Before, There Was A Frenzy
The Orlando Sentinel reports from Florida. “In one of the surest signs that the home-rental business is going corporate, the area’s biggest new landlord has started bundling rent checks from tenants and selling them as securities on Wall Street. The sale this month by Blackstone Group means that Wall Street investors are banking on tenants paying their rents on time. ‘They’re trying to manage huge portfolios of properties in widespread areas, and that’s difficult to do on a large scale. But they are on the waning side of their acquisitions,’ said Scott Hampton, owner of Hampton & Hampton Leasing and Management Inc. ‘They have literally been buying everything they bid on — sight unseen. You can only do that for so long.’”
“‘The securitization piece is the most dangerous piece of this buy-to-rent trend in the short term because it means the investors have a potentially insatiable appetite for more properties and are willing to bid more to successfully acquire them, which can inflate home prices,’ said Daren Blomquist, VP of RealtyTrac.”
“First-time foreclosure filings in Metro Orlando rose 38 percent from September to October, according to RealtyTrac. Florida as a whole saw an increase of 36 percent in first-time filings. One possible explanation is that some homeowners have exhausted their savings and have no home equity left to tap for expenses such as medical bills and car repairs. They may feel forced to delay making mortgage payments, said Mark Soskin, an economics professor at the University of Central Florida. ‘More people are living paycheck to paycheck,’ he said. ‘They used to have home-equity loans to fall back on. … A lot of the things they used to be able to use to get out of a problem in the short or medium term are now the kinds of things that throw them over the edge.’”
The Sun Sentinel. “The number of foreclosed homes scheduled for the auction block in October skyrocketed by 76 percent in Palm Beach County compared with a year ago, according to RealtyTrac. Many banks have waited for a rebound to unload properties. ‘Bankers are like anyone else: They don’t want to sell in a declining market,’ said South Florida bank analyst Ken Thomas, who said some foreclosed properties are actually selling for a profit now. So far, their auctioning off foreclosed properties hasn’t dampened the strong surge in home prices in Broward and Palm Beach counties, Thomas said. He hopes that trend continues, and that the banks don’t flood the market with homes.”
“More Palm Beach County home sellers are lowering their asking prices, another indication that the housing market has softened, a new report shows. Eighteen percent of homes for sale countywide in October had price cuts, compared with 12 percent in May, according to Redfin. A quarter of the Broward County homes for sale last month had reduced prices. ‘The clamor has diminished a little bit – the icing came off the cake,’ said Douglas Rill, broker with Century 21 America’s Choice in West Palm Beach. ‘Before, there was a frenzy, but now buyers are taking more time to think about things.’”
“‘I’ve seen sellers try to get record prices, but they’re not accomplishing their goals,’ said Michael Citron, an agent in northwestern Broward County. ‘Buyers are not taking back the market, so to speak, but they’re also not paying higher than what market value should be.’”
The Miami Herald. “The Southeast Florida Regional Climate Change Compact, a joint effort of four county governments, calculates the area could lose as much as $4 billion in taxable real estate with a one-foot rise in sea level. Nicole Hernandez Hammer, program manager of the Climate Change Initiative at FAU, is amazed developers don’t appear to worry about rising seas. ‘Look at Sunny Isles, with those giant cranes, building these lavish structures that are essentially at sea level.’”
“Congressional legislation last year required major increases in flood insurance premiums, which for decades have been subsidized. That means that ground-level homes in the Keys could see their premiums increased from $2,500 to $30,000, reports the Florida Keynoter — costs that could quickly drop real estate prices.”
“Plantation attorney Mitchell Chester warns that property sellers could eventually be sued if they don’t warn prospective buyers — ’starting now’ — that the property is endangered by rising sea level. A warning might scare away some buyers — but not all. Peter Harlem, an FIU researcher, points out that Miami boomed in the 1920s when developers sold swamp land to buyers who hadn’t seen it. Perhaps, Harlem suggests, that could happen again. ‘You know, about a third of America … doesn’t believe [in] climate change. That’s a sure market to sell to.’”
From WPTV. “It is the largest house in Boca Raton and it is up for sale. Realtors are having a tough time moving the nearly $13 million home, so they are offering a unique ‘freebie’ to help drive the sale home. The owner of the home is throwing in a rare, $500,000 Rolls-Royce Phantom. Senada Adzem, the Boca Raton Realtor selling the home, said it is not that easy to sell the residence, especially when the housing market has taken a dive in Florida. ‘As you can imagine, we’ve had a really rough six or seven years and even the ultra wealthy were not spending money,’ said Adzem.”
