Manhattan Glut of Condos
The lack of sales in the City is definately not good for the Jersey Shore. Manhattan or Brooklyn or Hoboken sellers are the natural buyers of single family houses in Monmouth County
"A sharp drop in the average price of Manhattan condominiums could revive concerns that the luxury condo boom, which has been seen around the five boroughs at an increasing rate since 2002, could result in a glut of apartments or developers rethinking their pricing expectations.
The second-quarter price drop versus last year is to be disclosed today when some of the city's largest firms release real estate statistics.
Much of that concern, according to some real estate analysts, is the byproduct of the 1980s, when thousands of new housing units hit the market as housing demand was softening. They say that an economic recession, rising inflation, high unemployment, and high mortgage rates led to serious housing price declines and an absorption rate of new units measured in years, not months. That cycle is now visible in other national housing markets - particularly those infiltrated by short-term investors - such as Miami and San Diego."
posted by Little_Silvered at 7:24 PM
30 Comments:
Softening of the New York City real estate market will definitely have an impact on the local market in Monmouth/Ocean. Less buyers from the outer boroughs of Staten Island and Brooklyn. I hear the market on SI has been slow this year, comparable to what we've been experiencing. The bubble definitely seems to be impacting the entire NY/NJ region.
I AM HEARING KARA HOMES, ONE OF NJ'S BIGGEST BUILDERS, IS HAVING FINANCIAL PROBLEMS. ANYONE HEAR THE SAME?
Kara Homes bankrupt?
Cue Nelson Muntz: "Ha-haaaa."
Do you have a way to track Ocean and Monmouth County MLS - Price reductions? I check manually and see "price changed", nut sometimes the seller increases the price and it is hard to follow. Thanks.
"Yes I heard that Kara homes the builders of the "Tradewinds" homes is going to file for bankruptcy."
And what is your source, or do you even have one? Did you hold a seashell to your ear & hear this information?
try calling kara homes...no one picks up the phone!!! i put money down on a kara property 7 months ago and it's still not started, i am trying to get my money back as per terms in contract, but their is no one to talk to at this company!!
something is up!
"Yes I heard that Kara homes the builders of the "Tradewinds" homes is going to file for bankruptcy."
"I heard from someone high up at DR Horton that Kara was shopping around for someone to buy them out."
Two different things entirely, no?
"I heard" the author of this blog made up a ridiculous tale about rumors involving Bruce Springsteen buying a home that'd be quite a huge step down for the Boss.
I heard from someone high up at Verizon that they had all their phones repo'ed, so I guess they CAN'T answer them right now. Bastards!
Its no secret monmouth/ocean market is hurting and kara is no different than centex, lennar, hovnanian or anyone else. centex laid off about 70% of their backoffice workforce recently. having a competitor spread financial concern rumors is typical in the building industry in case you haven't been around.
looks like kara's project in manhawkin will be left unfinished.....the bear market in real estate has begun!
Not true, but the days of building "quick delivery" and spec homes are gone for the time being. We have entered a "build to contract" market, not the "build it and they shall come" mentality of the past few years. Margins are too thin and carrying costs because of interest rates and raw building costs have skyrocketed with gasoline prices.
timmy o'toole-
My Dad owns his own company and often gets calls from banks about companies "in trouble." This means they are close to going belly up and the bank is trying to have someone come in and takeover so they can recover a piece of the money lended to the distressed company.
So, actually, a company trying to shop itself around is about the same as the bank looking for someone to take it over instead of losing all or nearly all the value in a bankruptcy.
JM
from the corporate meetings that i was present it was clear to me that it was zudi s intention to sell out and grab all the gold before the the whole shithouse goes up in flames
I heard that Kara Homes is going declaring bankruptcy on Friday, October 6, 2006. They have not completed the Cottage Gate project in Middletown and the people (who have already paid deposits) cannot move in because Middletown Township is not issuing COs
I heard that Kara homes is declaring bankruptcy on Friday, October 6. The township of Middletown is not issuing any COs, so no one can occupy the remaining houses, even those that have paid a substantial amount.
Confirmed on the Kara Homes bankruptcy - letter to employees has already gone out stating the Company is filing Chapter 11.
My understanding is that the letter was sent to employees on Wednesday Oct. 4.
I know a former employee of Kara homes. Yes they got the letter on Wendesday. Get this, the employees have not been paid for the previous three weeks of work. The letter said to go to the court clerk and file to see if you can get any money. How nice to be big business and s#@%w the working man.
i am a former kara employee - i got out before it was too late and saw the writing on the wall.
this is all true - kara is in WAY too deep to survive. as was said here they purchased a ton of land and are totally in debt. interest alone was killing them monthly. anyone involved in purchasing a kara home should take action today.
roberta schultz is a head honcho there and she'll succumb to pressure.
From this morning's Asury Park Presss - an article on Kara.
BANKRUPTCY CONSIDERED: Kara Homes lays off staff; talk of filing for Chapter 11 makes local clients anxious
Housing bust
Posted by the Asbury Park Press on 10/6/06
BY DAVID P. WILLIS AND CARMEN CUSIDO
STAFF WRITERS
Kara Homes Inc., one of the biggest home builders in Monmouth and Ocean counties, might be close to seeking protection from creditors under Chapter 11 of the bankruptcy law.
Earlier this week, at least some Kara Homes employees received a letter from the company notifying them that they were being laid off and stating that Kara "anticipates filing Chapter 11." Under that provision of the bankruptcy code, creditors claims are frozen by the court while the company can continue to operate as it attempts to reorganize.
It was unknown how many employees were laid off, and the company official who signed the letter, Roberta W. Schultz, vice president of human resources and organizational development, could not be reached for comment.
Patrick W. Turner, the general counsel for Kara, told Gannett New Jersey that filing for Chapter 11 "is one of the alternatives we're considering." He said he would not comment on the letter.
Turner said Wednesday the company terminated some personnel because it is "trying to restructure" the payroll. "We had to address payroll issues, and we did."
"We are trying to become more profitable," Turner said. He did not disclose what sort of financial trouble the home builder is experiencing.
East Brunswick-based Kara has a large presence in Monmouth and Ocean counties, with at least 15 housing developments in the two counties listed on its Web site, including Crine West Estates in Marlboro and Winding Run in Lacey.
The news has left people who have houses in the pipeline with Kara Homes anxious and uncertain.
Middletown resident Gina Haspilaire and her husband, Richard, have been waiting to move into their home at Cottage Gate at Navesink in Middletown since March 2005. The home's delivery date kept being delayed, Gina Haspilaire said.
Now the couple want Kara to return their deposit, which is about $125,000, she said. The couple used money saved for their son's college education to pay for the downpayment, figuring they would replace it with money from the sale of their existing home.
"When we did this, my son had two more years to finish high school," Haspilaire said. "Now we can't sell our house, and they won't give us back the money."
They don't want the house, which is completed but without a certificate of occupancy. She said she believes the contract was voided because the home wasn't delivered on time.
Frederick Young, a resident of Ocean Pines, Md., said he had a contract for a condominium at another Kara development in Mount Arlington, Morris County. After he and his wife became ill over the summer, he wanted to cancel the contract and get his $19,000 deposit back but hasn't been able to get in touch with Kara.
"I am being faced now with huge medical bills," Young said.
In a September interview, Kara founder Zudi Karagjozi responded to rumors about the company's problems. He said the company was operational, building and selling homes.
"Everything has been moving," he said. "It's just obviously, with this slower time, like all builders things are going a little slower than usual."
He said the company had been paring down debt, laying off some workers and selling some property.
Karagjozi started Kara Homes in 1999, and it quickly got noticed because of its rapid growth. In 2002, it was named the fastest-growing home builder in the nation by Builder Magazine. Last year, the company was 239th on Inc. magazine's list of 500 fastest-growing private companies in the nation.
But recently, Kara seems to have had problems paying its bills.
Some companies have filed documents with the Monmouth County clerk's office, saying they have not been paid for their work.
For instance, Whitman Construction LLC said that Kara owes it $44,326.75 for siding and roofing work done on a project in Sea Bright, according to a Notice of Unpaid Balance and Right to File Lien.
On Sept. 12, H&D Prime Construction Inc. filed a notice that it was owed $146,323 for supplying and installing siding and stucco at Kara at the Tradewinds in Sea Bright.
After several boom years, the residential real estate market has turned sour for home builders and real estate agents selling existing homes.
Homeowners are having a difficult time selling their existing homes, which is making it harder for them to step up into a new home, said Patrick J. O'Keefe, chief executive officer of the New Jersey Builders Association.
"Every builder I know . . . is in an aggressive inventory control posture," he said. "They are not starting projects; they are deferring projects.
"Where they have continuing construction, they are not beginning new units unless they have a firm contract in hand."
Housing starts are down 10 percent to 15 percent this year through August, compared with the same period last year, O'Keefe said.
"I expect it to decline further," he said. "This is the beginning of a very difficult market for builders and resellers alike."
David P. Willis: (732) 643-4039, or dwillis@app.com. Press staff writer James Prado Roberts contributed to this story.
Also in this mornings APP
It could be business as usual, or not
A bankrupt Kara Homes may go on
Posted by the Asbury Park Press on 10/6/06
BY BRIAN PRINCE
STAFF WRITER
Although officials of Kara Homes Inc. have said the company could file for Chapter 11 bankruptcy on the heels of employee layoffs Tuesday, attorneys in the area caution home buyers under contract with the builder not to panic.
Two Shore bankruptcy attorneys said Thursday that it is likely that Kara will continue to operate and build.
Warren Brumel, a Keyport bankruptcy attorney, said Kara likely will honor the contracts it has made.
"Most of the time in a Chapter 11 case, the business is going to continue to operate," he said, citing the Trump casinos in Atlantic City as an example.
But that doesn't mean people should sit on their hands, said Lee D. Gottesman, a bankruptcy attorney from Dover Township.
Gottesman urged people to file a proof of claim in federal bankruptcy court if Kara files for Chapter 11. A proof of claim is a document substantiating that a creditor is owed money.
"If they sit there and do nothing, they may lose everything," he said.
But Brumel said that there could be no real change for potential homeowners depending on how Kara decides to move forward. It is difficult to speculate on the future until Kara has filed for Chapter 11 and prepared its reorganization plan, he said.
Under Chapter 11, companies can continue doing business under court supervision. Much of the deposits put down by home buyers could become unsecured debt depending on whether there were protections such as surety bonds or whether the money was not put in escrow, Brumel said.
"They almost have to continue to try to build these houses if they want to come out (of bankruptcy)," Gottesman said.
Because deposits on homes are not always put into escrow, the money home buyers deposited could have already been spent, Gottesman said.
If Kara Homes files for Chapter 11, it has a certain period of time to decide whether it will go forward with contracts with home buyers, he said.
Housing bubble,Are you kidding!
This guy has been screwing people out of money for years..He is the lowest of the low and has millions socked away...Had a multi million dollar home built in Rumson by all his so called vendors..Never paid them a dime for any of it..Yu will see all this will come out..
lol true!
then again he did also give deep discounts on units to subs/vendors kara owed a bunch of money to.
and yeah...as it says in the article...unless you are buying into a "bonded community" then your deposit was surely spent!
So it's a done deal. Kara Homes officially filed late yesterday afternoon.
Homeowners requesting refunds have already started calling my office (I work for one of the subs).
They owe my company close to a million dollars.
This is going to hurt...
Kara Homes files for bankruptcy
Posted by the Asbury Park Press on 10/6/06
STAFF REPORT
Kara Homes Inc., one of the biggest home builders in Monmouth and Ocean counties, has filed for bankruptcy, according to U.S. Bankruptcy Court in Trenton.
Earlier this week, the company said it may file for bankruptcy in a short letter to employees whose jobs were terminated.
yes i have to agree that zudi been robbing all for the last six years it was a sham afterall robbie shultz the human resoure hired all assholes after all she worked in a hotdog factory in penn, so i was told by a female senior prject manager still there shes a joke i seen the bullshit the year i worked there this is the main reason for this . the poor subs will suffer while zudi sits in his many real mansions not the shit they built i could go on and on will see what happens
From the Bankruptcy Filing: Top 3 Vendors Kara owes money to:
1) $1.9 million to A-1 Bracket of Morrisville, Pa.
2) $1.5 million to Strober Building Supply of Haddonfield
3) $1.3 million to Sunrise Concrete Company of Rushland, Pa.
Just an FYI.
As a question - On the communities that were bonded - how is the process of getting deposit money supposed to work (assuming you had a deposit on a property whose site was bonded by Kara)? Anyone know?
i guess the pretitle guys will be busy for a long time and they said they didnt need them so much for the grave yerd
the problem there was ALL of the top execs. they are lazy and totally unaccountable. they have made promises to the company and to the banks for years and every time came up short - with no penalty.
robbie schultz knows nothing of the industry and literally made the company 100% worse when she showed up.
too many friends/family of zuhdi there
All the above is true. I used to be a small vendor for them and got to watch them grow. The cockiness was unbearable at times, particularily from the Zuhdster. This is their comeuppance but its a shame so many innocent people are getting burnt too.
I wonder if Zudi will ever have to pay the tax man for the 2 free houses that he built. One in Rumson ( his home ) and the other at Tradewinds ( his beach house ). Promised the subs that they would be paid then thanked them for the free work and material. Is that legal?
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