Tuesday, May 05, 2009
Deutsche Bank Dumping Foreclosed Homes In Miami. By Geniusofdespair
Deutsche Bank has sold a slew of foreclosed homes in the North section Miami-Dade County for bargain basement prices. Maybe what is happening is that this bank is finally recognizing derivative losses to its balance sheet, and writing off the underlying mortgages.
1. 425 NE 114 Street which sold for $325,000 in 4/2006, sold recently for $100,000. The assessed value in ‘08 was $295,053. EQUITY LOSS: $225,000
2. 345 NW 118 Street which sold for $499,500 in 9/2006, sold recently for $174,000. The assessed value in ‘08 was $225,250. EQUITY LOSS: $325,500
3. 661 NE 52 Terrace which sold for $759,000 in 5/2005, sold recently for $350,000. The assessed value in ‘08 was $510,373. EQUITY LOSS: $409,000
4. 224 NW 64 Street which sold for $339,000 in 5/2006, sold recently for $135,000. The assessed value in ‘08 was $337,252. EQUITY LOSS: $204,000
5. 11940 NW 16th Avenue which sold for $230,000 in 7/2006, sold recently for $64,900. The assessed value in ‘08 was $137,144. EQUITY LOSS: $165,100
6. 11930 N. Bayshore Drive (I could only find a comp. in the same line, 2 floors below that sold for $190,000 in 4/2007) sold recently for $56,000. The assessed value in ‘08 was $178,130. EQUITY LOSS (estimate): $134,000
7. 780 NE 69 St. which sold for $460,000 in 12/2005, sold recently for $155,000. The assessed value in ‘08 was $244,000. EQUITY LOSS: $305,000
How long will it take for consumers, who are badly shaken by job losses around the country, to come back into the South Florida real estate markets? At the height of the boom, as much as 70 percent of new housing construction was being purchased by flippers and speculators. I strongly doubt that this segment of the market is coming back, at all, in our lifetimes. So: two conclusions. Not only do we have a supply of housing inventory that far, far exceeds demand (Parkland, Krome Gold, anyone?), we also have sharply falling government revenues.
If banks are unloading mortgages at a fraction of a dollar, how long will it be before tax assessments are geared downward? If we look at only these 7 properties and compare the combined assessed value of $1,927,202 to the combined actual value (the selling price) of $1,034,900. That is about a 46% drop in taxable equity from 2008 assessments.
Multiply this effect by millions of homeowners and you can see that the "green shoots" in the economy probably mean that once the housing markets find a bottom, we will be bouncing there for years while taxes go up and inflation increases. It is not a pretty picture, but before blaming Obama; remember how we got here and who profited from this misery.