Tom Lindmark

http://blog.metro-real-estate.com/

120 Comments

    • ON: Tue Oct 7th 14:05 PM
      Commented on:
      Opportunity Staring Us in the Face
      Good advice. One further thought. If you are buying for investment purposes and have a somewhat long term horizon, prices now suggest you get into the market. If you can buy at 9 or 10 cap rates and generate close to double digit cash returns then you should move regardless of your price outlook. Looking for the absolute bottom is usually a fool's errand.
      View article »
    • ON: Sun Sep 14th 13:13 PM
      Commented on:
      Case/Shiller Index: Are We Close to a Bottom?
      I have been in the camp that thought there were hopeful signs of a bottoming out at least in Phoenix. Then yesterday I attended with a group a home auction in Phoenix. We went with the intent of buying and buy we did. At prices between $32 and $50 a square foot. We were buying homes in areas in which the published median price is say around $180,000 for less than half of that.

      It was a great deal, we bought 12 houses and spent about $1.2 million. We are able to put tenants in these properties and get cash on cash returns of from 8.5% to 15%. Like I said, a great deal from our perspective but it sure put a new perspective on the market. It's terrible.

      Just one other observation. The auction was poorly attended and the bidding was sluggish at best.
      View article »
    • ON: Sun Sep 14th 13:03 PM
      Commented on:
      More on the Fannie/Freddie Heist
      While I am not a big fan of the Fan/Fred bailout, I do think it is important to get the numbers right and properly analyze the risk. While Fannie and Freddie had approximately $5.3 trillion in debt and mortgage guarantees outstanding, these liabilities were offset by more than that amount of assets. The extent to which the assets do not perform will determine the ultimate loss to the Treasury. Potentially, it could be quite profitable. Here is a link to a back of the envelope analysis I did and a reader's reply that goes more in depth. blog.metro-real-estate...
      View article »
    • ON: Sun Sep 14th 12:53 PM
      Commented on:
      Is the High Home Ownership Rate Hurting Michigan?
      You have hit on the fallacy of a government policy of homeownership for everyone. Like any policy there are unintended consequences. One is that you tether people to property when in fact mobility is in their best interest. One of the great strengths of the U.S. economy has been labor mobility and we are in danger of losing that. I wrote an article several months ago on this subject. Here is a link and it contains a well written rebuttal to my ideas. blog.metro-real-estate...
      View article »
    • ON: Thu Sep 11th 11:37 AM
      Commented on:
      Housing Sales: Another Take On Modeling and Forecasting
      This is a link to an excellent article on modeling, the limits thereto and why one needs to approach models with care. www.nytimes.com/2008/0...
      View article »
    • ON: Mon Sep 8th 12:17 PM
      Commented on:
      Fannie and Freddie: 80% Dilution
      A minor technical point. Treasury did not advance any money to the GSE's with the agreement. If you read it you will see that the Treasury gets $1 billion of preferred and the warrants for 79.9% of thecompany in exchange for providing the facilities. Not to say that money won't be advanced just that none has been advanced so far.
      View article »
    • ON: Sun Sep 7th 13:24 PM
      Commented on:
      Home Inventories Soaring? Not Exactly
      Thanks for a different view. I agree that it's not a pretty picture but it's not as bad as most seem to want it to be. We've been beaten up pretty well in Phoenix yet the inventory and months of supply has not gone through the roof and is actually trending down slightly. It's going to be a slow climb out but it will happen. In the meantime, a lot of home buyers and investors are getting unbelievable values. There are always winners as well as losers in these cycles.
      View article »
    • ON: Sun Sep 7th 13:17 PM
      Commented on:
      Oil, Stock, and Housing Declines
      I hope these guys didn't blow off their entire Saturday researching this insightful article.
      View article »
    • ON: Sat Sep 6th 12:26 PM
      Commented on:
      Rent vs. Buy Datapoint of the Day
      Harm,
      I agree with most of your comments but think that the statement that it is "impossible" to purchase a house for less than the cost of renting in most of the U.S. is overly broad.
      I am in Phoenix which has been beaten down just as badly as California. We are now seeing substantial parts of the metro area in which the price depreciation was the most extreme offering rent:buy ratios of better than 1:1. That does include taxes and insurance. Put another way, cap rates are in the nine to ten range.
      View article »
    • ON: Sat Sep 6th 12:13 PM
      Commented on:
      Bill Gross' Bailout Call: Wise Man or Fool?
      Gross is up to his eyeballs in agency debt and preferred stock. He's just trying to protect his investments. When we see the details of the bailout of Fannie and Freddie tomorrow we will know if he was successful. My bet is that he wins. There is too much coincidence between all the noise he made late this week and the announcement that the administration is going to invoke conservatorship for the GSE's.

      In the interests of brevity my other thoughts can be found here blog.metro-real-estate...
      View article »
    • ON: Fri Sep 5th 12:57 PM
      Commented on:
      Mortgage Resets: COFI Numbers Improving
      The author ignores two facts.
      One, many ARMs have floors on the interest rate at reset, so the actual level of the index can be irrelevant.
      Two, the concern is not with interest rate resets but with recasting payments for Option ARMs. Increased mortgage balances amortized over shorter time periods produces ugly results. Here's a link with the latest estimate of the effects blog.metro-real-estate...
      View article »
    • ON: Wed Sep 3rd 12:06 PM
      Commented on:
      How Much Further Will Housing Fall?
      Good comments and not a bad article. I agree with Chris 1206's point that focusing on the median income misses the point that many houses are purchased by two income households. That makes the analysis too conservative. However, the analysis assumed that principal and interest payments were the only expense of owning a home. Most if not all lenders look at PITI and HOA expenses if those apply in computing the front end ratio. The analysis didn't do that so it is too liberal in that context.
      View article »
    • ON: Wed Sep 3rd 11:56 AM
      Commented on:
      Homebuilder Trends: Another Private Builder Fails [Housing Tracker]
      With regard to the section about borrowers skipping over foreclosures to buy new homes, I would take a bit of an exception. It is true that the banks sell the homes as is, but that doesn't mean that a buyer can't do their own due diligence and inspect the homes. A properly written contract will give a buyer the opportunity to walk and get their earnest money back if an inspection turns up unforeseen issues. Here is a link to a post I did some months ago on the subject. blog.metro-real-estate...
      View article »
    • ON: Wed Sep 3rd 11:50 AM
      Commented on:
      Option ARM Time Bomb About To Explode
      Great comment Kelly Lieberman.

      The dead horse of option ARMs has been beaten to death. This is old news.
      View article »
    • ON: Mon Sep 1st 15:06 PM
      Commented on:
      Prime Foreclosures Now Greater Than Subprime
      AvlGuy,
      Read the article. He says specifically "more prime foreclosures than subprime foreclosures as well." It's in the first sentence of the third paragraph.
      View article »
Loading...
Symbols:
Authors:
Quick Links:
Contribute an Article Become a Seeking Alpha Contributor

Transcripts

More Transcripts»