June 11, 2014

A Lot Of Seller Greed

The Sun Sentinel reports from Florida. ” Although more properties are hitting the market in Palm Beach County compared with a year ago, buyers and their real estate agents are still complaining about a lack of quality inventory. Broward County had 5,773 active single-family listings in April, up 41 percent over the same period a year ago, according to the Greater Fort Lauderdale Realtors. In the $150,000-to-$299,999 price range sought by young buyers, listings shot up 72 percent in April, according to MLS data provided by EWM Realtors International. But available houses in the most desirable neighborhoods remain scarce, agents say. Some listings are in poor shape, overpriced or both, leaving buyers scrambling to find something suitable.”

“‘There’s a lot of inventory that’s just garbage,’ said Allyson Sullivan, an agent with Lang Realty in Delray Beach. ‘And there’s a lot of seller greed out there. If the homes are overpriced, buyers aren’t jumping on them.’”

The Tampa Bay Times. “Tampa Bay home prices dropped year-over-year for the first time in 29 months as the spring selling season sputtered to a close, triggering fresh worries over a flattening housing rebound. Median home prices sagged to $162,000, down about 1 percent from the previous May, data from Realtors’ multiple listing service show. The number of sales also dipped for the seventh time in the last eight months.”

“The market this year has underwhelmed largely due to the booming rebound of 2013, when buying was boosted by a torrent of cash from investors gobbling bargain-priced homes. As the bargains have vanished, so, too, have the bulk buyers who propped up the market. Cash deals from investors and other deep-pocketed buyers last month slid below 40 percent of all sales for the first time since early 2012. ‘At this time of the year last year, things started to get a little crazy. It had that bubble feel to it, with so many offers,’ said Steve Capen, a Keller Williams agent in St. Petersburg.”

“The share of what’s selling in single-family homes has changed, too, with short sales dropping to the lowest share of purchases since 2008. Conventional sales of non-distressed homes have grown, but many foreclosures remain stuck in limbo. By April, state court data show, foreclosure judges still had more than 38,000 Tampa Bay cases to resolve.”

The Orlando Sentinel. “Brevard County pushed Metro Orlando out of the nation’s top spot for the number of foreclosure actions during May, a new report shows. Orlando foreclosure auctions were up 73 percent from a year earlier. In April, Orlando had the highest rate in the country. ‘The thing that stuck out to me is that Orlando is No. 3 in the national foreclosure rate, and what’s really driving that number is scheduled auctions,’ said Daren Blomquist, VP of RealtyTrac. ‘It’s actually kind of astounding because it had 400 [foreclosure] starts but more than 1,600 auctions.’”

From CNBC. “Jackie Schafer is not behind on her mortgage payments, and despite owing more on the loan than her Tampa area condo is worth, she has no desire to move. She wants to stay and pay, but she still may lose everything. ‘I thought this was something that I would have, and eventually it would be paid off,’ said Schafer. ‘I certainly didn’t think someone was going to come and steal it from me.’”

“Schafer is referring to a group of investors who recently bought 80 percent of the condos in her development in Palm Harbor, Florida. The investors want to buy out the remaining owners and convert the complex into rental apartments, but they are offering far lower than the owners originally paid—and they may have the legal right to do it. ‘They don’t care. To them it’s business. To us, it’s everything,’ said Schafer, who said she owes more than $90,000 on her mortgage and is being offered just $40,000 by the investors.”

The Miami Herald. “A panel of Miami real estate experts offered tips on buying and selling to a crowd of about 160 prospective customers at the Miami Herald’s residential real estate boot camp. Overall, Ron Shuffield, President and CEO of EWM Realty, said there has been a rise in inventory, by 25 to 50 percent since the recession. ‘If your budget is lower, there are values in every price range,’ he said.”

From Miami Today. “If you’ve been around Miami at least a decade you recall the euphoria that’s causing condos to spring up faster than we can count. ‘At this rate, we’ll have 12,000 [units] just this year,’ architect Willy Bermello told fellow members of the Miami’s Urban Development Review Board two weeks ago as more than 1,300 units in four unrelated towers sought approval.”

“Mind you, he only tallied what’s about to rise inside the city of Miami. As with all of Miami’s many booms, this one has unique elements, the reasons those caught up in the cycle use to assure anyone worried about a bubble that ‘this time is different’ – which is always true right up to the point that it isn’t.”

“Before the last bust $300 per square foot defined a luxury condo. The same units bring more than $600 per foot today. New condos are pricing well above $1,000 per foot – and getting their price. Since most buyers are foreigners who rent out their units, bankers and developers take comfort, telling us that none of us will get hurt if the bubble bursts. Nobody wants to talk about this, because lots of jobs and income are at stake. Well, nobody wanted to talk about it in the past decade, either. In fact, nobody ever wants to talk about it.”

“Back in January 1926, Harper’s Monthly Magazine ran a long tale of it by Gertrude Mathews Shelby about her dealings here in 1924 and 1925: Florida land buyers ‘found themselves in the midst of the mightiest and swiftest population migration of history – a migration like the possessive pilgrimage of army ants or the seasonal flight of myriads of blackbirds. From everywhere came the land-seekers, the profit-seekers.’”

“But less than a year afterward, the hurricane of 1926 wiped out much of downtown Miami’s value. That and the stock market crash of 1929 so far depreciated the worth of what she and others had owned downtown that prices didn’t return to their 1926 level until the 1950s.”

Bits Bucket for June 11, 2014

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