Hundreds Of Price Reductions Per Day In SW Florida
A television station in Florida reports on price reductions. “The days of sitting on property for a few months and selling it for a big profit may be over. Some of Southwest Florida’s biggest names in real estate are about to announce the effect of more than 16,000 homes on the market in our area.”
“Joan Cutler sold more than $6 million in property last year. This year, business is slowing down. ‘I think people got spoiled in Cape Coral that you put something on the market and somebody called and you got a listing and a contract and sold in a couple of weeks and that’s not happening anymore,’ said Cutler.”
“It’s not just the Cape, it’s happening all over Southwest Florida. Realtors explain more properties are listed for sale than are selling. The reason this is called a buyers market is because there are lots of homes being built and that means you’ll have plenty of selection.”
“Cutler says sellers are dropping their prices. ‘There are between 400-700 price reductions going through a day,’ said Cutler.”
“‘684 price reductions in Cape Coral alone in the last 24 hours,’ said Mishelle Montgomery. Montgomery is selling her salt water canal home. Last year, it may have sold in days, now she’s waiting. ‘October, the very beginning of October and we had no idea we’d still be sitting here today having not sold our home,’ said Montgomery.”
“‘We’ve lowered our price $70,000 and we will probably have to lower it even more,’ said Montgomery.
“Realtors like Cutler say it’s a leveling off. ‘If people will come to that realization that they’re going to be getting a little less, their homes will still sell,’ said Cutler.”
“Vacant land is still selling, but the prices are also coming down. One realtor said sellers who have reduced their prices slightly have sold in a few days. If you want to get that higher asking price, you may have to hold onto it until the extra number of homes are bought up and people are looking to build again.”
” If you want to get that higher asking price, you may have to hold onto it until the extra number of homes are bought up and people are looking to build again.”
That will be during the next boom cycle. Can you hold out until 2015?
What is she thinking? The inventory is going up lady, not down.
Weak Housing Data
By Tony Crescenzi
RealMoney.com Contributor
2/22/2006 9:50 AM EST
Click here for more stories by Tony Crescenzi
MORTGAGE TALK: The Mortgage Bankers Association released its weekly mortgage applications index this morning on home purchases and refinancing. The index for home purchases, which is very strongly correlated with the major housing-related data, rose to 408.7 from 391.70 the previous week.
1. Watch for These Warning Signs to Sell a Stock
2. Dell Chalks Up a Win
3. Stocks Close Lower After Dell
4. Why Gold Stocks Will Rise
5. Bears, Escape Google While You Can
The index has now been below the one-year average in 10 of the past 12 weeks, and the depth of that the decline relative to the one-year average is the most ever, dating back to 1990. The recent data underscore the notion that the housing sector is slowing. This should become readily apparent in the major housing statistics, albeit with a lag.
Most sellers think the bull run is still going still. They haven’t figured out that they now have some competition when they sell. I guess they are still in denial that they missed the top. The longer they wait the less they will get. Spring will not save them, it will actually get worse with more competition coming on board.
For more information on the situation in South Florida check out the South Florida Real Estate Bubble. Very solid blog.
David
Bubble Meter Blog
Thanks very much for posting that Craig’s listing for $210,000 of that row house in the Baltimore inner city (Montford Avenue).
I am more than familiar with that area of Baltimore, having been a graduate student at the Johns Hopkins University School of Medicine in the ’70’s. As I frequently parked my car on these streets, I know from personal experience about the high-crime that is prevalent in this region. There was a JHU medical student killed in this area, a bullet shot went through one of our windows in my Department, and I personally saw a drug deal go down from on the streets from my vantage on the 3rd floor.
The Johns Hopkins Hospital was the primary provider of medical services to the inner city, but during my time there was evolving from a ‘no-fire’ zone into one that was more active. In the ’60’s, there was much housing and businesses that existed side-by-side with the University, but Johns Hopkins bought up/evicted these, and now it looks more like a walled, armed camp.
$210,000 for one of these row houses? To paraphrase a old saw, “Location, location, disaster”.
Thanks to the reader who sent this in.
AZ & FL going down , the 2 state w the greatest influx of cash buyers. NE and other places have no hope …….
Good news guys… Inflation is in check according to the CPI this morning.
Oh wait… thats if you dont include food, energy, and housing… well who needs those things anyway.
destin, you live in FL right?
What’s going on in Naples?
Cant say I know much about Naples…. I am in NW FL between Pensacola and Panama City.
Here’s a good article about the CPI and it’s disconnect with reality:
http://www.lewrockwell.com/french/french13.html
It amazes me that housing costs can be totally ignored in CPI.
Isn’t that the largest single payment the majority of Americans make each month?
If you were to sign a loan for most houses today (as opposed to the same house 3-4 years prior), you have to expect that you will be paying 50-100% more. Meaning your $ is worth less than it was previously. (You need more dollars to purchase the same item. Isn’t this the definition of inflation?)
However, the fed keeps saying “no inflation here”.
Here’s a question for econ majors out there. If housing were included in CPI (as I think was the case at some time in the past), wouldn’t the FED have moved to halt inflation much earlier, say 2004? If so, I am guessing we should be at 7-8% interest rate now. And likely the housing bubble may have been less a bubble, and more inline with reality…
Here’s a good article about the CPI and it’s disconnect with reality:
http://www.lewrockwell.com/french/french13.html
It amazes me that housing costs can be totally ignored in CPI.
Isn’t that the largest single payment the majority of Americans make each month?
If you were to sign a loan for most houses today (as opposed to the same house 3-4 years prior), you have to expect that you will be paying 50-100% more. Meaning your $ is worth less than it was previously. (You need more dollars to purchase the same item. Isn’t this the definition of inflation?)
However, the fed keeps saying “no inflation here”.
Here’s a question for econ majors out there. If housing were included in CPI (as I think was the case at some time in the past), wouldn’t the FED have had to move to stop inflation much earlier, say 2004? If so, I am guessing we should be at 7-8% interest rate now. And likely the housing bubble may have been less a bubble, and more inline with reality…
Remember this GREAT Quote:
____________________
I just don’t think we have what it takes to prick the bubble… I don’t think prices are going to fall, and I don’t think they’re even going to be flat. ”
- Diane C. Swonk, chief economist at Mesirow Financial in Chicago, New York Times, Trading Places: Real Estate Instead of Dot-Coms, 3/25/05
What about this great Florida quote:
_______
“South Florida,” he said, ”is working off of a totally new economic model than any of us have ever experienced in the past” according to a realtor who predicted that a land shortage will support higher prices indefinitely.”
- New York Times, Trading Places: Real Estate Instead of Dot-Coms, 3/25/05
“Silicon Valley,’’ he said, ‘’is working off of a totally new economic model than any of us have ever experienced in the past” according to a venture capitalist who predicted that a bandwidth shortage will support higher prices indefinitely.” — circa 1999
I don’t think most of us here realize how truly uninformed the average person is about the housing bubble. I live in a suburb just east of THE OC. Lat month my neighbor disappeared almost overnight and left his house empty. I finally saw him yesterday and asked what’s up? Here’s our conversation:
Neighbor: “Oh I bought an even bigger house right up the hill over there with a view.”
Me: “You bought in this market?”
Neighbor” “Oh yeah, it’s a great time to buy with the way prices are going up.”
Me: “Well what are you going to do with this empty house?”
Neighbor: “Oh I don’t know, I definitely can’t pay two mortgages, so I will probably rent it, or if I can’t find a renter, I will just sell it.”
Me: “In this market? Did you know the inventory has doubled here in less than 2 months? See that house across the street, they have had 5 open houses and no offers in 4 months.”
Neighbor (cue the crickets): …..a long blank stare….”Oh…uh…really? Yeah, I don’t know, I think I can get high 700’s for it.”
Keep in mind the houses in this neighborhood have been selling in the low 600’s. Wow!
Good story. Shows you how uninformed people are. Sounds like this new flipper/realtor neighbor of mine in Irvine that just bought his condo and thinks he can get 100k more than the last comp. LOL.
Do you live in Corona? Haven’t they been building like gangbusters over there?
“Souther California also has a massive land shortage and real estate prices in California will never decline again”
Obviously there is no land shortage anywhere. All you have to do is build vertically. Look at every major city right now…That myth continues to make me laugh on a daily basis.
It is true that places like Florida and Southern California have a significant infrastructure shortage and lack of government investment so if you are one those dudes that bought your new construction $700 condo out in the middle on nowhere….happy commuting 3 hours to work and 1 hour to the grocery store each day!
“I don’t think most of us here realize how truly uninformed the average person is about the housing bubble.”
Great story iefencesitter. The average person today is a member of the Post Literate Society. Their information comes from TV sound bites. Newspaper circulation is at an all time low. Even if newspapers do not print the truth about RE, low circulation shows you how much reading, and thus thinking, have gone out of style. People want no-brainer investments, so they follow the loudest noise. Tech stocks. Real estate.
There’s a grain of truth to the “they’re not making land anymore” mantra…
*Land* (i.e., lots of 40-acres or more in areas with infrastructure) probably won’t bust as badly as the condo market will.
Why? Because the financing isn’t available for individuals. You usually can’t get “no money down” long-term loans on large lots. (Sometimes you can get a 1 or 2-year interest only lot loan, but that’s about it.)
However, they can enough densely packed condos for every man woman and child in the US to own two of them, and we still won’t come close to running out of land! And don’t forget slap-dash “condo conversions” of existing rental units, etc.
Comment by Brad
2006-02-22 09:54:28
“I don’t think most of us here realize how truly uninformed the average person is about the housing bubble.”
Great story iefencesitter. The average person today is a member of the Post Literate Society. Their information comes from TV sound bites. Newspaper circulation is at an all time low. Even if newspapers do not print the truth about RE, low circulation shows you how much reading, and thus thinking, have gone out of style. People want no-brainer investments, so they follow the loudest noise. Tech stocks. Real estate.
I’m quite agreed with you guys here. I see this everyday, when I go to work at my local public library. The head branch librarian there showed us numbers for each month over the past year as to what items were being checked out the most–and it certainly wasn’t books or newspapers. It was mainly VHS and DVD movies, and music CDs. Some people however, are slowly starting to get it (and IMHO too little, too late), as I have seen a recent mass checkout of Rich Dad Poor Dad books, real estate investing books, and books dealing with how to live on a lower budget with less cash and the biggie, books on the new bankruptcy reform laws.
“Realtors like Cutler say it’s a leveling off. ‘If people will come to that realization that they’re going to be getting a little less, their homes will still sell,’ said Cutler.”
Please, please let me just hear one Realtor admit to the fact prices may fall!!!! 400-700 price reductions in 1 day…but it’s a “levelling off”!! Just face the fact you may not be able to trade in the 1 year old Lincoln Navigator for the Hummer this year…