How is the mortgage market meltdown going to affect downtown KC's condo market?
- K.C.Highrise
- Colonnade
- Posts: 944
- Joined: Wed Feb 09, 2005 11:24 pm
How is the mortgage market meltdown going to affect downtown KC's condo market?
There has been some pretty big news out there about the housing market imploding! How will downtown hold up? The more data, stories etc. the better!
- ComandanteCero
- One Park Place
- Posts: 6222
- Joined: Tue Aug 24, 2004 2:40 am
- Location: OP
Re: How is the mortgage market meltdown going to affect downtown KC's condo mark
I'd say the housing slow down has been going on for a while now, atleast since last year when we started hearing about the growing surplus of homes on the market and the Fed Reserve slowly hiking rates. I wouldn't call it an implosion though, slow down yes.
I think the effect on downtown is that no large new condo projects will be proposed for a year or two (2007 has been a pretty quiet year in that respect). Maybe we'll see more rental projects proposed as the P+L district opens, with more condos being proposed later as that market improves.
Cordish seems to be suggesting this also in their talks of converting the Midland theater offices into rental apartments.
I think the effect on downtown is that no large new condo projects will be proposed for a year or two (2007 has been a pretty quiet year in that respect). Maybe we'll see more rental projects proposed as the P+L district opens, with more condos being proposed later as that market improves.
Cordish seems to be suggesting this also in their talks of converting the Midland theater offices into rental apartments.
KC Region is all part of the same animal regardless of state and county lines.
Think on the Regional scale.
Think on the Regional scale.
-
- Bryant Building
- Posts: 3569
- Joined: Mon Nov 13, 2006 1:36 pm
- Location: Longfellow
Re: How is the mortgage market meltdown going to affect downtown KC's condo mark
I've noticed a couple condos that I've been watching have dropped significantly in price but other factors could be adding into that.
You know, Dude, I myself dabbled in pacifism once. Not in 'Nam of course.
-
- City Center Square
- Posts: 12666
- Joined: Thu Mar 11, 2004 10:31 pm
Re: How is the mortgage market meltdown going to affect downtown KC's condo market?
And I guess this slowdown and price dropping was caused by the Funk getting elected Mayor. He is being blamed for many other things so why not this.
I may be right. I may be wrong. But there is a lot of gray area in-between.
- K.C.Highrise
- Colonnade
- Posts: 944
- Joined: Wed Feb 09, 2005 11:24 pm
- frankthetank
- Strip mall
- Posts: 108
- Joined: Mon Jan 01, 2007 12:08 am
Re: How is the mortgage market meltdown going to affect downtown KC's condo market?
No...but scaring off developers was.aknowledgeableperson wrote: And I guess this slowdown and price dropping was caused by the Funk getting elected Mayor.
-
- City Center Square
- Posts: 12666
- Joined: Thu Mar 11, 2004 10:31 pm
Re: How is the mortgage market meltdown going to affect downtown KC's condo market?
They were already scared off before the election. Afterall, look at what was proposed and approved the months before the election.
I may be right. I may be wrong. But there is a lot of gray area in-between.
- FangKC
- City Hall
- Posts: 18375
- Joined: Sat Jul 26, 2003 10:02 pm
- Location: Old Northeast -- Indian Mound
Re: How is the mortgage market meltdown going to affect downtown KC's condo market?
I don't think it will have a huge affect downtown. It is more likely to affect people who have higher credit risk and no money to put down. There are a lot of houses going into foreclosure and being dumped back on the market, so housing prices will probably go down some more, or stay flat for awhile.
Many of the downtown condo projects are aimed at empty nest buyers and more affluent young professionals. People who will probably have less problems getting a mortgage, or coming up with down payments.
I just heard predictions on PBS' McLaughlin Group Friday evening to expect the Federal Reserve to lower interest rates at least two times within the next six months. Even though energy costs and food prices are going up, inflation is still within reason. This is mostly because housing prices are going back down, and automakers are dumping cars on the market at a loss.
Lower prices on condos could actually help downtown more because people who were put off by some asking prices might reconsider, and jump in while prices are cheaper. Especially in buildings with tax abatements.
Many of the downtown condo projects are aimed at empty nest buyers and more affluent young professionals. People who will probably have less problems getting a mortgage, or coming up with down payments.
I just heard predictions on PBS' McLaughlin Group Friday evening to expect the Federal Reserve to lower interest rates at least two times within the next six months. Even though energy costs and food prices are going up, inflation is still within reason. This is mostly because housing prices are going back down, and automakers are dumping cars on the market at a loss.
Lower prices on condos could actually help downtown more because people who were put off by some asking prices might reconsider, and jump in while prices are cheaper. Especially in buildings with tax abatements.
There is no fifth destination.
- KCMax
- Global Moderator
- Posts: 24051
- Joined: Wed Aug 04, 2004 3:31 pm
- Location: The basement of a Ross Dress for Less
- Contact:
Re: How is the mortgage market meltdown going to affect downtown KC's condo mark
I've read just the opposite from other analysts. Many seem to think Bernake will see this as a market correction that needs to work itself out - a hiccup. And many in the administration will feel that those that offered and took these loans need to be punished for doing so to prevent this in the future.FangKC wrote:
I just heard predictions on PBS' McLaughlin Group Friday evening to expect the Federal Reserve to lower interest rates at least two times within the next six months. Even though energy costs and food prices are going up, inflation is still within reason. This is mostly because housing prices are going back down, and automakers are dumping cars on the market at a loss.
I wonder if this bubble burst will spur more affordable housing downtown. I have to think the luxury market is about tapped.
- FangKC
- City Hall
- Posts: 18375
- Joined: Sat Jul 26, 2003 10:02 pm
- Location: Old Northeast -- Indian Mound
Re: How is the mortgage market meltdown going to affect downtown KC's condo market?
Just reporting what I saw on the show. I can't recall the exact language used, but instead of a prediction, it might have been a report of what one of the reporters had heard through the grapevine.
There is no fifth destination.
- KCMax
- Global Moderator
- Posts: 24051
- Joined: Wed Aug 04, 2004 3:31 pm
- Location: The basement of a Ross Dress for Less
- Contact:
Re: How is the mortgage market meltdown going to affect downtown KC's condo mark
I'm not saying you're wrong, just that there are a lot of opinions on what the Fed will do. They're usually pretty cryptic about what they're about to do!
- kard
- Global Moderator
- Posts: 5627
- Joined: Thu Jan 05, 2006 12:37 pm
- Location: Kingdom of Waldo
Re: How is the mortgage market meltdown going to affect downtown KC's condo mark
What happens in 10 - 15 years when the boomer bubble starts downsizing their assets by moving in to retirement homes / rest homes, etc, and sell their homes and vacation homes, etc?
The supply will go up...prices go down?
The supply will go up...prices go down?
Haikus are easy
But sometimes they don't make sense
Refrigerator
But sometimes they don't make sense
Refrigerator
-
- The Quiet Chair
- Posts: 14070
- Joined: Wed Aug 04, 2004 5:57 pm
- Location: Sunny Johnson County
Re: How is the mortgage market meltdown going to affect downtown KC's condo mark
Why do you think Big Biz wanted to amnesty those 20M illegal aliens last spring?Kard wrote: What happens in 10 - 15 years when the boomer bubble starts downsizing their assets by moving in to retirement homes / rest homes, etc, and sell their homes and vacation homes, etc?
The supply will go up...prices go down?
[img width=472 height=40]http://media.kansascity.com/images/champions_blue.gif[/img]
"For 15 years...KU won every time. There was no rivalry" - Frank Martin
"For 15 years...KU won every time. There was no rivalry" - Frank Martin
-
- Alameda Tower
- Posts: 1450
- Joined: Sat Jan 15, 2005 11:47 pm
Re: How is the mortgage market meltdown going to affect downtown KC's condo mark
Lower housing prices might indirectly affect the downtown condo market.
1. Lower housing prices make those single-family homes a lot more competitive against condos. There are plenty of people that weigh condo vs. house and decide that you "get more for your money" with a house. Yes, I understand the amenities that come with a condo justify a higher price per square foot, but there's a point where, for some people, it just isn't worth it. I think there is a "sweet spot" for how much of a premium a condo can go for. Just because someone may be "affluent" doesn't mean they're not going to weigh where is the best place to spend their money.
2. Those empty nesters have to sell their house before moving downtown. If they can't get what they want out of their house, they may choose to sit on it instead of moving to a condo.
1. Lower housing prices make those single-family homes a lot more competitive against condos. There are plenty of people that weigh condo vs. house and decide that you "get more for your money" with a house. Yes, I understand the amenities that come with a condo justify a higher price per square foot, but there's a point where, for some people, it just isn't worth it. I think there is a "sweet spot" for how much of a premium a condo can go for. Just because someone may be "affluent" doesn't mean they're not going to weigh where is the best place to spend their money.
2. Those empty nesters have to sell their house before moving downtown. If they can't get what they want out of their house, they may choose to sit on it instead of moving to a condo.
-
- City Center Square
- Posts: 12666
- Joined: Thu Mar 11, 2004 10:31 pm
Re: How is the mortgage market meltdown going to affect downtown KC's condo market?
Here is an article concerning the topic of home loans. How the current market will affect dt will mainly be answered by finding out what type of loans people have been using to buy dt housing.
Article:
http://www.msnbc.msn.com/id/20216643/
Some interesting quotes in it:
Washington Mutual Inc., another major lender of option and interest-only ARMs, echoed those concerns in a similarly bleak Securities and Exchange Commission filing that warned the subprime problems are cropping up in higher-quality mortgages, too.
Thornberg is among the economists who believes the mortgage market turmoil could lead to a recession during the next year. “This snowball is just 20 percent down the hill. It’s nowhere near the bottom,” he said.
Article:
http://www.msnbc.msn.com/id/20216643/
Some interesting quotes in it:
Washington Mutual Inc., another major lender of option and interest-only ARMs, echoed those concerns in a similarly bleak Securities and Exchange Commission filing that warned the subprime problems are cropping up in higher-quality mortgages, too.
Thornberg is among the economists who believes the mortgage market turmoil could lead to a recession during the next year. “This snowball is just 20 percent down the hill. It’s nowhere near the bottom,” he said.
I may be right. I may be wrong. But there is a lot of gray area in-between.
- KCPowercat
- Ambassador
- Posts: 34137
- Joined: Mon Oct 07, 2002 12:49 pm
- Location: Quality Hill
- Contact:
Re: How is the mortgage market meltdown going to affect downtown KC's condo market?
Unlike many here...I hope none of the KC market is adversely affected.
How sad that some find pleasure in others suffering.
How sad that some find pleasure in others suffering.
- FangKC
- City Hall
- Posts: 18375
- Joined: Sat Jul 26, 2003 10:02 pm
- Location: Old Northeast -- Indian Mound
Re: How is the mortgage market meltdown going to affect downtown KC's condo market?
It's the sub-prime mortgages that are screwing everything up. The people who took those loans can't pay the increases in interest, and are going into foreclosure. A lot of foreclosures on the market bring all prices down. Sub-prime loans were a shell-game to start with. Mortgages companies and banks lured people in with cheap interest rates and no money down, and then sold the loans off as a big package to investors who didn't have a clue the details about the borrower.
I still see these "no-money down, affordable interest rate" mortgage signs plopped down in front of a lot of homes in the inner city.
People who want to own homes just need to learn that they have to get fixed rate mortgages, and save up some money to make a down payment. They also need to pay off credit cards, and stop spending on unnecessary things and getting in deeper. Younger people need to wait longer to buy and save up some money, and even cut their expenses for a period of time.
The argument about buying a house versus a condo is probably true in past years. But as the baby boomers retire, a lot of them are realizing they don't want to do yard work or home maintenance, and they want to be free to travel. A condo works better for them. The older seniors who are living much longer, and beginning to have problems with their health, and mobility, want out of their houses and live where they don't have to do physical chores any longer. Older women especially are looking for the physical security of a doorman or buzzer/alarm system in their dwelling. The aged is the fastest growing segment of the American population.
I still see these "no-money down, affordable interest rate" mortgage signs plopped down in front of a lot of homes in the inner city.
People who want to own homes just need to learn that they have to get fixed rate mortgages, and save up some money to make a down payment. They also need to pay off credit cards, and stop spending on unnecessary things and getting in deeper. Younger people need to wait longer to buy and save up some money, and even cut their expenses for a period of time.
The argument about buying a house versus a condo is probably true in past years. But as the baby boomers retire, a lot of them are realizing they don't want to do yard work or home maintenance, and they want to be free to travel. A condo works better for them. The older seniors who are living much longer, and beginning to have problems with their health, and mobility, want out of their houses and live where they don't have to do physical chores any longer. Older women especially are looking for the physical security of a doorman or buzzer/alarm system in their dwelling. The aged is the fastest growing segment of the American population.
There is no fifth destination.
- kard
- Global Moderator
- Posts: 5627
- Joined: Thu Jan 05, 2006 12:37 pm
- Location: Kingdom of Waldo
Re: How is the mortgage market meltdown going to affect downtown KC's condo market?
which posts make you say that?KCPowercat wrote: Unlike many here...I hope none of the KC market is adversely affected.
How sad that some find pleasure in others suffering.
Haikus are easy
But sometimes they don't make sense
Refrigerator
But sometimes they don't make sense
Refrigerator
- GRID
- City Hall
- Posts: 17302
- Joined: Mon Sep 15, 2003 12:20 pm
- Contact:
Re: How is the mortgage market meltdown going to affect downtown KC's condo market?
How is the mortgage market meltdown going to affect downtown KC's condo market?
KC has totally missed the boat on urban condo construction. We just got started way too late. Now with things like the economy slowing, the total breakdown of the entire housing and lending industry (it wasn't going to last forever) and even the fact that many of the "new construction" urban condos's major demographic market (baby boomers) are already finding places to retire, we just missed the boat a bit I think.
And now we just don't have the critical mass of existing new condo development downtown keep any momentum going through these rougher times because the market in KC is simply too immature compared to many large markets.
All I know is that nothing new has broken ground at all. There still has not been a new condo tower go up in downtown KC in over 30 years. I know, I know, we filled a lot of empty structures, but so did every other town.
We have this proposed:
The Broadway
The Broadway (tower 2)
Cordish tower (phase 1 at 12th)
Cordish towers next phases
P&L Condos
Wellington twin towers
Crown Center (tower near san fransisco)
29th and Main (dead plan I think)
Any bets on which, if any of these projects will get built?
Even the Plaza has had a few proposed towers since kirkwood and 4646 were announced many years ago and all are stalled.
KC has totally missed the boat on urban condo construction. We just got started way too late. Now with things like the economy slowing, the total breakdown of the entire housing and lending industry (it wasn't going to last forever) and even the fact that many of the "new construction" urban condos's major demographic market (baby boomers) are already finding places to retire, we just missed the boat a bit I think.
And now we just don't have the critical mass of existing new condo development downtown keep any momentum going through these rougher times because the market in KC is simply too immature compared to many large markets.
All I know is that nothing new has broken ground at all. There still has not been a new condo tower go up in downtown KC in over 30 years. I know, I know, we filled a lot of empty structures, but so did every other town.
We have this proposed:
The Broadway
The Broadway (tower 2)
Cordish tower (phase 1 at 12th)
Cordish towers next phases
P&L Condos
Wellington twin towers
Crown Center (tower near san fransisco)
29th and Main (dead plan I think)
Any bets on which, if any of these projects will get built?
Even the Plaza has had a few proposed towers since kirkwood and 4646 were announced many years ago and all are stalled.
-
- The Quiet Chair
- Posts: 14070
- Joined: Wed Aug 04, 2004 5:57 pm
- Location: Sunny Johnson County
subprime "crisis" - hah
A different view on the Subprime "crisis" - by Ben Stein:FangKC wrote: It's the sub-prime mortgages that are screwing everything up.
Housing a Theory
Yes, the housing market has slowed from a spectacular bubble level to a simply pretty good level. Housing sales and starts are now about what they were in 2002, and no one thought we were in a housing depression then.
In any event, housing is only about 5 percent of the economy. If it falls by 15 percent, that would represent a fall-off of about .75 percent. That's not trivial, but it's also not the stuff of which recessions are made.
The fact is that there is no recession. The economy is suffering from a labor shortage, not a surplus of unemployment. The Fed is worried about excess demand, not slack demand.
Corporate profits set new records every day. Whatever's happening in residential sales and building is simply not slowing down the economy. Why should a Boeing or a Merck or a Pfizer have any reaction to housing at all? Because the speculators sell everything they can when nervousness sets in -- and for no other reason.
A Minor Major Mess
Subprime is a mess. But it's a small mess. Subprime mortgages account for roughly 20 percent of mortgages even in the most heavily exposed states. About 20 percent of them are delinquent in some way. That's 4 percent of mortgages.
Of these, maybe half, or 2 percent, will go into foreclosure. There will be roughly 50 percent recovery on sale of these. This is a loss of 1 percent in the mortgage market -- a sum the lenders have already made many times over because of the hefty fees on those deals. In the context of the size of the U.S. financial sector, it's nothing.
And why should a crisis in subprime drive down stocks in Mexico and Thailand? Again, because the speculators seek to create panic to make money by selling short, and they sell short everything.
http://finance.yahoo.com/expert/article/yourlife/41148
[img width=472 height=40]http://media.kansascity.com/images/champions_blue.gif[/img]
"For 15 years...KU won every time. There was no rivalry" - Frank Martin
"For 15 years...KU won every time. There was no rivalry" - Frank Martin