What Is Grand Park?

It's a dream--nothing more:

From Cornerstone Holdings, LLC Website

Did you see the second sentence? 2543 residential units? That description is misleading at best, and is in keeping with the literature found on the Grand Park website itself. Aside from a minor attempt at a buildout, none of those statements is even close to accurate.

In the About Us section of the Grand Park website, we find this:

"Here at Grand Park, we’re Fraser Valley neighbors first, with a unique awareness of the valley’s culture, people, and values. It’s where we live, work and play; it’s who we are as individuals and as a company. This perspective guides our ideals, giving the people in our community the best we have to offer. We work to make good things happen, from the leadership in environmental and resource protection to the creation of the Cornerstone Community Foundation and donating the land for the new Grand Park Community Recreation Center."(Grand Park About)


Let's start at the end here... "We work to make good things happen... [to] donating land for the new Grand Park Community Recreation Center." The community center is taxpayer financed, and the tax-free $19 million bond issue for the center is currently under review by the IRS. That's a red flag if I've ever seen one. 


Anyone who thinks this project will ever be finished has been taking too much hopium. The housing and real estate market in the United States is dead for all intents and purposes. The Grand Park development was planned right as the U.S. housing bubble burst. Any buildout will only result in further losses to whomever attempts to undertake such a feat.


The meme of real estate as investment has been proven to be an outright fraud, and those who get suckered in now are sure to lose out when interest rates finally normalize. If you'd like to see just how much trouble the Grand Park development is in, just read this:


"So the 10 year Bond has gone from 2.33% to 3.7% in less than four months.  30 year mortgage money, no points, has gone from about 4% to just over 5% (no junk fees) in the same time.


This is an immediate 11% reduction in the implied value of every home in America, and it is exactly the opposite of what Bernanke said he was going to do.


Here's the math; don't believe me, get out your HP12c and run it yourself:
$100,000 borrowed, 30 years, 4% interest rate = $475.83 P&I.
Same P&I, 30 years, 5% interest rate borrows only $89,007.56.


That's an 11% loss of value and since 90% of the buyers purchase a payment in the housing market, not a price, this is an immediate 11% deflation in home values."(Market Ticker)


Right now, the Federal Reserve has short-term interest rates set to zero. How long they can keep this game going is anyone's guess. They WILL go up at some point, and when they do house prices nationwide will take a dirt nap that will make the current drop look like child's play. 


Anyone who invested money in real estate during the boom years is going to take a massive haircut. That includes Grand Park, a Cornerstone Holdings Company.