Have you heard the news? Trump sold one of his real estate investments in Palm Beach, Florida for around $95 million! Believe it or not, this investment was a single family home. I remember reading about this investment a few years ago. Trump purchased this home out of foreclosure for around $41 million. There was actually a great story behind the purchase, but I'll have to share this with you in another post. Here is a video from msnbc.com about the sale... It's impossible to determine Trump's exact profit. However, I would have to think that he made at least $35 million on one single family home investment. I factored in around $20 million in carrying costs and improvements during his ownership. This would bring his total investment to around $60 million. I thought the Florida market was terrible... Rob Minton |
Have you heard of the S&P/Case-Shiller Index? It's the widely accepted and oft-referenced statisitical tool that keeps telling us what every American knows by now -- that real estate prices have dropped. The index was developed by an economist from Welleley College, Karl Case, and an economist from Yale College, Robert Shiller. Their method of taking recent sale prices of homes and comparing those prices to previous sales prices has become the "go-to" source for media reporting the real estate story. You've probably read at least an article or two that had the phrase "according to the S&P/Case-Shiller Index ..." somewhere in it. What you've probably not read is that one of the Index's creators, Case, believes home prices might be near bottom. In this outstanding piece on Smartmoney.com, Case notes that the decline of new housing starts has been extremely dramatic -- only 975,000 in April of this year compared to 2.27 million in the peak of January, 2006. Meaning inventory is dropping drastically. According to the Smartmoney.com story, Case commented:
So the guy who created the index that every reporter seems to point to as proof the sky is falling is saying that things are looking up. But have you read that anywhere? Probably not. Have you read that the Case-Shiller Index, which in March reported price declines in 18 of the 20 major markets it encompasses, showed price INCREASES in eight of the 20 markets in its recently released April report? Probably not. Have you read that the Index is also showing a slowing down of price declines? Or that the sheer volume of homes that fall into the subprime housing category -- which makes up only 10 percent of the total U.S. housing stock -- is skewing down home prices? Probably not. Why haven't you read those things? Because the media are not reporting those things. I used to believe that the whole liberal media bias thing was a myth. But recently I've been paying closer attention and, especially now that the presidential election year is in full swing, what is reported depends on the source of the reporting. There seems to be political agendas involved. Or news outlets just want to report bad news because those are the headlines that sell papers or get clicks. There is a great quote in the Smartmoney story by S&P/Case Shiller Index Committee Chairman David Blitzer, who seems to explain why you've never heard any of the good news:
So don't wait for the evening news or the daily newspaper or MSN.com to tell you things are getting better. Pay attention to your local market. Study the statistics. Watch the trends. Because if you want good news, unfortunately you'll have to find it yourself. Mike Sivula |
Alabama Gulf Coast Real Estate Market News
Friday, July 18, 2008
Trump Sells Palm Beach Investment Property
