“Prices Are Slowly Trending Down” In Florida
The Florida realtors have the September numbers out. “A total of 13,485 existing single-family homes sold statewide last month, a decrease of 34 percent from the 20,451 homes sold during the previous September, according to the Florida Association of Realtors. Statewide, the existing-home median price slipped 1 percent to $243,900 last month; a year ago, it was $246,100.”
“Looking to Florida’s existing condominium market, sales of existing condos also decreased in September, with a total of 3,819 condos sold statewide compared to 6,930 in September 2005 for a 45 percent decrease, according to FAR. The statewide median sales price for condos last month was $201,900; a year ago, it was $215,500 for a 6 percent decrease.”
“Among the state’s larger markets, the Miami metropolitan statistical area reported 769 existing homes sold last month compared to 872 homes sold a year ago for a 12 percent decline. A total of 666 existing condos changed hands in Miami in September for a 40 percent decrease over the 1,106 condos sold the previous year.”
“‘Prices are slowly trending down,’ says Pat Dahne, chairman of the Realtor Association of Greater Miami. ‘As real estate professionals, we need to remind people that real estate is a long-term investment.”
The Miami Herald. “With sales sluggish, the inventory of existing single-family homes and condominiums with ‘for sale’ signs grew again in September. More than 62,000 homes were on the market in Miami-Dade and Broward — some 1,800 more than in August and nearly triple the number a year ago.”
“The reasons for the stubborn slowdown include skyrocketing prices staying beyond the reach of too many buyers, investors and speculators having fled the market, rising property insurance, the specter of higher property taxes discouraging new purchases and primary buyers waiting on the sideline for fear prices will drop further.”
The Naples News. “The number of homes sold in the Naples area declined 37 percent last month compared to September 2005. There were 236 home sales last month in the area, compared to 377 a year ago.”
“The median price of those homes also dropped, according to the numbers released today. The median price for an existing, single-family home sold by a Realtor was $446,900 last month, compared to $487,500 in September 2005.”
“There were 173 condo sales in the Naples area last month, down 62 percent from the 456 that sold last year in September.”
The News Press. “The number of sales and median price of an existing home in Lee County dropped in September compared to a year ago, according to statistics released today by the Florida Association of Realtors. There was a 9 percent drop from $288,700 to $261,400 in the median price; the number of homes sold with assistance from a Realtor plummeted 36 percent from 1,075 to 693.”
“In Collier County, the price dropped 8 percent from $487,500 to $446,900 and the number of sales fell 37 percent from 377 to 236. For Charlotte County, the price dropped 10 percent from $229,700 to $207,800 while the number of sales fell 42 percent from 353 to 206.”
The Sun Sentinel. “South Florida’s housing market showed no signs of improvement in September as prices and sales of existing homes continued to decline.”
“Palm Beach County’s median price of $365,500 dropped 9 percent or $34,500 from $400,000 in September 2005, FAR said Wednesday. Broward County’s median of $370,300 fell 2 percent or $9,100 from $379,400 in September.”
“Prices have fallen in Broward County for three months in a row; in Palm Beach County, prices have been down for the past two months. Year-over-year sales dropped by double digits in all three counties.”
“Palm Beach County had 566 sales in September, down 53 percent from the 1,202 sales last September. That slide was the largest in the state. Real estate agents across South Florida say they didn’t expect the slumping market to improve in September as buyers remain mostly hesistant.”
MSA details can be found in the tables at the bottom of the first link. No wonder the Sarasota group wanted to split off, they had the biggest decline in prices at 16%.
Here is a Florida update:
‘The state attorney general opened a criminal investigation Monday into inflated real estate transactions in Pinellas and Hillsborough counties. ‘Others may turn their heads to this kind of activity in a slow real estate market, but the attorney general’s office will not,’ said Crist’
‘Frank Gregoire, chairman of the Florida Real Estate Appraisal Board, said the Florida Department of Business and Professional Regulation also opened an investigation Monday. The agency regulates appraisers and those who sell real estate. But two real estate professionals with knowledge of the transactions say the agency asked them Monday to turn over contracts and records. Molen did not return a message left on her cell phone Monday.’
You know this is just the tippy tip of the iceburg. There has been so much fraud during this run up it ain’t funny and will take years to sort through, if possible. It will be a gold mine for many lawyers.
A reader just sent in this update from today:
‘Two more state agencies launched investigations Tuesday into transactions involving inflated prices on dozens of homes, clustered mainly in St. Petersburg and Pinellas Park. Michelle Darby, owner of TLW Mortgage Lending, said she is turning her files over to the state agency and filed a complaint with Stewart Title, which underwrites title insurance for Ocean Title. Molen at one time was a mortgage broker at Darby’s company, and Darby said she confirmed with one lender that two sets of settlement documents were created on one of Molen’s deals. ‘When I got those [settlement documents], I was floored,’ Darby said.’
‘Meanwhile, Countrywide Mortgage, the nation’s largest mortgage lender, said it launched an internal investigation into mortgages it funded.’
TLW = The Lords Work? Was that it?
I wonder if Darby has refunded the proceeds from these transactions? Or is she just floor she was caught doing “The Lord’s Work?
*floored
Isn’t she the one that had two sets of closing documents? One for the lender and one for the “books”… I remember that she ’sold’ like 18 houses in ine day, all to out of state buyers at prices that were some 50 % more than the market value.
Lots of people doing the perp walk on this one.
She could be in some major financial trouble if she sold the loans to the mortgage companies. She would be forced to repurchase the loans because the fraud committed by her employee on the deals. The mortgage companies won’t buy the excuse that Molen lied to her as well. Molen was her employee and as owner of the company, she was responsible for her actions. She filed the claim with Stewart Title because she wants them to pay any buyback claim from the mortgage companies.
what a joke…repurchase the mort notes! With what? She’s got nothing other than a desk and a phone. Liquidate that and you get the proceeds…I hope it covers the fraud. LOL
“She could be in some major financial trouble if she sold the loans to the mortgage companies.”
If you’re talking about Molen, the Tampa Tribune did a full story on here and the alleged scam she may have masterminded. Here’s the link:
http://tinyurl.com/yffyww
“The lawyer at the hot line advised Sweetin to part ways with Molen and withdraw from the transactions, which he did. Then he called the FBI and gave them copies of the contracts.”
Read on - juicy story. First of many.
26 years old. Of course. Maybe we can fix her up with Casey. They sound like they’re made for each other.
Actually, I was talking about Darby. Molen was her employee who she funded her deals through. She could be getting a letter from the lender she brokered Molen’s deals to stating she has to give them a check for $250,000 or whatever they financed. Most likely Darby won’t have the money, but she will be liable. Sort of like Casey Serin.
Ben posts ” Meanwhile, Countrywide Mortgage, the nation’s largest mortgage lender, said it launched an internal investigation into mortgages it funded.’ ”
Well, that should be a good one! Let’s hope they were as vigliant as Susan!
Tip of Berg indeed!
Just consider how much nicer the MEDIAN home is today compared to the MEDIAN in the summer of 05′.
I bet an apple to apple (identical home to home) comparrison would suprise even us hardcore bubblers.
Wouldn’t be suprised if the GF ($600-800k at the top) haven’t allready lost 30% or more.
Im sure there are piles of $600k loans on crap that wouldn’t be looked at now for $400k.
The scarry part is that this is all toppling under its own weight, the bad debt and falling comp sales have not even had an effect yet.
Let’s see how these $700k golfcourse 2nd homes (for dog-catchers from LA) in Arizona are selling after the banks have them falling outa their asses and regulators are screaming at them to write off all bad debt and liquidate all assetts.
What is GF?
Greator fool
I like that, how appropriate.
Im sure there are piles of $600k loans on crap that wouldn’t be looked at now for $400k.
Ya got that right, Bubba!
The appraiser who rubber stamped the deals should get what Skillings got…24 years.
That’ll clean this corrupt appraiser mess up in a hurry.
And whoa be to the POS of who were doin’ 5 1004’s a day.
WOW! I could not have said it better myself.
Molen would ask the listing agent to raise the price because she had a buyer that was willing to pay more . Than they would give the seller the original amount on the list price that the rest of the money would go to who knows who . Molen would than give one set of records to her broker and one set of records went to the lender .The listing brokers that went along with Molen will be in trouble also .
Does anyone have any historical data on the sales numbers? 13,485 sounds very low compared to 20,451, but I don’t know what that means from a historical perspective. Is that a low number in an absolute sense, or just low compared to last year?
Funny you ask that question - I was wondering the exact same thing: How does 13,485 sales in Florida measure up to the past? With this question in mind, I downloaded every month’s report from the FAR, going back to August 2002. With this, I found only 4 months (out of the past 50) that had sales volume lower:
December 2002: 13,071 sold
January 2006: 12,815 sold
January 2003: 11,161 sold
November 2002: 9,917 sold
Now remember, based on trends, as sales were going up, they typically revised the numbers upwards at a later date, due to late reporting sales. Now that sales are going down, I would imagine that our current figure will be revised downwards, due to cancelled contracts.
For comparison purposes, the peak sales during this time (and these, of course are peak sales for all time):
June 2004: 23,646 sold
June 2005: 25,552 sold
June 2004: 26,112 sold
Interesting… I guess then the number looks more normal than low to me. And maybe even in-line with the cycle, although a bit early for the winter cycle. In any case, gives me perspective. Thanks!
Oops - sorry. I reported June 2004 twice. The first figure was actually for July 2004. Corrected figures:
July 2004: 23,646 sold
June 2005: 25,552 sold
June 2004: 26,112 sold
‘The state attorney general opened a criminal investigation Monday into inflated real estate transactions in Pinellas and Hillsborough counties. ‘Others may turn their heads to this kind of activity in a slow real estate market, but the attorney general’s office will not,’ said Crist’
Isn’t it a little late to start investigating RE fraud? This should have occurred years ago.
Crist is in a tight race for governor of Florida. You think that has anything to do with the timing of this?
Crist is not in a tight race for Florida Governor. He’s leading by a double digit margin and is considered a shoe in.
Maybe, but there’s not all that much difference between the two candidates. Best we can hope for is that whoever is elected, they have a smart staff who will do some good work.
Not true. The race is just about dead even when the percentage of error is taken for account-as per news reported on 10-25-06. It was double digits but the gap has been closing for the past month. Just in on this race this morning 10-26-06: Crist was outed this morning on the local news as being gay. There has been some speculation about this, and who cares, but…Crist is on record as being against gay rights. I am sure he did not want his proclivities made public running as a Republican, and wooing that conservitive voter. What the real outrage here shoud be is what a hypocrite this man is, and obviously operating at some level of deceit, with the unknown being how deep does that rabbit hole go? To boot, it was also disclosed this am that Gov. Bush knew about the Foley page scandle a year ago and so did Crist. SO if Georgies little brother and the AG of Florida knew about this why didn’t he? Guess they don’t talk much when he makes all of those visits to Florida.
No, it is’nt. More downward pressure on prices good for buyers…
No one had anything to gain from investigating real estate fraud year’s ago.
Used to work for DBPR, mortgage fraud was EVERYWHERE we pleaded with supervisors to hire more investigators and staff however we were downsized instead. In several offices the moral was so bad all investigators left. Years of files just sat there. Remember Jeb was a broker. He didn’t much care for those pesky regulators.
A reader pointed out this quote in the CNN article:
‘Panama City is an economy waiting to break out,’ says Steven Cochrane, chief regional economist for Moody’s Economy.com. Property prices are still low by Florida standards, and the local market has already absorbed a price correction after peaking last year.’
‘Janet Roan, a Century 21 agent in Panama City, notes that two-bedroom beachfront condos are going for as little as $330,000 - down by more than $100,000 from 2005.’
So what did a condo go for in 2000. What do you do for work in Panama City?
You can be a lifeguard. Great beaches.
Unless you fly F22s, not a whole lot of “employment” in Panama City other than Spring Break activities.
If you can’t get a job working for the military you could always wait tables.
Marketed to fictional boomer demand.
marketmavenFL,
I prefer “fabricated” but…… fictional works. What a joke huh? More and more the MSM is latching on to the many different facets to the fables we’ve been fed for years. Me personally, I always kind of doubted them. Now? Is there any ROOM for doubt?
Much work there is strictly seasonal. Seems like half the SE U.S. descends on the area — houseparties and college vacation in the Spring and families in the Summer.
I was thinking that the author of that article must have had a grrrrreeeeat (and I mean GREAT) time down in Panama City, courtesy of the PC Chamber of Commerce, PC Coalition of Builders, PC Association of Realtors, etc, etc, etc…..
The speed of the falling prices scares the hell out of me. I’d guess the house sellers are now somewhere between stage two and three:
1. Denial - The “No, not me” stage.
2. Anger/Resentment - The “Why me?” stage.
3. Bargaining - The “If I do this, you’ll do that” stage.
4. Depression- The “It’s really happened” stage.
5. Acceptance - stage
This is only the beginning…
Yep, those are some major price cuts in some markets; yet, demand is still very low. I’m waiting to see if further price cuts will stimulate or stymie additional demand…
IMHO we are still in stage 1. Most people still believe “no, not me.” Stage 2/3 still 2 years away.
I would think by now we would already be seeing stark declines of 5-10% by now. The correction should be much more deeper then mear 1%. The run up has not been supported by true local economic fundementals. All this free money has to be shut down sooner then later. But then again its the recent buyers (Clueless) thats sustaining this market.
Incentives are masking the true decline. Sometime next spring, when DL’s Spring Bounce doesn’t hit, the builders will capitulate to costs - and then the real declines will be visible. Those on this blog will see it coming, but it will hit the media like a club.
Yeah, all the incentives, plus the fact that people take a while to change their ideas. I’m still hearing about how “housing never goes down”, “won’t go down further”, “is a great investment”… from acquaintances.
I think that there are still a decent amount of people who were so intent on buying that they will continue to think that talking 20-40k off a price is “an incredible deal” and “they were really lucky”.
We’ll see in ‘07 as prices keep falling - all these little declines will domino and gain momentum IMO.
Real time data shows 2006 built homes in the Las Vegas MLS with same sq. ft. are being deeded at $90,000 below 2005 homes with same sq. ft. The data getting to the general public is 30 days late, and there is vast discounting if you want your house sold. Find yourself a broker is willing to give you “contracted sales” for the last 60 days, the ones where escrow are opened. Major markdowns that won’t show up for 30 days
Significantly lower asking prices can still be masked by using median sales price figures. Here’s why.
Say last year a buyer was looking at houses priced at $450K, and ended up paying full price for one. Now it’s late 2006. A larger, nicer house that came on for $525K last year has been reduced multiple times to a current offering of $465K. This year’s equally-qualified buyer (who’s looking in the same price range as last year’s buyer) negotiates it down to $440K. $450K in 2005 vs. $440K in 2006 doesn’t look like much of a decline. It’s really $525K in 2005 vs. $440K this year. Unfortunately, that kind of drop can’t be accurately measured. But that’s what’s taking place, or worse.
“Significantly lower asking prices can still be masked by using median sales price figures. Here’s why.”
Yep. Another scenario is if the high-end sales stay strong for a little longer than the low-end (i.e. top-heavy market). There can be a bloodbath in the low-end but the mean price will barely even budge… When the high-end finally starts to slow the mean drops like a stone.
I worry a lot about the people in my own neighborhood … or heck, the people on my street. One couple has been trying to sell the house across the street from me for almost a year. They’ve cut the asking price by tens of thousands of dollars and are rapidly closing in on the price they paid in 2004 (gotta love those transaction records being online). They bought this house, incidentally, to live in while their bigger house in the same development was being built.
I don’t know how much they “need” to get from the sale, but it sure has to be getting tough for them. Nice couple, just seem to have done something I sure wouldn’t have. The couples who live on either side of their old house (now vacant since they’ve moved on to the bigger home) are now looking to sell too. One couple wants to move back to Nebraska to be closer to family. The other couple is having trouble keeping up with payments on their IO loan since she is now staying at home with a newborn. It’s a real mess here in South FL, that’s for sure.
http://interestrateroundup.blogspot.com/
They bought this house, incidentally, to live in while their bigger house in the same development was being built.
In other words, they are speculators, holding positions in 2 houses at the same time. No sympathy from this guy. I do have some sympathy for people who paid an inflated price just to own one house, even if they were idiots.
Miami prices are holding flat (no yty decrease), and sales are still strong. The inventory is still rising, but the prices are gravity-defying. In the attractive neighbourhoods (Pinecrest, Coral Gables) the prices are not budging at all, and the sales are still strong.
I am waiting to buy in Miami, and this is frustrating - it seems that the prices fall (if any) will not happen before mid-2007 at the earliest. Perhaps Moody’s report is right, and the drop is going to be very modest.
The drops will not be 50-60%; but they will come down significantly. My guess is price will give back a bout onehalf the runnup from 2001 to 2005. As we are all learning, this is taking longer than we thought. gordo nyc.
Longer than we thought? You should have been here in the spring of 2005. Most of us never dreamed we would be so far down the road by fall 06.
I have to echo what you say Ben; those double digit percentage drops translate to real dollar losses for those who bought last year. And $35,000 in PBC is huge; it’s not chump change. We’d all hate to be in their shoes right now.
Ben, Not disagreeing with you, the drop is large - I expect prices to drop to 1994 levels. Remember Japan lost 80 % of their housing prices over 15 years and they had the largest per capita savings rate in the world. The US has the largest per capita negative savings rate in the world. Please do not think this will be quick and easy like the stock market. IMHO many, many years before there is an uptick in the housing market.
Ben,
Agreed. The bust/correction/crash has far exceeded my expectations! I had a front row seat for the stock mkt. meltdown and so far I’d say this is running neck and neck! While it’s true houses aren’t as liquid as stocks so people can’t just sell ‘em at the drop off hat they sure can walk away from ‘em quick enough!
They’d better secure that rental property before defaulting, otherwise they won’t survive the credit check. Maybe we should write a checklist for FBs who need to walk away. One thing’s for sure, I’d advise them to do whatever they have to do right now to line up a rental with a tight lease BEFORE they really screw up their credit. Either that, or have a sympathetic relative all lined up. Or, find out where Wesley Snipes is and move there.
Wesley Snipes? What a great reference! Willie Nelson could give a few pointers as well.
Palmetto — actually, that sounds like good advice. Snipes is in Namibia. While in density and other ways it is more like Winnemucca than L.A., he can live very comfortably there until he gets himself off the hook.
That seems strange. The drop is always steeper, and it’s over quicker, than the upward climb.
Only in a liquid market. Housing is not liquid.
Just keep waiting, I think you will find the drop will be more than modest.
wmbz,
Yeah, ya’ know that “may” be true enough but look at it from the standpoint of a guy that’s 47. EVERY dollar I don’t borrow to buy a home is 3 (or more) I don’t have to pay back! Buying at or near the peak would’ve been financial suicide for people my age (even if we could well afford the payments). Let me ask you, would you rather be in the cheap seats cheering for more blood or an upside down, negative equity owner praying for the Lord to please bring you a GF? Me? I’ll take the cheap seats thanks.
Let me ask you, would you rather be in the cheap seats cheering for more blood or an upside down, negative equity owner praying for the Lord to please bring you a GF? Me? I’ll take the cheap seats thanks.
Got popcorn for two????
The stories that housing is no longer a path to easy riches have been in english, so nobody in Miami has read them.
Damn - you people are on a roll! That made me spit my coffee all over my keyboard!
Go to housing tracker and you will see that Miami is down sharply.
The initial wave of price declines is starting to really blast the non-remarkable properties, which are the majority - in Miami I’m thinking of all that crap in the SW 2xx Sts. running from Cutler Ridge to Homestead. Judging from auction results around Florida and elsewhere it would appear that the true market for this stuff is already off 25-35% from highs. Occasionally buyers may pay up, but I think most people - even RE pros - would agree (in their whispered cocktail talk) that prices on tract housing, condos, and junk are off this much. This may set a temporary first bottom for prices for the fall and winter, but it’s just damn hard to see how this could be nearing the final bottom yet.
It would be one thing if construction had already fallen off a cliff, but it really hasn’t - unless I am missing something starts have only fallen a couple hundred thousand (annualized) from their high and are still outpacing household formation. We’re down to the 1.6-1.7 million area, but until we get all the way down near 1mm for awhile (or else have a huge new wave of immigration) there has got to be continued pressure on prices. I’m thinking 45-60% for the junk.
Having said that, the Pinecrests and Coral Gables of the world are definitely not going to get hit as hard, though they will eventually pressured too, I believe. Reminds me a bit of the rare coin market. When the market turns, the garbage just gets hammered - nobody wants it. But the primo stuff holds up pretty well.
It seems like the layoffs are going to keep coming too. Pulte just laid off a third of it’s workforce.
http://biz.yahoo.com/bizj/061025/1365921.html?.v=1
The dominoes continue to fall everyday! While I feel sorry for these folks - as members of the REIC they are part of the cleansing that needs to occur…
Those are Florida jobs too.
It’s inevitable; the entire housing industry is contracting sharply and the industries that rely on it will also contract as a result of slowing derived demand. We see this phenomenon play out everyday on thehousingbubble.com. My number one source for housing industry news.
According to the article, “Pulte laid off about 60 workers from a local workforce of a little more 200 people.” That makes it look like a reference to just the the Jacksonville office. Does anyone know if Pulte has made a similar drop nationwide, this week?
The Florida corrections continue to strengthen on the graph.
Florida Medians Graph
It will be interesting to see how much the Oct 21 auctions pullled down
the Naples median in the October report due on Nov 25.
One local TV station covered a conference, I think at the Marriott and entitled “Urban Land,” at which they said Orlando is exempt from the bust. It’s different here.
A friend is buying a new home in Rancho Cucumunga CA. Price is 680k …builder is giving her 80k discount plus appliances etc. Builder is also ‘contributing’ 20k to closing. We tried to explain that she is really getting a 600k house with 20k thrown in.
NO! she said .. she is getting a 680k house for 580k. She simply can’t get her head around what is really happening. The house is really worth 400k.
How much does this friend make to be buying a 680K house?
I am unsure of her income - but it is over 100k. My brother(sub prime broker) is getting her a suicide loan.
It should be over 275K. Unbelieveable.
Is your last name Kevorkian by any chance?
Also, the real problem is to get that puppy to appraise at 600k.
My brother told me that it will be a real stretch….
Also, the real problem is to get that puppy to appraise at 600k.
My brother told me that it will be a real stretch….
Kickback a week’s worth of work to a starving rubber stamper.
He’ll do the deal.
txchick “How much does this friend make to be buying a 680K house? ”
My Guess with the help of my Am Book….20% balance about 550,000 at 6.75% 30 year fixed PI aprox 3,475.00 add Ins and Taxes my guess 4,300.00 month nut even at 33% you need to gross 13,000.00 per month over 150,000.00 per year.
What is the point of buying depreciating asset? She can wait and buy next year for cheaper price.
Maybe you should explain that the state of California will set her property tax basis at 1% (and + for local assessments) forever. She may think she’s buying it for 580K, but Arnold will want his extra $1000 bucks.
The real price drops will come in early 2007. Citizens (one of the very few, if not the only issuer of homeowner’s insurance in Florida) will be dropping all non-homesteaded single family homes and condos. This basically means that all second homes will be uninsurable. What do you think will happen after that?
I think there will be a lot of dumping of second homes by people who are marginal second homeowners. Should be a real hoedown hootenanny.
Florida West Coast anecdote: A local handyman was over here yesterday doing work for my landlord. Really nice guy, does work at various places all around here. Told me one guy he did some work for in a nearby “upscale” waterfront development paid $700,000 for his place at the peak and recent similar cribs in the same development have been selling recently for around $500,000, if they sell at all. The homeowner is majorly pissed off! He bought the place to live in, but that’s gotta hurt.
“What do you think will happen after that?”
Answer = All the second home owners, the Florida Association of Relators, Florida building industry groups, the Florida delegation in Congress, and other assorted Florida interest groups, all start squealing louder and louder that the Federal Government must implement a massive Federal Disaster Insurance Program to come to their rescue and offer insurance to them for below market rates … One more massive federal taxpayer funded/subsidized program, to bail out the FBs in Florida.
Subsidized program? With what money? The US is broke. No money in the till and gazillions in debt.
What do you mean… “With what money?”
Alls they has gots to do is print more uv it. Duh!
Right, print ‘em, Danno! Worthless paper. Nothing to see here, move on.
“With what money?”
Tell that to G.W. and Congress … The U.S. had no money and gazillions in debt a few years ago when they passed the Medicare prescription drug plan … The largest, most bloated entitlement program to be passed since the Great Society. It’s more important to our elected officials to offer goodies to powerful interest groups in a swing state like Florida, whose voters both parties desperately woo every 4 years at election time.
David — on initial reading, that is clerly what the article implies. But later on it says that such non-homestead owners who cannot then get coverage elsewhere can get it from Citizens for a 25% premium. So no one who keeps the paper moving will go without coverage — Tallahassee has taken the politically popular step of taxing non-homesteaders $1.25 for every $1.,00 a homesteader pays. TxChick — there is a potential business for you, and you can use unemployed mortgage brokers. Be the “Dog” of wind insurance fraud — cut a deal with Citizens for a reward per perp that you catch claiming homestead when he is also doing so elsewhere. There is a LOT of that going on, well before these rate increases.
Ha, I don’t want any business. Besides, there’d be no due process and no trial with me. Straight to jail
I wasn’t reading an article, I was going by what Citizens has been doing with our rental property. Wood frame apartment buildings trippled in premium and may be uninsurable next year. They are also dropping our insurance on our rental condos with NO coverage for ANY premium increase.
CAR #’s out;
http://www.car.org/index.php?id=MzY3MjA
SB Down 11% YOY! No bubble there…
YOLO COunty down 15%…
Napa County down 7%
Placer county down 16.5%
Soft landing!?!??!?
Can someone please post the historical homes price chart…I seemed
to have misplaced it…TIA
CAR #’s:
Orange County
$706,490
1.2%
-0.3%
DOWN .3% - ITS IN THE BAG!?!??!?!?!
I might open a nice bottle of wine and toast to Gary Watts!
As someone with no interest in CA RE, I would be hard pressed to infer a drop in median prices throughout CA with the data presented. Looks way too spread out. Decreases in the median appear to be in pockets, but not everywhere. Some of those places have large increases. Why?
Median prices are all too easily distorted. You could have five homes fall in price from $800,000 to $600,000 in a time period but, if only four houses below $600,000 sell, the median would be a “rich” $600,000. This would not reflect the lack of the ability to sell smaller properties nor would it reflect a dramatic fall from earlier prices.
In other words, using the median as a benchmark (particularly in a market with ever fewer transactions) wouldn’t necessarily reflect ANYTHING going on in the market.
You need apples to apples comparisons which, unfortunately, isn’t often the case in real estate. Worse still is the fact that, in a weak market, the only transactions going on are probably being done by people with MINIMAL sensitivity to pricing. The only buyers in a weak market are people with either huge guts, enough money that they don’t care or so numb they don’t know any better. These players choices likely skew to the above the median priced properties to begin with.
Jag,
Don’t know why, but I can tell you that “starter” single family homes in Anaheim Hills, Yorba Linda, and Brea are coming down. Three months ago you couldn’t find one for less than $600,000. Now they’re popping up all over the place. Yes, that’s right, $600k for a 30-40 year old, 1200 sq ft ranch, fixer upper. I’d say the asking prices in this segment are down about 10% in the last three months, but the homes aren’t moving.
Fed to the rescue! Held at 5.25% today. A big shock (sarcasm).
I wonder how long until they start talking about possible need to drop the FFR?
Watch the Fed’s actions, not their words or mandates. The Fed held despite rampant inflation that is WORSENING, including a core CPI twice the Fed ‘comfort level’- and the core CPI is oh-so-beloved by them. Don’t worry though, they are going to “watch” for inflation to make sure it doesn’t get out of hand I guess. But it’s hard to keep on the lookout for something that already happened.
don’t want to bore you too much with repetition, but let there be no further question as to the dovishness of this Fed, nor their true goal: to “save” housing.
The bank bailout begins quietly.
The Fed typically doesn’t change rates right before an election, perhaps to avoid any accusation of trying to affect the election. However, in this case, I think they are indeed being too dovish.
Perhaps the moderation in oil prices made them feel more secure in their decision, but if they are wrong, and inflation takes off (that is, increases even further from where it is already), then that will make it doubly hard to stop it later.
But even before inflation rumbles, market expectations of it could manifest themselves soon in the 10-year notes, and that’s what the 30-year mortgage generally follows. If bond traders/investors (remember, these guys have money in the game, not just hot air) end up pushing up the 10-year yield significantly because of their own inflationary worries, that will have the OPPOSITE effect of what the Fed wants: Even though short term rates would be low(ish), the typical, safe 30-year mortgage will rise, and put even more pressure on the housing market. Ouch.
Note also that there are more Fed members who would vote on the increase, but only one of that anti-inflation group of hawks is in the rotating voting block right now. Even if they all were, they’d have probably been outvoted again this meeting. All I can say is that I hope the moderates are right and the hawks wrong. But I’m not feeling comfortable about it.
Where is inflation going to come from? I mean, I lived through REAL inflation in the 70s. Today it seems as though as many things go down in price as go up.
If housing prices fall, building will fall, joblessness will increase, equity (and equity withdrawl) will fall, consumer demand will fall, the “wealth” effect will fall……again, what’s going to drive inflation out of control?
IMHO the inflation scenario relies not on the US, but on the 3 trillion US dollars floating overseas that no reasonable country wishes to hold. The vast foreign held dollars have been buying oil fields in Africa, crop lands in Brazil, gold and silver from the US (in fact the gold and silver sales last month reduced our export deficit by 3.5 billion) etc. Real inflation is when the cheap crap from China costs 1% more this month than last month. Everytime Paulson gets China to revalue the Yuan the cost is higher inflation in the US. Inflation in the US does not appear to be consumer demand, but foreign “get me out”.
It will come from savings (earned wealth in the form of money) versus debt (which is not wealth, but can come in the form of money). Those who understand how the game works realize that people losing money on housing is money that was borrowed from someone who had it. The chump filing bankruptcy may not have any skin in the game if he did the 100% financing. It was actually the money you had in an FDIC insured whatever.
that will have the OPPOSITE effect of what the Fed wants: Even though short term rates would be low(ish), the typical, safe 30-year mortgage will rise, and put even more pressure on the housing market. Ouch.
30 year mortgage? Does one park a horse and buggy in front of a house bought with a fixed 30 yr? That’s SO 20th century.
The fed goal has nothing to do with the 30 yr. It is the short term ARMs they’re trying to diffuse. Bail out the banks that lent all these toxic mortgages. As the short term ARMs reset, let’s get the “owners” into another short term ARM, resetting the ticking time bomb. Then 2-5 years from now, I’m sure we’ll have a true fix. Surely we will. If nothing else, will simply lather, rinse, and repeat! It’s worked so well so far!
Also, banks are getting slaughtered as their short term borrowing costs are higher than the long term payouts they can get. If the Fed can magically bring that short term borrowing cost down, PRESTO! Increased bank profits. (Just like Fannie Mae).
Delay delay delay. That is the name of the game.
Just like the deficit. We’ll fix it. Someday. Until then, borrow more! Yay!
The thing is, with the Fed Funds Rate where it is, they really aren’t providing any real relief for short term mortage rates (i.e. ARMs) because a LEGITIMATE adjustable rate mortgage with no tricks is about the same as a 30-year fixed! That provides hardly any extra boost to housing. The Fed would need to lower rates by a half point or more to get legitimate ARMs competitive again.
Then again, by doing nothing and letting inflation take hold (even if it’s via dollar devaluation) that will push up the 10-year, and thus the 3-year fixed mortgage, and ARMs can stay the same and look competitive in comparison. But a higher 30-year fixed has its own negative implication for housing affordability, so I see no help for housing here.
Now if you include the exotic ARMs, it might seem to be a different matter, but for those, it hardly even matters what the Fed Fund Rate or any other rate is when it’s just a teaser loan to begin with. As long as fools are ready to sign on to those, the whole thing is out of the Fed’s control. Fortunately, word is (very slowly) getting out in the MSM about these things.
My take is that they see themselves under massive pressure to barely hold or drop rates. From their statements over the last month, I think they’re waiting for solid, non-empirical evidence of an inflation bubble - a month or two of 0.3% core. Then they hop back on the train and it’s 6.0% or bust. But they won’t move without it. No way. Way too much flack.
You’re exactly on target.
The Fed is paying lipservice to fighting inflation while doing absolutely nothing about it. Meanwhile any cash American’s have is losing spending-power fast.
Time to buy gold and silver! The dollar is taking a beating, and it hasn’t even started yet. Just wait until a gallon of milk is $10. It’s going to happen so much faster than anyone can believe.
Inflation is on a tear.
If the ‘expectations’ drumbeat ever gets out of the box, current pressures on the working classes will make it a very tough thing to tame. Housing, food, energy - a booming run on the banks by any other name.
Meanwhile any cash American’s have is losing spending-power fast.
Depends what you want to spend that money on. Houses, Escalades, jet skis, etc. I think you’re going get a lot more for your money over the next few years. Anything that was purchased using debt.
Food, gas, other consumables that’s another story.
And I don’t see why the US$ price of gold is going to go up in the face of a massive US$ credit contraction.
2.48% on my 90-day CD renewals from BofA
What a f*ckin’ joke.
hd74man — State Farm Insurance will give you almost double that. I earn more, but at riskier institutions. When things look shaky enough, I’ll go to the insurance companies for safe harbor, if their yield spread still is decently above the BofA types’.
Double that here. No 100k FDIC limit.
http://biz.yahoo.com/prnews/061025/sfw053.html?.v=81
Check it here.
http://www.schwab.com/public/schwab/investment_products/cds_money_markets/certificates_deposit
But,, but,, but . Moody’s said that we will only see a 5% correction!
They can’t be wrong??!! ( COUGH COUGH)
Remember the end of Animal House where Kevin Bacon tries to calm people by yelling, “ALL IS WELL, ALL IS WELL!” , as he was trampled by the panicking masses.. Seems kinda fitting here as the talking heads desperatley attempt to keep the sheeple at bay.
I was chatting with another licensed agent about a deal he has just closed. He helped his client get a new model home for 928k with all the furnishings. He says it appraised for 990k for “just the house”. I asked how his “investor” had paid for this. He said he paid 90k down, and would be paying about 6k a month. But this is OK, because the Builder is going to rent it back from him to continue showing the Subdivision - for $4500/month!! The financial genius says:
they will give him 4500/month as a lease pmt - he has to come up with about 1500 himself…so not bad, 1500 a month to control a million dollar fancy home.
Oh, this is a nice new development in Oviedo, NE Orlando area with ‘A’ schools, but if memory serves there are rental triplexes built in the 70’s right across the street.
At that price, if he doesn’t have a Winter Springs zip code, he’s screwed. It’s like Winter Park and “near” Winter Park. Think I might know the (small) development — from the cutesy little Winter Springs Village, you go east past 417, on around the curve, well past the Oviedo city limits, and maybe a half mile down take a right (west). It’s about 20 acres or so at the top of a minor hill, and it is across from ‘60-’70s housing. They clear-cut all the nice old trees, which is suicide for million-dollar homes in this part of Florida. Is that the one?
Nope, on all counts. Try 434, near Sweetwater and the Black Hammock area. I think it is right at the old driving range. I haven’t been in that area for a while, but it seems to be continually getting “newer”, though still varied in the types of housing there.
What is his property tax and HOA? Probably $1500/month. Very nice.
He said the 6K included everything, but it seemed a little low to me too. Obviously we are not talking a 30-year (or even 40-year) Fixed.
Pretty scary though when you consider that insurers drop you at a moments notice here in FL, and you take into account the comments about Citizens above. If his current insurer drops him, he has some new issues to deal with on his “investment house”.
OK, maybe not a moments notice
…but I have heard plenty of stories from our work chat list of people blindsided with less than a few months to get new insurance.
My calculation says $6K is about right based on a 30-yr, 6% fixed loan, with 1% tax and no HOA. Higher tax, interest, or HOA would of course take it beyond that.
Taxes are probably 50% higher than what you are thinking…our millage tends to run 16-20 in Central Florida, if not the whole state. The house I just sold was assessed at 103k after homestead, and the taxes were about 1700.
At that rate, his taxes will be close to 1500/month. I have no idea what insurance would run on that, but insurance on my little house was 1300/year.
That is hilarious. Just think, the builder sells this shmuck the house for 928K, and now will parade potential new owners around his at minimum $1,500/month negative cash flow loss saying “Oh yes Mr and Mrs GF, you could own one just like this, for $800K, nahhh $750K, well maybe $700K, but I’ll throw in better furniture, a pool, upgraded appliances, and a used Jaguar too.”
ric — that’s exactly what will happen.
He doesn’t control it. He has to pay $10,000. property tax plus $18,000. a year. He doesn’t even get to live in it. He must pay $28,000 a year for an expensive call option that can go up or down. Fool.
Don’t forget the $4500/year he could be getting from the cash he used as a down payment.
“1500 a month to control” - brilliant, just brilliant. Wake up 50 bucks poorer every day from now until the cows come home in order to have an albatross around your neck and raise your stress level, etc. Would you buy a luxury yacht and pay $1500 a month more than you can lease it out for just to be able to “control” the asset?
He helped his client get a new model home for 928k with all the furnishings. He says it appraised for 990k for “just the house”.
Whatta crock ‘o crap.
There’s the example of the moron’s runnin’ around in the appraisal field today.
What newbie hackshop dimwit punched an instant $72k into the buyer’s pocket in a stagnant and declining market.
My guess the whole thing will get kicked back on a review. No way is an underwriter going to buy this.
Hope the idiot got his $125.00 fee split before the roof caves in.
S.J. police seek man linked to thefts at homes for sale
San Jose police are looking for a man they believe went to upscale open houses to scope out the homes for jewelry, video games and valuable figures that he and his girlfriend planned to return to steal.
http://www.mercurynews.com/mld/mercurynews/15845764.htm
Jeez, even the burglers are getting lazy these days……
US holds interset rates steady…………..
Looks like Australian interest rates are sure to rise next month.
http://www.abc.net.au/news/newsitems/200610/s1773604.htm
I wonder who’s swimming against the tide
slowly ?
fastest since depression
20% off may 05 for most places in FL
national - 2.5 % add inlfation = 6% and that’s old numbers folks, real old
OT:
Home equity is not your savings account
Thanks to the real estate run-up of the past several years, you’re sitting in a $500,000 home that you owe $50,000 on.
Wow, you’re rich. You’ve got $450,000 in home equity! So what if you have no savings? You’re sitting on a pile of cash.
Not so fast.
“Most Americans these days have more money invested in their homes than all their other investments combined, says Peter J. D’Arruda, author of “Financial Safari.”
That kind of thinking could be financially dangerous.
“If you put too much into your house, the bank has control over that money,” D’Arruda says. When a financial crisis hits and you need that equity most, the bank may well not give you what’s yours.
The typical 60YO American has $112k in his (401)k.
If you want “what’s yours”, sell the house. A house is worth what someone is willing to pay you for it, not a nickel more. The bank’s money is theirs, not yours.
Very surprised about the lack of coverage on the big Naples home auction on 10/21. According to Lawler Economic & Housing Consulting, the average sales price was 56% of the “zillowed” value, and only 72% of the last sales price!
Therefore, many rich, powerful Naples owners interested in ensuring that there is no coverage.
Do we have any posters who live in Naples?
I had printed out the pics of the houses from the auction site and have just now gone through the numbers and matched them with the printout/pics. The best properties fetched 350-400/sq ft. in places like The Moorings, Old Naples. (Disclaimer: have been in Naples a couple times, but do not know it well.) The stuff on the numbered avenues north didn’t do as well - 200-250/sq ft. or less.
So the auction prices are only low relatively speaking.
If you saw the pictures of the houses and their stats you’d be amazed at the Zillow estimates. Make San Diego look cheap. Interestingly, most of the properties were older (1950s-1970s) more established houses, but we’re not talking land: lot sizes ranged generally from 1/5 to 1/3 acre.
This is what I meant by the “first floor” of the price reduction I mentioned in the Miami thread above. I’m pretty convinced that most of these properties will fall substantially from these auction prices over the next year.
Also important to note: a buyer’s premium of 10% is added to the winning bid. These bids do not reflect the effective price to the buyer. (There was a 2% commission/concession given for realtor bidders.) So the effective price is higher than it appears in the link. I think this seller/lender was smart to organize a quick, professional auction. I’m sure down the road the interest/novelty in auctions will wane. If you’re going to panic, panic first!
It’s official: the downturn is common knowledge. I was at a training last night and everybody was talking about an imminent bust like it was nothing new or even surprising.
What a difference a year makes.
I’m starting to get what I wished for - and it may end up being worse than I was anticipating. I really hope this doesn’t spin into a full-blown depression.