Showing posts with label real estate. Show all posts
Showing posts with label real estate. Show all posts
5/2/15
8/27/13
7/6/13
6/7/13
4/4/13
2/23/13
Ashes Of Phoenix
Real Estate Boomtown going up in smoke...
Beware of market prophets in sheep's clothing, they're wolves.
Beware of market prophets in sheep's clothing, they're wolves.
2/20/13
8/28/12
6/27/11
Outside: The Town Seethes A Disquieting Heat
Inside: Blinds drawn waiting for gunfight in the street...
This summer will be a watershed moment for Arizona in the sense that many more people will accept the reality of the fundamental economic and social problems we face in our state. These are essentially the same as the rest of the country except we have economic indicators that seem technically not so bad but are deeply rooted in our almost total dependence on growth by continuous construction and real estate investment. The saloon brawl is over, egos and finances have been bruised, the stockmen and gamblers have retreated to their gathering places and all is quiet in town for the moment, waiting...
On Labor Day 2009 I did a video blog "The Economy and Me: My Hometown, Phoenix AZ" in which I discussed the fundamental problems of our state. On March 17, 2010 I wrote a blog "Phoenix Economic Crisis in Six Paragraphs" that outlined six fundamental problems we face. Two days later I wrote Part Two "We Will Still Need To Wear Shades" of how these six underlying points needed to be addressed if we were going to restore ourselves. These six essential problems still exist and actually were postponed due to 2010 being a year of respite where the inevitable was forestalled by loose money policies of the Federal government.
The points are:
These points remain essentially the same although some events over time have modified or accelerated them. The underlying problem to everything is simple: too much debt and the only way to resolve any of these points is deleveraging and bringing down the debt load of governments and individuals. The standoff between debtors and lenders cannot be forestalled any longer, the moment of who draws guns first has arrived.
The Real Estate problem, both Residential and Commercial along with the Mortgage/Lender Crisis, is heading for a Double Dip that is far worse than the first. At what point people are on the Denial and Acceptance continuum depends on what position they hold in the market. There is not much to be said that hasn't already been said on this topic except that City of Phoenix core has stayed relatively stable to what it had already dropped to. The city is ringed by cheaply built cookie cutter suburbs, mostly sub-prime, that are falling apart and much more underwater than residential and commercial real estate in Phoenix. The entire metro area will not escape another drop though with a few small exceptional pockets.
Unemployment and Underemployment is our most vexing problem. Although our numbers are slightly lower than the national average we're actually in worse shape. Realistically unemployment is somewhere between 15% and 25% but difficult to gauge since we do not have a stable long term population and an inept Local Census Bureau operation lacked credibility in being able to account for that with any semblance of accuracy. Those that are employed or underemployed are primarily in low wage jobs, have received little pay increases and are paying higher health insurance premiums making net pay lower. The jobs we have lost are gone and will not be coming back. This summer what businesses that have not died or fled the state, either because they are teetering or see no future here, will either be killed off or fly the coop. Some of the things that are against us now may very well be what saves us, such as inexpensive, plentiful commercial real estate and a hard working low wage labor force that is known for developed customer service skills.
Our State Government did a good job of balancing a budget the first year of this Legislative Session but the way Arizona government is organized, the burden falls on the counties, cities and towns that for the most part are acting in denial. Eventually they will have to cut services since the tax revenue provided to them by the state simply is not coming in. The political class and bureaucracies of Phoenix and Prescott are particularly guilty of being foolish and unrealistic with their expectations. They continue to operate as if the taxpayers can afford to subsidize their relatively luxurious salaries, benefits and are forging ahead with unrealistic projects and services. The police and fire unions will eventually have to capitulate on salaries, benefits and pensions along with "double dipping" into the system on all levels will have to cease.
Immigration in the form of illegal immigration has slowed by legislation well known as SB1070 but it certainly has not stopped. Our population both illegal and legal has gone underground; much of the legal population of all ethnic groups cannot afford to be out and about as they once did. Significant segments that do are spending borrowed money which also means borrowed time and will end sooner rather than later. We have a high student population due to the wide variety of educational institutions, especially in Phoenix, that traditionally have drawn positive impressions of the state and they either stayed or spread the good word when they left. Now they are just leaving since we are unable to offer them good employment at high wages to pay their colossal student indebtedness back. We are slowly building a strong solar industry which will require us to educate our population in that area as well as other industries we are gradually establishing.
We are in the same position I stated in my video blog of Labor Day 2009. It haunts of an era gone by of the old western town before there is a standoff. Everyone has gone inside, locked the doors and drawn the blinds hoping nothing will happen but knowing that something will. Some are in acceptance and others are in denial. What will occur is a white hat and a black hat representing the debtors and the loan holders, who is wearing what hat depends on point of view, will have a gunfight and one of them will lose triggering off other bullets to fire. When it's all over the dust will eventually settle and the town will inevitably come out and life will begin again. It will take time to reshape what we have and into something more sustainable and substantive but there is every reason to believe Arizona has all the basic elements needed to get fundamentals right again.
http://www.youtube.com/watch?v=FbCARgTdin8&hd=1
On Labor Day 2009 I did a video blog "The Economy and Me: My Hometown, Phoenix AZ" in which I discussed the fundamental problems of our state. On March 17, 2010 I wrote a blog "Phoenix Economic Crisis in Six Paragraphs" that outlined six fundamental problems we face. Two days later I wrote Part Two "We Will Still Need To Wear Shades" of how these six underlying points needed to be addressed if we were going to restore ourselves. These six essential problems still exist and actually were postponed due to 2010 being a year of respite where the inevitable was forestalled by loose money policies of the Federal government.
The points are:
- Residential Mortgage/Lender Crisis
- Unemployment/Underemployment
- State Government Insolvency
- Commercial Real Estate
- Immigration and Population
- Denial and Acceptance
These points remain essentially the same although some events over time have modified or accelerated them. The underlying problem to everything is simple: too much debt and the only way to resolve any of these points is deleveraging and bringing down the debt load of governments and individuals. The standoff between debtors and lenders cannot be forestalled any longer, the moment of who draws guns first has arrived.
The Real Estate problem, both Residential and Commercial along with the Mortgage/Lender Crisis, is heading for a Double Dip that is far worse than the first. At what point people are on the Denial and Acceptance continuum depends on what position they hold in the market. There is not much to be said that hasn't already been said on this topic except that City of Phoenix core has stayed relatively stable to what it had already dropped to. The city is ringed by cheaply built cookie cutter suburbs, mostly sub-prime, that are falling apart and much more underwater than residential and commercial real estate in Phoenix. The entire metro area will not escape another drop though with a few small exceptional pockets.
We are in the same position I stated in my video blog of Labor Day 2009. It haunts of an era gone by of the old western town before there is a standoff. Everyone has gone inside, locked the doors and drawn the blinds hoping nothing will happen but knowing that something will. Some are in acceptance and others are in denial. What will occur is a white hat and a black hat representing the debtors and the loan holders, who is wearing what hat depends on point of view, will have a gunfight and one of them will lose triggering off other bullets to fire. When it's all over the dust will eventually settle and the town will inevitably come out and life will begin again. It will take time to reshape what we have and into something more sustainable and substantive but there is every reason to believe Arizona has all the basic elements needed to get fundamentals right again.
http://www.youtube.com/watch?v=FbCARgTdin8&hd=1
6/23/11
4/12/11
Arizona Landscape
Camelback Corridor at 24th St Biltmore Financial District...
Camelback Mountain in the distance
Camelback Mountain in the distance
12/30/10
Economic, Social and Geopolitical
Mortgage Foreclosure Tsunami...
Delayed and forestalled Double Dip will occur in 2011
http://www.youtube.com/watch?v=Ze9MyGB2tBc
Reference:
"Home Prices Are Still Too High" by Peter D. Schiff WSJ (subscription required) http://online.wsj.com/article/SB10001424052702304173704575578190261574342.html
"Dr. Doom Predicts Another $1 Trillion In Housing Losses" [Nouriel Roubini] NYT
http://dealbook.nytimes.com/2010/12/06/dr-doom-predicts-another-1-trillion-in-housing-losses/?ref=foreclosures
"US mortgage foreclosures rise sharply" FT.com (subscription required)
http://www.ft.com/cms/s/0/3825f4b8-1387-11e0-a367-00144feabdc0.html#axzz19iRnoxL6
Delayed and forestalled Double Dip will occur in 2011
http://www.youtube.com/watch?v=Ze9MyGB2tBc
Reference:
"Home Prices Are Still Too High" by Peter D. Schiff WSJ (subscription required) http://online.wsj.com/article/SB10001424052702304173704575578190261574342.html
"Dr. Doom Predicts Another $1 Trillion In Housing Losses" [Nouriel Roubini] NYT
http://dealbook.nytimes.com/2010/12/06/dr-doom-predicts-another-1-trillion-in-housing-losses/?ref=foreclosures
"US mortgage foreclosures rise sharply" FT.com (subscription required)
http://www.ft.com/cms/s/0/3825f4b8-1387-11e0-a367-00144feabdc0.html#axzz19iRnoxL6
12/16/10
10/14/10
Term of the Day: Foreclosure Mills
Thinly disguised forged document preparers...
Foreclosure Mills: "Law firms that specialize in quickly processing thousands of foreclosures on behalf of lenders."
"Document Mess Hits Fannie, Freddie"
WSJ 10/14/10
Foreclosure Mills: "Law firms that specialize in quickly processing thousands of foreclosures on behalf of lenders."
"Document Mess Hits Fannie, Freddie"
WSJ 10/14/10
The Economy and Me
Conquering Fear of the Future...
Keep a clear head to fend off a sense of pending doom.
Since I live in a state that has been hard hit by the real estate collapse and the evolving mortgage-foreclosure disaster, in the epicenter of the economic damage of the resulting financial crisis, my perspective tends to get skewed on the larger US and world economy. To be sure the outlook is not very good in most places but Arizona, along with neighbors California and Nevada, has been particularly devastated and life often feels unstable with each bit of news about real estate and foreclosures making it seem even rockier. The news can be in the form of a headline, about someone we know, friends, family, workmates, a neighbor, friend of a friend or overheard in public. The feeling can rise suddenly, is unanticipated, unsettling and manifests itself in unexpected ways.
Even those of us that in spite of economic damage due to unemployment and other financial problems but have ourselves, our family and friends, managed to remain fairly intact and stable, relatively unscathed, are beset by unnerving raw thoughts and emotions. We wonder what is the next shoe to drop and even though we have made it through so far and have never been involved in too much debt, real estate transactions gone awry and the like, are concerned we will be hit by flying objects out of our control.
Most people here understand that this entire decade will be spent unwinding and reconfiguring the aftermath of Arizona's economy that collapsed due to an overblown building boom, that resulted in unrealistic real estate prices and far too much reliance on construction. This can cause moments of weariness at looking at the long road ahead or a sense of pending doom.
Truthfully, selfishly I suppose, I'm not worried much about what happens next for me. I'm a survivor and usually manage to make the best of whatever situation I end up in for the duration. My concern is more for what happens to society and institutions around me and how what happens to them will affect our daily lives. I worry about a breakdown in society around me that makes ordinary activity difficult. Since worrying never solved anything and the future can't be predicted, this is a futile waste of brain power. Good old therapeutic self-talk seems to work. These "memos to self" work for me:
Everything changes and in the long term it's usually for the better. A positive point of view and keeping perspective generally makes whatever happens turn out to be a good thing.
Remind myself that just as surely as a bad thought or feeling arrived unannounced, it can be replaced in a flash with another, better thought or feeling.
This is a great opportunity to embrace my inner bohemian. If the future is up in the air, then conventional rules and practices are irrelevant.
If nothing is the same anymore, then the future brings the chance to live life in new, unconventional ways. What is there to lose if the old way is gone?
Nothing ventured, nothing gained. There is an element of truth in what you expect is what you get, so it's a good idea to expect the best.
Keep a clear head to fend off a sense of pending doom.
Since I live in a state that has been hard hit by the real estate collapse and the evolving mortgage-foreclosure disaster, in the epicenter of the economic damage of the resulting financial crisis, my perspective tends to get skewed on the larger US and world economy. To be sure the outlook is not very good in most places but Arizona, along with neighbors California and Nevada, has been particularly devastated and life often feels unstable with each bit of news about real estate and foreclosures making it seem even rockier. The news can be in the form of a headline, about someone we know, friends, family, workmates, a neighbor, friend of a friend or overheard in public. The feeling can rise suddenly, is unanticipated, unsettling and manifests itself in unexpected ways.
Even those of us that in spite of economic damage due to unemployment and other financial problems but have ourselves, our family and friends, managed to remain fairly intact and stable, relatively unscathed, are beset by unnerving raw thoughts and emotions. We wonder what is the next shoe to drop and even though we have made it through so far and have never been involved in too much debt, real estate transactions gone awry and the like, are concerned we will be hit by flying objects out of our control.
Most people here understand that this entire decade will be spent unwinding and reconfiguring the aftermath of Arizona's economy that collapsed due to an overblown building boom, that resulted in unrealistic real estate prices and far too much reliance on construction. This can cause moments of weariness at looking at the long road ahead or a sense of pending doom.
Truthfully, selfishly I suppose, I'm not worried much about what happens next for me. I'm a survivor and usually manage to make the best of whatever situation I end up in for the duration. My concern is more for what happens to society and institutions around me and how what happens to them will affect our daily lives. I worry about a breakdown in society around me that makes ordinary activity difficult. Since worrying never solved anything and the future can't be predicted, this is a futile waste of brain power. Good old therapeutic self-talk seems to work. These "memos to self" work for me:
Everything changes and in the long term it's usually for the better. A positive point of view and keeping perspective generally makes whatever happens turn out to be a good thing.
Remind myself that just as surely as a bad thought or feeling arrived unannounced, it can be replaced in a flash with another, better thought or feeling.
This is a great opportunity to embrace my inner bohemian. If the future is up in the air, then conventional rules and practices are irrelevant.
If nothing is the same anymore, then the future brings the chance to live life in new, unconventional ways. What is there to lose if the old way is gone?
Nothing ventured, nothing gained. There is an element of truth in what you expect is what you get, so it's a good idea to expect the best.
10/13/10
Quality
It's about process...
Somewhere along the way, especially since the telecom/tech bubble and the rapid advancement of electronic communications, doing things in an orderly, well-thought out and thorough process got lost. Speed won out over doing things correctly, the right way, the first time, and now we are paying the price for it. The implications of not following a quality process can no longer be scoffed at, as they have been for the past few decades.
The real estate foreclosure scandal that is now finally coming to the forefront for what it is, a breakdown of proper legal procedure that is factually fraud, is the epitome of disruption of process. There was a reason why for decades prior to the nineties, real estate paralegals and lawyers, mortgage loan officers and title companies demanded precise research and documentation on paperwork for property transactions.
On a large scale those values were lost in the desire to make big and fast bucks by facilitating transactions with speed and little regard for accuracy, expediting them by fax machines and the internet, without thought to the implications down the road. We've barreled down that road uncontrollably, dead ended, and now will be paying a heavy steep price for a long time to come. The repercussions are not limited to real estate, mortgages and financial institutions but ricochet to other segments of the economy also.
It all comes down to quality work. It may be near impossible to unwind who really owns what and who owes what to who in this real estate tangle, due to the sacrifice of accuracy and quality to satisfy speed and quantity. One thing is certain, we will have to figure that out with quality methods in mind. An orderly, well thought out process, that is repeated accurately over and over again over time, is just as speedy as well as correct, results in no or few repercussions in the future. Accuracy and speed are not mutually exclusive of each other and both are integral to a quality process. It is imperative we put quality back at the core of any business transactions we do, as we rebuild our economy and this country.
Somewhere along the way, especially since the telecom/tech bubble and the rapid advancement of electronic communications, doing things in an orderly, well-thought out and thorough process got lost. Speed won out over doing things correctly, the right way, the first time, and now we are paying the price for it. The implications of not following a quality process can no longer be scoffed at, as they have been for the past few decades.
The real estate foreclosure scandal that is now finally coming to the forefront for what it is, a breakdown of proper legal procedure that is factually fraud, is the epitome of disruption of process. There was a reason why for decades prior to the nineties, real estate paralegals and lawyers, mortgage loan officers and title companies demanded precise research and documentation on paperwork for property transactions.
On a large scale those values were lost in the desire to make big and fast bucks by facilitating transactions with speed and little regard for accuracy, expediting them by fax machines and the internet, without thought to the implications down the road. We've barreled down that road uncontrollably, dead ended, and now will be paying a heavy steep price for a long time to come. The repercussions are not limited to real estate, mortgages and financial institutions but ricochet to other segments of the economy also.
It all comes down to quality work. It may be near impossible to unwind who really owns what and who owes what to who in this real estate tangle, due to the sacrifice of accuracy and quality to satisfy speed and quantity. One thing is certain, we will have to figure that out with quality methods in mind. An orderly, well thought out process, that is repeated accurately over and over again over time, is just as speedy as well as correct, results in no or few repercussions in the future. Accuracy and speed are not mutually exclusive of each other and both are integral to a quality process. It is imperative we put quality back at the core of any business transactions we do, as we rebuild our economy and this country.
10/11/10
Deleveraging and Insolvency
The Real Estate and Mortgage Foreclosure problem is unresolved...
Unwinding will take years but we can rise above while resolution is occurring.
It seems to me that if the major banks and mortgage companies are placing moratoriums on foreclosures due to affidavit and auditing problems on tens of thousands of foreclosures already processed, the problem must be deeper than currently being admitted. Truth is bubbling to the surface. The banks and mortgage companies have been trying to get out of these loans as quickly as they got into them, without proper procedures, due diligence and documentation. Rationally, this situation will take years to unwind and cannot be sped up no matter how much financial institutions and the government try to force the process. The implications cannot be understated.
Essentially this quagmire throws the entire real estate industry into chaos and ultimately threatens the entire financial and banking system. The mortgage business as we know it will require an overhaul, at the very least. I don't think it is at all dramatic to state this, only time will tell exactly how it plays out. In the long term I'm not sure it's a bad thing, it is an opportunity to reshape these businesses back into more natural and free markets. There is plenty of blame to go around that can be affixed later, the important thing now is to fix the problem. The big players have been gambling on a fantasy accounting game for several years now, where everyone pretended that houses and commercial property were still worth in real life what was owed to the lenders on paper. The reality is that gap makes the lenders insolvent.
As the slang saying goes: "Da Nile isn't just a river in Egypt."
Now is truth telling time and recognition that there can be no further delay in dealing with the substantial readjustment of the value of what real estate, and subsequently other property and currency, is factually worth. This is a tough, difficult process that a lot of people are not prepared for but the longer it is delayed, the more pain there will be when it inevitably reaches a coda.
It is the end of the world as we knew it but not the end of the world, rather the beginning of a new one. History has many examples of such periods and humanity always rises to the occasion. I wouldn't paint a pretty picture on the heartache and burn this will cause a lot of people nor would I say that it will be impossible to work through it. How we face up to the situation as a people and endure while grappling with the problem will be a testament to our character as a country. I believe there are enough people with the mettle to forge a path for all of us to get through and rise above what difficulties may come.
Unwinding will take years but we can rise above while resolution is occurring.
It seems to me that if the major banks and mortgage companies are placing moratoriums on foreclosures due to affidavit and auditing problems on tens of thousands of foreclosures already processed, the problem must be deeper than currently being admitted. Truth is bubbling to the surface. The banks and mortgage companies have been trying to get out of these loans as quickly as they got into them, without proper procedures, due diligence and documentation. Rationally, this situation will take years to unwind and cannot be sped up no matter how much financial institutions and the government try to force the process. The implications cannot be understated.
Essentially this quagmire throws the entire real estate industry into chaos and ultimately threatens the entire financial and banking system. The mortgage business as we know it will require an overhaul, at the very least. I don't think it is at all dramatic to state this, only time will tell exactly how it plays out. In the long term I'm not sure it's a bad thing, it is an opportunity to reshape these businesses back into more natural and free markets. There is plenty of blame to go around that can be affixed later, the important thing now is to fix the problem. The big players have been gambling on a fantasy accounting game for several years now, where everyone pretended that houses and commercial property were still worth in real life what was owed to the lenders on paper. The reality is that gap makes the lenders insolvent.
As the slang saying goes: "Da Nile isn't just a river in Egypt."
Now is truth telling time and recognition that there can be no further delay in dealing with the substantial readjustment of the value of what real estate, and subsequently other property and currency, is factually worth. This is a tough, difficult process that a lot of people are not prepared for but the longer it is delayed, the more pain there will be when it inevitably reaches a coda.
It is the end of the world as we knew it but not the end of the world, rather the beginning of a new one. History has many examples of such periods and humanity always rises to the occasion. I wouldn't paint a pretty picture on the heartache and burn this will cause a lot of people nor would I say that it will be impossible to work through it. How we face up to the situation as a people and endure while grappling with the problem will be a testament to our character as a country. I believe there are enough people with the mettle to forge a path for all of us to get through and rise above what difficulties may come.
9/1/10
Real Estate Bubble Chart
We have not reached bottom...
Don't be fooled by the psychology of the market. People are clinging to the hope of a real estate recovery. We are not yet at the bottom.
from Irving House Blog
We are on the verge of a global currency crisis, stock market crash, bank failures, government insolvencies and it's not the bottom for real estate. The best way to face multiple crisis is to look straight at them with clarity and no fear. It is the only option for resolution, which will take effort, time and creative thinking.
Don't be fooled by the psychology of the market. People are clinging to the hope of a real estate recovery. We are not yet at the bottom.
We are on the verge of a global currency crisis, stock market crash, bank failures, government insolvencies and it's not the bottom for real estate. The best way to face multiple crisis is to look straight at them with clarity and no fear. It is the only option for resolution, which will take effort, time and creative thinking.
Subscribe to:
Posts (Atom)