People Lose Their Shirts
A report from First Coast Connect in Florida. “Real estate broker Gabriel Miranda thought it could take a while to sell unit 905. The vacant condo is in Echo Brickell, a recently-built, sleek residential tower that overlooks Biscayne Bay and Key Biscayne. The building has elevators for cars, an enormous aquarium in the main lobby and a $42 million penthouse. But unit 905 has been on the market since February. And although its price has dropped more than 10 percent, making it the lowest-priced two-bedroom condo at Echo Brickell, Miranda is still waiting for a good enough offer.”
“Buyers from Latin America have fueled much of the boom, Miranda and other real estate analysts say. They have bought many of the new condominiums as investments in hopes of flipping and selling them for profits. But a lot of the units are vacant, and demand for them is lagging behind supply. The resulting glut is causing a decline in prices across greater Downtown, says Christopher Zoller, a realtor with EWM Realty International.”
“‘When you’ve got too many loaves of bread on the shelf, the next day you’re going to see day-old bread sold at half price,’ Zoller says, using a metaphor to describe the Downtown market.”
“In the greater Downtown area, there is a 32-month backlog of condos, says Peter Zalewski, a real estate consultant who runs the website cranespotters.com. Online listings show thousands of units for sale at luxury condo towers including Rise, SLS Brickell, the Bond and 50 Biscayne. Some of the condos are listed for more than $6 million, and others have been on sale for longer than a year. Values for several units have dropped more than 20 percent.”
“Many of the luxury condos for sale in Downtown are sitting unused. Zalewski walks around the area several nights each week and monitors the number of lights on to estimate how vacant the buildings are. There are obviously other reasons for the dark windows—snowbirds and people on vacation or just out for dinner. But Zalewski says the buildings, or ‘ghost towers,’ are unlit regardless of the day and time.”
“Zoller says the oversupply is forcing some people to sell their units for less than what they bought them for. And, on average, condos are staying on the market longer, making them less attractive to buyers who are turned off by units that have been on sale for a while. Zoller’s warning to clients: ‘If you don’t have to sell now, don’t sell now.’”
“But some people do not have that choice. And the glut is even affecting people who do live in their condos, like Deborah Shelton-Tynes. Shelton-Tynes owns two units at the Marquis across from Museum Park. She previously listed her units for about a combined $3.5 million in 2015 before deciding not to sell them. She’s now listing them for less than $2.3 million. ‘There’s just too much competition out there,’ she says. ‘By 2016, everything started to go down. I started watching properties going down.’”
“Shelton-Tynes, who plans on moving to Key West, says she will not drop her price because she can afford to wait for a buyer who is willing to pay more. But several other Marquis residents have already sold their units for losses, she says. People ‘lose their shirts.’”
“Seth Denison, a principal with the real estate firm Brickell Ventures, says prices will continue to decline as more units go on the market. Condo owners are now renting out their units until they are sold. And developers are even shelving projects until values rebound. “
‘There’s just too much competition out there,’ she says. ‘By 2016, everything started to go down. I started watching properties going down.’
I know Deborah, I’ve blogged about the whole sorry episode all along and you know what? The mainstream media has never admitted there was a bubble in Miami nor that it popped. Now why would they omit such an obvious fact?
‘Zalewski walks around the area several nights each week and monitors the number of lights on to estimate how vacant the buildings are’
There’s a photo.
This can be misleading per my experience in personal observation. As i said before my lying eyes led me wrong
In downtown Seattle, i look at big complexes. 1Dimension and others and they seem to 70% on at 10PM. Then you hear that huge 1Dimension is only a little more than 50% rented. So either the leasing office has forgot to turn off lights - or they have them on timers —- or i just dont understand
Do you remember the movie The Big Short about the housing crisis? When the guys went down to Florida and saw the empty subdivisions and even one with an aligator in the skeeved out swimming pool.
I thought it would be that obvious.
Per a news clipping from one of the posts yesterday, there was a fraudulent management company that was faking signs of occupancy
oh well
“‘When you’ve got too many loaves of bread on the shelf, the next day you’re going to see day-old bread sold at half price,’ Zoller says, using a metaphor to describe the Downtown market.”
I like that. It’s definitely worth stealing.
Just wait until the bread gets to be a week old. That’s the point in which you have to pay someone to haul the stuff away.
A good friend of mine works out at a landfill transfer station. They bring in caseloads of Sara Lee bread and so much extra bread that is never purchased. They have special equipment to de-bag this bread and then it gets turned into feed and shipped up to Idaho for pig farms. Pigs need those carbs to turn into bacon I suppose!
“Some of the condos are listed for more than $6 million, and others have been on sale for longer than a year. Values for several units have dropped more than 20 percent.”
How about the debt, if any, that went into buying these pricy condos? Has the debt also dropped by 20 percent?
No? Then tough luck.
I posted an article the other day where a company was offering 97% financing in Miami Beach.
An, yes, from such opportunities debt slaves are minted.
😁
During the last mortgage crisis didn’t banks start requiring 20% down on condo purchases when prices started to go South, and some refused to finance condos at all? If that hasn’t begun yet, they have a long way to fall.
I note that requiring 20% down on all home purchases should be the law, and would prevent these types of bubbles anyways, but government went the route of the Dodd Frank Act and other regulations that didn’t directly fix the problem and just became another black hole to dump our tax dollars down without any real benefit. They never wanted to fix the problem.
“They never wanted to fix the problem.”
They wanted to save the banks.
It doesn’t need to be the law. Just require 20% in order to qualify for Fannie Mae to buy the loan. If a bank wants to extend a loan for less and take the full risk for it, that’s their business.
Of course, the gov proposed 20% down as part of QRM back when Dodd Frank was passed, and it was watered down to almost nothing.
Without government (read: taxpayer), guarantees of the mortgages, banks would require a substantial down payment. No new law needed.
Great news for dips who wanna buy now: mortgage rates are tumbling!
Mortgage rates tumble as housing starts to drag down the economy
By Andrea Riquier
Published: Aug 16, 2018 10:42 a.m. ET
So far in 2018 the 30-year-fixed has averaged 4.44%, up from 3.99% in 2017
Getty Images
Street of brightly painted colonial style homes in Richmond, Va.
Rates for home loans tumbled in line with the broader bond market, even as the housing market’s woes threatened to become a headwind for the entire U.S. economy.
The 30-year fixed-rate mortgage averaged 4.53% during the Aug. 16 week, down six basis points, according to the weekly data from mortgage provider Freddie Mac. The 15-year fixed-rate mortgage averaged 4.01%, down from 4.05%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.87%, down three basis points.
…
gosh , the msm says higher rates are to blame
and trump
“Seth Denison, a principal with the real estate firm Brickell Ventures, says prices will continue to decline as more units go on the market. Condo owners are now renting out their units until they are sold. And developers are even shelving projects until values rebound. “
It is interesting to me to see how the terms “price” and “value” are interchangeable as if they are describing the same thing - which they are not.
“Prices will continue to decline” “… developers are even shelving projects until values rebound.“
See? “Price” used in one way and “Value” is used in the same way when convienient and in a different way when convenient. It all depends on which term is the most convenient.
Warren Buffett was asked what the difference between price and value was and he replied “Price is what you pay and value is what you get”.
I like that in that it homes in on the truth. As for equating the two terms I think it masks the truth.
If rising prices creates rising values and these rising prices are the result of idiots somehow getting hold of money and throwing it at the market then it follows that rising values are dependent on idiots getting hold of money and throwing it at the market.
This will continue until the world runs out of idiots (which is unlikely) or until the idiots of the world no longer have access to money (which is much more likely).
Ask yourself: And then what happens? What happens to prices? If prices equate to values then what happens to values? What happens to wealth?
If one was to collect a group of idiots who have access to money together in a room and allowed them, even encouraged them, to participate in a bidding warrior an item would one not expect the biggest idiot to bid up and pay the highest price for that item? Yes? No?
If yes then what would be the repercussions to the real estate market if that item was a house, a house that was a comp to, say, a hundred other houses? Would not the prices and thus the values of those hundred other comps reflect the actions of this idiot, the biggest idiot of them all? Yes? No?
Clackamas, OR Housing Prices Crater 9% YOY As Portland Area Homeowners Lose Their Shirt On Housing
https://www.movoto.com/clackamas-or/market-trends/
Sorry to disappoint you all, but the housing market is not going to crater as you all hope. Enjoy renting. Sorry for your loss.
We’ve been renting at below 25% of income in a good school district, with responsible landlords who pay for HOA, maintenance and repair, and yardwork. We’ve been saving the difference between what an overpriced mortgage would cost and our rent, and have the value of a San Diego starter home in a diversified portfolio that will not go down with the next housing crash. We live largely debt free.
If this is a loss, then I look forward to more losses to come.
I let this troll post in to show what’s coming in these days. After all these years, suddenly this outpouring of support from strangers!
I wonder if something has changed out there?
It’s like a Troll Advent Calendar! Every day you get a new one!!
Ron is one missed paycheck away from the whole house of cards imploding.
Meanwhile, I have so much money left after “throwing money away on rent” every month that I don’t know where to throw it.
“the housing market is not going to crater” appears to be a conclusion that you’ve reached based on facts. Considering that copious facts are presented on this blog to support the theory that housing is in a bubble, I’d be very interested in hearing the facts upon which you’ve based your opposing conclusion. It could be a very good discussion.
Housing my friends. Housing.
Emeryville, CA Housing Prices Crater 10% YOY As Tech Wreck Ravages Alameda County
https://www.movoto.com/emeryville-ca/market-trends/
Ron forgot to back his claim with any supporting evidence whatsoever.
I suspect Ron watches a lot of MSM news. FB. Great to see the trolls coming out though. Yet another sign!
Sorry to disappoint you all, but the housing market is not going to crater as you all hope. Enjoy renting. Sorry for your loss.
I smell fear.
Sorry to disappoint you all, but the housing market is not going to crater as you all hope. Enjoy renting. Sorry for your loss.
I love the smell of FB denial in the morning. It smells like…victory.
I would like to see an outright end to non-citizen ownership of residential property (with an exception for permanent legal residents). The right of citizens to own private property is so fundamental to the balance of power in democracy. Allowing foreign buyers to speculate undermines this right of citizens by driving up prices. And this is coming from someone who does not want to own a house.
It should go both ways. I see no reason for US citizens to own property in foreign lands. It disrupts their economy equally.
I do not adhere to any general set of rules on globalism, trade, immigration, etc. I think each of these should be approached pragmatically relative to the situation. But for housing, one of the fundamental building blocks of a society, I think the risk of outside speculation is greater than any benefits that can be identified.
“Allowing foreign buyers to speculate undermines this right of citizens by driving up prices.”
Ah, but driving up real estate prices is a wondrous thing because high real estate prices is seen as wealth.
The higher go the real estate prices the more wealth there is that is - presto! - magically created.
if you restrict foreign ownership you wind up like 80s mexico= nasty
owners w/o kids in school lower your tax basis. 55% of re tax goes to schools
Kirkland, WA Housing Prices Crater 5% YOY On Plunging Housing Demand
https://www.movoto.com/kirkland-wa/market-trends/
The US economy is roaring, suggesting that the Fed can continue its tightening program apace without worrying about sparking a slowdown.
It is roaring, I’ll give you that. I have never seen so much traffic in places. But it’s all a lie, just like 2005. I remember driving around then, wondering how everybody was suddenly so rich. A few short years later, the sun set on all the thirty-thousand-dollar-millionaires…
Note the top voted definition was posted September 2007:
https://www.urbandictionary.com/define.php?term=30k millionaire
This term got posted alot on the Dirty Scottsdale site, back in the day…
I miss that site…
I have never seen so much traffic in places. But it’s all a lie, just like 2005.
To me it’s interesting because last time it seemed like the economy tanked before the houses if I’m remembering right. In this case it seems like houses are going down first. Unless you count crypto as “the economy”.
Are you planning to trade your Bitcoin HODLings for Turkish lira?
Bitcoin Analysis
August 17, 2018 01:00
Bitcoin Price Drops Against Turkish Lira as Treasury Seeks to Calm Investors
turkey lira bitcoin cryptocurrency
The Turkish Lira value improved against the bitcoin price ahead of an important conference between the country’s financial chief and global investors.
The BTC/TRY recorded a 22 percent drop since establishing its intraday high at 45382-fiat. A political spat between the Turkish and U.S. governments last week had influenced the latter to double the tariffs on Turkish steel and aluminum. As a result, the Lira value dropped to a record low of $0.139 on Monday, shaking an already weakening economy to further extent. The currency started to reverse its trend only on Wednesday when Qatar calmed the market by promising to issue loans worth $15 billion to improve the Turkish economic sentiments. The TRY/USD rose 6 percent in response to the decisive push.
https://www.ccn.com/bitcoin-price-drops-against-turkish-lira-as-treasury-seeks-to-calm-investors/
Now THERE’S a race to the bottom.
In regards to this everything bubble, there has been a proliferation of subprime auto loans which are above and beyond the value of the underlying asset.
It wasn’t enough just to provide credit to people with low incomes and shaky repayment history, bankers had to go well beyond that to loan them tens of thousands of dollars IN EXCESS of the vehicle value. This is what has pushed used vehicle prices into the stratosphere.
This guy in Bend, OR owes $25,000 on a $15,000 truck (and that’s being generous) that he’s trying to sell. He’s fooked, of course, but this is the rot that’s been created by bankers:
https://bend.craigslist.org/cto/d/lifted-dually-cummins/6658578570.html
The above wasn’t even really an auto loan, it was a personal loan to a debt-junkie, disguised as an auto loan, so a bunch of Yellenbucks could grab yield and make a banker rich.
“… but this is the rot that’s been created by bankers.”
I get the joke, it is all the fault of bankers. Ignorant pukes had nothing to do with it. They are true victims, victims of predatory lending.
And although its price has dropped more than 10 percent, making it the lowest-priced two-bedroom condo at Echo Brickell, Miranda is still waiting for a good enough offer.”
You stick to your guns, Miranda. That Greater Fool with the full price offer will be along any day now, and then your coffee pot privileges at the Real Estate office will be restored.