The Worst Of Times In Florida
The Miami Herald reports from Florida. “Boca Developers is considering a bulk sale of unsold units at three South Florida projects, in a proposed deal that shows how builders are grappling with the ongoing slowdown in the housing market. Boca Developers CEO Brian Street said the Deerfield Beach company is considering all options to sell its inventory.”
“‘These are the worst of times for condo development,’ said Street, whose company is among the biggest condo builders in South Florida. ‘Everybody is trying to get inventory reduced and debt threshold diminished. Everyone is trying to get some sort of deal done, us included. But we simply aren’t there yet.’”
“Under the proposal, many of the units would be rented following the bulk sale with the idea of later trying to sell them when the residential market improves.”
“‘This is a sign of the times,’ said real estate analyst Michael Cannon. ‘We see this in every real estate cycle. When a project in not marketable the capital investor wants to either get out of the project or minimize his investment. In this case they are trying to get a vulture fund to buy and hold.’”
“Street’s efforts to unload units come a year after he made a major bet in South Florida residential real estate by buying out his partner in the Biscayne Landing project. The massive development in North Miami is ultimately supposed to have some 6,000 residential units.”
“‘I don’t regret buying Swerdlow out,’ Street said. ‘It was the right decision. Do I like our timing? Of course not.’”
The Bradenton Herald. “The move by developers of Tarpon Pointe, a two-tower condo project approved for downtown a year ago, to seek an extension doesn’t come as a surprise to city planners.”
“A slowdown in condominium sales has several projects stalling, with other developers having applied for similar extensions and rethinking how they’ll do their projects.”
“As to whether the delays are a negative omen for the future of downtown projects, those invested in them shake their heads no. ‘It’s not a wait-and-see attitude,’ said project co-developer Ron Allen. ‘But we’re going to move cautiously until the market tends to rebound itself some.’”
“Local Realtor Leslie Wells has seen some parts of the market stay steady, and from a Realtor’s perspective, now is the time to buy property. But for developers, she said, ‘they just need to see how long can they hold on and how long can they wait.’”
“Empty houses are multiplying. Florida’s Miami Dade County has a 31-month supply of existing condos on the market. About 20,000 new ones will be completed by the end of 2008, says Jack McCabe, a consultant in Deerfield Beach, Fla.”
“He says about two-thirds of those have been sold, but many buyers are canceling orders rather than taking possession of a depreciating asset.”
The Herald Tribune. “The Manatee condo market is not only plagued by a lengthening list of unsold residences and plummeting prices, but developers are being hit by a flurry of lawsuits filed by buyers who want out of their contracts.”
“Twenty-one suits have been filed in the past 18 months, with most of them arguing that developers breached terms of sales agreements by failing to complete construction in two years.”
“At the same time, condo buyers in Manatee have defaulted on 22 loans since January 2006, forcing bankers to put properties back on the market at the worst possible moment.”
“But instead of easing back on construction in the face of these trends as their counterparts in Sarasota are doing, Manatee developers are planning to bring 3,307 units out of the ground by the end of 2009, Orlando economist Hank Fishkind’s projections show.”
“‘Stuff has to come off market one way or another,’ said Scott Norris, a condo specialist in Bradenton. ‘We have to get rid of supply.’”
“‘When the market was booming, quite a few investors were thinking they could buy and flip for a profit,’ said Chris Kawcak, a Manatee county condo specialist. ‘For a period of time, it worked great. But it gave developers a false sense of demand. That’s why so many rushed to do conversions and put up buildings.’”
“In Miami alone, developers will deliver 8,000 units this year and 12,000 next year. That comes on top of the more than 20,000 unsold units already clogging the market.”
“In Southwest Florida, the situation is proportionally similar. The result is that Sarasota County’s inventory of unsold condos reached 2,588 in March, a 447 percent increase from March 2005.”
“In Manatee, inventories rose twice as fast, swelling 851 percent to 2,246 during the same time period. But Norris thinks inventory numbers do not tell the whole story. ‘Developers and condo converters have not put everything they have in the MLS,’ Norris said. ‘They are holding quite a lot back.’”
“Given the bleak market situation in Manatee, it is no wonder buyers have responded the way they have. As in Sarasota, many have put their units back on the market. Others are walking away from deposits, believing it better to lose $60,000 now than to tie up $600,000 and assume the monthly carrying costs of a condo that cannot easily be sold.”
“‘We’re seeing an incredible amount of walkaways statewide,’ said consultant Jack McCabe.”
“Some buyers are not satisfied with walking away from their contracts, though. They want their deposits back. That is why the number of lawsuits filed by buyers against developers is way up this year. Fourteen have been filed in the first five months of 2007, compared with just seven in all of 2006.”
“Lawyers representing developers said the real reason their clients were being sued had nothing to do with the stated reason in their lawsuits. ‘They obviously bought for investment purposes and no longer think the condo is worth the contract price,’ said John Chapman, a Sarasota attorney who represents the developers of the Bel Mare condo tower. ‘If they did, they would close on the properties and flip them.’”
“In the meantime, 19 Manatee condo buyers have defaulted on $7 million in mortgages since January 2006. One of them, Ron Frohlich, failed to make payments on three loans after buying two condos in the WaterCrest and another in Laguna at Riviera Dunes.”
“Manatee County court documents show that Frohlich was a classic real estate investor. He spent $2.4 million to buy 12 properties in Manatee County during the past 10 years and sold them for a $1.8 million profit.”
“Court documents also show that the Frohlich began defaulting on three condo loans this year. But when bank representatives went to serve him and his wife with foreclosure suits, they found the couple had disappeared.”
“‘Their current residence is unknown. There is no phone listing for the subjects. No employment information could be found,’ wrote Hugh Heath of Tampa-based Accu-Search in his April 20 report.”
“Manatee Fruit Co. increased the prices of its condo units at its Terra Ceia Bay development and still managed to sell six units in seven weeks this spring. Chris Teeters, a real estate investor from Jupiter, said he bought one of those units because the price was right and he believes in the project.”
“‘I paid $265 per square foot, and I don’t think that price can be duplicated again,’ Teeters said.”
“Though he considers his Terra Ceia purchase a great deal, Teeters said he is not optimistic about Florida’s condo market in general. ‘Back in the early ’80s, the condo market went through a similar transition and it took 10 years to work through. I think it will take 10 years this time, too.’”
Ahhhh…. A day without news of the collapse of the FL housing bubble is like a day without sunshine…
Wanted: Ron Frohlich. Come on folks, we can find this guy.
Do ya think a bank would want to know any of this info about a client that was borrowing a ton of money from them??? Naaah.
Why try to find him? This guy played the same game as the mortgage brokers and builders and he won. In other words, he screwed them instead of getting screwed. I have zero sympathy for him, the realtors, the builders, banks or mortgage brokers who all took part in the “greed train” during this boom.
The REAL victims of this mess is the naive Joe Sixpack’s or young couples trying to get in on the property ladder who always end up paying the price AND the taxpayer who ends up bailing out the hedge funds, S&L’s, etc. Until they (government) introduce heavy duty taxes on profits made in these booms, which ALWAYS attract scam artists like Ron Frolich like flies to dog crap, they will continue to operate.
It isn’t that difficult to control these booms which inevitably go bust and end up putting most of the profits into the pockets of the few.
The rules should be: (A) Own one property and you owe no taxes on the sale if you have owned it more than 5 years. (B) Own more than one property and for less than a certain period (say 10 years) you pay 90% tax on the profits.
I’m not too happy about taxes in general but in these boom and bust circumstances, it’s usually the little guys who get hurt financially even if they invested with stars in their eyes after being shilled by a realtor or broker. As usual, if you hear there’s big money to be made by investing in “something”, it’s usually too late because the smart money got in early and are getting out as the dumb money invests.
We need some hearings in Washington on this subject (lol).
“I’m not too happy about taxes in general but in these boom and bust circumstances, it’s usually the little guys who get hurt financially even if they invested with stars in their eyes after being shilled by a realtor or broker. As usual, if you hear there’s big money to be made by investing in “something”, it’s usually too late because the smart money got in early and are getting out as the dumb money invests.”
I agree with you. Nothing points out the complete incompetence of gov’t economists and politicians than a boom/bust- they stick their heads in the sand (or up their butts) during the run up- which should have been obvious- and then run around posturing after it is way too late. Pouring some cold water on a public mass delusion is the least that we should expect a competent government to do. I think it has something to do with the philosophy that rapid ‘growth’ is always better than (yawn) stability.
The SEC should, for a start, get it’s pee pee whacked for approving the creation of REMICs made up of cr*p loans. The SEC could have dampened the whole mess nicely- it should only put its imprimatur on CDO/REMICS based on loans with substantial downpayments. There should also be at least a strongly worded (official) statement to the effect that the rating agencies were failures, substantially overrating the MBS derivatives. They should also promulgate standards for ‘reasonably’ run public pension plans banning the purchase of mortgage backed securities backed by low- or no downpayment mortgages. Hitting at the delusional securities market is key to preventing housing booms IMHO.
He’s in Australia with Casey looking for sweet dealz.
I’m hooked on that story now. Not even trying to make a living. It’s too hard to keep up if I try to actually make some money
Thanks for the updates on Casey. While intrigued, I always feel dirty after checking his site. Don’t want his “sponsors” to get any extra page views (and hence, give money to Casey).
I felt the same way. I don’t want to visit IAFF, I found another site that trashes him step by step, and I read that one w/o ever have to give him pageviews.
And despite all the evidence of the collapse, the MSM is still pushing FAR’s agenda until the bitter end. Monday’s headline in the Orlando Sentinel was “Orlando median existing home price edges up.” Of course, once you read the article, you’ll see that inventories are WAY up and sales are WAY down. And, while they do offer the month-to-month comparison, they don’t bother to give the year-to-year comparison:
http://tinyurl.com/2aq7pc
Besides, the median price for homes for sale in the Orlando market is down 11.1% since last year:
http://www.housingtracker.net/askingprices/Florida/Orlando-Kissimmee/
When inventories are up and sales are down and the median rises, that just means that the expensive houses are still selling then correct? Kind of just screwing up the curve for the area representing values that do not represent the vast majority of the houses. So, what is next is the cake eaters are still going to buy, yet the vast majority will plunge and then the prices they are paying will be swallowed up by the losses? I suspect this will then be reported honestly as sales down, prices down, median plunges, I doubt it…..and this will take a while as stales stall and expensive houses still sell representing false numbers.
Won’t be long before prices start falling.
More on the subject from Miami.
http://www.dailybusinessreview.com/news.html?news_id=43596
Still more on Miami
-Downtown revival an elusive dream-
http://www.miamiherald.com/103/story/133961.html
-Miami housing director steers funds toward ex-
http://www.miamiherald.com/884/story/136627.html
Miami… the gift that keeps on giving
HOUSING IN MIAMI
Miami mayor on housing: ‘We’re not perfect, nobody is’
http://www.miamiherald.com/540/story/133340.html
“‘I don’t regret buying Swerdlow out,’ Street said. ‘It was the right decision. Do I like our timing? Of course not.’”
Translation:
“‘I made a poopoo,’ Street said. ‘It was moronic. Am I a moron? Of course not.’”
Yes…No matter what kind of decision you make, if it is at the wrong time, it is a bad decision.
Our newspaper foreclosures in rural Ohio contain tons of Deutsche Bank, Countrywide, Apex, Ameriquest, and Wells Fargo. They must all sell out in order to stay in business.
Chris Teeters, a real estate investor from Jupiter, said he bought one of those units because the price was right and he believes in the project.”
“Though he considers his Terra Ceia purchase a great deal, Teeters said he is not optimistic about Florida’s condo market in general.
So he’s pessimistic about all of FLA’s condo market - except the one he bought.
“So he’s pessimistic about all of FLA’s condo market - except the one he bought.”
Exactly the mentality. I’ve got a friend of mine in a “high end” SFH development who is watching the market crash around him. This however isn’t huring HIS home because he’s got a rare discontinued model. Don’t bother looking at the new model that’s 25 square feet bigger with a price $150,000 less! Fact is the house he paid $525,000 can be purchased from the builder with more square footage and the same upgrades for $394,900.
‘Rare discontinued model’
… that’s hilarious
“… that’s hilarious”
And he honestly believes it. The model was so rare and unsold the builder didn’t bother to build a model home to show.
Oh man, that’s just sad. An extreme example of a human’s ability to trick ourselves with our own mind so we can avoid feeling the pain.
He’s deluding himself, but if it keeps him sane and he can afford the payments, he may be OK. He has a place to live, albeit overpriced.
Sounds like the same rationalizations people have for buying overpriced cars.
“Sounds like the same rationalizations people have for buying overpriced cars.”
It’s not a dressed up Honda, it’s an Acura. That’s not a Toyota in the lot, it’s a Lexus. That’s no Grand Marquis, it’s a Towncar.
Again no change here in Sarasota Fl. All of the new downtown condos are dark at night. Yet here is yet another ugly behemoth going up: http://www.atriumonringling.com/
Sobering thought:
First sign of a hurricane residents will gather in the safe room, and the generator will not be properly vented and then we have a REAL major disaster on our hands.
=======———————————–
The developers have also focused on the residents’ safety and security by encompassing a Safe Room. In the case of serious weather the Safe Room will accommodate the entire building with food, water and power supplied by a generator. The Atrium is the only building in Sarasota that offers this convenience.
Yet here is yet another ugly behemoth going up
Laundered drug money…
Why does every “owner” in the flash slideshow have grey hair? I guess it’s going to be a senior condo development? That’s really too bad, because I was going to buy one.
“All the new downtown condos are dark at night.”
Those are not the only things going dark at night. Check this out:
http://www.news-press.com/apps/pbcs.dll/article?AID=/20070611/NEWS0111/70611058/1075
Subprime and housing won’t affect the economy? Yeah right!
It’s a friggin’ mess is what it is. I wouldn’t mind if it was just that current projects are in a bust, what gets me is the rabid building and development that STILL continues. In SouthShore Tampa Bay, here’s a little taste of the insanity:
http://cnewspubs.com/realestate/modules/news/article.php?storyid=382
http://cnewspubs.com/realestate/modules/news/article.php?storyid=381
And that’s just the latest. Notice the Centex development is selling units starting at the “$100,000s”.
WOW!!! That’s an amazing starting price. I guarantee the starting price a couple of years ago would have been $280,000.00. In the end, you’ll probably see $80,000.00 for these. Makes me wonder what the real cost of these units is to the developer.
I wonder how my old friend Jim is fairing out in Tampa now with his new real estate business he decided to start a few years back….I suspect he is probably freaking out and hitting the bottle and wishing he never left So Cal probably.
If he started a few years back and worked fast, then pulled back, he might actually be OK. Some people did make money on the bubble. Depends when he got in and out.
Getting in on the “ground floor” of a 10 year downswing?
“Though he considers his Terra Ceia purchase a great deal, Teeters said he is not optimistic about Florida’s condo market in general. ‘Back in the early ’80s, the condo market went through a similar transition and it took 10 years to work through. I think it will take 10 years this time, too.’”
“He says about two-thirds of those have been sold, but many buyers are canceling orders rather than taking possession of a depreciating asset.”
- Of course the NAR has reported these as ‘Sold” and counted them in their propaganda. They won’t whisper a word of the cancellations
‘I paid $265 per square foot, and I don’t think that price can be duplicated again,’ Teeters said.”
Though he considers his Terra Ceia purchase a great deal…
Uhhhh?
Price of the spec house I am living in (not FL) is currently right around $260/sqft, and renting out for 50 cents per month per sqft. Yesterday the builder’s brother told me they are contemplating another price reduction, from 43x annual rent to 41x annual rent, bfd. It does show they are getting more serious about trying to unhitch this millstone from their necks.
Well, maybe he’s right… prices might not get back up that high for quite some time…
Maybe they meant he’s from Jupiter as in the 5th planet from the sun? cause his logic is out of this world…
“Empty houses are multiplying. Florida’s Miami Dade County has a 31-month supply of existing condos on the market. About 20,000 new ones will be completed by the end of 2008, says Jack McCabe, a consultant in Deerfield Beach, Fla.”
I am imagining the tragic crash of a mile-long train with the locomotives in the very back. Somehow the engineer in charge of the locomotives has not yet figured out the front end of the train has already begun to plunge over the edge of the washed-out bridge ahead in the track, so he still has the engines running at full throttle.
I can really visualize that Get Stucco…..fits the leitmotif or feeling of these times to a tee.
Stucco - that image can’t possibly be apt. It does not jibe at all with the real estate community’s description of a market that is “stabilizing” or “is taking a breather before rising again” or (my favorite) “becoming more balanced” (what the hell does that mean?) Surely you meant to describe a smiling Thomas the Tank Engine relaxedly gliding into Buyersville Station to pick up more new homeowners for the trip ahead.
You’re scaring the children, the FBs and the GFs!
If that is the case, zeropointzero, it is time to wheel out The Fat Controller (i.e. Mr. Topham Hatt) to herd the FB’s to their doom on Deathtrain 2007
Pulled by Henry and Gordon with gleaming new coaches, as Thomas has been permanently assigned to the shortline for “cheekiness” and being, well, short.
phooey, why did I suggest two loco’s on a passenger train? I must be tripping.
Could be a mixed trainset, ie gondola cars full of the lumps of coal this christmas for the FB’s children being hauled in the back. Sounds like a bumpy ride.
The difference in the market between existing SFHs (excepting mega-homebuilder tract housing) and high-rise condos is so great now that they can hardly even be considered in the same category of assets. A “luxury” high-rise on Butler Blvd. near Jax Beach but on the Jacksonville side of the tidal marsh (intracoastal waterway) has sat almost empty for over a year now, despite starting prices being reduced from “the low 800s” to “the 600s.” Likewise most of the new condo completions at Jax Beach - unoccupied.
Meanwhile, SFHs in desirable neighborhoods continue to trade at prices not far from the peak and luxury custom homes continue to be built in Ponte Vedra (”Palm Beach north”).
“A “luxury” high-rise on Butler Blvd. near Jax Beach…”
LUXURY and Jacksonville in the same sentence…LOL!!!!! That’s funny. What gets me is that these silly condo developers thought that those COULD be put in the same sentence.
It’s near one of the so-called premier employers here - the Mayo Clinic. I guess the developers figured everyone would want to shell out 3/4 of a mill for a nice hospice with a view while they struggled with terminal cancer - why not, since it’d obviously be worth a million or more when you passed it on to your children.
“I guess the developers figured everyone would want to shell out 3/4 of a mill for a nice hospice with a view…”
Guess that’s what everyone thought during the boom. Everywhere an excuse. Down in Palm Beach County we were working off from an entirely new economic model and prices would only go up and would sustain a 25% yoy gain for decades to come.
“I guess the developers figured everyone would want to shell out 3/4 of a mill for a nice hospice with a view while they struggled with terminal cancer…”
Actually, with the stress of being a FB in a condo, the heart attack rate could be pretty high- being close to a hospital might be a big benefit. And you might even qualify for medicaid if the gov’t evaluates your ‘asset’ at fair market value.
Not really true about the SFH’s in Jacksonville. Existing homes in the desirable neighborhoods of Jacksonville are considerably down (15-25% down) and many inventory “luxury” homes have been selling for around 50% off original asking. Head down to the Julington Creek and northern St. Augustine area and you will see mass carnage in Jacksonville “luxury” home market. I have personally been looking at several homes in San Marco (one of the most desireable neighborhoods in JAX) that can be bought for about 50% off peak.
Jacksonville is probably the hardest hit of all of the Florida markets considering the inventory level and price drops per population size of the area. The area is also very different in that the age, type and size of homes in the area are much crappier than other Florida cities.
David - You’re obviously more tuned in than I am, but I’ll be damned if I see stuff off that much. 50% off peak in San Marco for SFH? I’m trolling up and down San Jose and Hendricks all the time and what I see is that if something comes on the market 10% below comps it trades. Would love to hear an example or two of 50% off.
I agree with you about St. Johns County except for the northern areas of Ponte Vedra at the beach - there are miles of unopened roads in nascient spec developments we now use for our cycling routes. And once you get south of Guana on A1A there is obviously a lot of pain and consternation. But Jax the hardest hit? I don’t think so.
My wife and I are more than likely going to purchase a home in San Marco in the next few months. We have been keeping up with that neighborhood on a better than weekly basis for the last 18 months. We have it narrowed down to three homes. All three have been on the market for over a year, are listed for about 35-40% off peak, and can be had for 50% off peak. The inventory level for the neighborhood has skyrocketed over the spring and little is selling.
There are so many varying factors to consider in Florida’s housing market. But, here is why I believe Jacksonville is the hardest hit of all of the major Florida markets:
1. highest level of inventory per population in the state
2. highest level of foreclosures in the state
3. highest median home price per income level in the state
South Florida’s prices and inventory are higher. But, you have to consider that Miami and it’s surrounding cities are absolutely massive compared to NE Florida and the population is much more highly paid.
People **WAY** over-estimate the median incomes in South Florida. Believe it or not Jacksonville actually has a HIGHER household median income that Dade County. During the last census in 2000, Jacksonville had a median household income of $47,243, while Dade County was $40,260.
Sources:
http://en.wikipedia.org/wiki/Miami-Dade_County,_Florida
http://en.wikipedia.org/wiki/Jacksonville,_Florida
Only Dade county. Comparing the median income of Dade County to the entire Miami metropolitan area is like comparing the median income of Watts to the entire LA metro area. It’s one lower income area in a sea of higher income areas. When you compare the Jacksonville metro area to the Miami metro area the numbers are considerably different. Jacksonville proper has twice the population of Miami proper, but the Miami metro area has five times the population of the Jacksonville metropolitan area. When looking at HUD’s 2005 median incomes for metro areas, Jacksonville drops to $42k while Miami rises to over $52k. The median income of Miami is considerably higher than that of Jacksonville.
Huh? I didn’t compare the City of Miami to Jacksonville; I compared the entire Dade County to Jacksonville. You are right that the City of Miami is tiny (only 362,470 people). However, I showed stats for all of Dade County, which is huge with a population of 2.4M people.
As I’m sure you know, Jacksonville, which has the largest land mass of any U.S. city is basically Duval County. However, just to be fair, I should have compared Duval County to Dade County.
So, just so we’re getting all the comparisons straight, the median incomes (and populations) are as follows:
City of Miami: $27,225 (pop: 362,470)
Dade County: $40,260 (pop: 2,402,208
City of Jacksonville: $47,243 (pop: 782,623)*
Duval County: $47,689 (pop: 778,879)**
*2005 data
*2000 data
There’s just a huge misconception that people in Miami are loaded. This misconception is perpetuated by the creative tourism marketing that likes to show Miami as South Beach, Coral Gables, or Coconut Grove. While those places are loaded with VERY rich people, Miami-Dade has many more people that live in cities like Hialeah, Perrine, Richmond Heights, Opa Locka, Homestead, etc.
Sources:
http://en.wikipedia.org/wiki/Jacksonville,_Florida
http://en.wikipedia.org/wiki/Miami-Dade_County,_Florida
http://en.wikipedia.org/wiki/Miami,_Florida
http://en.wikipedia.org/wiki/Duval_County,_Florida
“As I’m sure you know, Jacksonville, which has the largest land mass of any U.S. city is basically Duval County.”
OT, but as an Alaskan I need to point out that while Jacksonville covers 841 square miles, Juneau, Alaska covers 3248 square miles.
Nice work, Gatorfan. I never knew all that. What makes it even better is that cost of living is probably rather less in Duval than in Dade.
wow. This has been a pretty well kept secret.
What’s going on at St. Augustine Beach. How are condos holding up there?
CONDOS…What was lost in the frenzy is why people used to buy condos in the first place. It was a tax write off with care free living that you could break even on at the time of sale. During the bubble people wanted to make a fortune by getting in pre-construction and flipping to the next sucker.
What tax write-off? Do tell.
Thanks to this blog, I’ve had an easier job holding my wife’s impulse to buy for the last year and a half. We sold in fall-05 and have been renters since. The last lease that we signed is a bit to rich for our budget (250 rent multiplier at the time). I figured that the savings from not buying would cover many times over what we would have lost had we bought.
note….For those of you that feel prices aren’t budging in the Miami area…
She has been religiously keeping tab of the local market - Coconut Grove, Miami - since we were shopping for our current rental (250 rent multiplier at the time). After seeing some very interesting deals and inspired by this blog as well, she has mapped some of her findings on the web. For those interested in the 33133 zip code of C.Grove, you can go to . The interactive maps are the main attraction.
messed up the tag… http://grovesbubble.blogspot.com/
Good information! Thanks.
Oh, yes, and hi-ho, the derry-o, our state tools, er, uh, representatives begin their first day of deliberations on what to do about the so-called “tax situation” in Florida. First of all, there is no situation. I had a conversation with a New York transplant to Florida who is flabbergasted by this. They quite rightly pointed out that taxes are not really bad at all in Florida as compared to other parts of the country, especially IF you have Save Our Homes. The only reason taxes are a problem is because of the bubble and when the bubble goes away, so does the so-called “tax problem”.
Oh, Lordy, please deliver me from Tallahassee politicians. These tools are really going to eff it up this time. Why? Because our gov is MAKING them eff it up, by insisting they do something. Why is he insisting? Well, they screwed up the insurance situation, so this tax thing is a big diversion. And now it becomes a pissing match between state and local governments. Who loses? Property owners.
“Oh, Lordy, please deliver me from Tallahassee politicians.”
They’ll screw this one up worse than the insurance mess. That was a good idea…let’s force private industry to charge what WE want them to charge and put the state on the hook for billions while we’re at it. The thing that kills me is that the insurance market was finally starting to get stable (granted with very high prices) and then BOOM! Lower your rates and buy our re-insurance or you can leave our state.
With that mess behind us…how bad can they mess up the tax situation?
“how bad can they mess up the tax situation?”
We’re going to find out shortly. This oughta be good.
I like the proposal that drops taxes by $112 on average. I pay $3800 per year. That breaks down to a 2.9% decrease for me. Where will I spend it all?
The other proposal that’s comical will drop taxes by $1,400 on average in Palm Beach County. As much as I’d like to cut my taxes by over 1/3, there will be absolutely no money left for corruption. Local governments won’t stand for that.
You can count on the fact that whatever they do, it’ll be complicated, stupid and will shaft Floridians and non-resident property owners alike. There’s nothing more a politician loves to do than punish the citizens for their own venality and stupidity.
From what I’m seeing on the news, this is becoming a pissing match not only between the state and local governments, but also between Democratic and Republican representatives. There are actually some sane politicians who are saying they should just leave it alone and go home, wait another year and then revisit the issue and see if anything really needs to be done. The wisest course, IMHO.
They will be putting a band-aid on a sucking chest wound.
The symptom is taxes…The problem is reckless spending.
I agree. No more building roads, storm drains, sewers, power plants, etc on the public dime. If it can’t provide revenue to cover the bond issues (in tolls or other revenues), forget it. And no more letting developers throw up structures and let the government pick up the rest. Let the developers cover the costs of development. It might make that “cheap” county land less cheap and slow down the sprawl.
No more billions for highways.
No more billions for airports.
No more billions for sports arenas.
No more billions to bail out hurricane damage for insurers and FBs.
No more billions to keep millionaires in their waterfront property.
No more billions to construct extra medical and law schools in the Florida state system … two or three of each ought to suffice.
Sounds good to me. But seriously, they’re talking about cutting the police department, the fire department, the library, the schools, and public transit. Not a lot of fat to trim there, except maybe when you count police OT (a big scam up north–dunno about here), and teacher salaries (artificially kept high by artificial barriers to entry, so, in economic terms, fat).
Maybe the library can sell “extra” books on eBay and the policemen can do charity shows to buy a new cruiser or computer in the office. I understand centerfolds of male and female police are quite popular.
“The only reason taxes are a problem is because of the bubble and when the bubble goes away, so does the so-called “tax problem”.”
Palmetto, how can you say that? It’s not the bubble that caused taxes to go up. If the county/local govt had been fiscally responsible they would have lowered the millage rate as assessments went through the roof. That would have kept each home’s tax bill roughly the same. I can almost guarantee that when appraisals do go back down, govt will RAISE the millage rate to keep taxes as high as they are now.
It doesn’t surprise me that government would not lower the millage rate as assessments went through the roof. It’s sort of like selling on commission, they make more as property values go up. I wouldn’t lower millage rates, I’d take the windfall and pay back bills, sock some away for emergencies, maybe make some badly needed improvements. That’s responsible. What was done with the windfall was irresponsible. RAISING the millage to keep taxes high when assessments fall, THAT is criminal. And that is when tax reform (or regulation) would really be needed. But right now, unless they do something to ensure there is a cap, I’d wait and see.
Right now, to hear local governments threatening to cut back fire and law enforcement services, that’s disgusting. Fearmongering. It wouldn’t even be an issue if they hadn’t pissed the money away on expanding staffs and departments and vanity projects.
“Right now, to hear local governments threatening to cut back fire and law enforcement services, that’s disgusting. Fearmongering. It wouldn’t even be an issue if they hadn’t pissed the money away on expanding staffs and departments and vanity projects.”
Agreed Palmetto, absolutely. Let me say however that I disagree with you on the tax situation and agree with Bill that we can’t just let the bubble bust and everything will be fine. As Bill pointed out they will just raise the millage rate and continue to screw most people on taxes.
There is no tax problem for people who have lived here who bought a house say 7 years ago and who have it homesteaded and continue to live there. Having said that for other people who came in say 3 years ago and purchased a home to live in, not speculate, many of them are choking to death on high taxes and insurance even with the homestead. Thus, the mass exodus out of the state. Not trying to cause a disagreement because I often agree with things you post, but I wholeheartedly disagree with regards to there being no problem with taxes and/or that it will fix itself as the bubble pops.
People are being “taxed” to death in Florida, the tax being in reality a real tax (property) and insurance (not really a tax but I’m sure it feels like one to some).
I read often on this blog but rarely comment. I don’t understand why you feel those that bought houses 3 years ago are being choked to death by taxes. Noone forced them to buy the home. They should have been aware of their taxes. If they couldn’t afford the taxes, then they couldn’t afford the home. We could have easily afforded a half million dollar home without the taxes. Therefore we opted not to buy. Doesn’t this make more sense?
Apparently you don’t read very well so let me repeat what was in the post…It’s the taxes and the quadrupling and quintupling of the insurance. I’m sure your so God aweful rich it doesn’t matter to you but to common folks when insurance goes from around $1,000 to $5,000/year in some cases that extra $4,000/year is just a little bit painful.
Now let me also explain how taxes are not set but can be raised artificially raised through higher millage rates and other tricks to help bump county spending and we can be here all day doing this…Don’t mean to rant at your post, it’s just that yes there really is a problem here in Florida.
Only problem is 3 years ago prices were lower and taxes were too. Some who bought had no idea home prices would go up 100-150%.
This is why I don’t post. I don’t like being attacked and I’m perfectly capable of reading. Wealth has nothing to do with our current tax situation. If you fall under SOH, your taxes are capped. So, I don’t understand how people’s taxes are skyrocketing. I’m not aware of the millage rate going up dramatically. Those that are sno birds do have a tax problem if they purchased many years ago. I know they have skyrocketing property taxes since they don’t fall under SOH. It would seem to me that if someone does not want to pay taxes on a home that was once valued at $300k ($5,967 in taxes) and now at $500K (9,945 in taxes) than they should not purchase the home. Isn’t it possible that if many people thought like that we may not be in this predicament? Granted, there are many other factors (flippers, subprime and fraud). If people stop buying and prices go down, so will taxes. I am adamantly against the current tax proposal. I fear that it will create another false bottom. If they would let this play out, I believe the market would eventually correct itself and taxes would return to normal. Insurance is another issue altogether.
I read very well. I don’t understand your point. Once you purchase a home your taxes are capped and don’t go up dramatically. Taxes on a $300K home are approx. $5,967 and on $500K $9,946, This is very steep and is directly related to home values. It is also no surprise. So, I’m not sure why anyone would buy if they couldn’t afford the taxes. I fear that the current tax proposal would create a false bottom. Rising interest rates and better lending practices will hopefully prevent another false bottom. I’m certainly not wealthy, but I have taken advice from this blog. I sold my house, am currently renting and waiting for prices to come down. Insurance is another issue altogether. I apologize if this becomes somewhat of a double post. I posted prior and it didn’t show up. Not really sure what happened.
what happened a lot up here in MD is that the taxes listed by the realwhore were last year’s taxes based on the “current” SOH type tax paid by the seller. The buyer says “oh, taxes are 1500, no problem” Except big problem, new buyer will pay higher tax based on new sales price and they are not grandfathered in with our SOH type cap. They expect a 150 a mmonth bill and BAM, it’s 500. Throw in our electric co. raising rates by 50 - 72%. It adds up, yes they could not afford the house so they should ot have bought it. But I bought my house 10 yrd ago, and if not for our tax cap, I couldn’t afford to live here bacause the ha ha true tax is close to 3X more than what I pay. That’s how after the fact items that you may or may not know about can rise up and get you.
It’s funny - as bad as things are in Flordia, we have a condo building boom here in Austin, TX. A lot of the developers are from Flordia and are moving their money into Austin. I guess the proverb “Once burned twice shy” doesn’t apply to real estate.
(tried to poast this earlier) same thing here in Montrose, Colorado - developer from Lost Wages (Las Vegas) bailed down there and came up here and changed his name. Building very expensive golf course houses that are just sitting. I hate it when they make you take your shoes off at an open house (or wear those stupid plastic booties over your shoes) - so I hope he goes flatass broke. Pretentious Posers make me Puke.
“Condo buyers in Manatee have defaulted on 22 loans since January 2006, forcing bankers to put properties back on the market at the worst possible moment.”
If they think they’ve already seen the worst possible moment, they’ve got another think coming.
If this doesn’t stop, in five years south Hillsborough (which I refuse to call “SouthShore”) will look like Tampa Palms.
Not connected to these stories, but I was driving around south Tampa last weekend and saw a number of new McMansions–copies of the same generic two-story, 3,500 square foot box which extends to the lot boundaries and looks like it was built in a week. What an architectural and aesthetic disappointment the twenty-first century is turning out to be.
“in five years south Hillsborough (which I refuse to call “SouthShore”) will look like Tampa Palms.”
Sorry, snakecharmer, I guess I’m annoying you each time I refer to SouthShore and I apologize for that. Actually, you are correct. We used to call this area the East Bay and in fact that’s a much better designation to refer to that part of Hillsborough that extends from Brandon south to the Manatee/Hillsborough County line and east to 1-75. The rest of Hillsborough east of 1-75 was designated South Hillsborough. SouthShore is a Chamber of Commerce designation and you are right, it sucks. East Bay. I’ll be happy to revert to that.
If you think that’s bad, get a load of what the Gainesville Chamber of Commerce foisted on us (and my &$^%#!!! boss stenciled on all our new vehicles):
GAINEsVILLE
Every path starts with passion.
Jeez, shouldn’t it be “begins”? That would be more euphonius. And let’s not even “begin” with how generic and UN-representative of Gainesville this drivel is…
not a gator, that’s a riot!!! How did the words “passion” and “passionate” ever become such overused, BS buzzwords?
I think it started with recruiters and human resources idiots. “Must have a passion for_______”. You fill in the blank. YAWN!! If I’m going to work for someone else at some boring, sterile job, the only thing I’m going to have a “passion” for is getting my paycheck. Sure, I’ll give them my skills and a job well done commensurate with what I’m getting paid. That’s it. “Passionate’s” got nothing to do with it.
I’m just waiting for this to become the hip and resurgent retro style in another 40 years or so. Listings will tout completely intact turn of the century kitchens complete with dark stained wood and even the original stone countertops and floors, although they are badly cracked and scuffed–er, classically age worn with a unique patina–by then. Probably the stainless clad KitchenAid appliances won’t last more than two decades at the most.
“Probably the stainless clad KitchenAid appliances won’t last more than two decades at the most.”
So true, but I’ll bet they last longer than these houses. (I’m renting one)
Seriously, snake charmer, thanks for the slap upside the head. It woke me up. I realize this SouthShore business was something the Tampa Tribune dreamed up in concert with the area Chamber of Commerces as a marketing ploy. And I just went along with it. Shame on me. I normally pride myself on not going along with marketing BS.
I wasn’t intending to flame you in any way. It’s just that I remember that part of the county as pleasantly sleepy, with tomato fields and retired circus performers. Those things will be lost, and the sprawl and development that replaces them, under the banner of this new “upscale” name, will make the area look exactly the same as anyother suburban place, which is to say totally forgettable.
No offense was taken, you are quite right in your point of view. This area was my bolt-hole from South Florida in 2000. I thought I died and went to heaven. It was an area of benign neglect that the Hillsborough County Commission wasn’t even remotely interested in. People here used to complain that East Bay (see, I’m already reverting and I feel better) was the red headed stepchild of Hillsborough County. They wanted the County Commission to pay more attention to the area. They did. Be careful what you wish for. Wonder what hedge fund the Dickmans will be investing with?
Yea…I miss labsta boy!!
BEN: a 10 year ticker would be nice and a conversion so folks can see how much more RE went down…………today its WEEEEEEEEEEEEEEEEEEEEEEEEEEEE down
“‘I don’t regret buying Swerdlow out,’ Street said. ‘It was the right decision. Do I like our timing? Of course not.’”
I like Swerdlow’s timing. There’s a sweet side of every deal and only 1 party gets to enjoy it.
Indeed, the sweet deal was had by the partner who got bought out and is now relaxing with a cocktail on some Caribbean beach. Meanwhile, Street gets to deal with the daily headaches of a development that has flopped. Yeah, that was a good decision all right! Amazing how people will continue to lie to themselves. Florida appears to be effed beyond repair. Of course, CA’s day of reckoning is on the horizon.
Ssssh, when it comes to public sector contracts, sometimes there is no winner in the deal at all. Everyone loses money, time, and performance, and those involved try to conceal the project from their resumes as they quietly
sneak awaymove on in their careers.Looks like our Coutrywide ceo sold stock options yesterday, 2 mil worth.
From AP June 11:
“In a Form 4 filed Friday with the SEC, Angelo R. Mozilo reported he exercised the options Friday for $9.94 apiece and then sold all 70,000 shares on the same day for $37.95 apiece.”
“worstr of times”
lol.
It’s going to get much worse.
wow everything sold yesterday in DC - inventory down 21%
http://www.housingtracker.net/
A little OT, but speaking of DC, has anyone else noticed that the neighborhoods immediately surrounding government areas in larger cities (I don’t include small town government in this indictment) are usually the absolute pits? Full of creeps, criminals, bums, panhandlers, flophouses and poverty housing. Or is it just Florida and DC?
I’ve noticed that, too. All of the state capitals I’ve been to (maybe apart from Austin and Annapolis) seem like total pits. The worst I’ve been to is Trenton, N.J.
Madison and Boston–not pits. This is probably because they have industry other than gov’t.
DC is a national disgrace. The founders were trying to avoid creating another Paris. Well, they succeeded.
That’s gotta be a computer glitch.
Things in my neighborhood (Northfarm) in Rockville, MD just north of DC are selling quickly with multiple offers. I still can’t believe it, the last house sold even before the open house for above asking price with 5 contracts submitted.
Yeah, well things in my neighborhood (NoVA) aren’t selling. And 8000 homes were not magically sold in Rockville last week.
Yup, same here. I live in a great close-in neighborhood in Crystal City, and there’s homes for sale all over with nothing appearing to move.
Our friends in Rockville (west of Rt 97, north of Rt 28) have lowered their price twice already.
Nada.
Check out houses in 20852, there is nothing nice below the $800k range. What I mean by nice is a house that does not need a lot of work or is 50 years old with small bathrooms and closets. Most houses in this zip are well above that price. Schools are good, close to metro and DC, that is why houses in my neighborhood are moving quickly.
You’re right: I just did a quick look at Zip Realty, and in 20852 everything below $800k is pretty dreadful (although once you get above $800k quality changes dramatically). I’d rather move to Indianapolis than pay $700k to live in one of those dumps — what a depressing existance.
What people are beginning to do is buy the older houses for $800k plus and then knock them down and build a $2 million McMansion.
It is nuts I am just glad I bought my house 5 years ago. I would hate to be a first time homebuyer looking right now. I don’t know how a young family just getting started is going to purchase anything these days. I would not sleep at night buying a house for $800,000 and having a $600,000 mortgage.
Hey, those 50 year old houses aren’t dumps! I lived in one for two years when I was in high school. Bah!
Besides, aren’t the 800K houses in 20852 like Victorians and stuff? Bit older than 50 years, eh? Probably cost a lot in maintenance. They are nice–I used to walk around that neighborhood for fun, until it got too hot. Then I doubled back for some mulberries by the drainage ditch near Fleet St (and what used to be a slum lord apt complex) or went towards the shell of what used to be downtown before some grandiose planners in the 1960’s tore it all down.
Of course, I would just as often cross the tracks* to the Black neighborhood because cheap ice pops at the Hostess outlet were the bomb…
*Rockville is, and was, segregated by railroad tracks. They also have a large and prominent Confederate memorial.
I lived right down the street from the 7-Eleven. I guess you would consider that a negative but it turned out to be the most totally awesome location. 24 hour slurpees in the middle of August? Oh, yeah.
“I would not sleep at night buying a house for $800,000 and having a $600,000 mortgage.”
But at least that’s better than buying a house worth $600K and having an $800K mortgage.
Can you say “expired listings”?
But shouldn’t there have been a spike [up] of 8000 listing 90 days ago?
Hmm, you’d think so. It’ll be interesting to see where the inventory goes on the next report. I really doubt things are booming around here; certainly no signs of it ‘on the ground’.
Did a big real estate agency withdraw from the MLS?
How’s Tarpon Springs these days?
I am in Gulf Shores, Al. (next to Pensacola) and there are several condo towers under construction and others finished which appear to have many empty units…..lots of real estate signs in the sfr neighborhoods. Anyone know how the market is in this area?
How’s this for a steal? A friend just purchased a “new home” from a would be flipper (flopper) at PGA ( Maistone)village in St Lucie. The flopper paid a little over 400k from the builder last year and my friend just got it for 261k. Seems like a nice buy unless prices keep dropping. Seems like 1 out of every 2 house built there in 2005 are still vacant and for sale by their new owners
Probably planned on the 8000 drop to spur sales, then next month they’ll say they made an error. I’ve seen this happen numerous times.
http://tinyurl.com/2qcd7m
Celebrity broker down to last millions
“His timing was off, he admits. ‘The market is slowing down. Everybody knows what’s happening in the Miami market because of the condo oversupply. It’s going to be a bloodbath out there. You know what the buyers are saying? `Let me wait, why should I pay $10 million for a house when it might be down to $8 million in a year.’ ”