“No Magic Pill” For Floridas’ Housing Bubble
The Palm Beach Post reports from Florida. “Naples saw existing-home values fall 8 percent in September on 37 percent fewer sales, according to last week’s Florida Association of Realtors report. The really confidence-shaking price drops in Naples occurred this month at JJManning Auctioneers’ sale of 44 homes in the wealthy Southwest Florida enclave.”
“Real estate analyst Tom Lawler looked up the first 15 properties’ Zillow.com values and their sales histories. For those homes with ‘not too silly’ Zillow values and that had sold within the past few years, Lawler came up with some startling discoveries about the Naples market, where the median price of an existing home in September was $446,900, according to the association, down from $497,500 a year ago.”
“Only one auction property sold for more than its last sale. On average, Lawler says, auction prices were down 28 percent from the last sales price. The home at 920 Forest Ave., which sold for $690,000 on July 22, 2005, sold at auction for $400,000. The home at 1848 Crayton Road, which sold for $950,000 on March 10, 2005, sold at auction for $625,000.”
“A random check of all the homes auctioned suggests similar results for the rest of the properties, Lawler says. One reason there’s currently more than a two-year supply of homes for sale in Naples, he says, is that sellers are asking ‘unrealistic prices.’”
“‘For those who have to sell, these results should be sending chills down their spines,’ he concludes.”
“Auctioneer Perry Diamond stood on the pool deck of the historic home in West Palm Beach’s Flamingo Park and barked into his microphone. ‘Looking for $600,000, do I have $550,000? $550,000? $500,000?’ said Diamond. ‘Let’s kick it in at $500,000.’”
“‘The auction is today,’ Diamond said. ‘You’re going to buy it today, or it’s going to go back to the seller.’ Still nothing. Nevertheless, after 70 seconds of patter, Diamond declared that he had a $500,000 bid for a home that had been listed for as much as $725,000. ‘We can consider it sold subject to seller’s confirmation,’ Diamond said.”
“But there was no bid for seller John Neuharth to confirm. Neuharth waited out the auction at a friend’s house, and two days later he said he was still ‘totally confused’ about what happened at the auction.”
“Amid a slow market for home sales and a growing glut of properties, frustrated sellers increasingly are turning to auctions in search of quick transactions. Auctioneers hype the process as a way to build buzz and move homes in a moribund market. But as the failed auction on Oct. 14 showed, this marketing method is no magic pill.”
“Longtime auctioneer Karlin Daniel of Stuart derides reserve sales such as Neuharth’s as ‘hocus-pocus auctions’ that give the business a bad name. ‘The worst part is, people go to the auction and say, ‘No one bid. Auctions don’t work,’ Daniel said. ‘I’ve heard that for 30 years. That’s really damaging to auctions.’”
“Diamond, on the other hand, said he will ‘never, ever’ consider an absolute auction because of the danger that a $500,000 house would sell for $50,000.”
“Palm Beach County and the Treasure Coast are no longer the booming sellers’ markets they were between 2000 and 2005. The slowdown has caused an astounding 49-month supply of existing homes for sale in Palm Beach County.”
“Last month, Palm Beach County and the Treasure Coast led the state in declining home sales and tied for the third-largest rate of falling home prices. That has led to thousands of frustrated sellers such as Neuharth looking at everything from auctions to value-range pricing to unload their home.”
“Shortly after he declared the property sold, Diamond acknowledged that there was no sale. ‘Sometimes you want to cry,’ Diamond said while standing in Neuharth’s dining room. ‘Let me introduce you to one of those times.’”
“It’s not uncommon for an auctioneer in a reserve auction to make a bid on behalf of the seller, Daniel said, and Diamond said he declared the home sold simply to save face for the seller. ‘All I was trying to do was to protect the price of the home,’ Diamond said.”
“But the disillusioned seller was upset that his auctioneer went ahead with an auction when only one bidder showed up with the requisite check for $25,000. ‘I am not pleased,’ Neuharth said. ‘There shouldn’t have been an auction because there was only one registered bidder.’”
“Diamond’s auction partner planned to sell another house a block away from Neuharth’s on the same day, but that sale fell flat, too. Sally Markman expected to auction that property, but she said an offer came in just before the auction. Markman canceled the auction, saying she didn’t have enough bidders.”
“Markman’s client, Broward County real estate investor Dennis Bittner, said he rejected the offer for 915 Flamingo Drive because it was well below his $239,900 asking price. Markman even advertised the home as a ‘pre-foreclosure’ sale, although Bittner said he’s in no danger of default.”
“Sellers who want to strike a middle ground can try a ‘minimum-bid auction,’ which auctioneer Marilou MacKenzie recommends to sellers such as Robert Bono, who plans to auction his home next month. The minimum bid is $269,900, a little more than half the home’s list price of $515,000.”
“‘It’s a little frightening,’ Bono said. Still, he hopes the auction brings a quick sale and gets him out from under his mortgage on the house, an investment property that’s producing no income. ‘Listing it is going to make it one of thousands,’ Bono said. ‘And I don’t have a tenant in there, so it’s costing me $3,000 a month.’”
The News Press. “Commercial real estate broker Frank D’Alessandro sent a shock wave throughout the residential real estate community by predicting, in his weekly News-Press column, that the residential market would not recover until the third quarter of 2008.”
“Yet in a July 2005 column, in which I predicted that the housing bubble was about to burst, D’Alessandro disagreed with my assessment and was quoted as stating, ‘While housing prices would be leveling off, the 5 percent annual population growth would be the key factor in maintaining current housing prices.’”
“D’Alessandro, who heads the largest commercial real estate brokerage in Lee County, admits that he was caught off base last year. ‘With homes being grabbed up as soon as they came on the market, I assumed that future snowbirds, buying a second home, were major contributors to the boom. Instead it was speculators and, once the market showed signs of softening, they started to bail out, further depressing the market.’”
“This time D’Alessandro has more hard evidence to back up his prediction, pointing out that Realtor multiple listings have a huge overload of 12,654 single-family homes and 7,819 condominiums on the market at median sale prices far in excess of the current median sales price of $264,100 for homes and $237,500 for condominiums.”
“This residential inventory does not include thousands of houses and condominiums for sale from a score of builders.”
“(Realtor) Barbara Watt says that signs of renewed activity are already taking place, especially in Cape Coral, where prices are already down by almost 20 percent. However, sales figures throughout Lee County do not bear out Watt’s optimism. While there are buyers waiting on the sidelines, they are waiting for prices to drop even further.”
“Buyers are now leery about reducing monthly payments by taking out no-interest or adjustable rate mortgages that, during the boom period, accounted for nearly 30 percent of the mortgage business. Many families who purchased homes last year at peak prices, with little money down and without fixed-rate mortgages are now facing foreclosures.”
“When will the market pick up? When prices begin to drop even more. And there is movement in that direction already from new-home builders who, feeling the pressure from heavy investments in land and infrastructure, still need revenues even if their profit margins have to be cut. Despite the glut on the market, they continue to build.”
“Sunday’s real estate section shows most builders either cutting prices on existing models, covering closing costs or offering free upgrades. However, most existing home sellers are reluctant to reduce their asking price significantly even though they should realize that few people are ever fortunate enough to sell at the peak of the market whether it is a house or a publicly listed stock.”
‘Two recent polls conducted by the St. Petersburg Times offer some insights into the perception of high-priced housing in the Tampa Bay area. The first survey, reported in the new Sunday Times section Working on Oct. 22 indicated that area companies are finding housing prices, when compared with the offered job pay here, are a growing impediment to hiring out-of-area talent. The second survey, noted in the Times on Friday, found that one in three Floridians have seriously considered moving out of the Sunshine State because of rising property taxes and insurance premiums - two big parts of most homeowners’ housing costs.’
‘Worry over homes is not just about buying too high or selling too low. Residential housing is critical to high-growth Tampa Bay and surrounding area job markets in Florida, where housing-related industries account for a remarkable one-fifth of our jobs.’
This sort of thing is happening out here too, in the SF Bay Area, regardless of the opportunities in the Silicon Valley.
I have heard from many people that its the same here in SD, though I have no evidence to back that up. Its one of those background themes that comes up at parties.
Josh
indicated that area companies are finding housing prices, when compared with the offered job pay here, are a growing impediment to hiring out-of-area talent.
Really? Ummm… NO duh! We’re having an issue here in Los Angeles. Its not hiring the kid right out of college that is an issue, its hiring the experienced individual, with a family, who expects a house.
I wish the census bureau tracked city growth/shrinkage monthly (or even quarterly).
As to home construction jobs? Say goodbye to half of them for two years, nationwide.
Neil
“where housing-related industries account for a remarkable one-fifth of our jobs.’
I read that in California 40% of the economy/job markert was real estate related. That includes construction, appliances/cabinets, real estate agents, title agents, apprasiors, home depot/remodel retail sales (from refi), as well as big ticket reatil sales, etc.
This down turn is going to hurt!
So instead of two checkout observers at Home Depot’s self-checkout there will only be one, with one other full-service checkout with 12 patons in line?
patons=patrons
My bad! -
(On average, Lawler says, auction prices were down 28 percent from the last sales price.)
In most bubble markets, a 28% nominal decline and a few years of inflation would probably recreate affordability at current mortgage rates.
As I’ve said, a quick adjustment would be better for almost everyone — except flippers, those who toxic mortgages who absolutely have to refinance, and those who lent to them. Basically, it’s their interests against everyone elses, including the realtors and lenders who need sales.
A 28% nominal decline in some bubble markets will help but many markets here in Florida need 50% nominal declines to get us back to some sense of normality and affordability. The downturn is going to be very severe here.
Crispy,
we need THE quote.
Let’s see…. a 100%+ runup in prices over 5 years, and a 10 % decline in price equals a bottom? I think not. Adjusted for inflation, we should have seen maybe a 15-20% increase, so do the math. We gots a loooonnnng ways to go folks.
“South Florida,” he said, ”is working off of a totally new economic model than any of us have ever experienced in the past” according to a realtor who predicted that a land shortage will support higher prices indefinitely.”
- New York Times, Trading Places: Real Estate Instead of Dot-Coms, 3/25/05
That will NEVER EVER get old!!!!
I agree. Please post this at least once a week if you haven’t already been doing so.
Sorry but I forgot to add the latest wekly numbers are out.. Ugh.
MIAMI 10/28/06
Median price $376,000 down $3000 in one week, down $36,000 YOY or 8%.
# of units for sale 41,703, up about 400 in one week, up from 16,425 one year ago or 153 % YOY.
http://www.housingtracker.net/old_housingtracker/location/Florida/Miami/?state=Florida&city=Miami
the miami buildup is no where near over with. 4 30 stories towers across from aaa arena not even finished.
over!
28% decline is not good enough especially in overpriced city’s like Naples. Try 50%. I know lots who purchased multiple properties to flip them and now they are sucking wind.
In most bubble markets, a 28% nominal decline in prices would probably spark a calamitous crash, as many investors and subprime borrowers with suicide loans who “got stucco” when the market moved against them would suddenly realize they will not be able to ride out the storm and race for the exits.
That may be true in some markets. But in others, where people have been priced out like NYC, SF, and Boston, as the investors rushed for the exits at 28% down, real homeowners would finally be able to buy.
“Real homeowners” would risk catching a falling knife. That is why the wise will wait until the dust settles, rather than jumping in when some economists are declaring “this time is different, and prices have settled out in only one year instead of the usual seven or so for every previous housing bust in the historical record.”
GS, I just don’t think people like WT are going to get it. It’s not a matter of “real” homeowners being “able” to buy. I’m able to buy a 911 Turbo, but it would be a very stupid financial decision.
Prices are coming down but psychology hasn’t yet turned. People have forgotten all about the days (not so long ago) when they thought of a house as a financial albatross rather than the world’s greatest investment. Once prices nationwide are down over 10%, yes, more people will be “able” to buy. But by then, the psyc will have changed an nobody will “want” to buy…which will facilitate the next 30% down.
Even after a 28% haircut, most people would still not be able to afford SF and NY. Stretching the budget to buy a home only made sense when prices were going up double digits every year. On the way back down, even affordability may not save those markets.
Looks like a solid argument for ‘panic selling’ and acceleration to the trough.
I agree. Clear the exits! Florida is embarking on a whole new bubble busting paradigm in its race to the bottom.
What’s more, if these auction prices persist, they are going reinforce buyer ‘lower price’ expetations.
“Auctions” by themselves indicate a distressed market and affect the psychology of the market. The denial phase is behind us, next comes the anger phase. Fear and panic are due mid 2007.
fred,
I agree with your premise but lately some sellers have been using auctions as a ploy only to genearte interest with no real price discount; consequently, watering down the auction brand and its inherent price discount expectation.
So bascially they’re crying wolf, and we all know what happened to that kid.
“Fear and panic are due mid 2007. ”
I agree spring/summer ‘07 housing season is setting up to be critical. If it is a total washout, as many here believe, panic may well set in.
If that happens, housing prices ‘08 will be toast! Although, still may not be the bottom.
Strap yourselves in folks it’s going to be a wild ride the next couple of years!
“Basically, it’s their interests against everyone elses, including the realtors and lenders who need sales.”
Yup. Wonder when the MSM will start piling on and indentifying flippers as the villains, instead of just framing them as stuckees.
Oh boyyeeyy. Looking at the Naples auction results, I wonder what is going through the minds of the local bankers who loaned these really FS the money… Ouch! That really must hurt.
If I were a responsible banker, I’d stop lending until the market bottomed.
If I were a responsible banker, I’d stop lending until the market bottomed.
I’d say it’s a little late for that!
HAH!
“responsible banker”. That’s almost as funny as ‘military intelligence”, or “jumbo shrimp.”
I’m still hoping. My lawyer has repeatedly cautioned me not to act in any way that could define me as a “bank” and subject me to banking regulations. But I’m not a bank, I don’t take deposits. I lend only my own money, no points, no fees, no boolsheet. I have stopped lending. All my few dozen clients have been very prompt in their payments all of 2006. Maybe they are scared too. Why did I always have plenty of business when I was charging huge interest rates? One of the reasons may have been the “no points, no fees, no boolsheet” policy. Another reason may have been that I liberally advertised my “skip payments” policy — once you’ve had your loan a couple of years I don’t giva damn if you need to skip a couple of payments, as long as you call me up ahead of time and let me know it’s gonna happen, I will revise the amortization table for free. This year only one couple availed themselves of the policy, claiming that they were short the money to fix a burst water heater. I said OK. Most clients on SS or other govt pensions, somewhat insulated from job market problems. We’ll see.
I’m still hoping. My lawyer has repeatedly cautioned me not to act in any way that could define me as a “bank” and subject me to banking regulations. But I’m not a bank, I don’t take deposits. I lend only my own money, no points, no fees, no boolsheet. I have stopped lending. All my few dozen clients have been very prompt in their payments all of 2006. Maybe they are scared too. Why did I always have plenty of business when I was charging huge interest rates? One of the reasons may have been the “no points, no fees, no boolsheet” policy. Another reason may have been that I liberally advertised my “skip payments” policy — once you’ve had your loan a couple of years I don’t giva damn if you need to skip a couple of payments, as long as you call me up ahead of time and let me know it’s gonna happen, I will revise the amortization table for free. This year only one couple availed themselves of the policy, claiming that they were short the money to fix a burst water heater. I said OK. Most clients on SS or other govt pensions, somewhat insulated from job market problems. We’ll see.
“responsible banker” ….>> oxymoron, with heavy evidence on “moron”
Thought the ‘responsible banker’ phrase would stir you guys up.
Seriously, however, some bankers may have foolishly believed ‘wealthful’ communities like Naples were insulated from the bubble — the golf course, ocean, and all. As a result, they may have ‘hedged’ their in house portfolios in communities like Naples.
Now that prices are heading South they too are upside down with the borrowers. Consequently, they may want to turn off the credit spigot.
As I’ve said, a quick adjustment would be better for almost everyone
I agree. A fast correction to any bubble is best for the economy, because people can begin buying and selling again.
The question is “what is the ‘correct’ price for a house?” Once buyers (and sellers) know where prices will end up, then prices can more quickly move to that point.
I think you’ve got to look at the long run price to rent ratios as the place where prices will end up. The question is, for a given market, how much must prices come down at today’s rents to get that ratio to the historic average.
Agree with you that the price-to-rent ratio is key. 50% price reductions seem to be in order in many locations.
“Markman even advertised the home as a ‘pre-foreclosure’ sale, although Bittner said he’s in no danger of default.”
The real estate market must be bad, even the usual lying done by ‘investors” is not working.
I am shocked that the RE Agent allowed this seller to lie.
If I read that and was located in his market, I just might develop a Tx Chick style vendetta against him and his property.
You know,
God has a funny sense of humor. I can’t wait until this Bittner guy is really in foreclosure and NOBODY bids.
Where is that house? My first thought was that anything selling in that price range in south Florida has to be next door to a crack den or a public housing project.
I read that as the auctioneer lying trying to hype the auction. Unclear that the seller asked her to do it.
Gone to a few non-RE auctions advertised as absolute, with no reserve, only to have the auctioneer say the starting bid was not high enough. LIke the one auctioneer said, some give the racket a bad name.
Sounds like those 2 FL auctioneers, Diamond and Markman, need to be added to the people not to trust list.
I went to an auto auction years ago. A pair of SedanDeVilles came up for sale. The bidding failed to meet the reserve. The auctioneer comment:”I told him we weren’t miracle workers.”
“But there was no bid for seller John Neuharth to confirm. Neuharth, a personal trainer at a West Palm Beach gym, waited out the auction at a friend’s house, and two days later he said he was still “totally confused” about what happened at the auction.”
What’s there to be confused about? You paid $10,000 in marketing plus probably something to the auctioneer and bought back your own POS meathead!!!!
What’s there to be confused about? You paid $10,000 in marketing plus probably something to the auctioneer and bought back your own POS meathead!!!!
LMFAO!! this guy is probably looking for his gun about now.
Too many steriods in the brain , me thinks.
Seller,” So, duh, like dude, I duh, give you $10,000 and you, like dude, will, duh guarantee me , like a buyer? Awesome dude!”
Auctioneer,” Sure thing. Why, I may even bid on it myself.”
Seller,” Dude, you are the man.”
We all are becoming numb to and keep glossing over the most fundamental, obvious question:
Just how in the he11 was a “personal trainer” able to speculate on a half-million dollar home ?!?!?!
Being 45 yrs old and remembering the 18% APR, 10% MINIMUM money down ( and it has to be money YOU saved ) mortgages of the ’80s……I am continually shocked by this “Ownership Society” paradigm that allowed all this crazy lending bu11sh!t to happen.
I remember going to the bank IN PERSON with MY HAT IN MY HAND, a SHIRT, TIE, SHINED SHOES, W-2 FORMS, PAYCHECK STUBS, and a PLAN when I got my first mortgage at the tender age of 27. It took me 90 days to close, that is after they looked up my A$$ with a MICROSCOPE.
It will end badly. And sooner than anybody on here thinks. Excuse me for the rant.
Meant to say ” 12% APR “…my bad.
I am not sure if a “personal trainer” even makes it onto the top ten FB profession of choice.
We have already had to my knowledge a pizza boy, fireman, policeman, baker (as in bake me some bread), receptionist, secretary, hairdressers (a lot of hairdressers) who have purchased real estate in the $500,000 to $2,000,000 range not to mention a certain unemployed 24 year old idiot with a $2 million real estate empire approaching BK. Hell there was a thread yesterday about some guy named Taiwan who bought two houses while he was in prison.
So what’s one meathead with a $500,000 house more or less?
We’ve also had “unemployed” (casey serin) and “panhandler”.
“We all are becoming numb to and keep glossing over the most fundamental, obvious question:”
The problem is that there are too many fundamental, obvious questions to sort out at the moment…
Let me suggest one for discussion - How to make some $, legally, on this situation?
Les-Amen, my experience also.
I remember the gyrations I had to go through to get my first mortgage in 1995. I was getting divorced and buying the house as a single woman but the first mortgage company still wanted to run my soon-to-be ex-husband’s credit (which would have completely blown out my good credit.) I moved onto another mortgage company who approved the loan, but insisted that I pay off my credit card in full.
Said credit card had a $400 balance. I paid it off every month so did that as normal and got the loan. It was crazy how spotless everyone who bought a house in those days had to be!
And yes - the money for the down had to come from your own savings, and the mortgage company would check your bank balances for the past YEAR to make sure no one had dumped a suspiciously-large amount of money in your account to help with the down. The mortgage company would compare paycheck stubs to your bank statement for the past year too.
Recovering homeowner-My daughter just went through the same issues. Got a 30 year loan at 6.25%. Am proud of her!
“Diamond, on the other hand, said he will ‘never, ever’ consider an absolute auction because of the danger that a $500,000 house would sell for $50,000.”
Hey, if that’s the price, well, that’s the price. Tough doo doo.
Unless market values had truly fallen to $50,000 (which they clearly have not), the only possible way this could happen is if the auction were so poorly advertised that nobody showed up. Apparently there is a great deal of confusion on this point, at least judging by the content of the articles Ben posted on this thread.
In Florida one has to now watch out for the bad auction houses that will spring up that will not advertise according to the sellers best interest etc. or might be in with the sharks to cream people . Desperate times produce desperate people who are easy to take advantage of . This is why I believe a auction does not really set the true value of homes in alot of cases .
Wizard –
That suggests that anyone who wants to sell by auction better make sure they are dealing with a reputable auction company.
On the contrary, not many people looked at this guys house before. He probably has 10 times the traffic at say 10 people at an auction than he did using a realtor. This is who wants to buy his house, someone at an auction, because a apparently, no one else is interested in it. They had plenty of time to come flocking via the MLS and they didn’t, so apparently this is the market now, and they don’t want to pay too much. Buyers set the price, this is now the price. So an auction is the true price. When you say ‘true value’ of the house, the house is only worth want someone is willing to pay for it. Before he was having trouble even finding anyone to determine the price for him, no he’s found people to do that, and it’s ‘value’ is what they’re offering. Simple as that.
GS . Yes I’m saying that one should deal with a reputable auction house . I think questionable auction houses will be springing up and a seller needs to be careful .
As far as a auction setting the true value of a area ,I don’t totally buy that .
Auctions are designed for the desperate who cannot risk a normal marketing time or they are desperate .
If you have a whole tract of homes or condos auctioned off than yes that might set the value for a given area . Same with foreclosures .If you have a area that has to many foreclosures than that will set the trend for the area . If you only have one auction or one foreclosure in a given tract that does not set the value for the whole tract unless many sales go to auction or foreclosure .It only show what low value you get when a desperate seller sells .
In some of these tracts where you had 40% speculators who bought on margin who will end up in foreclosure or auction, or short sale , Im sure it will define the trend price for that tract .That is why it is a risk to buy in areas or tracts that had high speculation buying on margin,or where you had alot of first time buyers that were put on loans they could not afford .
In this current situation you could have alot of foreclosures in high end tracts depending on who bought and what % of buyers are speculators or up-side down borrowers .
It’s too early to buy when you see auctions where the minimum bids are not even reached, or the seller won’t accept what IS bid. Once we see auctions where the bidder accepts a bid 50% or more below his asking price will it be time to consider purchasing.
I concur. Nobody knows at this point how low market prices have fallen — only that it lies somewhere in the neighborhood of those unaccepted bids (in the case of the failed Bressi Ranch auction in Carlsbad, CA, the unaccepted bids were something like 33% below the owners’ wishing prices).
In my case as a 48 year old making near the top level of my certification, how much debt should I take on? It really does not matter how much the prices drop. I think we could hit the 50% quite quickly and it still not be appropiate for most middle aged boomers with increasing medicial costs and tighter job prospects.
I agree tg. With basic costs of living skyrocketing and most incomes flatlined, what’s left over for acceptable housing costs is going to be is less and less over time. Not a feel good scenario in my book either.
Ditto. My budget (pre-boomer, in retirement) for total housing costs has declined noticeably just since selling out a year and a half ago. Property taxes will drive me out of Florida, even after prices have bottomed out. I believe the cold reality for the majority of boomer retirees is that they need to be living in a home with no mortgage, whether it’s a house, a condo, a mobile home or a rental, and I think the bulk of boomers have not reckoned with that yet. When re-sale prices were rising, it was a lot easier to rationalize a modest mortgage. No clue whether reverse mortgages will play a large part in boomer plans, but they look pretty dangerous to me unless you’re already 85.
I know someone who is 85 who took out a reverse mortgage to survive until death and this loan is working for that person because of their age .
Chip –
You bring up a good point which I have not seen discussed here so far. The boomers are supposed to be the Great White Hope for the Florida market, but as the risk of taking on massive mortgage debt plus other staggeringly high PITI elements later in life sinks in against a backdrop of falling home prices, I have a hard time foreseeing how boomer demand is going to rescue the market.
Bubble sitting Boomers with cash or a good financial statement will be in a position to pick up retirement homes at 50-60% of todays prices. Under this scenario they will come in sizable numbers. This is picking up the pieces and not “the Great White Hope.”
Boomer demand is an urban myth. I agree with Chip, I myself have pondered the scenario that in the future, perhaps people will have to own their homes outright and the combo of tax and insurance payments will equal what a mortgage payment used to be. Another interesting scenario is what happens if prices really tank big time and the $50,000.00 homestead exemption goes into effect. There will be houses where the homeowners pay no taxes if their property is valued below $50,000.00. Not impossible. When I first moved to the Tampa area and was looking up in Dade City (which was mostly rural, with some very pretty areas and also some very depressed areas back in 2000) a realtor told me that some people in the area had homes valued at less than $25,000 and so didn’t pay RE taxes.
Not that you’d want to live in those houses. But there were some $50,000 houses in that area that were livable at that time. Valued around $120,000 these days. If they sink back to $50,000, I’m in.
You nailed it Chip and GS. I have no intention of buying unless I can get what I want and pay cash. No way am I going to sign a note for 300K. I’ll buy in the 250K range post crash for cash. I disagree with those that think the boomers will be drawn to inner-city condos offering cultural/sporting/dining etc. I expect that rural communities with good hospitals and emergency rooms will be popular.
“…rural communities with good hospitals and emergency rooms will be popular.”
That is *exactly* what I am looking for. Ocala/Marion County in Florida was supposed to be that solution, but it grew too fast right in the middle of the bubble, so prices (and therefore taxes) soared there as elsewhere. And the beautiful rural nature of the area is long gone, replaced by terrible traffic and long caravans of golf carts.
Hey Chip,
You crossed the line buddy.. Don’t bash the golf carts.. On second thought, I prefer walking… carry on…
People that are retiring are looking for a cheaper life style usually because they are concerned about medical bills and high medical costs . Builders that build small inexpensive retirement complexes with club houses ,pools , walking trails etc ,will capture alot of retired people if they build them cheap enough .Alot of retired people no longer care about having a big yard because the children are gone .
The builder Pulte was catering to that older market but than he raised his prices and the speculators came in and now like all the other builders he will have to adjust his prices downward .
I also think that all the builder over-estimated how many people where going to be retiring at the same time .
Maybe the builders thought the baby boomers would buy their retirement property ahead of time and hold on to two houses until they retire ,(which apparently some did do this ).
Some retired people are stubborn sellers who want top dollar for their long term house before they buy the retirement home so they need to sell and it isn’t happening right now .
These people that want to make a move should realize that if they sell for cheaper they will also get the retirement home cheaper also but people get greedy and want to sell high and buy low .
Agreed, places become retirement meccas primarily because they are cheap and retirees don’t need to live near jobs, giving them greater flexibility in where they are going to live than those still working.
MrktMaven — LOL — you haven’t seen golf carts until you’ve been to The Villages. There are trains of them running along the cart paths — like a skinny version of the parking lot people movers at Disney. The area obviously has appeal, but is too vast and too dense for me. Personally, I think that Del Webb does a better job - wider avenues, larger lots, less “busy” stuff. But Webb, too, got into the high prices.
“Sellers who want to strike a middle ground can try a ‘minimum-bid auction,’ which auctioneer Marilou MacKenzie recommends to sellers such as Robert Bono, who plans to auction his home next month. The minimum bid is $269,900, a little more than half the home’s list price of $515,000.”
Now this is more like it. The starting price is marked down 50% from the list which is in line with the HBB consensus of where prices need to be to get buyer interest.
If the auction game keeps playing out in South Florida the comps are going to crash over the next three months.
At the present time, sellers are still far too much in denial and not sufficiently panicked for this scenario to play out.
My history with auctions during the RTC period is nothing more than a scam. All the good deals, repeat, all the good deals were scooped up by the auctioneer and his friends way before the auction occurred. In fact, the auctioneer would work over the distressed seller to list the property low, and then clear it off the auction list before it ever came to sale. If there is ez money to be made in real estate, the sharks will be coming to the surface.
Learn some negotiation skills, or hire a negotiator to succeed in buying below market.
“… all the good deals were scooped up by the auctioneer and his friends way before the auction occurred.”
Why did the letters IPO just spontaneously pop into my head?
How can you have a minimum bid below the mortgage amount? The bank might agree to a short sale, but nothing says that they have to.
This is interesting:
“Sunday’s real estate section shows most builders either cutting prices on existing models, covering closing costs or offering free upgrades. However, most existing home sellers are reluctant to reduce their asking price significantly even though they should realize that few people are ever fortunate enough to sell at the peak of the market whether it is a house or a publicly listed stock.”
I have studied the booms/busts in the US, Japan, and other countries and it is a weird thing but the ratio of boomtime/downturn is always within the same range: .6 and .625. The US 1970 and 1980 numbers are 3yrs/5yrs = 0.6 and 5yrs/8yrs = 0.625. And Japan’s is 11yrs/18yrs = 0.611. Take a look at Schiller’s graph the Nikkei Bubble graph:
http://graphics8.nytimes.com/images/2006/08/26/weekinreview/27leon_graph2.large.gif
http://www.stock-market-crash.net/nikkei.htm
The ratios are the same because what affects the timescale is market psychology (which is a constant) not any of these other factors like interest rates, easy credit, etc. These factors just affect how high the market goes, not timescale. You can already see how long it will take sellers to realize that the market has changed and also just how drastically it has changed. The bubble prices are still too fresh in their minds for them to accept anything less.
Melissa — do you have any thoughts about the impact of the Internet on these ratios? I ask because blogging was not big when this bubble started, yet now at bust time, word is spreading like wildfire and cannot be controlled by the MSM. I see big-circulation newspapers, like the Orlando Sentinel here, frantically rolling out topical blogs and so far, thankfully, they do not appear to have been censoring input. I’d think that this avalanche of unfiltered right-now news will have a compressing effect on the cycle, though how much would be pretty tough to predict.
I agree completely Chip, if I’d had access to realtime reporting in ‘91 I wouldn’t have bought. I was a knife catcher then, I think this time around there will be far fewer because the blogs are speading the word.
Chip,
I enthusiastically agree. My gut says that web-based information availability and velocity will serve to ‘full-throttle’ this process forward. As severe as the run-up was, I have no feel for how far down it will go, so history will be the best guide. I’d be willing to bet that the level of financial anguish and the truncated time frame during which it will be experienced (both first-hand and vicariously) will increase the degree of overshoot. Once the MSM percieves the situation as “BAD” they will fill the airwaves with it non stop, because bad news sells. This ‘in your face’ coverage will make it impossible for pockets of ignorance and denial to exist. I’m also in Orlando and there is still a lot of ‘its different here’, here.
In the 70-80’s we gauged the market by the thickness of the MLS book and the daily incoming call rate.
I’m also in Orlando and there is still a lot of ‘its different here’, here.
I just was talking to a friend from Tampa and asking in a very non-threatening way about how house prices were there. He said it was “different” in Tampa. No more land to build on…blah, blah.
I just smiled and told him how lucky he was. Amazing how these same pat phrases keep popping up everywhere. So, denial definitely out there, except for the flippers. I think they get the game is lost, especially in Fla.
Well, those are good points and I’m not sure if recent technology affects the timescale or the amount of run-up. My guess would be the latter and the reason I say this is because of Shiller’s graph (Schiller’s? unsure on spelling - I’ve seen it spelled both ways.) Compare the height of the 70s and 80s bubbles to that of the recent one and then compare the pace of the media then as opposed to now. Are comparisons similar? I know that nobody wants to hear that the bubble will take 14 years to deflate, neither do I, but I don’t want to fool myself either. Sellers don’t want to hear it because they don’t like the thought of their home values decreasing and buyers don’t want to hear it because they don’t want to wait that long. Although, you guys maybe right and I hope you are …
Very interesting stuff, Melissa. One bit of hope for us bubble-sitters though: it looks like most declines are initially as steep as the inclines before them. Once the bulk of the decline has occurred, then there’s a smaller, more gradual decline that takes a long time to hit a final bottom.
So you might get a good deal on a house in, say, 3 to 5 years, even though you’ll have to wait another 5 - 7 (?) to start seeing real appreciation.
Yeah, you are right about that. So the current boom started in 1997 and ended 2005, so that’s 8 years. 8 x 1.618 (the inverse, downturn/boomtime or the Golden Ratio) is 12.944. But … I’ve noticed that you are right, it will be 8 years (2005 + 8 = 2013) for it to reach near bottom (dropping sharply), and then slowly level off for the remaining 5 years (until 2018).
Great post. It just adds further ridicule to those brokers who think the market will “come back in the spring”. Maybe Spring 2014?
Re: the Schiller graph you posted a link to: The problem with Schiller’s inflation adjusted math is that he’s using official inflation indexes and not ‘real inflation’ indexes. The graph shows a huge inflation-adjusted spike, but to be fair, that spike would be significantly less steep if he calculated using non-government inflation numbers.
The ratio you are finding is the inverse of φ (1.618) and is common in nature. It is also the number obtained when two adjacent numbers are expressed as a ratio in the Fibonacci series of numbers. For example 1,2,3,5,8,13,21,…. If you have 8/13 = .615, 13/21 = .619, etc. These numbers are also widely found in nature. Elliottwave Theory proposes this is a naturally occuring ration in human activities due to certain developments of the human brain through evolution.
The ratio you indicate is an interesting find.
Wow, that is weird! Very cool though.
8 % ? try 18%
more like off 20%
Just wait until October’s actual numbers are released. Oh, wait. They’re all “seasonally adjusted” to prevent absolute panic.
“Auctioneer Perry Diamond stood on the pool deck of the historic home in West Palm Beach’s Flamingo Park and barked into his microphone. ‘Looking for $600,000, do I have $550,000? $550,000? $500,000?’ said Diamond. ‘Let’s kick it in at $500,000.’”
Isn’t this known in the auction world as “going Dutch?”
A true Dutch auction starts at a value and the auctioneer declines until the first bid, which is accepted and the auction ends. I took an auction theory course in graduate school that was interesting, and one of our proofs was that the Dutch auction has the same expected sale price as a normal-style auction.
I guess you missed my point, which was that the auctioneer unwittingly created the appearance of a Dutch auction by testing the waters with an opening bid which was clearly too high. I am guessing that this is how the Dutch auction concept may have originated, as tulip bulb salesmen accidently set the opening bid far above the market price.
“Diamond, on the other hand, said he will ‘never, ever’ consider an absolute auction because of the danger that a $500,000 house would sell for $50,000.”
Abysmal ignorance of economics and sale by auction don’t mix…
“(Realtor) Barbara Watt says that signs of renewed activity are already taking place, especially in Cape Coral, where prices are already down by almost 20 percent. However, sales figures throughout Lee County do not bear out Watt’s optimism. While there are buyers waiting on the sidelines, they are waiting for prices to drop even further.”
She goes on to say 30% of loans taken out were ARM’s….. Old school for me maybe but fib to me 1st time and get called on it, anything else you say is BS women.
Right on. What is a “$500,000 house” ?????????
I imagine this has been brought up before on this blog, but I don’t recall the answer. I am assuming that auction sales do not show up in the existing home sales data that we ususally see. I can’t imagine that the Realtors track these numbers, as they do with their MLS. So these auction sales will not show up in the existing home sales statistics, and it will look like new home sales are bearing the brunt of the correction, like in the East SF Bay Area, where new home sales prices were down 20% YoY already, but existing home sales prices look pretty flat.
Good point, and one worth keeping in mind when considering the Realtors (TM) insistence that “full-year median prices have never fallen on a nationwide basis since the 1930s.” Maybe they fell, but if auction results were kept out of the official stats, it would not show up in the data.
ID — I think that the echo efffect might mitigate a lot of this. The auction price will screw the appraisals and the listing comps for the neighborhood, so the used-home sales should suffer as a result, perhaps to a lesser extend and with some lag.
Inevitably, these prices will bleed into the general market place by word of mouth or otherwise and buyers will expect lower prices…
an auction results site might help-
“But there was no bid for seller John Neuharth to confirm. Neuharth waited out the auction at a friend’s house, and two days later he said he was still ‘totally confused’ about what happened at the auction.”
You bet he was totally confused, like someone who just stepped out of his car after a major wreck. I will bet there is fear and panic spreading quickly in that county this week. Perhaps one of out Palm Beach County posters who tracks that area will keep an eye out for spikes in active listings there.
Whoops — wrong county — the auction was in Collier. Any posters from there?
“Amid a slow market for home sales and a growing glut of properties, frustrated sellers increasingly are turning to auctions in search of quick transactions. Auctioneers hype the process as a way to build buzz and move homes in a moribund market. But as the failed auction on Oct. 14 showed, this marketing method is no magic pill.”
Auctioneers who hype the process probably help contribute to the bad name auctions have in the USA. They should focus on the primary advantage of auctions, which is to quickly move homes at a sale price near market value when liquidity has siezed up in the home purchase market, and not insinuate that by “building buzz,” they will somehow generate higher sale prices than the MLS.
All the data and published evidence I have seen suggests that MLS sales result in higher prices than auction under normal market conditions. The one case where I can envision no advantage to MLS sale is if market values are in a free fall, in which case “testing the water” through an MLS listing could result in large losses while waiting for a buyer to show up (kind of like Linus’s Great Pumpkin), whereas an absolute auction will get the seller through the exit door immediately.
“Last month, Palm Beach County and the Treasure Coast led the state in declining home sales and tied for the third-largest rate of falling home prices.”
As I suggested above, the comparitive advantage of auctions to MLS sale increases when prices are rapidly falling.
I went to an auction about 10 years ago by the builder for some new homes up in Rancho Bernado, armed with a 5K cashiers check. The homes were nice but in a matter of seconds they got bid up a couple hundred thousand. My wife said get your arm down. Complete opposite sides of the spectrum from what happened above. When will we get back to my scenario?
“My wife said get your arm down.”
LOL. The domestic ejection-seat.
The “bidding up” you witnessed is evidence that the opening price was set below current market value. The same thing could happen next weekend if the auction company had carte blanche to ignore the sellers wishing price and start the bid at 10% below current market value instead. (Trouble is, when liquidity is gone, so is any effective way to estimate current market value…)
Forgot to mention that there was about 300-400 people at this auction, a real feeding frenzy driving prices up. All of the 30 homes sold. Don’t know how many schills there were in the audience though. In hindsight anyone who bought that day 10 or 12 years ago, made a significant profit.
The only proof the homes sold is if a new deed was recorded. What you witnessed was some body getting his bid accepted. Who had buyers remorse the next morning? Who didn’t qualify for the loan? And you seriously asked how many shills were bidding! What would you do if your business depended on getting some excitement from the audience???
This question might be a little off topic, but does anyone that in the Treasure Coast/Palm Beach area have data on how many people the Construction industry is laying off right now?
I ran into a carpenter buddy who said that he was out of work for the first time in his life. I drive the construction site and they are easily off 50-60% from a year ago. They don’t show up in the jobless figures as most were illegal.
I wonder if we will start to see more crime as a result of this?
When people are desperate, they do desperate things.
“A random check of all the homes auctioned suggests similar results for the rest of the properties, Lawler says. One reason there’s currently more than a two-year supply of homes for sale in Naples, he says, is that sellers are asking ‘unrealistic prices.’”
Conversely, the more than two-year supply of homes for sale in Naples goes a long way to explaining why the auction results are 28% below the last sale price.
The funny part is that little more than a year ago, those prices were considered to be perfectly realistic.
The lines between consensus reality and surrealism are getting kinda blurry.
The lines are blurry because they are moving rather quickly at the moment…
See if you can spot the reason why the auction was not successful:
“Both Diamond and Markman are agents at Lang Realty in Boca Raton, and Lang Realty owner Scott Agran stressed that the auction company is separate from his company. Agran said Diamond and Markman earned their auction licenses only recently.”
That’s right. Looks like you have a couple of former Realtors (TM) who went out and got their auction license when the RE started getting slow IMO. The auction failed because it was performed by a couple of amateurs.
The Boca auction also looks like a ginned up campaign promoted to ensnare unsuspecting out of town investor/buyers. LOL, it did’nt work! These Realtors™ never stop, do they? They are really scummy sometimes.
I would give them credit for being able to see the next bubble career in FL–auctioneering! I’d say they’re slightly brighter bulbs than the other agents who are wondering how to pay their multiple mortgates.
So they suck as auctioneers–but they’ll get plenty of practice soon. I don’t think the auctions are even remotely interesting until they are no-reserve, or at least a published minimum-bid that is truly low (50% below peak). Why waste your time going to one with a hidden mystery wishing price still attached?
I read the word “crash” re the DFW market in D Rag’s Home issue this morning (which of course was quickly shot down by the local real-whores) but still . . .interesting
We sold our home in Palm Beach County this spring because we decided we had enough of living in Florida with the cost of living. My home insurance more than tripled from 2002 to 2005…..1100 to more than 3500. I’ve been keeping an eye on tthe homes in our old neighborhood and very little is moving even with 10-20% price drops…….apparently we got out just in time.
Auctioneers holding auctions with one bidder present? Auctioneers falsely advertising homes as preforeclosure. Bidding on behalf of the seller. What is an auctioneer doing trying to “protect the home’s value”. The whole industry smells and needs a complete purge.
Sounds like the wild west down there in FLA. You kind of think it will end in a sort of capitulation , but it’s starting much earlier than anticipated.
I don’t see the slightest whiff of capitulation yet. Capitulation means everyone is throwing in the towel, and the MLS listings definitely don’t show that yet. A few dozen well-publicized people pretending to throw towels is not capitulation.
Real capitulation occurs when the remaining holdouts who have not yet paniced realize that they made a horrible mistake by not being first to panic, and yet decide to take their lumps and get out anyway at whatever cost.
“I am not pleased,” Neuharth said. “There shouldn’t have been an auction because there was only one registered bidder. This is so new to people, and there’s a lot of confusion.”
Diamond’s auction partner planned to sell another house a block away from Neuharth’s on the same day, but that sale fell flat, too.
Sally Markman expected to auction that property, but she said an offer came in just before the auction. Markman canceled the auction, saying she didn’t have enough bidders.
“If I had five or six people standing there, I would have conducted an auction,” Markman said.
Markman’s client, Broward County real estate investor Dennis Bittner, said he rejected the offer for 915 Flamingo Drive because it was well below his $239,900 asking price. Markman even advertised the home as a “pre-foreclosure” sale, although Bittner said he’s in no danger of default. Still, Bittner said, he was pleased with Markman’s marketing efforts.
Both Diamond and Markman are agents at Lang Realty in Boca Raton, and Lang Realty owner Scott Agran stressed that the auction company is separate from his company. Agran said Diamond and Markman earned their auction licenses only recently.”
————————
Wait, it looks like there is more going on here than is in the story. 915 Flamingo was bought by “Triple Diamond, Inc.” 5 months ago, for $150K. The mortgage was for $162K. And the seller, is asking $239k, representing it as “pre-foreclosure?”
I see a few potential problems with this. First, the auction client Neuharth may not be aware that the person he hired to auction his property has a competing property down the street. Second, a licenced RE agent, under certain ethical rules, is representing that a property is being sold for an “investor”? What about the fact that the property is offered as a “pre-foreclosure”?
And what about the fact that the mortgage amount is showing as higher than the purchase price, in the property records?
Anyway, there are a few indications that this is not really a distressed seller, but an investor looking to use an auction and “foreclosure” buzz to market a property.
‘there are a few indications that this is not really a distressed seller, but an investor looking to use an auction and ‘foreclosure’ buzz to market a property.’
Thanks for looking that up. If the reporter had done so, this would have been a completely different article.
That is unbelieveable. What a slimeball. But that’s PFTC in South Florida. Scam capital of the U.S.
You should change your handle to Magnum PI!
Along the same lines:
2006 Florida Statutes 468.389
PART VI
AUCTIONEERS
Prohibited acts; penalties.–
(b) Misrepresentation of property for sale at auction…
(d) False, deceptive, misleading, or untruthful advertising.
(e) Any conduct in connection with a sales transaction which demonstrates bad faith or dishonesty.
(f) Using or permitting the use of false bidders, cappers, or shills.
(d) The auction business shall be responsible for the content of all advertising disseminated in preparation for an auction.
Did’nt the article say these Realtor™ guys just got their auction licenses? They should be familiar with these rules.
“….This time D’Alessandro has more hard evidence to back up his prediction, pointing out that Realtor multiple listings have a huge overload of 12,654 single-family homes and 7,819 condominiums on the market at median sale prices far in excess of the current median sales price of $264,100 for homes and $237,500 for condominiums.”
I guess I’m missing something in D’Ales’ new “evidence backed” prediction of a bottom in 2008. Could be more to the story. This looks to me like pointing at an approaching tidal wave and declaring “we’re all going to be dry in March….”
(not if they keep hitting the coast one after another Frank ….)
Well although D’Ales will probably error in his prediction at least he has taken the lead among his Realtor (TM) brethern by pushing the recovery to the third quarter of 2008. The prediction will at least dash FB hopes of a Spring ‘07 recovery and might get the price reduction rolling.
Charles Smith has a good opinion piece today on the housing ‘bottom’. How, why and when we’ll get there, and the supporting information with links back to previous writings. What’s even better, it makes sense! I guess that’s what I would like to see from the crystal ball forecasters ….
I pick the bottom of this market at 2010, but I would imagine most readers would like what they see and read from the likes of Mish, Smith or hey, Ben’s site! Otherwise, why doesn’t the News-Press just call me next time…..
(but you’re right, Frank’s at least pointing out the obvious; the train is rolling backward down the hill)
Smith’s latest is pretty good. Thanks for the tip!
“Affordability is the No. 1 problem facing potential buyers because, with house values more than doubling in the past five years, many buyers are priced out of the market.”
Starting to see that mentioned. Finally.
I wonder where they came up with this silly notion?
Wait buy now or…
Ooops, too late.
And the remaining 1st time home buyers, for the most part, are not interested in exotic loans… Does that mean that only bloggers and their friends are left?
Neil
“Diamond, on the other hand, said he will ‘never, ever’ consider an absolute auction because of the danger that a $500,000 house would sell for $50,000.”
If the seller is so confident that it’s a $500k house then there shouldn’t be any hesitation about an absolute auction. If he’s afraid it might go for $50k, then that’s what Mr. Market says it’s worth and if you can’t live with that then don’t waste peoples’ time.
Guess not, if it’s his own property.
“Buyers are now leery about reducing monthly payments by taking out no-interest or adjustable rate mortgages that, during the boom period, accounted for nearly 30 percent of the mortgage business. Many families who purchased homes last year at peak prices, with little money down and without fixed-rate mortgages are now facing foreclosures.”
Guess what? Market values will have to fall by a considerable amount to equilibrate with a new-found aversion to suicide lending. Any particular household simply can’t pay nearly as large a purchase price using a 30-year fixed & 20% downpayment as they could (assuming the same initial monthly payment) with an I/O Option ARM & 0% downpayment.
I must have missed something in college. The girl I am dating informed me the other day that I am wasting my money on renting. Says that I should buy “something, anything” to keep from renting and in 2-3 years I can sell it, pocket a ton of cash, and upgrade to a nicer place. I was in too good of a mood to argue at that point so I just smiled and nodded. The level of delusion is still incredible.
“I was in too good of a mood to argue at that point so I just smiled and nodded.”
I will refrain from any rude questions about why you were in such a good mood. But just imagine how tricky these discussions get when it is not your girlfriend, but your spouse, at the other end of the conversation.
GetStucco,
You have an excellent point. To point out why that situation wouldn’t leave one in a good mood… her family will kick in to ask where are you buying? (Not when, not if, but…)
Thankfully my fiancee has bought into a one year+ time lag. I know at the end of that year I’ll be under a little pressure. Man I hope by then that Panic has set in…
Neil
Excellent advice, GS!!!
The mentality today is to keep up with the Jones. The women in my neighborhood would be embarrased to tell their friends that are renting, hence probably her comments.
Funny how many are renting cars and tell me I am stupid for buying cars that are 1 year old and still under warrantee at a 30% discount.
I cannot wait for these morons to start learning about finace and economics the hard way!
Well, i sold today. Had to drop 30k, but it was well worth it. Fortunately, i bought low in 05 (pre-construction, gated community, etc), so shaving off 30k didn’t matter all that much. Still cleared a hefty profit, quadrupled what i put down.
Very happy man today. And many thanks go out to this website. In Nov/Dec of last year I found this site, and immediately shat my pants. I started to come up with an exit strategy … and put it into action.
Now, we play the waiting game. Rent for awhile, get hitched in April, and then maybe buy this summer (in North NJ), or just wait until next winter.
Meanwhile, the chuck of change in ING/HSBC racks up 4-5%.
Again, thanks. I really do feel lucky today.
Congratulations. You cut it pretty darned close. Did you sell and close, or just go under contract? If the latter, hopefully there is no contingency about sale of a property.
“Still cleared a hefty profit, quadrupled what i put down.”
Amazing!
I sold my home in 96 not making more than $2,000.00 (had the home for 11 years and after waiting for over 8 months to sell the home was glad to find a buyer). Since than did not buy and now feel pretty anxious. I am 48 and have a little of 200K in the bank. They always talk about the fixed incomes of the elderly but I’ve reached my ceiling at my job and apart from a maybe salary increase of 2% yearly, I don’t see much growth. I l ive in Miami and in the building I live they just decided ( condo conversion) that only the owners are allowed to have pets. My 9 year old daughter has a little 7 pound dog and now we are going to have to move. Miami for as much as I like it, is making me sick lately. Bunch of arrogant condo owners ( this used to be partly a section 8 bld ) now dictate your life. Prices are out of control and all these people that bought 3 years ago could not have bought the same condos for the rates they want to sell it for. That is why I don’t see how it can take so long to see a substantial decline. If Florida does not institute a state tax and drastically lower the property taxes things will not get better for anyone.
I am feeling sad and frustrated. I was one of those “smart” people trying to live below my means and paying cash for a home. By the tme I almost got there prices were out of reach.
Yvonne you might want to check out other towns with a dynamic job market to live where you get great value in housing for your dollar. Places like Atlanta, Charlotte, Houston, Dallas come to mind. If you must stay in Florida then Jacksonville is still decent..