It’s A Real Circus Out There In Florida
The Charlotte News reports from Florida. “Even with foreclosures, short sales and the overall recession, local real estate markets appear to be doing better than might be expected. Homes that offer a real bang for the buck can be found — for those who have the cash or the credit rating to get a mortgage. ‘So many things are skewing values,’ said Rex Govorchin, president of the Englewood Area Board of Realtors. ‘It’s a real circus out there.’”
“Claudia Ridge a Realtor and someone with 15 years of experience in Englewood, said …she’s seeing a significant drop in the sale of waterfront residential homes, where people now pay $500,000 to $600,000 for older houses. Five years ago, she said, vacant waterfront lots were selling for those prices.”
“The buyers she isn’t seeing in great numbers are those people who are still working. ‘People’s jobs are unstable,’ Ridge said. ‘I don’t see a lot of people upgrading their homes. These people are staying put.’”
“Think small and see a big bang for your buck in Port Charlotte, said Vickie McPhee with Century 21 Almar & Associates. ‘I am now seeing prices at a level as when I first started,’ said McPhee said, who began selling real estate in Port Charlotte in 1998. ‘Right now, the big bang for the buck is in the price levels under $100,000 and $150,000.’”
“Older sections of Port Charlotte, such as the smaller homes surrounding the Cultural Center, McPhee said, are selling for $20,000 and $30,000. Real buys, she said, can be found for $40,000 or $50,000.”
From CBS 12. “Over 40 lenders and banks unloaded their homes at a masssive auction Monday night. US Home Auctions is putting 1800 Florida foreclosures on the auction block this week, with auctions in Miami, West Palm Beach, Fort Myers and Tampa. The homes sold for pennies on the dollar. Buyers bid up 3-bedroom homes in West Palm Beach. Most sell for $50,000. Some Port St. Lucie homes sold for around $40,000. Even a downtown West Palm Beach highrise waterfront condo sold for just under $100,000.”
“‘45-50 looking for 45 to take the lead who wants in?’ speakers blared in a packed auction house at the South Florida Fairgrounds.”
The Palm Beach Post. “When an eternal optimist like Frank McKinney says he’s scared, you know times are tough. The flamboyant developer has delayed construction of two oceanfront manses in Manalapan until the global economy recovers. McKinney had planned to build a $125 million castle and a $30 million estate on vacant land he owns just south of the Ritz-Carlton.”
“But now that the luxury market no longer is bulletproof, McKinney acknowledged that pushing forward would be ‘foolish.’ ‘It’s a pretty scary time - I know I’m scared,’ McKinney said last week. ‘This is the first time I have seen the wealthy affected by one thing and one thing only, and that’s sentiment.’”
“As McKinney’s caution suggests, the high end of the economy no longer lives in its own little fantasy world. A year ago, private jets were still selling, mega-yachts were moving, and home prices in the town of Palm Beach were soaring (even as prices in the county of Palm Beach were tanking).”
“Now, though, mansion sellers like Dru Schmitt have slashed prices. Schmitt sold his 23,000-square-foot palace in Boca Raton in January for $12.9 million, after originally listing it for $24.9 million. The deal was recorded at $10.9 million, but the buyer paid an extra $2 million for furniture, said the buyer’s agent, Gary Pohrer.”
“The global meltdown has brought more setbacks for Rodger Krouse and Marc Leder, two titans of the private equity industry who run Sun Capital Partners of Boca Raton. Both invested with Bernard L. Madoff Investment Securities, the massive Ponzi scheme, and appear on the list of victims released this month by a federal bankruptcy court.”
“Bernard Madoff made a killing at 2 North Breakers Row. According to court records, he recruited at least eight investors for his alleged $50 billion Ponzi scheme at that 48-unit complex. A Palm Beach Post analysis of the court records shows that at a few Palm Beach condominiums and neighborhoods, losses were particularly heavy.”
“Many of the unfortunate tenants at the luxurious pink oceanside complex, where units go for $4 million to $6 million, are keeping mum about their losses. None contacted for this article would talk and it seems they are not even telling their neighbors. Roberta Robinson, 81, who has lived there almost 20 years, said she wasn’t aware how many of her neighbors had invested with Madoff, but said there were clues.”
“‘It hasn’t been quite as lively around here,’ she said. ‘In fact, in the first few days after the news broke, it was sad. But people seem to be going on with their lives. The people here aren’t the ones who lost everything, like some other poor people.’”
The Cape Coral Daily Breeze. “In addition to a high rate of foreclosures and a high unemployment rate, Cape Coral now has another characteristic of a failing economy - a failed bank. Riverside Bank of the Gulf Coast was shuttered Friday by the Florida Office of Financial Regulation.”
“Riverside chairman Elmer Tabor knew the end was near as early as December. Tabor…said the bank’s failure is the result of the fallout from the housing crisis and not due to mismanagement. Construction loans that typically would be picked up by secondary market lenders like Fannie Mae, Freddie Mac, Wells Fargo and others were left on Riverside’s books.”
“‘In ‘05 a brand new house was selling at $250,000. By the time the house got completed a year later that house was at $190,000. The secondary market wouldn’t take that loan because it was upside-down,’ Tabor said.”
“‘Ours was not frivolous lending,’ he added. Tabor also pointed out that the bank’s customers would not lose any assets in the transition. ‘The only ones that lost out on this are the stockholders,’ he said.”
The Herald Tribune. “Elaine Friedman moved out of her home in August after her mortgage lender filed for foreclosure. As she did so, she had her utilities turned off. Florida Power & Light stopped sending her a bill. Manatee County Public Works did not. The county continues to charge her $24.47 in ‘readiness-to-serve’ fees for water and sewer.”
“‘It’s awfully frustrating,’ said Friedman, who relies on Social Security and says she cannot afford to pay for services she no longer uses. ‘It’s a real handicap every month.’”
“Like Manatee, however, other public utility providers throughout the region are hearing more complaints about readiness-to-serve billing. ‘It’s magnified because of the foreclosure market,’ Palmetto City Clerk Jim Freeman said. ‘We’ve had questions, pursuant to our ordinance. They understand it after we explain it to them, but they may still not like it.’”
The St Petersburg Times. “Members of Tampa Bay’s business community don’t need Treasury Secretary Timothy Geithner or anyone else to tell them the credit noose has tightened. ‘The banks are hoarding money; the banks aren’t lending anything,’ said Jeremy Dixon, general manager of (a) Brandon-based temporary staffing agency. The credit restrictions, Dixon believes, are fueling a vicious cycle.”
“Already, economists have warned that Florida’s unemployment rate, now at 8.1 percent, may reach double digits this year. The bay area’s unemployment rate is 8.3 percent, the worst major metro area in the state. Just a few years ago, Florida led the country in job growth and was adding 1,000 people a day as a mecca for both retirees and job seekers.”
“Consider this measure of how the bay area’s reputation as a job magnet has reversed. In the Times’ 2006 survey, 17 percent of leaders pointed to growth management as the area’s single most pressing problem. No one mentioned it this year.”
“Until the employment picture brightens, it will be tough for real estate prices and the economy as a whole to start climbing again. ‘The key to any economic recovery is jobs,’ said Ray Sandelli, senior managing director of CB Commercial Real Estate in Tampa. ‘You could have the best interest rates and the best terms available so someone could buy a house, but if they don’t have a job or are fearful of losing their job, they’re not going to buy.”’
From Florida Today. “Brevard County lost 5,700 jobs, or nearly 3 percent of its work force, in 2008, and economists expect more companies to trim their staffs in 2009 as revenues keep shrinking. ‘The layoff parade is going to continue,’ said Sean Snaith, director of the University of Central Florida’s Institute for Economic Competitiveness.”
“The federal stimulus package working through Congress might help a few companies avoid layoffs, but that help will be limited, Snaith said. Florida will see double-digit statewide unemployment rates before the year is over. ‘We’re just really starting to see the beginnings of this process,’ he said.”
“The number of foreclosure filings in Sarasota, Manatee and Charlotte counties dropped sharply in January compared with December, with Florida as a whole seeing a 20 percent decline. Most experts attributed the decline to the state’s moratorium on foreclosures rather than to an improving housing market.”
“The moratorium was clearly the driving force, ‘because the fundamentals have not improved,’ said Dennis Black, a Port Charlotte-based real estate consultant.”
“Black argues that moratoriums simply kick the can down the road: ‘Not filing the foreclosure papers on a particular day or month doesn’t change the fact that the borrower is still not making the payments. The minute the person that is owed the money is permitted to foreclose, he will.’”
The Reporter. “Shifting into survival mode, the once-thriving but now economically struggling Four Corners real estate industry is looking for ways stay afloat as the state and nation enters its third year of a prolonged housing slump.”
“Although Central Florida’s real estate market has shown some signs of improvement since September, with sales rising in Osceola and Orange counties in particular, that’s mostly seen as a reaction to plummeting prices, particularly for foreclosed homes that the banks are eager to get off the books. And problems in the housing market persist.”
“A few years ago, real estate agents in Four Corners had no such troubles. Construction was booming in the area with plenty of newly built homes available, and the price tags kept soaring upward as pre-sales went briskly. Realtors often were signing contracts on the hood of their car moments after showing a new home.”
“Sean DePasquale, a senior loan officer with Florida Mortgage Partners Inc., said the full impact of many adjustable rate loans written in Florida at the height of the market in 2004 and 2005 hasn’t even hit home yet for a lot of local banks. ‘A lot of what the banks are dealing with is they are still bracing for the storm,’ he said. ‘It hasn’t happened yet.’”
The Northwest Florida Daily News. “David Nelson wants to bring more condominiums to Destin, but this developer intends to do so without changing the skyline or breaking ground on beachfront land. In fact, the condos will come and go in the amount of time it takes to drop anchor and walk off the deck to reel in a good catch, take in a round of golf and get a haircut before moving on to the next stop along the route where every bend in the river leads to home.”
“Home in this case is a ‘floating condominium’ in a new ‘floating community’ called River Cities. The concept came to Nelson through a combination of 29 years as a contractor in the residential, commercial and marine construction industries, 30 years of boating experience and 19 years of living aboard a house boat on the Mississippi River in St. Paul, Minn.”
“Nelson plans to have 90 percent of up to 200 units sold before construction begins. To reach his goal, Nelson is marketing the new lifestyle by visiting targeted port cities and making presentations on what life aboard a floating condominium community is all about. So who might a mobile community appeal to?”
“‘My baby boom generation is looking for things to do,’ he said.”
“So how much does this lifestyle cost? Like condominiums on land, The Marquette will have a homeowners’ association that collects a monthly fee that will pay for fuel and salaries that keep the floating community running. Nelson said that owners of smaller units can expect to pay $1,200 a month and those who own a ‘comfortable two bedroom’ will pay $2,000 a month to the association. The condominiums are priced anywhere from $55,000 to $1.8 million.”
“Shane Moody, president of the Destin Area Chamber of Commerce, said that it is an ‘interesting concept,’ but that the timing is probably a little off because of the down real estate and condo market.”
