Extreme Home Makeover Depression Edition (From Mish)

[seanm123]

I am disgusted, demolishing brand new homes in Southern California.

http://globaleconomicanalysis.blogsp...epression.html

These homes should have been donated to charity like Habitat for Humanity.

[Serge_Tomiko]

Re: Extreme Home Makeover Depression Edition (From Mish)

You're forgetting the value of the land.

It is entirely possible, given this is California, that the land is worth more as utilized for agricultural purposes than as a residential development. This is actually a fundamental aspect of valuing real estate - it's call highest and best use analysis. Giving the property away to Habitat or whatever would result in a total loss to the bank. Demolishing the houses, for which there is no demand by people who can pay for them, allows the land to be utilized for some other purpose for which there is demand. Like growing food.

It is quite common that land is worth more vacant than as improved. Mish, or whomever wrote this snippet, seems to think that is not the case. As a Manhattan resident, I can tell you it happens all the time.

[GRG55]

Re: Extreme Home Makeover Depression Edition (From Mish)

You're forgetting the value of the land.

It is entirely possible, given this is California, that the land is worth more as utilized for agricultural purposes than as a residential development. This is actually a fundamental aspect of valuing real estate - it's call highest and best use analysis. Giving the property away to Habitat or whatever would result in a total loss to the bank. Demolishing the houses, for which there is no demand by people who can pay for them, allows the land to be utilized for some other purpose for which there is demand. Like growing food.

It is quite common that land is worth more vacant than as improved. Mish, or whomever wrote this snippet, seems to think that is not the case. As a Manhattan resident, I can tell you it happens all the time.

There's an urban/city center equivalent to the suburban trend of putting the land back to agriculture...conversion to a pay parking lot. I am noticing it more and more, especially early stage city center projects where the old building on the site has already been knocked down

In cases where a massive underground excavation has already been dug, I have noticed a few announcements of finishing the underground parkade and building a park on top "until the economy improves and development can proceed".

When the last big CRE bust hit here in the early '80s, several tower projects were cancelled. At least one of those "temporary" parks over a parking garage is still there a quarter century later...

[don]

Re: Extreme Home Makeover Depression Edition (From Mish)

In my burg a jewel box of a baseball stadium, a truly finely crafted labor of love, lasted for 4 seasons. It's now been torn down and is vacant land for whatever tomorrow might bring. It was brand new. Across the street is the glorified newest strip mall which has reached 50% occupancy, tops, and continues to be tweaked to find that elusive something to make it a success.
(I shot the entire stadium demise, from pristine to demolition. It's in composition now.)

[petertribo]

Re: Extreme Home Makeover Depression Edition (From Mish)

In my burg a jewel box of a baseball stadium, a truly finely crafted labor of love, lasted for 4 seasons.

That sounds like a fascinating story and a microcosm of an Economy gone bad. What was the name of the team? Any stories on line? As you know, there are a number of major stadiums possibly in trouble two in NY and that monster in Dallas for starters. And, of course, my Hall of Famer, Quicken Loans Arena where you can get a refi and a cold beer at the same time.

[petertribo]

Re: Extreme Home Makeover Depression Edition (From Mish)

You're forgetting the value of the land.

Or forget the value of the land. Feds recently cutoff water to prime agricultural area of CA. Part of CA is irrigated desert. No water, what is the economic value? It is at least severely diminished. More at:

http://www.itulip.com/forums/showthr...adillac+desert

[don]

Re: Extreme Home Makeover Depression Edition (From Mish)

That sounds like a fascinating story and a microcosm of an Economy gone bad. What was the name of the team? Any stories on line? As you know, there are a number of major stadiums possibly in trouble two in NY and that monster in Dallas for starters. And, of course, my Hall of Famer, Quicken Loans Arena where you can get a refi and a cold beer at the same time.

If I knew how to post personal pictures I would put a couple up from the book-in-progress. This was a college-level stadium, capacity around 3000. Truly an All-American Tragedy. (Is Monty Cliff available? ;) )

[GRG55]

Re: Extreme Home Makeover Depression Edition (From Mish)

If I knew how to post personal pictures I would put a couple up from the book-in-progress. This was a college-level stadium, capacity around 3000. Truly an All-American Tragedy. (Is Monty Cliff available? ;) )

don: You can upload pics easily to the iTulip photoplog, and hang a caption or some commentary on each one. You can access the photoplog on the green menu line above. It's pretty easy to use [if I can do it anyone can...]

[don]

Re: Extreme Home Makeover Depression Edition (From Mish)

don: You can upload pics easily to the iTulip photoplog, and hang a caption or some commentary on each one. You can access the photoplog on the green menu line above. It's pretty easy to use [if I can do it anyone can...]

Thanks, pal, I'll try it soon.

[don]

Re: Extreme Home Makeover Depression Edition (From Mish)

This should give you a fair idea of what was lost.
Four baseball seasons, then kaput
(these pictures are copyrighted )

[rjwjr]

Re: Extreme Home Makeover Depression Edition (From Mish)

You're forgetting the value of the land.

It is entirely possible, given this is California, that the land is worth more as utilized for agricultural purposes than as a residential development. This is actually a fundamental aspect of valuing real estate - it's call highest and best use analysis. Giving the property away to Habitat or whatever would result in a total loss to the bank. Demolishing the houses, for which there is no demand by people who can pay for them, allows the land to be utilized for some other purpose for which there is demand. Like growing food.

It is quite common that land is worth more vacant than as improved. Mish, or whomever wrote this snippet, seems to think that is not the case. As a Manhattan resident, I can tell you it happens all the time.

Locally here, we had a semi-private golf course sold to a developer who was going to use the land for more condo's, etc. during the boom. The bubble burst stopped the project in its infancy. Now the once-pretty, well maintained course is a real eyesore. Many holes are visible from well-traveled roads and it meandered through existing condo's and homes. Those owners have gone from golf course view - to being told they were losing their view to more condo's and other structures - to wild, unmaintained dirt and weed areas. I'm not sure there is a "best use" for these odd-shaped strips of land that were once golf holes...maybe grave sites for the banksters and other FIRE economy crooks.

[flintlock]

Re: Extreme Home Makeover Depression Edition (From Mish)

This should give you a fair idea of what was lost.
Four baseball seasons, then kaput
(these pictures are copyrighted )

Great pictures Don, lol!

[don]

Re: Extreme Home Makeover Depression Edition (From Mish)

Have any of you guys caught the little twist that's being put on the demolished homes? It's implied- no details, naturally- that the bank demolished the existing homes because there were too many code requirements needing to be fulfilled to make them marketable.

Ideology never sleeps.

From the little information and the pictures we know:

the houses were not completed, meaning many of the finish appliances (built-ins, light fixtures, etc) were not likely installed

the development lacks street lighting, traffic control, crosswalk stripping, etc. Possibly a firehouse if that was in the original plans. (A common requirement for tracks this size)

It's seems pretty clear, without any additional unknown and rather extraordinary requirement information, that this is simply a busted development and the bank is cutting its losses. Hold the propaganda, please. And I will have another plate of oysters!

[kescwi]

Re: Extreme Home Makeover Depression Edition (From Mish)

Have any of you guys caught the little twist that's being put on the demolished homes? It's implied- no details, naturally- that the bank demolished the existing homes because there were too many code requirements needing to be fulfilled to make them marketable.

I’m a contractor in South Carolina and starting in the fall of 2006 and early 2007 we put out 7 bids, IIRC, in residential, we received requests to bid and visited about 15/20 sites, that involved completing work started by other contractors. While we only took on 3, all had code violations ranging from strapping and hold downs to improper flashing installation which in and of themselves were costly repairs but we also came across a large number of violations which were also against standard practices and common sense that were/are actually very dangerous.

I think the issue of code violations, it’s not that simple but for lack of a better term, at least what I have seen in small sampling is going to become an ever increasing problem as some the homes built during the last stages of the bubble by speculators and anyone who could pass the simple licensing test begin to deteriorate. We currently have two rather sizable projects on deck where we are repairing the work of others as part of a settlement (forwarded to us oddly enough form our attorney who was concerned we wouldn’t be able to pay him as he pursued the money owed us from one of the 3 jobs mentioned above).

[flintlock]

Re: Extreme Home Makeover Depression Edition (From Mish)

I'm an electrical contractor and probably half my business now is fixing code violations. Over the years I have finished up several bank owned properties, and yes, they are usually much worse than average. And more than one was sabotaged by unpaid sub contractors. Watch out for that.