‘Returning To Reality’ In Florida
Some housing bubble reports from Florida. The Palm Beach Post, “Sales of existing single-family homes in Palm Beach County posted the biggest second-quarter decline in the state as one of the hottest real estate markets in the nation continued to cool down, a Florida Association of Realtors report shows.”
“Indeed, home sales dropped in all 20 markets in Florida, with all but two posting double-digit slides compared with the same quarter a year ago.”
“Condominium sales in Palm Beach County plunged deeper than single-family home sales, with a 44 percent drop in the second quarter compared with second-quarter sales in 2005. Treasure Coast condo sales fell 41 percent over the same year-over-year period.”
“‘Flippers are not buying property now, but they are the ones holding a large part of the inventory,’ said Jim Sahnger, of Palm Beach Financial Network. ‘Those buying homes today are primarily for their principal residence, and they are offering fair prices, but that’s still in excess of what property sold for last year.’”
“‘Properties have not been on the market long enough to force downward pressure on prices,’ said (broker) Chappy Adams. ‘Unless a seller really, really needs to sell, they will try it out for a while at the price they were used to over the last six months.’”
“The Florida Association of Realtors in Orlando said the state’s housing market overall was following the national trend. The ‘declining strength of the domestic economy’ is ‘a stiff wind in the face of the existing real estate market,’ said David Scott, a University of Central Florida finance professor.”
“Sales of houses and condos slipped during the second quarter of the year in Collier County. The number of houses sold in the county last quarter was down 44 percent from the second quarter of 2005. Condo sales decreased by 53 percent during the second quarter this year compared to last year.”
“Sales of existing homes in the Sarasota-Bradenton market fell 39 percent during the second quarter. Sales were down 28 percent in the Charlotte County-North Port market. in Southwest Florida, condo sales dropped 46 percent in the Sarasota-Bradenton market during the quarter. Condo sales in the Charlotte County-North Port market dropped 96 percent.”
“Home sales fell by 23 percent in Miami-Dade county. Sales are slowing because of a glut of properties on the market. The rapid price escalation during the past five years has prevented many people from buying homes. Rising insurance premiums and property taxes also are hurting potential buyers.”
“Some sellers are getting desperate, lowering asking prices and offering perks to buyers and their agents.”
From Florida Today. “Second-quarter home sales in Brevard dropped 28 percent compared to the second quarter of 2005. Second-quarter condominium sales fell 78 percent. Local real estate officials say properties are taking longer to sell, and inventories continue to grow.”
“(Broker) Nicholas Rahal in Rockledge, predicts future housing reports will show the median housing price dropping. ‘Selling prices are dropping,’ of some properties, Rahal said. ‘There’s no question about it.’ Every day, Rahal reviews the latest MLS offerings in Brevard, and he notices dozens of downward price adjustments on types of homes.”
“J.R. Fuller, broker in Melbourne, agrees that some prices are down, but they’re falling from what he and others have called an artificially high perch. ‘We haven’t really dropped prices,’ Fuller said. ‘But we’re returning to reality.’”
“Home sales fell by 23 percent in Miami-Dade county. Sales are slowing because of a glut of properties on the market.”
There are some confused realty people and journalists out there. “There was too much more to sell, so fewer sales were made!” Yeah, sure, I follow that logic.
LOWER THE PRICE AND IT WILL SELL AND YOU REALTORS WILL BE ABLE TO EAT!!
Bingo. All the reports of home sales withering , yet prices are pretty stable. My lord. Try to look into the future just a little bit. When home sales stats went through the roof and inventory dwindled, home prices went through the roof. Yet when home sales numbers evaporate , and inventories reach unprecedented levels ? Oh , prices may stabilize or come in slightly. These people act like this is the end , and we just wait for it to come back. They use the term ‘buyers market’ like it’s some cute , novel fad that’ll pass in a short while.
“Yet when home sales numbers evaporate , and inventories reach unprecedented levels ? Oh , prices may stabilize or come in slightly.”
IMHO, Right now pretty much everyone knows that the housing boom is over and there is no more upside for a long time to come. Therefore, everyone who is thinking of selling is doing it now and that is causing an increase in inventory. The extent that prices will decline in a given market will depend on the number of these owners that are overleveraged. The highly overleveraged ones have to sell and will drop their prices to do so even if a loss is incurred. Whereas, those that have the money to meet the carrying cost of the property will just pull their properties off the market if they are going to lose money on the sale. That doesn’t factor in conditions such as a general decline in employment in a city which will lead to lower housing prices overall because of deflation.
dont worry, prices will go down. it is a greed thing. people dont deal with logic. they deal with greed and greed blinds people. it took time for the bubble to go up. it will go down eventually.
“Sales are slowing because of a glut of properties on the market.”
It really irks me to see people use this crazy kind of logic. The glut of homes and slowing sales are both essentially the same observation/metric/measure and are the result of some other market factor not the other way around.
That market factor is high asking prices.
True, don’t know how that one got by the editors desk. Oh yeah, the corpoate media is just another SHILL for the real estate industry. Sales are not slowing because of the glut, but vice-versa: the glut is occurring because of a slowing sales, but mostly because of the speculator DUMP of properties on the market. The properties are not moving because of a sum of the unrealistic prices plus the now-apparent lack of appeal for investors and speculators which the properties formerly had during the last five years that convinced them to buy at the radically inflated rates in the first place. The number is 40% speculator buys in the Tri-County area prior to the housing deflation, folks.
“The number is 40% speculator buys in the Tri-County area prior to the housing deflation, folks.”
I’m starting to believe the number is actually higher.
The crash of realty prices is just around the corner, like Labor Day, 2006. Is there any qualified buyer left for these overpriced turkeys. When panic sets in on these sellers who have listening to their real estate clowns, I expect a crash of dot.com numbers, say 20% overnight. The CNBC baffoons couldn’t stop the market crash, and neither can these real estate spinners.
david cee, I think you and I both agreed that 4th of July would be a turning point. Now you and I (and others on this blog) are thinking Labor Day could be another major step down.
If bubble mania is mostly psychology then I think about the “happy feelings” people are supposed to have on significant days such as Labor Day…kids back in school, cool fall weather, football, maybe leaves turning, etc. It’s supposed to recall good times but this year maybe not so much for some FBs.
Anyone ready to call Halloween, Thanksgiving and Christmas ‘06 for similar reasons? Let’s not even talk about the spin already in works for the Nov elections. It’s psychology 101 working against the spinmeisters.
Its more like october 25 or somwthing. That is when the numbers for sales of Sept. will be in. That is when the statistic wizards can’t work the numbers in the realtors favor. It will be 10-15% decline YOY right in your face sellers. Someone hear the toliet flush?
Did you see the wall st. Journal article on Monday(?) that said for the 1st 5 month of 2006 that 12.3% of all homes were purchased with an Option ARM. This compared with 8.4% of all homes purchased with an option arm for all of 2005. That is a 46% increase!!
‘Builders risk insurance, which covers real estate projects during the construction phase, is getting a lot more expensive. Citizens Property Insurance Corp. has notified agents that, although it is continuing builders risk lines, the rate hike on wind-only coverage will average 150.6 percent statewide.’
‘South Florida built its reputation as a retirement community on a handful of ingredients: sun, sand, the absence of a state income tax — and plenty of affordable housing. No matter how tight the budget or small the nest egg, a senior citizen could usually find housing here.’
‘Seniors are becoming the overlooked casualties of the region’s affordable housing crisis, advocates say. ”When people talk about the crisis here they talk about the workforce — the teachers and firefighters and hotel workers and young families . They aren’t thinking about the 70-, 80- and 90-year-olds who suddenly find they have no place to live,’ said Edith Lederberg.’
Sorry OT;…Ben, Tchick, Az, shortly on CNBC a interview with the developer of “White Hills” Arizona
All those 70-, 80- and 90-year-olds who lived through the biggest bull market in the history of the free world, and didn’t manage to get through it with enough money to buy a POS condo? I have no sympathy for them.
Until this past year, I rarely heard of people leaving Florida solely because of the cost of living here. Most who left without regard to jobs were “halfbacks,” Yankees who moved halfway back home either because of the heat or to be nearer to family. Now I hear increasingly about economic emigrants from the state and, for the first time, personally know several people who have bailed.
If house prices revert to pre-2000 levels AND if local governments reduce their spending so as to keep millage steady, then there is a chance the low-income retiree market can recover much of its lustre. Otherwise, it’s just a totally different game than what was expected not long ago.
“Seniors are becoming the overlooked casualties..”
I visited my grandmother (80 years plus) in Pensacola while I was on vacation and she was freaking out about her property insurance premium that rocketed from about $2,000 per year to $5,000 courtesy of Fisher-Brown Insurance Agency. She’s the original owner of the house and in forty plus years had only one claim to have the roof repaired due to hurricane Ivan. Grandma thinks it’s a conspiracy by the insurance company to “get an old widow” after my grandfather, who did business with the company for about 50 years, died recently.
Although I recall on a previous thread that someone ripped State Farm, we found that they had the best rates after going out for alternative quotes without getting exotic. She got the new insurance in place a week before tropical storm Chris showed up for about $3,500 and gave Fisher-Brown the finger.
Grandma lives in a very good area of Pensacola and per her own words “Widow’s Row”. There are about fourteen houses ranging from about 2,500 to 4,000 sq feet on her street with ten occupied by financially secure little old ladies on fixed income with massive amounts of equity. None of the houses are for sale as of yet but a few more bumps in their expenses will probably trigger an avalanche of sales which will really screw up the comps for flippers in the area.
Presuming that your grandmother has paid off her house and looking at the history why is she carrying insurance? Depending on the price of the house, she seems like a good candidate for self insurance.
Theoretically yes in regards to self insurance however realistically - no. Nobody in my family is going to step up to the plate and push that issue. Based on our family politics there is no upside in the event that something happens.
Better to pay the premium and have Grandma sleep better at night when the hurricanes enter the Gulf.
Great point about retirees. On my first trip to FL in 1996, I noticed a lot of new homes available in the I-4 corridor under 100k- a good price for middle class retirees. It appears to be much different now.
OT But if you want to watch the Plunge Protection Team at work, just check out the charts here.. http://tinyurl.com/ovpm8
The homebuilders started drifting downward this morning….until 10:30 when the Angel magically appeared. All the HBs reversed direction and started a sharp climb upward. The magical Angel did it again…
Is there any way I can say this without sounding evil?
Us young people with lives to live could really use those huge homes that the retirees are living in for, oh, I don’t know, FAMILIES. In the meantime, I will continue to delay my life like all the rest of my peers as the average age of marriage and the average age of having kids pushes ever upwards, as does the life expectancy of retirees bolstered by lipitor, viagra, and haitian and hispanic nursemaids. Of course, this trend could be lauded as an overpopulation impediment, but on a personal note…it sucks for me!
Join a political movement to take back power away from senior citizens. Oppose all COLA increases in social security, medicare, etc. Push for reductions in all benefits, and increases in starting age. Never let anybody make you feel guilty for demanding that people of all ages support themselves without having the government steal your money to do it for them.
Yeah, right. But the human/free-market part of me could never do that…esp since I’ll be older one day too. Maybe I’ll move into a condo stead when I’m that age so I wont be a big hypocrite.
“(Broker) Nicholas Rahal in Rockledge, predicts future housing reports will show the median housing price dropping. ‘Selling prices are dropping,’ of some properties, Rahal said. ‘There’s no question about it.’ Every day, Rahal reviews the latest MLS offerings in Brevard, and he notices dozens of downward price adjustments on types of homes.”
On the Sarasora MLS I see A minimum of 200 a week. Double that if you include condos.
Sarasota MLS hotsheet (last 24hrs.) NEW LISTING/83—BACK ON MARKET/14—PRICE REDUCED/102—PENDING SALES/34—EXPIRED+WITHDRAWN/107—SOLD/27—This is SFH only. These numbers are typical of the last 7 or 8 months. The little office where I hang my license is all but abandoned.
prices aren’t down it’s just an illusion
off 10% here now in 22151 12 miles from Pentagon
I still don’t think sellers can grasp what is happening in my area. (lake nona in Orlando) Houses just stay up for sale longer and longer with $10k price reductions or none at all. Meanwhile, there are additional houses for sale week after week after week.
Time is on the buyers side now. Each month goes by will cost the sellers more money. If they don’t drop, they will slowly bleed to death. By the time they realize it, others will too and all will rush for the EXIT sign.
Prices in Miami are dropping fast and down 9.4%, from last year, according to info at http://www.homepricebubble.com !!
I hear you.
I have been following the market in Pensacola, Gulf Breeze, and Pensacola Beach area for the past five months. Only in the last week or two have I seen “serious” reductions in the asking price of around 5% or so on properties marked up about 100% per review of sale records maintained by the local state property appraiser.
Interestingly, three properties I have been following over the last four months which were originally listed as FSBO have been listed with an agent after taking a small 5% clip in the asking price. I also did a few drive bys while on vacation and noticed that a few owners are confused as to what they want to do with their property. A couple houses had separate “For Sale”, “For Rent”, and “Lease to Own” signs stuck into the front yard of the property.
Slightly off-topic, but I’ve got what I consider to be a “scoop” worth noting on the interaction between mortgage rates and housing activity. In short, rates are falling but it’s NOT prompting an increase in home buying activity, according to weekly data. One caveat: It’s early, so this trend could fizzle out. But nonetheless, it’s interesting to see.
I go into more detail at my blog:
http://interestrateroundup.blogspot.com/
Bookmarked it. Good info, and what I actually expected to see happen. It’s not about rates. It’s about shoehorning every living breathing idiot available into overpriced houses and suddenly having nobody left to buy.
Japan lowered rates to practically zero. Even with that, housing prices have been going down for 16 years. If you look at a chart of Japan’s housing run up in the late 80’s it’s identical to the run up here in the last five years. Looking at Japan’s chart of prices after the real estate market crash, could be a good indication of where we are heading. It’s UGLY!!!
there’s no mystery here. if rates go down to 1% i’m still not buying your $750k crackerjack box pos. i have consistently said to people “charge me 10% interest and cut the housing price in half.”
In response to the PPI number, the number was +0.1% core rather than -0.3% reported if you take out autos and light trucks. Light truck (SUV’s) prices were down 3.1%. Reckon they are dropping prices to push unwanted gas-guzzlers out the door? I consider the number negative for the economy, but the stock market obviously thought otherwise….
‘Seniors are becoming the overlooked casualties of the region’s affordable housing crisis, advocates say. ‘’When people talk about the crisis here they talk about the workforce — the teachers and firefighters and hotel workers and young families . They aren’t thinking about the 70-, 80- and 90-year-olds who suddenly find they have no place to live,’ said Edith Lederberg.’
St. Pete Times had an article today about the housing market and a realtor comment saying that Florida is ’still a retirement mecca’. For how long is my question….
The only places that still seem to be “cooking” along are the 55+ communities like The Villages, a virtual sea of white hair. All I can guess is that anyone still buying in there figures there is a Greater Fool out there somewhere, or they are buying for cash and believe they can live the rest of their life in that house, so to heck with its residual value.
There is no doubt that if I had property right now, loss or not, I would make sure it sold fast, and that means big discounts, before even bigger ones become necessary down the road.
On a side note, I learned one of our biggest Title companies here in CA had layoffs last week and a hiring freeze. There is no doubt things are bad in the real estate business right now.
No RE manipulation going on? HA!! Go ahead and pick this BS apart. Information is presented by the a-hole of the year, Gary Watts.
B. Listing Agent Advice
1. Price Reductions: Please do not put a “price reduced” banner on your listings, and if you
have one up, please take it down. It “falsely” advertises to the neighborhood that prices
in the area are going down. What is more true is that sellers are lowering their
expectations and becoming realistic.
Plus: For we who show property, it does not instill confidence in our potential buyers.
2. Sold Signs: When the listing goes into escrow, please put an “in escrow” or “sold” banner on the sign! The days of a panicked buyer, desperately looking on their own for a home, are long gone. Once again, we are advertising to the neighborhood the wrong information.
Plus: Imagine how potential buyers feel seeing all those for sale signs. Do you really think you’re helping them enter the market?
3. Signs: If you have a listing where there are other (or many) for sale signs nearby, I
would recommend that you call the other agents and see how many of them will remove their signs from their listings. At the very worst, rotate your signs until one (or more) of the listings sell, then make sure it has a sold sign on it!
4. Price Ranging: In a market like this, it is foolish to price range your listing-unless you
have a unique custom home on an exceptional lot! Price ranging deters buyers from
entering the negotiating process. They prefer to deal with properties that have a defined
price when beginning the negotiating process.
Forgive me, but I’m going to post this all over the place, ’cause I hate this crap.
nnv!
No need for an apology! It actually helps me to see this reposted b/c I still can’t believe what I’m hearing? Especially the “for sale sign rotation” scheme! That’s like saying “If all you people would just go back to their cabins there will plenty of lifeboats for everyone”! Sheesh.
The Market Makers used to do that in the NASDAQ market. Collusion was a big rampant wink wink nod nod , old boys network until they got nailed and paid untold millions in fines and reparations. Gotta believe, and it’s only my opinion, that what this hammehead is suggesting is at the very least, unethical . Is there any kind of ethics oversight committee in NAR?
Maybe see Level III collusion ala:
Robert H. Lande & Howard P. Marvel, The Three Types of Collusion: Fixing Prices, Rivals and Rules, 2000 Wis. L. Rev. 941 (2000).
Again , nothing but my own personal opinion and worth exactly what you paid to read it!!
Watt’s memo must have made it over to Fla. Compare Watt’s words to J.R. Fuller, broker in Melbourne quoted in one of the articles above:
Watt’s on price reduction: (paraphrased): Please do not put a “price reduced” banner…It “falsely” advertises to the neighborhood that prices in the area are going down. What is more true is that sellers are lowering their expectations and becoming realistic.
Fuller: ‘We haven’t really dropped prices,’ Fuller said. ‘But we’re returning to reality.’
The common theme seems to admit prices are dropping but at the same time deny it?
“3. Signs: If you have a listing where there are other (or many) for sale signs nearby, I
would recommend that you call the other agents and see how many of them will remove their signs from their listings. At the very worst, rotate your signs until one (or more) of the listings sell, then make sure it has a sold sign on it!”
Oh, I’m sure this recommendation would go over real well with the seller. Yeah, the seller will make the deceptive presentation that his house is off the market, a house he’s desperately trying to sell, so someone else will have the opportunity he could’ve had. Some how I don’t see the realtors pulling this one off, unless they wait for their sellers to go to work and then huck the “for sale” sign in the bushes. “Those damn rascal kids” will be their excuse.
Didn’t I say about a month ago that the realtors would next try to control inventory . I can predict every move they are going to make . IMHO it’s bad faith to to try to hide the market conditions or control inventory .The NAR needs to be notified that one of their cheerleaders is directing agents to attempt to hide market conditions .
First, I agree that if I was a seller, I would be *Pissed* to find my sign down.
Second: Are realtors ™ from competing agencies really going to cooperate?
Third: If properties still aren’t selling, how is this little deception helping anyone?
Also, what if buyers only want to look at “price reduced” properties? Hmmm???
I’ve been predicting for a while that by the ides of October that “Joe sixpack” will know housing prices are on the decline.
Currently, I’m noticing a trend of *more* signs not less. Before, PCH was a busy enough street that anyone selling in the 90277 would place one sign there to direct in traffic with one or two “mid signs” to get one to an open house (if you were lucky). Now… I see open houses with signs directing people in from *every* major street (at least from the four directions). With a sign at every intersection pointing the way.
To think, this hasn’t even really begun. Imagine what it will be like when the tidal wave hits in 2Q2007?
Neil
At least they can’t hide the numbers from realtor.com and the other sites that total up active listings.
I don’t see anything inherently evil in the above. Pretty good advice to his constituents.
Thanks for the post to keep up with the latest shenanigans the RE people are pulling. Just confirms the situation that we all know is unfolding and no amount of window dressing will change the outcome.
LOL. Does Watts really think those desperate chumps are going to rotate signs so that *someone else’s house* will sell before theirs? Not a chance, they’re going to be at each other like a pack of hyenas soon enough, and instead of preserving the comps they’ll be racing to undercut their neighbor. It’s going to get ugly.
Pay no attention to that man behind the curtain!
A friend of mine recently tried to sell a co-op in downtown DC bought two years ago. Her and her fiance want to move in together but the co-op is too small. It sat on the market for several months, with some price reductions. After realizing there was no way to sell without writing a check at closing, they’ve pulled it off the market. They’ll live apart a little longer. But they won’t be able to wait forever to move on with their lives.
It’s not just the adjustable rate folks, and the interest-only folks. It’s moving, new jobs, new relationships, divorces. Renters don’t have to put their lives on hold waiting for the market to adjust. Sellers do. So many of those who rushed in the last few years were young buyers, rushing in to buy before they were ‘priced out’ (most already were, thus the exotic mortgages). What will happen to them?
Amen to that about renters. I live in Orlando, if housing takes a dive, so does Florida’s economy unless you can count on tourism & aggriculture’s high paying jobs to keep things going here…
At least of prices drop, housing goes and Florida is in recession I can pick up and move rather than being stuck upside down in that new home!
So many of those who rushed in the last few years were young buyers, rushing in to buy before they were ‘priced out’ (most already were, thus the exotic mortgages). What will happen to them?
Auger, there is a young couple at the window booth in need of “the special”.
Mort, Am I the only guy in here with a wallet or what?
OH Waitress! I would like to buy a round of “very painful ass-poundings” for the young couple at the window booth please!
I usually like to save my rounds for the more egregious examples of flipperdom not normally for the average folk that stumbled into the gunfight. I do try to accomodate special requests though!
“They’ll live apart a little longer.”
Tell your friend to sell now and minimize her loss. If she waits, her loss will only increase and they will have to live apart a lot longer.
Why is it with these RE Agents that they never talk about prices being down but talk about sales volume being down? I am beginning to hear in Orange County,Ca. that prices are coming down but some how they are never talked about. Are they trying to tell us that RE prices never come down? I am hearing that some offers on resales are being bid 15% off asking prices.
I can tell you people from having both feet on the ground here in Central Florida that the pressure is building.
There are now bandit signs at every busy intersection and the desperation oozes from them. Saw one the other day where the flipper was trying to unload two properties at once as a package….wanted to do Owner Financing and would shoehorn some sucker into BOTH properties for only $ 2,000 down !!!! Whoo Hoo !!!( Phone number had a NY Area code )
Lots of abandoned “HandyMan” projects for sale as well. They swooped in and bought EVERYTHING that had a deed attached. We now have 2bdr shacks near the railroad tracks down here going for 100K.
I wont even address the thousands of homes for sale up in Four Corners ( Polk, Lake, Osceola, Orange county intersection ) that languish on the market unsold….
In my little town of Winter Haven we currently have near 800 properties for sale on the MLS…not counting the hundreds of do-it-yourselfer flipper asshats trying to unload as FSBO.
IT SEEMS LIKE EVERYTHING EVERYWHERE IS FOR SALE. The natives who are lucky enough to sell at these ridiculous prices are pulling up camp and quitting Florida for good. Most of ‘em are moving to Tennessee or Northern Georgia.
I have lived in various parts of Florida for over 25 years and have NEVER seen anything like this….NEVER.
It must end badly.
Great post, Les,
In the last month alone, I’ve seen the # of properties listed for Tampa (just Tampa, not any other cities) go from 6,607 to 7,275 - this is as of today.
FYI, I’m running a site that’s focused on our bubble down here in the Sunshine State. My opinion of the current status is very similar to what’s happening in most places: the market is at the very, very beginning of the down-turn. Tons of inventory that is increasing by the day, but no corresponding reduction in prices. Click on my blog name to go to the site for more…
Interesting blog, interesting observations on Save Our Homes and the downturn in school enrollment. There was more to the school enrollment story last night on the local news. If I was a parent, I would not put my kids in the public school system in Florida. Not if I wanted them to live. The schools are downright scary and many (not all, but many) of them are little better than warehouses, recruitment centers for gangs and clinics for disturbed children that parents are too worn out to handle. So it doesn’t surprise me to hear that families are either fleeing the state, or deciding not to move here in the first place.
Palmetto, thanks.
Yea, the schools are pretty good in some places, absolutely scary in others. I work in NE St. Pete, and would love to live close to work. Unfortunately, I have a daughter who just started Kindergarten, and there isn’t a school within 15 miles radius that isn’t a “Junior Criminal Academy”. So, I commute - and curse the gas prices when I fillup for $50+ every week.
Also, I just added a new post on the fuzzy numbers being reported by the NAR for Tampa. The problem? They are UNDER-reporting the median sales prices. If I did more research, I’d be willing to bet the same is happening in other Florida metro areas. I think I know why they’re doing it - check it out.
http://florida-paradiselost.blogspot.com/2006/08/something-smells-in-bay-area-and-its.html
Great analysis. That smartass anonypuss poster probably didn’t realize it, but he was actually making your point.
Yep, looks like something else besides red tide smells in the Tampa Bay area. I’m in the South Shore area, or East Bay, as it used to be known. Reading the Tampa Trib RE section on Sunday is a real kick. Craigslist is fun, too. But you know, even more than the bubble itself, the phenomenon that astounds me most is the blatant criminal tone of this whole mess. The lying, the cheating, the stealing, all of it. It’s like people decided to go criminal on a mass scale. People who probably were normally decent folks have gone completely, stark, staring, wild-eyed insane.
Forgive me, but I’m going to post this all over the place, ’cause I hate this crap.
Wow….it really goes to show how badly folks are trying to hide the bad news.
Simmssays…Bye Bye Boring Laundry
http://www.americaninventorspot.com
markets are likeing DEflation
you likie ?
not a good thing for a 0 savings debtor economy
Not a good time to be an FB. The guvmint has bigger fish to fry.
“…The guvmint has bigger fish to fry.”
A point lost on many, many folks out there.
Just heard a commercial on the radio advertising 54 homes for sale by the Bank of the Commonwealth. They are offering 1 year with no morgage payments or full closing costs as an incentive. Do not know if they are shorting the builders original prices. Also offering free retro appliances (whatever that is) for the first three callers.
I have NEVER heard of this sort of marketing for SFH here in the Virginia Beach area. There has been a large increase in auctions in the area but I do not know whether or not they are sucessfull due to the owners reserve/approval. Seems to be very early in the cycle for this sort of thing to be happening. 8 months after the top of the market. Must be some weird type of telaphathy (sp?) within the pool of potential buyers. Still willing to bet that the homes that they are attempting to peddle are overpriced. I think I will wait a while, when they own several hundred, pricing will be a little more realistic. Cheers!
I think “retro appliances” are what you see on “30-Minute Meals” on the Food Channel. Modern stuff with the exterior styling of the 1950s.
I heard similiar ads on the radio. I also heard the same bank advertising mortgages and what not, and the immediate impression I got (from my bubble blog training) was that the lending institution is most likely exposed to lots of crappy loans.
I emailed and asked the board of my credit union how exposed they are to a housing market crash, and I didn’t received a response.
…I was horrified mine was cheerfully offering ARMs in this climate… Frustrated, trying to find some entity which resembles a bank more than a casino…
Miami homes for sale inventory jumps past 63,000!! check out the inventory tracker at http://www.realestatedecline.com
That site gives me a headache. There must be 50+ different fonts being used.
like a ransom note.
CrispyCole…Flordia…Panic…Need Quote…Hurry!
chip told me that this relates to florida
postet in the last topic
http://immobilienblasen.blogspot.com/2006/08/jade-homes-shut-down-operations.html
Wow, wonder how long these unfinished houses will sit there, withering in the Fla. sun and moldering in the monsoon rains?
I love the line in the article about how “the only ones who will be hurt will be some subs.” You means those subs with the big, shiny new pickups and boats parked in front of their houses, and the 50″ widescreens in the living room? Yeah, I’m sure the pain will stop with them…
On the other hand, squatters, drug dealers and lovesick teenagers will undoubtedly appreciate the newly-available abandoned properties.
How can Jade Homes go bust so quickly? They sold 123 homes last year; only 4 homes this year. They had to have made some good profit in the last few years (built over 500 homes), where did it all go that they can’t even handle 8 bad months?
TYPICAL Florida scumbag builder. Keep taking in the $$$ until the day you close. Most likely he will go ch 11. IMHO, the shutting of doors was not decided upon last night. Many of these builders suck every last $$ and then fold, only to pop up again under a new name. Roofers, construction, and many other industries are notorious for doing this. I would be curious to see if his subs and suppliers have been paid. Most of the time , they are left holding the bag like the FB’s.
The fact that the owner of jade said something like he is “talking to his lawyer and exploring all options.”, is all I need to know. CH 11 baby
From having done accounting work for construction firms, I can say they don’t put much money away for the inevitable down times. Plus they often finance all those truck fleets, tools and heavy equipment. That’s why I have been critical of the public homebuilders business plan. If they are doing so great, why all the borrowing?
“Chappy Adams”? Where do brokers get these names?
Well, there are still places in Florida where teeth are a luxury.
Actually I think his name at birth was Chapman Adams (the 2nd or the 3rd). Broker of Illustrated Properties, a pretty large Palm Beach County based independent real estate brokerage company. I used to like it when the newspaper had a typo and referred to him as “Crappy” Adams.
The best part of the article:
“Flippers are not buying property now, but they are the ones holding a large part of the inventory.”
In other words, the flippers got caught. Don’t bail them out. The music has stopped and now they have to face it.
I’d love to see a reporter on T.V. interview a flipper and ask ‘Did you ever play musical chairs when you were a kid? And did you learn anything from it?’
It just really goes to show you that a speculator driven market is not stable . In the final analysis, it’s the end-users and locals that will be living in these homes .
Speculators use to always have to put more money down and pay a higher rate in past lender cycles and that is because they are higher risk . People always let their investments and their second houses go before their primary residences. It’s the lenders fault if they let speculators in under the guise of owner occupied . I have seen some underwriters demand proof of a sale of a persons primary residence to prove that they are going to occupy . When someone lives out of state there is a high chance they are a speculator .If the home is not within reasonable distance from their work ,they could be a speculator . If the borrower has own 5 houses in the last 3 years and they currently own 3 ,they could be a speculator . If a borrower has 15 mortgage searches in recent days , they could be a speculator buying more than one property .Come on Lenders get real .
In other words ,if speculators had been treated like they should of been treated lending wise ,they would not of had the power to move market prices up to the degree they did .
MIami prices down 9.4% and inventory up 208% in 12 months. WOW
Make no bones about it, there is a not so quiet building of fear in the population. You cannot have a discussion without the fizzled out real estate market coming up. Many friends of mine have or are going to be “pulling back” on discretionary spending. The real estate industry in Florida and especially in S. Fl is a large percentage of the economy.
Simple economics dictate that an increase in supply lowers the value of the underlying commodity. September is rapidly approaching and that is when the resets start to hit.
Patience…
While resets are starting to hit, its going to be a wave building until 2Q2007. At that point it will crash (with more resets coming along through 2008 in good numbers).
This is going to be ugly. Very ugly.
Patience Grasshopper. Even with sales off 25%, a very large number of sales are being made. I am looking in the Palm Coast, Ormond Beach areas and the sales prices are increased YOY and from QtoQ. The percent increase from previous months is almost zero now, and I think it is going to turn the corner next month. However, it is not a crash here, and as much as I’d like to see things just sink quickly back to pre-speculative prices… ain’t gonna happen without a major economic impact.
So my best guess for these two FL markets is a gradual 10% first year decline starting this fall. 20-30% over the next 5-8 years. Holding at 30% decline until fundamentals catch up. Florida has a positive population gain, and it is still desirable amongst retirees, despite all the bad press recently.
So we cannot expect buyers to just dump their properties at a 40% discount for a while. Maybe one or two desparate sellers and maybe some condos in Miami or Naples, but not a wholesale market shift downward around the Jax / Orlando markets. It will happen, but it will take some time. gordo
I wish 20-30%! My best guess is 10% decline for a couple of years for a net of around 20-25% comedown of current prices, and then return to a regular market, bar any other economic disruptions. Of course, gasoline prices are anyones guess, with peak oil anywhere from now to 40 years from now predicted.
Well the speculative portion of the price has to be accounted for… and in NE FL that portion seems to be in the 30-40% range [over the last five years]. Giving back normal appreciation for those years and accepting the fact that FL is still a growth state, you may be correct. South Florida will get banged up pretty good, but their prices were high five years ago. Jax and Daytona were very low in comparision so I think there is room for their prices to move up relative to housing in the southern tier of the state. Either way, it doesn’t look like a crash for JAX and surrounding areas. I wish I was wrong and hope I am. gordo
Well the speculative portion of the price has to be accounted for… and in NE FL that portion seems to be in the 30-40% range [over the last five years]. Giving back normal appreciation for those years and accepting the fact that FL is still a growth state, you may be correct. South Florida will get banged up pretty good, but their prices were high five years ago. Jax and Daytona were very low in comparision so I think there is room for their prices to move up relative to housing in the southern tier of the state. Either way, it doesn’t look like a crash for JAX and surrounding areas. I wish I was wrong and hope I am. gordo
What is reality? What was reality the last 30 years? I think the common wisdom will be “real estate is a very risky investment” before this is over. But even then, you have boomers needing to get out of assets like real estate and stocks, with their blown up 401k and imploded pensions. So maybe it really is different this time.
In a bad way.
you make a very good point that i don’t see discussed much. my six siblings and i are all baby boomers. we all own our homes. none of us are trying to buy second homes. 5 of us have a total of 12 children yet to attend college. we are not buying anymore property. who does everybody think they’re going to sell to? boomers already own, gen-x is 40% smaller, gen-y has too much consumer and educational debt, is lazy and competes with a couple billion people willing to work for less. it is my theory that the last 3 housing booms have been driven by boomers — each one reflecting new household formation by incoming groups of late 20- and 30-somethings. guess what, folks? we’re done. i think real estate would have been in a protracted downturn regardless of this decade’s recent insanity. boomers will be net real estate sellers for the next 20 years.
I think you are discounting the tidal wave of immigration. This is where our population increase has come from the last 10 years. And whoever is in is in, even if we lock the border tight, we aren’t getting everyone who is in, out. These immigrant families, legal or illegal, tend to have large extended families and are buying into capitalism big time. I don’t think they are quite empowered enough economically to hold up the high prices we have now and agree with projected declines. But buy they will, albeit at lower prices. They will give a lot of support to this market after the initial speculator fallout - at lower prices of course. Eventually, all the specuvestor homes will find a family at a new market price, it just may not be boomer familes.