Some Florida Deals ‘Didn’t Make Sense From The Get-Go’
The Palm Beach Post reports from Florida. “Palm Beach County home-price growth slowed in the second quarter compared with last year in the steepest three-month decline on record, according to a government report released Tuesday that shows the housing slump deepening.”
“Palm Beach County’s one-year home-price growth ranks 22nd out of 275 metropolitan areas, the federal report said. Although on its face that sounds like good news, it’s offset by a dramatic drop in the number of homes sold year over year and a huge expansion in inventory. The number of homes for sale in Palm Beach County rose to 22,206 in July from 7,701 in July 2005, according to a local real estate firm.”
“There is another important aspect of Fannie Mae and Freddie Mac that suggest the results shown in the Palm Beach County report, in particular, should be evaluated with caution, an analyst said Tuesday. ‘Fannie and Freddie,’ as they’re known in the mortgage industry, have low shares of adjustable-rate mortgages, the analyst said, but Palm Beach County’s share of adjustable-rate mortgages is high.”
“‘The last estimate I saw was about 57 percent for purchase loans,’ said consultant James Lawler. ‘The OFHEO index for your area would contain very few observations.’”
The Sun Sentinel. “For the first time in 35 years, Palm Beach County public schools started class with fewer students than the previous year. District officials anticipated a small decline this year, with hurricanes and high housing costs driving residents out of the county. But actual enrollment was about 2,200 students below even those projections.”
“Officials say housing costs may be the biggest factor in the decline. More than 12,000 rental units have been converted to condominium units, demographer Art Wittman said. ‘I’ve had parents tell me they could not afford to live in their own home,’ said Carol Blacharski, principal at Loggers Run Middle, west of Boca Raton. ‘If I did not already own a home, I could not afford to be here.’”
The South Florida Business Journal. “Here’s a fresh indicator of problems in the condo and townhome market: More than 50 unbuilt projects are listed for sale in the region. Some developers who fail to sell may find their projects going back to lenders. Miami hosts a majority of the more than 50 projects.”
“‘It’s a problem because a rental community developer won’t pay more than $35,000 a unit land cost, compared to $60,000 to $80,000 for a typical condominium project,’ CB Richard Ellis VP Robert Given said.”
“In Broward County, Brenner Real Estate Group President Scott Brenner had a contract with a major northeastern homebuilder firm that took a pass on the project at the last minute. ‘The buyer got concerned about the market,’ Brenner said, although he declined to name the publicly traded firm.”
“There is no single reason for the glut of offerings. Some are deals falling through, others are back on the market after financing turndowns and some developers are just worried about market conditions. (Developer) Luis Dominguez said he was not concerned about the oversupply of units in Miami and blamed the ‘doom-and-gloom reports’ about the market on the media.”
“There’s no question that Miami faces an oversupply of units. Consider the numbers: Since 1995, fewer than 15,000 residential units have been completed. Right now, almost 18,000 units are under construction. Nearly 63,000 units are in the permitting pipeline. And that’s just in the city of Miami.”
“In some cases, the slowdown will lead to a reduction in projects, and help the region’s workforce find homes they can afford. ‘Some deals just didn’t make sense from the get-go,’ said consultant Jack McCabe. ‘Market price dynamics work in both up and down markets, and we are in a down market right now.’”
Some other Florida links from the past weekend:
‘The full page advertisement in the Gulf Harbors Civic Association’s newsletter was a desperate plea to homeowners. “WHY IS EVERYONE SELLING? MORE HOMES FOR SALE MEAN LOWER PRICES! STOP SELLING!’
‘After struggling home builder Jade Homes suddenly closed its doors last month, buyers of about 75 homes found themselves in difficult straits. Ali Alshalkmi is a Tampa businessman who bought 10 homes at a total cost of about $3 million for himself and members of his extended family. He deposited $200,000 with Jade last year.’
‘Are you trying to sell a house in South Florida and starting to get a little desperate? ‘I thought, ‘Something is cooking here,’ said Saecker. ‘Not only is the market going down, but people are really getting anxious, desperate and motivated to make deals.’
BAHHAHAHHAHA! I can see the blood coming down the street!
The clowns are trying to talk up the market. My response to them:
STOP LYING!
REAL ESTATE GOES DOWN!!
BACK TO MCDONALDS FOR ALL MEMBERS OF THE REIC!!
ENTER DARK HELMET:
You see lonestar? Evil will always triumph….because good…is dumb.
I think Evil (greed, group think, and ignorance) are failing and good is triumphing.
Or Dr. Evil: Is it an evil condominium project?
Maybe the Gulf Harbors Civic Association will take notice next time investors are buying homes in their area that they have no intention of living in and try to put a stop to it. These people that are selling have no vested interest in the area. They don’t give a damn!
It would be interesting to know how many members of the Gulf Harbors Civic Association were ooh-ing and ahh-ing and clapping and secretly counting their riches as these same investors and speculators drove the ‘value’ of their own homes through the roof over the past few years.
All of them, Huck. All of them.
OOOOOOhh.. I see a bunch of lawsuits here. I wonder how many of those FB’s lied on the apps? Investors vs. owner-occupied??? No doc vs. doc? No income needed?
This bubble is falling apart faster than a J Lo marriage.
Maybe they prefer that homes go into forclosure and have a bunch of weeds and other overgrowth in the yard- that will help property values.
Throughout 2004-2005, I heard or read many well educated people argue that housing markets will not crash like the dot-coms because housing assets do not offer the same liquidity as stocks and bonds.
Ironically, however, from reading these articles and observing the massive build of inventories in multiple markets across the country, it seems that this same lack of liquidity is going to crush these markets.
The well educated class were right about one point, however. With the dot-com stocks you could quickly sell and quietly take your medicine. With houses on the other hand, you are left with an asset that needs continuous cash outlays for things such as maintenance, debt servicing, and insurance. As a result, the effects of this bubble’s implosion may be more disastrous.
Do you think they point this problem out in those “weekend-get rich in real estate” seminars?
great last paragraph. if you watch those flipper shows, it sure looks on their face like a crash if they can’t sell and have all kinds of expenses. so while your investment is depreciating, you’re still paying money to it every month.
WOO-HOO! Go Gators!
Actually, they’ll crash FASTER than dot-coms because the don’t offer the same liquidity….you just have no way of getting a true value of your house until it’s sold…but that doesn’t mean it’s worth anything.
If you think about it…suppose you HAVE to sell your wonderful get-rich-quick scheme because you can’t make the payment. But there are NO BUYERS (20 other condos are for sale in your same unit.)
Basically, it’s worth zero!
or worse, when you sell you have to bring money to the table.
The funny thing is — this guy will be luckier if he just loses his $200,000 than if he actually had to purchase all 10 houses. I hope he gets his money back — but I also hope he realizes his good fortune in either outcome.
“Ali Alshalkmi is a Tampa businessman who bought 10 homes at a total cost of about $3 million for himself and members of his extended family. He deposited $200,000 with Jade last year.”
Bought 10 homes for his extended family my a**. Sounds like another joker trying to get rich off a flip after buying right at the top. LMAO!
I wouldn’t buy 10 pairs of socks at one time, much less 10 houses.
“Not only is the market going down, but people are really getting anxious, desperate and motivated to make deals.’”
I am waiting for the sellers to reach Panic Stage, and then I know we will have the opportunity for low ball offers being accepted
“(Developer) Luis Dominguez said he was not concerned about the oversupply of units in Miami and blamed the ‘doom-and-gloom reports’ about the market on the media.”
Oh, right, THAT’S the problem. No, it’s never the market conditions.
yeah - it couldn’t possibly be the oversupply of units…
Reminds me of ‘I can’t be out of money. I’ve still got checks in my checkbook.’
Full steam ahead, Captain Dominguez. Ignore that iceberg over there.
As I reported yesterday in another post, In PB county there is a THIRTY SIX MONTH supply of inventory. Now we find out that 57% of the mortgages are an ARM.
tick…tick…tick…
And yet they keep building !
McCabe again:
SHADDUP!
txchick57:
Shhhh…..
???
Is this a side debate, like mine with Northern VA? Who’s McCabe?
Response to advertising that urged sellers not to sell .
(1) How can I not sell when I can’t afford or rent the property .
(2) How can I not sell when my full intent was a 6 month flip to pick up a 50% gain
(3) How can I not sell when I lost my construction job and my wife who is a mortgage agent just got laid off . Also my friend is selling because they lost their job in the travel/hotel business .
(4) How can I not sell when my insurance and taxes just went up and I’m on a fixed income .
(5) How can I not sell when I got a job transfer .
(6) How can I not sell when I will be in foreclosure in 3 months
(7) How can I not sell when a hurricane is a coming
Was in Tampa this week and there were quite a few auctions listed in the Tribune - a couple of absolute auctions as well. The ship is turning.
“In some cases, the slowdown will lead to a reduction in projects, and help the region’s workforce find homes they can afford.”
The slowdown may also lead to in increase in unemployment as construction, RE, and mortgage jobs dry up as well as “trickle-down” retail and service jobs- so maybe people won’t be able to afford those new low prices.
Does anyone have numbers on Monroe County (FL) housing supply? While there’s not the land there to overbuild, there are plenty of condos for sale and the prices are outrageous. Would like to hear most about Islamorada and Key Colony areas. Thanks.
I’m very interested in that as well. You can go here to see what’s for sale:
http://www.realtor.com/marathon/nbregion2.asp?st%3Dfl%26poe%3Drealtor&poe=realtor
The prices there are now so expensive that if somebody GAVE me a condo there I’d have to rent it out full-time just to cover the taxes and insurance. There’s no way to justify buying at those prices. Something has to give, I hope, as I’d love a place there.
I’m from Homestead but lived in the Keys for many years. I think I would only live there in a small, inexpensive, paid-off home or a mobile home. IOW, no insurance.
We used to own in Islamorada (sold in ‘01) and even back then (with ok insurance rates and not too high taxes) you could only partially cover your owner expenses with rentals. The Keys rental season is very short. I like the mobile home idea (never thought I’d say that). Lots of those in Marathon and Big Pine Key.
I live in Marathon (midway between Key West and Key Largo) and real estate sales have nearly come to a stand still down here. I just compared YOY transactions for April (our selling season runs from January through May, with March/April being the peak). According to Monroe County records, in April of 2005 there were just under 900 real estate transactions. For April 2006, there were less than 100 (79 I believe) - Ouch. Prices have truly gone insane here - much more expensive than Miami. Homes that sold for $150,000 in 1998 are now asking nearly $1,000,000 - ugly, soul-less crackerboxes on cluttered streets, interspersed with dilapidated trailers perched on mediocre canal front lots. We sold our place in 2004 and now rent a nice home with dock on the open ocean for 25% of what it would cost to own. My wife and I drove around Islamorada this weekend and were stunned by the garbage they are building - cheap particle board and vinyl sided monstrocities under construction for $1000 to $1400/ft (one place was named Anglers Reef, I believe). These things are right next to U.S. 1 and boat slips are extra - any takers ? I could go on and on, but it’s too depressing. This will end VERY badly. If you are considering buying in the Keys - Don’t. It’s far cheaper to rent, and you’ll sleep better at night not worrying about the next hurricane.
Thanks for the Keys insight. We sold our Islamorada condo at the end of ‘01 and we made 50% after owning for eight years. Our intent was to buy back in when we were ready but I don’t see that happening anytime soon. Even if prices come down, the tax and insurance problems sound like a nightmare. Florida has a lot to fix. However, you never know, maybe a Key Colony Beach bargain is out there in the future.
The way this bubble is collapsing, you may very well be able to pick up a Keys property at a reasonable price in the next few years. Once prices are back down to where they should be, the insurance and taxes will be more manageable. Key Colony Beach is a nice area - much more manicured and not cluttered up like some areas (they also have the strictest traffic police around - when I head down Sadowski Causeway onto the island I don’t dare go even 1 mph over the posted limit !).
Here is a link to Keysnews dot com, the electronic version of the Key West Citizen. It is an article about a local realtor who has taken it upon herself to call sellers and try and convince them to pull their homes off the market to reduce the glutted supply (she did this after reading a David Lereah memo) :
http://www.keysnews.com/286960902849236.bsp.htm
You could declare the secession of the Florida Keys from the U.S. to become the Conch Republic, that way local officials can set their own interest rates.
Anglers reef - Did you see the website description? Here’s part of it, whoever wrote it had to be smoking some of that square grouper the keys used to be famous for:
“The community is limited to just fifty-two single family homes showcasing spectacular ocean views, each crafted in the style of Native Conch and the British West Indies, adorned with tin roofs and gingerbread trim - the look and feel of a cozy, Caribbean fishing port.”
I’ll agree the view is beautiful, but they’re just a bunch of small townhouses on the side of the road. Looks like they stacked two single-wide trailers on top of each other. Beacon Reef is my favorite in Islamorada, great location, great pool and dock area. Of course, almost $1 million for a 1,000 square foot condo is crazy.
When I drove from Miami down to Key West earlier this year, I was shocked to see construction on Upper Matecumbe Key within shouting distance of the Labor Day Hurricane monument. It had been many years since I made the trip down US-1, so I also was dismayed by the size of the Home Depot on Marathon, which had not previously been there. I guess I was hoping for something to scale, instead of the same big box you find anywhere.
Loved Porky’s BBQ, though–that by itself might be worth another trip to your town.
I live in Key Largo. And there are nothing selling. I rent a 650K dollar condo for 1100 a month. When I use to drop off my rent check at the realestate office. It used to buy phones ring and elbows flying. These past 5 to 6 months. Nada. Oh and I checked Zillow yesterday. My condo is now 500K.
The mortgage mom stories are getting thicker. 6 months pregnant and no nest; mean ol’ contractors ripping out plumbing; fly by night builders unable to deliver of their promised streets of gold. It occurs to me that if all of this crashes fast enough, maybe whole neighborhoods of FB’s will simply refuse to pay - and refuse to move. Thousands of ‘owners’ in protest; evictions happening surrounded by chanting hordes of fellow FB’s screaming ‘RE Bloodsucker!’ and ‘Death to Fannie Mae!’ Man o man! Sounds like ACTION NEWS heaven.
Boy, you’re just a barrel of sunshine this morning.
Yeah, as I re-read that, it is rather gloomy. Trouble is, I also find the image entirely possible.
That would be interesting… a U.S. version of squatter cities like in Robert Neuwirth’s book Shadow Cities. (See his blog.)
(It occurs to me that if all of this crashes fast enough, maybe whole neighborhoods of FB’s will simply refuse to pay - and refuse to move. Thousands of ‘owners’ in protest; evictions happening surrounded by chanting hordes of fellow FB’s screaming ‘RE Bloodsucker!’ and ‘Death to Fannie Mae!’)
Yep, the mother of all cram-downs is definately a scenario.
But there would be a re-backlash if the losses hit other people in the pocketbook. Ideally the HELOC and “20″ loans, the hedge funds, along with the speculators, would take the hit, leaving conforming loans held by Fannie and Freddie with limited losses. That would stop the speculation, reassert the standards, and make housing affordable. But who knows?
Fan and Fred got involved in co-op and condo workouts in the early 1990s bust in NYC. Anyone know what happened back then?
I expect the same this time around but on a national scale.
Ideally the HELOC and “20″ loans, the hedge funds, along with the speculators, would take the hit, leaving conforming loans held by Fannie and Freddie with limited losses.
The HELOC and the 20 loans are certainly the ones that are going to take the largest hit, by the nature of the conforming loans..
If RE goes down only 20% (!), then Fannie and Freddie don’t really care, no?
I also feel that Fannie/Freddie won’t get hit to hard because of the loan amount limits they had .
your comments make me think of the farms that were being auctioned off in the corn belt years back.
“your comments make me think of the farms that were being auctioned off in the corn belt years back.”
I had, and always will, sympathy for mom ‘n pop farmers whose farms were auctioned off. Most of those farms were in the families for generations. Virtually none were acquired as speculative investments in the contemporary meaning. As for today’s fools, grifters and bad pickers, I have no sympathy. Big difference.
Standard Pacific Abandons Downtown L.A. Condo Deal
The 272 units, which failed to attract enough buyers, will be leased as apartments instead.
http://tinyurl.com/fjr4q
Requires registration. Gist?
Duuuuh. “Expanded” gist?
U.S. Home Prices Climb 1.17%
The quarterly gain is the smallest since 1999 and the latest sign of the slowing housing market.
http://tinyurl.com/z7emu
that “gain” was from last qtr as transactions are taking 6+ months now
Florida condos for everyone! Next to implode: Arizona!
But everyone in AZ says “it’s different here, everyone is moving here, the economy is great, shut up Bubbleheads. my property is up 300%.”
And I’m like: “Right, 300% in 2 years? No Bubble Here, Move along!”
I wouldn’t mind one of those beach front Miami condos that are listed at 1.5M for 200k or so. I might be able to get a few friends/relatives in on the deal to make it a cheap time share.
I’m in Tucson, where the job market has been replete with low-paying service jobs for years. Tell me again how people moving here are going to afford a house?
I own a lot in Florida, bought 3 years ago. The assessed value went up 300% from last year and the taxes are up 400%. Should have sold it last year, but keeping it is also ok. Many Florida home owners are facing massive and nearly simultanous increases in property taxes and home owner’s insurance. These bills are just coming out. It will not be surprising to seeing many more people listing their properties, especially speculative vacation homes. It’s too late. I am not sure why the local governments would not reduce the tax rates as home prices double.
‘I am not sure why the local governments would not reduce the tax rates as home prices double.’
In my area, the local rag recently ran a story about the pay increases given to top managers, police and fire - as well as new hires by the bunch - due to a “windfall of local property taxes”. These tax increases are baked in and spent. Lowering rates and/or assessment is not an option. The cancer analogy is oh so true.
California got itself in a lot of trouble during the dotcom days. Tax revenue went up, and they spent it just as fast. The politicians never think about paying down debt. They end up with expansion that they just cut later which is unstable practice. Big businesses do it too.
Sorry, I have to pick up on this one.
I would like to qualify this by saying that, until about 2 months ago, I worked for a local government in S. Fl (West Palm Beach).
WPB has seen a surge in revenue like nothing before; its totally amazing. The tax income, combined with the increase in permitting? There is more money there then you can imagine. PB County has something like a 2 billion dollar surplus (which they are keeping in case of emergency).
This is part of the problem down here. I have NO idea how government can look at the increase in value and NOT decrease the tax rate. Why does it cost double to get the same services now; when 4 years ago it was 1/2 the cost??!
I think this is one of the “silent” problems in the housing boom, and one that will get people really, really pissed off when it starts to collapse. They have no idea how much money runs through these government offices, much of it based on “home value”. Take a look at South Florida Water Management; they have more money then some small countries!
You know what one of the biggest problems is? Nobody can/will ever remove the tax burden until everyone feels it equally. If you bought here 4 years ago, your taxes would be “locked in” at a max 4% (maybe 6, I don’t remember) gain per year. So, even though your home doubled in value, your not paying any extra taxes. However, the guy across the street, who just bought? He is paying DOUBLE!
What a great system. When majority rules, it makes perfect sense. Most people are locked in, they are NEVER going to vote out that kind of protection. And they are discussing giving people portability of their tax bills (so if you move to a bigger home, you don’t pay the full rate on the new home, but what you would have if you had bought that home when you bought the home your coming from).
This, believe it or not, is actually how it works here. My father is a professor and an accountant, and we got into a huge argument about this (there is NO way that’s how it works down there; its taxation without representation; etc, etc). Anyway, he looked it up, and his jaw hit the ground.
Unfortunately, I did not want to be right that time.
A lot of people have their second home/condo on the beach.
These people do not get homestead exemption(3% cap on taxes like the people that live in their homes) and they do not vote in that county…So why would the politicians care about
them?
True, for the most part. But alas, many of the snowbirds are liars (tax cheats) who claim Florida as their principal residence regarding Florida taxes on their winter home and also claim homestead, and the attending tax break, on their Yankee home. If Florida tax assessors offered bounties for these people, the flurry of activity and “Holy Shit!s” would put Steve McQueen to shame.
Yea, this 2-tier system of taxation is a complete joke. However, we have to give California credit for inventing it with Proposition 13, back in the early 80s.
There’s a good article on the situation here:
http://www.blogger.com/comment.g?blogID=32333514&postID=115558950091578644
PB County has something like a 2 billion dollar surplus (which they are keeping in case of emergency)
Did I read that right? A municipality saving for a rainy day?
Impeach the bastards!
“I am not sure why the local governments would not reduce the tax rates as home prices double.”
Because they were greedy and stupid. One or two taxing jurisdictions might have wisely salted the money away, but most spent it on expanding their infrastructure, compounding their career-threatening actions with added recurring costs: more employees and more buildings/things to maintain.
They should have reduced millage rates in direct proportion to the increase in valuations, except for the amount needed to service new construction. I will be in the commission chambers to remind them of that, quite pointedly, at budget approval time. Hopefully you and many others will, too.
If you do not un-elect as many of these politicians as you can, zero will change. Get rid of large swathes of incumbents and the remainder will be listening to your view very intently.
Ah yes, all these auctions starting remind me of when we bought in Juno Beach, Fl. back in the spring of 1992. We bought a townhouse at auction for 165K, it had been on the market for 235K. It was in a very nice development on the intercoastal and we lived there for five years and sold at break even in 1997. People also forget that after the early 1990’s bust we had several years of flat prices.
Chris
I bought a place on the ocean in 1989 and for the next ten years thought I might have been better off with passbook savings. Then it took off. And soon enough, it might look like 1989 again.
That realtor in Gulf Harbor is a complete, unadulterated idiot.
“DON’T SELL!” really means: “I’m trying to sell several investment properties of my own, and now you’re competing against me! It’s not fair, It’s not fair, It’s not fair, It’s not fair, It’s not fair!!!!”
(cue world’s smallest violin here)
Jerry — glad to see that your are posting again on your blog. I had bookmarked it “occasional update.” Things are rolling now.
Two things:
1. I personally know 4 families that purchased a new house before
selling their previous…They are all in near panic mode…How many of these morons are out there.
2. The mls is not even close to the number of units for sale. I know
of a large condo complex in New Smyrna Beach that has 75 units for sale. Only a few are listed in MLS…
Yeah, probably all 75 are under one listing.
These so called matchup desperate-sellers-with-low-ball-buyers websites are a crock. See a bunch of realtors still trying to get 2X 2002 prices in
florida. Gimme a break. I aint buying to till I see tons of screaming desperate sellers on craigslist and we’re back to 2002 prices.
http://www.motivatedsellernetwork.com/searchresults2.php?type3=17&opt7=FL&opt9=&opt1=0&opt2=0&minprice=&maxprice=&Submit=SEARCH&page=1
2002? You’re easy. I think that most of us are looking for 1999-2001 prices, with dips to 1997.
But houses can be like split-tails — along comes that one…
“Florida is working off a totally new economic model than any of us have ever experienced in the past.”
LOL. I just crack up reading “working off a totally new economic model.”
Does anyone have an update on the Melbourne, FL market? I sold a 3br/2ba 1460 sf. home there in Feb. 2006. The homeowner was a family member who passed away. It was in interesting situation in that the prices had gone up substantially in 2003 to 2005. Most of the neighbors were saying to hang on to it until the end of 2006 to get $250K. The next door neighbor told me everything being bought in the area in the last two years were investors with interest only/adjustable loans, and she thought the prices were going to come down. The realtor I chose listed it at $225K in late Nov., 2005. I got one offer for 200K and one below 200K. In January 2006 the realtor told me the market had come down a little, but she thought I could get 220K. I received an offer in late Feb. that was $215K, as-is, cash, closing in 20 days. Apparently a young, newly married couple were getting the home as a gift from their parents. I didn’t even counter. The home was structurally good but needed paint throughout, some carpet replaced, and had the original kitchen/baths (1986). I thought the offer was a reasonable offer, and it closed with no problem. I had a man cutting the lawn for me, and he was shocked when I told him it sold. He said NOTHING was selling and there were for sale signs on every other home. I am just curious as to what is happening now, are prices coming down, is anything selling? Thanks.
You made out like a bandit. I shoot skeet with a guy who recently was eating, tile by tile, some spec homes he built there, about the same size as yours (Melbourne is a large RE area). Bottom line: whatever house you might have owned in Melbourne in early 2006, if you sold it at a price that an honest Realtor did not think was flat giving it away, you dodged a big bullet. Be thankful and contribute a noticeable amount of money to some cause that is worthy, to you. Too bad for the young couple who bought the place; hopefully they have good income and will stay long enough to see it all come back.
Chip, I was the executor for this estate, and the money was left to the homeowner’s grandchildren. I interviewed three realtors. One had a hard time coming up with a price. She said things were going up so fast I should just pick a price and add on $25K (???). Another said I should list it at $207K and I would get $200K or less. The realtor I went with initially thought it would sell for $220K, and suggested listing it at $225K. In almost 3 months on the market, I had the two offers of $200K and something so far below $200K that my realtor didn’t even accept their paperwork. I have bought and sold homes in Maryland without a realtor, and I generally don’t feel a realtor is necessary. I will make an exception for my realtor in Melbourne: she was outstanding. I felt she not only gave me good advice, she also took care (before being asked) of lots of details for me. She had a repair done and never charged me. I think she earned her 5% and was honest with me. I never met the young couple as all the paperwork was sent to me overnight to sign. I just hope they take advantage of starting out with no debt by staying that way.
BTW, unless that place is very close to the ocean or river or yuppie-walk, its value will be $150,000 TOPS when all this is over, IMO.
Chip, The house is not near the ocean or river. It is off of Croton Ave, in a neighborhood near the intersection of Croton and Lake Washington. It is about a 15 minute drive to the ocean. I think the average price went from around 120K to 220K in the period 2002 to 2005. I also wouldn’t be surprised if the value is $150K in two years. I considered renting it, and I found out the rent would be about $850 per month. It was an easy decision to sell instead.
“For the first time in 35 years, Palm Beach County public schools started class with fewer students than the previous year. District officials anticipated a small decline this year, with hurricanes and high housing costs driving residents out of the county. But actual enrollment was about 2,200 students below even those projections. Officials say housing costs may be the biggest factor in the decline.”
“…may be the biggest factor.” Bet they aren’t. I will bet that the school officials, lazy beings that they tend to be, used building permits or new-house sales or some numbers a Hermann Göring-inspired planner gave them. Nobody, nobody, bothered to ask how many of these new housing units might remain empty for the foreseeable future because they were bought by speculators who never intended to live in them. The only things breeding in those houses are cockroaches (or, as we fondly refer to them, palmetto bugs).
Another pin stuck in the Florida bubble is soaring homeowners insurance costs. In many locales near the water (ocean or gulf), it is not uncommon for owners to pay a premium equal to 2% of the coverage each year. For example, the owner of a house insured for $200k (land excluded) is probably paying between $3,000 and $4,000 per year for insurance.