‘Insane Rush To Build Has Exceeded Hysteria To Buy’
Myrtle Beach Online reports from South Carolina. “The buyer’s market continues on the Grand Strand as condominium sales continue to slide, making little dent in a ballooning inventory. Condo sales dropped 31 percent in third quarter 2006 to 5,003 from 7,269 in third quarter 2005, according to the MLS for Horry and Georgetown counties.”
“Real estate brokers say some condo prices are being cut, but single-family prices are holding steady. Analysts say it will take more than a year to clear out the 10,493 condos on the market. About 4,946 condos were on the market this time last year.”
“The market’s 5,291 single-family homes may take 10 months to be absorbed, said (broker) Rod Smith. About 3,305 homes were on the market this time last year. Smith said sellers are having trouble backing away from the price their home would sell for in 2005. But buyers are aware the market has softened and aren’t willing to buy at any price.”
“‘I don’t look at it as a bad market. There are just two kinds of markets, buyers markets and sellers markets,’ said market analystTom Maeser. ‘We’re just going through a correction right now.’”
The News Press in Florida. “The number of single-family permits issued in Cape Coral and unincorporated Lee County plunged in September — reaching levels not not seen for years. Builders in unincorporated Lee County, Bonita Springs and Fort Myers Beach pulled 458 permits for single-family houses in September, down 61 percent from a year ago and down 22 percent from August.”
“Real estate agent Michael Schneider-Christians in Cape Coral said the decreasing number of permits is a result of the increased inventory of homes available for purchase. ‘We do not need much new construction,’ he said. ‘People who would actually like to have a new house have one ready to go. They don’t have to wait for one to be built.’”
“Michael Reitmann, VP of the Lee Building Industry Association, said there are a lot of good deals available on existing homes, lessening the attractiveness of building new ones. ‘Right now the investors are competing with the builders to divest themselves of inventory,’ Reitmann said. ‘I think it’s going to take at least a year, year and a half.’”
“More optimistic was real estate agent Ernie Horvath, who noted ‘we’ve already received an 18 percent price reduction’ for single-family homes since the height was reached in December when the median price was at its all-time high of $322,300. In August, the median price was $264,100, according to the Florida Association of Realtors.”
“Sandra Cheney of Cape Coral said she and her husband recently experienced firsthand softening of the market. They put their lakefront Gulf-access home on the market in December for $659,000.”
“After months without even a bite, they reduced the price and finally went under contract a few days ago for $495,000. All in all, Sandra Cheney said, it’s a tough market. ‘We’re under contract, finally, finally, finally,’ she said. ‘It wasn’t a fun thing to be going through.’”
The Orlando Sentinel. “According to the Orlando Regional Realtor Association, the Orlando area’s existing-home market peaked last summer. The inventory of properties for sale, meanwhile, has ballooned from less than a two-month supply to more than 10 months.”
“‘Buyers are out there, and they’re looking at a lot of inventory,’ said Barry Carnes, broker Longwood. ‘You’re seeing a couple of [price] adjustments, at least, before some [homes] are selling.’”
“‘If you’re an investor, you’re probably not going to get great returns,’ said Stanley Smith, a professor of finance at the University of Central Florida. ‘If you’re looking to buy a home, you’re probably not going to lose much, and you may gain some.’”
The Herald Tribune. “There are three primary reasons for a Southwest Florida price decline: tightening monetary policy, rampant real estate speculation in the last three years and affordability, Moody’s economist Brian Carey said.”
“‘The speculators have left the market. They were involved in bidding up the market, by artificially increasing demand. Now they are totally shut off, and they are trying to sell what they bought,’ he said.”
“Dave and Jane Wilson have seen evidence of price declines. The two retired federal workers went heavily into residential real estate with their retirement savings in 2004-05. They are still in the game, but looking to get out of two south Sarasota condominiums in the Serenade development.”
“‘One went from $235,000 down to $210,000. The other, we paid $191,000, and I have seen them for $175,000 to $180,000,’ Dave Wilson said. They will sell the Sarasota properties when they can break even ‘and sort of get out of Florida,’ Wilson said.”
The Courier News. “Dear Mr. Berko: I’d like your thoughts on buying three condo-hotels at $625,000 each. These units recently sold for $675,000, but the developer said the units could easily be rented 30 weeks out of the year. This looks like a superb investment that would easily pay all my costs, including mortgages on the three properties. What do you think of this idea? It’s like having three second homes and it won’t cost me a dime.”
“Dear HE: I think your developer is a big fat liar. The real estate market in most parts of Florida is quaking on its foundations, and prices that have been pushed into the ozone layer by carpetbaggers and unctuous speculators may fall like tears from a tall camel’s eye. The maniacal and insane rush to build condominiums and homes in Florida has finally exceeded the unhinged hyperhysteria to buy.”
“Walk away. That developer is giving you a heck of a sales pitch and making promises that I doubt he can keep. He’s stuck with inventory that isn’t moving and it sounds like he’s getting desperate.”
‘Only eight months after Pizzi bought his Englewood home for $450,000, county property appraisers valued it at $540,000 — a 20 percent increase. Pizzi says the county appraisers are acting unrealistic and unfair. ‘Something’s a little out of whack,’ he said. ‘I wish the county would give me $540,000 for the house. I’d sell it to them tomorrow.’
That’s the way to fix appraisals that are too high, the person or organization has to buy it for the price they appraise if for if it is offered.
Unctuous speculators. Great description. About time someone offered some straight talk in print.
Condo sales dropped 31 percent in third quarter 2006 to 5,003
Analysts say it will take more than a year to clear out the 10,493 condos on the market
___________________________________________
I am no housing analyst, but my calculator says: 25 months
yeah, that’s right, 25 months is more than a year.
The nice thing about even that fluffed over number is that it does not include the increasing rate of new sellers and new construction.
I haven’t seen recent numbers, but I read once that Florida has 5 supply of new condos coming online by the end of the year (and that doesn’t include current supply of condos).
I wish someone would do report on the overbuild issue because that’s where the Hard/Soft economic landing debate really is (for those that think there is a debate)
The other thing that is not factored into condo sales forecasts, given that old farts like me are the target market for condos, is the ability of retirees to pay the much higher property taxes and triple insurance premiums, the latter factoring into far higher monthly condo fees than the old folks had budgeted for.
Just a thought, but can’t months of supply be a misleading statistic when you only use sales figures for a single month? Even in a “normal” market, sales are going to be slower at certain times of year. This would make the months of supply look unnaturally large for slow times and smaller when sales pick up.
So in theory (not saying it’s going to happen), it should be possible to clear out inventory at a faster pace during spring and summer selling season.
The sales are July-Sep (3rd qtr). These are closed sales, ie escrows opened in Jun- Aug during the “busy season”. This is the strongest sales period. If we figure the next six months - IMO - sales will be much lower and push the months inventory much higher.
“Condo sales dropped 31 percent in third quarter 2006 to 5,003
“Analysts say it will take more than a year to clear out the 10,493 condos on the market.”
Hmmm, if 5000 units are sold in three months (a calendar quarter), then wouldn’t 10,000 units sell in six months? It looks like a lower quarterly volume has already been factored in, because they’re saying it will take a year. Where do you get 25 months?
“‘If you’re an investor, you’re probably not going to get great returns,’ said Stanley Smith, a professor of finance at the University of Central Florida. ‘If you’re looking to buy a home, you’re probably not going to lose much, and you may gain some.’”
Note to self: remove University of Central Florida from list of schools daughter can apply to.
Professor of finance my ass. Dolt.
You should probably remove any state school from your list. They let anyone in those places…even me!
I hope you don’t acutally send your children to college for an education. They only reason to go is for connections and a magic piece of paper. They’ll have to get their education elsewhere.
I got a great education at a state school. Cheap too. No real connections though.
Josh
“They will sell the Sarasota properties when they can break even.”
You don’t know whether to laugh or cry when you hear people say stuff like this. I wonder if they are still holding some CMGI and waiting til it gets back up to $120/share so they can get out at break even there too.
There is one sure thing in this strategy - it will eat away their financial future and then they will eventually sell for a much greater loss.
This is story number 5,285 with a “I will sell when I can break even”, “I raised my kids here - so I am not going to give it away”, etc.. Soon these people will change their tune. They are only hurting theirselves, others in their area have dropped their prices and sold - meanwhile these GREEDY ba$tards will eventually sell, BUT at a much lower price.
If they hold on much longer, they will be right. They won’t be able to give it away, or sell for any price.
Dave and Jane Wilson have seen evidence of price declines. The two retired federal workers went heavily into residential real estate with their retirement savings in 2004-05.
“Welcome to Walmart”
whatever happend to “Diversification” being the 1st rule of investing ?
- “More optimistic was real estate agent Ernie Horvath, who noted ‘we’ve already received an 18 percent price reduction’ for single-family homes since the height was reached in December.
Dave and Jane Wilson are toast. They watched too many late night infomercials and thought that they could become wealthy overnight. Hell, you can’t even hardly unload a used car in a hurry.
cool- we’ll still pay their pensions till eternity
But I think their new diet of Walmart’s “Old Roy” will shorten their length of the pension payout.
Estimates of how long it will take to “clear the inventory” seem very optimistic and also very difficult to make. First, inventory is still growing, despite the slow down in building, so one needs to know how many new listings are coming onto the market. Second, someone who is selling and buying locally has not net effect on the inventory. In order to reduce the inventory, you need: 1) first time buyers, 2) people moving in from outside the area, and 3) speculators who are buying more homes rather than selling. Perhaps they are counting on people selling in Florida and buying in South Carolina. However, IMO, I would not count on speculators (including second home buyers) for a long time. First time buyers may also be few and far between until prices come down a lot more.
Yeah, I just dig all these unfounded predictions about a turn around in ‘07. Sure, we’re going to clear out all this inventory over the typically slow winter months, and just be rearing to go Spring ‘07 (oh, I forgot about the post Super bowl bounce.)
Listen, housing markets are like super tankers. When a super tanker comes in to port, I hear they have to shut the engines down 8 miles out because it takes them that long to stop their momentum in the direction they’re headed. We all know which direction this tanker is headed, and it ain’t gonna be turnin’ on a dime.
They don’t really ever turn them off, and sometimes its as much as 12 miles(Dad was a tanker officer.) The analogy fits well though. I often try to imagine the amount of water (in this case money) that is displaced when the tanker (in this case housing market) moves.
Josh
“oh, I forgot about the post Super bowl bounce.”
LMAO!!!
Yeah, what ever happened with that damn bounce?
-’Second, someone who is selling and buying locally has not net effect on the inventory.’
Outstanding point.
Are they even counting the ‘For Sale By Owner?’
“Analysts say it will take more than a year to clear out the 10,493 condos on the market”
Are the ‘analysts’ using the same rate of sales that they encountered last year and the year before? Are they assuming also that as the market melts , they will not see an increasing rate in the number of condos thrown on the market. What if they saw the former rate cut in half, and the latter rate doubled?
Will that mean we’ll just wait 4 years or so. Or is it exponential? Like 8 years maybe?
Nah , more than likely I think is that the answer will lie in price cuts. Big ones.
Big Price Cuts, Well who will be the buyers? everybody
still thinks the RE bubble is going strong, its way over
the only buyers will be the new losers. The proof that the RE bubble is alive is this blog and others like it.
It reflects a huge interest in RE, when NOBODY comments on these stories and others like them, then
the bubble will finally BEGIN to end. Come back in 12 years, thats when to buy-maybe
Is the stock market bubble still going? Maria is still on TV and isn’t getting any younger but we’ve hit all time highs!(As long as you convienently ignore that the dollar has dropped from 120-86, 46% of trades are black box trades and even higher if using the old methodology etc.)
It’ll be interesting if there is enough support to prop up real estate like Wall Street has been propped. All hail Goldman Sachs!
Smith said sellers are having trouble backing away from the price their home would sell for in 2005. But buyers are aware the market has softened and aren’t willing to buy at any price.”
“‘I don’t look at it as a bad market. There are just two kinds of markets, buyers markets and sellers markets,’ said market analystTom Maeser. ‘We’re just going through a correction right now.’”
The ‘buyer’s aren’t willing to buy’ is not, I believe, the current story. In a recent conversation with my RE sister-in-law, her frustration at the lack of sales ended in tears and anger. Her attitude is that the market is ‘locked-up’, in that currently almost all buyers are also sellers, and that almost all sellers expect last years price. It’s not that buyers aren’t willing to buy - they can’t sell their current house at a price they refuse to (or can not) lower. She said basically, first time buyers just don’t exist anymore. They either bought in the last 5 years, can’t qualify in any market, or just want to rent. Every deal she works on has a sale contingency tacked on to both ends - and try as she might to talk reason both sets of buyer/sellers think that they deserve the price they want, and think the other’s house is over-priced. She also believes that if prices drop 10 to 15%, house sales will all but completely stop, since so few of her clients have any more equity than that. At that point, no more price reductions - and zero sales. Last word. She also said the number one sense she gets at RE meetings and in ‘chit-chat’ is fear.
Ah, the death throws of a Ponzi scheme.
What area of the country are you reporting on? Thanks.
“..believes that if prices drop 10 to 15%, house sales will all but completely stop…”
Now that’s an intersting angle, and a possibility that nobody wants to talk about. Especially since it seems a possibility given what she notes about there not being any more first time buyers. So many will just resign themselves to being a slave to their housing payments, at least the ones that can even afford it. (The consequences for the general economy scare you.) Many of the rest though, including a good bunch of specu-tards , will just walk away eventually.
I’d like to see more discussion on the possibilities and ramifications of this scenario — not a crash per se , but just a complete grinding to a halt of RE.
This scenario is part of the “buy now or be priced out forever” scenario.
Sellers will hold for a while…but not forever. That is just not possible. It only takes one “bad apple” to ruin the barrel, no? In other words, one desperate seller will set the values in a neighborhood…and despite whatever fantasy the other sellers are living in, reality will set in when that desperate seller has finally sold. Reality is sweet.
At that point, no more price reductions - and zero sales.
Doubtful. The forced sales will then take over, which will NOT be pretty.
Agreed, we will soon be entering the panic-selling phase.
“…which will NOT be pretty.”
That’s OK — I’m tough — I can take it. Might even put one of ‘em out of their misery.
Isn’t that more or less what happened in the early to mid 90s in the post-bubble markets in LA, DC, etc? Sales went to near zero for a while, if I recall correctly.
In the mid 90’s it was common to have homes sit on the market for YEARS! Nothing wrong with property, priced well, just no buyers! The only deals I did in the early 90’s were selling flips from contractors (they had to by fixers because they had no other work) or sellin homes investors bought from the banks at the courthouse (for cash).
It was standard to call up the listing agent a few weeks into a purchase escrow and act really pissed off (over anything) demanding concessions ammounting to thousands of dollars ($2-5K on a $50K deal, up to 10% depending) or you will kill the deal! If they said no you just moved through like nothing happened, but more often than not they would give up thousands on the deal (even the listing agents would give up a big chunck of their commision). The home had been on the market so long without an offer that the sellers would do anything to close the deal.
Kinda funny, as I remember there was a stigma to new listings “They arn’t ready to sell yet, they will be ready after sitting about 6 months without offers”.
It became irritating to show property to buyers, because for many days afterwords the listing agents would call you begging for offers (multiple times). If you wern’t rude to the agents you could spend hours on the phone saying no to them and their POS listings.
What part of the country?
Central Valley, California
Bakersfield - Oh let it be. LOL.
What market is your SIL in?
Man, this is true, true, true. My buddy, a RE broker for over 25 years, says the current state of affairs “blows” and what you’re sister-in-law reports is accurate. Sellers are trapped and strapped and IF they even get an offer, my buddy says “98% of those get cancelled because of the contingency of buyer’s property selling in time”.
At that point, no more price reductions - and zero sales.
This is highly unlikely. Most of the population will be forced to relocate for work before they finish paying off their mortgage. Even if this miraculously shrinks to a small percentage of the population, that population will be forced to sell, and their price drops will set the market price.
From a RE agents’ perspective, though, that is the relevant concern. After all, “zero sales for me” is functionally the same as “zero sales”; RE agents should be more concerned about the volume of transactions than RE prices.
Annata — Since we’re talking about a chain of events that will span just a number of years and therefore won’t be perpetual, I think that it is possible that there will seem to be “no” sales for quite a while. Let’s say that lasts for a year to a year and a half. How many agents can feed themselves for that long with zero income and bills to pay? Here in central Florida, many brokers are advertising for new agents — precisely because the agents earn no salary and are a very low marginal expense.
******BEST POST*******
This post was one of the ever posted on this site!
I wonder if the big increase in pending sales in August includes these people with contingencies. If so, the pending sales may not materialize.
“She also said the number one sense she gets at RE meetings and in ‘chit-chat’ is fear. ”
This is most excellent news. Using the handy financial euphoria index for booms and busts, that would put us about 1/3 of the way down the slope to the bottom of the drop. Personally, I see us somewhere between DENIAL and FEAR, but getting their quickly:
OPTIMISM………I think i will invest some money in REAL ESTATE.
EXCITEMENT………..That was great, prices are going up.
THRILL…………….I’m going to REFI and buy some neat new toys.
EUPHORIA……. wow!! ….I am a financial GENIUS.
(top of market)
ANXIETY……….A temporary set-back, I’m in for the LONG TERM.
DENIAL….The market’s a little slow, but I can afford to wait.
FEAR**** I can’t believe things aren’t moving…..tons of inventory
DESPERATION……….Honey, we need to sell and unload this crap.
PANIC………..SELL! SELL!! Bring me any offers.
CAPITULATION……We’re loosing our equity. How did this happen?
DESPONDENCY……Here are the KEYS. I will never buy RE again.
(bottom of market).
DEPRESSION………maybe we can find a used trailer somewhere.
HOPE………….”There’s a small apt. for rent in mid-town.
RELIEF……….We’ll at least we got out of crack-town.
OPTIMISM…………”Honey, I’ve been thinking we should start looking for another House”.
inventory figures for sonoma county are deceptive in that they do not (mostly) include fsbo,or new construction.we don’t have first time buyers here unles they win the lottery,or daddy buys it for his little girl,the speculators are hanging in the wind,moaning,and as far as people moving in,traditionally that was people cashing out of higher priced areas and retiring here.not happening.
I live in Temelec, (renting) and the number of homes for sale keep climbing, at least 10 within 5 blocks of me and a new one this morning. These homes are well built but were sold for 32K back in 72 and now they want 550 to 700K. When they get around 70K to 110K then I would buy one.
But where do you think Daddy gets the money to give his little girl downpayment money? Let’s say it all together: H-E-L-O-C. As prices tank and home equity tanks, Daddy will have less money to give, thus resulting in fewer Daddy’s-little-girls becoming instant homeowners. Poor little rich girl.
dude
inventory 2-3 months =sellers
4-6 =flat
7+= buyers
10+= crash
1st & 10 lets do it again. thanks i committed that rule of thumb to memory.
For those following the Jersey market, from the Home News Tribune:
http://www.thnt.com/apps/pbcs.dll/article?AID=/20061005/NEWS/61005001
Kara Homes, Inc. one of the state’s largest private home builders of condominiums and active-adult communities, is anticipating filing for bankruptcy.
Patrick W. Turner, the general counsel for Kara, said yesterday that the company terminated some personnel on Tuesday because it is “trying to restructure” the payroll.
“We are trying to become more profitable,” Turner said, without disclosing what sort of financial trouble the homebuilder is experiencing.
Kara Homes sent a memo to several employees indicating that “the company anticipates filing Chapter 11.”
Employees would be eligible to file for unemployment benefits, according to the letter sent by Roberta W. Schultz, the company’s vice president of Human Resources and Organizational Development. She could not be reached for comment about how many employees had been let go.
Turner said filing Chapter 11 “is one of the alternatives we’re considering,” but he said he could not comment on the letter.
jb
New Jersey Real Estate Report
““Dear Mr. Berko: I’d like your thoughts on buying three condo-hotels at $625,000 each. “
I have never read a contract on one of these but to me it seems that Condo-Hotels are just big Timeshares where you can lose a lot more money while spending a lot more money for the right to stay a few weeks. Timeshares can occasionally work out for someone if it matches what they need but these Condo-Hotels seem to be even worse where you put up all the risk capitol while giving the management a license to skim off any profits that might be made off rentals.
Anyone have any different opinion on these things?
My parents have a condo-hotel unit that they purchased in 1987 in the virgin islands. They paid around $200K, it’s right on the beach, and it’s extremely, extremely nice. But as of last year, similar units were selling for $175K. After almost 20 years, it is still a loss. It was cash flow negative for more than a decade. There was an incident a few years ago where the managers embezzled a bunch of money and no one received rental income for more than a year. Hurricanes are expensive - when there is damage, the place gets shut down, which means that no one gets income. The whole thing is a bad deal.
Thanks for the reply, what you say is exactly the kind of thing I was thinking could happen. I guess there could be good deals but figuring out which is which would be kind of hard and if you lived out of the area it would be difficult to find out what is really going on.
There are some Condo-hotels in the Florida Panhandle and a few other select coastal locations. I expect you will see many more. These were the result of the last FLORIDA Condo bust back in the eighties. Prices of Condos fell by 50% or more because of overbuilding.
When the properties couldn’t get off-loaded, some people bought them cheaply ($30k), and since many were conversions, they were easily to convert back to motels, complete with the front desk. These owners often live in the complex and rent the units that they bought CHEAP.
The concept works well when the price is right. The example from V.I. shows the price wasn’t right….and EVERYTHING I’ve seen in the market is WAY OFF. About 1/3 of current prices you could generate profits, but the property management would need to be closely scrutinized.
The profitable ones I have seen were set up by the investor/owners, not originally sold that way.
“The profitable ones I have seen were set up by the investor/owners, not originally sold that way.”
That sounds exactly right.
A friend of mine bought into a different version of this on the beach in Thailand, during their last big bust. He got a gorgeous big penthouse unit on a jutting-out corner (diamond-shaped building) directly on the ocean for some ridiculously low price, I think about $65K US — the hotel in which the units were located was going under and had to offload some of its inventory. So today, about half the rooms are hotel-owned and half investor-owned. He’s under no illusions about the hotel renting his unit before theirs but doesn’t care — he bought it, very cheaply, for use as a weekend place. That place in a real condo on a warm coast in the U.S. would cost $2M minimum, IMO.
“Dave and Jane Wilson have seen evidence of price declines. The two retired federal workers …………..”
Enough said. Federal workers can barely tie their own shoes.
Tie shoes? They’re Loafers!
90k to start at Dept of homeland overlap- 20+ days off 1st year
Everyday they’re not a work I feel safer, bump that AL time higher.
That’s because anyone with sense has left DHS and they can’t fill the open positions. Or so I hear…..
Dude! You owe me $$$ for a new laptop. Unless you can provide tips for how to clean up spewed Pepsi enough to get it working again!
“Tie shoes? They’re Loafers!”
That’s got to be the catch of the day. Frick and Frack — good one.
A little off the subject, but was wondering among those watching the housing bubble deflate, what are you doing about your gold positions?
Has anybody been adding to them given the recent, sharp declines? Or, are people viewing that as “catching a falling knife?”
Thanks.
If you believe in the camp that says the Fed will inflate or die then Gold is a great place to be.
Gold the metal may go back to $400 rather then up to $2,000. Just like the RE market really lots of spec’s, hedge fund, etc pushing the price way up. Notice since Japan has started raising interest rates how the gold, copper, oil etc has taken a dive. Its all about cheap money not peak oil or gold as a safe haven story.
It’s very hard to see gold climbing from here without going lower first. If inflation continues to trend off and Bernanke continues to talk tough gold could slide through its support in the 520-540 area in which case it would probably go all the way to the mid-400s, but only briefly. At that point it would be a screaming buy, as the bull case is still established. Mes deux centimes.
Sounds like you people are think short term. I’ve never made any money in short term trades.
I’ve been buying gold steadily a little at a time since 1999. Same thing with oil. Just bought another couple of Eagles and some more ConocoPhillips. I’ll check in with you again in 15 years.
maybe solar,nuke power or new energy technology will replace oil since it has such negative consequences for global warming. Long term doesn’t mean sh-t really, human’s adapt and change create new technology and find new ways to adapt. JDSU might be $10 in 15 years , so what! Folks who paid $80 bucks in 2000 will still be under water.
Its all about the use of your capital today and what kind of return can be expected vs the risk.
Maybe I can buy a living room today, the bedroom in a year, and work my way up to master bedroom in about 10 years. It’ll all appreciate over time, right?
I’d like to buy but not yet
~ $547 is major fibanaci retracement level. We are only a small % above it and it also corresponds to some serious moving average resistance in this area. (Levitt Brothers have a good analysis http://www.leavittbrothers.com//chartspeak/ChartSpeak_100406.pdf)
Oil is also very oversold on daily and monthly basis. Time for the short covering. I re-entered “USO” (a oil ETF) yesterday.
“~ $547 is major fibanaci retracement level.”
It’s Fibonacci, and your statement is nonsense on par with reading tea leaves.
Anthony , outside of a few coins , I don’t have much Gold.
I do have a lot of silver exposure though as i like it much better of the two, for numerous reasons.
I am continuing to add to silver holdings here. jmo.
Me too.
We’ve beefed up our stock in gold exploration companies on the Crescent Valley trend in Nevada.
The precious metals will diverge from the rest of the commodities market, as soon as the weight of the national debt and consumer debt become apparent. Precious metals will soar as the value of the dollar declines.
This Berko guy does’nt pull any punches does he? He is a straight shooter. I hope HE and others like him heed Berko’s warnings.
“…prices that have been pushed into the ozone layer by carpetbaggers and unctuous speculators may fall like tears from a tall camel’s eye. The maniacal and insane rush to build condominiums and homes in Florida has finally exceeded the unhinged hyperhysteria to buy.”
This man’s a poet.
The bard of the bubble.
The bubble bard.
Take your pick.
God how I wish they would just stop building entirely. Every new house is such a flippin’ eyesore. Now, if they were building nice little Craftsman or Tudor cottages or heck, even nice brick ranches 1500-2100 sq ft on 0.2 acre, I would say, bubble away. But I swear all they build is garage doors and nested gables..at least that’s all I see *cringe* (sorry, this really gets to me)
The game is throw it up as fast and cheap as you can. The sheeple who buy these shitboxes don’t know the difference.
First two things I look at when I go into a house are windows and plumbing fixtures. If those are cheap, I don’t care if the countertops are made out of solid gold. No deal.
.2 Acres? Doesn’t exist where I live for under a million.
I agree wholeheartedly. I am at a loss for words when trying to describe this new breed of house. Sh!tbox is the word that comes to mind.
Even the old fashioned 1000sf concrete block Florida retirement house would be better then a lot of what they are building now.
You mean like this one for $450,000…
http://tinyurl.com/hls7m
Only thing that makes sense there is that that-there is a $500K beach lot and they’re giving you an allowance to haul it away. What would you insure it for? The only rational amount would be zero, but would the lender allow that?
In the listing, waterfront is shown as “no.” This probably is across the street from the water and your view would be between houses, unless you like to drink on the roof.
Yeah but I suspect that even with a “waterview” it should go for a lot less then $450,000. Also if it has a “waterview” I would think that the realtor would have taken a picture of it since the house is certainly not worth $450,000
I agree! Nested gables, fake paned windows, 5 types of exterior (fake stone, fake brick, stucco, cheap siding AND a touch of wood). The front doors are particularly awful — fake wood along with fake stained glass. Ugh.
So if developers buy at $100,000 per acre, and they are said to be overpaying, at 5 to an acre that costs them $20.000. Where does the other $480,000 come from?
Gotta check this out from The Mess that Greenspan Made blog….way funny:
Guest Blogger Stephen Colbert on Housing
themessthatgreenspanmade.blogspot.com/2006/10/guest-blogger-stephen-colbert-on.html
Waiting — yes, it’s funny. Nice & dry. Here’s a shorter link that doesn’t require a copy and paste:
http://tinyurl.com/e6gp2
It’s normal for building to occasionally leap ahead of demand for housing, as building plans have to be made far in advance of when the demand conditions will dictate what a completed home is worth. The builders have recognized the problem and have scaled back construction plans to give demand the chance to catch up. Where is the problem?
Looks like the problem is with their stock price being down about 50% and their margins getting cut in half!
So the stocks are on 50% off sale. Sounds like it might be a good time to buy.
OK…. now I’m beginning to think Hopeful is a housing bear that has been drinking …. Just a bit too much positive spin.
Put down the bottle and get some sleep.
True on the reverse as well. After a prolonged economic downturn, its easy for housing demand to outpace builders when the economic mood of a local changes and people feel comfortable buying again. That’s when prices suddenly shoot up.
Maybe you should ask WCI Communities, or Bankrupt Jade Home (sold 6 homes this year, 105 in 2005), or Kara Homes (NJ homebuilder Bankrupt today), or that Tampa condo converter that went belly-up last week, or the listed HBs, ask them “Where is the problem?”
the problem is that demand won’t catch up for a few years (5-10 perhaps)
I am at a loss for words when trying to describe this new breed of house. Sh!tbox is the word that comes to mind.
Minor correction to what to call these current houses. It is McShitbox. McCrackerbox. McUglybox. McFallApart. McButtUglyEyesore. Too much fun.
How ’bout McPOS?
“‘If you’re an investor, you’re probably not going to get great returns,’ said Stanley Smith, a professor of finance at the University of Central Florida. ‘If you’re looking to buy a home, you’re probably not going to lose much, and you may gain some.
Let me get this straight–the market somehow “knows” whether your an “investor” or not, and adjusts your sale price accordingly? How does that work?
I was on Craigslist for the Orlando. Check out Lennar homes ad.
http://orlando.craigslist.org/rfs/216388861.html
Looks like prices are coming down. The momentum for a price drop in the Orlando area is going to get worse.
Great catch Orlando! DR Horton started a similar price cutting campaign approximately 3 weeks ago; I’ve been waiting for another major builder to respond. I don’t see any mention of the price cuts on Lennar’s website, however.
Slimey ba5+ar6s! Even as the market caves in around them, they’re the same lying scoundrels as ever:
“$245990 New Home - 9 Months No Payments + up to $40k off”
Not really. For instance, the house they show in the photo is NOT the one you get for $245,990. Once you do some digging, you find out it’s really a townhouse in their lowest-price-rated subdivision. Ignore the lying photo!
$40k off is not from that cheap model, best I can tell, but appears to be for higher-priced models. Key liar phrase is “up to $40k”, meaning “could be $1k - or zero”.
I’m not even going to waste time on their mortgage payment fine print. Maybe it’s true, but I hardly trust them now. My first impression (for a second) was “Hey, not a bad house for that little money, what with the discounts”. But of course, it’s simply not true.
Liars, liars, liars! I hope they get stuck with those places for years.
Finally, Clarity of Thought. Seeing things as they really are, is wonderful. It’s like waking up from a bad dream.