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 Home On The Course Newsletter
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Florida, Long Island golf club members bilked big time |
In "The Snows of Kilamanjaro," author Ernest Hemingway fictionalizes an alleged conversation he had with fellow writer F. Scott Fitzgerald.
Fitzgerald: "The rich are different from you and me."
Hemingway: "Yes, they have more money."
Such a conversation probably took place before the Great Depression and before many of the Roaring Twenties rich lost everything. Today, as Yogi Berra would say, the wealthy are suffering "déjà vu all over again." In that regard, they are no different than the rest of us.
The latest story of the rich getting poorer lands at the top of page 1 of the Wall Street Journal today, in an article about a huge default by a private investment firm led by Wall Street legend Bernard Madoff. His investors, all of them high-wealth individuals, may have lost upwards of $50 billion in what Madoff confided to his sons -- a day before they turned him in, according to the Journal -- was a giant "Ponzi scheme."
Many of the bilked are members of elite country clubs in Florida and on Long Island (NY). There is no telling what percentage of their net worth they invested with Madoff nor what effect, if any, these huge losses might have on membership rolls at the Palm Beach Country Club, Fresh Meadows Country Club on Long Island and the other clubs whose members considered big investments in Madoff's fund an emblem of status. But we can be sure that other golf clubs in Florida, struggling just to survive under the weight of the housing and economic crises, will be eager to offer deep discounts to those who may no longer be able to bear the expense of keeping up with the Joneses, or the Trumps.
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Correction: In a story the other day about the Tennessee National golf community, I indicated the club's initiation fee of $30,000 could be spread over four years, when actually it is three years. The first $10,000 is due at sign-up, the second $10K two years later, and the last payment in the third year. Also, when the promised community center and pool are built, club member dues will not be affected. Maintenance of the facilities will be paid from homeowner association dues.
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Friday, 12 December 2008 06:08 |
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What a 4.5% mortgage rate would cost you |
A mountain home in the Connestee Falls golf community in North Carolina is currently on the market for $530,000. With a 20% down payment, monthly principle and interest on a 4.5% loan would be $2,148.41.
As part of its smorgasbord of ideas to get the U.S. economy moving again, or at least to stop tanking, the U.S. government has revealed a plan to tamp down mortgage interest rates by a point or more, to 4.5%. The almost unprecedented low rate will be available only to those with good credit ratings and who are purchasing a new home. The rates will not be available for refinancing existing mortgages, and a 20% minimum down payment will be required.
Given the plummet in home prices across the land, this is actually a scheme that could work. The combination of low interest rate and low home prices could drag some people from off the sidelines, especially those with cash or bullet-proof pension incomes.
I took a look at the mortgage factor tables to determine the monthly principal and interest payments on 30-year loans at a range of amounts. These do not include charges for taxes, club dues, homeowner association fees, utility costs and other charges, which will vary from town to town and community to community.
Loan amount Monthly Principle & Interest
200,000 1,013.40
300,000 1,520.10
400,000 2,026.80
500,000 2,533.50
600,000 3,040.20
1,000,000 5,067.00
If you want to calculate the payment for loan amounts not listed, simply multiply by a factor of 5.067 for every $1,000 borrowed.
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Thursday, 11 December 2008 04:52 |
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Cool house-hunting app for iPhone |
While waiting for my car to be serviced this morning, I noted a full-page ad in the Wall Street Journal for the Apple iPhone. I own an Apple iPhone, which I use as a way to check emails, my calendar, and baseball scores (during the season). Oh yes, I actually do use it as a phone too. The ad featured a dozen and a half applications I could download to the phone, ranging from a one-time cost of $9.99 (for a game) to absolutely free for Associate Press news headlines, a voice recording feature and something called Shazam, which will tell you the name of the artist and a song that is playing if you hold the iPhone up to the radio speaker.
When I accessed the iPhone app store to explore these, I found dozens of other applications for download, including Home Finder. Using large real estate related data bases, including one by Google that stores MLS (multiple listing service) information, Home Finder can access millions of homes for sale. Plug in a zip code for the location of the home you are seeking, a price range, some basic data on number of bedrooms and square footage, and in a few seconds, all homes that fit your parameters are listed.
I tested Home Finder with a search of homes within five miles of Pawleys Island, SC, where we own a vacation home. I set the price between $500,000 and $750,000, the bedrooms at 3+ and the square footage at 4,000. Home Finder kicked out a couple dozen listings (including the same house twice, at two different prices, which indicates that records may not be edited quickly). Many did not include a street address but do include a link to the listing agent's web site, where many more details about the house are available.
Such an application would have saved my wife and me many hours of investigation when we first started looking at properties 20 years ago during vacations along the South Carolina coast. Back then, we relied mostly on the listings in those real estate books you find in racks outside restaurants and in driving around the area. We would stop in golf communities whose front entrances looked attractive or whose golf courses had been well reviewed. Sometimes we hit, and sometimes we missed.
I much prefer the modern app-roach.
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Wednesday, 10 December 2008 05:06 |
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