A ‘Needed Adjustment’ In Florida
The St Petersburg Times reports from Florida. “A year ago, Hillsborough County’s housing market was hyperventilating. Now it’s sighing. ‘The people who are selling are very fortunate,’ said Vince Arcuri, a real estate agent based in Odessa.”
“Why? Because everywhere Arcuri looks, he sees overpriced houses. One’s $50,000 too high here. Another’s 30 percent out of whack there. ‘They’re all overpriced,’ he said.”
“‘Inventory has quadrupled,’ said Brad Monroe, the New president of the Greater Tampa Association of Realtors. ‘Sales are off by 40 percent. There’s downward pressure on prices.’ ‘It’s getting very, very slow,’ said Yuly Vazquez, a Tampa real estate agent who has held four-hour open houses where only two or three people strolled in.”
“‘They’ve never had as much product to choose from,’ Monroe said. ‘Sellers are going to have to be more aggressive.’ The speculators are gone, yet the building boom they encouraged is still evident. ‘There’s a whole bunch of brand-new houses that have never been lived in that aren’t selling,’ Monroe said.”
“Arcuri and Monroe advise sellers not to peg their homes’ prices to sales during the past year. That was too high, they agree. ‘We need to go back to about mid-2004,’ Arcuri said. ‘That’s where the market is now.’”
“Monroe’s Realtors association predicted last week that it would lose 10 percent of its members next year. His statewide association reported Monday that August home sales in the Tampa Bay area had dropped 42 percent from the prior August. ‘The market was out of control,’ Arcuri said. ‘We needed this adjustment.’”
The Herald Tribune. “Leonard Sondheimer knows firsthand the perils of the real estate boom. The 68-year-oldm retired until he and his wife sought to diversify their investments into the Southwest Florida real estate rush, now finds himself working full time again in Bradenton.”
“The Sondheimers, who bought a house from Jade Homes that now stands unfinished with 75 others, also enticed more than a dozen neighbors and friends to buy investment homes from Jade. The Sondheimers and other Jade buyers are among the thousands who, during the booming 2003-05 cycle, saw a no-lose opportunity in the region’s real estate game.”
“Leonard Sondheimer just flunked a credit check at a time when he thought he would be enjoying his golden years. He deeply regrets involving friends and neighbors with Jade. They are now facing the same uphill prospects for recovering their investment. ‘I feel terrible,’ Sondheimer said.”
“Jade’s single largest customer is probably Ali Alshalkmi, a Tampa-based commercial investment broker who bought 10 homes from Jade for family and as investments. He figures he is at risk for more than $3 million. ‘I don’t think they’ve actually done anything,’ Alshalkmi said of Jade managers. ‘They’re buying time.’”
“Jade’s president, Andrew Coles, has lost weight since the Jade furor surfaced. He also has had a ‘lot of sleepless nights.’”
“Coles expected the real estate market to slow down, ‘but not so rapidly.’ Jade’s failure was a by-product of the ‘phenomenal growth’ of the past three years, Coles said. He said he built a business to handle high volume and found it ‘tough to readjust the scale’ in time to avert financial collapse.”
“When asked his greatest regret, Coles stared off into the distance for a full two minutes. ‘It’s a tough question,’ he said. ‘Not reacting quick enough to a change in the market. You always think next month it’ll get better.’”
‘Kathleen Mitchell couldn’t sell a bayfront Miami condo that was about to lose its water view to a high-rise luxury apartment building. So she turned to a Catholic saint who’s known as ‘the underground real estate agent.’ Ron Weissman, who sells St. Joseph statues, said he’s been stunned by the rise in sales. ‘I figured we’d sell a few hundred of these, but we’re selling 10 times what we thought,’ said Weissman, who lives in Delray Beach. ‘My wife and I both think it has to have something to do with the fact that the real estate market is in the tank.’
“The boom times for local government tax rolls might be ending. The hot real estate market flooded cities with cash over the past five years. But that frenzy is slowing, and the future appears grim. ‘I’m not an economist, but my crystal ball says we have some tough years ahead,’ said Jamie Titcomb, executive director of the Palm Beach County League of Cities.”
“Re the Wednesday story, ‘Palm Beach County Commission eases affordable housing requirements’: Why would anyone in their right mind believe that if Palm Beach County’s housing market is flooded and home prices are going to drop, allowing developers to build median-priced homes will help the housing market? It will only cause people’s homes to lose more value as the market becomes flooded.”
“The Palm Beach County commissioners are killing our housing market and helping to devalue our homes.”
“St. Joe” is actually a baseball manager, revered by many in the NYC area.
““The boom times for local government tax rolls might be ending. The hot real estate market flooded cities with cash over the past five years.”
People forget the CA disaster during 2001-02, which brought Ahhnold to power, when the tax revenues plummeted after the Scam Market collapse, especially, the tech Scams. The CA Tax Revenues have not yet recovered from their 2000 high.
Jas Jain
I was always amazed that during the booming tech years, they didn’t bury a few nuts here & there for rainy days. There must be a law against gov’t saving. Have money- will spend.
Now, the state is faced with declining property tax revenues. Time for more bonds, I suppose.
In the long run, I believe the only solution is to vote against every single incumbent — every last one. If enough people did that, the ones that were left standing would be dying to know what you want them to do.
Chip, my sentiments exactly. But in some ways, that’s letting them off the hook far too lightly. Indictments, jail time, even tarring and feathering, these are the events I’d like to see. There was a story on the local news two nights back about a couple in their 70s who have been living down a dirt road that belongs to the county (Hillsborough) and for 30 years they’ve been trying to get the county to pave it. The official in charge was so arrogant and just said they didn’t have the money to do it. WTF? Where’s all that tax revenue people are paying?
“There must be a law against gov’t saving. Have money- will spend.”
This is a direct result of nuts like the Club for Growth. They demand that all excess revenues be returned to taxpayers, never mentioning that revenues, like expenditures are cyclical. In effect, they can never ’save for a rainy day’. In fairness, many municipalities burn through the excess cash like there’s no tomorrow. But if you were constantly under a ‘use it or lose it’ philosopy, why not spend it and hope for the best?
Yeah, but don’t anyone say we that we still don’t spend money like drunken sailors. California, with or without Arnold, has no sense of balance. All we’re doing is replacing the go-go days of dot.com spending insanity with current RE funny money. The result will be worse, as we pile bad debt onto bad debt.
What’s the old saying? “Markets have no memory.” People forget everything. The California pop, the S&L scandal, etc. There was a time in Texas that people were buying houses with credit cards. The difference is that all of those were localized phenomena, for the most part. This is likely the first national bubble in real estate.
“In early 2005, the Sondheimers contracted with Jade to build a $260,000 North Port house as an investment.
They put 10 percent down. They say that Jade managers insisted that they take out a construction credit line of $246,900 with CNL bank in Sarasota.”
So if the Sondheimers paid for a completed house then why don’t they have a completed house? I know they are probably overpriced but at least they would have a completed house to sell at a loss, instead they have an incomplete house that they probably could not give away.
It sound like there is more to this story then what the article says since if everyone took out a builders loan then everyone should at least have gotten a completed house even if overpriced.
I read the original story and thought the same thing — I’m going to shoot the reporter an e-mail and see if he gets back, you’d be surprised they often do.
Thanks for trying to check up on the story. The reporter seemed to want to do a “human interest story” and make everyone victims instead of a “somebody did something wrong story” when its pretty obvious that somebody did something wrong.
Why didn’t the bank insist on the builder providing a payment bond and a labor and materials bond? If these bonds were in place, then the homes would be completed (the surety would pay for the completion and would pay off the subcontractors). Unbelievable.
“Why didn’t the bank insist on the builder providing a payment bond and a labor and materials bond?”
I will bet that bonds are now considered to be old fashioned way of doing things, after all when you can give out $500,000 real estate loans to people without even asking for paperwork to verify who they are then things like payment bonds are not going to be pushed either. I have heard people say that commercial loans have better standards then just personnel real estate loans but I am betting that these big developments are also weak on fundamentals.
“Jade’s president, Andrew Coles, has lost weight since the Jade furor surfaced. He also has had a ‘lot of sleepless nights.’”
If this weight-loss trend continues, maybe the cost to the general public to bailout housing could be made up in savings to health insurers, reducing premiums (as long as we can somehow control the stress/sleepless factor). I say, if you are a FB, but lose enough weight to get to your ideal weight, thus creating positive benefits to society, then you qualify for a bailout credit.
So that’s how the South Beach Diet works. Lose pounds and riches.
LOL that’s hilarious- s.beach diet indeed.
How ’bout the Gary Watts Diet? “15 lbs is in the bag for 06.”
I’m sure others could think up more….
New Florida developer work out CD - “Sweatin to the Foldies”
Very perceptive, I just read Jade folded last Friday, Mr. Cole is a director of the Manatee Builders Assoc.
How embarassing!
“saw a no-lose opportunity”
Is there any better statement than this to describe a bubble mentality?
- “Coles expected the real estate market to slow down,
- ‘but not so rapidly.’
- Jade’s failure was a by-product of the ‘phenomenal growth’ of the past three years,
- found it ‘tough to readjust the scale’ in time to avert financial collapse.”
If it seems ‘TO GOOD TO BE TRUE’ . . then it is! The drunken run up in prices could in wise be justified with any kind view. There was a ‘Sweet Spot’ of about 24 months where it worked. Morons.
- “Coles expected the real estate market to slow down,
- ‘but not so rapidly.’
- Jade’s failure was a by-product of the ‘phenomenal growth’ of the past three years,
- found it ‘tough to readjust the scale’ in time to avert financial collapse.”
If it seems ‘TO GOOD TO BE TRUE’ . . then it is! The drunken run up in prices could in wise be justified with any kind view. There was a ‘Sweet Spot’ of about 24 months where it worked. Morons.
‘We need to go back to about mid-2004,’ Arcuri said. ‘That’s where the market is now.’”
Whoa baby, that’s over 2 years of juicy gains right down the toilet. Anyone who bought last year is now well under water.
Furthermore, ‘that’s where the market is now!’ Next Spring the market will probably be priced at 2002-2003 levels or worse.
Good point!!!
The great real estate time machine.
“Next Spring the market will probably be priced at 2002-2003 levels or worse.”
Exactly. And on down from there. Pretty much like a normal sine curve, until we reach (actually, overshoot) equilibrium. The couple of brief dead-cat bounces along the way, as breathless buyers think 10% off is their magic number, will come and go and we’ll revert to that old tried-and-true mean. I’m ready to buy at 1999 prices, even if they might plow on down to 1997 or earlier for a bottom, solely because I want more variety to choose from.
Apparently real estate has a “way back machine” (for those in my age bracket that remember the cartoon). The only question is, how far back is it going to go.
Florida seems to be defying housing rule #1: prices being sticky on the way down. Maybe it will be different this time, as some of us have been predicting.
Yep, because the only thing different this time is the widespread use of toxic loans that will force sales and foreclosures. This means that many FBs won’t have the ability to simply hold and wait, as underwater homeowners did in past downturns. And, since prices are set by those actually selling (whether FBs or bank REOs), this steady stream will keep prices moving down and prevent a total lockup of the market.
these investors are like aging ball players who think if they get back in shape they can have one more good year.
“When asked his greatest regret, Coles stared off into the distance for a full two minutes. ‘It’s a tough question,’ he said. ‘Not reacting quick enough to a change in the market. You always think next month it’ll get better.’”
Local builders like them are losing weight and having sleepless nights. Whereas the top management of the listed companies have been cashing out their stock option: while the company was doing share buy back using reserve cash.
Coles of the world are probably a shade better than then the Tolls?
Ofcourse like the trapped buyers, they only have themselves to blame. Biting more than they can chew.
Nah, for two minutes he was thinking about a beach-front villa in the south Pacific, where he should have fled to last year, before burning all of the cash.
Although it saddens me to think of a 68 year old being forced back to work. At the same time, people that age should have the bulk of their wealth invested in fixed income and not in speculative investments, to avoid situations exactly like this.
The stupid greedy pr*ck screwed over his friends and neighbors as well. He should work till he’s dead.
Don’t forget Alan Greenspan — chief architect of the Fed’s easy money policy that helped create a boom/bust in the Nasdaq and then in housing. He gets, what? $100,000 a speech? $150,000? How about he comes down to Southwest FL and personally hands out checks to all the people whose lives he helped ruin. Not saying these individual buyers/borrowers/investors don’t deserve what they’re getting — no one put a gun to their heads and told them to buy lots of investment property. But it seems to me blame should rest with the REAL culprit behind the boom.
Mike, that’s exactly right. Greenspan will be lionized, Bernanke will get the bricks.
I will conclude whether it was AL’s failure or part of a laid out plan in six months to an year. (BB is key)
He (AL) already said that he envisioned what will happen because of the rate cuts, the Good and the Bad. ( We don’t have UGLY any more? ;-))
He also mentioned something to the effect that future exchange rate of dollar taking care of some imbalnce… ( This clearly reads falling Dollar..)
Whereas BB said next year the savings rate will go up ( Indicating to me higher interest rate sucking out money from system )
We can clearly see inflation is actually now up and up.
Food and energy is a big cost of household, they are left out of inflation calculation. ( Stealth inflation..)
Rent is still part of it, and going up on most areas,(except in BBland) so even official figures will continue to be up.
We hear from Ex fed chairman that there is tremendus political pressure to keep the inflation going. ( thus lowering all of our living standards..)
So what is the BB going to do, if he cuts rate, then he is following AL Greenspan; the conclusion is the whole thing was planned way before. ( The permanent devaluation of future dollar)
If BB contains inflation by raising rates, he is doing mop up operation after greenspan spill. And AL’s job was a quick fix…
In that case I will think Greenspan was genuinly scared of Deflation and he did what he had to do to prevent it.
This is what I am getting …what key facts I am missing?
Now may be JAS JAIN or somebody else give a ECON101 on the deflation scenerio and I am still in line with that .
Thanks. How to “close” that open HTML please!
How to close the HTML? FWIW, I don’t fool with it, so as not to look like a fool. I just use a couple of asterisks to emphasize and occasionally a very short all-caps.
Just think about how crazy the investment strategy was for these investment groups/people .Buy new construction that was overvalued to begin with ,turn it for a 20 to 40% profit within a year because end users buyers would be just tickled to pay another 100K to a flipper in that short a period of time . Florida has alot going against it right now to expect any reasonable recovery for their housing market in the near future IMHO .
(1) Katrina made people stop and think about risk factors .
(2) Extreme over building causing extreme excess inventory
(3) Insurance rate increases
(4) High property taxes
(5) Excessive speculation buying 2004-2006
“Florida has alot going against it right now to expect any reasonable recovery for their housing market in the near future IMHO .
(1) Katrina made people stop and think about risk factors .
(2) Extreme over building causing extreme excess inventory
(3) Insurance rate increases
(4) High property taxes
(5) Excessive speculation buying 2004-2006″
Right on, Wizard. That’s Florida in a nutshell. IMHO, Florida will be hurt the most by the housing bubble, because of the above factors. You can bet on it. And don’t anyone be looking for the newly elected gov to do anything. Both candidates are a couple of pantywaist milquetoasts with not even one ball between them. Our only hope is that we get a bulldog, take no prisoners attorney general to clean up the mess.
Palmetto says, “…with not even one ball between them”; that is LOL funny.
Latest weekly numbers for Miami ( Dade County). Now over 40,000 units for sale. Two more months and then people will think about tax loss selling.
Can you write off the loss of a sale on a house? I didn’t think so.
Do you know, how many months of the inventory is that?
That is, how many units were sold in Miami-Dade in August?
SFC, you cannot . In fact, youmost likely will receive a 1099 for the difference in the amount owed and the amount sold.
Uba, I believe it is around a 3 year supply.
According to the Herald Tribune, “the 68-year-old [retiree]….now finds himself working full time again in Bradenton.”
Now, that fits the description of a roasted specuvestor. Wow!
Now that has to suck. I’m a lot younger than him and I’d go postal if I had to report somewhere every day.
I’d go postal
Only if you didn’t kill them from snarkiness first.
PS. Any word on your blog?
Bet he’s not working where the dozen+ neighbors and friends who he talked into joining him in the investments do their shoping. Or maybe they’re too busy working themselves now, to shop much.
Why would a 68 year old retiree (Leonard Sondheimer) even think of jumping into a speculative investment? I know, he thought it was a “sure thing.” In his mind it was an insured bank CD that happened to be paying 30% a year interest.
Enjoy your Wall Mart greeter job, Mr. Sondheimer. I’ll think about you (NOT!) while I’m on the golf course today.
Oops, I see you’re a mattress salesman. A suitably ironic job seeing as how you’re probably not sleeping well at night.
What’s more, the embarassment of inviting your neighbors in on the gig! This example further illustrates the extent of speculator driven phantom demand in Florida, a group of neighbors getting together to build another sub-division with no intent to reside in it. That’s just insane; no, that’s beyond insane; its unadulterrated mouth watering greed!
Mr. Sondheimer is:
Mr. Feeble-Mind, rescued from Slay-Good by Mr. Great-Heart, who joins Christiana’s company of pilgrims.
(Only in this real estate fanasty, Mr. Sondheimer and his dear friends, won’t be rescued.)
Bill, you’d be surprised how many scams are presented to the retiree crowd. I get a call or letter (and sometimes 2 or 3 of each) every week describing the next best retiree investment (Ponzi) scheme. Some sound very plausible and lucrative … until you look at the bottom line.
They’re all overpriced,’ he said.
Funny, that’s what we’ve been saying.
All housing market adjustments are ‘needed’ and will not ‘result in a crash’ or in any ‘bursting bubble.’ So let’s suggest to the press corps that they refrain from continually writing the same drivel over and over and over.
Right! And “It’s a good thing.” Come on, if it were a good thing you wouldn’t have to keep repeating it, guys. Just gotta keep whistling through the graveyard, I guess.
And don’t forget, “we saw this coming”.
Brandon, Riverview, Palmetto, Lutz, New Tampa - all are chock full of new empty homes for sale. Add this to the already record inventory, and (contrary to the fictional report issued by GTAR - Greatr Tampa Association of Realtors) you have, at the very minimum, a 12+ month supply of inventory. And the question remains:
WHERE are the people who are going to move into these houses? And WHERE are they going to get the money to pay $150+/sq foot?
Anyone? Anyone? Buehler? Anyone?
I encourage all Florida Bubble watchers to pickup the paper this weekend, find an Open House to go to, lookup what the local tax appraiser and find out what the house was purchased for, and then go and have a great time ridiculing the realtor.
Gordon Gecko only had part of it right, when he said: “Greed is good.”. For tons of laughs!
You left out the best part of Hillsborough County, the part the developers are calling “South Shore”, between Apollo Beach and Ruskin. Take a trip down 41 south. Look a MiraBay.
Hundreds of Multi-Million dollars homes and Townhomes.
Mostly deserted…………..and then travel EAST to the south of Riverview. Lots of new subdivisions with really crappy BOX houses. It just boggles the mind.
Diogenes, you’re talking my neck of the woods. It is mind-boggling down here. Also the disparity between what is being built and the overwhelming illegal immigrant population, much of which was employed by the builders. Very scary.
I got sucked into the hype buying a house at the top in 1981 in Houston at 16-1/2% that took almost 20 years to get back to its purchase price. The ten percent or so of people who lost their jobs in the 80’s saw really hard times. I’ve been studying real estate ever since and saw this bubble for what it was. People make mistakes, and many certainly couldn’t see the xcess liquidity that underlies the mess we are now in. I really don’t enjoy reading the mean comments on this blog celebrating other people’s mistakes. What is wrong in this country that people so desperately grabbed onto the goldrush mentality?
Media and advertisers. “You deserve” (fill in the blank). In your face consumption mentality without attendant job and income gains.
It’s got to be genetic. Maybe that’s why CA was so hard hit first. All those strike-it-rich genes from the original ‘49ers have been inherited, passed around, and just reared their ugly heads in housing.
Speculators are going to and should roasts in this RE inferno. They add zero value to the community; in fact, I could argue they take away purchasing opportunity from real buyers, families looking for affordable housing.
In my neck of the woods firefighters, policemen, teachers, and so on can’t afford to live in the communities they work anymore. In fact, most of the low-paid public service workers are leaving FL and those that promised to move here are rescinding offers as we speak.
I agree with your point, but don’t forget that some of those speculators were firefighters, policemen, teachers. That’s one reason the spectacle of this housing bust (and Ben’s blog) is so fascinating. It wasn’t the standard greedy-rich-screwing-the-poor-and-working-class scenario. Bubble victims and perpetrators cut across class lines. Not to mention gender, race and immigration status lines as well. (My former maid is now a real estate investor with a fat mortgage.)
Furthermore, why should my generation have to fund Mr. Sondheimer’s misadventures? His intent was to have us buy his zero value-added overpriced flip. And now that things have’nt gone as he greedily anticipated, he expects us to bail him out and shower him with sympathy. Let’s be honest, he had a secure retirement and at Mr. Sondheimer’s age he was smugly juggling fire without a cape; as a result, he got burned!
“The Sondheimers and other Jade buyers are among the thousands who, during the booming 2003-05 cycle, saw a no-lose opportunity in the region’s real estate game.”
Obviously it wasn’t a “no-lose” opportunity. And the sheeple think that investing in real estate is safe. Like Dr. Phil would say GET REAL.
The 2.7 trillion resetting in near future, what would they have bought in terms of contributing to technology, alternative fuels, etc.???
” I really don’t enjoy reading the mean comments on this blog celebrating other people’s mistakes.”
Well, I for one didn’t enjoy reading comments in the newspaper, listening to neighbors and RE agents telling me how STUPID I was because I didn’t choose to join in their game. Works both ways and some times an in-your-face attitude rams the message home.
easthawaii - celebrating other people’s mistakes is mean
God bless America!
Prudence does have much of a constituency in these days of eternal “hype”.
Maybe it will make a comback.
“I really don’t enjoy reading the mean comments on this blog celebrating other people’s mistakes.”
Guess you didn’t spend any time reading the investors’ and RE bulls’ blogs this past couple of years. As Salinasron notes, it cuts both ways. While Ben’s blog is, I believe, the most courteous blog of its nature on the Web, it’s also a tough room and thin-skinned posters might well be happier elsewhere. Gallows humor is a specialty.
There’s a difference between tough and graceless. Alot of the patrons here are nasty pieces of work.
It’s one thing to trot out gallows humour when your chips are down. It’s quite petty to do so when you have the upper hand.
i just recalled a saying we used back in the day: “here’s a dime - call someone who cares!”
nowadays no one uses public phones, and if they do it’s certainly more than a dime.
there must be an internet equivalent.
Moreover, we are not entirely flipping from this fodder’s flop.
It’s purely impromptu pontification; we’re not profiting at his expense. In addition to his own blind perilous profit pursuit, it was the bankers, builders, and RE agents backing them that beckoned him into this prickly protracted pickle.
Just went on Realtor.com looking at Naples listings. Pages and pages of homes up for auction in what was once thought to be bulletproof in terms of price gains. Question for the group. Would anyone go in now and buy one of these houses at auction?? Or is it still too soon?
You want to stay in Naples, go to Vacation Rentals by Owner - vrbo.com - and go to Naples. http://www.vrbo.com/vacation-rentals/region/usa/florida/south-gulf-coast/naples-area
I bet there’s 10 times as many places there as there were two years ago, you could probably get a great deal on a winter rental.
I would think it is too soon.
However, if you can find a property that is going for a selling price comparable to 2000-2001, I would buy it.
There’s no point in waiting if you want the property and the price is good. Most likely you are finding 2004 prices, which I believe are still TOO high, although they are “bargains” by comparison to 2005.
Hey if you can’t sell then just rent them out for a nice positive cash flow. Of course the competition is getting a bit fierce.
Craiglist house rentals.
3BR
Date Phoenix Orlando Raleigh
25/03 2571 610 724
02/04 2494 637 711
01/05 2572 766 908
09/06 3014 961 903
01/07 3296 1055 979
07/08 4166 1374 1186
14/08 4452 1511 1190
21/08 4846 1619 1249
28/08 5119 1749 1245
05/09 5261 1821 1220
11/09 5445 1875 1133
18/09 5746 1972 1134
25/09 5924 2021 1075
29/09 6208 2169 1058
Hey, nice data, ‘curtain. That’s some nice inventory. I wonder what % is new construction.
Any other cities?
Those are the only ones I have been tracking. I look at some of the ads and most of the ones in Phoenix seem to be new flipper houses. Some really nice places renting under $1000 a month.
Very interesting stats. Keep’m coming from time to time. Maybe send to the MSM as back-up data that rents are about to take off? Rents only go up! The more houses for rent, the higher rents will go. It’s the new paradigm.
Turning off italics
I’m with you txchick57 - going postal to report to some dumbf*ck of a boss. It would really suck at 68, and then thinking I caused all of my friends/family to the same result. LOL No sympathy for complete stupidity. Nobody was waiting to bail me out of some tough times. I had to do it myself, with a lot of work and saving mentality.
I was talking to someone last night and he was comparing the housing crisis to dot.com burst…all the people on margin who got hosed. I agree..it’s an apt analogy. But thinking further, it’s actually much worse, helped along by a myriad of factors, not the least being the general American House is Wealth mentality. Most people didn’t have margin accounts and day trade. Most people now have house(s) and most people have been aided and abetted in their pursuit of the American Dream. Playing the market, daytrading on margin was seen by most Americans as too risky or shady. Buying real estate couldn’t be more American and safe.
So, really, now I think the analogy between the two busts isn’t really a good one. This one is much much worse.
Catherine, be sure and look at the October Architectural Digest. Who is the Phoenix art patron with the space age 30K square foot, one bedroom “house” in that issue? Awesome place and art collection!
I’m pretty sure that joint is in Cave Creek…looking north.
It’s unreal, isn’t it? Check Zillow! LOL.
txchick,
Here’s the link to the architect…he’s the same guy who designed the now very controversial 9/11 Memorial in Phx.
http://www.jonesstudioinc.com/
But who’s the owner? It said every architect in AZ was talking about “them” but it didn’t say who “they” are.
I have no idea, or does the website give any hint that I can see.
Uber wealth. Uber private. With that kind of art, who can blame them?
txchick…
check this house out…will bruder designed it - been on the market for a while here…
http://www.visualtour.com/show.asp?sk=13&t=617647
Wow, what’s that listed for.
Did you notice the chintzy white refrigerator? That place should have a Traulsen
on 2 acres, 3200sf, 4/4, 925K..
but it’s in the pines, might be too cold for you!
That’s a beautiful home… where in N. Arizona is it?
Prescott
In the 90s bust there wasn’t much mortgage equity withdrawl going on either.
What happens when even relatively “conservative” people who have had (seemingly) a large chunk of equity in their homes, who thought they were “comfortably” borrowing against their home value, wake up and realize they don’t have any or much “equity” anymore? That, to me, is very frightening.
‘We need to go back to about mid-2004,’ Arcuri said. ‘That’s where the market is now.’”
I totally agree. This period is roughly the mid point of the overall spike in prices. Beyond mid 2004, prices were based on speculators selling to other speculators… without consideration of the fundamentals.
time to vent.
1. to build as they have in tampa bay is crazy. it is just too risky. the economy cant support the prices and the risk of hurricanes is greater than any other city in florida, outside of miami. a major storm coming from the west will flood most of the region.
2. prices are going to have to go back to 2001. to buy a house at 200,000 in 2001 is drastically different than today. with the rise of insurance, taxes, gas and everything else, housing prices actually need to fall in other buy into the same 200,000 home and handle additional cost. this means less and and less buyers and less people will to buy, knowing that the cost of the home is more as the cost of living is rising.
3. the pbc commissioners have done everything to support developers, including minimizing the % of affordable homes in new development. now developers are crying. why dont they cry about the insurance companies and oil companies. they are eating the hand that feed them.
4. the declining value of homes is because (THE HOUSING PRICES ARE TOO HIGH). cant force people into homes.
5. the day of reckoning is here, by the end of 2007 you will see blood on the street, prices falling 50% and tax funds to the govt down 25%.
good night and good luck!
Risk of hurricane is greater than any other Florida city sans Miami? Actually, Tampa is the least likely large Florida city to get hit by a major hurricane. I researched this pretty heavily before we moved here.
I think he meant large Florida City with the least chance of winning the Superbowl this year. Not that my Dolphins are going much better.
you had ample warning about Daunte Culpepper.
the second coming of Kordell Stewart.
no, because of tampa bay land elevation, it is prime for tidal surge unlike any where else in florida. the gulf allows tidal surge to occur much easier than on the east coast. miami is somewhat protected by miami beach, but it depends on the direction of the storm. wilma created a bit of storm surge because the wind came from the south up biscayne bay. a hurricane coming into tampa from the southwest will flood out most of south and downtown tampa and all of saint petersburg. tampa dont have alot of major hurricanes historical, but they have had them before. the problem in florida is that there wasnt alot of storms for 30 - 40 years except for andrew, until 2004. in the 1920’s - 1950’s florida was getting hit by storm almost annually. almost no one lives here from that time period anymore. wilma was the first hurricane eye to go over broward county in 50 years. the infrastructure in florida is so bad, only a cat 1 destroyed the electric grid. a cat 3 or 4 and the lights will be out for months. talk about economic downfall. people who are smart, really should be upset with the lack of regulation in building. stop giving out tax breaks.
That’s interesting. I didn’t know that. Why exactly is that true? Can you tell me where I can find more information about it? Thanks.
there was a big write up in the tampa bay paper about storm surge and when they had a hurricane in the 1920’s, there was flooding everywhere.
Good Comments.
I agree.
BTW, I assume you are working/worked for the Postal Service.
I was LSM operator, 1980-1982 at SCF Tampa. Spend any time there?
This happens everywhere, but here is a particularly revolting story about the intersection of politics & real estate in Florida. I hope this Realtor/pol gets roasted on this deal.
http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20060605/NEWS/606050540
I dislike realtors intensely, but they are, as someone posted yesterday, only salespeople. Far more dangerous are individuals like Mr. Sondheimer, who are only too happy to carry the water. I haven’t read the article, but I’d be curious to know whether he expressed any concern over possibly losing his friends.
As for the situation on the ground here in Tampa, it is cratering. I am starting to see handwritten snipe signs saying “motivated” or “desperate.” Yet again this week I read of more condo towers planned. This is a very interesting time we live in.
You have to wonder how much of the recently purchased inventory would sell at any price, given that a massive amount of new inventory is in the pipeline.
How many real estate properties will become worthless?
I think that the people who buy now from the builders (because they think they are getting a steal) are going to be sellers a few years down the road.
“…The 68-year-old retired until he and his wife sought to diversify their investments into the Southwest Florida real estate rush…”
Ah the good old days, when to “diversify” meant to spread around assets across multiple vehicles so as to reduce overall risk, not like today when it means sinking 100% into housing speculation.
Even with the current declines there really isn’t much pricing decrease. In Palmetto Bruce Williams homes has lowered their prices back to 2005 levels. In Parrish some builders are lowering prices but again it’s 2005 pricing. I look at homes in subdivisions monthly watching for price drops and to date I have only seen decreases to 2005 levels. Land prices are still high, there’s a subdivision called Twin Rivers in Parrish, the lots are minimun 1/2 acre and larger and I like the open space feel versus being five feet away from my neighbor. Two weeks ago I looked at homes and land there, again 2005 prices. I think it’s really going to take something big before these people “get it” and start aggresivly dropping prices. In my little corner of the world here I don’t see that happening yet. My two cents worth.
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I thought EVERYONE wanted to live in Florida!?!? I mean it has a great four-season climate. Low humidity. Excellent public school system. Just a great place to raise a family. Oh wait, I am thinking about someplace else.
The jig is up in Florida.
The state had horrible crime on the way up - should be very nasty on the way down.
People that are buying in Florida right now are clueless. It’s really a shame. You should see the massive fronts of brand new St. Pete Beach condo buildings with NOBODY in them.
The reason I think prices remain high is because home owners have been conditioned enough that their properties are really worth that much, refusing to budge to realities. All it takes, I think, for people to go back to their senses is for a homeowners to drop their prices realistically, based more on common sense than fantasies, and the whole market will follow. There will always be the greedy ones, mainly speculators hoping to recoup their investments, but the longer they wait, the worse things will become in a year or two.
One lesson that we need to imbibe deeply from this crazed real estate market is that developers and bankers need to be more sensible and make sure those speculators are not there to grab those properties at pre-construction prices and then turn around to flip them at sky-high prices. That get-rich scheme is what has ruined the housing market everywhere.