GLG News by Homebuilding Experts (United Kingdom)

Howard LiggettPresident and CEODistressed Real Estate Consulting Services, Inc.

Tax Lien Certificates Offer Stability During Unstable Times

October 1, 2009

Analysis of:Tax Bills Put Pressure on Struggling Homeowners | www.nytimes.com

Present estimates of  unpaid property taxes in the United States place the figure as high as $15 billion annually.  The choices available to government officials for remedying this shortfall are limited.  Counties and cities could increase the tax rate,borrow (maybe) the necessary capital,reduce services (again) or sell the tax debt to investors willing to take the risk they will be repaid.  The first three options are distasteful to most property owners,particularly those who pay on time.

Jon WatsonPrincipalJon Watson Consulting

Recovery in UK housing production could trigger further land bank write downs

August 6, 2009

Analysis of:Taylor Wimpey takes further £527m writedowns | www.ft.com

Taylor Wimpey's results (5 August) show a further write down of £527m on their land bank and work in progress. The following day, Bellway launched a £45m rights issue to finance further land purchases (http://www.building.co.uk/story.asp?storycode=3146488&origin=bldgdailynewsletter). These different responses to the problem of writing down the value of sites purchased at the height of the housing land bubble in 2006/7 could have significant consequences as the market recovers.

Howard LiggettPresident and CEODistressed Real Estate Consulting Services, Inc.

Foreign & Domestic Investors Positioning For Florida Distressed Real Estate Deluge

June 8, 2009

Analysis of:IS IT A GREAT TIME TO BUY PROPERTY IN FLORIDA NOW? | www.overseaspropertymall.com

South Florida's depressed real estate market is still about six months from rock bottom, but now bargain hunters are out in force. At a recent conference, real estate brokers and lawyers agreed the sharpest declines in value and the highest spikes in foreclosures will hit once most of Miami's new condo units are built in late 2008 and into 2009. Still, several brokers are noticing that distressed properties are starting to sell, and buyers - especially foreign buyers - are already eyeing the market to make sure they don't miss a feeding frenzy for cheap real estate. The trifecta of the housing glut, the subprime crisis and the weak dollar has made South Florida real estate attractive again - but for a very different reason than in 2005.

Howard LiggettPresident and CEODistressed Real Estate Consulting Services, Inc.

South Florida's Real Estate Armageddon Presents Huge Acquisition Opportunities

January 15, 2009

Analysis of:Nonresidential Construction Seen Falling 11% in 2009 | www.cnbc.com

South Florida's commercial and residential real estate markets suffered in 2008, and the New Year doesn't figure to offer much relief. Continued foreclosures and the weak economy will continue having an impact on prices and number of properties available with only aggressive sellers disposing of properties. Although home sales started picking up this past summer, the beleaguered housing market has been hammered by foreclosures and falling prices. Meanwhile, the sputtering economy has local businesses retrenching and cutting jobs, dealing a blow to the retail, office and industrial sectors. All this carnage creates an opportunity for those positioned to take advantage of the adjustment in prices, and higher expected returns.

Howard LiggettPresident and CEODistressed Real Estate Consulting Services, Inc.

Valuation Vendors Critical to the Home Sale Rebound

December 12, 2008

Analysis of:U.S. Eyes Plan to Lift Home Sales | online.wsj.com

As markets change,servicers and lenders need to choose a valuation company that can quickly and easily adapt.  Questions to ask include: Does your valuation vendor use a quality evaluation logic that can be changed on the fly?  The preferred valuation model would weigh more heavily on comps in an appreciating market and listings in a declining market.

Howard LiggettPresident and CEODistressed Real Estate Consulting Services, Inc.

Credit Default Swaps Are Dangerous Should the Waters Rise

December 5, 2008

Analysis of:N.Y. Approves ICE Credit-Default Swap Clearing Plan (Update 2) | www.bloomberg.com

Credit default swaps have been a major element in the ongoing financial crisis. That doesn't mean it's necessarily easy to understand just what the problem is with them.  In an effort to gain clarity I have engaged in a self-directed study on the topic with the following analogy to report.

Jon WatsonPrincipalJon Watson Consulting

SAFETY FIRST, BUT A RATHER HASTY DECISION?

October 10, 2008

Analysis of:Kier to focus on social housing | www.ft.com

Kier is one of the major housing contractors in the UK and a significant “second division” house builder.  They have decided to exit house building and concentrate solely on building for housing associations (the main providers of affordable/social housing in the UK).    In the short term, this is undoubtedly an appropriate tactic.  However, I am not sure that it makes sense as a longer term strategy.  The latest NHBC statistics show that house building starts in the June – August quarter 2008 are down 65%, whereas social housing starts are up 8%.   However, house building opportunities in the UK are dependent on land supply, which is very restricted due to the planning system.  In the short term, there will be a ready supply of “fire sale” sites, but when the market recovers, shortages are likely to become very apparent very quickly. 

Howard LiggettPresident and CEODistressed Real Estate Consulting Services, Inc.

Nationalization of the Finance Industry Will Doom Middle Class America

September 16, 2008

Analysis of:Capital Markets' Turmoil Clouds Some Realities | www.globest.com

The government takeover of ailing mortgage giants Fannie Mae and Freddie Mac was no surprise and has been jumped all over by the mainstream press. This move was intended not to cause something to happen, but to prevent something from happening. That something was the imminent bankruptcy of the two entities that account for about 80 percent of U.S. mortgage issuance.  What does it mean for those who watch from afar in locales like Omaha,Denver,Orlando and Atlanta?

Howard LiggettPresident and CEODistressed Real Estate Consulting Services, Inc.

State & Local Tax Reforms May Cripple Municipal Development

July 15, 2008

Analysis of:Cleveland Sues Banks Over Foreclosures | www.msnbc.msn.com

July 1 marked the beginning of a new fiscal year for most states and about one third of local governments, and, as a result of declining economic conditions, ushered in a period of cutback management and difficult decision making for many state and local leaders. Reduce taxes,reduce spending is the hue and cry from John Q. Public and understandably so.  However,we as voters sometimes shoot ourselves in the foot when it comes to government reform predicated solely on the idea "not if it impacts me".   Reductions in infrastructure funding,cutbacks in nonessentials such as public parks, street festivals,art appreciation events can spell doom for commercial developers and retailers who had earlier held plans to locate within municipal boundaries.

Howard LiggettPresident and CEODistressed Real Estate Consulting Services, Inc.

HELOC Losses are Increasing and Will Reduce Access to the American Dream

June 23, 2008

Analysis of: The American Dream Goes On | www.usnews.com

In their first quarter results, several banking organizations reported stunning losses and provisions generated by these loans, with predictions of much more to come in future quarters. Indeed, national banks, which hold about half of all home equity loans, sustained as much loss from this type of credit in the first quarter of this year than they did in all of 2007.  Home equity lending has grown dramatically in recent years, more than doubling since 2002 to about $1.1 trillion outstanding!

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