If God gives you lemons...
May 28, 2008 12:19 PM Subscribe
Among European countries, Spain has been hit particularly badly by the global credit crisis. Miguel Marina, a recently unemployed real estate agent (what else?) has been one of its victims. Unable to keep up with his mortgage payments or to find a buyer for his home, he has found an original solution: he's raffling his apartment at 5€ a ticket.
Considering that the total value of the tickets he's selling is 320,000 €, and that the Spanish press (which is all over the story) is reporting that his previous asking price for the apartment was 200,000 €, and that his current debt is of 188,000 €, Mr. Marina may end up pocketing a tidy profit, after all. The lawfulness of the raffle is however disputed (in Spanish).
Considering that the total value of the tickets he's selling is 320,000 €, and that the Spanish press (which is all over the story) is reporting that his previous asking price for the apartment was 200,000 €, and that his current debt is of 188,000 €, Mr. Marina may end up pocketing a tidy profit, after all. The lawfulness of the raffle is however disputed (in Spanish).
There have been a few attempts to do this in the UK, it's a legal minefield and I don't think anyone has ever actually pulled it off yet.
posted by Lanark at 12:48 PM on May 28, 2008
posted by Lanark at 12:48 PM on May 28, 2008
If God gives you lemons... get yourself a new God.
posted by MotherTucker at 12:57 PM on May 28, 2008 [1 favorite]
posted by MotherTucker at 12:57 PM on May 28, 2008 [1 favorite]
There was also an attempt to do something similar right here on MetaFilter a couple of weeks ago.
posted by yhbc at 1:06 PM on May 28, 2008
posted by yhbc at 1:06 PM on May 28, 2008
Good luck to him. The stock of unsold new homes in Spain is sitting at about .011/person. In the US, by contrast, it's .0015, an order of magnitude difference. Roughly half of the real estate agencies in Spain are bankrupt. So if you think it's bad here...
posted by jedicus at 1:17 PM on May 28, 2008
posted by jedicus at 1:17 PM on May 28, 2008
this is not at all new, as a simple mefi search should have shown you.
posted by krautland at 1:31 PM on May 28, 2008
posted by krautland at 1:31 PM on May 28, 2008
The lawfulness is disputed in Spanish? Seems obvious that in Spain the dispute would be conducted in Spanish.
posted by Mister_A at 1:33 PM on May 28, 2008
posted by Mister_A at 1:33 PM on May 28, 2008
The lawfulness is disputed in Spanish? Seems obvious that in Spain the dispute would be conducted in Spanish.
I don't think people in Spain speak Spanish. Last time I was there they didn't understand a word I said.
posted by Floydd at 1:44 PM on May 28, 2008 [1 favorite]
I don't think people in Spain speak Spanish. Last time I was there they didn't understand a word I said.
posted by Floydd at 1:44 PM on May 28, 2008 [1 favorite]
On the bright side, if I end up moving to Spain, there'll be some crappy new construction houses to buy on the cheap. It might even make the exchange rate not seem so bad.
posted by wierdo at 2:07 PM on May 28, 2008
posted by wierdo at 2:07 PM on May 28, 2008
I don't think people in Spain speak Spanish. Last time I was there they didn't understand a word I said.
You must not have been loud enough. Try being louder next time.
posted by inigo2 at 2:12 PM on May 28, 2008
You must not have been loud enough. Try being louder next time.
posted by inigo2 at 2:12 PM on May 28, 2008
No, no. When you are in a foreign country and people don't understand you, you don't only have to talk loudly, but slowly as well.
posted by ersatz at 2:30 PM on May 28, 2008
posted by ersatz at 2:30 PM on May 28, 2008
Yeah, the past month has not been the greatest here in Madrid. Rent goes up with inflation, my annual payrise just about covers it. And it's been raining for a fucking month now. None of this was mentioned in the brochure...
posted by slimepuppy at 3:29 PM on May 28, 2008
posted by slimepuppy at 3:29 PM on May 28, 2008
No, no. When you are in a foreign country and people don't understand you, you don't only have to talk loudly, but slowly as well.
Like you're talking to a dog, right? /kidsinthehall
posted by Talanvor at 3:30 PM on May 28, 2008
Like you're talking to a dog, right? /kidsinthehall
posted by Talanvor at 3:30 PM on May 28, 2008
Ugh - having lived in Spain for quite some time I can tell you that the quality of recent construction is complete and total crap. Worse crap than the crap they build in the US, where at least (for the most part) you can rely on building codes being followed.
In my last flat in a town north of Valencia, a beach town with developers spooging over each other to build buildings on top of one another (oh look honey, what a beautiful view of the beach...oh wait, another damned building just went up in front of our balcony...shit, there goes the view), the developer had removed several circuit breakers and installed pieces of copper wiring to make the connection. When asked why he did this (as I pulled the smoldering wires from the wall in front of him and then ripped open two other fuse panels to see the same), he said, "the wires we installed couldn't handle the power requirements and kept tripping fuses, so we just installed these and the problem went away."
Surprisingly (wink wink, nudge nudge), the building department didn't see anything wrong with this. We promptly moved out of the apartment.
posted by tgrundke at 7:52 PM on May 28, 2008
In my last flat in a town north of Valencia, a beach town with developers spooging over each other to build buildings on top of one another (oh look honey, what a beautiful view of the beach...oh wait, another damned building just went up in front of our balcony...shit, there goes the view), the developer had removed several circuit breakers and installed pieces of copper wiring to make the connection. When asked why he did this (as I pulled the smoldering wires from the wall in front of him and then ripped open two other fuse panels to see the same), he said, "the wires we installed couldn't handle the power requirements and kept tripping fuses, so we just installed these and the problem went away."
Surprisingly (wink wink, nudge nudge), the building department didn't see anything wrong with this. We promptly moved out of the apartment.
posted by tgrundke at 7:52 PM on May 28, 2008
tgrundke: There are good builders in Spain, and building standards used to be quite high (not least as a reaction to a number of scandals in the seventies), the problem there is that the housing boom attracted plenty of shady characters with little experience or knowledge of construction. Coastal areas like Valencia are worst on that aspect, not least because of the number of naive foreigners buying.
As for the building inspectors missing such faults, I think collusion is less likely than overwork. When hundreds of thousands of new homes are being built and the number of building inspectors doesn't increase accordingly, it isn't at all surprising that this sort of thing happens.
posted by Skeptic at 5:09 AM on May 29, 2008
As for the building inspectors missing such faults, I think collusion is less likely than overwork. When hundreds of thousands of new homes are being built and the number of building inspectors doesn't increase accordingly, it isn't at all surprising that this sort of thing happens.
posted by Skeptic at 5:09 AM on May 29, 2008
Spain was hit hard due to a combination of factors: first, low interest rates, set by the ECB, which didn't address inflationary pressures in Spain - i.e., these rates were determined across the EuroZone.
Second, lots of speculative money piled into Spain from the UK and other environs. Folks were purchasing down there big time, builders were organising all expense paid junkets to the Coastal regions so buyers could grab property, folks were flipping properties still under construction, and in general totally over stretching themselves financially.
Finally, builders constructed flats and houses on any and all land they could purchase and frequently bribing inspectors to look the other way, or blatantly ignoring long standing laws against construction.
The Birtish papers are rife with such "horror stories", and many of us believe folks in England will be scared off purchasing in Spain for a long time to come, even if credit conditions returned to normal.
Just to show you how crazy it got: I work in banking and personally know several folks that purchased Spanish property with Sterling mortgages and NO MONEY DOWN. In other words, they funded Euro debt with Pound Sterling payable mortgages. Never advisable for retail money to engage in such nonsense. But they did. The banks were pushing these products on pretty much anyone with a pulse.
Now that the bubble has burst there is a lot of property coming onto the market, particularly in the costal resort areas, that the purchasers couldn't afford in the first place. And the market hasn't bottomed out there yet; we expect another twelve months or perhaps longer before we can see bottom.
The situation in Spain is particularly curious as Spanish banks are very, very well run; indeed, Spain is the only G7 country whose banks have been largely unaffected by the credit crunch.
Most of the funding for the nonsense that took pace in Spain wasn't provided by Spanish banks - the regulators wouldn't allow it. No, most of the above trend demand for housing was due to external forces such as English & Irish folks purchasing investment properties down there.
Someday, the collapse of the Spanish real estate market - the graft, the corruption, financial extravagance, overall almost continent wide greed and frenzy that focused on Spain from 2001 to 2007 - will be an interesting case study at Business School. I say "someday", as the collapse isn't over yet.
posted by Mutant at 6:50 AM on May 29, 2008
Second, lots of speculative money piled into Spain from the UK and other environs. Folks were purchasing down there big time, builders were organising all expense paid junkets to the Coastal regions so buyers could grab property, folks were flipping properties still under construction, and in general totally over stretching themselves financially.
Finally, builders constructed flats and houses on any and all land they could purchase and frequently bribing inspectors to look the other way, or blatantly ignoring long standing laws against construction.
The Birtish papers are rife with such "horror stories", and many of us believe folks in England will be scared off purchasing in Spain for a long time to come, even if credit conditions returned to normal.
Just to show you how crazy it got: I work in banking and personally know several folks that purchased Spanish property with Sterling mortgages and NO MONEY DOWN. In other words, they funded Euro debt with Pound Sterling payable mortgages. Never advisable for retail money to engage in such nonsense. But they did. The banks were pushing these products on pretty much anyone with a pulse.
Now that the bubble has burst there is a lot of property coming onto the market, particularly in the costal resort areas, that the purchasers couldn't afford in the first place. And the market hasn't bottomed out there yet; we expect another twelve months or perhaps longer before we can see bottom.
The situation in Spain is particularly curious as Spanish banks are very, very well run; indeed, Spain is the only G7 country whose banks have been largely unaffected by the credit crunch.
Most of the funding for the nonsense that took pace in Spain wasn't provided by Spanish banks - the regulators wouldn't allow it. No, most of the above trend demand for housing was due to external forces such as English & Irish folks purchasing investment properties down there.
Someday, the collapse of the Spanish real estate market - the graft, the corruption, financial extravagance, overall almost continent wide greed and frenzy that focused on Spain from 2001 to 2007 - will be an interesting case study at Business School. I say "someday", as the collapse isn't over yet.
posted by Mutant at 6:50 AM on May 29, 2008
Mutant There have been, in fact, two bubbles in Spain. One in the costas, mostly driven by foreign money, and one in the big cities, driven by domestic speculation.
The domestic speculation was driven by several factors: first of all, the introduction of the euro put large amounts of previously undeclared money in circulation, priming the real estate market. Then, unprecedentedly low interest rates fuelled the rise. Also, while, on paper Spanish banks are indeed very conservative in their lending, on the ground ferocious competition between bank branches led to quite a few ho-hum mortgages being granted.
But above all, Spaniards are very attached to real estate as an investment. There's a strong distrust of most other investments, whereas, until now, Spanish real estate prices had never gone down. So, houses were seen as a risk-free, high-performance (up to 20% p.a.) investment. With interest rates at 3-4% ou'd be dumb not to buy as many houses as possible on credit. Except that, of course, there's no such thing as a low-risk, high-return investment and sooner or later the invisible hand of the market will bitch-slap you with a vengeance.
As for corruption, you'd be careful at where you point your finger: Spanish inspectors and civil servants in general are usually as straight as they come. The trouble lied rather with local politicians. When a developer decided to build several tens of thousands of houses in the middle of nowhere, he usually hadn't much trouble persuading the town council (or even the entire population) of the closest village. In some places, like Marbella, this led to outrageous levels of planning corruption. And since local authorities are funded to a great extent by property taxes, even mayors not on the take had a good reason to look the other way when planning was ignored.
posted by Skeptic at 9:13 AM on May 29, 2008
The domestic speculation was driven by several factors: first of all, the introduction of the euro put large amounts of previously undeclared money in circulation, priming the real estate market. Then, unprecedentedly low interest rates fuelled the rise. Also, while, on paper Spanish banks are indeed very conservative in their lending, on the ground ferocious competition between bank branches led to quite a few ho-hum mortgages being granted.
But above all, Spaniards are very attached to real estate as an investment. There's a strong distrust of most other investments, whereas, until now, Spanish real estate prices had never gone down. So, houses were seen as a risk-free, high-performance (up to 20% p.a.) investment. With interest rates at 3-4% ou'd be dumb not to buy as many houses as possible on credit. Except that, of course, there's no such thing as a low-risk, high-return investment and sooner or later the invisible hand of the market will bitch-slap you with a vengeance.
As for corruption, you'd be careful at where you point your finger: Spanish inspectors and civil servants in general are usually as straight as they come. The trouble lied rather with local politicians. When a developer decided to build several tens of thousands of houses in the middle of nowhere, he usually hadn't much trouble persuading the town council (or even the entire population) of the closest village. In some places, like Marbella, this led to outrageous levels of planning corruption. And since local authorities are funded to a great extent by property taxes, even mayors not on the take had a good reason to look the other way when planning was ignored.
posted by Skeptic at 9:13 AM on May 29, 2008
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posted by Floydd at 12:26 PM on May 28, 2008