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.


youbetcha' said...


Geniusofdespair said...

My math is so bad, I hope I got this right...checked it twice.

youbetcha' said...

County assessments always run behind market value. I think zillow.com has a way of showing the current vs what it should be. I know with my house it made me ill, but it did show the other figure being more like what I thought it should be.

Somewhere it also showed whether my house was dropping more or less than the average for my city. When I looked I was right, my value was holding closer to what it used to be than other areas. However, the foreclosures still are killing the comparables, even though my neighborhood is fairly stable with few sales or foreclosures. Thus, Bank of A, laughed off my story when I said we were holding our own over here. And he hung up on me, his current customer. He knows that my jumbo loan will be hard to place, and his employer will benefit by keeping my interest rate up. The loan man with B of A lives in Texas, so what does he know about the importance of location in Miami?

Also, after reading about Lending Tree (bad, bad, bad), I realized that American Express nailed us on the credit history with all the games they played (like Chase). If I wasn't low on my credit history before, AMEX dropping my credit lines did not help it.

The stupid thing is now they are posting on my account page trying to get me to ask for a credit increase. Is that so they can run my credit again and lower it again, because they don't like my mortgage company (which was the last excuse), now that I have been taken over by Bank of A?

miaexile said...

This is like finally ripping the bandaid off a very hairy arm. You scream and then you compose yourself and look forward. For those of us deeply underwater because we purchased the homes we're living in at the peak, it feels like I've finally feeling the bottom under my feet, but it doesn't help that I'm still holding my breath underwater. I will forever hate the banks.

Anonymous said...

Looking at these numbers, it might be the time to buy!

youbetcha' said...

I am with you miaexile!

This is not where we are supposed to be at this point in our lives. I feel like I have stuck to a pool drain fighting for my life for years. Not a way to grow old.

Anonymous said...

DB acts as the trustee for many of the securitizations issued by Wall Street. They own some of their notes, but not many. These losses are passed through to investors in RMBS and CDO's. Not to say they don't have a host of problems, but they are a very large Trustee.

Anonymous said...

For the end-user, note that most of the great deal foreclosures are in the crappiest parts of town. I don't care if I can get a house for $30k...the fact that its in Opa-Locka kills the deal.

Geniusofdespair said...

What about the home at 661 NE 52nd Terrace? You could get that at a $409,000 savings. It was orginally 3/4 of a million. Hardly in Opa-Locka.

swampthing said...

Flippers have evaporated (good riddance), who is doing the buying?

Anonymous said...

People with a ton of patience are doing the deals. The banks are making buying a foreclosure a 5 month event. Even then, they are holding so many "bid contracts" on a property, you wait and wait to find out months later the bank isn't selling to you.

Business is brisk in south Dade in spite of the banks. You can buy a foreclosure in Cutler Cay on Old Cutler for 350k, those houses were 750k when they were built 3 years ago.

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