Greed Blinds People From The Truth
The Herald Tribune reports from Florida. “How do you end the condo death spiral? Hire an aggressive debt collector, renegotiate any payments going out the door and act diplomatically while you put in more hours than at your day job. ‘I gave up pretty much my life and my vacation,’ said Oded Neeman, who became president of the Village at Townpark Condominium Association last summer, a few months after buying a foreclosed unit there. Both he and Audrey Barrientos joined the board that August. Unlike him, Barrientos got sucked into the buying frenzy when the conversion was first announced in 2006.”
“‘Two of my girlfriends were in line waiting to buy at 11 o’clock at night,’ said Barrientos, who ended up paying a $5,000 deposit on a three-bedroom, two-bath unit priced at $256,900, for which she saw only a floor plan. Later, after the market fell apart, she averaged down by buying a second unit for $80,000.”
The Tampa Tribune. “From the outside, the two story house in a quiet Seffner subdivision looks like a good investment. The grass is tall, it needs to be painted, but it’s in foreclosure and the bank is willing to offer a discount to a buyer who will take it off their hands. But the inside is a different story. Someone, perhaps unhappy about losing the home, smashed holes in the walls, scribbled graffiti, piled trash in every room, and ripped out appliances.”
“The home was offered at auction early this month and someone put down a $4,200 down payment to purchase it, public records show. But no one came back with the balance. ‘It looks like someone took revenge,’ said Nick Davis, a real estate agent with Re-Max Premier Group. ‘Unfortunately, we’re seeing more of this. We’ve seen cement in the plumbing systems, the air conditioners ripped out from the outside, wiring being removed.’”
From TC Palm. “It was a development that had everything. Urged on by highway billboards, people flocked to this 8,200-acre community west of Interstate 95 from everywhere, including fast-paced, congested South Florida. Then the recession hit in 2007 and everything got turned upside down in Tradition.”
“With the recession, development stalled. Large swaths of land remain vacant. ‘The master plan that they had worked,’ Port St. Lucie Assistant City Manager Greg Oravec said. ‘They were going to make a ton of money. This was going to be the best thing ever. Everything was going to be sweet cream, but all of that fell apart.’”
“A total of 162 Martin County homes in some phase of foreclosure were purchased by third parties during the quarter at an average price of $147,832, or about 20 percent less than the average sales price of homes not in foreclosure, RealtyTrac said in its second-quarter foreclosure sales report. Of those sales, 73 were bank-owned repossessions (REOs), for which the average discount was 20 percent. The 128 pre-foreclosure sales, mostly short sales, had an average discount of 19 percent.”
“By contrast, the average discount for all foreclosure-related sales in Indian River County was 53 percent, the second-highest in the nation among metropolitan statistical areas with at least 100 foreclosure-related sales during the second quarter. Only Louisville, Ky., posted a higher foreclosure discount at 54 percent, said RealtyTrac.”
“W.D. ‘Chic’ Acosta, Seacoast National Bank’s executive VP for mortgage banking, said, ‘Indian River County was clearly the last of the three (Treasure Coast) counties where homeowners capitulated, but you’re seeing that process speed up now as part of the economic process we’re going through.’”
“Acosta said the average home price in Indian River County is higher, so struggling homeowners did not capitulate as quickly. ‘Martin and St. Lucie counties have been bouncing on the bottom, but maybe Indian River County is now finding that bottom,’ Acosta said. ‘Now they are finally capitulating, so there are bigger drops.’”
The News Press. “Concrete blocks, bulldozers and ’sale’ signs have become common sights at Catalina Isles this summer. More than 20 homes are under construction at the south Fort Myers community. Catalina Isles resident David Foster began looking at homes in the community in 2005. At the height of the market, though, residences were in the $500,000 range. He and wife Joy watched as the cost of homes slipped over time. ‘Prices kept going down and finally, it was affordable for us,’ he said.”
“In 2007, Foster and his wife purchased their three-bedroom, two-bath home for just under $283,000. Prices at the gated community range from $205,990 for homes with 1,827 square feet to 4,377 square feet for $377,990. Foster, a firefighter and real estate agent with Paradise Realty Network in Fort Myers, said D.R. Horton opened larger estate lots in the back of the community, which also helped spur sales. He has sold two homes at the community recently.”
“‘Instead of gambling on an abused foreclosure or short sale, clients prefer a brand-new house that’s competitively priced with a warranty,’ Foster said.”
“The activity at Catalina is a complete turnaround from a few years ago, and it’s a positive sign in a tough market. ‘For a while there, a lot of people moved out because they were upside down on their house,’ Foster said. ‘We’re getting a lot more neighbors now, so we’re happy.’”
“Now that Catalina’s almost sold out, D.R. Horton will be concentrating on sales at Banyan Bay, just down the road on Winkler Extension. Ryland Homes built about 25 homes there, and D.R. Horton is taking it over to develop the remainder of its approximately 80 lots.”
“As record numbers of foreclosures leave many with a need to find a place to live, apartment complexes are suddenly a hot commodity to buy or build here and around the nation. Still, no new complexes are under construction locally and they’re unlikely to be built here for the next couple years at least, experts say. Why?”
“The answer is simple, said Randy Mercer, a commercial real estate broker with CB Richard Ellis, Fort Myers-Naples: ‘You just don’t need to do it.’ It’s much faster and cheaper to take over an existing, partially completed condo project and turn it into rentals, he said.”
“The landscape of residential real estate has changed fundamentally in ways that will benefit apartment rentals for years to come, said Jack McCabe, a Deerfield Beach-based real estate consultant who tracks home markets on both coasts of Florida. Besides foreclosure refugees, he said, ‘You have a large group of people who want to rent by choice now who think the whole American dream of owning a home is a myth now.’”
The Miami Herald. “Seven years ago, while South Florida developers were still staging high-flying condo parties and speculators lined up to put down deposits on new units, housing analyst Jack McCabe saw dangerous signs and began to warn that a downturn was imminent.”
“Q: When did you know that the housing bubble was going to burst? A: April 2004. Q: Why do you think so many people missed the warning signs? A: Greed blinds people from the truth. No one with a vested interest in real estate wanted to see the gravy train end. Early in the decline, some developers and Realtors publicly blamed my analysis and predictions for causing the housing bust in South Florida.”
“Q: Has South Florida’s housing market hit the bottom yet? If not, when do you predict it will? A: The housing markets will not bottom out until foreclosures and short sales are less than 10 percent of total sales and inventory, and the unemployment rate is less than 6 percent. The earliest that will happen is the first quarter of 2013.”
“Q: You can have a conference call with any three living people. Who do you choose? A: If the call was today, I would pick Barack Obama, [U.S. Treasury Secretary] Tim Geithner, and [Federal Reserve Chairman] Ben Bernanke. Three brilliant men that are clueless as to how to end the housing depression and begin to repair the foundation of our economy.”
