It’s hard to say if this is a real story or not but I am quite sure that this kind of situation is happening all over the place.
Check out this story and be sure to click on the link to see the replies as well.
Upside down on SFR in Vegas…running out of $$$
Posted by Brandon V. on June 09, 2005 at 17:59:54:
Help! Any ideas, comments welcome.
My partner and I are in a mess with a brand new house in Las Vegas. Here are the details.
1. AUG 2004, we paid $445,000 for a Pulte model in the community of Aliante, North Las Vegas.
2. 100% financed and still owe roughly the same.
2. Payment is $3000/month.
3. Currently could only sell for about $360,000.
4. Finally found tenants to lease out for $1100/month in APR to reduce neg cash flow to $1900/month.
We are running out of cash quickly. We desperately need some ideas on how to get out of this house immediately.
I think that story is going to be repeated thousands of times in Florida, California, and in fact all of the bubble areas within a year or less. According to Jack McCabe, CEO of McCabe Research and Consulting “Short-term speculators flooding the condo market in Southeast Florida have created a tidal wave of investor enthusiasm that will most assuredly lead to oversupply and downward pressure on pricing within the next few years. Publicly you won’t find a developer or a lender who tells you that they’re concerned about the market at this point. Privately, they will all tell you that they are concerned. One lender has already cut off funding for condo construction.”
A single lender cutting off funding now is too little to late if you ask me. The damage has already been done. It’s just that no one sees it yet.
Mike Shedlock / Mish/