The Five Stages Of Housing Bubble Grief In Florida
The Palm Beach Post has a preview of tomorrows existing home sales number. “Have existing home prices in Palm Beach County finally started to fall? After peaking in November at a median of $421,500, existing home prices have languished around $390,000 all year. Some observers are privately saying that home prices have begun a downturn.”
“Palm Beach County home sales in June, according to the MLS report, plunged 39 percent compared with June 2005: to 947 from 1,551. If the Florida Association of Realtors report echoes this, June will mark the seventh straight month of significantly declining sales.”
“Active listings in June represent an 18-month supply of homes at the most-recent sales pace, notes a correspondent. The MLS’ new-listings report for June also gives a vivid snapshot of our real estate market, and just how unaffordable it is. Of 3,495 new listings in Palm Beach County last month, nearly 80 percent had asking prices of $300,000 or more. Nearly a third had price tags topping $500,000.”
“Housing consultant Thomas Lawler thinks South Florida’s real estate market has entered what the respected ‘death-and-dying’ psychiatrist Elisabeth Kubler-Ross called the first of five stages of grief.”
“This process takes time, Lawler says, which is why home prices in hot markets that cool fast don’t immediately start falling.”
The Sun Sentinel reports on the states schools. “After decades of runaway school growth, educators across much of Florida are asking, ‘Where are all the kids?’ Enrollment has swung into reverse in several of the largest school districts and slowed dramatically in others.”
“‘We used to grow by 10,000 kids a year,’ said Jane Turner, budget director for the Broward district. This past year, however, it lost almost 2,500 students. Some districts, including Seminole and Palm Beach, are teetering on the edge of an enrollment drop.”
“Although no one can cite a definite cause, school officials blame the growth stall on such influences as fear of hurricanes, curbs on immigration and high housing prices that drive away families.”
“In Palm Beach County, schools have struggled to handle 5,000 or more additional students a year. Last year only 270 more students arrived. ‘This year we expect to be flat. I figure we will get three kids,’ said Mike Burke, budget director for Palm Beach County schools. He was not joking. He said he came up with the total after crunching the numbers.”
“‘The only thing I really have evidence for is that fewer students came into the state,’ said Carolyn DuBard, an analyst with the Florida Legislature. In Seminole and Palm Beach counties, officials say low-income residents may have been forced out by the high cost of houses and conversion of apartments to condominiums.”
One Florida letter writer thinks this is why prices are falling:
‘ Remember a couple years ago when real estate shot up so quickly that people were shouting from their new homes, ‘Property values are going up; the time to buy is now!’ as if the Apocalypse were here?’
‘I had never seen such hype. Everywhere you went people were talking real estate jargon. Seeing this phenomenon happen before my very eyes, I, like so many others, decided to jump at the opportunity. What happened next? Rising property values came to a sudden stop. As a matter of fact, right when my pen hit the paper, I heard the boom as the bubble burst outside.’
‘So I’ll forget the hype and look at the bright side. After I pay my property taxes, Florida will no longer have a deficit.’
What’s so obscene about this whole real estate bubble is that we just went through the same thing a few years back with tech stocks. How can people fall for the exact same scam twice in a row?
Let’s see. People failing to think rationally and logically. People with no knowledge of finances, financial markets, credit, etc. People wanting to make a lot money without having to actually work for it. Herd mentality. Lots of reasons - none of which are any excuse. Will they learn? Probably not.
Lay-offs in Sarasota, No Problem. Baby Boomers to the rescue!!!
Building industry cutting workers
As the housing market slows, local builders are looking to slim down.
By MICHAEL POLLICK
michael.pollick@heraldtribune.com
Southwest Florida home builders, many of whom are still finishing residences ordered last year, are bracing themselves for the day when those jobs dry up by trimming their work forces through attrition and, in a few cases, through actual layoffs.
“I think probably what you are seeing is a little retrenchment,” said Lawrence Anderson, executive vice president of the Home Builders Association of Sarasota County, whose membership includes about 350 builders.
Anderson said he had virtually no numbers on Southwest Florida employment among builders, and that he also could not estimate the extent of the layoffs or attrition.
WCI Communities, a major builder active in Sarasota and Manatee counties, confirmed Monday that it is laying off an unspecified number of workers.
“WCI has adjusted the size of its work force to be more consistent with the current business environment,” said Steve Zenker, a spokesman for the publicly traded company, which is based in Bonita Springs.
“As stated previously, new orders through the first part of the year have been much lower than experienced during the same period in prior years.”
The company is building Waterlefe in Bradenton and Venetian Golf and River Club in Venice. In Sarasota, WCI has a contract pending to acquire the Hyatt Sarasota property, with a view toward razing it and building condos.
Zenker would not comment on the status that proposed project.
At the offices of two larger Sarasota County builders — Lee Wetherington Cos. and John Cannon Homes — attrition is the order of the day.
“I think there there is a hiring freeze out there for most everybody,” said Lee Wetherington, whose company builds homes priced at $500,000 and up in Sarasota County. “We have 12 positions that we are not going to fill, and probably by the end of the year we will lose another six through attrition, and we are just not hiring.”
“That is more or less what we are doing,” said John Cannon. “We haven’t laid anybody off. We have a huge backlog that we are still working through. We’ve probably still got 12 months of work.”
Like most home builders, Cannon and Wetherington actually provide work for many times the number of people they employ by subcontracting out parts of each job.
Cannon, for instance, said his payroll now stands at 90, but if you counted the affiliated workers, “it would be 1,000 people or more.”
So far, the loss of oomph in housing has not wreaked too much havoc for the region’s work force, because there is so much demand for workers in general.
“Skilled trades have been in such high demand that I would think if they want to work, they can,” said Sally Hill, spokeswoman for the Suncoast Work Force Board and Jobs Etc.
The fact that business might be going slack for subcontractors can be an advantage for the builder.
Pruett Builders Inc., specializing in $1.5 million to $5 million homes, has trimmed its sails by eliminating a nine-man in-house framing team, said Larry Bostrom, director of construction.
“Actually, right now we can get a good or better service outside for less money,” Bostrom said.
The picture is much the same nationally, but may be more exaggerated here because of the extent of the boom in 2004-05.
“The market is definitely slowing down,” said Michael Carliner, an economist with the National Association of Home Builders. “I think the outlook is for declining employment by sometime next year, perhaps before then.”
Wetherington seemed to agree: “We had too many speculators. Now we’ve got to burn all that inventory off. It will be burned out easily by this coming season. That is why summer and fall of next year is when you’re going to see the uptick. That is how business works.”
While acknowledging slower sales, Cannon said that the longer term for Southwest Florida is bright.
“The underlying demand for homes in Sarasota is there. The people moving to town, the growth of the state as a whole. The baby boomers and what they are going to do with the rest of their lives.
“All those things are still there.”
Last modified: July 25. 2006 3:42AM
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I think it is crazier that Florida went through this in the 1920s- and it is happening again! Many people never learn from history.
Oh boy I hope your are wrong, but I fear you are right. Many historians think the 1927 real estate crash in Florida was the initial shock that started the ball rolling for the great depression. The question is, are we headed there again?
Let’s see….. the effects of the 1927 Florida real estate bust on the economy was masked by the stock market boom that followed. Then the crash. Now we have the effects of the 2001 stock market crash being masked by subsequent real estate boom. Care to guess what happens next?
Quotable notables from Prudent Bear .com today:
NY TIMES Trading places RealEstate instead of Dot-coms.
” So FLa.” he said, ” is woking off a totally new economic model, than any of us have EVER experienced in the past according to a realtor who predicted that a LAND SHORTAGE will support prices indefinately……date 3/25/05..
Apparently indefinately has come and gone and could be defined as 120 days.
I must comment on that “NEW economic model thing”…..it was a lack of any histroical perspective that was lacking in mys judgement, not his NEW model!
there was no real aftermath to the dot con bubble because Sir Alan Greensperm spooged cash all over everything. The only lessoned learned is that there’s no consequences to risk.
Stocks topped first in 1837 followed by real estate and a depression. In the 1920’s real estate topped first followed by stocks and a depression. It does not look good.
I think Florida prices are going to crash pretty soon! Miami is listed as having inventory of homes for sale over 61,000 according to http://www.homepricebubble.com
“As a matter of fact, right when my pen hit the paper, I heard the boom as the bubble burst outside.”
That was *almost” me. After getting married in the summer of ‘05, all of our friends, family and co-workers were asking “Are you guys looking to buy a house?” “When are you going to buy a house?” “Isn’t the next step to buy a house and start a family?” Blah-blah-blah. If we had bought, it would have been right at the top.
good for you, sticking to your guns under pressure!
OT: I have been reading in other blogs that this blog does not allow postings of opposing viewpoints. How true is this? I have posted a couple of opposing viewpoints with regards to I/O loans. And these have been posted. But I dont see nearly as many Bulls as I do on other blogs.
My posts show up almost instantly–I’m pretty sure you can say whatever you want. You might get lambasted for it, but you can say it.
I would like to see some opposing viewpoints here as well as the data that supports them.
I too would like some pro housing viewpoints with data, if only to back up the responses I hear when I mention the bubble to my clueless friends who are all recent first time homeowners and refuse to believe that their houses will go down in value.
Responses I hear:
‘Housing prices will NEVER go down in Orlando / Brevard / wherever my house is’
‘Look around. There is crazy growth and business here! Prices will stay hi because rich foreigners / retirees will continue to buy as vacation homes or investments’
‘People are just trying to sell to make a quick buck, but they don’t HAVE to sell so they won’t lower their prices.’
I don’t think there’s anything wrong with this Blog being devoted almost wholly to the Housing Bear point of view. Given the massive cheerleading of the NAR and all the flipper “investment” (cough) boards, it’s great to have a forum of our own.
Of course, when doe-eyed innocents like LV Landlord show up, it’s always amusing to pop their soap-bubble la-la land dreams and turn them into a quivering buddle of neurosis before they flee to safer environs among the rapidly-dwindling RE Bulls.
OK, I disagree with everything you say!
I oppose the housing bubble.
It depends on what you mean by can’t post. Most blogs edit or moderate posts (if only to remove the utter filth that inevitably goes to popular sites that allow open posting). I’ve not seen very many posts disapper here. However, this site has a good mix of sharp and rabid defenders of the housing buble view and many don’t sugar coat their views.
If it is a debate you seek, you should have your facts in line, and be ready for some hostility, but you should find what you are looking for here. I also don’t toe the line in some areas.
Perhaps Ben can comment on that question?
BayQT~
If you want to interact with RE Bulls, lance over at http://bubblemeter.blogspot.com/ hasn’t gotten tired yet.
Nah, I’ll vouch for Ben although he doesn’t need it by a longshot. He’s pretty good about letting stuff post. Out of all the opposing view stuff I have posted I think only one has not been posted and in all honesty it was pretty hostile and probably should not have been posted. Sometimes the server lags and the posting comes in later. But to my knowledge I have never had anything not post except that one and I have had some pretty good debates here. This blog is very good. Just pack heat when you post an opposing view. By heat I mean knowledge not profanity. Although I will get testy sometimes I try to avoid it.
Holy cow. In the month they sold 947 homes, while 3495 new listings showed up. If that’s not a bubble popping, I don’t know what is.
I wish those (3495-947)=2548 homes the best of luck selling, along with the accumulated difference from many months now. Not going to happen any time soon, though. 18 months’ supply - astounding.
Here’s another reason to get out of Florida:
http://tinyurl.com/rz2w6
Colbert set that up to be funny and the guy went along with it. That may be ill advised, but hardly damning in itself. This character is about to run as an unopposed incumbent so if you have problems then it is up to you to provide competition at the polls.
Maybe a better source of scare stories would be to check FARK.com for stories that have the “FLORIDA” tag?
Um, same way we decided exporting democracy to middle east would be a great idea? those who fail to learn the lessons of history, etc…
In Silicon Valley, we’re still firmly entrenched in the first phase of grief: denial.
Perhaps, in some areas like San Diego and Florida that are already falling, we’re halfway into the second stage: anger… but we’re not completely there yet.
There’s still a long way to go, boys and girls.
I figure 10% of RE agents and mort brokers are in hibernation now- if RE employment was 9.8% in 05 what will it be in 07 ?
I figure 10% of RE agents and mort brokers are in hibernation now- if RE employment was 9.8% in 05 what will it be in 07 ?
It’s more like they are in hiding now. Hoping that the idiots they helped buy homes the past few years forget all the stupid advice they gave them for encouragement.
it’s a lot more than 10%, i have realtor friends that have not cleared a check since the beginning of the year. mortgage people are in worse shape. one of my reps said she did six appointments with brokers on thursday last week, four were in starbucks and two were in panera bread.
the out-of-work thing has happened to my sister-in-law. she sells (or used to sell) properties in venice, ca. we’re trying to find her some new kind of employment.
i still can’t fathom that she pays over $800 monthly lease on a new BMW. fortunately, she has $100k banked and rents.
Yes, she IS one of the lucky ones. And, to me, $800 lease on any vehicle is too much. Depending on how she spends her money, that $100k could go away pretty fast. I think she should look for a more reasonably priced vehicle to reduce the hit to her budget.
But that’s just me….
BayQT~
Dude, like, for sure she wouldn’t be caught DEAD in a FORD! It is ALL about appearance there. Scatch below the surface and you see base metal, but hey! At least you look good!!! Or else ‘gag me with a spoon’!
$800 bucks a month, it must be a a 7 series BMW (retail about $80K). She NEEDED it because the 5 series is too small for clients and high school kids in Venice drive 3 series. A smart home buyer knows that if a realtor drives an expensive car, she must be good at her job!
hopefully its a nice car.
Technically since it’s Summertime now, the word is Aestivation: a period of dormancy in the Summer. If they haven’t woken up by December, we’ll just call it a dirt nap.
There was a story on our local (Reno) news about a double murder suicide in Florida yesterday, a husband and wife and their child, who was killed. The reporter said that the parents were financial planners and had recently been sued by some investors for bad real estate advice. What a tragedy, especially for the child.
How sad. That sucks big time.
BayQT~
1. Don’t you wonder if this kind of thing will be happening again in the near future, as weak people reach desperation?
2. I wonder how the residents of that spanking new high-rise are dealing with the idea of all that bloodshed in their building?
3. Flagler county is not a big place, and this building sticks out there like a sore thumb. It seems like a towering visual representation of everything that was wrong with this bubble, from greed to beach erosion (and everything in between).
Hi. I saw that too. My guess / hunch is that the real story is that they themselves were over their head in RE debt. It was one of those news articles you read where what is presented does not quite add up. - - There must be more.
What it reminded me of were the news stories of day traders killing themselves and/or others when their stocks were going into the tank during THAT bubble.
A reminder that there are real life-and-death consequences at work here. This is not a game.
This is NOT new news. There has been for the last 6 months a standoff between buyers and sellers in South Florida. Since January of 2006, prices have steadily eroded while the inventory has exploded.
Sellers have an enormouse sense of entitlement. They feel that they DESERVE to get the prices they are asking. The specuvestors have long since exited the market as the flipping game ground to a halt. Waht remains are the true buyers, of which 90%+ are priced out of the market, and wealthy foreigners.
Sellers are still clinging to the hope that there is some magical fix here. They are drinking the Kool Aid from the Real Estate industry that claims this is merely a lull in an ongoing bull market. They refuse to sell at realistic prices and are holding out because “real estate always goes back up.”
Forget about the 18 month inventory,forget about the jump in foreclosures, forget about the 2 trillion in resets coming, forget about the $200,000 affordability gap, forget about the doubling in insurance and taxes, forget about stagnant wages, forget about the hurricanes, and forget about the rising interest rate environment, home prices have to go up 20 % a year because they are running out of land.
‘Enormouse’!!?? God, I hope that was intentional. If so (and, truthfully, even if not) it gets my vote as the great RE malapropism of this blog.
I agree - in light of the fact that the rest of the post is spelled correctly (except waht, which is obviously just a typo), bigdaddy63 gets the award for cleverest Florida bubble word I’ve heard.
I though enormouse referred to Disney
thought
Come fall, after several unattended open houses and widespread reports of dismal sales, these sellers will have their “come to jesus” moment where the veil is lifted from their eyes. The flood gates will open and prices will drop like rocks. That will be when the ass-pounding begins in earnest for these folks.
I can tell you first-hand that many owners along the coast of SoCal don’t believe it can happen here. They think they are living in paradise and homes near the ocean will never drop in value. The Beach Boys sang about how wonderful it is here. Prices won’t drop in this wonderful place….Florida maybe, not here.
Sellers are still clinging to the hope that there is some magical fix here. They are drinking the Kool Aid from the Real Estate industry that claims this is merely a lull in an ongoing bull market. They refuse to sell at realistic prices and are holding out because “real estate always goes back up.”
The realtors are continually saying the baby boomers are still coming, If I had a quarter for every time I’ve heard that I could retire now! I’ve been looking in Manatee county for about two years now and cant-wouldn’t jump into the insanity these people believe. Real estate is the best investment, personaly I could care less, I’m looking for a home to live in, if I wanted to invest I would hire an investment consultant. You are totally right on about Florida, seems we forgot what housing was created for, to have a roof over your head, not an ATM machine. Big Daddy for govenor, you have my vote. Now if we could just get Robert Cote for president I think things would be fine.
Robert Cote for Prez!!!!
I’m currently live in Broward and work in Miami (for one more year, got here last summer). You nailed it on your assessment of what’s going on here. It keeps me VERY entertained. My first year lease is up on my house…I’ve got my fingers crossed that my landlord doesn’t try to raise the rent. She could have sold last summer, but was too greedy. I know she won’t sell know as she has a crazy inflated idea of what her house is worth.
I can not help but wonder if this is the same Tom Lawler that was head of risk mgmt. at FNM. If so, Ahhhhhh, he has become a consultant, collecting a nice pension, yours and my money folks.
Slightly OT, but the Miami Herald has a great special report on corruption in the Miami-Dade agency that’s supposed to build affordable housing for the poor, elderly, and infirm. It started yesterday, and is available at herald.com but you may have to register (free).
Even by Miami standards, it’s appalling. If they are willing to steal the money designated to help these poor people, just imaging the corruption going on in the rest of the building industry.
I read that entire article on Sunday. Just another example of how Miami-Dade is really more like Latin America than the United States. It was very apalling, yet not surprising. There is are articles like this (though not this big of scale) almost weekly in the Miami Herald. Big KUDOs to the Herald for their outstanding investigative reporting. I really think the Feds need to come in and take over some of these agencies and a bunch of these local swindlers need to go to prison asap.
Gas prices alone will sink the Florida economy. No state is as dependent on tourism as the economic driver. I don’t work for Disney but I can provide ancedotal evidence of how the local man is hurting.
I do some work for a local park that is often packed with travelers. It was great and relaxing until the 2002 RV association of America push to get people outdoors. As the housing boom developed, people cashed out to buy SUVs, pickups, campers, and boats and suddenly needed a place to keep/use them. Storage facilities around here are stuffed full of those toys that sit for years sometimes without being moved. For a few years it was impossible to camp at all in Florida because all the parks were full every weekend. To accomodate these new customers, many parks did electrical upgrades and almost all hiked up their nightly camping fee to over $20.
Constrast with the present; it’s a piece of cake to get into every park with little or no reservation and fees are being dropped in some circumstances.
In 2002/03/04 a lot of the people doing recreational activities were in new SUVs, new boats, jetskis, campers, etc. Those people stick out like a sore thumb in the outdoors circle. This year I have noticed a more traditional type of person enjoying these activities. The people with canoes strapped to the top of their 10 year old cars, beat up minivans, families, and just regular joes’ out in jonboats on the river. People wearing camoflauge in the woods instead of designer clothing, etc.
Symptomatic of a trend? You betcha….we had the great outdoor craze of the late 60s (remember the slide-in camper?) that was stopped dead by gas prices in the 73 oil shock. History has again repeated itself.
Moman,
I know exactly what you mean about the designer outdoorsmen!
LOL
A lot of people could suddenly afford the “dream”, and they took their Macy’s mentality to terrorize the rest of us (pul-lease, outdoorsman with bling is an oxymoron).
Were you ever just shocked by their lack of consideration for the nature they were enjoying? (I have vivid memories of ameteur powerboaters leaking gas in the water…)
Absolutely, those designer outdoorsman are horrible. I quit staying overnights in the parks because of the amount of them who would stay the night, have their radio blasting, be rude to the rest of the people, and leave the next day and have trash scattered everywhere.
Now that the craze is over I am thankful. I continue to avoid staying near those types who are easily identified with expensive new tents and camping equipment. Generally they arrive in a shiny new truck that has nary a scratch in the bed. If they are in disguise, it comes off at dark when they cannot start a fire without using a gallon of gasoline or asking for help.
I have had near accidents using my canoe to fish or bird-watch around those fools. Thankfully, most of them are repulsed by any thing that requires a bit of knowledge, patience, or work (fishing, hunting) so they are only a problem when hiking, biking, camping, or boating.
I know about LEN and WCI. What other builders have the biggest exposure in Florida?
M/I Homes, David Weekly homes, and KB Home all have significant exposure in the Tampa Bay area.
JOE!
this blog is like having box seats on the 50 yard line to the greatest financial unwinding in history. but as obvious as is to most of us who’ve got a jones for ben’s blog, if i had not lived through the 90s bust, in which i saw several apts. in my co-op lose half their value by 1995, i might not be so convinced that we are once again in a bubble. i think the internet and general availability and immediacy of market data to all participants will shorten the period of this price crash significantly. what took 5 years the last time around might only take a year and a half. by superbowl 2007, we’ll all be ready for a half-time breather from this game.
The weird thing is that I am in disbelief myself. All my rational thinking says that it will have to happen. But my gut tells me it won’t and fear tells me I’ll be “priced out forever”.
Thankfully I’ve always resisted the gut and listened to the brain.
well, luckily your brain is bigger than your…. it will be a good 2-5 years before a buying bottom, imho, at least in the nyc market. that just shows how long this has to play out. 2020???
The dominoes just need to tip a little in the right direction and then BAM all hell will break lose. Massive realtor layoffs, mortgage companies going bankrupt, foreclosures sky rocket, it will be ugly. You know what I need to do is get a nice bottle of wine and safe it for just that occassion.
Not the greatest in history, just in our lifetimes.
First time poster, long time Florida lurker. At the very least, things won’t turn around in Florida until the insurance problem is solved. And that won’t happen until after the elections, if it ever does. So we can expect the ass pounding to continue until the end of the year at least. In some cases, people are paying almost as much in insurance as they are in mortgage payments, if they can even get it.
But, as far as I can see, most property owners are still in deep denial or, as I like to call it, the “monkeys holding onto their nuts” syndrome, named after the story about how hunters trap monkeys, by putting nuts in a jar with an opening just large enough for the monkey’s paw. When the monkey grabs hold of the nuts, its fist is too big to withdraw from the jar. But the monkey will not let go, being greedy for the nuts, and just sits there gibbering until the hunter comes along to bag him. Which characterizes Florida property owners who bought at the top and are in denial.
I doubt the insurance problem in Fla can be fixed…without perhaps spreading it out over the rest of the country (which many will oppose). The insurance “problem” is a preview of coming attractions. For a longer term view, go see Al Gore’s movie “An Inconvenient Truth”… the future of Florida is explained quite vividly.
There were reasons why Florida remained sparsely populated until the 1920s (and it’s not our ancestors were stupid)… Modern tech, fossil fuels and a spell of stable good weather made the 20th century boom happen. Fossil fuel becomes scarce, weather becomes unstable… Florida becomes more like it was in the 19th Century and before…
Florida real estate may be in for a much longer bear market than 5 years. I like visiting Fla. and will continue to do so…but no way will invest (or own for consumption) in property there any time soon.
i suspect that the simple lack of hurricane preparedness on unoccupied flipper properties — no plywood on windows, etc., will mean that any substantial hurricane will wipe out whole communities in fl. bubbleville.
that was a lot of what happened, i believe, in 1926 in the first great fl. r.e. crash.
What get me is fake rather than functional window shutters. What would it take to have functional window shutters that would actually protect your windows from storm blown debris? Think about it, close them, latch them done. Instead we have people trying to figure out how to attach real plywood protection without putting holes in their fake shutters.
Interesting post, Jim and I couldn’t agree more. The builders here in Fla are into “fake everything”. During Hurricane Andrew, we had these old painted metal Bahama shutters that you could swing down and lock into place. They worked very well, provided shade and ventilation during the day and storm protection when it was needed. This was at a 1920s old wood Florida shack, made of Dade County pine, which ages so hard the termites run in the other direction. Not only that, but I recall old photos of Hurricane Camille, where the concrete block homes on the Gulf were decimated, while the old wooden houses still stood. There are many ways to build that is compatible with Florida weather, but people from up North and from California seem to want these crappy cookie cutter homes with “volume ceilings” and drywall, which becomes moldy “wetwall” after a hurricane. And then everyone starts screaming about mold and looking for someone to sue. What do they expect? I just shake my head when I see the building that goes on here.
Palmetto…I agree with everything in your post, but don’t blame Californians along with the Northerners for what’s going on in Florida. No true Californian would ever want to live in Florida, EVER! Tiger Woods is a great golfer, but a great California disappointment when he moved to Florida just to escape state income taxes…like he can’t afford to chip in his share, especially after making use of all the great public courses during his youth!
What do you mean by “things won’t turn around in Florida until the insurance problem is solved.” Does that mean the rest of us have to continue to subsidize all of the people that want to live in Hurricane Alley? If you want to live in Florida, pay your own way.
It’s repulsive how all of the losers in New Orleans expect everybody else to pay for their life in that hell hole. If you want to live in Florida, enter at your own risk. Keep your eyeballs off of everybody else’s wallet.
I don’t understand the attack, Mark Fignar. I certainly don’t expect “the rest of you” to subsidize Floridians and I never said so, just as I don’t expect to subsidize people living in along flooding riverbanks, earthquake zones, wildfire zones, tornado zones, drought zones, etc. In other words, I don’t think there’s any part of this country that is immune from some sort of natural disaster, mostly weather related.
Florida’s insurance problem is up to Florida to handle, it was created by dimwitted, greedy Florida politicians who bent over for the developers and encouraged dense building along the coast and over sinkholes and all sort of crazy places. (Recent story on the local news about a developer who is building over ancient sinkholes and is aware of it and justifies it. Local pols sit back and let it happen)The insurance problem in Florida started a long time ago and could have been solved in many ways, like by requiring any insurance company that wanted to do business in this state to provide homeowners in addition to other lines, not cherry pick what products they wanted to provide. Either that, or stay out. Building along coastal areas should have been severely restricted. Florida has been savaged by corporate interests working with low, greedy politicians.
But, Florida has been through this before many times, going all the way back to Ponce de Leon and his search for gold and the fountain of youth, but instead found hostile Indians, snakes, gators and malaria. Florida always gets even one way or another, she’s kind of like the good time party girl who plays dumb at the convention, but leaves the conventioneers who thought they were taking advantage with a good dose of the clap to remember her by. From what I’m reading here, the party’s just getting started.
You are absolutely correct. Natural disasters can occur anywhere. Politicians and greedy insurance companies out for a buck. The funny thing is that insurance companies “throw” money around recklessly. Many of my co-workers received double the amount they should have for hurricane repairs. None of them gave a damn due to the fact that insurers make so much profit and pay out so little of the time. The rest of the US home owners aren’t subsidizing anyone - they are just allowing insurers to hold their bloated profit margins.
Right you are, DEW, I’m really tired of hearing people from other parts of the country screaming about how they don’t want to subsidize life in “Hurricane Alley”, when they live in areas that are just as vulnerable, if not more so. The way it looks to me right now, the least vulnerable places to be are inland areas of the Northeast and Northwest, away from riverbanks. I’ve been thinking of moving back up North, but just like one of the other posters here, I’m not quite ready to give up on Florida yet. By the way, we sold out at the top. I would not have paid for our home what the buyers paid. When I see home prices in the outlying areas surrounding Tampa dip below $100,000.00 for a modest concrete block in a traditional modest neighborhood, I’ll know we are getting back to normal. I don’t know how people are making it here. I spoke to a realtor a few months ago who was retiring and had one listing left to sell as a favor to family friends. She told me the market was very slow. I said maybe it would pick up again next season. She said “Don’t kid yourself, THIS season was slow”.
I think the Florida insurance problem will be solved with insurance similar to California’s earthquake insurance: High insurance rates, super high deductibles and very limited coverage.
Well, then I guess the insurance problem here in Florida is just about solved, because that’s what’s happening. Housing prices will have to come down to compensate.
I think that most people who have lived through the dot-com bubble have learned exactly how to deal with this housing bubble. Do not try to catch the falling knife. Let it hit the ground, then pick it up. Wait to buy for another 12 to 24 months.
Prices in a housing bubble don’t drop as fast as stocks in a stock bubble. This is the one saving grace in a housing bubble. People with equity can still get out with a profit if they lower their price in time before it’s too late. Those who are realistic will beat those who are greedy.
My first post here after reading this blog for months. I’ve actually cut down on my TV watching time, as this is better entertainment.
I live in the Sarasota/Bradenton area of FLA. And in the paper this morning the headlines reads “state farm wins huge hike in rates.” The State approved a 107% hike in rates that will kick in Aug 2006.
I’m actually thinking of self-insuring. Take the money I save and buy some good roll down hurricane shutters. I’m about 10 miles inland and I really feel that my rates in some way pays for those that are on the water and have a much higher exposure. Having said that, I acknowledge that their rates are higher than mine. In any case, insurance down here is so limited that your house would almost have to be completely destroyed to get any significant payoff from the insurance company.
This morning I did my weekly bike tour inventory of the for sale signs in my 300 home neighborhood. There were 32 homes for sale. This is the highest level in the five years that I have lived here. Also, I have not seen a sold sign in the last 6 months.