What did we know and when did we know it?

I was going through my old Blogger blog earlier today and came upon this post written almost four year ago (Feb 22, 2005). It was back when I worked in Palm Beach County Florida and referenced a study by National City Bank (now part of PNC Bank) published that month. Unfortunately, the link below will now take you to current study (3rd Quarter 2008) but it is an interesting look at housing values.

There was plenty empirical and anecdotal evidence four years ago that the market could not sustain the growth of the prior few years, but most people in the biz (and the general public) were not ready to believe.

Blog Post from February 22, 2005 below    http://tinyurl.com/c8qdhw

The Housing "Bubblette"

There's been a lot published recently about the possibility of a housing bubble that will burst and leave people with negative equity in their homes. Can it happen? Has it happened before? The answer is yes and yes. Japan has had a slow housing market for the past seven or eight years so any economy is susceptible.

The economics department of National City Corporation, a large financial institution, did a study to try to identify in the 99 largest US markets where single family home valuations are at a premium or a discount. And good old Palm Beach County per the study is 26% overvalued per the benchmarks used. All of the markets that were more overvalued were in California. Also highly overvalued in Florida were the Miami Ft Lauderdale and Sarasota markets. Big markets like Orlando, Tampa and Jacksonville were basically neutral. The most undervalued, Memphis and Salt Lake City.
You can read the entire study at http://www.nationalcity.com/economics

For several years, I have almost daily read a couple of law firm blogs that deal with mortgage fraud and follow cases and update the reports.

Both of them today reported that a 74 year old real estate broker in Denver that was found guilty of four counts of mortgage fraud in July was sentenced to 36 months probation with 15 months of house arrrest, restitution and forced to forfeit a $44,292 judgment.

Just because I was curious, I checked this person on Colorado's website and found that she was disciplined in 1993 for falsifying information (specifically asserting she had deposits in an escrow account when she did not collect these deposits) and sentenced to a 90 day license suspension, 4 hours of additional continuing ed and a $400 fine (the italics are mine). According to the state licensing site, she still has an active license.

There are articles on Fraud Blogger and on Mortgage Fraud Blog

We constantly talk about weeding out people in our respective businesses that operate outside the bounds of good business practices and sound ethics. Unfortunately, the state licensing authority in most states is slow to revoke licenses of people like the broker in the story. You would think that someone who was found guilty by a jury six months ago would not still be licensed.

I first met Joe Pitts back in 1998 when I had to attend a training session for the Regional MLS (West Palm Beach) when a new system was introduced. Since we were scheduled alphabetically by last name, I happened to share a computer with an"older" gentleman that I had never met before. We talked a bit and since he was unfamiliar with some of the systems, I tried to help him as best I could to get started, since the new system was going "live in about two weeks.

Over the next couple of years, I'd speak with Joe once in a while, usually setting up showings, but I always asked him how he was doing with the computerized MLS and he always said something like "I'm getting there".

What I didn't know was that Joe had lived in the same neighborhood (Westgate) in West Palm Beach since the age of 6 except for a 20 year career in the Army which included a tour in Vietnam. The Westgate area had been part of the incorporated City of West Palm Beach but the city had de-annexed the area and it had become an area known for drugs, high crime and blight.

When Joe retired from the military, he moved back to Westgate, obtained a real estate license and eventually opened a brokerage. Then he helped to restart the area's redevelopment authority and started working to improve the neighborhood. Among the areas Joe helped improve were having all of the streets paved (most were dirt), getting the county to bring in public water and sewer and having sidewalks added on almost every street. Another major problem had been street flooding and Joe worked with the county engineers to acquire land for retention ponds and storm drains for the entire area.

But Joe's proudest achievement was helping the school district take the local elementary school, which was at double it's capacity with 27 portable classrooms and helping the district acquire surrounding property to built a brand new 900 student school.

Joe was honored in 2000 by the National Association of Realtors as one of the five national Good Neighbor Award winners and the next summer by the Florida Association of Realtors. I spoke with Joe that spring, congratulating him on the award and he was his usual humble self. He mentioned that his recognition came from local residents and long time neighbors who thanked him for his efforts to improve the neighborhood. He also told me he was kind of embarrassed by the attention because he didn't think he did anything special.

Joe passed away in 2005 at the age of 73. He was a good guy

In our current economic situation, it's not just houses that are falling into foreclosure. I have written before about shopping centers and other commercial locations that are being foreclosed but this is a first for me.

The Gettysburg, Pennsylvania Country Club, located in a very historic area, is being sold at sheriff's sale on January 9, 2009. The club has been unable to attract enough new membership to pay off a $2.9 million loan for renovations completed two years ago and actually closed it's doors in May 2008.

The story from the Carlisle Sentinel:

"The 60-year-old Gettysburg Country Club is slated to be sold at a sheriff's sale next month after a rescue of the troubled organization failed.
Susquehanna Banks, which foreclosed on the property, is seeking a minimum of $2.9 million when the property goes up for bid on Jan. 9 at the Adams County sheriff's office.
The club has been unable to pay off the debt from a major renovation in 2006, including a conference room, ballroom, pub and tennis courts.
It officially closed on May 30 this year after the club couldn't attract the membership it needed to pay down the debt.
The 120-acre property is inside the boundaries of the Gettysburg National Military Park."

While the property is located within the Gettysburg National Military Park, so are hundreds of other privately owned properties, including homes, businesses and privately owned visitor attractions. These were built prior to the designation of the area as a National Park. It is not part of the government land which is the national historic park.

Here is a link to more information that was published on May 31 right after the club closed:

http://civilwarlibrarian.blogspot.com/2008/05/news-gettysburg-country-club-site-of.html

That's right. Joe Paterno, who has been the head football coach at Penn State since like forever, has agreed to stay 3 more years in that capacity.

Joe has been head coach since 1966 and had been an assistant from the early 1950's when he joined his college coach from Brown University, Rip Engle. In the past two years he has had to deal with a broken leg (after a player rolled over him on the sidelines) and hip replacement surgery which occured last month after the last regular season game.

Joe plans to be on the sideline coaching at the Rose Bowl on January 1, 2009 in Pasadena.

I, for one, hope Joe stays another ten years. His activities on behalf of the university as a whole are legendary. He and his wife Sue spearheaded a drive to expand the main library and they were so effective, the building is called the Paterno Library. He has personally donated millions to the academic parts of the university.

Way to go Joe

A new museum dedicated to the Hershey chocolate story will be opening in January right here on West Chocolate Avenue.

The museum is dedicated to honoring and preserving the life of Milton Hershey, the founder of Hershey and innovator of all the sweet treats we enjoy today. Incidently, this is the first large building on Chocolate Avenue, Hershey's main street, in 75 years.

When opened, the museum will include a chocolate laboratory, a museum shop, Cafe Zooka (featuring chocolate desserts and a chocolate tasing area.

In preparation for the opening, the former Hershey Museum closed arounf Thanksgiving so that permanent exhibits could be moved to the new facility. The old museum, located in the middle of the Chocolate World, Hershey Park and HersheyPark Arena area was difficult to get into during the summer season because of the lack of nearby parking.

This is the new Hershey Story building:

 In a decision today by Lebanon County President Judge Eby, the Lebanon County Commissioners have been ordered to reassess all properties in the county by the end of 2012.

This is due to a property tax assessment appeal by a local couple in 2006 in which they stated "the county's failure to conduct a countywide assessment for 36 years "has caused a discriminiatory effect of taxation" that harmed them and others."

In effect, if you live in a home built before 1972, your tax assessment is based on the 1972 value. If you live in a home built in 2005 (as we do) our assessment is based on 2005 values.

I don't expect that my taxes will go down, but I expect that people living in older neighborhoods in the county will be paying a more proportionate share of the cost of government.