‘Market Showing Little Signs Of Revival’: Florida
The Palm Beach Post reports from Florida. “Big home builders have been warning Wall Street for months that housing demand just isn’t what it used to be. They’re slashing profit targets as stocks slide and would-be home buyers try to make sense of it all. Even in Port St. Lucie, the country’s third-fastest-growing city, the trend is playing out.”
“For proof, look no farther than the 203 single-family home permits in August, down 70 percent from the 669 permits issued in August 2005. The figure has been dropping all summer.”
“With the real estate market showing little signs of revival, some condo converters are facing this dilemma: Should I keep trying to sell these units as condos, or just give up and go back to apartments? Folks who bought units in condo conversions are starting to realize their new homes still operate more like a rental apartment than a condo. Short-term renters are being cultivated, even as sales continue slowly.”
“As condo conversions limp through the summer, it seems the longer sales go on, the more some buyers become skittish and cancel their reservations. At the 160-unit Pineapple Grove Village in Delray Beach, for instance, sales and/or reservations stood at 104 in September 2005. But as of July 1, that figure had dropped to 85, Jack McCabe said.”
“Another Strand condo has unraveled completely. Developer Cary Glickstein has canceled The Strand condo in downtown Delray Beach and returned $15 million in deposits. A factor that ended the project: Glickstein’s buyers were tired of the waiting game. The final straw was seeing one buyer, ‘near tears,’ come into the sales office, Glickstein said. The buyer had used his daughter’s college tuition for his down payment.’”
The Sun Sentinel. “Michael Perlmutter’s someone who spots homes in foreclosure or preforeclosure and then resells them. ‘Eighty percent of the part-time weekend investors who dabbled in real estate have folded,’ he said. Perlmutter said he gets five to seven calls a day from people in financial difficulty looking for someone to buy their houses. ‘There’s never been a better time than right now because of the supply,’ he said.”
“Gone are the campers, the speculators who lined up, sometimes for days, to snap up prime condo units at early prices. Local expert Mark Zilbert in Miami Beach, said that half the buyers who hold contracts on preconstruction condos, most of them real estate speculators, don’t want to complete the purchases on their condos.”
“‘They just want their deposit back to get out of it,’ he said. ‘So an opportunity lies for someone approaching a buyer who bought an apartment in 2003 or 2004 and offering them their contract price.’”
The Pensacola News Journal. “More than a dozen Perdido Key condominium associations are alleging the county has overvalued their property. In 2005, values shot up as supplies dwindled and demand for housing surged. This year, properties are languishing for months on the market, if they sell at all.”
“‘The actual values for 2006 are going down because of a glut of condos,’ said Chuck Hoffman, who owns property on Perdido Key.”
The Naples Insider. “New construction developments (and apartment conversions) released in 2004 and much of 2005, that would normally take several years to sell, took just a matter of days to sell to investors. When built, many investor owners wanted out, vs. waiting for some future date to sell. Basically, rolling several years worth of future listings of homes, forward to today.”
“The market has homes that would not normally even exist, listed for sale. And if they did exist would be owned by an end-user buyer, and not be for sale. Overall, Naples has about a 19 month supply of homes for sale. At least 50% of homes are listed significantly above current market prices and have only a lottery’s chance of selling.”
“When sellers realized they could not get 20% higher than peak, they lower their prices to the peak price levels, when they could not get peak prices, then some sellers listed below peak pricing. I can site hundreds of examples were homes have sold by 30% or more off of original list price.”
‘The housing market, traditionally Florida’s ally, is hostile to many people today. The combination of huge post-hurricane insurance increases and soaring property appraisals can be ‘toxic’ for real estate statewide.’
‘Much of 2005 was a time of skyrocketing sale prices. Homes were scarce and speculators discovered Pensacola post-Hurricane Ivan. But no one is ‘flipping’ property for big bucks now. Yet, another tax bill is due.’
‘It’s kind of a double whammy,’ said Blair Stephenson, who owns rental property in East Hill. Raise the rent and possibly lose tenants, or be unable to sell the property in a glutted market with high assessments.’
Just what Florida needs now: An earthquake
Sun-Sentinel.com, FL
6.0 earthquake in Gulf rattles some Floridians for 20 seconds
Well, there goes one of my “back atchoo” taunts to Californians who diss Florida as being swampland and hurricane prone. Ah, but we don’t have earthquakes! Must be those California specuvestors who brought the quakes with them, lol. Sheesh, well, get ready for the tsunamis.
Don’t miss the comment section at the bottom of the PNJ article to get the on ground local reaction. Lot of bitch’n and moan’n.
time to buy ?
after 7 to 20 years of above mean/income pricing ,depending how you look at it. A little soon,don’t you think
try 07 or 08 dude
‘little signs of revival’
Is that is? They expect revival? After a what , 9 month ’softening’ , people are really expecting to start a revival? After the most ludicrous speculative boom in at least 60 years , and they think a little 9 month inventory buildup and some mild price erosion is goint to be the extent of the correction? I expect a revival too - in several years and from much more historically realistic levels.
- Basically, rolling several years worth of future listings of homes, forward to today.”
-“The market has homes that would not normally even exist, listed for sale. And if they did exist would be owned by an end-user buyer, and not be for sale.
Homes that should not exist or be for sale. Well said.
I think “little” in this case means “no”.
Not a lot of sympathy here for people using their children’s college tuition money as a downpayment on a stinkin’ condo. What was the parent thinking ? Not of his kids’ future, evidently. This is going to wind up looking like the stock market fall of 1929, after everyone leveraged themselves to the hilt and bought shares on margin. The housing debacle will take years to unwind and seriously deflate this country’s monetary values, etc….for us, cash is king right now. We have pulled in our horns even more than before…
I’m not offering sympathy, but I will offer you what they were thinking…We need more money for college than we can save, we’ve got to either invest in the *risky* stock market (remember 2000!), or we can invest with easy terms in the only investment sanctioned by God to never decline in value.
If you believe as they do, they made the right choice.
Well sure, and they could have gotten even a bigger return on investment at the roulette table if they had won.
It never ceases to amaze me how so many people think or expect that they are entitled to windfall profits on their investments without risk. I just want to ask these people if they think it would be reasonable for their banks to charge them 50% interest on their mortgage and car loans and if not, why not. Because that’s exactly what they are expecting other people to pay them for their money.
I like that analogy! I will use that one!
He should be thanking the heavens on his knees that he got the deposit back. By the time this is all over, lots of these “investors” will get nothing back after the developer folds with the project half finished or runs off with all the money.
wow 30% off peak in the most popular state for cash buyers from the North- better keep that story under wraps
At the Hot Properities blog on Business Weekly, I’m getting hammered by a few people who still think the winter will bring back the buyers in florida! I went back to past posts and found some interesting facts.
This past April I posted that according to Realtor.com zip code 34202(the lakewood ranch area) had over 500 homes listed with the least expensive home being $349k. Today that same house is listed for $258k and there are now 1,608 homes listed.
I can’t believe these idiots! One has called me an angry person wanting the market and Florida to crumble! Oh well, the good news is that Business Weekly has finally stopped the bullish talk when it comes to real estate!
Oops, my point I was trying to make before my ranting took over, was that the market price in Bradenton has started to drop down almost 30% and the houses still aren’t selling.
I saw those posts - that Pamela chick is out of touch with reality. I stood up for you on a couple of those posts (under the name Wes).
thanks! Pamela seems to have given up. Tricia is still hanging in there! she has yet to give any valid reason other than the world class beaches and weather as a reason for the market to bounce back.
“New construction developments (and apartment conversions) released in 2004 and much of 2005, that would normally take several years to sell, took just a matter of days to sell to investors. When built, many investor owners wanted out, vs. waiting for some future date to sell. Basically, rolling several years worth of future listings of homes, forward to today.”
Wow, you mean people used to actually HOLD property for a few years before selling? What a concept! Ah, the desire for instant gratification. Gotta love it.
Where you been Palmetto?
Don’t you realize we are in the middle of ‘instant gratification world’? I was at International Mall and Westshore Plaza this weekend; both of those places are so crammed it was hard to find a parking spot. Most of the restuarants have been busy in this city. Tampa Airport so busy that there was no parking in the new remote garage. At my local hangout they said business is better than it has ever been. We did have a lull in August but it looks to have been an abberation. WalMart has been a little slower though - could be the lower income folks be getting hurt the worst.
“‘There’s never been a better time than right now because of the supply,’ he said.”
But there certainly will be some better times than right now in the near future.
‘There’s never been a better time than right now because of the supply,’ he said.”
This phrase caught my attention too. It’s interesting to see this phrase now applied to real estate vultures, the ones who go in after the slaughter to pick up good deals.
I hope their will be better times as I am hoping for prices to drop significantly enough for me to notice.
Simmssays…your house too small when
http://www.americaninventorspot.com
“Zilbert said that the investor has to be prepared to settle on the unit and hold it for a year or so. After that, he says, they should be able to resell the condo at a profit. “They’ll probably see a 50 to 60 percent return on their money, which is a far cry from the 200 to 300 percent we used to see,” he said.”
How can the The Sun-Sentinel print statements like that, with no immediate opposing viewpoint, or statement such as “on the other hand, you have a greater chance of losing 100% of your money”. Mr. Zilbert must be a big advertising client.
Can we settle our debts to China by giving them the Florida peninsula and keys? We can build a big wall accross the panhandle and prevent all immigration to the contentinental US. A worthy trade I think.
Woo-up there! We need Florida for the Cubans soon to be flocking (swimming) over.
No need for that. Bush will build them a bridge and kiss their asses on the way in.
I remember in the 80’s the bank that Keating was associated with was promising a 12% yield ,(I think it was Lincoln S&L). Investors piled in thinking they were FDIC insured accounts because of the Bank offering these . Big newpaper advertising every week . The yield was only a couple points above normal safe insured CD accounts .
The deal went bust,( I think the investors were actually investing in a Hotel in Arizona ), and many retired people lost their life savings . Keating went to jail .
Anyway, my point is its amazing what risks people will ignore when it comes to making a little more money .
I remember looking at those advertisings every week in the newspaper thinking that these had to be a higher risk if the yield was 2 points higher and I passed on it but alot of people got sucked in .
So now all the cheerleaders/ promising these 15% to 40% or more yield per year on real estate reminds me of the eventual loss of those investors back about 20 years ago .No wonder people were going nuts with these kinds of yield expectations during this real estate boom that they thought was a sure bet .
This is the level of profesionalism in journalism that we have to put up with here in America. I gave up reading the WSJ and other traditional print financial media outfits because they are so irresponsible. Now I get most of my news from blogs, and I read newspapers from India and other places to get other people’s perspectives on things. If I want to get the low-down on new cars then C&D would be the last place that I would turn to for credible, unbiased information. If I want the low-down on politics then the NYT would be the last place for me. And if I want the low-down on RE then this blog would be the first place (but not the last) to get good info as far as what is going on in RE; at least what is being said here is never going to be said by any realtor that I know of.
Florida real estate bull alert!
http://www.topix.net/forum/source/south-florida-sun-sentinel/TPLNNOJCJMQGHAIPG
Volume could drop from 250 homes sold to one home sold, but if it was at the average price of the 250, these bulls would call the market “stable.”
‘There’s never been a better time than right now because of the supply,’ he said.”
He makes it sound as if the supply is going to go poof into thin air. Of course, the strength of housing is that it DOESN’T go poof. So who is going to snap up all this supply away from us? Renters? Option ARM already dried up the renter pool. Illegals? If they have to live 4 families to a house, there aren’t enough illegal households to fill the houses.
Ugh, how I hate hate hate this false “demand.” So much wasted wood and farmland.
Also known on the eastern seaboard as “hurricane buffers”.
Can’t wait for new bumper stickers like “Lost my ass in Florida Real Estate”
I lost my wallet in El Segundo.
I lost my car keys under the seat cushion.
I lost my virginity to a Florida Realtor®.
gotta get it… got …got t’ get it
I spoke with my cousin from Orlando at a family function yesterday, she told me her condo association just got hit with an 85% increase in their master policy, many people in complex have resided there for over ten years, are retired on fixed incomes and may have to leave. Even she doesn’t know if she wants to stay either, as she is being stretched to the max, as wages have not kept up.
FL has insurance socialism, everyone pays for coastal dwelers
]like Katrina and NOLA
Orlando shouldn’t get any increase for canes
I agree coastal areas are at the most risk but Florida is a peninsula so the whole state is at risk. My sister had hurricane damage to her house in Maitland (Orlando) about five years ago from a hurricane.
There are two reasons that very few people settled in Florida until the second half of the 20th century–one is air conditioning and the other is hurricanes!
Look, this I have to nitpick on. Ac did make Florida more palitable.
But the main reason Florida wasn’t inhabitted until the second half of the 20th century was mosquitos and disease. DDT eliminated enough mosquitos that malaria/yellow fever and other fun stuff disapeared from florida. We then proceeded to drain/pave the state.
Yes, huricanes are an issue. But its not as big of a deal as non-Floridians make it out to be. I hear others chant about “California falling into the ocean.” Ummm… the pacific plate is the rising plate…
Florida will be around in 50 years. The question is how cheap will the homes get? My prediction? When they are once again cheaper than midwest homes allowing for retirees to flood down to Florida again. But the correction will be… painfull.
Neil
I agree that bugs and disease were a big problem in Florida and that DDT and irrigation helped get them under control, however bugs and disease were also present in other areas of the South (LA, MS, GA, SC, TX) that IMO had significantly more activity/settlement than Florida prior to the mid 20th century.
Hooray for Jeff Glickstein at the Strand condo in Delray.
Although I’m sure he cancelled the condo mostly for selfish reasons, the altrusim of his return to depositers is not lost on this local.
It’s not “altruism” when you’re returning deposits on a project you cancelled. Anything less is called theft.
The past year, as I ride my bike through downtown Delray and see all these new condo development signs, I keep wondering why 1,000’s of wealthy people suddenly had a burning desire to live near the railroad tracks. Guess there’s less than the developers thought. Anyone know what’s going on where City Limits used to be? It looks like noone’s touched the property for years.
A herald Tribune reporter called the florida state bird the “Crane” because when you ook up in any Florida city, you see a crane.
Oops, look up!
Florida’s market is just dead. Nothing selling. Today I reviewed applications for an IT position at work. Out of 30 apps, I saw 3 Realtors, 3 IT people working for realtor organizations, and 2 working for homebuilders, such as WCI. Oh, and a mortgage broker. People are fleeing the industry.
If they flee fast enough, there will be minimal layoffs. I bet all of the builders already have in place hiring freezes. (Ya think?)
The Labor day massacre seems to be progressing as many predicted.
Mike,
you should SEE the number of mtg. brokers and realtors applying for sales openings we have - uncanny really.
dd
I have read on this blog that insurance is going up for Florida coastal regions. What does the insurance industry consider to be a “coastal region”? Is it within a certain distance from the ocean, for example 25 miles? Are the residents of central FL having the same insurance increases, or less? Thanks
Increases seem to be on a county by county basis, some are smaller such as 30% year over year for inland counties, some are more like 100% for coastal counties. It depends on the company you have. I’m fortunate to still have State Farm, they have doubled in 3 years, but it is still 1/2 as much as people who have bought recently and have had to use Citizens. If you recently bought near the coasts only Citizens will cover you, and a bill of $4500 / year on a $300k house is common.
For people who are getting increases, how are they notified? Do you just get your bill in the mail and it is doubled?
Here is your bill, Pay this amount by this date or we drop you. in other words tes
I like this link which shows that just off the peak is not necessarily the right time to buy. More downward pressure could be coming: http://www.bullnotbull.com/archive/japan-tale.html
Nice post Gary. I’ve seen that amazing Japanese housing chart before, but that story really made it real. His poor uncle, still under water after 12 years. Yikes.
At renewal time, the insurance company either A) cancels you, then you call the state run insurer, Citizens and get a $4500 quote, or B) you get a notice in the mail saying “We are pleased to offer you renewal at the rate of $XXXX” . You basically have to take it because no other private company will cover you if you are near the coasts, and I don’t think Citizens will cover you unless you have been dropped. At this rate of increase in a couple of years, some people’s insurance expense will equal their Principal/Interest portion. Florida is not cheap any more. It was a bargain 15 years ago, but no more.
I remember when a big ‘cane hit FL real hard a few years back. It was found out that entire subdivisons where not up to the building codes. I thought that what this means is that the building practices would improve considerably in FL since the insurance companies would now insist on this. It looks like I was wrong, the Ins Cos are now simply passing on these costs (of lack of oversight) to their customers. What a rotten world we live in!
No way! There are 1,000 people a day moving to, um, there were 550 illegals, 7 Canadians and Bill from Akron (Go Buckeyes!) moving to, I mean leaving… aww forget it.
very amusing!
But, alot closer to the truth than you may know.
(Also posted this in the Bits Bucket)
I clicked on one of the Google ads in between the posts today and voila!, we have a Re/Max agent telling it like it is about the market in Brevard County, which is on the ocean, west of Orlando/Orange County. Congratulations to this guy for his honest. He says that prices on individual homes have dropped as much as 25% and that the agents themselves virtually stopped buying investment properties at least six months ago. Refreshing.
http://www.bubbletruth.com/
Chip, This is an interesting approach by this realtor. I found it interesting that he says that, as you stated, some homes have fallen in price by 25%. He states that buyers are basically spending the same amount, but they are able to buy much more home for the same money.
FL is in trouble, basides infated prices now its a 2-6k charge for insurance and taxes are going to be insane with todays prices, an easy 3-16k in taxes.