If you are looking for somewhere to hide when global warming finally destroys us all in a nuclear blast followed by anarchy, why not a $2 million condo?
Well, it seems your chance has passed. These luxury disaster-proof, underground condos in rural Kansas are all sold out.
The structure is the brainchild of Larry Hall – a former software engineer, is being built from a hollowed out Atlas F missile silo, and includes such amenities as a pool, a movie theater, a classroom and minor surgery center.
The 15-story building – dubbed “Survival Condos” – has six full-floor residences and one half-floor residence. The full-floor condos (shown below) have three bedrooms, two bathrooms, a kitchen, a dining room and a great room and go for $2 million. The half-floor condos go for $1 million, have one or two bedrooms, one bathroom, a kitchen and a great room.
All of the condos feature state-of-the-art kitchen appliances, granite or custom concrete counters, Jacuzzi tubs in the master bath and a list of other amenities that would be attractive in any condo – much less one with 2.5 to 9 foot thick walls that will protect against nuclear war and shockwaves traveling up to 2,000mph.
The worst of the 2008 financial crisis and real estate collapse may be over for America’s Finest City, according to a report released by the San Diego Regional Chamber of Commerce.
The data in the report, San Diego’s Road to Economic Recovery, shows gradual and positive economic trends for San Diego in the areas of unemployment, real estate, tourism and production. The report examines each of these trends from both a long-term perspective spanning periods pre and post-crisis, as well as first quarter activity from 2012.
The San Diego unemployment rate has fallen from its peak of 10.9 percent in July 2010, yet at 9.6 percent in March 2012, remains well above pre-crisis levels of 4.5-5 percent, according to the report. The biggest gains over the past few months have been in leisure and hospitality, due to the tourism season, as well as in state and local government and health services.
“This report represents yet another positive indication that San Diego is recovering at a faster rate than other cities in California and across the nation,” said Ruben Barrales, Chamber president and CEO. “While the recovery remains slow, San Diego is well positioned for long term success and viability.”
Much like the state and national economies, San Diego is still struggling to fully recover from the 2008 recession but making positive strides, according to the report. Since 2011, San Diego’s economy has performed more favorably than both California and the national economy. In the regional real estate market in the first quarter of 2012, foreclosures saw an average monthly decrease of 28 percent compared to the previous year. San Diego’s occupancy rates in March 2012 were higher than those of March 2007. From their lowest point in March 2009, San Diego home prices saw a modest recovery up until mid-2010 at which point another slip in prices was observed. This downward home price trend has slowed in recent months with the most recent data from February 2012 showing the first year-over-year increase in median home price seen in over a year.
Data and analysis for the report was provided by Export Access Global Consulting, a graduate student-run global market research and consulting group at the University of California San Diego.
In a new sign that the local housing market may be pulling up from its nose dive, home sales in North County jumped in May, and they rose slightly in Southwest Riverside County, data from Realtors said.
Last year, homebuyers generally stayed out of the housing market as the economy sputtered. But homebuyers seem ready to jump back in the market this year, even as sellers bail out, creating a situation in which homebuyers have to bid for the few remaining properties in North County. Inventory is down in Southwest Riverside County as well, but home sales have been flat there.
“People want to buy,” said Maggie Rogan, a Fallbrook real estate broker. “The buyers are out there looking.”
In North County, buyers picked up 957 houses in May, up 27.4 percent from 12 months earlier and up 7.9 percent from April, according to the North San Diego County Association of Realtors. That’s more houses than they bought in the autumn of 2009 or spring of 2010, when a government tax credit goosed sales for a while.
“The inventory is low. I don’t have as many homes to show people that I’m used to,” said Dusty Brazil, a Carlsbad real estate agent.
Despite the bidding wars in some places, median home prices keep falling. The median home price in San Diego County fell 2.4 percent on an annual basis to $420,000, though that was up 6.9 percent from April.
Reasons why the recent surge will look seasonal as summer plods along:
1. The good news in the media will cause sellers to become giddy, and tack on an extra 5% to 10% to their list price in an attempt to capitalize.
2. There aren’t enough good buys coming on the market, which means buyers will be forced to consider paying more. I think there is great reluctance – buyers would rather wait, than over-pay.
3. The election cycle will become more distracting, and boredom will set in.
If sales slow down through the rest of summer, it will be tempting to wait a little longer as we bounce around. But you won’t see the good deals lying around – you have to dig them out!
For those who are casually observing, it is tough to fully grasp the frenzy-like market activity that has been on-going this year. It seems to intensify each week, as buyers gravitate to each new listing and quickly examine its worth.
If all you see is a listing go pending during its first week on the market, it probably isn’t that remarkable. But the action behind some of these makes you think that the demand has a long ways to go before being satisfied.
Here are some examples:
We’ve been stalking the Water’s End complex west of the I-5 freeway in SW Carlsbad for the last couple of years. ProfHoff finally scored the right house, at the right price for her and her husband Tom, paying $740,000 last month.
There have been four sales closed in the $600,000s over the last 12 months, yet this listed on the range $795,000 to $819,000.
In the confidential remarks it says that the seller is “very firm” on price, and they were only offering 1.5% commission to the buyer’s agent – and it still went pending after seven days on market!
Remember the flipper on Nardo in Solana Beach (who paid $729,000 in November)? It was marked pending right after we saw it here, listed on the range $995,000 to $1,089,000:
There was a time not long ago that we thought we should be buying newer 3,000+ sf tract houses in Carmel Valley in the $900,000s? Here’s a 3 br/4 ba, 2,424sf house built in 1986 (but decked out since) that listed for $947,000 that didn’t even make it to the open market – it was submitted right into pending:
So then same agent listed the same floor plan, in the same complex, with similar canyon setting with no granite but bigger yard on the range $749,000 to $789,000 – and it went pending after 6 days:
Del Mar remains hot, with several houses closing around $1,000/sf – but those were mostly teardowns closer to the $1,000,000 mark. This 2,306 sf house built in 1959 had been on the market for $2,500,000 for 150 days with no price reduction.
We saw the video tour of my new Encinitas listing here.
It found two offers within the first 48 hours of being on the market, and sold for full price, $629,000 – a nice 6.7% increase over what the sellers paid for it 11 months ago:
Hopefully the sellers (and listing agents) of the properties that aren’t selling will realize how hot the market is – and we see an increase in price reductions now that July is less than two weeks away!
WASHINGTON — In the real estate brokerage field they’re often known as “setups” or “pinball” homes, and this spring’s improving conditions in some markets could be stimulating more of them.
A setup or pinball property is a house listed with an unrealistically high asking price that pulls in lots of visits by agents and shoppers, but no offers. The problem is this: Real estate agents, including even the listing agent, are using the overpriced house as a negative example to sell similar homes in the area that carry lower asking prices.
“It’s like a pinball machine,” said Debbie Cook, an agent with Long & Foster Real Estate in Silver Spring, Md. The “setup” is the foil — the house that agents show clients to make other, more realistically priced listings look better. Maybe the sellers — encouraged by reports of rising sales and low mortgage rates — insisted on the aggressive asking price and wouldn’t list for anything less. Or maybe the sellers’ agent, not wanting to lose the listing, didn’t fully brief them about what the house could command in today’s conditions.
Whatever the specifics, such houses tend to see heavy foot traffic but go nowhere until the sellers drop the asking prices, usually by significant amounts. Before then, however, they may be used without the sellers’ knowledge to market other houses. Since no one seriously expects them to sell at their original asking price, agents are happy to exploit the overpricing to facilitate other sales.
“We’re definitely seeing it,” said Sandy Nichols Acevedo, an agent at Prudential California Realty in Oxnard. “Some people think they can go higher now because the market seems to be doing better.”
For the elderly who have assets in the $1,000,000 to $5,000,000 million range, you should consider selling your house before the end of this year.
The death tax (a.k.a., the federal estate tax) is a tax applied to the transfer of a person’s assets at death. It is defined by the Internal Revenue Service as “a tax on your right to transfer property at your death.”
Under current law, the tax is temporarily set at the rate of 35 percent with an exemption of $5 million. On January 1, 2013 the estate tax is set to return at a top marginal rate of 55 percent (with an additional 5% surtax for certain estates) on all assets above a $1 million exemption amount.
Everything a person has of any value counts towards the death tax exemption. This means your car, home, stocks, bonds, bank accounts all are totaled together to calculate if you owe the estate tax. Starting January 1, 2013, under current law, if your total estate is over $1 million, you will owe taxes at a 55% rate. Think about all the assets you own:
personal property (such as a home, cars, furniture, artwork)
business assets (property, machinery and inventory)
investments (stocks, bonds and real estate)
Now think about how much that is worth – these days, it doesn’t take much to push you over the $1 dollar exemption, after which all additional assets are taxed at a 55% rate. It is easy to see why nearly 70% of voters want the death tax repealed permanently. The estate tax doesn’t just affect millionaires and billionaires, it affects everyday people and America’s main job creating engine – family businesses.
For any assets valued over the exemption, the people who inherit the farm, business, or property will owe the tax within nine months of the decedent’s death. For those family businesses that are forced to take out a loan to keep the business running, their tax rate becomes the tax paid, plus the interest owed on the loan.
Preparing for the return of the jumbo lending market and the days when Fannie Mae and Freddie Mac are no longer mortgage finance behemoths, Rancho Financial is bringing to market loans often blamed for the destruction of the nation’s housing economy.
A division of Calabasas, Calif.-based Skyline Financial, Rancho only six weeks ago began originating stated-income loans — when a borrower’s personal income is not verified. Rancho is currently processing about 100 applications with an average request of $500,000. The company is receiving 10 calls a day for a stated income program that has a $1.5 million loan limit and requires loans above $1 million to have a second appraisal.
Borrowers’ bank statements are examined, but not their tax returns or pay stubs. And unlike earlier versions of stated-income mortgages to high-risk borrowers, the Rancho product is only for the affluent homeowner.
“In the late 1990s and 2000s, no one was regulating anything and you had these loans that were made and sold on Wall Street, and they became known as ‘liar loans,'” says Rancho mortgage banker Craig Brock.”We’re staying clear of that. If someone has several hundred thousand in assets, chances are they do have the money. We’re trying to target smart people who have financial advisers, who have certified public accountants.”
But the concern that this product will again be abused permeates the mortgage-lending arena. “Yes, they can be abused, but that doesn’t mean the potential for abuse mean they should be taken out of the market place for everyone. That doesn’t seem to be an appropriate response,” says Rich Andreano, a partner at the Washington, D.C., law firm Ballard Spahr.
Most of the loans, Brock says, will go to individuals with a loan-to-value ration of 65% to 70% who put down 30% and a credit score of at least 740. A borrower must have a 2-year history of self-employment, a 12-month reserve and a CPA letter or business license.
“If we’ve got all those things, then the chances are pretty darn high that they have the ability to repay,” Brock says. “They won’t walk away from a 30% down payment.”
The generation of this program is unique considering the tremendous amount of uncertainty surrounding the finalization of the Dodd-Frank Act, which is making financial institutions hesitant to inject capital into the jumbo mortgage lending space.
“There’s no financing,” Christopher Whalen, a senior managing director at Tangent Capital Partners, said in early April. “In the New York area there is no financing available above $1 million dollars.”
But Brock views the program as a catalyst to drive the jumbo market and reinvigorate the secondary mortgage-finance market.
“We’re like a lot of companies nationwide. The reason why we’re bringing programs like this out is because we’re preparing for the day that Fannie Mae and Freddie Mac don’t exist,” Brock says.
“We have a hell of a conundrum right now because not only are we having to prepare now for Fannie and Freddie to not exist, but we’re having to create a whole new conduit for these jumbo loans. It’s a heck of a grind,” says Brock, who cites plunging property values and the Dodd Frank Act as challenges to the resurgence of the non-agency market.
Rancho won’t hold the stated income loans on its books. Instead, it sells them to a single portfolio investor (a confidentiality agreement prevents Brock from identifying the investor) who apparently is more comfortable buying these types of loans than the rest of the market.
“They found an investor. Well, they’re lucky,” says Andreano, remarking on the loan program. “For the right investor there is a marketplace for it. If you find the lender to do this correctly, these are good products to have. They won’t be large in number, it’s just they won’t be standard. The typical investor’s only going want the mainstream vanilla-type loans.”
And Fannie Mae and Freddie Mac aren’t taking them. A spokesperson at Freddie said products with alternative stated income provisions were eliminated from the agency’s guide years ago.
“There’s only one source (taking the loans). Until (PIMCO founder) Bill Gross, until Goldman Sachs start purchasing these loans again, it’s going to be slim pickings. Until they start buying these things, we won’t see any huge volume,” says Brock, who projects originating $50 to $75 million in stated income loans in the programs first 12 months.
“We’re hopeful that the market’s turning,” he adds. “A lot of us are showing confidence. We could be out there grabbing the so-called low-hanging fruit, but we’re trying to show some foresight for when the market comes back and people are involved in buying higher-prices homes.”
If you are looking for somewhere to hide when global warming finally destroys us all in a nuclear blast followed by anarchy, why not a $2 million condo?
