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31 comments on The Finance Round-Up: October 17th 2007
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31 comments on The Finance Round-Up: October 17th 2007
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GAIA Host Collective
Yeah, and there is also the self-reinforcing foreclosure cycle in the US whereby current foreclosures and short sales cause neighborhood home appraisals to drop, thus putting additional borrowers in an "upside down" situation where they owe more on the house than it is worth. The result is "jingle mail" where the keys are mailed back to the bank, who then forecloses.
Sometime in 2008, one can expect whole condominum projects to foreclose in Miami.
http://www.youtube.com/watch?v=QVFBojFJTZM
Here in AZ a few days ago on the news they had a whole development a bit outside of town where new houses started at 285K, They were auctioning them off with a reserve of 89K and only selling one in 10 if that.
The problem started when they loaned to those not capable of producing significant wealth through their work.
I followed a link here a few weeks back regarding the Florida condo market. The area being described had a historic appetite for about 1,000 units a year changing hands. There were 9,000 units, mostly unoccupied spec housing, currently on the market.
This has even happened here in the middle of nowhere. We have a little tourist town complex here made of Okoboji, West, Okoboji, Arnold's Park, Spirit Lake, Wahpeton, Egralharve, and Milford - about 6,000 full time residents set in the midst of 21.7 square miles of glacial lakes. Its cool, but its not all that. The far northeast corner in Spirit Lake where the city ends and the farmland begins has a six story condo tower overlooking a bit of East Lake Okoboji and some corn fields. There is a big sign on the side "Discount for first eight units sold". Judging from the parking lot there is someone there in the sales office and its otherwise unoccupied.