It Can't Get Any Worse

Right?

Riverpark Bust

Wow, who could have predicted?

At the beginning of this decade, the developers of RiverPark in Oxnard looked at the vacant land, the asphalt plant and the run-down neighborhoods along the Santa Clara River and bet the area could almost be its own little new-suburban city. RiverPark would be a place where the people of 2010 would walk their kids to school, stroll through the neighborhood park, stop to buy organic produce from Whole Foods Market, and head home to chop it on their new granite countertops.
...

Today, RiverPark has about 800 occupied homes, rather than the 2,800 the plans call for at build-out. The shopping center sits vacant and fenced-off, construction equipment the only thing parked in its vast lots. The planned opening keeps getting pushed back, with “late 2010” the latest word from the developer, Shea Properties.

Be sure to read the comments for the different perspectives. Outsiders doing the Nelson Muntz "Hah hah!" The stuccos who lament their trusting the city. The denialists who can't even see reality. Past Riverpork posts here.

The thing that will kill the project will ultimately all come down to a failure of government. Yes, built in a flood plain. Yes, too dense. Yes, taxes too high regardless of home prices. All direct consequences of incompetent leadership at the municipal level. It's too late for Riverpark. Will the city wake up in time to save themselves from Wagon Wheel?

And the hits will keep coming. 800 occupied residences are not enough to service the HOA or Mello-Roos debts encumbered on their behalf. I wonder how many understand they are joint and several liable for the entire amount and not just the pro rata share currently being assessed? If you think the current 2.6% plus municipal burden is excessive, just wait. Riverpark will be a text book study for generations to come.

Jingle Bells

Clearly I've been stingy. Amends below:

Hide the Decline

Hat tip to Cobradriver for this unbelievable practice revealed:


This two-bedroom house at 1857 Prospect St. in Sarasota, bought for $453,900 in 2007, was just resold for $523,900. But the deal was a deed in lieu of foreclosure and no money changed hands. So why would a bank pay nearly $3,700 in stamp taxes?

The Herald Tribune has the story:

C&M had defaulted on a $408,500 mortgage, and Bank of Commerce was claiming its collateral. No money actually changed hands, according to Charles Murphy, the bank's chief executive.

Then why did the bank bother paying nearly $3,700 in documentary stamp taxes to make it look like the property had been sold for $523,900?
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"The loan balance is the main consideration," Dart said. "That and any unpaid interest."

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Any questions?

Bad Tentacles

Jim the Reltor has been hacked. It appears to be a breach at the server at this time so there's not a lot that can be done. If anyone has a suggestion or just a comment of support feel free to leave a reply.

California Default Watch 2

Controller Releases November 2009 Cash Report

PR09:031
12/10/2009
Contact: Jacob Roper
916-445-2636

SACRAMENTO – State Controller John Chiang today released his monthly report covering California’s cash balance, receipts and disbursements in November. The month’s receipts were relatively close to estimates, down by 0.7% or $40.8 million.

“While revenues largely held up for two months, the next eight weeks will be far more telling of the State’s fiscal health,” said Chiang. “Record unemployment, at levels not seen for three decades, continues to aggravate California’s structural budget deficit.”

The receipts from tax deadlines in December and January are generally reliable indicators of expected Spring tax receipts.

Year-to-date revenues remain below the amended 2009-10 budget’s estimates by $835 million or -2.8%. But lower-than-anticipated State expenses combined with an additional $1 billion in external borrowing put the State’s cash position $610 million ahead of its projected level on November 30.

The State started the fiscal year with an $11.9 billion cash deficit in the General Fund, which grew to $24.4 billion by November 30. Those deficits are being covered with a combination of $15.6 billion of internal borrowing from special funds and $8.8 billion in short-term revenue anticipation notes.

November 2009's financial statement and the summary analysis can be found on the Controller’s Web site at www.sco.ca.gov.

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There's no words for this that discerning readers cannot see for themselves. Internal borrowing is "not paying bills" and "short-term revenue anticipation notes" is more debt.

Weather Sucks Stay Away!

This is the horror left in the wake of the Monday storm. Stay away. There's two more storms behind it.

30 months Too Late

By my estimate $2.5T in MEW is unsupported by reasonable asset valuation. In total somewhere between $7T and $9T in phantom equity is exposed in any retracement to the mean. An orderly retreat will allow inflation to eat away much of this. A decline in the dollar may result in a disproportionate amount of pain to be taken by foreign investors. No matter how the pain is spread, there will be consumer pain. Likewise because of govt spending policies that resemble the proverbial cricket in summer we can expect massive deficits and even larger tax inceases. - Aug 6, 2006

And what does the MSM say?:

U.S. Homeowners Lost $5.9 Trillion Since 2006 Peak
By Dan Levy

Dec. 9 (Bloomberg) -- U.S. homeowners have lost about $5.9 trillion in value since the housing market’s peak in March 2006 as mounting foreclosures and the recession weighed on prices, according to Zillow.com.

Almost half a trillion dollars was wiped out this year through November as housing headed for a third straight annual decline. New foreclosures and higher mortgage rates in 2010 may hinder a rebound, the property data service said today in a statement.

Let's Play Does It Float?

Not that there's any open bodies of water anywhere near Victorville but there sure are more and more possible signs of a reasonable real estate investment market.
How would this one pencil out?

13752 Bluegrass:
Year Built: 2003 4 total bedroom(s) 2 total bath(s)
2 total full bath(s) Approximately 2277 sq. ft.
Fireplace in the Den 3 car garage
Central air conditioning Lot is 7205 sq. ft.

Decent house, not a mess, established neighborhood. Taxes don't appear too high.

Here's what the whacky z-people think they know.


$70k purchase, $5k costs. You'll need $20,000 and a $55,000 mortgage at ~6%. Payment $340. Taxes $160. I'd put at least $100 toward upkeep. It's gonna cost ya $600/mo to own this place plus $100/month lost opportunity cost of tying up $20k. These are tough times and so I'd have to factor 15% vaccancy. You'd need to rent for $825/month.

Yes, it floats.

Now for a rant. You all know the z data is hopelessly inaccurate. No news there but check out this bit:

That's Bing™ on top with a 2009 Copyright of 2008 NAVTEO material. These houses were built in 2003 no doubt these images are 2001 or earlier. Abusive application of supposed copyrights is getting entirely out of control.

Sears the REIT

Sears Holdings:
KMart 1,321 discount stores, averaging 92,000 square feet
KMart 47 Super Centers, averaging 166,000 square feet
Sears 929 broadline stores averaging 133,000 square feet
Sears Essentials/Grand 73 stores averaging 115,000 square feet
Specialty stores 1,233 averaging 8,700 square feet

Grand total: 272 million square feet of retail space. Monuments fall.


This on the recent news of so many REITs exploding on stock values. Suckers.

The Eyes of Laura St.

1446 Laura St. to be exact.

Check out the listing history:
Oct 17, 2009 Price Changed $235,000 -- MRMLS #I721298
Jul 14, 2009 Price Changed $265,000 -- MRMLS #I721298
Jul 21, 2008 Price Changed $299,000 -- MRMLS #I721298
Jul 21, 2007 Price Changed $309,000 -- MRMLS #I721298
Apr 28, 2007 Price Changed $329,900 -- MRMLS #I721298
Apr 02, 2007 Listed $344,000 -- MRMLS #I721298

As we close in on the 1000 day listing you would think they'd have learned a few lessons. They've made 30 mortgage payments and 5 tax payments in this time while losing equity faster and faster. Had they listed in April 2007 for $275,000 they'd have closed in a month. Instead they've spent $25k and watched another $50k evaporate.