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February 11, 2008 – Comments (14)

Despite numerous reports showing home values in historic decline, more than three out of four homeowners believe their own home has not lost value in the past year, according to an online survey.

Only read the rest if your mouth and throat are clear of easily-snarfed liquids...

This is great proof of the power of delusional thinking, as well as, I think, the myriad lies spun by the greedy, empty hucksters at the NAR over the past few years.

14 Comments – Post Your Own

#1) On February 11, 2008 at 2:09 PM, WVUTOM (89.02) wrote:

Could the fact that home-sellers are dillusional right now about the true market price of the homes be a reason for the decline?

If people are trying to hold on too much right now to their property, they are shifting the demand curve of the supply of homes available.  By restricting supply, they actually increase the price of homes.  With the increase in price of homes, more credit is necessary.  With more credit necessary, less people qualify for loans.  With less people qualifying for loans, less Bank revenue. With less bank revenue, less likely to be risky with their loans.  Just a snowball effect..... 

I could however be clearly off on this, but just my knee-jerk reaction 

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#2) On February 11, 2008 at 2:24 PM, Gemini846 (50.01) wrote:

I think it's less of the case of dillusion but more of a stiff dose of reality. People are under the assumption that in 3-5 years thier home prices will bounce back to mid bubble levels, much like a long stock position that has missed earnings and taken a temporary hit. They don't see a "loss" because they haven't realized it.

Real Estate companies, CMO holders et dont have this option. They have to estimate thier assets for tax or credit purposes so they are forced to "write down" the value of those assets rather than cook the books.

Only people who are trying to sell and haven't seen a buyer in a while but who are still keeping thier price high are dilusional, but oweing more than the house is worth is keeping them in that state. The article didn't give a time period for the survey. Some old codger who has been in his house for 20 years HAS seen it appreciate even though he missed the oportune time to sell.

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#3) On February 11, 2008 at 2:34 PM, TMFBent (99.81) wrote:

old codger who has been in his house for 20 years HAS seen it appreciate

Possible, but not a certainty in real, inflation-adjusted terms, especially considering the expenses of holding a home.

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#4) On February 11, 2008 at 2:58 PM, floridabuilder2 (99.23) wrote:

It was delusional thinking that gave our country McDonalds, Disney, Personal Computers, and Pet Rocks..... Mr Bent....

Delusional thinking is what makes America great and why we are winning the war against Iran and Russia

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#5) On February 11, 2008 at 3:20 PM, devoish (98.56) wrote:

 Put down your coffee.

 The link is to the same story I pasted here. I have to get a mop now. Enjoy:

By Martha Graybow

NEW YORK, Feb 11 (Reuters) - Luxury builder Toll Brothers Inc (TOL.N: Quote, Profile, Research), hurt as many buyers to try to get out of contracts for new homes amid falling prices, says a member of its founding family is trying to walk away from an agreement to buy a new condominium.

The daughter of Vice Chairman and co-founder Bruce Toll informed the company last month that she and her husband "did not intend to make settlement" on a $2.47 million home they had previously agreed to purchase, the company said in a regulatory filing.

Toll Brothers went on to say that it intends to pursue its rights under the agreement of sale with Toll's daughter, Wendy Topkis.

A company spokesman was not immediately available for comment on the filing, which was made public on Friday.

The company, hard hit by the U.S. real estate slump, said last week that it sees no signs of improvement in the depressed housing market. It estimated a 22 percent drop in home-building revenue for its fiscal first quarter, ended Jan. 31.

In its filing with the U.S. Securities and Exchange Commission, Toll Brothers said it has a policy of providing home purchase discounts to immediate family members of company employees.

The contract with Topkis was reached prior to fiscal 2007, it said. The location of the condo was not disclosed. (Reporting by Martha Graybow; Editing by Steve Orlofsky)

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#6) On February 11, 2008 at 3:28 PM, TMFBent (99.81) wrote:

old codger who has been in his house for 20 years HAS seen it appreciate

Possible, but not a certainty in real, inflation-adjusted terms, especially considering the expenses of holding a home.

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#7) On February 11, 2008 at 3:31 PM, TMFBent (99.81) wrote:

Dovoish -- OMFG... That's hilarious. And, if I remember correctly, family members get some pretty huge discounts on these things already. Have to review the proxy to see if this one was one of the discounted units, and what the deal was.

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#8) On February 11, 2008 at 3:39 PM, TMFBent (99.81) wrote:

No word on what the prospective discount was for ol' Wendy, there, but the filing makes clear what another Toll freeloader got by way of a discount: about 4.3%. Not enormously huge. But I really wonder just how far this "policy" extends down the line of "company employees." My bet is Fredy McHammer's daughter doesn't get a 4% discount.

I sincerely hope these shareholder pillagers are wicked underwater on their Toll condos. It would be real justice, and not just the poetic kind.

In December 2007, the Company sold a condominium to a trust, the beneficiary of which is Jacob Toll, the son of Robert I. Toll, for a price of approximately $2,235,672, which reflects a discount of $93,153 from the normal purchase price. The discount is consistent with the Company’s policy of providing home purchase discounts to immediate family members of Company employees.

Prior to fiscal 2007, the Company entered into an agreement of sale to build and sell a condominium to Wendy Topkis, Bruce E. Toll’s daughter, and her husband for a purchase price of $2,468,075. In January 2008, the buyers informed the Company that they did not intend to make settlement on the condominium. The Company intends to pursue its rights under the agreement of sale.

 

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#9) On February 11, 2008 at 3:40 PM, JonBarleycorn (71.04) wrote:

Survey of 1,619 homeowners ... This survey reveals that despite the data to the contrary ... Article doesn't say how many of the 1619 had tried to sell. Sellers are certainly paying attention.

We who aren't selling can afford to be in denial (at least until we try to realize our 'profits').

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#10) On February 11, 2008 at 3:40 PM, TMFBent (99.81) wrote:

Oh, and I know you're just yanking my chain, FB, but there's a difference between dreams and delusions...

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#11) On February 11, 2008 at 3:46 PM, Imperial1964 (97.77) wrote:

My home has not lost value in 2007.

In 2007, I completely remodeled the kitchen and master bedroom and finished the bathroom remodel, which started out 2007 with unfinished drywall.

My home will continue to rise in value throughout 2008 as I continue much-needed renovations.

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#12) On February 11, 2008 at 3:52 PM, TMFBent (99.81) wrote:

lol, imperial. Thanks for showing exactly why the NAR's numbers on home prices are so bogus. By their math, you buy a home for 100,000, you put 20,000 in, you sell it for 115,000, and you've "made" 15 thousand bucks!

For shizzles and gagizzles, here's some more from Toll's craptastic proxy:

Adam Barzilay, the son of Zvi Barzilay, was employed on a part-time basis by the Company as a Land Acquisition Manager for a portion of fiscal 2007. During his employ with the Company during fiscal 2007, Mr. Adam Barzilay received $86,121 in salary and benefits and a bonus of $46,450. Mr. Adam Barzilay also received an option to acquire 1,250 shares of the Company’s common stock, all of which was forfeited when Mr. Adam Barzilay voluntarily ended his employment with the Company in September of 2007. The Company believes that the compensation paid to Mr. Adam Barzilay during his employment with the Company was equivalent to the compensation it would pay to an unrelated individual with a similar position.

 

From time to time, the Company charters an aircraft for business purposes that is indirectly owned by Grey Falcon Management, L.P., a company that is ultimately owned by Robert I. Toll. The Company pays charter rates that are less than those charged to unrelated parties seeking to rent Mr. Toll’s plane. During fiscal 2007, Mr. Toll received or was entitled to receive approximately $339,500 in fees related to the chartering of his aircraft by the Company.

 

Ballard, Spahr, Andrews & Ingersoll, LLP, the law firm of which Richard J. Braemer, a director of the Company, is a partner, acted as counsel to the Company in various matters during fiscal 2007 and was paid aggregate fees of approximately $825,400 during fiscal 2007.

 

Bruce E. Toll is the Chairman of, and has an ownership interest in, Philadelphia Media Holdings, L.L.C., which is the parent company of the Philadelphia Inquirer and the Philadelphia Daily News, two newspapers where the Company routinely advertises its homes and employment opportunities. During fiscal 2007, the Company paid approximately $1,109,740 in advertising to the Philadelphia Inquirer and the Philadelphia Daily News.

 

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#13) On February 12, 2008 at 8:07 AM, TMFBent (99.81) wrote:

lol, imperial. Thanks for showing exactly why the NAR's numbers on home prices are so bogus. By their math, you buy a home for 100,000, you put 20,000 in, you sell it for 115,000, and you've "made" 15 thousand bucks!

For shizzles and gagizzles, here's some more from Toll's craptastic proxy:

Adam Barzilay, the son of Zvi Barzilay, was employed on a part-time basis by the Company as a Land Acquisition Manager for a portion of fiscal 2007. During his employ with the Company during fiscal 2007, Mr. Adam Barzilay received $86,121 in salary and benefits and a bonus of $46,450. Mr. Adam Barzilay also received an option to acquire 1,250 shares of the Company’s common stock, all of which was forfeited when Mr. Adam Barzilay voluntarily ended his employment with the Company in September of 2007. The Company believes that the compensation paid to Mr. Adam Barzilay during his employment with the Company was equivalent to the compensation it would pay to an unrelated individual with a similar position.

 

From time to time, the Company charters an aircraft for business purposes that is indirectly owned by Grey Falcon Management, L.P., a company that is ultimately owned by Robert I. Toll. The Company pays charter rates that are less than those charged to unrelated parties seeking to rent Mr. Toll’s plane. During fiscal 2007, Mr. Toll received or was entitled to receive approximately $339,500 in fees related to the chartering of his aircraft by the Company.

 

Ballard, Spahr, Andrews & Ingersoll, LLP, the law firm of which Richard J. Braemer, a director of the Company, is a partner, acted as counsel to the Company in various matters during fiscal 2007 and was paid aggregate fees of approximately $825,400 during fiscal 2007.

 

Bruce E. Toll is the Chairman of, and has an ownership interest in, Philadelphia Media Holdings, L.L.C., which is the parent company of the Philadelphia Inquirer and the Philadelphia Daily News, two newspapers where the Company routinely advertises its homes and employment opportunities. During fiscal 2007, the Company paid approximately $1,109,740 in advertising to the Philadelphia Inquirer and the Philadelphia Daily News.

 

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#14) On February 12, 2008 at 4:36 PM, ByrneShill (73.92) wrote:

@Imperial: By the same account, I buried 100K$ in my backyard. Now my house is worth 100K$ more than yesterday.

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