Housing Doom

Thank you to Kevin Tomlinson, who sent me this post from his South Beach Condo Blog:

Say you want to sell your unit at Related Group’s new 50 Biscayne Condo in downtown Miami, you find a buyer willing to purchase your unit, you agree on terms, and you probably think, “whew, I’m really lucky I sold.”  Not so fast: today’s Daily Business Review is reporting

Banks and mortgage lenders compile lists of buildings they find too risky for lending, and they refuse to finance purchases there. 

What this means if your Miami Condo is “on the list”

It could mean that it will very hard to obtain financing for your condo, whether you are a buyer or a seller, in one of the “non-warrantable” condominiums.

The lists include finished buildings and projects still under development.

Prominent projects on BankUnited’s list include the Related Group’s 50 Biscayne and 500 Brickell; Terra Group’s 600 Biscayne and 900 Biscayne, and Cabi Developers’ Everglades on the Bay.

Is This the Last Nail in the Coffin for Miami Condos?

The impact of today’s news on the Miami condo market:

• Developers with unfinished buildings on the list may have high “walk-away” rates
• Owners of units in “blacklisted” condos may find it next to impossible to sell

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Hank Paulson on housing– "The worst is just beginning" [Thanks L!]

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Homebuilders are upset that government is not doing to save them from the crisis they created themselves– and they are going to punish Congress by withholding political contributions: [Hat tip L!]

WASHINGTON (AP) — The lobbying group representing homebuilders is cutting off contributions to federal congressional campaigns, saying lawmakers and the Bush administration have not done enough to stabilize the housing market.

 The National Association of Home Builders said Tuesday its political action committee has decided to stop making contributions to candidates for Congress "until further notice."

Since 1990, the trade group has given nearly $20 million to federal candidates, with 35 percent going to Democrats and 65 percent to Republicans, according to the Center for Responsive Politics.

Lawmakers and the Bush administration, "have not adequately addressed the underlying economic issues that would help to stabilize the housing sector and keep the economy moving forward," the trade group’s president, Brian Catalde said in a statement. "More needs to be done to jump-start housing and ensure the economy does not fall into a recession."

It’s a strange move on the part of homebuilders for a couple of reasons.  First of all, who ever bought influence by NOT contributing to a campaign?  Then there is the question of what they really expect the government to do.  The fundamental problem at the moment is that there is a glut of homes on the market, and they are priced above market fundamentals.  A recession can help with prices, and only time and restraint on the part of homebuilders will address the inventory.

The homebuilders however, aren’t interested in a market correction.  They want a market "jump-start".  That could only be achieved by once more creating an artificial demand.

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