http://condogossip.com/blog.php en Mon, 08 Sep 2008 11:38:39 GMT vBulletin 60 http://www.condogossip.com/images/misc/rss.jpg http://condogossip.com/blog.php http://condogossip.com/blog.php?b=24 Sat, 30 Aug 2008 18:55:21 GMT I was right about USO (US oil) just about perfectly. After July 4th we experienced a large sell off. I have included an image of USO the US Oil... I was right about USO (US oil) just about perfectly. After July 4th we experienced a large sell off. I have included an image of USO the US Oil ETF. This is not the per barrel price CL@1 but it tracks it very closely. Especially on a relative basis. Percent up, percent down.



For the short term at least, i was wrong about the XLF. I bought at 23.33 in my previous blog post. It took a nasty dip right after. The good news is that it made a sharp recovery after that. This was the bounce i was trying to catch for a quick profit. At least the bounce was an opportunity for me to get out at 22.50 with my shirt. If you are not already out of the XLF or banking and financial sector vehicles i recommend you get out asap! I expect another round of weakness to hit us hard in this sector. Here is a graph of the XLF ETF. It's taking people on wall street alot longer to realize the depth of the financial problems than i expected. Perhaps because alot of firms are attempting to hide their problems. The next shoe to fall is probably commercial loans. Or we may see more bank failures.




I expect the broader market to put in a bottom in late September or early October. We need to re-test the lows of 1200 on the SP500 before we can go higher. I expect it to do this before the election and then have a bull market through February 2009, regardless of who is elected. Most likely banking/financial stocks will be the catalyst for the double bottom in the S&P500. I would also like to see the VIX get above 30 on this move down. (Volitilty Index)

I called the bottom in real estate alot sooner than anyone else. I said 2009/2010. Now you are starting to see alot of people saying this. Jim Cramer from Mad Money is calling the bottom in July 2009. This will not be a "V" bottom whenever it occurs and we will pull ourselves out of it very slowly. Don't expect gains till 2011. I have included a graph of the IYR ETF which tracks real estate prices in the US roughly.



Inflation will continue to hurt us for the next 2 or 3 years. I personally believe the Bush Administration allowed the dollar to de-value so much to help soften the blow of the real estate meltdown. This makes the nominal value of your condo or home appear to not change as much. However; the actual loss of value remains the same. Sneaky... huh? hehe :mad: ]]> jake http://condogossip.com/blog.php?b=24 http://condogossip.com/blog.php?b=23 Fri, 18 Jul 2008 03:00:05 GMT 3. up % = down % People think that 10% up is equal to 10% down. This is not true. The down percent is larger. This is why losses hurt you so much.... 3. up % = down %
People think that 10% up is equal to 10% down. This is not true. The down percent is larger. This is why losses hurt you so much. Lets say you have 10,000 dollars and you loose 10%. That's 1,000 dollars. You now have 9,000 dollars. You will have to make 11.11% inorder to regain your 1,000 dollars.

2. Big loses are ok as long as you have bigger gains. 80% this year is worth it, even if you loose 50% the next year. Sounds good right? No because again if you have 10,000$ and you make 8,000 you have 18,000. Now if you loose 50% you will have 9,000. 5% per year would yield you more money. About 11,025 at the end of two time periods.

1. As long as you make a greater interest rate on an investment than your debt, it's best to invest instead of paying down your debt. This is the biggest interest rate myth of all time! I remember the first time i heard this. A car sales man told me about this in the early ninties. I thought it was very perplexing. I couldn't quite put my finger on it. Everybody thinks that if you make 6% on a CD and your mortgage is 5% you should invest in the CD and make the 1% spread!! Idiots... You are loosing a ton of money. I can't tell you how many people i hear this from all the time. Not only is it incredibly stupid, but the people always think they are so clever and smart. They always do the math wrong.

If you don't owe the money, you don't owe the interest on it! In this example, if you were to take off 10,000 from your mortgage costing you 5%, it would save you more than 500 a year. You are only making an extra 100$ a month by purchasing the CD at 6%. Would you rather have 500$ dollars a year or 100$ a year!!! Duh! This doesn't even take into consideration compounding. The CD will only last a few years, whereas, mortgages generally last 30 years. So a little more off the top will save you huge money over the life of the loan. ]]> jake http://condogossip.com/blog.php?b=23 http://condogossip.com/blog.php?b=22 Thu, 03 Jul 2008 22:00:50 GMT "Location Efficient" is the newest word.

See my past blogs. I have been talking about the point where condos become more efficient than single family homes. This point is fast approaching if not upon us with 150$/barrel oil. Now people are starting to talk about your gasoline bill as a monthly cost. You can add the monthly cost of living in the suburbs to your monthly rent. Say 200$ a month. Additionally heating and cooling bills for property will continue to rise no matter where you live as electric and natural gas prices rise steadily.

Intown property and condos should benefit from the current trends. ]]> jake http://condogossip.com/blog.php?b=22 http://condogossip.com/blog.php?b=21 Mon, 16 Jun 2008 00:01:45 GMT Apparently things aren't that bad in Miami real estate as you might hear. I am down here this weekend shopping for some properties and i have to say i am shocked at my reception. I thought sales offices would roll out the red carpet for prospective buyers. Far from it. Even the Realtors i have talked to haven't been that responsive.

Marina Blue in Brickell has a closed sales office on the weekend. The concierge is unable to provide you with any sales literature, information or contacts.

I called for a look at "The Plaza at Brickell" at 2:30pm on Sunday and the sales person told me they closed at 3pm and she would just send me an email instead. Haven't gotten the email and didn't get to tour the building.

I called the number published in the weekend paper for ONE Miami and the fellow didn't speak much english. (I don't speak that much spanish but if i was in sales i would at least have a spanish contact i would immediately transfer you to) He wasn't much interested in showing me his resales anyhow.

I stopped by the 900 Biscayne sales office on a Saturday afternoon and although the sign says they are supposed to be open on the weekend and two cars were in the back, the doors to the sales center were locked.

Most buildings have no visible signage, sales office or place to park. Couldn't find the sales office at 50 Biscayne! Since there is no where to park, i couldn't even get out of the car to walk around.

I am beginning to think Floridians can't sell a glass of water to a man dieing of thirst. I can't figure it out. The best i could guess is that they have had bad luck with walk-ins in the past and don't really care for that market. Or is it possible that they have not adjusted their sales methods from the heady hey days of rapid condo sales? Maybe they expect the condos to all sell themselves. Whatever the case, things must not be that bad... ]]> jake http://condogossip.com/blog.php?b=21 http://condogossip.com/blog.php?b=20 Tue, 10 Jun 2008 02:29:32 GMT Well i am headed down to Miami this coming weekend so look for some fantastic updates. Unfortunately, I won't be hosting any parties for the website this year. I will be having a great time and relaxing. I expect to get some fantastic updates and great photos. It will be strange to see the sky line completed now and most of the buildings in place. Anyways, just a heads up to check the miami content in about a week or so.

If you know of any events in Miami i might be interested in this weekend, let me know. Thanks. ]]> jake http://condogossip.com/blog.php?b=20 http://condogossip.com/blog.php?b=19 Sun, 08 Jun 2008 02:30:43 GMT Well the XLF broke 24 on Friday June 6, 2008. I bought the banks at market close. Those who are smart and read my blog remember that i have been... Well the XLF broke 24 on Friday June 6, 2008. I bought the banks at market close. Those who are smart and read my blog remember that i have been advising people to buy the XLF (or financial and banking mutual funds) when the XLF goes below 24. The XLF is an ETF index of the banking and financial stocks. It's a great indicator for the financial sector. I bought at 23.33. We'll see how i do :)



Most people are probably wondering when the real estate market is going to bottom. I think we are at the bottom, (although some haven't marked to market) but we won't see any price improvements until 2010. So we need to hang out at these levels for one more year. Take a look at the IYR. This is an ETF that tracks the Dow US Real Estate Index. As you can see the 50 day moving average is about to break through the 200 day moving average. The last time this happened was in July of 2004. It lead to quite a bull market for real estate companies that the index tracks. Could this be a proxy for property prices? Maybe. Also notice the high of 95 in Feb 07 and the 40% retracement to 57.50 low. It has stabilized at ~70.00 which is a 26% drop in price from the peak.

How does this compare with property prices? I bet it lines up well. Since price is really a measure of sentiment. If someone has a property price index or data. Please share it.



Consult your financial professional to consider an investments suitability for your situation. ]]> jake http://condogossip.com/blog.php?b=19 http://condogossip.com/blog.php?b=18 Sun, 18 May 2008 16:50:48 GMT _Real Estate and Condos:_ Everybody I know and their brother plans to sell real estate in the spring of 2009. This is a troubling trend. Currently,... Real Estate and Condos:
Everybody I know and their brother plans to sell real estate in the spring of 2009. This is a troubling trend. Currently, in the spring of 2008, price discounts are steep and the ability to borrow capital is tight. We should see continued easing of the mortgage markets (availability of capital) but probably more declines in price.

After the second round of speculators gets in this spring and many people take ownership of their condos. (Many condos will be delivered in 2008 in Miami) Owners will start to realize the size of their carrying costs. (HOA Fees, property taxes and unit maintenance) Again, certain markets have fees that are way out of proportion to actual costs and needs. Look for amenities to get cut like crazy. Owners will realize that a condo isn't an investment vehicle but a "home" later this year. This realization will be triggered by the complexity of homeowner association viability, lawsuits and construction defects. This will create continued price pressure in 2009 and 2010.

The good news is that the current energy and commodities trends may help support condo pricing soon. I call it "condo efficientcy price rationalization" or CEPR for short. For condo's this means they will be priced cheaper than alternatives. (For example a free standing home.) With increasing energy and raw material costs I think we will reach this "point of efficiency" in the next 5 years and condos will benefit from being cheaper than their alternatives. As opposed to currently and in the past few years where they have been priced at a premium to regular real estate.

Condo prices will also benefit from the high price of gas. Generally the buildings are well located near restaurants, work and mass transit. This creates homeowner savings and condo value.

Stock Market Report:
The current updraft in the market will end in the next month or two. The market shouldn't exceed S&P 1450 or 1500. I think it will range at 1450 for a while before falling. I also predict oil will top in the next 2 months, if not by the end of May, and return to 80$ a barrel price very quickly. You know you have reached a top when you see commercials on TV talking about gas prices. There are offers locking in 3$ rates for new cars or "free" gas for other new cars. It's all the guy on main street can talk about-- which is a sure sign of a top.

The government says it will stop filling the SPR (Strategic Petroleum Reserve) in July, demand is starting to react to the 4$ price, (people are trading Hummer's for civic's) and a democratic victory in November seems possible. A democrat in the Whitehouse should lead to a draw down in Iraqi activity which will lead to less fuel consumption from the largest petro consumer in the world: The US military.

Expect a double bottom in Financials, I'd buy financials anytime the XLF hits 24. Which I think we will see by October if not sooner.

Consult your financial advisor/realtor to consider a trades suitablity for your specific situation before investing. My blog represents my opinions. ]]> jake http://condogossip.com/blog.php?b=18 http://condogossip.com/blog.php?b=17 Sat, 05 Apr 2008 17:02:23 GMT The center of Buckhead nightlife seems to be the new Fado's. The new two story location is packed. It is located right next to the Eclipse condominiums and the Buckhead public library. (Yes we have libraries in Buckhead!! Developers have been trying hard to buy this land from the city and tear it down.) Pretty much everybody is at the new Fado's. It's very hot right now. I ran into alot of people i know last night. A rainy Firday night.

The Streets of Buckhead project is under construction all around. Tongue and Groove will not be opening at 3044 Peachtree at the location of the old "BAR" night club, lately a furniture store. Apparently they have taken over the lease at the old "Lotus Lounge" in Lindburgh station. This is a big win for the Eon condos. I think the Peachtree Road / Buckhead Village location would have been far superior. Especially in the future.

John Frazier is no longer the manager at VIA restaurant at the Eclipse. He has moved on to other opportunities. I am not sure how VIA is doing these days. I think Jonathan Orozco will be promoting it and providing photography. Walter Tello aka "Wally Bear" finished up his promotions and photography stint with them in December 2007. ]]> jake http://condogossip.com/blog.php?b=17 http://condogossip.com/blog.php?b=16 Fri, 21 Mar 2008 02:32:10 GMT Well i have heard about alot of ways to choose a condo. Location. Best chances for price appreciation. The view. Hot pool action. But the best... Well i have heard about alot of ways to choose a condo. Location. Best chances for price appreciation. The view. Hot pool action. But the best idea for picking a condo comes to me from Rebecca. She says a person should check the parking lot to see what kind of cars are there. I got a good chuckle out of this at first, but the more i think about it the more i think she may be on to something. Car's are a very accurate personality indicator. A person's car is like their cloths now days. It says alot about you. (whether you like it or not)

It's pretty much a personality and age meter. You get a pretty good idea of what's going on inside the building by looking at the cars. For example, when i go to Lola and Bricktops (or Bluepoint for that matter) i always see the valet pull around a Ferrari or a Lambo and some pathetic old guy with gold chains gets in. Two minutes later a silky hot fox comes out and they pull her Geo metro around or her honda civic. Conclusion: gold diggers paradise. Now it's alot quicker (and cheaper) to figure this out in the parking lot than inside.

The car indicator is genius, it tells you about bars and it tells you about condos. Check the parking lot before you buy next time. If you see alot of caddies forgedda bout it. If you see alot of Geo metro's, now that's what i am talkin about!!... But if you drive a Geo yourself you might be looking for Hummers (although i say this is a douche bag car) BMW's, Acura's and Mercedes. Little ones ofcourse. Only my grandpa drives an S class or a 7 series. ]]> jake http://condogossip.com/blog.php?b=16 http://condogossip.com/blog.php?b=15 Thu, 06 Mar 2008 23:24:03 GMT The new limits are bullshit! These new "temporary" limits make the problem worse. They help the most inflated markets on the east coast and west coast remain overbloated in fantasy land. The working people in the middle of the country get no help at all. They get punished for responsible pricing while the most irresponsible people get the most help. :koko: It doesn't make sense to help some but not others!


Atlanta, GA 417,000
Boston, MA 523,750
Chicago, IL 417,000
Dallas, TX 417,000
Honolulu, HI 793,750*
Las Vegas, NV 417,000
Los Angeles, CA 729,750
Miami, FL 423,750
New York, NY 729,750
San Diego, CA 697,500
San Francisco, CA 729,750
Seattle, WA 567,500

*Allowed to be higher than limit due to construction costs.

You can check the government site for yourself. Change the "Limit Type" box to "Fannie/Freddie"

https://entp.hud.gov/idapp/html/hicostlook.cfm

Note that the FHA loan limit has been raised as well. FHA is a government loan system that helps first time buyers and low income people by get loans. I think it was raised to 350k in Atlanta area. ]]> jake http://condogossip.com/blog.php?b=15 http://condogossip.com/blog.php?b=14 Sun, 02 Mar 2008 21:46:40 GMT Serranoatlanta.com Serranoatlanta.com ]]> rnorthcutt http://condogossip.com/blog.php?b=14 http://condogossip.com/blog.php?b=13 Sun, 02 Mar 2008 00:50:45 GMT You heard it here first. Condogossip.com predicts mortgage interest rates will rise going forward from March 2008. Although the fed may cut rates... You heard it here first. Condogossip.com predicts mortgage interest rates will rise going forward from March 2008. Although the fed may cut rates for banks and other interest rates like your checking account and CD's may go lower this year, mortgage rates won't. I believe mortgage rates are headed higher. The rates will include the greater risk premiums, documentation premiums as well as the cost of more expensive mortgage default insurance. Non-conforming loans will continue their recent trend of at least a 100 basis point premium over conventional rates.

I don't believe that the condo market will bottom until 2009. We will no doubt get a dead cat bounce this spring. This is seasonally the busiest real estate time. We will also see another round of speculators hitting the market due to all the recent press coverage of dramatic price dips. This will be short lived. I still don't see widespread capitualtion in condo markets. Developers have been much quicker to adjust their pricing. Individuals have been slower to adjust their pricing.

After the second round of speculators gets in this spring and many people take ownership of their condos. (Many condos will be delivered in 2008 in Miami) Owners will start to realize the size of their carrying costs. (HOA Fees, property taxes and unit maintenance) Again, certain markets have fees that are way out of proportion to actual costs and needs. Look for Amenities to get cut like crazy. Owners will realize that a condo isn't an investment vehicle but a "home" later this year. This realization will be triggered by the complexity of homeowner association viability, lawsuits and construction defects.

Homeowner associations are complex things that require a lot of effort and participation by the homeowners to make them function correctly. Even under the best of circumstances they are more difficult to operate than most people understand. A vacant building of out-of-town homeowners presents a challenge to an association. Trying to balance your association's books when you have 50 foreclosed units in your building presents an even greater challenge. The association will collect no fees from the units in foreclosure., sometimes for many months. This makes the burden even larger on legit residents.

I expect lawsuits to start flying. People will probably sue their association because they aren't taking care of basic services or doing this or that correctly. This will make units harder to sell. Construction companies will sue for unpaid construction costs by the developer. (For example the sheet rock company suing Turnberry homeowners in Las Vegas)

One of my big concerns is construction quality. Even in the best of times contractors cut every possible corner and only the honest reputable ones do a decent job. When things get ugly with money, expect all kinds of strange results. I would even go so far as to predict a building will collapse somewhere. When the first hurricane hits a coastal town expect to find out that the glass used wasn't what the design specs called for!

These are some of the things i believe will lead to a bottom in 2009. As you can see it's not just about price movement, it's the annoyance factor. People will just get so fed up with all the hassels of condo ownership that they will sell at any price just to get out. Look for press stories about these homeowner hassels later this year and throughout 2009. ]]> jake http://condogossip.com/blog.php?b=13 http://condogossip.com/blog.php?b=12 Mon, 25 Feb 2008 06:37:53 GMT

As you can see the site is well under construction for the new wiki's. You can see what the new wiki's will look like in my previous blog entry entitled "Take a look at the future" on Feb 22. I am really excited, the wiki's in combination with the new navigation will take the site to a new level! :cheers: The new navigation involves removing the "connect" "website" and "getmap" links to the right of each properties picture. The wiki's will now be located under their respective forum and contain all of this data. The link removal will be the last step as i wait for the profile wiki completion and then migrate my links to the wiki.

Here is the new layout. Hopefully it will be very intuitive, easy and quick.

Public Forum
Profile Wiki - The profile wiki will allow you to enter links and information about a specific property. This will allow you to enter links for street level retail as well as info stats. #units, #floors etc.

Buy/Sell/Rent
Price Wiki - allows you to enter observed market prices for the building. Note the closet and parking place options! :cool:
Foreclosure Wiki - allows you to report foreclosures at that property.
Offer Wiki - allows you to access to a free bid/ask book for the property. Make an offer on anything. Its free!

Owners Forum
Snapevine voice mail widget if applicable - allows you to leave voice mails about the property.
Vendor Wiki - Allows you to keep and share contact info for the properties vendors.
Property Communicator - allows you to send emails and sms text mails to people who have signed up on the interest list for that property.

I expect most of the changes to be complete by mid March. I have updated the forum names already as you may have noticed. This is to better communicate the purpose of the forums since some people seem to be struggling with that. Finally i upgraded the icons for the email and sms txt links. Again the new icons better communicate the lists and the purpose of the lists. Its really a neat option. Especially for condotels where people rent out on a short term basis. Regardless everyone can use the lists to send out last minute deals or important information that is urgent.

Please continue to use the site and tell your friends about it we are making real progress growing the user group now. Should be a pretty great site in just a few more weeks. Thanks to everyone who uses my site.

all my best,
--jake ]]> jake http://condogossip.com/blog.php?b=12 http://condogossip.com/blog.php?b=11 Sun, 03 Feb 2008 21:07:12 GMT Here is a great article (http://finance.yahoo.com/real-estate/article/104340/Housing-Meltdown;_ylt=Am02IxF8JOKdFgD0B7v2Zz9O7sMF) everyone should... Here is a great article everyone should read. Although bearish. It talks about another 25% down in real estate prices, and no bottom till 2010. It brings up some important points, the most important being: Even though the fed has cut rates drastically, mortgage rates have not come down.

Not mentioned directly in the article, is that some markets just don't make economic sense. For example Vegas and Miami which i am familiar with. (But probably some areas of DC and California too) Although i can't predict the future, i can tell you with pretty good certainty a 2 bedroom 1300 sq foot condo is not worth 800,000$, $800month fees, 800$/month taxes. Even if you had the condo paid for. 1600$ month in taxes and fees just doesn't make economic sense. There are too many alternatives that cost significantly less and offer about the same utility. If i am not mistaken, i think the cost of a 2 bedroom in a named miami property is moving down to the mid to low 600s as we speak.

What the article forgets to mention, which i consider very important, is population trends. America is predicted to keep growing despite boomers retiring. Each year we have tons of legal and illegal immigration to this country. The wealthiest, smartest people from around the world are always moving here to do business. This trend will continue to have a positive effect on housing. However we need to see rationalization. For condo's this means they need to be priced cheaper than alternatives. For example a free standing home. With increasing energy and raw material costs i think we will reach this "point of efficiency" in the next 5 years and condos will benefit from being cheaper than their alternatives. As opposed to now where they are priced at a premium in many cases. ]]> jake http://condogossip.com/blog.php?b=11 http://condogossip.com/blog.php?b=10 Fri, 01 Feb 2008 03:34:28 GMT It saves homeowners about $240 a year by increasing the homestead exemption an average of $15,000, gives homeowners ''portability'' -- the ability to transfer their tax savings to a new home -- and gives new tax breaks to businesses and, to a lesser extent, non-homestead property.

Read the complete article in the Miami Herald. ]]> jake http://condogossip.com/blog.php?b=10