I love a good interactive data presentation, and lately I think NYTimes does this better than most places on the web.
Check out this latest data presentation of the US Debt Trap. I chose to profile this on the blog because the information is gripping and the presentation is crisp and clear. Now, if they only allowed you to embed it…
Alderman Gene Schuler is very helpful and is taking takes advantage of technology to communicate with his constitutents. Here is a good example - heads up Albany Park Chicago and all those who want to get a realistic home value assessment for their next couple tax years!
Board of Review Accepting Assessment Appeal Complaint Forms For Lakeview Township
Dear 47th Ward Residents,
The Cook County Board of Review has announced dates for filing assessment appeal complaints by property owners in the Lakeview township. The filing dates for property assessment appeals open on Wednesday, October 15 and will close on Monday, December 1, 2008.
Owners of homes, condominiums, town homes, apartment buildings, and businesses
may appeal their assessments to the Board if they feel that their assessment is too high. A lawyer is not required to file an appeal on behalf of residential property owners. Evidence which can be particularly help to the homeowner seeking as assessment reduction includes any of the following items.* A photo of the taxpayers property.
* Proof of recent sale prices of homes similar to the home of the taxpayer.
* A real estate appraisal.
* Assessed valuations of comparable properties in your neighborhood.
* Evidence of flood, fire, demolition, or structural damage.Complaint forms can be picked up at the 47th Ward Public Service Office or downloaded here. For your convenience, complaint forms and supporting documentation can be dropped off at the 47th Ward Public Service Office until noon on Monday, December 1, 2008.
Thank you,
Alderman Gene Schulter
Six ways to save energy plus breakdown of your home’s energy use
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Car Fuel saving tips, inflate tires, improve your speed limit, maintain your car.
Eco 20/20 energy saving tips
A good article on making sense of the Wall Street bailout.
The Roots of the Crisis
How did Wall Street get into this mess?
Michael Flynn | October 1, 2008
Let’s be clear: This is a Wall Street crisis, not a national economic crisis.
I don’t necessarily agree, but it’s a thought provoking comprehensive piece. Enjoy.
I can’t resist putting Brad’s commentary in this… Brad, I hope you don’t mind.
I am trying to get a construction project financed now. I have credit support in place from a AAA rated County with a huge balance sheet, but still am finding that lenders have shut their doors and are not offering loans. My project - totally financible in any other market - is at risk.
Our subcontractors have lines of credit that they use to buy materials and make payroll until their customers - under contract with firm commitments - pay them for work put in place. When these subs have their loc’s frozen, then they can’t perform. They lay off workers and go into hibernation. We may still be hovering around 6.1% unemployment (what month was this???), but if something isn’t done to re-open the doors of the banks, this will quickly climb.
That said, I think most of the article is balls-on.
With a little time to reflect on all that has been going on, I finally have an opinion on all this mess …
1. I don’t support the financial bailout. Somebody yelled fire in the crowded movie theater and is now saying that the bailout is the only way out. We need a solution, but this thing is being driven out of panic.
2. The underlying assets are “illiquid” but not “invaluable.” The article states that only 2% of loans are in default. If you only look at the sub-prime loans (which is the real problem), the real number is around 7% (according to show on TV last night). Beyond those in default, you then have to add in the loans that are likely to go into default in the next 3 years if work outs aren’t done. This probably brings the “at risk” portion of the sub-prime pool up to the low to mid-teens. Let’s guess at 15% just to pick a number. That means that 85% of the pool is performing. If the 15% at risk was written off completely (even in foreclosure the assets have value), then the pool of remaining performing assets should be worth a hell of a lot more than 22% of book (the amount that Merrilll sold off for).
3. Low pricing is because of a supply demand imbalance. Banks are being forced to sell and there aren’t any buyers. The reason that the banks are being forced to sell is, as the article states, the “mark to market” accounting policies and the capital reserve requirements. Fix these (even if temporarily) to allow the banks to stay solvent and not have to fire sale the assets at a fraction of their value.
4. If the government ends up buying the assets, I have no confidence that they will be able to find the value back. Its not what they do. And there are too many bankers that will find a way to outsmart them. That being said, I see a business opportunity…
If Fannie/Freddie end up owning all these pools of assets, they will need to manage them. They don’t have the capabilities to do work-outs on a loan by loan basis. I would think that there would be an opportunity for a third party to come in and take over managing sub-prime pools. This third party would conduct a new underwriting on every loan in a pool that its been assigned. The performing loans would be verified and the non-performing or “at risk” loans would be identified for work-out. The third party would then figure out what debt service could be supported under responsible underwriting and would restructure the at-risk loans such that they could be taken out of the at-risk category. This might mean extending payment periods, lowering interest rates, or possibly even forgiving a portion of the loan (if it was determined that that created more value than simply taking the project into forclosure). There would still be some loans that couldn’t be worked out. These would be written off and pulled out of the pools. What would be left over is a responsibly underwritten and 100% performing pool of loans that the goverment could continue to hold or sell at a higher value. The third party that created all the value would be paid cost plus a portion of the value created (gain on sale or increase in NPV if the pool was held).
Thoughts? Anyone ready to make a proposal to Freddie/Fannie to do this?
After the housing crash and the bailout of the crashing wall street firms and the American credit crunch does anyone still think about what the value of their home is? Zillow and other Real estate valuation websites were rocking with traffic when real estate investing was like day trading in slow motion.
Real estate agents in big cities down play the loosing values by arguing that averages don’t always translate to neighborhoods. I would agree that in general that is true. However, in general my favorite real estate indicator is the S&P/Case-Shiller Home Price Indices.
The S&P/Case-Shiller Home Price Indices measures the residential housing market, tracking changes in the value of the residential real estate market in 20 metropolitan regions across the United States. These indices use the repeat sales pricing technique to measure housing markets. First developed by Karl Case and Robert Shiller, this methodology collects data on single-family home re-sales, capturing re-sold sale prices to form sale pairs
Sounds pretty fancy, but here is a great application of this data - you can download the spreadsheet with the raw data on the site. Then for kicks, if your city is in the list, plug in the date of your home purchase and play it against current value to calculate a percentage increase or decrease.
Here is a graph of a typical property’s worth purchased in July 2005 in the Chicago Metropolitan Area.
