“Welcome To Post-Boom” Florida
The News Press reports from Florida. “Welcome to the post-boom world of Southwest Florida real estate, where builders compete for scarce customers by offering deep discounts and upgrades such as the Lees’ pool. Home prices in Lee County have dropped sharply since December, when the median price of a single-family home peaked at an all-time high of $322,300.”
“By August, that figure had fallen to $264,100, down 7 percent from $283,600 a year earlier. In Collier County, the median price in August was $469,100, down 6 percent from $500,800 a year earlier.”
“Meanwhile, about 12,000 houses are on the market in Lee County, about three times the number from a year ago.” “As a result, incentives have proliferated. ‘That’s the first thing builders do when the market softens,’ said John McIlwain, with the Urban Land Institute. ‘They don’t want to reduce prices because it affects values and the market.’”
“‘The prices are going to start coming down, but it’s really hard for a builder to post a sign: ‘Price reduced,’ McIlwain said. ‘That sends a bad message to the buyer. People wonder a couple of things: ‘If I don’t buy, will it come down next week,’ or ‘If I buy, now, if it comes down next week will I lose value?’”
“A builder’s incentives can drastically reduce prices in a neighborhood. Real estate agent D. Michael Burke points to the Savona development in Grandezza where the average price of homes sold has dropped steadily from $668,975 in the fourth quarter of 2005 to $504,500 in the third quarter of 2006.”
“‘It’s very difficult to compete with what they’re doing,’ Burke said.”
“Sometimes a developer’s incentives are used to compete with people who are trying to resell houses in a partially built community. Not everyone in the real-estate business thinks incentives other than price are a good idea.”
“‘We have a saying in our office,’ said Rich Halpern, president of a Bonita Springs-based research firm. ‘If your builder says he’s giving you a refrigerator, go to his house and if his wife still has a refrigerator, he didn’t give you a refrigerator, you’re buying a refrigerator from him.”
The Bradenton Herald. “The market is likely returning to where it was in 2002-03, and ‘one can regard the market of 2004 and 2005 as an aberration,’ said Dale Friedley of the Manatee County Property Appraiser’s Office”
“Locally, home sales in September slid 37.2 percent from last year. Condo sales tumbled by 73.6 percent.” “‘
“It was unsustainable and I think we all knew that,’ said Jan Smith, president of Jan Smith & Company.”
“While 2002’s real estate market was a healthy one, the market became saturated with condominiums during the past four years. ‘There is not only oversaturation on the market, but condo sellers had this perception that these were solid gold and they could charge anything they wanted for them,’ said Ken Miller, sales associate.”
“It is not just the luxury market that has seen an influx of condos. The conversion of apartments to condos has flooded the more affordable market as well.”
“There were several instances in which apartment complexes aimed to go condo only to find the market flattening before they could convert. After changing the name and doing some renovations, 210 Watermark in downtown Bradenton found the market too volatile and reverted back to a rental community.”
The St Petersburg Times. “Needing millions of dollars to revive its stalled Trump Tower Tampa condominium project, developer SimDag LLC has sold off one of its chief assets: its headquarters building in downtown Tampa.”
“The sales price was $280,000 less than SimDag’s partners paid for the six-story office building in 2003, according to the Hillsborough County Property Appraisers office.”
“Developers say they’ve collected nonrefundable deposits on 80 percent of the units, but construction on the building foundation has visibly slackened.”
“‘When they broke ground two or three months ago, there were probably 30-plus people working on the site. Now some mornings I come out and the gates are locked,’ said Eric Bailey, an executive with the company for which the recently sold office building is named.”
“Finding financing for what could be a landmark tower has proved elusive as lenders scurry from the slumping housing market. Construction overruns forced SimDag to hit depositors up for millions of extra dollars last winter.”
“In August the Trump Organization announced it would wield its clout in the lending community to help SimDag negotiate a $200-million construction loan for the tower. Neither Tampa investment banker Robert Moreyra, president of Atlantic American Capital Advisors, nor SimDag chief executive Frank Dagostino returned calls from the St. Petersburg Times. Executives in Trump’s New York offices could not be reached Wednesday for comment.”
‘While Sarasota investor Neil Mohamed Husani grabbed headlines for deals that boosted some real estate values by tens of millions of dollars in the region, another group of Southwest Florida investors, using similar tactics, are collectively facing years of prison time.’
‘By grossly inflating the value of real estate to get loans that more than covered their original purchases, they put banks in danger of loan losses, distorted the local real estate market and increased taxable property values in two counties.’
Husani. Not Smith or Jones. I’ll say no more because then I’ll be accused of immigrant hate, despite the fact that my family were (legal) immigrants.
So why isn’t Husani grabbing prison time as well??
Since his first name is Neil, he probably was born in the USA.
Nihil
Nihil
went to miami yesterday. oh my! the building of new properties are unreal. thousands of new units are going up from downtown on biscayne to 40th and biscayne. and now midtown miami is going up with target, marshalls and other stores. even miami beach has major construction going on. with the new carnival center (performing arts) open, more is being built up. the questions is how much is too much. if i am wealth and enjoy the good life, do i move to the new miami or slow naples. i have to be 80 to want to live in naples.
Finally, the lawsuits and talk of how this whole thing affected taxes and insurance. Nice.
Yes ,finally .As if this hasn’t always been a issue of fraud on the community . Pulte and KB Homes announced yesterday that they would reduce house prices . KB Homes senior director of operations Rex McQuire said ,”We’re taking a haircut .” Pulte cut prices on some homes by 30K ,(about 10%).Tell me if these builders don’t read this site ,(using the word “haircut”)
Enough with the incentives and kickbacks .
Yep, I’ve noticed that Centex and KB have dropped prices in a few of their Orlando communities by $30-35k.
Crooked appraiser’s greased the skids.
But, isn’t it amazing how the property “values” doubled overnight.
These “sales” reflected in the recorded sales in the County, thereby skewing the effective value of all homes in the area.
Euphoria~! is the only word for neighbors in adjacent houses.
Wow!! Look how much our property values have gone up!!!
We are financial geniuses.!!!
These people should be doing 20 years HARD TIME. Not 3-4 yrs.
USA today reports on the front page today that Assaults and Murders in Orlando are up 386% over last year.
All those communities of houses thrown up by pulte/ryland/KB are going to be crime-infested slums as soon as people flee (or when houses sit empty until they’re rented at bargain prices to people on assistance.)
I read an article recently here in NE FL that argued there is a strong relationship between homicide rates and foreclosures. A large percentage of the homicides were commited by persons under some type of foreclosure. The story cited that Chicago had a similar pattern.
Oh wonderful, that’s just what we need up here. Although completely anecdotal I will add that in Chicago the luxury import car drivers (BMW, Audi etc.) do seem to be driving worse than ever. Could it be that those $400k + Lincoln Park, Near West and Near South condos are losing their luster? Hey Chicago yuppies - are the walls closing in on you? Are things getting a little tight? The wolf is definitely at the door - believe it!
It’s starting to fall apart.
Hmmm…you’d think the relationship would be between suicide and foreclosures. But then again, it’s more of the victimless society that abounds - screw up your finances and your life? Kill someone else over it!
Good reason to own a gun. I bought several last year.
Andy - seriously I think there are a lot(relatively anyway) of people thinking like that . Take a look at Smith and Wesson ’s stock price this year.
Changes in uburban violence vs. urban violence would be intersting study last couple/next couple years. Lotta people that never should have owned now do . No social opinions , just an observation.
should be suburban violence. No coffee yet.
No offense taken. I bought mine because of these blogs and I could see this shite coming down the pike. Anytime you have angry broke unemployed people out on the streets you have big problems. This will make France’s recent problems look like a picnic.
You’re in NE Florida? How’s thing looking in St. Augustine? I see a buttload of listings there.
Lot’s of large scale community plans; check out Nocatee.com to get a taste. Things are slowly turning, however. DR Horton is offering huge discounts upto 50k around World Golf Village and in a Northern Nassau county community. Other builders are sticking to financing gimmickery and fanciful incentives like 10k for Rooms-to-Go and $1 closings.
DR Horton, Mercedes Homes, KB Homes, ICI Homes, and other builders have been offering 50k off and accepting over 100k off of their homes in St. John’s county just to move inventory. My wife and I walked into an ICI planned community last weekend and had the sales associate begging us to look into an inventory home. I don’t see why we couldn’t have gotten it for at least 50% off asking if we were interested. Several of the blocks had at least 50% of their existing homes for sale by flippers in nearby Julington Creek.
Just now came back from a friend’s house in St. Aug. Bch. They’re getting it ready for the normal winter rental. His normal Jan-Feb-Mar client is hemming and hawing and they realize she is backing out5. So now they’re scrambling trying to find a broker to handle it. While I was there one called back to cancel this afternoon’s appointment saying they are not taking any rentals right now unless they are extra special or have a pool. So they are down to listing it with another agent who is supposedly coming tomorrow, then back to NC for them and hope for the best. BTW, they hadn’t been down since early summer and were flabbergasted at the change in the market between then and now. Everything is for sale or rent.
Interesting.
St. Augustine and St. John’s county are a complete disaster. I get flyers and e-mails at work daily from real estate brokers who are selling off the land purchased for planned communities in St. Augustine and Ponte Vedra. Some very expensive planned communities are looking at selling their remaining land to apartment developers.
By the way, we are section 8 housing developers. Good luck to the new owners of million dollar homes that will have crack dens across the street.
Typical outcome of fiat money run amok.
Whatcha gonna do? Bad Boy… Bad Boy… COPS, shot on location…. Remember perps you see on this program are renters until proven otherwise. Whatcha gonna do? Bad Boy, Bad Boy.
Hillarious, gordo!
New rap song by K-Fed:
“I’m packin’ my 9
in sweet suburban town
USA.
Got no time
for mortgage that I
got to pay!
Y’all, my a.r.m.
just blew up right
in my face,
Gonna kill
some innocent dude
in my race!”
Orlando-Rated as the city having the people with the “nastiest” and “meanest” demeanors in the country by Men’s Health Magazine.
Ugly…
A family of 4 (mother father and two children) were just found EXECUTED on Florida’s Turnpike this morning outside of St.Lucie.
http://www.cbsnews.com/stories/2006/10/13/national/main2088363.shtml
Crime and poverty go togther like hotdogs and mustard. Florida never really was “safe” even with some more expensive houses.
News stories like this will cause housing to go down even further. What family would move to St. Lucie after reading this story?
Reads like an immigrant hate crime. Killing immigrants including women and children is gaining popularity in some circles. Read a similar story in South GA some months back.
Check out the comments. It’s turning into a gun-law shoutfest (I won’t dignify the posts by using the word “debate”).
Those are the illegal alien “gangsters” looking for work………
the reason they’re all here in Amerika, isn’t it?
Some great material here. Developer Jan Smith “knew” that the boom was “unsustainable.” How many people did Jan Smith tell in his quest to make a buck? And those subdivision names–”Grandezza” and “Savona.” For God’s sake, it’s not Italy, it’s Fort Myers.
Pensacola Beach which is probably ground zero for the Redneck Riviera has a massive brown stucco resort called “Portofino” which popped up in the last four years. The condo towers look like four brown dog turds standing on end upon the white quartz beach sand. Completely alien architecture and a perfect example of visual pollution in my book.
Bad idea development and architecture will bear the brunt.
The “fool pool” is empty.
Popper,
You should write the ads for this place: Come bask in the sun at the Redneck Riveria’s most exclusive dog turd village condo enclave Portofino!
Popper , I smell an opportunity here for a coffe table book
Popper, I know ‘whatch ya’ mean, I lived in Pensacola all my life and moved to Tampa Bay just last year. I’ve been keeping up with the local news there, and it’s looking like the downtown condo developments are throwing in the towel!
The downtown condo development movement is a complete joke.
One of my favorites is the new luxury condo development called “Salamanca” that is going up on the downtown Gulf Power office campus. I have a hard time believing there are GFs out there ready to pay $2.4 million for a “downtown” luxury condo that is NOT on the water. I am thinking that would be a tough sell even in Miami.
Is this it?
http://www.portofinoisland.com
That’s the one.
I see Levin & Co. are now attempting to rename the whole island Portofino. I am glad when I was in town last summer I blew my cash over in Ft. Walton Beach and Destin.
Oh, every low rent developer in the U.S. has a Tuscany theme. It’s really pretty funny when you think about it. You can see some of the most egregious architectural vomitings of that sort in Dallas, where pretension trumps common sense 24/365.
How true…these names are all over Seattle. Maybe it is just me but I would be embarrassed to say that I live in some idiotic name like Villa Trofino, or some other nonsense. But, then again, I never bought into the entire “consumer culture.”
there was a time when slapping a French-sounding name on any consumable good supposedly gave it more class, more cachet, and more marketability.
Italy is the new France.
years ago (early 80s) I bought a condo in a converted apt house in OakLawn/Highland Park border in Dallas. Fancy Highland Park has street names of French towns and provinces. My street was ‘Bowser’ still in Dallas city limits. Months later I was getting a garden hose out of the storage rooms of our building and found the old apartment house sign: “Le Bowser” !!!
Well “IF” he knew it was unsustainable then I expect that he has no properties for sale as he would have stopped building in anticipation (unless he has a death wish). I’m guessing he is up to his ass in unsold properties and is trying to come off as smart when in reality he is a dolt like the rest.
“….If I buy, now, if it comes down next week will I lose value”?
Value: The worth of a thing in money or goods at a certain time.
Price: Value or worth.
Whew! At first I thought they were the same thing, but ‘Value’ is time sensitive, while ‘Price’ is not. So really, that is good news …. The price of the property you bought can plummet, but it never affects the value because it was a good deal at the time.
I’m going to run out and buy right now before the value drops any lower…..
- the average price of homes sold has dropped steadily from $668,975 in the fourth quarter of 2005 to $504,500 in the third quarter of 2006.”
So we start with the 504k as the bubble price. Take out the bubble and you have 289k.
As Warren Buffett says, price is what you pay, value is what you get. In my mind, value is the utility of a thing. It never changes except through depreciation (eventually things get used up.) A hammer has a constant value to me regardless of the price attached to it.
The question when considering price then, is whether a thing is good value for the money.
Home prices in Lee County have dropped sharply since December, when the median price of a single-family home peaked at an all-time high of $322,300.”
This means by December the median (off the top of my head) will be down 20% YOY assuming NO further price drops. Now if that is not a crashing market I don’t know what is.
Wanna buy a lot in Leighigh Acres: 7410 listed on Realtor.com.
Hurry……running out of land!
I noticed this a few months ago. A lot showed up on foreclosure.com. Being that they all seemed contiguous I was wondering if a nuch were bought up at once by a developer that’s going t!ts-up.
You do know the history of Lehigh Acres, right?
Check out this web site:
http://www.spikowski.com/landscam.htm#THE%20CASE%20OF%20LEHIGH%20ACRES,%20FLORIDA
If you see satellite photos of the state of Florida, Lehigh sticks out like a sore thumb - a huge grid of roads with no buildings. I heard back in the 80’s that you could still see signs there “Now that you’re back from the war, how about a new home from….”. They might still be there. I’d be curious to hear from anyone who lives near there what it’s like now.
I’ve been familiar with miles and miles of empty lots for years. Same thing east of Naples. The sattellite photos are great. Tons of land down there. The empty non-Everglades area is as large as the developed area.
The prices are going to start coming down, but it’s really hard for a builder to post a sign: ‘Price reduced,’ McIlwain said. ‘That sends a bad message to the buyer. People wonder a couple of things: ‘If I don’t buy, will it come down next week,’ or ‘If I buy, now, if it comes down next week will I lose value?
Well maybe they could try the tactic being used around here. I saw a “Price Improved” sign the other day. What a happy, pleasant sign - right? Sends nothing but warm fuzzies.
“Price Reduced” at a furnature store does not send a bad message to the buyer. “Price Reduced” at the grocery store does not send a bad message to the buyer. Visible Price Reductions at the gas pump do not send a bad message to the buyer.
Why should “Price Reduced” send a bad message in housing?
It doesn’t to me! (And I’m a homeowner).
This is a great example of media bias. House prices going up faster than wages or inflation is a BAD thing…when they stop doing this, it’s a GOOD thing. But few people other than the ones here would think that way.
Because you don’t buy gasoline on 90% margin hoping to sell it for more later. People who buy just as much housing as they need for the immediate future are called renters. Everyone else is buying future housing now in order to avoid the expected increase in future housing expenses.
Exactly. Those renting now are ALSO buying future housing by putting their saved money into the safest investment vehicles they can find.
Houses are considered an investment. Furniture, groceries and gas are not.
Housing is an investment if you buy it to rent it out. Even with today’s somewhat reduced prices, it is not possible to get a positive cash flow by buying a SFH and renting it out. Therefore it is like buying a stock with a negative dividend. Not to mention the hassle.
The market is likely returning to where it was in 2002-03
If that Manatee County official is referring to prices, and not just sales volume, that would have to go close to being the most bearish comment so far from any level of government.
It’s got a looooooong way to go to get to 2002-2003 prices.
HPI Q1 2002 = 151
HPI Q1 2003 = 168
HPI Q2 2006 = 316
That means prices would have to come down 47% to equal Q1 2003 prices, and 52% to equal Q1 2002 prices.
I can live with that.
But there’s a lot of folks out there who can’t.
Sounds like they have a problem then, no?
This seems about right to me. In most areas, 02-03 is when the price-rent ratios took off.
Nope, the goon appraiser for Manatee County somehow believes house prices will be up 12%-14% for 2006. Since ‘02-’03 saw this kind of appreciation, we’re now “back to normal”. This article was an absolute joke as this area has had huge sales drop’s of about 40-50% for the last several months and prices ARE coming down. Sarasota/Bradenton already reported a decline in prices of 11% as of August. Lennar is reducing prices 30%+ in Mantee County and neighborhoods everywhere are littered with For Sale signs. This appraiser is on drugs. Of course, you can’t get through an article about Florida Real Estate without this quote from the Realtors:
“‘The first wave of baby boomers retiring are on their way,’ Smith said”.
All is now clear. Sheesh.
“‘We have a saying in our office,’ said Rich Halpern, president of a Bonita Springs-based research firm. ‘If your builder says he’s giving you a refrigerator, go to his house and if his wife still has a refrigerator, he didn’t give you a refrigerator, you’re buying a refrigerator from him.”
Priceless - and so true.
Same for washers and dryers, cars, upgrades, closing costs, financing credits etc. They’re not free gifts - they’re things your paying for by paying a price for the home that’s more than it’s really worth. (Relativeness of “worth” notwithstanding).
Notice how effective the “genius” Trump is at getting more financing for this loser project.
Between Trump attempting to sell a home for $125 million, his work with that fruad Kyosaki and his recent initiation of a his mortgage company I don’t think it will be long before his “genius” is exposed for what it is; a joke.
How can you say Trump is a joke. He is a genius. Just ask him.
But Trump is a genius because he makes everyone think he owns the building he has a minor name stake in. He gets a development fee, a marketing fee, and % of the profits. But Trump actually owns very litle. he gets deep pocketed partners to do handle the heavy lifting. He is a brillaint negotiator, one of the best, and this comes from personal experience. He’s not a joke. He’s a master of hype and self-promotion.
“It was unsustainable and I think we all knew that,’ said Jan Smith, president of Jan Smith & Company.”
All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident.
Arthur Schopenhauer
German philosopher (1788 - 1860)
Ventura County has joined San Diego as down y-o-y (-3.3%) in SoCal. We’ve discussed San Diego and several others follow it closely but why Ventura? Just because it rose so much more? Housing stock make up? Noise in the data based on the small market size?
sorry, wrong topic, must be the weekend.
According to sptimes.com, “SimDag acquired the name in a licensing deal with New York real estate tycoon Donald Trump.” That’s a nice way to leverage your brand Mr. Trump but brand leveragers beware of the risks.
Moreover, from my vantage it looks like the high-end tower market is taking a beating. WCI is competing in the same high end space and it’s not doing well at the moment.
Furthermore, did construction costs really increase so much that developers can’t make a profit on these towers? Or, did speculative demand fall off a cliff? I suspect the latter; perhaps it’s both.
Lastly, is lending really drying up for these grand monoliths of speculative excess and bubble shame? Makes me wonder why…. you’d think everyone would want a piece of the Trump brand. Oops! Is the bating boom beckoning a bad bubble brand association?
“Furthermore, did construction costs really increase so much that developers can’t make a profit on these towers? Or, did speculative demand fall off a cliff? I suspect the latter; perhaps it’s both.”
How could costs be increasing when the construction boom is whinding down? Costs are decreasing. These developers are lying, pure and simple. Nobody wants to say “we where absolutely stupid for thinking that there would be thoussands of new flippers all lined up to buy the tens of thousands of new condos that are coming on line in FL.” Better to say “the condo business has not met our expectations due to increasing costs.”
Furthermore, did construction costs really increase so much that developers can’t make a profit on these towers?
the margins are much thinner than a few years ago. High land prices, and high construction costs due to labor shortages and material shortages. Here’s an anecdote. I am aware of a new large $500M college expansion (I wont name it)building in a large US city. It’s designed by one of the biggest and busiest architectural firms in the world. They can’t get anyone to bid on their curtain wall.
Interesting that at least some parts of Florida peaked last December, rather than during summer 05′. If we assume that prices in Lee county stabilize, they will already have an 18% drop by this December. However, it seems likely that home prices will fall even more in the next few months. About 20% in one year suggests that getting back to more normal prices, say 50% off the peak, is very likely in the next year or two.
The Bradenton Herald. “The market is likely returning to where it was in 2002-03, and ‘one can regard the market of 2004 and 2005 as an aberration,’ said Dale Friedley of the Manatee County Property Appraiser’s Office”
Another year they’ll be saying we’re returning to 2001 prices, a year after that we’ll be returning to 1999 prices. Slow learners but they’re catching on.
of all the comments by industry insiders (builders, agents etc), I find it most dishonest to hear “this just couldn’t be sustained.” Really? Why now?
Since when did that conversation take place when loan brokers and agents were writing up the purchase and sale agreements and loan applications.
Total BS.
“‘We have a saying in our office,’ said Rich Halpern, president of a Bonita Springs-based research firm. ‘If your builder says he’s giving you a refrigerator, go to his house and if his wife still has a refrigerator, he didn’t give you a refrigerator, you’re buying a refrigerator from him.”
Classic. Now that all of the FB’s are underwater, he points and laughs at them.
The Bradenton Herald. “The market is likely returning to where it was in 2002-03, and ‘one can regard the market of 2004 and 2005 as an aberration,’ said Dale Friedley of the Manatee County Property Appraiser’s Office”
Wishful thinking Dale. It may hang out at 2002 for a while, but prices are heading to 1997 on the overshoot! Woo hoo, 20% price cuts before X-Mas are “in the bag”!!!!!!
I think you’re misunderstanding this news article in the Bradenton Herald. It says:
"Unless there is a downturn in the last three months, the annual appreciation for 2006 will be between 12 percent and 14 percent, comparable to levels in 2003," Dale Friedley of the Manatee County Property Appraiser's Office said in a press release that accompanied sales figures for September and the third quarter.
The market is likely returning to where it was in 2002-03, and "one can regard the market of 2004 and 2005 as an aberration," Friedley said, adding that the fourth-quarter numbers will be key to determining price trends.
My take is that the decrease in appreciation to 12-14% of the 2002-3 levels is the likely scenario. The increase in appreciation of 2004-5 where an aberration…
I’m I wrong? I sure wish…
“My take is that the decrease in appreciation to 12-14% of the 2002-3 levels is the likely scenario. The increase in appreciation of 2004-5 where an aberration…”
Yup, he’s saying we’re back to 12-14%/yr apprecation instead of the crazy 40-50% “abberation” and he’s full of it. These people don’t look at trends at all…..
average price of homes sold has dropped steadily from $668,975 in the fourth quarter of 2005 to $504,500 in the third quarter of 2006
Now that is a harry cut!!…There have to be some pissed off people
that bought in 2005.
But, according to MOODY’S we are only supposed to have a 5% correction and that the markets are supposed to rebound shortly.
BWHAHAHA
UHaul one-way 26′ truck rental rate for November 15th-
Sarasota to Raleigh, NC: $908
Raleigh to Sarasota: $500
That’s pretty much inversely proportional to the cost of living in both those areas. You get to move to Sarasota at half price, but once there your cost of living is double that of a place like Raleigh. We did the opposite, and enjoy home prices, taxes and utilities that are close to half the Florida costs.
Can’t say the same about insurance, however. It’s only 1/8 as much here.
Seems to work for many city pairs.
Santa Monica to Raleigh: $3701
Raleigh to Santa Monica: $939
Gawd….could you imagine actually driving one of those POS beasts that far. I drove one around town and it beat me to death.
Once your body heat activates the sweat Bubba (the previous user) left on the smooth vinyl seats you stick pretty good.
The “U-Haul Index” strikes again.
People wonder a couple of things: ‘If I don’t buy, will it come down next week,’ or ‘If I buy, now, if it comes down next week will I lose value?’”
Wow, that’s a tough one, but I’ll go out on a limb. The answer is…. yes.
““It was unsustainable and I think we all knew that,’ said Jan Smith, president of Jan Smith & Company.””
I thought Florida was working off of a new economic model. LOL!
No, its a new paragdigm, totally different.
Josh
Not so fast, I went to three subdivisions in Parrish and Bradenton both in Manatee county. The prices of new homes are only back to 2005 prices, no less than that. I’ve been looking in these areas for the past three years and have the price sheets of most newer developments from 03-06. I have yet to see builders or resales get close to 2003 levels. Example, Country Meadows a subdivision in Bradenton east of I-75 created by two builders, Lennar and Medallion builders average lot size 1/2 acre with HOA but no CDD fees. Looked at both builders spec homes and the prices have not been lowered in the past three months. Don’t be fooled by the paper, I look every month and again I’m only seeing price drops to mid summer 2005.
You are right about the builders not lowering prices. I too have been watching neighborhoods. Ithink the larger builders may be afraid of lawsuits. Some of the larger builders have offered us price guaruntees as well as up to $75k in options. So in essence, the prices have dropped, only not on paper. Where two years ago a buyer had to pay extra for the pool and granite, now they get it thrown in. Thus, paying less for the exact same house and upgrades as your neighbor that bought a year ago!
Are you checking out the builders “list price” or did you go into any models and act interested? I was in a Lennar model in Ellenton that sold for $460k last Fall and their “list price’” when we walked in was $380k. By the time we were ready to leave the agent was offering it at $330k If I was seriously interested in the piece of crap, I think they would have dropped it further since they have empty houses sitting. $330k was still way overpriced IMO…..
Flic,
I’ve gone to several subdivisions and acted real interested in hopes that they would give me their best price without bartering. As I said I still do not see the price decreases as anything meaningful yet. Country meadows has about 20 spec homes up and finished, I would think that they would do whatever is in their best interest to dump these but that doesn’t seem to be the case as I said. Either it’s going to be a slow grind down or a big thud, the jury is still out out on this one.
“When they broke ground two or three months ago”
should read
“when they go broke two or three months from now”
Good one!
Tampa Bay Lightning strikes again:
http://bn9.com/content/36/2006/10/13/190298.html?title=Arson%20investigation%20in%20Tampa
Smoke ‘em if you got ‘em.
in addition to expensive hurricane insurance, fire insurance costs will go up as more underwater homeonwers chose this way out….
I don’t know the answer to this one, but how does burning your house down get you out of your mortgage? Wouldn’t the bank still expect you to pay? There can’t be a “if your house burns down you don’t have to pay” clause in mortgage contracts.
Insurance theoretically would pay. This is actually insurance fraud.
There was another suspicious Tampa-vacant-house-fire about a month ago as well. I couldn’t find the story…
This is the old story of I could pay off the loan and own the lot with the insurance money. I see this all the time. Incendiary fires have obvious indicators and will be found.
If anyone doubts that the prices of homes in S. Fla are still tremendously overvalud,,, check this out.
http://rmlsfl.mlxchange.com/Pub/EmailView.asp?r=741060501&s=RML&t=RML
This was first listed at $429,900.. Now they are looking for $249,900.. only a 46% haircut. This type of info is kept secret from the public and only available to subsribers of the MLS. I bet that is the amount owed on the property. Looks like another specuvestor that got burned trying to flip and got flopped.
OPENING BID STARTS AT $249,900–PROPERTY TO BE SOLD AT PUBLIC AUCTION SATURDAY, OCTOBER 14, 2006 AT 12 NOON
Wow, that actually would not be a bad deal at 250 or so. That’s about 100/sq ft (2200 sq ft, 2500 total). I might have to mosey on down to that auction; just to see what’s going on in RE auctions now.
I think your right, that’s probably the amount owed. So, what happens to all those homes bought for 500K, with 510K owed, that are now worth 250K? Ewwww.. I am imagining, nothing very good.
Holy hell! Awesome find. How’d you get that info?
hehehe… I could tell you but…..
I sae today at least 10 other properties that have been “reduced” anywhere from $30 - $100,000 from the original list price.
Yeah,, prices are only down 5 % my arse. And the tooth fairy is going to leave me a quarter tonight under my pillow. IMHO, the REIC is hard at work with the manipulation of prices to keep the illusion of calm for the sheeple.
If they got rid of the relisting sh!t everyone would be able to see this and assess the damage for themselves.
How are reductions calculated? If someone lists a condo at say 500k that was sold last year for 300k and then lowers the rate to say 350k than you still pay a lot more than you would have the year before.
The reductions don’t impress me, unless the price is down to at least Jan of 2005.
Anyone any thoughts on Miami, don’t see many reductions here yet