The U.S. Commerce Department reported this morning that the 1.38 million new homes and apartments built in July was the lowest figure since January 1997, down almost 21 percent from a year ago. The government agency also reported that unemployment figures, as indicated by those filing for benefits, had increased by 6,000, a surprise to people who watch such things and probably an accelerant for yet another triple-digit stock market drop this morning.
I'm not an economist, nor do I play one at this web site. But I do own two homes and a piece of "unimproved" property, as well as a few shares of this and that company, and I suppose that gives me the right to offer some thoughts and whine a little. So here goes.
I wouldn't show one scintilla of mercy to those idiots who gave away free money in the form of sub-prime loans. Let them fend for themselves the way a potential seven million people who face foreclosure on their over-leveraged homes will have to (a prediction by the loud but savvy Wall Street sage, Jim Cramer). Ditto the equally dumb but exceedingly greedy hedge fund managers who bought and consolidated the dopey loans, and then fed the rotten paper to their customers. Greed is not good...
Read the feature on the Montes family of California in today's Wall Street Journal. Tired of renting an apartment, Mario and Leticia Montes signed on for a sub-prime loan two years ago for a $567,000 house in California. Their payments will rise ("reset") in December to $50,000 annually from $38,400 this year. The couple makes a combined $90,000 per year. They already had two car loans and a loan to pay for a daughter's education. What were their lenders thinking? What were the Montes' thinking? Yet there are tens of thousands of Montes' out there.
I don't know if the Federal Reserve lowering interest rates will re-stimulate the housing market, but instinct tells me no. It is too late for the Montes' and the others who were suckered by low interest and no down payment. The poison may just have to flow out of the patient for a while.
I have my own take on the unemployment numbers. As I have traveled through the southeastern U.S. and stopped to look at many homes under construction, Spanish is the dominant language at the sites, and I have always suspected that many of those workers were undocumented. As new home construction began its descent, the first ones laid off were undocumented, and so the official unemployment numbers were unaffected. But now as new construction grinds pretty much toward a halt, we can expect the unemployment numbers to escalate.
It is hard to see anything too positive in the near term, although in the housing market, like the stock market, pain often provides excellent buying opportunities. When we hear of some, we will pass them along...and hope you do the same.
Tiger Woods' first foray into golf course design is in the desert terrain of Dubai. His second one will present an entirely different challenge.
Yesterday, the world's best golfer confirmed that he will design a mountain layout for the Cliffs Communities at High Carolina, between Asheville, NC, and Greenville, SC. The course, which will be laid out especially for walkers, will sit at an elevation of 4,000 feet amid a community of homes priced well into the millions of dollars. Scheduled opening is sometime in 2010.
Tiger, who is chasing Jack Nicklaus' record 18 PGA victories in major tournaments, will have to do some catching up at the Cliffs as well, where Jack has his name on two courses. Other designers in the Cliffs portfolio of built and planned courses include Gary Player, Tom Fazio, Ben Wright and Tom Jackson, whose Cliffs at Glassy design is at about the same elevation as the property where Woods will work his magic.
Membership in one of the Cliffs courses confers membership in all. The current initiation fee is $125,000, with dues nearing $500 a month. The longest drive (car drive, that is) from the Cliffs at Walnut Cove (Nicklaus) to the Cliffs at Keowee Vineyard (Fazio) is about an hour.
Anything Tiger does stimulates interest in the golf world, and it will be interesting to see if his designs in Dubai and South Carolina reflect his own style of play the way Nicklaus' early designs did. The Nicklaus designs of the mid to late 1980s tend to force us commoners to hit high, Nicklaus-like approach shots to well-protected greens, as at the Melrose Course on Daufuskie Island, SC, and Pawleys Plantation in Pawleys Island, SC. In announcing the Cliffs venture, Tiger said he wants to design a course his "friends" would enjoy playing. Given the company he keeps, High Carolina should be tough.
Tiger Woods' course for the Cliffs at High Carolina will be at an elevation similar to the nearby Cliffs at Glassy, an intriguing layout by Tom Jackson.
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March 2024 In This Issue Half Million People Leave Florida. Why? Your Next Home Not Getting Bigger; It’s Getting Better
