In Florida, “Everyone’s Selling Now”
The St Petersburg Times reports from Florida. “Jeanne Gavish met with clients Ed and Earlene Young last week to tell them the housing market would soon come back to life. ‘You’re staring daggers at me,’ said Gavish, sitting in the Youngs’ living room. ‘No I’m not,’ said Young. ‘It’s just that we had this great expectation of selling in a heartbeat and we can’t believe we’ve found ourselves in a market that’s bottomed out.’”
“Gavish knows how she feels. The ongoing depression in the real estate market has transformed the lives of brokers and agents, said Gavish, the former president of the Hernando County Association of Realtors. Many of Gavish’s own investment properties have lingered on the market without buyers or renters. Attendance in a beginning real estate class at her Nature Coast Real Estate School ‘dropped off a cliff’ in February, she said.”
“The median sale price of houses in the area did not begin to fall until June, but has since slid more than $10,000.”
“But she isn’t ready to drop the price of the Youngs’ house. They bought it for $145,000. Their asking price of $229,000 is still valid, Gavish said, based on recent sales in Wellington and the added benefit of being on a cul-de-sac. Neither were the Youngs ready to accept a long stay on the market. When she was asked when she needed to sell the house, Earlene Young had a ready answer: ‘Three months ago.’”
“By all accounts, the party is over for most condo developments in and around downtown Tampa. Weeds, not construction cranes, are spouting in more than one expensive empty tract. Tampa’s long-sought dream of a vibrant residential core, while not gone, appears to be seriously diminished.”
“All told, about a dozen projects with more than 4,100 planned units have either been delayed, put on hold or are simply dead. Banks have stopped lending money for condominium projects, said Mark Huey, manager of economic development for Tampa. ‘You see that happening throughout the state and the country,’ he said.”
“Frank DeBose, part of the group behind the defunct 02 at Pinnacle Place, said, ‘We’ve put too much housing in the higher end.’ Buildings with high-priced units now under construction will probably have to drop their prices, he said. ‘Five years from now, the discussion is going to be about all those $700,000 and $800,000 condos downtown that you can buy for $300,000,’ he said.”
The Tampa Tribune. “State agencies are investigating potential mortgage and title fraud involving 36 unorthodox real estate deals in the Bay area. The deals aren’t an anomaly. ‘The reports we’re getting are incredible,’ said Doug Pollock, (who) investigates problem mortgages. ‘This scheme is hitting every county in Florida. It’s like people are going to classes to learn how to do this.’”
“How widespread are the inflated deals? The answer, industry experts fear, is that they’re everywhere, but there’s no way to determine the extent. ‘This is prevalent in some areas,’ said Brad Monroe, president of the Greater Tampa Association of Realtors. ‘It just makes you wonder how many of these deals are going on that we don’t know about yet.’”
The Herald Tribune. “The J.P. King Auction Co. will auction 100 units in The Hamptons at Tampa Palms condominium conversion project. Forty of the units will sell at absolute auction, meaning they will go to the highest bidders with no minimum bid or reserve.”
“‘With the marketplace slowing down a bit,’ said King in the understatement of the year, ‘Bay Communities decided it was a good time to get more aggressive and sell a number of units in one day.’”
The Naples News. “Ruth Lundi and David Chadwick decided to give their home away in an essay contest. ‘I talked to a few Realtors who came out to look at the place and said it would be hard to even get people to come out for a showing,’ Lundi said. ‘Everyone’s selling now.’”
“They are soliciting 6,000, 250-word entries on the subject — ‘I believe you should give me your home because …’ Each entry is $100 so they stand to make about $600,000 which would cover the appraised price of their home as well as the cost of advertising and running the contest.”
“Skeptics will be skeptics, however, said (broker) Brett Ellis. ‘To me it sounds like an act of desperation … like someone who isn’t willing to price their home at today’s market and is trying to get more money for it,’ Ellis said. ‘If you price it right, anything will sell. If you want to overprice it you can try an essay contest.’”
“When Jan and Barbara Mueller put their 2,700-square-foot coach home in Mediterra on sale for $970,000, it didn’t move for months. So they took it off the market. Now it is back on the market for $840,000. But this time the home, which sits near the Lee-Collier county line, has been staged by a professional.”
“‘There are 10 other homes on the market that are essentially similar,’ said Jan Mueller.”
“In another instance, stager Sarah Stickney bought a $225,000 boat that will be given away with the house. In that house, the main focus was the back patio. ‘It’s what the house is all about so we emphasized that and put the boat in the back to really draw attention to it,’ Stickney said.”
“The house hasn’t sold yet, but she is confident it will.”
Three letters to the editor:
‘I refer you to paragraph four on Page 7D of your article on Oct. 27 that points out that in 2005 inflated prices of real estate were pushed further by ‘investors’ and now these ‘investors’ are actively engaged in liquidating many of their ‘investments.’ The plan for a quick turnover for even further inflated prices is forever based not on principles of investing, but in the psychology of the ‘greater fool theory.’ When one looks at the percentage of mortgages in the Tampa Bay area originating in 2005 that were interest-only loans, one must conclude these folks never thought through their projects from a historical perspective, to say nothing of common sense.’
‘Those real estate speculators of 2004-2005 operated from the same thought basis as the then-recently minted stock market speculators of 1995-2000…indulging in the latest socially elite way to gamble.’
The second:
‘My husband and I own a successful real estate company in west Pasco county. That is until a few months ago! Your reporting about stalled sales and cooling prices is right on the money for most of Tampa Bay, but things are much worse in Pasco. I would like to see some reporting on how this real estate nightmare has affected the thousands of people that work in the industries related to housing. I know agents who haven’t sold a home in months and are living off their savings, in hopes that things will turn around. If things don’t turn around by the end of the first quarter, our county will be in dire straits.’
‘Most Realtors and mortgage brokers don’t want to talk about it because they think it will only make things worse. I just can’t imagine how much worse it can get! Our phones have been dead for the past couple weeks, just like they always are between Thanksgiving and New Year’s. If it is like this now, I can’t imagine how it will be in the first quarter.’
‘I received a call from an A/C contractor wondering how business was, because his phones have been quiet, too. He told me several of the small suppliers he uses are about to face foreclosures because things are so bad. We also had a Realtor ask us if we could buy his house because he was about to default on his mortgage. And my hairdresser said it was affecting their business and how they spend their money, too.’
I am extremely frustrated by the government’s response to this crisis. I most certainly don’t want to come off as a whining Realtor looking for sympathy. That is not the case. But many good agents will be financially affected by this for years. I hope somehow we can get Tallahassee or Washington’s ear before it is too late for many small business owners.’
The third:
‘Your article today is a relief from the avalanche of negative articles concerning real estate. We did benefit from the downturn in the stock market and tech stocks. Young investors at that point never saw a bad stock market and thus they thought they would become instant millionaires. Not so! Next up was the millionaire quest through real estate. Thank goodness people are back buying homes rather than hoping they make the right decision to gain at least 100 percent appreciation in a month or two. The mortgage industry also fueled the market with “free” or easy-to-obtain money so that everyone just loaded up on mortgages and home equity loans for more investment properties. Add our tax and insurance crisis and we wonder why the market has suffered. All of this and the exponential rise in articles on real estate have paralyzed people wanting to make good decisions. Who wants to buy at the bottom of the market - or in Florida for that matter?’
I hope somehow we can get Tallahassee or Washington’s ear before it is too late for many small business owners.’
_______________________________
Too late - enjoy the ride down! Pass the popcorn this is getting good!
Move over. Here’s a fresh bowl of Orville Redenbacher. Hey you, down in front!!
“Most Realtors and mortgage brokers don’t want to talk about it”
Fear. When you know the outcome but cannot face it you, literally, can’t talk about it. I’m sorry for all of those affected by this debacle but this is what happens whenever euphoria replaces skepticism. The converse, of course, is when “everyone” is talking about their gains…they can’t stop talking about how “smart” they are/were. Of course, that is the classic sign that things in a market are peaking (the old “shoeshine boy” story relating to stock bubbles). The music has stopped. It won’t get turned on again for a decade…or more.
The music may have stopped in Florida, but according to one of Ben’s postings yesterday, it’s just getting started in Texas. The GF machine never stops spitting them out I guess.
I think one of her problems is her own industry, they don’t want to talk about it. They distort the numbers, hide the numbers, lie about the numbers, and tell everyone that its going to be fine. So if this is what the industry wants the public to think, then why would government or anyone else step in to help. SINCE ITS GOING TO BE FINE!!!!
I wonder what the greedy realtor thinks the government’s response should be. Oh wait, I bet I can guess. Like hell I’m going to subsidize her loss through taxes that are already too high.
She wants government relief??? I haven’t the words. Except for…
RAISE THE F’ING RATES!
I seriously hope that we’re approaching 8% by this time next year.
“I am extremely frustrated by the government’s response to this crisis. I most certainly don’t want to come off as a whining Realtor looking for sympathy.”
I thought the new thinking was something like “it’s an ownership society” and “personal discipline” and all those good family values???
It’s now time for all these hypocrites to demonstrate the strength of their “beliefs”.
Give me a break. These are your rock ribbed Republican “small bidness” types until the first downturn, then they’re squealing like pigs looking for a gubbmint handout.
txchick posts “Give me a break. These are your rock ribbed Republican “small bidness” types until the first downturn, then they’re squealing like pigs looking for a gubbmint handout.
Praise Be!!!!! Praise Be!!!!!…. Tell the truth sister! …..Great post. Two funny sentances to cut that self serving belly-acking manifesto too shreads!
PS mabye GW will pass the hat….No wait these people will be new deal Dems by the 08′ election…..LOL LOL LOL
I predict the government’s response will be higher taxes and big cuts in public services. It will have no choice.
The good news is that cops, teachers and firefighters will be able to afford housing again. The bad news is there won’t be any.
How will revenues help these hypocrites? Besides, raising revenues is a must as the treasury has been driven into bankruptcy.
Capt. Credit posts ” treasury has been driven into bankruptcy.”
Captian, I fear we passed bankruptcy some years passed. The government has had the peddle past the metal for years, we passed warp drive spending some time long gone.
Whatever happened to that nice surplus we had going? I know we are fighting a big war, but why cut taxes when you are fighting a war?
Honestly, I don’t see any way out of this clusterF* except solid 5% + inflation for the next ten years.
Here is a question maybe one of you with some economics smarts can answer:
Is it possible to have rising unemployment (from RE layoffs + spillover), high inflation, AND low interest rates?
Yes, it’s called stagflation. Slowing economy, weakening dollar which makes imports more expensive such as gas and food. Oh wait, we don’t consider gas to be part of inflation, it doesn’t count. Move on, nothing to see here.
Many years ago, a friend came home with a Commodore PET computer. It sported an astonishing 16K of ram and a tape cassette software loader and came with a text based game called “El Presidente” - Kindof a Sim Country of a sort. The idea was to allocate your budget and debt, while trying to keep the population happy. In every case, it was possible to stay in the game the longest running up huge debt.
I suspect at this point, if we raise taxes or just about any other supposed measure to “fix” the debt problem facing us all, it will have severe unintended consequences.
My math says we can and indeed MUST have a decade of runaway inflation in order to put everything back into perspective. Of course this is not popular as it puts the cost on the generation which ran up these vast national, personal and corporate debts.
chris posts”Whatever happened to that nice surplus we had going? I know we are fighting a big war, but why cut taxes when you are fighting a war?
AE Replies ….Can you say….All gone? Next question very good question? If we are indeed fighting a war what ever happened to sacrfice and winning the war?
Honestly, I don’t see any way out of this clusterF* except solid 5% + inflation for the next ten years.
AE replies I hope we get off this easy. I doubt any one in our government has given this any thought.
Here is a question maybe one of you with some economics smarts can answer:
Is it possible to have rising unemployment (from RE layoffs + spillover), high inflation, AND low interest rates?
AE replies I first would answer I would bet on Deflation. But I am old enough to recall the “Guns and Butter” war of LBJ… Now he did not cut taxes, but he did not raise them enough to cover, the war in Viet-Nam or the massive social spending programes at home. It is some what similar today sub, the tax cuts for social spending, then add an unfunded war. Bingo!
As the war ended around 1975 Prez Carter was elected. The erea was marked with the joy of “stag-flation” and the “misery- index” unemployment + inflation all three being the same.
Four years later comes Pres. Reagen and Paul Volker fed chairman who crushed inflation by getting morage rates to about 17% and the prime about 21%. The ecno went into steep recession…..by 1984 we are out. Millions got crushed and went bust. This is a briefly what happened last time. The time frame was about 10 years.
Never was a surplus, just numbers games typical no matter which party is in control.
Sorry. Can’t let that one slip. The surpluses were real. Until they were spent.
Posted “Never was a surplus, just numbers games typical no matter which party is in control.”
I am sorry too. It is a moving target but it was as balanced as we will see in a long time.
Read the numbers GW has posted for 6 years….Yikes!
I’m not so sure they were real. I don’t see how any reasonably financially responsible person can say we ever had a surplus. When you have a surplus of billions and yet you still owe trillions, how is that a surplus?
It’s like an somebody saying “I have a surplus this month!” when they have $500 left over after the bills are paid. Yet they are carrying $20,000 in credit card debt. Surplus? Real? I don’t think so.
wmbz was right, there was no “surplus”. Everyone knows the budget numbers are as cooked as the CPI.
Per GAAP, the government has been driving deeper into the red for decades, and that trend has never reversed. Just because DC didn’t spend every last dime of excess FICA receipts for a brief period does not mean they were somehow “saving” money.
It’s like switching your optionARM payment from fully amortizing to negAM and then claiming the difference as a “surplus”. Yeah, right.
“::Sorry. Can’t let that one slip. The surpluses were real. Until they were spent.::”
Wrong. Go to public debt to the penny and you will find that there never was a fiscal year with a surplus.
Dream on kids. Budget surplus in FY 1999 and 2000.
http://www.whitehouse.gov/omb/budget/fy2004/sheets/hist01z1.xls
And 1998 and 2000 too.
Cap’n Crunch, stop drinking the koolaid. Those numbers represent government running on a strictly cash basis, ignoring any and all future obligations.
I suppose that you subscribe to the baseline-budgeting terminology wherein DC describes slowing the increase in spending a “cut”.
Stop talking political BS and start talking reality.
Hmm. Some would consider the cash numbers the only true numbers. The accrual-based numbers, sketchy even for a normal business, are pretty much fantasy where the government is concerned.
For a short period, the feds collected more in tax than they spent. Just because some folks are under the delusion that some of those taxes were being saved for future payment of social security doesn’t make it so. The dollars were spent. How future administrations will deal with the lack of actual savings in SS is up to them.
Capital gains taxes collected from the dot-com bubble, is why we approached a surplus in 1999-2000. No more bubble money, then and now.
CDF Firefighters can already afford housing plenty: $150K-200K annually.
Note: That is what CDF Captains typically make, not your regular line firefighters.
I had a friend in the San Francisco FD. Biggest playboy I knew. Worked a three-and-a-half day shift at the station (where they ate like kings and had jacuzzi parties with local hotties, no kidding) and pulled down $70K base plus another $20-30K overtime.
Friggin’ Lucky!
Same with the PD - 8 hours pay for four hours work (because the rest of the time they’re off loafing).
For those who want to jump in and defend them - don’t bother. I worked with a major metro pd for years.
Don’t forget … Fire fighters and police officers in San Francisco get some of the richest pension and retiree health benefits around. I believe, after 20 years on the force, they get a pension of 90% of their average yearly salary (including overtime). Almost every year, they put a new voter initiative on the local ballot to further enhance the salary, pension, or benefits of police and firefighters in San Francisco. It was particularly disgusting that, in the immediate wake of 9/11, they used the 9/11 tragedy to woo voters to goose up their pension benefits. Meanwhile, with vastly improved building codes and fire safety requirements, there have been far fewer fires or other calls for the S.F.F.D. In otherwords, the S.F.F.D. is bloated and should be downsized. But if an elected official even mentions the possibility of closing a fire station, or laying off firefighters, he/she will feel the full wrath of the powerful public sector unions in San Francisco.
Fires are down over a third in Boston. They now send a pumper to virtually every car accident….seriously. Apparently they believe they can paper over the decrease in need by simply citing “calls” instead of actual fires fought.
With all due respect to firemen, this needs “adjustment”.
If it sounds so easy, and you know the scam, why don’t you sign up for the job instead of complaining?
Which job would he sign up for? Mayor or governor?
“If it sounds so easy, and you know the scam, why don’t you sign up for the job instead of complaining?”
This is an idiotic comment only a moron would make. I have a great professional job that pays me well … Sorry, I have no desire to sit on my ass for 4 days a week in a fire station waiting for a fire to happen, even if they have a great pension. But that does not mean, as a taxpayer, I should not be infuriated by the colossal waste of tax dollars that pay for the bloated salaries, pensions and other benefits that go to a fire department that should in reality be about 1/2 the size it actually is.
My new thinking on how the Govt will respond: it will recognize the crisis, claim that its the result of the mortgage interest tax deduction (in part) and also no capital gains taxes, eliminate the deductions (double win - therefore collecting more tax AND “addressing the problem”), and then this will create a second boom for those “rushing” to get in before the new policy takes effect (because they’ll have some sort of grandfathering clause). Thoughts?
They’re gonna have to raise revenue somehow. When you’ve spent every last penny to your name and then borrow until the cows come home, reality hits. Getting rid of cap gains is a good start.
The IRS is already taking a closer look at mortgage deduction:
http://bricksandsticks.wordpress.com/2006/10/31/irs-examines-popular-real-estate-write-offs/#more-211
(can’t remember tags for linkage: SORRY)
I agree that local/state governments, especially here in FL, where property taxes pay the bills, are going to get a rude awakening soon. We’ve seen plenty of “public servant” raises, more landscaping in public projects, new roads, new libraries, etc., etc. as a result of increased tax revenue stemming from the property value boom and the increase in purchase transactions. As home and lan valuations start slumping, homeowners successfully lobby for lower assessments, and transaction taxes fall, governments are going to be forced to tighten their belts. It’ll take time, but I think that will be a key story/development in 2007 and 2008.
http://interestrateroundup.blogspot.com/
This is one of those dirty little secrets that nobody wants to talk about.
“it’s an ownership society”
it still is but the bank owns your house! way back, plantation owners owned the slaves. most people only think positive things about living in an “ownership society.” Wal-mart is another example since they force small businesses out and “become the owner” of the marketplace.
And if you’re free and clear from the bank, the government still owns your house.
That’s right. It is an ownership society but nobody said that you would be the owner!!! Its a cookbook! Bwahahaha!!
“who” not “you”
to serve man….lol
That’s one of my favorite Twilight Zones.
And 2005 is one of my least favorite twilight zones.;)
I am extremely frustrated by the government’s response to this crisis. I most certainly don’t want to come off as a whining Realtor looking for sympathy. That is not the case. But many good agents will be financially affected by this for years. I hope somehow we can get Tallahassee or Washington’s ear before it is too late for many small business owners.’
Here it comes. Next thing you know they’ll be asking to get paid not to sell, just like farmers get paid not to farm. A large part of this bubble was fed by deregulation of the mortgage industry (both government deregulation, and the dropping of internal standards within the industry), and, of course, by cheap money from the fed. Both of those were cheerleaded by the real estate industry. I have a hard time feeling sorry for them now.
I doubt it will play. Greenspan didn’t care about retail daytraders and the Fed is not concerned with pissant realtors and “investors” - especially with all the fraud hitting the news now.
“But many good agents will be financially affected by this for years”
And think about their poor clients that got hustled into over priced homes with really bad ARM loans that will reset at double the mortgage payment? Can’t worry about these “suckers’ only about the “good agents” who represented them. Boo! Yah!
AMEN! They onlt care about #1!
*only
“‘Five years from now, the discussion is going to be about all those $700,000 and $800,000 condos downtown that you can buy for $300,000,’ he said.”
-
Uh…. try about $150,000. And I may be a little generous, there. Condos are supposed to be entry-level airboxes for people that can’t afford single family housing. They should be priced for the bottom end buyer.
Good point, Mozo.
The dot.com run up was based on the perception that consumers and businesses would change their buying and business habits very rapidly and adopt the new technology. It would only work if there was overwhelming faith that the ‘new economic reality’ hype was for real. In reality, people are slow to change their ways.
Buying $700,000k condos requires the same leap of faith: that urban cores would be safe, walkable, lively places, with all the amenities. In short, a great change from the reality of where these dot.condos are being built. Cities are slow to change their ways.
Condos are purchased apartments, and therefore should have purchase value slightly more than the rental value of a similar apartment. With mortgage and fees at 2x, 3x, 4x rent, the market gets distorted. Over time distortions get worn down.
Especially considering that some of the sh!t they were peddling earlier this year **used to be apartments** in the first place.
“Jeanne Gavish…the housing market would soon come back to life. …‘It’s just that we had this great expectation of selling in a heartbeat and we can’t believe we’ve found ourselves in a market that’s bottomed out.’”
They’re all still in the DENIAL phase! What they don’t understand is that the longer they take to accept the new reality the worse things will get.
What really gets me is that the realtors and sellers are in a room full of newly rational actors and don’t understand why they cannot get the respect they deserve.
http://tinyurl.com/tbcuu
“…[seller's agents] don’t understand why they cannot get the respect they deserve.”
Some don’t deserve the respect they get. As a seller’s agent in addition to performing a broad market analysis you are also responsible for performing a client analysis. It’s obvious the sellers want some profit but want a rapid exit even more based on the following, “…When she was asked when she needed to sell the house, Earlene Young had a ready answer: ‘Three months ago.’”
The seller’s agent here of course has not done her due diligence and is dragging her feet based on the following, ““But she isn’t ready to drop the price of the Youngs’ house. They bought it for $145,000. Their asking price of $229,000 is still valid, Gavish said, based on recent sales in Wellington and the added benefit of being on a cul-de-sac….”
No wonder the NAR fears losing listing market share to Auctions, FSBOs, and other competitors and as a result botched its ‘great time to buy or sell campaign.’ Some of their agents don’t understand their role in fulfilling seller needs. Heck, they can’t even identify what the seller wants. That’s why the NAR is saying it is a good time to buy ‘and sell.’ They are afraid sellers, like the lady in Michigan who took the auction route, are going to take their business elsewhere.
P.S.,
As you can see based on this thread, sellers are doing some whacky things to drive sales as a result of poor agent performance such as essay contests, auctions, and offering boats with their homes. Some sellers are really desperate to sell but they are not entirely willing to cut prices yet, however. As a result, homebuilders will continue to maintain the upper hand in this market environment b/c they are willing and able to cut prices.
Isn’t this possibly illegal? These sellers are trying to raise money with a lottery. I don’t see why it matters that the prize is a house vs. 600K in cash. The state has a monopoly on lotteries.
Private businesses can get away with this (Publisher’s clearinghouse, McDonalds prizes) only by allowing you a chance to win without making a purchase. Charging $100 for entry -thats a lottery.
Also, what if the winner of the essay contest turns out to be one of their relatives? There are reasons stuff like this is regulated.
I thought that if you gave something to a winner who paid for a ticket, it was called a “raffle.” There are raffles for stuff, including nice cars, all the time. But I don’t know if it’s a requirement that the item be raffled by a registered non-profit.
Oh, good point. Probably the only way they could do it in would be to set up some sort of charity, but even then they’d draw attention from the state.
I was gonna post that if a raffle were such a good idea, why don’t we see more of them.
State governments hate competition when it comes to running games of chance with strongly negative expected values, that’s for sure.
I don’t know if it is illegal to offer a contest per se but you raise some serious doubts that this one is legal. As you suggest, it is a rather ’subjective awarding’ process unlike a lottery where everyone knows the outcome is random.
There is no question that its illegal. A private individual may not run a lottery for personal profit in any state in the union. Period.
If you “win” this house, wouldn’t your a** be on the line for 33 % in taxes, just like if you won the lottery?
The seller’s agent does not want to drop the price because she owns a few houses in the neighborhood that she invested in. She doesn’t want the comps lowered to kill her equity. Once she sells her investment properties, she will be glad to lower the price.
Good point Tom. “Conflict of interest” seems to be the rule and not the exception among all the players in the RE game at this point in the cycle.
“The seller’s agent does not want to drop the price because she owns a few houses in the neighborhood….”
Oh boy, Tom. You opened a can of worms with your observation. Not only is there a conflict in price maintenance, there is also a conflict in product presentation preference; the agent has an interest in presenting and selling her homes above the client’s. An attorney specializing in agency law could easily make a case against the agent in question for lack of performance.
jesus, if these people were held to any kind of fiduciary standard they would all be in jail.
Tom, I never thought about this but I put your theory to test on a recent home I saw here in Bradenton where the seller is trying to pull a ‘double’ on a house bought in 2004 for $240k (now listed at $480k). Other similar houses in the neighborhood are priced and have sold for more than $120k less. I looked up the Realtor in the property records and guess what?? She owns a vacant house a couple blocks away!!!
(my best Geraldine voice) “Not uh, honey, you’re not even CLOSE to this bottom.”(/Geraldine) Somewhat ironic since it’s FLIP Wilson.
Here come da judge(ment)!
Okay, you guys are pretty good/funny.
“Who wants to buy at the bottom of the market..?” I thought that buying at the bottom is the correct strategy. However, unfortunately for RE agents and their selling customers, we are no where near the bottom, especially in FL. The bottom won’t come just by waiting, it will require big cuts in prices. I guess another issue is that we will need to bounce around near the bottom for several quarters and for the inventory to decline considerably before the bottom buyers start to deal.
Not so fast! Another “expert” has declared it is over:
http://www.sun-sentinel.com/business/local/sfl-ybrealpo06nov06,0,7965793.column?coll=sfla-business-front
“I think you’ve seen the majority of the pullback,” said Brian Tonry, vice president of McGraw-Hill Construction. The company is a division of the McGraw-Hill Cos., the New York-based global information services provider.
Dave — where in North GA are you?
Dahlonega
I’ve been looking for a retirement place in NW Georgia that is not likely to be overrun with yankees. Everything farther east from you seems to be. Do you have good medical care there? Also thought about Rome and some of the smaller cities in between.
From the linked article:
“Basically, in 2008 things will start to uptick,” he said. “We’ll see some single-digit growth in the latter part of 2008 into 2009.”
Uh, 2008 is over a year away, and 2009 is like saying 2050.
Can we say that “$229,000 is still valid” in 2008? The Youngs’ needed to sell their home “three months ago.” Will they maintain their 229k price for another 14 months? Will/can all the other sellers wait 14 or 18 months to sell their houses?
The advice is worth what you paid for it. No, I take that back. Heeding that advice will cost you a bundle.
‘It’s just that we had this great expectation of selling in a heartbeat and we can’t believe we’ve found ourselves in a market that’s bottomed out.’”
Ha! If they think they’ve seen “bottomed out” yet, they’ve still got a few delusions to work out of their system!
If by “bottomed out” they mean “several years to go before bottoming out” then the market has “bottomed out”.
If by “bottomed out” they mean “several years to go before bottoming out” then the market has “bottomed out”.
I was considering that “bottoming out” may only occur when the banks dictate: when they don’t repurchase the property at auctions and let the true market bear out the pricing, when foreclosure properties start showing firesale price cuts, when fraud in the system starts looking like a detriment to their business model instead of a cost of doing business.
I understand in the early 90s in the most distressed markets, the banks did just that. They stopped repoing houses because they already had too many of them on their hands. The occupants generally became squatters, which was great for a few months until the sheriff came a-callin’.
Bottomed already? Whew! Glad that’s over with. Just in time for the snowbird buyers to push prices back up. Right…..?
“They are soliciting 6,000, 250-word entries on the subject — ‘I believe you should give me your home because …’ Each entry is $100 so they stand to make about $600,000 which would cover the appraised price of their home as well as the cost of advertising and running the contest.”
What if they don’t get 6,000 entries? What if they only get a couple hundred?
“What if they don’t get 6,000 entries? What if they only get a couple hundred?”
I don’t know but the could sell “movie rights.” at least there is one concept for a movie about the housing bubble that ends happy for someone.
I was wondering how the builders were making out with “keeping the deposits” since they pay for the discount to the next buyer…
“What if they don’t get 6,000 entries? What if they only get a couple hundred?”
Or what if they get 20,000 entries? Let’s see, if you figure maybe 3 minutes to read each one, that’d be 1,000 hours, or the equivalent of 6 months of full-time work to sell your house. Yep, that’s a good idea. Even if they just get 6,000, that’s still about a months-worth of full-time work to sell your house.
And that’s not including the time spent addressing the multiple lawsuits they’ll probably get from people who claim they had a better essay, or that their essay wasn’t read, etc.
Yep, that’s a good idea.
I wonder what the legal ramifications are to this raffle? If they only get 200 entries, are they still obligated to give the house to the winner? If that obligation isn’t in writing, then they’re lucky if they get 10 suckers to send in entries.
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they’ll never get 600 entries and the contest will ultimately be canceled.
Gekko posts “they’ll never get 600 entries and the contest will ultimately be canceled.”
I agree and they know, there are not 6,000 people that can write 250 words in Floridia…..LOL….Maybe 6,000 can make thier mark or sign thier name….LOL.LOL
I bet they can spell “their”.
And Florida….:-)
AEN you have identified the problem in their grand scheme!
Well they can write about the best way to dress up the property out front like:, Making a planter out of an old toilet, stacking newspapers on top of the car on blocks, tying a pitbull to the tree etc….
I just can’t imagine how much worse it can get! Our phones have been dead for the past couple weeks, just like they always are between Thanksgiving and New Year’s. If it is like this now, I can’t imagine how it will be in the first quarter.’
Can’t imagine it getting worse? Oh boy… it will. It might be Florida, but its time to cue the tumbleweed!
The ongoing depression in the real estate market has transformed the lives of brokers and agents, said Gavish, the former president of the Hernando County Association of Realtors. Many of Gavish’s own investment properties have lingered on the market without buyers or renters. Attendance in a beginning real estate class at her Nature Coast Real Estate School ‘dropped off a cliff’ in February, she said.”
Awww… the flips aren’t selling, commisions are low, and her real estate school has run out of new Cassey’s.
This is before MBS buyers get spooked. Imagine after that… at Gekko noted before, this will be the first national real estate downturn with a national mortgage market. So Florida going down is going to impact every other state.
Interesting times…
Neil
“When Jan and Barbara Mueller put their 2,700-square-foot coach home in Mediterra on sale for $970,000, it didn’t move for months. So they took it off the market. Now it is back on the market for $840,000. But this time the home, which sits near the Lee-Collier county line, has been staged by a professional.”
Can’t be all that bad. It looks like they are still making a profit on the property, since they paid $718K:
Date Book - Page Amount
10/02 3128-554 $718,000.00
However, they did refinance it for $637K in 2005.
Mtg Recording Date: 08/17/2005 Mtg Loan Type: CONV
Mtg Document #: 3869-2431 Mtg Rate Type: ADJ
Document Type: MORTGAGE
Lender: COUNTRYWIDE BK Mtg Term: 30 YEARS
Loan Amount: $637,500 Mtg Rate: 1
But that was the same month they bought another property in the same subdivision, for $3 Million.
Recording/Sale Date: 08/19/2005 / 08/18/2005
1st Mtg Amount/Type: $2,152,500 / CONV
Sale Price: $3,075,000
1st Mtg Int. Rate/Type: 5.17 / ADJ
1st Mtg Document #: 3872-162
Document #: 3872-160
Deed Type: WARRANTY DEED
Price Per SqFt: $521.72
Nice adjustable on that $2M mortgage. They probably put the condo on the market the day after they got the refinance, and bought the $3M house. That has been 15 months.
Anyone feel pity for them?
Nice research!
Nice very hungry alligator. Pardon me if I refuse to believe a couple that was living in a condo can suddenly afford to live in a $3M+home. Oh, I see the $1M down payment. I’m thinking windfall (e.g., inheritance). Most of it plowed into the McMansion. Oh, some would have been left asside. Since used for vacations, furniture, parities (you’re not anyone without at least a dozen caterers… Yes, I’ve seen this attitude!), and paying both mortgages.
This new economic model should prove interesting. I’m betting they lose both homes in 2008.
Neil
Quotable
“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
_____________________________________________________
What about this crap you guys were spouting you big cry babies! Suck it up and learn the phrase “You want fries with that”!
There is a small amount of truth in that quote. Hardly anyone is alive today, that can remember Florida in 1926 during the run up. Or the bust.
History sure does rhyme. http://xroads.virginia.edu/~HYPER/ALLEN/ch11.html
Jim - great piece of Florida history. Hadn’t realized that Sanford was ever notable for anything except being a car-train terminus. When I was in high school in Orlando, kids from Sanford seemed as if they were from a different state.
So funny, I was at Davis Islands yesterday. It’s still a piece of Tampa paradise but also has history in the first housing bust.
1926, The Florida housing bubble bust. 1929, The stock market bubble bust.
2000, The stock market bubble bust. 2006, The housing bubble bust.
The housing and stock market busts seem to go together, happening not too many years apart from each other.
The idea that car and mall-dependent city like Tampa was going to possess a “vibrant downtown core” was and is a delusion. Now what we have is an overly-congested Potemkin village. I’m not going to deny that Channelside looks better, simply because apartment towers, even partially occupied, look nicer than warehouses and adult video stores. But with all the construction and stoplights it now takes fifteen minutes to get off Harbour Island.
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Rate of Return Calculator
Start Amount $145,000
End Amount $229,000
Years 5
Rate 9.57%
Isn’t this misleading since you are including all of the costs including the cost of the mortgage, taxes, etc?
this is not really a return calc. it’s their expected level of annual appreciation based on their list price vs. what they paid and # of years.
“In another instance, stager Sarah Stickney bought a $225,000 boat that will be given away with the house. In that house, the main focus was the back patio. ‘It’s what the house is all about so we emphasized that and put the boat in the back to really draw attention to it,’ Stickney said.”
1. Sarah did not buy the boat. The new owner is “buying” it.
2. The house is “all about” the deck? What’s wrong with the rest of it? Is the house so bad that you want to keep buyers from looking at it, by distracting them to the deck with a shiny boat?
3. If she whacked $250,000 off the price, wouldn’t that work better? The new owner could buy their own boat. Or better yet, save $30,000 year in interest, taxes, and insurance, based on a lower assessment….
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No. The boat is more “creative”. Realtwores get paid to be “creative”. Cutting the price $250K would make too much sense and be to “easy”. Real Estate is an art, not a science. (Apparently).
How could I have been so silly….
Plus, the RE agent effectively gets a 6% commission on the boat. Probably more than the boat salesman got!
There is going to be a helluva deal on boats in Florida in a couple more years.
You can live in your boat, but you can’t sail your house.
HA!
Your quote and comments truly reflect the reality detachment enveloping this market and seller expectations. Is the seller offering a boat, house, lifestyle, or a unique combination of all three? Is this what most buyers want or is the seller appealing to a much smaller group of potential buyers as a result of the ‘unique’ boat/deck offer?
Sure — it’s a “$225,000″ boat. riiiiiiiiiiight. I guarantee she didn’t pay anything near $225k for a depreciating asset that not everyone wants like a boat. Would love to know the real details on that. what a load.
I once got a advertising post card from a local attorney that was pretty humorous. It said that the three worst things that can happen to you are: contract a fatal disease, be named in a lawsuit, and buying a boat. If the lawsuit part had happened to you, then call their office. So true about the boat. Like RVs, most people wind up using them once or twice, and then sell at a big loss a few years later. These realtors are really freaking stupid. A $225K boat? That would have to be a pretty impressive vessel.
High end boat sales have been through the roof for the last 7 or 8 years. Friends of the family make boats down in Australia and times have been good. But they know a downturn is coming.
And modern boats last. Thirty or forty years. These aren’t those old wood Cris crafts that are useless after five years of being ignored.
CA guy is right, boats hold horrible resale. Let us pretend it was purchased for $225K. The second it was driven out of the vendors slip it was a $175K boat (just like a car, you lose 20% driving it off the lot). Most boats lose 30% to 50% by year 3. Then, like cars, depreciation slows but doesn’t stop. Oh, I’m sure someone will point out a historic or collectable boat. But I can point out hundreds of collectable cars; the exception, not the rule.
This is yet another hungry alligator.
Neil
The boat might be useful to escape a hurricane when the house is underwater.
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the old adage goes, “If it floats, flies, or f**ks, RENT it.” it’s cheaper.
I’ll have to remember that. It may be my new mantra. Thanks.
Perhaps the boat hasn’t been “purchased” yet. My guess is the boat dealer is a friend, desperate for a sale as well. Thus, the boat parked at her house on “consignment.” Assuming the house sells at her asking price (which it won’t), then she would then pay the boat dealer his agreed selling price for the boat.
An “A” for originality, “F” for realistic sales technique.
I found a shirt on the internet that says “If it flies, floats, or f**ks you are better off renting it”. Couldn’t help but get a chuckle. I’ll wear that shirt and go look at her house.
And: The two happiest days for a boat owner are the day he buys and the day he sells his boat.
why not 10000 contestants? you are missing cool 1 mil there…
I still can’t get over the fact that so many people believe that we are going return to a ‘normal’ market without a major correction. For five years there has been a run up in prices that was crazy. Everyone thought this is nuts, how can prices jump 20% per year? Now that we have come over the top, they think, “Well.. I guess that’s all over with now. It looks like it’s time to get back to normal with growth rate of 2 or 3% per year”. Like what do they think has happened here? Do they really think a downward 10% correction will offset a 50-100% increase? What are they thinking?
Apparently not everyone believes we are returning to a ‘normal’ market without a major correction. Check out the WSJ Opinion piece I just posted to the bits bucket for evidence the WSJ editors think otherwise.
Gordo — that’s the part that makes me chuckle. Seems like virtually all sellers think they can keep all the marbles and we’ll just start over from there. Three years ago, I hadn’t given much thought to renting. Two years ago, I figured we’d rent for one year, two max. One year ago, I starting thinking, maybe three. Now, as my CDs bring in 5.5% and the interest comes close to paying the rent, my time-to-buy horizon has turned to mush. I think there are many, many sellers who do not reckon with how satisfied a lot of renters are with their costs versus owning, and it is getting no air time at all.
“Great crowd, this place is hopping. Wow, great light show. Whadaya mean, that’s not part of the act. Cr@p, where are the exits! Why are all these people in my way! Fire hot.”
OT, Imploder …Sorry if I offended you yesterday . It was really just a little joke that I thought that you would be amused by , but I guess I was wrong .Poor joke on my part imploder .But it was true when I said I thought you were a interesting person .
Man oh man, Florida is toast. I am a native and am so glad we are headed back to the day. I suspect I will die in about the same climate I was born into. Small towns and few people.
Back in the day we all knew one another and we waved hello when driving down the street. We had very little other than each other and our communities. We depended on each other. Nothing like a leveling of the world at large to bring folks back to their roots.
The coming nightmare will undoubtedly knock the self righteous wind out of a lot of people and perhaps bring us back to the really important aspect of life.
There are no atheists in battle.
Agreed. But between now and then there’s an ocean of pain.
(For the literary purists out there, the quote is: “There are no athiests in foxholes”… but the point is the same)
woops.
‘atheists’ (sp)
I know the quote but I am a former Marine and we call them fighting holes. Used battle as a generic.
Fighting holes. Ooh-rah. The most uncomfortable night of my life was spent in one at Mt. Fuji Japan.
Let this RE madness end. Our society has only further eroded because of this housing greed. Chris’ rant below is awesome. This blog is a great place of refuge for me. Nice to know there are a few sane people left.
Semper Fi- My worst was 77 days in a little hamlet named Khe Sanh with about 40,000 NVA wanting my hole. All of um’.
Glad you made it home.
I agree with you. People are also fall less likely to screw their neighbor, co-worker, parents of kids best friend, etc. One of the issues with this whole r.e. thing has been that people have been so willing to screw each other. The real estate agents put people into homes they cant afford. The loan officers sell buyers loans they shouldn’t have. The non-local / non-community banks push the toxic loan products. Greedy sellers & homebuilders try to “get over” on unsuspsecting G.F.’s buy selling them P.O.S. homes built by illegals with sagging floors, faulty electrical and day-old fast food left in the walls before drywalling up, so there is a perpertual ant problem (sometimes even caustic materials as well).
All the while since people are so disconeected from one another, there is little consequence to screwing your fellow man. You dont have to see them in church/mosque/temple, or at the local piggly wiggly. So no one cares if they screw the person who just left their store/office. And then the realtors have the nerve to be worried about themselves, forget about all of the people the screwed, who relied upon their “expertise”.
If we all lived in smaller communities, then there might be some backlash if people screwed each other. We might still have tar & feathering and community shunning. I know its a rant, but unless we have morals instituted in our country we are in trouble. The politicians commit fraud, the Fed Res print fiat money, the news tells lies, celebrities and athlete routinely set bad examples of behavior. People flip each other off while driving, dont hold doors open, men dont stand up and offer seats to women while waiting in restaurants (and the stupid staff doesn’t say anything either). Remember “dont judge others - what is wrong for you to do may be right for them”.
As others mentioned, this place needs am enema. Rant off.
Chris, excellent rant. This is something that has been on my mind a lot. I believe globalization is a failed experiment and this housing bust is a symptom of that failed experiment. When other people are just faceless and disconnected, people don’t think of the consequences of unethical activity. But in smaller communities, it matters big time. “Don’t s**t where you eat” is a good maxim to live by”. I do see a return to localization, it will happen for survival reasons after all this shakes out. Went to a local fall festival yesterday and it was hokey, but it was fun. The best exhibit was a local family owned hydroponic farm that produces six acres of food on one acre of land. Off topic, but that’s the answer to these toxic agribusinesses that brought all the illegals, who then went into the building trades. One family can run the farm and then trade with other local families doing the same thing. It’s also a way of having a food supply in the coming financial tsunami. On topic, the festival had a slew of realtors and developers with booths pushing their crappy homes. Most of them were leaning their heads on their hands, bored s**tless. No traffic for them. I hope they can adapt their digestive systems to eat all the useless lumber, particle board and nails that will be left in the wake of the bust.
Palmetto, have you been reading Kunstler? He is of the opinion that Florida does not have a future, and at this rate I am inclined to agree with him. The entire state rapidly has become an ugly, overpriced, uninsurable concrete expanse where we all sit in traffic and wonder what the hell happened.
snake, I tend to agree with Kunstler, except I do think Florida has a little bit of a future, but its future is in its past. Back to the days of low cost living. Dime suggests letting everything overgrow, I agree. We may have a future as producers of alternative energy, solar and ethanol. Our ports will always have traffic. There will be some tourism and sporting/boating interest, but less than before. It is less attractive as a retiree haven and certainly not attractive to families. It isn’t even attractive to illegals anymore, since the bust began. The illegals here caught on real fast that the money was in building, not in picking crops. Now that that source of income has dried up, Florida is too expensive for them. There was a mass movement to Georgia, where they can get factory work and cost of living is less.
Ummm guys (I assume), since you are Floridians, can you tell me the latest news from St Joe Co. I was really ashamed of them when they dumped the paper business and went into real estate. They let all those people drop. I read an article about that in a local Port St Joe real estate newspaper called “The Coastline”. In it the writer - yes, an RE agent - said “We were sorry to see our old neighbors go, but we had new neighbors to replace them.” The whole article and the St Joe Co. thing in general has come off as a very cold, greedy, and unfeeling, enterprise that appears to be failing. They made money when they made paper. What is going on now? I just don’t hear anything about it.
Roidy
“Don’t s**t where you eat” is a good maxim to live by”
That’s what the REIC did in Florida and now they are going to pay the price with fewer and fewer sales transactions. Unfortunately, as noted in this thread, some members of the REIC don’t realize this as yet that’s why they like the NAHB are calling for government intervention.
Did you happen to catch the Sunday tribune article about the local strawberry growers??
They are afraid there isn’t enough illegal immigration to find laborers for their coming harvest.
Get that? I thought they were all doing the jobs we didn’t want to do. We won’t have lettuce. We won’t have strawberries, blah, blah, blah, without them.
Well, there’s 10’s of millions of them here. Why is there a shortage of labor for the jobs we supposedly didn’t want to do??
Rant off.
Hey, diogenes, yes, I caught the story. Just about made me toss my cookies. And I agree with Chrisusc, the illegals absolutely hate and resent Americans. They made the choice to take those jobs and lowered the wages to drive out American workers, now they want to be paid more and they unionize. I never buy the line about “doing jobs Americans won’t do”. It’s more like, “undercut the American workers, drive them out, then protest and get what the Americans had”. Let the strawberries rot.
I remember when my home town was rampaged by very large hail some years back. This brought many contractors from out of state to cash in on the hail damage repair boom that soon followed. I was at a bar and some out of state contractors walked in, talking about how great their illegal workers are for them. They repeatedly said “we pay them just as much as we pay anybody else (meaning Americans), and they do a great job.” If they knew their illegal workers where driving down everybody’s wages, they didn’t let on.
Chris — “…day-old fast food left in the walls before drywalling up, so there is a perpertual ant problem (sometimes even caustic materials as well).”
Now there is a point that is very useful to me, since it’s 50-50 that I will build when it’s time to get back into ownership. Thanks for that. I’ve seen building trash left in the walls before, but it never occurreed to me that a worker would be so irresponsible as to leave food there. Just another of many reasons why I’d pay a retired inspector to check the site daily as my quality-control type.
I have been to many a construction job site and because I am a “myati” (mostly black) and speak a little Spanish, the workers tend to talk to me. They absolutely hate gringo’s. And every chance they get they do poor work and stick it to the good ole USA because they think the southwest is theirs and want it back. This is truthful. I had a factory in Mexico.
Not all illegals are that way, but there are quite a few that feel that way. But also, I have met many a $50k to $75 gringo foreman that was rude and condescending to the illegals on the jobs sites, because they knew they could get away with it.
So if you build a home, just be polite to everyone and occaionally buy some beers for everybody and don’t have a b*tchy wife who is rude (like most of the wanna-be’s who buy Pulte/Toll Bros homes), then generally the workers won’t do a poor job.
That’s just my take for what its worth.
Beautiful.
All those FBs living in McMansionville, unaware that their house has been sabotaged by the resentful (and probably drunk) illegal construction crew.
What will Mrs. FB do when her (so she thinks) custom crafted Butler’s pantry falls apart right in front of her Thanksgiving guests…and the (temp) hired help too!
Corona = cerveza mas fina
Reminds me of a few instances:
1. Case study in college of a Ford Escort built in Hermosillo that had rattling been bottles hidden in the wheel well with a written note “You wouldn’t have found this bottle if I had been paid well”.
2. I unloaded a package of products made in Mexico once and one package had written (in Spanish)…”Long live mexico, F**k you stupid gringo”. I couldn’t help but laugh and even laughed more when my boss put it on the shelf to sell.
I’ve seen first hand the shoddy construction in Florida. I wouldn’t even want to own anything that was built en masse.
Great post, moman. I’ve known this about illegals all along, that’s why I won’t go near them for anything, or hire them. In the long run, they are FAR more costly, in terms of lousy and dangerous work, plus taxpayer funded education and health care, plus law enforcement. We can’t afford them. Right now, I can look out my window and watch the crew working for the “investor” who bought the house across the street. It’s a real scene. One guy just tripped on the cord of a saw and nearly fell off the roof. Extension cords, tools all over the place, everyone screaming at each other, wood and shingles flying. It’s an accident waiting to happen.
i don’t know… i suspect some of the smaller communities rant is false nostalgia. in any case, aside from rant about it and take those small steps reaching out to people in your own life, what can you actually do about the loss of community, real or imagined?
what about reasonable regulation in place of the tarring and the feathering?
IMO, the coming depression and peak oil will lead to some major attitude adjustments, both for people and the government.
Great post, dime. I’m with you, I want to see Florida revert to its former low key status. The only problem is, when the dust clears, we are left with ghost town developments, scarred land, half-assed development problems, etc. Let’s hope that people learned their lesson so big time, they never want to hear about Florida again.
So true Palmetto but remember this state has an amazing ability to overgrow anything in a short time. Think Aztecs and Incas.
LOL, Dime! Global warming should speed the process. I guess we do have that advantage, so perhaps Florida can heal faster from the carnage. As to Aztecs and Incas, I was thinking the same thing myself in another post, except I mentioned the Mayans.
Mounting evidence that a residential real estate credit crunch is fully underway based on the following statement, “Banks have stopped lending money for condominium projects, said Mark Huey, manager of economic development for Tampa. ‘You see that happening throughout the state and the country,’ he said.”
P.S.,
Lenders may actually be turning the screws on some condo project franchisors based on the following statement, “The J.P. King Auction Co. will auction 100 units in The Hamptons at Tampa Palms condominium conversion project. Forty of the units will sell at absolute auction, meaning they will go to the highest bidders with no minimum bid or reserve.” It’s very difficult to service debt if you are not generating revenue.
Construction financing is supposed to be temporary. Even if the builder can service the debt, the lender had to get the money back, or convert the loan into some other kind of debt.
I agree. Many of us have asking “When will we see a change in lending standards?”
It looks like the loose cannons are being tied to the deck now, for commercial lending. Residential can’t be too far behind.
I talked to a mortgage broker friend this weekend…He said lending is getting tighter, but he is still pumping out helocs.
Ellis said, ‘If you price it right, anything will sell.’
Lock this guy up! He’s dangerous!
I thought he came across rather resentful that the owners were trying to take things into their own hands and leave him out of the selling process, IMO.
I agree with you, however, he should be locked up for having rational pricing thoughts in an irrational pricing expectations world. He is as you say dangerous. The manic mob of sellers will turn on anyone who cheats them out of or does not completely fulfill their profit expectations. The manic mob is busy looking for scapegoats everywhere but the bathroom mirror.
Note to specuvestors, developers, builders, illegal immigrants in the building trade, mortgage fraudsters, FBs and all other locusts leaving Florida: DON’T LET THE DOOR HIT YA WHERE THE GOOD LORD SPLIT YA!
Slightly OT but percents are funny things. For example, I bought in Los Angles for 300,000 and sold for 800,000. Almost a 300 % increase. That same house in my opinion will be worth about 400,000 in 3 years. But that’s a 50% decrease. So, these realtors don’t have a clue. It will be 40 to 50% decreases from current prices.
We are already seeing many stories about FB that are upside down. I suspect, like many of you that this is only the beginning. What options are avalaible for this scenario.
Purchased in so Cal in 2005 for $500k, used IO loan with no down. Currently worth $450k. If sold would be $80k upside down once you factor sales fees and closing costs.
I made this scenario up, but I have been reading about many similar situations.
The only options I see are:
1) forslosure
2) suck it up and make the payments.
Believe it or not, lendors are still giving 100% loans. I close on a property I am selling next week and when I was reviewing the HUD I noticed that the buyer is getting a loan for $214,500. The sales price is $214,900 with $6k in incentives. Amazing.
In the last two busts, those who could hold on long enough and suck up the payments finally came out OK, but many just could not hold on, and this forms the above two camps.
The difference between the first and second group seems to be one of willingness to eat top ramen for ten years and work two jobs, vs the second group which was expecting an easy in and out buck.
…and the last two busts did not have everyone borrowing 10x income with zero down on upwardly adjusting ARMs. Stick a fork in them!
In another instance, stager Sarah Stickney bought a $225,000 boat that will be given away with the house. In that house, the main focus was the back patio. ‘It’s what the house is all about so we emphasized that and put the boat in the back to really draw attention to it,’ Stickney said
Sarah, how about selling the boat and throwing the house in for free. Or better yet, sell me a Big Mac and throw the other two in for free.
Palmetto, have you been reading Kunstler? He is of the opinion that Florida does not have a future, and at this rate I am inclined to agree with him. The entire state rapidly has become an ugly, overpriced, uninsurable concrete expanse where we all sit in traffic and wonder what the hell happened.
Don’t worry. Florida is already on borrowed time. In 100 years 80% of Florida will be underwater and all those condo shells will make fabulous artificial reefs for the diving industry.
I, for one, am sure not going to invest in any coastal property within 100′ of sea level or anywhere along any exposed coast.
100 horizontal feet or 100 vertical feet? 100 horizontal feet doesn’t even protect you from a Category 4 hurricane, much less global warming. And 100 vertical, as you implied, sinks most of the state.
How would you like it if this was your agent’s “plan”:
[i]Gavish, former wife of Brooksville real estate broker Jack Gavish, has several strategies to make the best of it.
She and her partner, Kerry Bullerdick, look for bargains from owners desperate to sell[/i]
Wow.
That’s the condemnation I read here (or via a link) about auctions, that many/most auctioneers pounce on every good deal for themselves and their cronies, so it is almost impossible to find a real steal, at least this early on.
Chip, I am looking for you today! I had written in several months asking about the Melbourne market. I was the one who sold a relative’s 3br/2ba home to close an estate.
I was happy with the realtor I had used in Melbourne. I asked her if she would mind if I contacted her toward the end of the year to see what was going on in the market there.
To give the background, this 1986 home with no updates was listed right after Thanksgiving for $229K. The realtor thought it would get 225. Around January, she told me the market was starting down, and now she thought it would sell for 220. I got 2 offers below $200K, then one for $215 with closing in 15 days and no home inspection. I took the $215 with no counter.
Today I emailed the realtor asking what was going in the market there. She told me nothing is selling, everything is for sale, and the estate home I sold would now be $70,000 lower than what it sold for 8 months ago. I was absolutely shocked.
Chip—you said when this was all over the house would be worth $150K. I had no idea it would get to that level so fast. It made me feel good because I wanted to do the best job I could as executor of this estate and get the most money possible for the owner’s grandchildren. I just can’t get over how much she says it would have dropped in such a short time. Chip, where do you see the Melbourne residential market going from here? I don’t have any interest in owning property in FL, but I am just following Melbourne because I have never seen anything like this in my lifetime.
no one should buy a house in melbourne for over 150,000
If you read the literature on this topic, the consensus seems to be that current warming trends could result in between a 1 meter and 9 meter rise in sea level over the next 100 years. The Greenland ice sheet alone contains enough fresh water that if melted would raise global sea levels by 23′ and the West Antarctic ice sheet contains a similar quantity of ice.
Here’s a recent article on the subject that shows some maps of what would be flooded in Florida with a 20′ rise in sea level. Basically a wide band around all the coasts and the bottom 1/4 of the state entirely.
No one is projecting 100′ rise in sea level in 100 years. But a 20′ rise in sea level combined with increasingly severe weather patterns resulting from warmer oceans would mean that the prudent planner would avoid any coastal land within 100′ of sea level. You probably don’t have to worry so much if you’re talking about inland basins that are geographically isolated from the oceans.
Oops, here’s the article
http://www.timesonline.co.uk/article/0,,2-2100776,00.html
No to worry, we can just build some levy’s. Always worked in the past.
I am extremely frustrated by the government’s response to this crisis.
LOL. What is “the government” supposed to do? Purchase the houses? These people are idiots.
Drove through the Naples/Ft. Myers area this weekend. What I saw was either alot of vacant land with a smattering of McMansions here and there, or a ton of for sale signs.
Up and down Tamiami trail there you could see large undeveloped lots. Everyone I talked to spoke about how the market is coming down. Many lamented that they are stuck in their houses, unable to sell, and no one left to sell to. In the Sunday paper, it was full of ads for HB’s offering huge incentives and $$$ off.
In seeing the area, I am amazed that there were FB’s & GF’s to run up prices to where they were. The area is nice, but not nice enough to justify the nosebleed prices of 2005.
ISTM the headline isn’t correct. Since YoY sales are down it is definitly no true that everyone is selling, merely TRYING to sell. BIG difference.
Link to article in today’s Tampa Tribune. 110 Condos on the auction block. 40 with no miniumum bid.
http://www.tbo.com/news/metro/MGBA66OF6UE.html
I’ve lived in Florida twice. Once in the late 80’s early 90’s when I went to school at FSU. The second time was when I lived in Tampa. The second time got really strange after we had been there five years. It went really crazy with all of this real estate development. North Florida is still very nice. I’ve previously posted a question: “What is the news about the St. Joe Co.?” They made the dumbest business decision to do real estate development instead of what they were really good at: paper. I know paper manufacturing is not sexy, but it is a good business. I can’t seem to find out anything about what they are doing. I’m sure it’s not good or at least I hope it’s not good. I hate dumb ideas. That business decision was a dumb idea.
Roidy
St. Joe closed up shop and got out of the real estate development business about 3 months ago.
Really? Are they back to making paper?
Roidy