like an opportunity...
I recall looking at Realtytrac.com even back in 2007 and spotting more than a few suburban developments that seemed to be about 50 percent in foreclosure.
I don’t think there’s much question that someone was engaged in mortgage fraud.
This will continue spreading and spreading — but Obama says things are looking better -— for he and his well healed political hacks.
......Sounds like an opportunity.........
In Knoxville Tennessee a company is advertising exclusive lakefront property at about that megadiscount rate. They quote sale prices of adjacent properties in the project at three or four times the current fire sale.
Imagine the chagrin of the neighbor who paid 400 grand for a property and the one next door goes for only 75 g’s
I saw this and it made me wonder how many Freepers, much less, how many in General Population, understand the awful significance of this.
Yeah, it’s an opportunity.
If you can afford to sit on it for a generation until the housing supply and demand even-out again.
____________________________________________
Please enlighten us in detail.
There is no recovery, only economists lying to protect their messiah.
Pray for America
The awful significance is speculation. Some developers thought they were going to get rich developing a corn field or a patch of woods into a subdivision. Can’t feel too sorry for them.
I live in South Forsyth County and there are no fewer than 3 of these abandoned subdivisions right around mine. They have roads, sewer caps, partially built entrances and weeds. Not only are they a blight on the landscape, but they are prime opportunities for kids to get in trouble by racing the roads and congregating for beer parties.
Buying a subdivision without no homes or almost no homes could be a chance to build a neighborhood to a specific set of values in a conservative HOA.
During the oil collaspe of the middle 80s, those sights were all too common in Texas. It was eerie, everything would be in place except the buildings: light poles, slabs, driveways, utilities.
The RTC came in and quite a few people got rich buying up those properties as they became government property when the developers let them go to the banks which then collapsed.
It was sad to see.
Vince
We’ve got the situation of a dog chasing it’s tail down a bottomless pit. It’s virtually a mirror image of the 1930’s except in this case, rather than farms, it’s residential real estate. Thus when we read the article, we note: “Banks that backed these projects are taking it on the chin, recording huge losses as they foreclose on property and make sales at a fraction of the original loan price.In the past year, 16 Georgia banks have failed, more than in any other state, largely because of residential real estate losses. Dozens more are struggling.”
The FDIC has already intervened, i.e., taken over 78 failed banks this year and near broke. Many would say, well, the FDIC can’t go broke because the Fed can always print fresh dollars to prime the FDIC; the problem with that is that the collateral for the dollar, if you will, i.e., the value of goods, services, production and property of the underlying economy is falling precipitously in value which can lead to only one thing, a devaluation of the dollar.
Then there’s another 2 shoes to drop; 1) as heard on the Radio this a.m., while the Banks appear to have regained their footing, they won’t be able to withstand a collapse in “commercial real estate” which is doubtless set to occur because commercial real estate loans are short term and are comming due to reset at the same time that many of the existing loans are near or at default and the value of the underlying properties is in steep decline due to high vacancy rates. None of the commercial bank loan Banks are presently willing to or capable of re-setting those loans; the final shoe is 2) One Quadrillion in “derivatives” on the books of these very same banks. That’s 1000 Trillion. If my understanding is correct those derivatives turn out to be instruments the banks created to borrow against the loans they had made.......at a ratio of 30:1. Even the Feds can’t absorb One Quadrillion in losses which means the banks.......go down.
I’m still researching the matter but one analyst I’ve been following is suggesting we’d best be putting some cash aside to prepare for a “Bank Holiday”.
That area looks like North Korea.
Depending on the state you live in, and the bankruptcy laws, many informed people are cashing in on this.
They are using the equity in their first home, to buy a second home, at a much lower price, then declaring bankruptcy.
Courts allow you to keep 1 home, so they recommit to the bank on the 2nd home, and lose the 1st one (which they may be under the tank in).
Here in Illinois, I know 2 very wealthy people who have done this.
How do very wealthy people declare bankruptcy? Heck if I know. I wish I did know.
My former boss who owns a large commercial printer (net worth about 200 million) did this and bragged about it. Now of course, he owns about 5 LLC’s, and I am sure his property is owned by these LLC’s, but somehow this is being done. His brother did the same thing.
They both gave up their original brownstones in Chicago (across from what was Cabrini Green), and moved to the suburbs into sprawling Lake Forest mansions, all under the guise of bankruptcy, and the law of keeping one home. The one owner, Ken, claimed he got a property that was worth 18 million 2 years ago, for 6 million, and bragged to all is managers about it.
BTW, Ken is also a devout liberal. Ironic in a way.
See post 18. This kind of thing affects all of us.
Doing the dirt work and putting in the sewer and water systems in subdivisions is what my son has been doing for the past 9 years. He rarely worked less than 60 hours a week. When we were visiting last month he took us to 3 empty subdivisions that he had done and pointed out even more that had one or two houses completed but empty.
Real estate in his area has been prohibitively expensive but he thinks he can afford to buy a house now.
“Imagine the chagrin of the neighbor who paid 400 grand for a property and the one next door goes for only 75 g’s”
There doesn’t need to be a ‘financial crisis’ of any kind for that to happen; you just need Socialists running your city!
‘The People’s Republik of Madistan’ has tons of vacant high-rise condos downtown that no one wants. Literally millions of dollars tied up on these TIFF funding scams (where the city kicks in a percentage for the builder) and they DEMANDED Section Eight housing be part of those projects.
So, those with the means get to have a high-rise condo for $400K and their Section Eight neighbors get theirs for $100K for the same floorspace and gorgeous lake view.
People of means are NOT stupid and aren’t buying, or if they’re smart they’re hiding their assets and applying for the Section Eight housing, LOL!
Eventually, those luxury condos will all go Section Eight, the city will ultimately be responsible for the bill (which means the TAXPAYERS will be!) and we’ll have yet another blighted spot on our hands where the thugs with ‘unreportable income sources’ from Chicago and Milwaukee move in and take over.
It’s pure insanity...but it’s PLANNED insanity where the LeftTards are concerned! It’s all about being FAIR. *SPIT*
As long as people are still losing their jobs there will be no recovery.
“The hardest hit areas are on the region’s fringe, Palm said, such as Bartow, Jackson and Newton counties, where there’s tons of supply and few sales.
Sitting in front of a computer at his home office, Palm pulls up a color-coded map of metro Atlanta showing lot supply by U.S. Census tract. An ominous arc of dark reds and browns encircles Atlanta.
‘This is the ring of death,’ he said.”
I’ll bet every major metro area has a ‘ring of death’ these days. Even my little Cow Town of 6K has a condo subdivision with golf course built on the outskirts about five years ago with most of it sitting empty and only the smaller condos selling. Acres and acres sitting, waiting for ONE single-family home to be built there, and then last season when we had the flooding, a lot of the condos had water damage due to poor drainage design!
http://www.thelegendatbergamont.com/real-estate
Poor Andy North, LOL! Some ‘legend’ to leave behind, but it is a very pretty spot with all that ‘green’ but I’m sure they were thinking dollars, not grass, LOL!
It is in the organization of their businesses and they have good lawyers.
The government is getting ready to do a buyout of dairys. The government buys the cows and you aren’t allowed to have a dairy for a year but most of them are going to have one immediately after the buyout using different organizing techniques.
When the government runs those cattle through cattle auctions to recoup some of their money there will be an oversupply of beef and beef cattle ranchers are going to take it on the chin.
Farmers who grow feed will also take it on the chin and I guess even more than they are now. Alfalfa has gone from 200 a ton to 60 just recently.
You pays your monies and you takes your chances....it has always been thus.
Others have said that as well.
I suggest you put aside more than money too.
Why? Propping up the price of cheese? This sounds like FDR's plan where the government paid farmers to fail and other people starved.
Thank you.
I’ve got a similar PVC forest over in Smyrna across the street from my neighborhood. It was supposed to be laden with $400K homes that would eventually drive the value of the entire neighborhood up...at least that’s what the developer told us all.
Not when they are worth 10 on the dollar, no opportunity here. When housing prices were obsurd developers would pay anything knowing they could pass it on and a buyer would show up willing. Now those parcels of land they paid rediculous sums of money for, aren’t worth didly, particularly undeveloped.
To you and others who are watching this, please see:
http://market-ticker.denninger.net/archives/1319-Banking-and-Credit-It-Is-NOT-Over.html
I think I should post something like a “may make you sick to your stomach” alert. It’s a reasonably better explanation of what I’ve been finding in my endless quest for the truth. Sadly, the MSM and those who might better understand the machinations of the banking business are playing it very close to the vest and I’m having a great deal of trouble gathering quality information on this topic.
I’m in one of these subdivisions, although in SC. 1 builder built 15-20 homes, then sold the remaining of 77 lots to another builder. That builder put up 10-15 homes (total now of 31) before both builders went bankrupt.
The remaining 30+ lots have gone to a bank who does not seem all that interested in selling them yet. A neighbor and I have been interested in buying and splitting the lot between us, but the bank is not interested yet.
In terms of the general public they are now waking up (unless hard-core Obama hacks) to the fact what's in the White House is dangerously dictatorial, not only on state-mandated health care schemes, but numerous other issues.
“Not only are they a blight on the landscape, but they are prime opportunities for kids to get in trouble by racing the roads and congregating for beer parties.”
Those were fun times!
Oof. I’m glad I don’t have anything like that, that close to me.
Mortgage fraud may be a stretch for some, but stupid lending and hit-and-run mortgage brokerage fees sure come to mind. Too bad there is no claw-back to hit the mortgage brokers.
Thanks again, from a RE investor.
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