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.
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