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GLG News by this Author

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RATIONAL EXUBURNCE

September 15, 2008

Analysis of:Yale’s Shiller: U.S. Housing Slump May Exceed Great Depression | blogs.wsj.com

Comments to a recent article I wrote, “Defining Value and the Risk of Delay,” have encouraged me to follow-up with this piece. Alan Greenspan uttered the words “irrational exuberance” in 1996 when referring to the stock market bubble that ultimately didn’t reverse until several years later, but it was one of the most severe in history.  Yale’s Robert Shiller also authored the book in 2000 entitled “Irrational Exuberance” and in 2005 paralleled the housing boom to the same fundamental concerns.  While we don’t show a running ticker across our TV screen, there is an on going disconnect between land and lot valuations - realized or not.  The following attempts to establish the fundamentals for determining lot values in this new world.

RATIONAL EXUBERANCE

September 15, 2008

Analysis of:Yale’s Shiller: U.S. Housing Slump May Exceed Great Depression | blogs.wsj.com

Comments to a recent article I wrote, “Defining Value and the Risk of Delay,” have encouraged me to follow-up with this piece.  Alan Greenspan uttered the words “irrational exuberance” in 1996 when referring to the stock market bubble that ultimately didn’t reverse until several years later, but it was one of the most severe in history.  Yale’s Robert Shiller also authored the book in 2000 entitled “Irrational Exuberance” and in 2005 paralleled the housing boom to the same fundamental concerns.  While we don’t show a running ticker across our TV screen, there is an on going disconnect between land and lot valuations - realized or not.  The following attempts to establish the fundamentals for determining lot values in this new world.

Defining Value and the Risk of Delay

September 12, 2008

Analysis of:Yale’s Shiller: U.S. Housing Slump May Exceed Great Depression | blogs.wsj.com

Residential real estate lenders, property owners, and potential investors are seeing that current land values have in fact drop to levels that could be 60% below their highs in 2006.  Community developments and lot prices have shown the most obvious excesses and value collapses.  When you put current economic measurements into perspective, this is consistent with a longer term view of historic property appreciation and further explains the correction that has occurred.  There are risks could potentially deepen discounts and delay a recovery to normalized underwriting standards, but as we progress the outlook appears to be on track for a gradual recovery over the next three to five years. 

Working Through CDD Defaults

June 4, 2008

Analysis of:Residential real estate set to double | www.business24-7.ae

A Community Development District (CDD) is a local, special purpose government is an alternative method for managing and financing infrastructure required to support community development. CDD's possess several powers as a legal entity, such as the right to enter into contracts; the right to own both real and personal property; adopt by-laws, rules and regulations and orders; to sue and be sued; to obtain funds by borrowing; to issue bonds and levy assessments. They may impose and levy taxes or assessments, or both taxes and assessments, on the property. These taxes and assessments pay the construction, operation and maintenance costs of certain public facilities and services of the district and are set annually by the governing board of the district. While this system of structured financing has worked well for more than thirty years, the realities today’s real estate economy is presenting new challenges and opportunities.

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