Tony Robbins issues Economic Warning

Posted on August 24, 2010 | 1 Comment

Possible stock market/economic Crash in next 9 months. 

Ok so I thought that I had seen everything.    Let me first start this off by saying Tony Robbins helped change my life 20 years ago.  I respect him to the fullest and he is one of the most influential persons in my life.  These two new videos have been brought  to my attention.  Unusual they are -as I cant ever recall Tony giving a warning like this before.  So if you have about 23 min please do yourself a favor and watch them  – It may help you immensely.

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Posted in depression, Las Vegas Real Estate, National Real Estate, Recession

Shadow Inventory is the new The Loch Ness Monster

Posted on February 18, 2010 | Leave a comment

Many people have reported to see it.

Many more are searching for it.   Many ,many more or wondering if its just a myth.   The legend still grows.

Shadow Inventory will be featured on a new episode of History Channel’s “Monster Quest” next week.

Yes it is a monster and Yes; my friends, I have seen it.  Driving around the many vacant houses, talking to the many people who arent paying their mortgages and going down to the trustee sales  seeing most auctions postponed or cancelled leaves me to believe that this monster is for real.  

The question is how and when will this monster make its appearance?   Will it Just one day walk down the middle of the Las Vegas Strip and announce to the world:  ”Here I am ” or will he make some small appearances here and there over a long period of time thereby making the legend grow?

I am leaning towards number 2.

New article today over all the news wires:

Heartened by the recent rise in home prices? Don’t get too comfortable. Standard & Poor’s, the credit-rating agency that tells investors what mortgage-backed securities are worth, reports that the increase was just an illusion. It predicts the nation is about to see a deluge of new foreclosures that will drive real estate values back down.
Blame the “shadow inventory” – nearly 1.8 million homes that are on the road to foreclosure but for all kinds of reasons haven’t gotten there yet.
Many homeowners have fallen behind on their mortgages or stopped paying, but foreclosure has not yet arrived. Mortgage servicers, the folks who send you the bills and file for foreclosure when you can’t pay them, are overwhelmed. Courts, too, are backed up. Mortgage modifications and foreclosure moratoriums have put off the day of reckoning for borrowers, but not forever. And unemployment is sabotaging more homeowners every day.they just decide to stop paying.

Out of more than $1.6 trillion in existing mortgages that were packaged into mortgage-backed securities by Wall Street, some $425 billion worth are extremely late on their payments, and therefore likely to go into foreclosure. Only a fraction of borrowers who fall seriously behind are able to catch up, with the help of a loan modification. And even then the majority end up falling behind again. That amount of bad mortgage debt has been spiking up every month, slowing down just a little thanks to the government’s Home Affordable Modification Program, but still continuing to rise.

Meanwhile, even as the amount of unpaid mortgage debt rises, the number of foreclosed, bank-owned homes for sale has been holding fairly steady. That tells us that the number of foreclosures for sale on the market is actually just a sliver of all the ones that are really out there. S&P’s chilling conclusion: “Overall, it is our opinion that recent positive housing reports should not be construed as a sign that the distress in the residential housing market is abating, but rather should be attributed to the temporarily limited supply of homes on the market.”

The bottom line: just counting the homeowners who are currently behind on their mortgages, along with the existing number of foreclosures for sale, at the current pace it will take nearly three years to sell all the foreclosures out there. That doesn’t include all the borrowers who haven’t fallen behind yet but are going to, because of unemployment or because their Option ARM payments are spiking up or because

The shadow inventory is equal to half the size of the entire market of homes for sale. When it starts getting listed, expect home prices in areas with lots of foreclosures to plummet. Yes, more.

http://www.housingwatch.com/2010/02/17/the-coming-foreclosure-flood/

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Posted in Las Vegas Real Estate, Shadow Inventory

The Death of Lake Las Vegas

Posted on February 12, 2010 | Leave a comment

“THE MISTAKE BY THE LAKE”

With the announcement this week that the 5 star Ritz-Carlton In Lake Las Vegas will be shutting its doors on May 2nd- rumors are gaining steam that this synthetic Oasis in the desert  may soon see a fall that it wont be able to recover from.

Once a land of  Boom and Dreams, LLV has become a posterchild for the Boom and Bust of  our Housing death spiral.  Building something out of nothing was a dream of the Transcontinental Corp back in 1993,and after 13 plus years of rampant growth - Lake Las Vegas now seems closer to becoming vacated than completed. 

 In 2005 , when driving out to Lake Las Vegas it was hard to keep up with the new upscale developments. The Luxury condos, Townhomes,Condotels,new golf courses and Custom Mansions littered the growing landscape and filled  the vision of what the Developers had put on paper 14 years earlier.  And the amazing thing was the Premium Pricing. Wow it was top shelf. $500-1000 per sq ft was common. Wealthy investors and speculators fed of the dreams of the Developers  and  bought their seldom used 2nd,3rd and 4th homes with lofty pricing with abhorrent HOA fees.

I have stayed out there many times. Once you got there it was pretty nice. Somewhat boring, but nice. The high end hotels,large man made lake filled with Largemouth Bass and designer golf courses wetted many a appettite. But you knew it couldn’t last.

There was no shopping. No schools. It took 30 min to get there from the strip -often driving through not so great areas. The temperture was 5 degrees hotter than the Strip. But once you were there it was -Different.

With the housing crash , came the LLV crash. The developers went bankrupt. A Couple of the golf courses shut down . the Hotels struggled. The one casino-the Montelago almost shut down and is still hemmorhaging cash. The Quaint shopping area -Montelago Village is becoming quickly vacated by the failing small buinesses it leased to. Many of the homeowners have/are walking away from their bad investments.

What is next? And what can stop the collapse?   Honestly I would say it will be many years before we know the answer to this , but I cant see a turnaround anytime soon.  There is a chance that this place could eventually become a ghost town occupied by only tumbleweeds and lost dreams.   Lake Las Vegas mirrors  The City of Las Vegas itself- as a “one trick pony’  whose economy relies on the growth of its Tourism industry with no back up plan.  One thing I do know , you always need a backup plan.  LLV is a example of this.  It will take a very risky large investment and a terrific plan to bring renewed life to this dying suburb.   Unless that happens soon , Lake Las Vegas will eventually dry up and crumble in the desert heat.

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Posted in Las Vegas Real Estate

A scene from the movie “ALIENS” -better known as the Clark County Trustee Sale

Posted on January 27, 2010 | 4 Comments

Yes I was scared.   I wandered down to the planet known as “Nevada Legal News” not quite knowing what to expect on another strange rainy day in Vegas. What I was met with -set me back a bit.  

What are those things? are those Pods?,  Cocoons?    As I approached, I reached into my jacket to pull out my Laser Gun . Ripley would of been proud.   I was going to open fire on those little Alien creatures as soon as they morphed out of them. 

Such is life these days at the Local Trustee Sale.  The foreclosure/investor gammut seems to have made its way down to the areas where only a select few once treaded. Now at the the trustee sales, it is a very competitive setting.  

 Those Pods  are in fact Hunting Stations that are made to camoflauge hunters from Deer or other trophies but are now used for the purpose of Hunting Real Estate Deals.  Little nifty tents these were.   Some of the “hunters” had propane heaters and many had portable laptops with wifi. The smell of Subway subs rafted through some of the openings in these pods.  Every now and then some ramblings were heard -but mostly just quiet.

As I stood in the back , umbrella in hand, awaiting the bidding to begin, I couldn’t help but laugh at the scene.

At 10:15 am the little female auctioneer began the proceedings and many of the 400+ properties were started to be auctioned off (or rather postponed or cancelled ).    

Of course of the few ones that werent cancelled, many received alot of activity from the Aliens.  As the auctioneer quickly spitted out the info on the property(which amounted to the equivalent of the human ear trying to pick up a dog whistle), the Aliens came to life.  Opening bids came out of Pod #1  and then Pod #13 got into it -to increase the bidding. Soon several aliens were out bidding each other in a attempt to steal away the prize- A Local home perceived to be a good deal.  Quickly one of Alpha Aliens won the battle and the house was theirs.  Then after this round of bidding was over, they would escape from their pods and walk into the Legal news office to sign over their numerous Cashiers Checks of many denominations that were stashed in their pockets.

a Interesting process it was.  It seemed most were professionals who had the whole process down to a science. This is their life as they currently know it. And then there were some newbie investors and then some onlookers. It was hard not to over hear the many conversations.

  are you sure there is someone in that house , it was empty last night.

 

 That deal stinks , you overpaid for that.

 

Those guys have no idea what they are doing

It was pretty funny. and eye opening.  But the most amazing part was the apparant lack of margin on the winning bids to actual Property value on the Alien sales.

a example was this house:

2044 Wandering Dove 89134.   A  typical 1700 sq ft 2 story home located in Indian Hills- a average gated sub in Summerlin.  I put the value at 180k( I am very accurate with my values).

opening bid was 130k.  Okay decent room there.  Home is vacant and in apparantly good cond.  After the bidding was completed property sold at 157k.  And that doesnt include the costs as well as various HOA and other small Liens attached.   margin is at 5-10%.   Not enough in my book for the hassle.   Most of the sold ones were like this.

But every now and then a deal came on .  There was a 1900 sq ft one story in Sun City Summerlin on the golf course with some strip views.  Occupied however. sold for 243k and value is 310k.   But this was a rarity.  It seemed most shyed away from the occupied homes and many bid on the available vacant ones.

this kind of reminded me of some of the chaos of auctions and new home lotteries in 2003/2004.      Usually a top is in place when the masses are getting involved. Once the Goverment drip system is over and the deluge comes, will the Aliens seek another planet to conquer?

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Posted in Las Vegas Real Estate, trustee sales

California Dreamin’ revisited

Posted on January 5, 2010 | Leave a comment

And you think it would eventully end – that they would figure out that paying 2.0 mill for a 2500 sq ft house with minimal or no ocean views on a 5000 sq ft lot wasnt a good deal after all.   Just because it sold for 3.0 mill in 2006 doesnt make it a good deal now at 2 mill.   

but some things never change.  

for many of the residents in the higher end coastal areas the Dreamin’  lives on…

Inventory keeps falling and home buyers keep buying -spurring talks of a mini Bubble.

Seems as if manyof these home buyers in So Cal are either:

        1-Smarter than us- as they buy when the market is down.

        2-Dumber than everyone as they think that prices of 6-10 times earnings represent a good deal.

Just go on any of the popular home blog sites from those areas and watch with amazement and horror of many of the buyers reasonings as to why the exorbarant pricing in some of the ritzy areas may be a bargain.

Should be interesting to watch how their tune will change in the coming 2 years…

with that in mind I wanted to repost one of my favorite blogs of 2009-”The Next Bubble- Califonia Dreamin’”

Tha Mama’s & The Papa’s famous tune states-   ” I’d be Safe and Warm-  if I was in L.A.”

They may be warm in LA. , But How Safe is it really? 

Is it Safe to get back into Housing ?  Many of the So Cals seem to think so .  Currently in our crazy economic times , So Cal is experiancing – 4 STRAIGHT MONTHS OF INCREASING MEDIAN HOME VALUES!       Like- Wow !   and how does that make sense?   I thought we were in a MAJOR recession?   I See new stats that the average So Cal homeowner is so far underwater that a Obama search mission cannot possibly rescue their floundering ship.  But yet, prices are going up and Inventory is going down !  Some one please explain how this can be occuring.     I will tell you all-  Here is what is happening and what will happen:

TULIP MANIA – part Duex

As many know, the first speculative bubble in recorded history is thought to be The Tulip Mania which occured in Holland in 1637- during which a rapid frenzied rise in prices for a new tulip bulb contract gave way to a price collapse that wiped out fortunes for many. Popularized in Charles Mackey’s;  “Extraordinary Popular Delusions and the Madness of Crowds”  the concept covers many bubbles with the assumption that crowds of people often behave irrationally. 

Currently we are seeing a mini REO buying mania in So Cal -and to some degree here in Vegas and the other hardest hit metro areas . Vegas and these other areas are also seeing a inventory falloff due to the Obama stimulus plans as well as a “leveling” of prices.  Of course , So Cal likes to go about things “In Style”  so this mini drop in inventory causes a panic that “the bottom must be in” and “now is the time to get a great deal on a bank owned home” as it might be your  “last chance” to ever see these prices again.  This perceived Supply shortfall has caused a Demand Mania. I just came back from a REO conference in Denver and I talked to a couple of big agents in San Diego and Orange County who talked about receiving 30 offers on every single bank owned home that was priced well.  30 offers?  on every house?  are you kidding?   Nope – they are not.  As in all frenzy’s, these tales of having to put in 20 offers to get one accepted and 30 offers on every house tend to only augment the size of the mania- it feeds itself.  So supply will keep going down for a while and the median price will show a continued rise for next couple months-but the best part is -THIS ENITRE MARKET IS FAKE!  

WHEN YOU DROP A FURRY LITTLE KITTY FROM A 60 STORY BUILDING………

Yeah we all know what happens and this current real estate market is right in the middle of this famous quoted “Dead cat bounce” . For the 3 of you that doesnt know what this means-basically when a market collapses it will bounce  up only to fall to new lows as each bounce gets a little smaller than the previous one.  What we are seeing is exactly the work of a maddening crowd- a crowd that should of took more Economic Courses in College rather than the easy 4 credit So Cal 101 course-”My house is bigger than yours and my wife is hotter too” . 

Basically it goes like this …  as stated in one of my previous rants http://vegasandre.wordpress.com/2009/08/16/whats-next-for-vegas-a-great-rebound-or-planet-of-the-apes/, No matter what stimulus package is enacted -nothing will get rid of the negative equity-And when we say negative we mean huge- most are upside down over 100k. Another amazing stat is that in So CAL the amount of loans hitting 90 days delinquent IS TRIPLE what is was this time in 2008.  Amazing isnt it? and of course the rising unemployment . Parden my algebra but I am curious how severe under water + record 90 days late + record unemployment = increase in median prices.   Maybe I should of studied more.   Oh yeah – one more secret ingedient to throw into the mix… 

A NEW PSYCHOLOGY

 A paradigm shift is underway in our society where it is now Accepted and Smart to let your house go rather than working out a solution. At this REO conference I heard from a agent that he is underwater on his 10 homes  over 100k each and that he was letting them all go and collecting free rent till they get repoed by the bank. Another agent listening to this  gave him a  ”Hi Five” and applauded this action.  How times have changed- once it was a Scarlet Letter and now it is the “smart thing to do”  in many eyes.  I heard it all weekend- “hey you can repair your credit in a couple years but how many years to get back that negative equity?”

THE RESULT

Straight to the point- this mini bubble will be our new foreclosures in 2011-2013 and extend this downturn many more years .  I guess as a REO agent -I have some job security ahead of me

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Posted in california housing