The Same Housing Market That We Had Before
Forbes reports on Florida. “Since the housing bust, foreign buyers have flooded the U.S. housing market. Foreign nationals accounted for $82.5 billion, or 8.9%, of the $928 billion spent on U.S. residential real estate from April 2011 through March 2012, according to the National Association of Realtors. That was up 24% from $66.4 billion the previous year. The Chinese are the second-largest foreign buyers of U.S. homes. Who’s No. 1? Our neighbors to the north in Canada. Canadians have been a dominant purchasing force in hard-hit Sunbelt states like Arizona and Florida.”
“‘The market in downtown Miami has been principally dominated by Argentineans, then Brazilians, then Venezuelans,’ said Philip Spiegelman, a principal at International Sales Group, a marketing and sales organization for real estate developers. Spiegelman says Europeans, particularly French, have been buying more in southern Florida in recent months as well. ‘The real attraction here is cheap, cheap, cheap waterfront real estate: these buyers look at this and think it will never be as cheap again.’”
Business Excellence Magazine. “In another sign that a new Florida condo boom is under way, the Miami Herald last week reported that 45 new condo towers are in various stages of development for the Southeast Florida area. Another new project that launched in late 2011 was Barefoot Beach Villas in Pompano Beach. They were priced in the $300,000 to $400,000 range and sold out in just a few months – mostly to Canadian buyers.”
From WFTV. “There’s a trend under way in the central Florida housing market, and buyers having trouble landing their dream home, and the problem is due to other buyers outbidding on the same property. One local house listed at $99,900 got 15 offers in seven days. Realtors with similar bank-owned properties that have three bedrooms, two bathrooms are having no trouble attracting potential buyers. ‘There’s 15 offers on this home,’ said Ray Lopez of Keller Williams. ‘All but one is above asking price.’”
“Housing inventory around the Orlando metro is down more than 20 percent, and with interest rates below 4 percent, buyers are still there. ‘That’s what’s driving the market,’ said Lopez. ‘You have low pricing, great interest rates and you have really, really, cheap pricing compared to where it ought to be.’”
The Orlando Sentinel. “Orlando real-estate agent Cindy Brads knew the home market had turned when a bidding war ensued recently on a stripped-down foreclosure in Eustis that quickly sold for a price comparable to houses with all their parts intact. And it sold for more than its $156,800 asking price.”
“‘This place needed special financing, because there were no air conditioners, no appliances, no toilets, no cabinets in the bathrooms, no light fixtures. They ripped out the wiring and the breakers out of the electrical box. They even dug up the septic tank — dug up the septic tank,’ Brads said. ‘And we still got into a bidding war, which was shocking.’”
“Such examples may be heartening to the legions of homeowners eager to restore property values damaged by the housing slump, recession and global credit crisis of the past five years, but they do not constitute a normal, stable market. Such an extreme bounce-back is not considered sustainable — just as the housing bubble that burst in 2006-07 was not. With the number of new and ongoing foreclosures once again rising in the Orlando metropolitan area, the supercharged market is unlikely to continue at its current pace.”
“‘When condominiums that sold for only $50,000 just a couple of years ago are now easily fetching $75,000, that’s a sign the bidding wars won’t last,’ said Bob Tenaglia, broker for Orlando-based Realty Executive Central Florida. ‘You know that it can’t last for long,’ he added. ‘You can’t sustain that for long, because we’ll get into the same housing market that we had before.’”
The Sun Sentinel. “South Florida homeowner associations are foreclosing on some of the nation’s largest banks, accusing the lenders of failing to pay thousands of dollars in maintenance fees on repossessed properties. The foreclosure filings are a growing trend. In one Broward County case, Deutsche Bank didn’t pay maintenance fees for nearly three years on a townhome it repossessed in September 2009 at the Southbridge development in Pembroke Pines, said Ben Solomon, a lawyer for the association.”
“The Southbridge HOA filed for foreclosure against Deutsche Bank last year. The bank finally paid $25,553 in June — and only then because it had to convey clear title to another buyer, Solomon said. In another case, he said, JPMorgan Chase hasn’t paid the Keys Gate Condominium Association in Miami-Dade County for more than two years after it foreclosed on a condominium there.”
The News Journal. “After seeing its ranking among Florida’s 67 counties improve to No. 30 the previous month, Flagler County once again is the worst in the state in terms of foreclosure activity. A total of 379 homeowners in Flagler County last month either received a default warning notice, a notice of pending foreclosure auction or were repossessed by the lender, up from 85 in June, according to RealtyTrac.”
“But the July numbers don’t seem to match what area Realtors say they are seeing in the marketplace. ‘That’s wrong. That’s not even true,’ said Carmen Bongiovanni, president of the Flagler County Association of Realtors, when told of the latest RealtyTrac numbers for his county. The last time he checked his association’s database a few days ago, ‘there were still only 17 or 18 listings as far as foreclosures. I don’t know where RealtyTrac gets their numbers.’”
“Therese Keys, the broker for Beach Bum Realty in Ormond Beach said on Thursday she could only find 11 foreclosure listings on the market for Flagler. ‘I sell a lot of foreclosures,’ she said. ‘I can tell you right now the inventory is so low, they’re being snapped up (by buyers) as soon as they’re put on the market, especially the $100,000 ones.’”
“Daren Blomquist, VP of RealtyTrac, defended the accuracy of his company’s numbers. ‘The important distinction is they’re (Realtors) looking at properties that are for sale, that may be short sales or foreclosures. What we’re looking at are properties that are in foreclosure, whether or not they’re listed as being for sale.’”
Tampa Bay Newspapers. “A recent survey of middle-aged Floridians found more and more of us don’t hold out much hope for retiring as well-off as our parents – or even at all. The poll confirms that most Florida baby boomers – especially those who’ve suffered great personal losses with the collapse of housing values – are feeling helpless and pessimistic about the future of the Sunshine State.”
“Those polled are at an age when they should be earning the most money of their lives, yet the bipartisan pollsters found 69 percent don’t expect to make enough to even consider retirement, and 58 percent worry they won’t live comfortably when they eventually do stop working. If the results of this poll prove anything, it is that the American Dream is dead for too many Florida baby boomers.”
“In an economy forever based on tourism, real estate and construction, there continues to be no meaningful job creation. Even then, the jobs available in these sectors pay crappy wages. The biggest problem is that too many homeowners are underwater on their mortgages and lost their life savings when their home equity – and stock fluctuations in their 401ks – were wiped out by Wall Street shenanigans.”
“With rising food and energy prices, and higher property taxes and insurance premiums, it’s become very expensive to live in the Sunshine State for workers and the retired alike. Yet the insurance market remains so messed up that Florida is one Category 5 hurricane away from insolvency. ‘This survey paints a picture of Floridians age 50+ who are having to defer their dreams and come to terms with a tough economy,’ said Jeff Johnson, AARP Florida interim state director. ‘For an alarmingly large number, their dreams are delayed or slipping out of reach.’”
The Bradenton Herald. “It’s a scenario playing out across the state: rising insurance premiums play an increasing role in the home sales market, according to real estate agents and home builders. Housing professionals say Citizens’ rate hikes are already hurting the real estate market, killing potential deals and spurring more foreclosures. Danny Hertzberg, a Miami Beach real estate agent, said that in the last six months he has seen insurance costs emerge for the first time as a ‘big ticket item’ with the potential to kill pending sales.”
“‘It impacts the carrying costs. When you put that in addition to the property taxes, it can become unaffordable,’ he said. ‘For people who want to sell and move, it’s one more barrier on selling. And you already have a group of people who are underwater and can’t sell.’”
“Bill Andrews, who bought a modest two-bedroom home in Hollywood in 2010, said insurance rate hikes with Citizens are making it harder for him to afford to live there. The son of a loan officer, Andrews said he carefully weighed his financial position before taking out a conventional 30-year fixed mortgage for the $120,000 home. What he didn’t consider, he said, was an impending campaign by Citizens to raise the cost of state-run insurance by more than the 10 percent rate cap enacted in 2009 .’
“‘We could reach a point where it’s not worth staying here anymore,’ said Andrews, a librarian who said he lives paycheck to paycheck. ‘We’ll move up [the state] or out of the state entirely.’”
“Andrews said his insurance rates have increased by nearly $1,000, and the rising costs are pushing him ever closer to defaulting on his recent mortgage. ‘This is going to force out everybody who could just afford a home during the worst financial crisis in this country,’ he said. ‘In South Florida, where we’re already hurting, it’s going to force everybody to walk away again.’”
“Upon entering the Willowbrook condominium community in East Manatee, one can’t help but notice large blue tarps covering balconies facing the gated entrance. The bright, neon-green warning notifications on doorways, which were hung by Manatee County inspectors to warn people of safety concerns, are so visible in one neighborhood, it almost looks festive.”
“Residents have expressed concerns regarding the value of their homes, which were built by KB Home. Though not all homes in the 270-unit community are plagued with sinking floors, separating window frames and other construction defects, residents could be seeing a decreased market value for their homes. Residents paid between $125,000 to 170,000 for the homes.”
“‘The market value before any of this hit the media was shot anyway,’ said Dan Koehler, who bought his condo in Willowbrook three years ago. ‘Anyone who rolls into here and sees the tarps, they’re not going to buy. The homes are just crap. I don’t think anyone will buy them after this.’”
