‘There Are No Flocks Out There’ In Florida
The Herald Tribune reports from Florida. “When it comes to competing to land manufacturing jobs, Florida just doesn’t stand a chance. Never was that reality clearer than on Thursday, when the state received a double-barreled message: North Carolina will gain not only a new Chris-Craft Corp. boat plant, but an Indian Motorcycle Co. factory as well.”
“‘It’s frustrating that we are not able to make it financially feasible for them to continue expanding here,’ said Nancy Engel, of the Economic Development Council in Manatee County, where Chris-Craft is based. ‘We try to work with the state, and we look at incentives, but when it comes to the cost of land in a high-growth area, and the impact that has on affordable housing, there’s not a lot we can do.’”
From Florida Today. “A key annual survey takes stock of Brevard County manufacturing firms to identify industry trends and challenges and, hopefully, produce more jobs. That’s needed because Brevard is seeing its manufacturing shrink. The county lost 1,500 manufacturing jobs in the past year.”
“The annual report is all the more important because one benefit Brevard used to boast is a card that can no longer be played: lower housing prices.”
The Orlando Sentinel. “The figures released Thursday show that June’s inventory was up by only 258 listings from May, far less than the April-to-May jump of 2,143 homes, the Orlando Regional Realtor Association said.”
“For Christine and John Rombough, who are nervously trying to sell their north Orlando home because of an out-of-state job transfer, the easing of the record buildup in inventory is encouraging. ‘We’ll take any ray of hope,’ Christine Rombough said.”
“Their four-bedroom, two-bath home has been on the market for more than a month, with few signs of buyer interest. They recently trimmed the asking price from $320,000 to $314,900. Her husband is commuting between Orlando and Charlotte, N.C., while they try to sell the home in what this year has become a buyer’s market.”
“‘We didn’t get to pick’ when to list the home for sale, she said, because of the surprise transfer. ‘Last year, the neighborhood was just hopping’ with quick sales. ‘Now, there are no flocks out there, she said.”
“Existing-home sales in the Realtors’ core Orlando market, mainly Orange and Seminole counties, fell 14 percent in June compared with June 2005, which was the peak month of last year’s record home-sales market. The June dip was partly the result of this year’s record buildup in homes available for sale, said Beverly Pindling, the local Realtor association’s president.”
“New homes are also providing more competition for the resale market, as builders offer a range of incentives and marketing deals to stimulate interest as mortgage-interest rates continue to rise.”
“Stephen and Chandra Smith recently decided to renew their apartment lease in Avalon Park in east Orange County rather than try to buy a home or condo, once they got a look at high asking prices. One condominium unit they considered was priced at $325,000, even though it was about the same size as the two-bedroom apartment they are leasing for $1,080 a month.”
From a Jacksonville television station. “Jacksonville real estate agents say the market is turning in favor of the buyer. University of North Florida economics professor Mary Borg thinks house prices will drop soon. ‘A lot of sort of average income people were priced out of the housing market, so now that prices are coming down it’s good for the average consumer and will spur economic growth,’ said Borg.”
A related link:
‘There’s been an explosion of condo-hotel development around the country, and only time will tell if trouble lies ahead, a hospitality industry expert said Thursday. Abraham Pizam, professor at the Rosen College of Hospitality at the University of Central Florida, said Florida, California and Nevada have been hotbeds for condo-hotel development.’
‘For developers, investment returns ranging to 30 percent are a strong draw. For investors in hotel rooms or suites, the lure is the chance to own a piece of a hotel, plus the possible return from rentals and appreciation. But if appreciation fails to materialize, there’s the possibility of a massive sell-off that would rock the industry, Pizam told members of the Central Florida Chapter of the National Association of Industrial and Office Properties.’
” the lure is the chance to own a piece of a hotel ”
Please, if I ever aspire to own a hotel room, shoot me in the head.
Just buy a monogrammed towel from the gift shop.
I guess the Rombaughs must not be that desperate to sell. A $5,100 drop in price to $314,900? They have got to be kidding. According to the Orange County Property Appraiser’s website, they paid $176,700 for the place 3 years ago:
http://tinyurl.com/l6kgm
The way the article is written, you would almost feel bad for them.
You answered the question I was wondering about (how much they originally paid and when). Their “plight” is simply greedy entitlement mentality. Zero sympathy from me.
I did some math to help out the Rombaugh’s……..
Bought @ $176,700…….I compounded 4% appreciation for 3 years and the value was $198,782 (please double check my math). They are asking for a 37% premium over what I consider to be possibly “fair value”. One thing to remember is the $176,700 could be bubble inflated. BTW, I used 4% appreciation due to unusually low interest rates.
If they sold it for $200K they’d have a 4.5% return per year. Historically, that is good for RE. It is going to take some time for the sheep to realize RE is a very long-term investment.
I like the interstate commuting part. Chews up some quality time no doubt.
To view their NICE NEIGHBORHOOD CLICK HERE
http://tinyurl.com/mq2s7
One thing about Florida:
When it’s crappy, it’s really crappy.
Don’t forget the HELOC and Refi they took out on it to buy a new SUV and pay off the Credit Cards!
What does this mean. Just Assessed Value: $205,843 ??
Is that what the house Appraises at?
http://www.ocpafl.org/pls/webappI/get_parcel_master?pid=292130765901130&query_data=1111111O&tax_year=2006
Look at the property next door, slightly larger but it was sold for $345,000 on 05/31/2006. They are not that off in their expectations.
Looks like a greater fool took it off their hands. Looks like the flock of fools has dried up. Also from Google Earth, the place looks like a cookie cutter neighborhood on a dirty road next to some orange grove. That’s prime real estate right there! Location Location Location. better buy now, they aren’t making any more land next to abandoned Orange Groves!
Here is the link
http://tinyurl.com/mq2s7
Here is the URL to Zillow. Most of us agree that ZILLOW overshoots and it says it is worth 294k. In reality, it is probably worth less. Realtors are right, sellers are unrealistic. Gee, I wonder whose fault that is???
http://tinyurl.com/oztlp
another gov/edu economist
mary , prices already HAVE dropped
my old man has coome down from 1.2 mill to 850k w no offers
on a canal w pool and boat lift
Damn, where’s that? Sounds like Marco Island. That’s a 33% haircut already.
“I guess the Rombaughs must not be that desperate to sell. A $5,100 drop in price to $314,900? They have got to be kidding. According to the Orange County Property Appraiser’s website, they paid $176,700 for the place 3 years ago:”
They have probably used the equity they had to pay for all the toys. They are stuck I suppose.
If we had a real time web camera of their house. I bet we would see the jet-ski/Harley-Davidson/Weber grill for sale out front. That is how it is becoming on my Boston,MA street. Cheers everyrone……
I went to the Orlando realtors press release, and because there was no mention of an inventory total, I checked out the PDF file on the right titled, ‘Housing trends summary.’ On the line for ‘2006 new listings’ it has 7,111 for June and 2,680 for new sales in June. Hmm.
For the year to date, the report shows 39,508 new listings and 14,924 sales. I still can’t find an overall inventory total.
Regarding the press release, do they really expect anyone to believe there were only 258 new listings in the Orlando area in June (vs. 2,143 in May)? Unless area realtors are colluding to turn down new listings, I don’t see how that’s possible. And if they are turning down new listings, you can almost bet there was a surge in FSBOs between May and June.
they are definetly not posting the real facts. then again, everything is still come on board to sell. good luck. orlando has nothing going for it but mouse ears.
Two Things:
Prices here in Jacksonville won’t “drop soon,” they have already been dropping. The average time on the market is now 9 months and the inventory is at an all time high which is about four times what it was last year. Very little is selling and most houses that come off the market are being pulled off by people who can’t sell them.
Why would any company put a large scale manufacturing facility anywhere in Florida. Even if RE was cheap, the entire state has weather problems that could stop production or destroy the facility.
How’s the condo market in St. Augustine doing?
The article says the guy is commuting between orlando and charlotte, NC?
google maps says that is a nearly 11 hour drive, each way:
http://maps.google.com/maps?f=d&hl=en&saddr=charlotte,nc&daddr=orlando,fl&ie=UTF8&om=1
So 22 hours driving, leaving 2 hours free to work or sleep? or is he flying 2 hours a day, with 2 more hours at the airports?
It’s probably a weekly/biweekly communte. The trouble with these types of commutes is sometimes spouses discover they like be apart more than being together. This has lead to permanent separations in at least three couples I know of.
Do they still get together on the weekends?? lol
Is the irony here that the boat company was complaining about the cost of land/housing when the bubble was the very phenomenon that allowed them to expand and build a new factory?
I was thinking the same thing, since the Brunswick boating sales slip was a catalyst for the discretionary sales stock sell off of late.
http://www.smartmoney.com/bn/ON/index.cfm?story=ON-20060712-000689-1105
I think the irony is they are about to expand just in time for a major reccesion. The bubble giveth and….
Takes away discretionary high end spending for the middle class.
Ouch!
But this example points out something. Jobs will migrate from high cost areas to lower cost areas. As Cris-Craft and Brunswick (+others) all compete nationally, the buyer doesn’t give a damn where the boat is made (maybe looking for that “made in USA” sticker…) but what they get at a certain price point.
The same is true of most consumer goods and even for industrial goods.
I know many jobs are leaving California…
Neil
Totally Off-Topic Trivia. As a boy, DeepinTheHeartOf sometimes explored in / fished at the remains of Chris-Craft’s 1st factory (abandoned, except for small parts store near the road).
/remembering simpler summers long gone-by
“Existing-home sales in the Realtors’ core Orlando market, mainly Orange and Seminole counties, fell 14 percent in June compared with June 2005, which was the peak month of last year’s record home-sales market. The June dip was partly the result of this year’s record buildup in homes available for sale”
This thought NEVER makes sense to me. Increased inventory does not cause decrease sales. they have it backwards. Decreased sales can lead to INCREASED inventory.
And likewise, it’s DECREASED inventory that can decrease sales (since there isn’t a product to buy).
I find it humorous that last year they were saying that sales would even be higher IF there were more inventory (because the lack of inventory was restricting sales). Now they have the inventory, and they blame that on the lack of sales too.
Anything to avoid saying what must really be said: The homes cost too much. It is the HIGH PRICES that is reducing sales. Sales will pick up if/when sellers reduce the prices.
I wouldn’t think that it takes a genius to figure this out.
sheesh.
realtors love to sound like idiots- only an economic girlieman uses them
OT About the median… Check out list price tracker on 75th percentile from PHX market. That’s where the substantial price drops are occurring. If there are additional sales in the higher end (relative to overall sales) because of substantial price declines (and decreased sales volume since the low and middle markets are paralyzed) you get an increasing median. Median means nothing in this market.
http://www.benengebreth.org/housingtracker/location/Arizona/Phoenix/
Those are listing prices, not sales prices. In August 2005 sales were taking place at or over the listing price. Now sales are taking place below listing price. So on the high end that 17.5% drop in listing prices likely equates to a 20+% decline in actual sales prices. In the stock market that qualifies as a Bear Market. According to LAY or KL, in RE, that equates to a welcome return to normalcy.
The high inventory is finally putting pressure on Rents. Notice in my door yesterday that my rent would stay the same if I stay and sign another lease. This would be $150.00 less than my neighbors who renewed in February for the exact same apartment. Late last year and earlier this year rents were going up 30-60 percent in this complex. There are now so many condo’s and townhomes for rent they finally had to lower rents. And yes they are much larger many with garages and of course the obligatory Granite countertops. Can you say bah-bye. I can.
Can you say bah-bye. I can.
For the sake of those that rent after you: Please tell the landlord that their rent is too high by $n00 per month. n is up to you.
low ball em !
We justed signed a lease in December with a 22% increase in rent. I hope you are right and rents will trend down or stay the same next year.
BTW, where do you rent? We live in Hunter’s Creek, SE Orlando. Thanks.
One thing that I found after years of renting: If you are ready to move, you can get much better deals in times like these, with a slow market and lots of available places. However, if you are unwilling to go anywhere else (and worse, if your landlord knows it), then you are more likely to get stuck with an increase at the landlord’s whim.
Of course, to take advantage of that piece of “theory” was a real pain in the neck, since on more than one occasion I did find myself moving to cheaper digs than I could get out of the current landlord.
That said, it seems that in a lot of the country, suburbs especially, the things standing empty are more and more the townhouses and single family homes. These, then, would be where the renter’s negotiating power will be, not necessarily in the apartment/condo type rentals.
Thanks, NoVa Sideliner, for your comment. I agree: SFHs and townhomes rent for similar or lower rates than I expect them to ask for at next renewal. In that case, we would be out of here in an instant.
Do a background check on potential Landlords and make sure they have excellent credit. It would suck to move in and then find out they are being foreclosed on.
Colonial Grand at Town Park, Lake Mary.
Would you recommend living there? My lease is coming up, and my apartment complex (Waterford Lakes area) wants to raise my rent by $150 a month.
Absolutely not. There are brand new townhomes available for the same amount they are asking for rent. The area is great but very overbuilt. Checkout rentclicks.com and realtor.com and look for rentals, there is so much available.
They rented out the apartment above me to the Marriott. It’s like living in a hotel. Lots of noise. Management is awful, never respond in a timely way. They can’t keep their help and the maintenace crew looks really scarry. I am friends with one of them and he agrees.
Another poster mentioned “leaving the area”, I’ve rented a 2bed, 2bath, 2car garage villa (2 years old) for 150 more than I pay for a 1,1,1, here. There are lots of deals out there right now.
There’s Twin Lakes and Dunwoody commons in Sanford renting townhomes, flippers that can’t sell most likely. When I was looking at places to rent I check the tax records to make sure they were up to date, if they were delinquent I didn’t bother to look at property. It is riskier than a complex - you have to use your good judgement.
WHAT IS YOUR MAGIC NUMBER?
From Homebuilder :Like was in Florida fedw days back (”All reasonable offer will be considered”), we have similar sales event in SAC, CA.
This catchline here is more interesting though ” What’s your magic number?”
Anybody in SAC area, check them out for the fun of it… there is FREE LUNCH ( who said there is no free lunch?)
From BEAZER HOMES
“Come Join Us:
Saturday, July 22:
Lincoln Village in Lincoln
12:00pm – 2:00pm
Live Remote with
FISH 103.9 FM
Radio Disney Child ID Cards
Free Lunch
916-645-4684
Riverdale North in Natomas
12:00pm – 2:00pm
Live Remote with 93.7 JACK FM
Free Lunch
916-928-4245
Fieldstone Meadows in Folsom
12:00pm – 2:00pm
Free Lunch
916-983-1687
Come out this weekend and find out how we can make a magic number work for you ”
If I was interested in the area you can enjoy the lunch while they work out a magic umber with a 30 years fixed loan that is no more than 30% of income
NPR did a piece on Centex this morning, this ‘model family’ stuff still cracks me up: http://tinyurl.com/krcl5
My magic number is two. As in two middle fingers flashing them my reply to their offer.
Leslie Appleton-Young or David Lereah
If it could be found Leslie Appleton-Young, her husband, assuming she is married or if Leslie is a man his wife, son, daughter or any relation invited to their thanksgiving day celebration sold a home in last year and has not bought another for whatever reason only know to Appleton-Youngs would that be a Smoking Gun and some connection to now deceased Ken Lay who also suggested to buy while he was selling.
How would I research county sales records?
Appleton-Young had no qualms about predicting a hard landing here: “We’re expecting a fairly significant shakeout.”
I am a member of the board here in Orlando. They work more magic with numbers than David Copperfield.
The reason for the minimal listing activity is two fold. One, the sellers are giving up and as they bleed money they pull their MLS listing for the commish and go FSBO. Another factor is agents are refusing dumbass listings due to the costs associated with them. The market is dead from about $250 up and there aren’t many of those out there other than apt/condos.
The board has long since turned its back on the metro area when counting listings but they include all of the MSA in sales. Totally bogus data.
Can you explain the discrepancy I found between the press release and the associations statistics on inventory that I posted above?
Working right now Ben but will look it over this weekend and respond.
The truth be told we have about 60,000 properties for sale in Orlando MSA. Oh about 3-4 years of inventory based upon my read and that includes all new housing. Oh there is more spec space every day.
That’s 6% of the nation’s total. Naples/Ft. Myers has to have a ton too.
Jack is smart. Jack knows he can make money if he can get sellers to be realistic. Way to go Jack! Honest people like you will earn what you make by telling sellers not what they want to hear, but the God to honest truth.
Thanks Tom but I am an appraiser. I also have abrokers license but have not sold anything but commercial property in 30 years. A new service we are offering is a consultation to brokers and agents to help bring the sellers into the rhealm of reality. The agents hire us to give an honest and true opinion of the probable selling price. The agents like it because the sellers tend to want to kill the messenger. Basically our estimate of a probable selling price is many times 20-40% less than sellers concept of the “market”. I expect that within 6 months we will see clearly a “real market value” at 30% below last summers numbers.
The bottom is 2 years away and I truly believe we will reach 40% below those numbers and perhaps more. This phenomenon is completely off the radar of history.
I just met one of my colleague, who mentioned that he is buying a house right now in central new jersey. I tried to convince him not to do that, but I failed. He is an intelligent man with post grad in Rutgers Univ in NJ and otherwise brilliant person. He is buying not to flip, but to stay for a long time though. Still I tried to tell him (with the pointer to this blog) that waiting a couple of years here may be better. But he is impatient - that he waited already for 2 years - and he needs a place to live. Sigh! Why is only a owned house is a “place to live”?
Sorry, I did an off-topic post.
I live in Central jersey too. The idea of “always goes up” is so ingrained into everyone’s head that it will take a while (at least six months) for the general public to come to terms with what has just recently started happening.
All you can do is point them to this blog and tell them your opinion. After that, it’s not your money or problem. If they bought recently, just remove their email address from the list you send these articles to. My cousing bought a duplex in Hillsboro in late 2004 for $389,000. It last sold in 2001 for $191,000. I warned them repeatedly not to buy. Now that that they did, however, I don’t bother sending them more info. All it will do is make them feel bad. Let them find out on their own and say, I should have listed to so and so
someone i know just announced she was going to ‘try her hand’ at flipping real estate (in austin tx) - former teacher, sahm…yikes. a little late don’t you think? just shows how big this whole bubble is - and still influencing the very people who you’d think would be the last ones to want anything to do with real estate. guess i won’t say anything, though.
There’s a girl here in my office (early 20s) in CA that is trying to buy a condo in Austin with her boyfriend as an investment. I’ve politely tried to tell her it’s a bad idea, but she feels that Austin is just starting to appreciate and she can make some money. Of course, she’s never been to Austin and knows nothing of the market (quite frankly, neither do I, but that just seems idiotic to me to invest in a market that you don’t know anything about).
She doesn’t make or have a lot of money, and this is going to be an expensive lesson, but maybe if she learns it early it will make her wiser in the future. There’s going to be a lot of pain out there.
Plus buying into an “investment” with someone you are not married to can be very painful too. I have several of those stories but I won’t bore you….I’m sure most of you people can imagine break-ups lined with cash and legal entanglements.
The maid of honor at my wedding was the new wife after the girlfriend/boyfriend purchase and probably ended up paying for her husband’s prior financial misstep.
Wrote that too fast last night…the wife paid lots of money out of her pocket to break the financial entanglements her husband had with his ex girlfriend after the girlfriend walked and stopped making payments.
The thing that was most sad about that story is the ex-girlfriend was a friend of ours too. She had cash but instead decided to help her new boyfriend with his singing career. She moved to another state, had lots of excuses.
The wife decided she needed to save their credit rating and dug deep to keep up payments on a house she wanted absolutely no part of. (It was in the boonies so said girlfriend could have her horse, was a commuting nightmare and took a while to sell) That didn’t make the start of their marriage so easy.
just shows how big this whole bubble is - and still influencing the very people who you’d think would be the last ones to want anything to do with real estate
THIS marks the LAST!!
Q.E.D.
“big this whole bubble is - and still influencing the very people who you’d think would be the last ones to want anything to do with real estate.”
_ think you said it with the “last ones” — they don’t call them great-ER- fools for nothing. The “last ones” are the “last fools”
I find that when people ask me for advice, they really just want me to confirm what they already think they should do. No matter who it is or what they want advice about. It seems that when people get an idea in their heads about something they have problems accepting any information that contradicts those ideas.
What’s frustrating is it’s not that they’re being stubborn, but that what you tell them doesn’t register at all. Instead of comprehending what you tell them and arguing the point with you, they just ignore it and move the conversation to a different point. Or they’ll get angry at you.
I’m not trying to be condescending, though. I have caught myself doing this before. I guess if everyone were always rational the world would be sort of boring anyhow.
That’s ok. I see Economists left and right with Masters and Doctorate degrees falling for this bogus boloney that houses always goes up. Good luck finding a job when a potential employer does a background check on your credit, sees a foreclosure and BK, and says, “Sorry, but we don’t want someone like you being an economist. We could be liable for the advice that you give and take. We need someone with a backbone.”
If I was the management of Chris-Craft and Indian, I would make the same decision even without the incentives. Who would you rather manage:
a) people who are paid enough to own or rent a decent place in a safe area, with a few bucks left over at the end of the month.
b) people who live in a place where housing is so expensive they have no hope (at $37K or $47K per year) of getting ahead. By the time they pay for rent, food, and gas, there’s nothing left.
Who is going to build the better boat and motorcycle?
Boat and motorcycle sales are tanking as the home ATM has dried up. Fill a boat with gas and see how it feels. $3.96 a gallon for marine gas which is a way to say, “ripoff”.
Here in South Florida I see all these beautiful new $100,000+ center consoles - do you think many of those were purchased by home equity loans? I love boats, but the idea of taking out all the equity out of a house to buy one is crazy. I trailer my boat (bought with cash used for $25K), so I fill it at the gas station. $3.00 - 5% cashback on the credit card = $2.85. I might go through $100 gas on a weekend if I use the boat both days - it helps that the fishing grounds are so close here.
But motorcycle sales should rise with the price of gas due to their fuel economy. Maybe not on the high end or HDs, but in general. No?
Who’s less likely to break in after hours?
Florida has demolished so many marinas in the past few years to build waterfront condos (much to the dismay of many, many boaters). I would wonder if any boat companies feel like staying here?
1.5% appreciation over inflation has been the historic norm for RE. Anything beyond that is bubble, except some very special -limited- areas. If people do not get that +20% appreciation a year is bubble , it is hopeless for them. For example with 20% a year appreciation a house that is $200K today will be about $500K in five years and 1.23 Million in ten years. If someone thinks this is realistic I am not going to convince him, he should be check for sanity. However that’s what has happened in the last five years and most sellers think prices are fair. This is tremendously wrong and Sellers will realize their mistake sooner or later.
As for boats, the two happiest days in the life of a boat-owner. First is the day they buy it. Next is the day that they finally sell it (and toss off all the headaches of maintenance, expense, extra “friends” who want to boat (but conveniently have no money to chip in for expenses), pressure to use it, etc.
Not me, I’m never more happy than when I’m out on the ocean in my boat. The fact that it’s rarely flat calm out there, and I don’t do “intracoastal cruises” keeps most “friends” from latching on for free boating, and my fishing friends know how expensive it is and kick in.
But you are correct, boating is an expensive and involving endevour. Using them costs a lot for fuel, and letting them sit results it more maintenance costs than using them.
Tee brain drain of positive thinking.
The latest news on apt to condo conversions. A hot shot from Miami came up here (Orlando) and bought 3 apartment projects in a golf community. He proceeded to paint and put up flags. Told every tenant to vacate in 2 months or purchase their for about $240,000 for a 2/2 with 1300 sf. This was last November.
Chase foreclosed on the golf course and shut it down. Developer purchased golf course and maintains only the fairways adjacent to his units. The balance is overgrown and going to seed.
Chapter 2- No sales still, so developer converter tries to sell gold course to surronding home owners with no deal.
Developer contacts remaining tenants and offer same unit for $185,000 or renew lease for 12 months. Tenants smell blood and take leasing as an option. For lease signs pop up and flags still flapping.
Final chapter, is Miami dude goes back to Miami and banks, homeowners, tenants et al work out of this crap. (5 yrs)
I hope those tenants get lower rents for all the trouble that he put them through.