“It’s No Longer Business As Usual” In Florida
The Tampa Tribune reports from Florida. “J.P. King, the real estate auction house known for selling off luxury properties across the country, is gearing up to sell 100 condominiums this weekend in Tampa, and is predicting many more condo auctions in Florida next year.”
“‘Frankly, they overbuilt the market,’ he said. As a result, many developers now have surplus condominium units that they couldn’t sell, he said. The Hamptons auction ‘is the first of a lot of what you’re going to see in 2007,’ he said. ‘There will be more in Florida probably than anywhere else.’”
“Of the 100 units Bay Communities will auction off, 40 will have no reserve price, which means there’s no minimum price for bidders. The Hamptons has sold only about 56 units, which means about 260 remain on the market.”
“Carter said developers must cover taxes, interest and maintenance costs on unsold properties, which is a strong incentive to sell them off. ‘When you factor in getting out from under those carrying costs, you probably come out ahead,’ he said.”
“Some previous buyers say they’ve encountered unexpected liens and unpaid bills at The Hamptons. Nancy Alexander said she was looking for a little extra income a year ago when she bought two condominiums there. Instead, she said, she found unpaid tax bills, a growing list of liens, and the kinds of hassles she hasn’t seen before in her 20 years as a local real estate broker and investor.”
“Complications continue to mount, and bills and liens keep arriving, she said. ‘We still hate going to the mail,’ she said.”
The Herald Tribune. “As soon as Barbara Anson realized last summer that the market for raw land in the Myakka City area was dead, she called her clients and told them to slash prices.”
“‘People had to realize that the bubble had burst,’ said Anson. ‘If they wanted to sell, they needed to lower their prices.’”
“And not just by a little bit. ‘Prices have to come down to where they were five years ago,’ Anson said. ‘Five-acre parcels that were selling for $250,000 to $300,000 should now be priced at $130,000 to $150,000. Ten-acre parcels that were selling to $300,000 should now be $195,000 to $180,000.’”
“Anson ‘is one of a handful of very sharp Realtors who has been forward thinking,’ consultant Jack McCabe said. ‘No matter how many Realtors say that this is a great time to buy, buyers are more savvy now. They understand that it doesn’t make sense to buy into a falling market.’”
“Anson realizes that her conclusions about the market are not popular among fellow real estate agents, but she sees no other way to jump start the market. ‘Prices were 150 percent overvalued during the boom,’ she said.”
“Some observers think that the developer proposing one of the region’s largest retail destinations for Jones Loop Road, are banking on some dramatic demographic changes in southern Charlotte County that are by no means guaranteed.”
“West Palm Beach builder Syd Kitson’s giant Babcock Ranch proposal (is) expected to add another 50,000 households to the area around the Charlotte-Lee county line.”
“The customers that The Wilder Cos. is banking on are younger, wealthier and much more active than exist today. ‘They are not building to meet today’s needs, but what they expect to be tomorrow’s demands,’ Scott said. ‘They are expecting large numbers of baby boomers, many of which who will be coming into quite a bit of money.’”
From TC Palm. “KB Home’s Treasure Coast division had its second round of layoffs in less than six months and may be closing its Vero Beach design center on State Road 60.”
“Bill Glynn, a Realtor in Vero Beach, said through his contacts he learned KB Home will lay off up to 900 employees statewide. ‘I think they did away with a lot of their support staff in Brevard, St. Lucie and Indian River,’ Glynn said. ‘That’s what these big builders do when things slowdown, they lay off people.’”
“Don Santos, past president of the Treasure Coast Builders Association, said said another indicator the home building giant could be leaving the Treasure Coast is the unloading of vast parcels in Port St. Lucie.”
“Edie Ousley, spokeswoman for the Tallahassee-based Florida Home Builders Association, said, ‘There are a lot of layoffs in residential construction right now,’ Ousley said. ‘We soared to unsustainable highs in 2005 and now we’re experiencing a downward correction.’”
“Ousley added that she’s concerned Florida’s economy could suffer if the market continued to slump. ‘Construction is Florida’s second largest economic engine and we need this industry to thrive,’ Ousley said.”
The Florida Times Union. “In the wake of fewer home sales and increasing inventory, local home builders and Realtors are arming themselves with a weapon they hope will help turn the tide in the local market: Information.”
“Most speakers at the seminar hit the audience with a similar message: ‘Now is a great time to buy.’”
“Home building consultant Charlie Clark cited unrealistic expectations among sellers as one of the reasons the number of home sales has slowed in the past year. ‘Just because they think their home is worth something, it doesn’t mean somebody else does,’ he said.”
“Evidence of the strength in Jacksonville’s market seems to not be reaching home builders’ sales people, said Clockwork Marketing president Maxine McBride. When asked by mystery shoppers if it was a good time to buy, sales associates tended to cite strong incentives given by builders rather than strong aspects of the market, she said, emphasizing the need for builders to get the message across on the ground level.”
“‘It’s no longer business as usual,’ she said. ‘People want a magic bullet, but there is none.’”
‘Palm Beach County commissioners decided Tuesday that $1.5 million was too much to pay a group of well-connected developers for a 10-acre vacant tract on Northlake Boulevard. McCarty questioned the appraisal’s validity. ‘I think the taxpayers are getting hosed here,’ she said.’
‘On one side of Miami-Dade’s real-estate slowdown are thousands of vacant condominiums and town houses, built or converted from apartments during the exuberant boom and now draining developers’ cash flow one month at a time.’
‘On another side are thousands of teachers, police officers, nurses and other middle-class workers, waiting for prices to fall a little bit more. The outgoing chairman of the County Commission wants to bring them together by having developers sell empty condos at a discount to first-time buyers who qualify for county subsidies.’
‘Visitation to the theme park capitol that underpins Florida’s multibillion-dollar industry seems to be sputtering. The area has seen double-digit declines in September and October hotel occupancy, according to Smith Travel Research. It ranked worst in year-to-date occupancy decline among the company’s top 25 U.S. destinations (excluding Las Vegas), with a 4.6 percent drop so far.’
‘Visitors to all areas of Florida are down so far in 2006, which could give the state its first year-to-year drop since the Sept. 11 terrorist attacks. Orlando occupancy has been down each month in 2006 over the same periods in 2005 except April, when it was up 10 percent. But no declines were as dramatic as the 10 point September drop and 13 percent October dip.’
WOW…
“Anson realizes that her conclusions about the market are not popular among fellow real estate agents, but she sees no other way to jump start the market. ‘Prices were 150 percent overvalued during the boom,’ she said.”
Try getting that out of an Realtor in SoCal!!!
Got a new post up…
SoCalMtgGuy
http://www.housingbubblecasualty.com
This is what we have all been waiting for someone in the REIC to openly admit: The actual worth is 40% of current “wishing price”. Keep that in mind when you’re considering making an offer. 150% overvalued means a 60% haircut.
2000 prices, now that’s what I’m talking about! And even then, there’s still problems in Florida. Has to fall even further to compensate for the insane insurance. I was talking to a friend last night that the only way to buy in Florida right now is to pay cash for solidly built home, make it as hurricane proof as possible and go bare when it comes to insurance, setting aside some money for storm repairs.
Absolutely. You’re better of spending the money on homeowners insurance instead to storm-proof your home - strong window shutters, bracing, a generator and a serious water pump. You can only do that of course if you own the home outright. I figure about 4-5 more years of price declines and a couple of bad hurricanes and I’ll be able to get one pretty cheap.
That’s what I’m thinking, packman. Screw this insurance stuff. It’s blackmail.
Even if you have insurance, just try to get your claim fairly adjudicated anyway.
txchick, pssst. Palatka! Or Putnam County in general, if you don’t mind being inland.
January 2, I’m on a plane. As much as I hate it, I have to get serious about finding something.
Check out http://www.realestatedecline.com
“Fort Myers-Cape Coral median price falls by $196,000K”
The median in Ft. Myers was never close to what they say it was. Before the hurricanes hit last year, the median was about $290K. October was a brief anomoly of $322K, not $445. Their data is incorrect. See:
http://media.living.net/statistics/2005/october2005.pdf
(from the FAR’s own website)
Someone goofed with the numbers, and everyone’s playing it up to be a huge decline in values, and it’s not. There is truly a decline, but it’s only about 15% (about 290k to about 250k) not 44%.
Single-month YoY stats are misleading for small areas like single cities, due to the small sample size. For small sample-size areas, you have to average things out over a several-month period to get the true picture. In this case though someone just fudged the numbers for October.
SoCalMtgGuy, good post on your blog. The part where you quote Michael W. Perry (IndyMac Bank) having stated: “We have created an enormous amount of wealth for Americans”, makes we want to puke. What people like Perry have done is facilitate a giant Ponzi like scheme that has merely assisted the TRANSFER of wealth from poor saps that were conned into paying too high of a price for houses to those that sold it too them, or idiots who were stupid enought to try and jump on the gravy train of speculative investing at the wrong time. There simply is no free lunch. If someone is getting rich, someone else is getting screwed! BTW…from you comments on the Army-Navy game, I guess you are former Navy from San Diego. I’m a former SWO myself and was afforded the opportunity to watch the San Diego housing cycle(s) play themselves out since 1984. I’m waiting to see how far prices will retreat this time. If they do it soon enough I may return.
I think real estate bubbles and busts are business as usual in Florida.
Hotels numbers being down could be there weren’t all the evacuations into hotels because of multiple hurricanes - so last year the hotels filled up in October because of a hurricane - I know I went to a timeshare during October because of the one going across the state and out through Indian River County
“The outgoing chairman of the County Commission wants to bring them together by having developers sell empty condos at a discount to first-time buyers who qualify for county subsidies.”
How can it be a discount if the they are providing county subsidies? Sounds like the ‘outgoing’ chairman is trying help his developer buddies unload overpriced units and stick the taxpayers with the bill. Of course he’s just trying to help those poor policemen, firefighters and nurses….
“Sounds like the ‘outgoing’ chairman is trying help his developer buddies unload overpriced units and stick the taxpayers with the bill.”
Sure does.
AAAAAAAAAGH !!! Keep prices artificially high, and use government money (aka - everyone’s money) to help bail out developers, AND probably still end up putting teachers, cops and firefighters in condos that are too expensive for them.
If developers (by lower prices) and mortgage companies (by lower rates or fees) and real estate folks (by kicking back a point or two of commission) want to help subsidize these folks — that’s fine. Because they are the folks who helped create the outsize prices to start with.
They say it’s subsidies for the public servants — but it’s really subsidies for the builders and developers.
Damn - this just makes me mad. And I’m no where the hell near Florida. Damn.
Zero,
Im right here if Florida. Im happy today because of the above info that my town is 150 % overpriced.
If an actual realtor here will admit this then we are one step further to getting this knotty problem corrected. I will grant you it’s a small step.
But it is a needed step.
You all have got it right.
The City of Miami has been sending fllyers to employees about the same subject.
How does a new employee earning in the 30’s afford a 300 k condo?
Yeah buddy they sure are helping the employees.
Also interesting to note that the Commisioner , Martinez was given FREE work on building his new home and a very “special” price for the land as well. Guess who “helped” him? The same local developers and builders that come before the commision!
No conflict there huh?
county workers are closer to God and deserve mo free sht
Auction question -are the sellers coughing up 10% !!! ???
wow that’s insane
useless county workers need more incentives to laze around! viva la america…
In miami, that is cubana empire.
Anyone know what Lee County vacant lots go for, particularly Cape Coral?
nyc-is-different,
Don’t even bother coming down here. Prices are crashing fast and for sale signs everywhere.
Yes, for God’s sake will everyone stop trying to build their Florida Dream Home and buy something we’ve already got?
No, my wife and I “own” (outright if you exclude the lease to the Lee County accessor) a couple of adjacent lots there and we’re trying to decide whether to cash out or hold for a rebound (probably 20 years).
One of the bigger developers in SoCal is starting to get rid of more people and I heard they may be closing another office. I also heard they closed another office a few months ago. This was a place who was willing to just throw money around to get projects done during the boom.
But then all the smaller projects that we have at work through private developers are still going strong, just not as many as a year ago.
Does anyone have data on what going on with the other businesses associated to developers? Such as my field Civil Engr, or Architects or anything like that?
The price that developed land will sell for has been declining sharply. The price to develop land has not changed much. So of course most of the total price change for residental housing is reflected in the price for raw land. But it’s even worse than that. In a declining market, the developer is buying undeveloped land based on the expected price for developed residental property a year or more in the future. After all, if you buy a house that declines in value 5%, at least you’ve gotten to live there for a year. You have received SOME benefit for your carrying costs and depreciation. A builder receives NOTHING (except possibly a deposit) until the building is finished and sold.
And of course in the face of a vast oversupply of housing, you DON’T need an industry to create more housing. It constitutes a “misallocation of resources.” It is an industry with a fair amount of fixed costs, and it’s much more efficient to slowly and continously build houses to meet demand. A boom-bust cycle in inefficient. But given that we’ve just had an incredible boom and supplies are high, cranking out more housing is not what Fla needs. It NEEDS a bust to match the boom.
Exactly, Jim. We do need a bust to match the boom and we’ll get it. In a way, I admire the sheer stubbornness of the sellers in the face of the inevitable. However, given that many homes were sold with little or no money down and then values fall below what the house is worth, what other choice do some sellers have but to hold on as long as possible and then walk away? When that happens, it goes back to the bank or HUD or whatever. If you check HUD prices for their Florida repos, those are pretty ridiculous, too.
I agree also. Florida needs a bust to “cleanse” it of the toxic increases.
Good one, Captain Jack. Maybe we should call it “The Great Florida Housing Enema”.
Wow. How long have I been reading this blog and waiting for a “real-estate professional” to say that?
Now, when *all* of the “real estate professionals” start saying that… then what?
“Now, when *all* of the “real estate professionals” start saying that… then what?”
Look out belowwwwwwwwww!
I think it’s smart business. You simply acknowledge reality when all your colleagues are guilding the lily and thereby cement your reputation as a straight shooter.
She better be looking behind her back or the cult members might….
Charlie Clark said …
“‘Just because they think their home is worth something ,it doesn’t mean somebody else does ,he said .’”
Boy, we have come a long way from “Buy now or you will be priced out forever .”
The interesting thing about that is that new houses built on that new cheap land are going to cost a lot less because land is a major portion of the cost of a house. So that means that builders will drop prices even further, further undercutting the market !
This is a vicious circle going DOWN.
There’s a reason why income is distributed very unequally among real estate agents. Most of the money is made by a relatively small population of agents. My guess is that this agent is part of that small population.
The incentive to increase the number of transactions is much larger than the incentive to increase the dollar amount of each transaction. The successful agents know this and act accordingly.
“Some previous buyers say they’ve encountered unexpected liens and unpaid bills at The Hamptons. Nancy Alexander said she was looking for a little extra income a year ago when she bought two condominiums there. Instead, she said, she found unpaid tax bills, a growing list of liens, and the kinds of hassles she hasn’t seen before in her 20 years as a local real estate broker and investor.”
“Complications continue to mount, and bills and liens keep arriving, she said. ‘We still hate going to the mail,’ she said.
Sounds like a job for the NRT… oh boy, this is getting interesting. Those unpaid liens can really clog up the market.
Neil
Neil,
I never thought of it that way! My mom worked for title co’s for years and now that you mention it she said they were an administrative nightmare!
The other quote I liked was the one from a Mr. Carter where he talks about:
“When you factor in getting out from under those carrying costs, you probably come out ahead” Really? No kidding! Ohhhhh! He means “you probably come out ahead” AFTER the builder/promoter has stiffed every sub contractor that had anything to do w/the project? Seriously, this is how these guys think.
OT Perhaps someone could verify this comment. I believe that the continuing reference to “drinking the Kool Aid” is based on the book “The Electric Kool Aid Acid Test” by Ken Kesey. Those that are trying to suggest this has as its roots Jim Jones, I believe are missing the point.
wiki says “The American phrase drink the Kool-Aid, meaning “to become a firm believer in something; to accept an argument or philosophy wholeheartedly or blindly”,[6] is a product of the Jonestown massacre, despite the fact that the beverage consumed by the Jonestowners was actually Flavor Aid. ”
http://en.wikipedia.org/wiki/Jonestown
I think the Cool Aid thing started at Apple. I think Jobs was behind it.
Know why there wern’t many good jokes about the mass suicide @ the Jonestown temple in Guyana, almost 30 years ago?
The punchline was too long~
g-r-o-a-n.
Ouchie!
I think the inventories peaked about few months ago. Now the inventories are heading south. Pricing will stabilize next and we will have a stable housing market. If you are renting now and want to own a house, this is a good time. I am not real estate developer or agent. Just my two cents.
Larry - keep reading this blog. You will find compelling data suggesting otherwise.
And how many “investment” properties do you “own,” Lar?
Not a good time in Florida, regardless of inventory. Too many problems with taxes and insurance, not enough wage income to support the prices.
I talked to an old acquaintance in Sarasota yesterday, and he said prices are down about 20%. He was envious that we sold and moved when we did (May 2005). But it wasn’t awareness of the bubble, it was the hurricanes that drove our decision.
20% ain’t nearly enough.
I have little doubt that “Larry” is the infamous Larry Nusbaum, Phoenix AZ real estate investor extraordinaire, who regularly infects Barry Ritholtz’s blog, shamelessly plugs his “How to Become a Millionaire” book, and is known to go to bed every night with a Kool-Aid IV drip.
Larry’s favorite hobby is putting his foot to the necks of “bitter renters”.
Larry, did I summarize accurately?
Larry inventories are shrinking because people are taking their houses off the market for the holidays and to wait until spring. It is a normal seasonal reduction.
Another way of measuring the reality of a situation on the ground, in addition to UHaul rates coming in state and going out of state, is to look at bed and mattress sales. There are some really GREAT deals available. They can’t move the inventory.
And, what pray tell, is so special about the spring of ‘07?
This is a joke, right? If not, I think we have our first post from David Lereah.
Please give your background and resume so we can deduce whether you know something and your credibility level. And yes, I will be glad to publicize mine.
You’ve got to admit, Larry certainly got our attention. LOL!
Hey, Larry, what were you predicting Jan 1, 2006 as to what real estate would do for the year 2006? Curious minds want to know?
Whew! Glad thats over!
If you read the rest of the Sarasota Herald article, you will find so many great qoutes! It was a breath of fresh air. FINALLY! ACCEPTANCE!!!!
Here’s a great qoute from Anson,”Every five years there’s a cycle in real estate. We were at the top and riding high 18 months ago. I made some sellers millionaires, and the boom didn’t hurt me either”. Finally a realtor tells the truth! I know who’s going to represent me when I finally do purchase a home!
Another great qoute from that article is from Jack McCabe. McCabe says”The faster real estate agents and their clients come to the conclusion that Florida real estate prices need to come down, the faster the recovery can begin”. AMEN!!!!!
Anson and McCabe need to come to South Shore Tampa Bay and given seminars for the local firms, like Beggins (love the name, so apt for the bust) Realty (C-21). Talk about a bunch of cheerleaders.
guys guess what I got a new job………….check this out you guys might want to try it out of you have a few mins to research it. Just click on the link and click to the left of the screen under nationwide career opportunities.
Just disregard the main part of the page.
https://www.sebringcapital.com/
good luck
LOL. Too bad I never want a Hummer — bet there will be a lot of fairly new ones for sale soon.
I watch the number of listings in the Gainesville and Ocala area. The Gainesville MLS had around 1,300 single family and attached units listed in January 2006. Today that number is around 2,700. This number has been steady for several month now. However, this is due mostly to expired listings vs. new listings. I expect a huge increase in the Spring which will finally cause a price correction in a locat market that is considered “balloon proof” due to the University of Florida and large government employment. Old Gainesville people know better. The early 80’s hammered local real estate developers.
Palmetto,
I happen to like Beggins, but I live on the beach near Tampa so maybe these realtors act differently than the ones in Tampa.
After the former president, Jim Beggins was published a couple of times in the St. Pete Times we exchanged emails, and I separately hooked up with one of their agents. I made an offer of $110K on a house listed at $197.5K based on market rents and historical appreciation through a Beggins realtor… Guess what, they refused my offer and upped their asking price to $250K. Beggins let them out of their contract because they realized it was a waste of their time.
That Jim Beggins guy turned his company over to his son; I believe his name is Craig. Jim does the weekly training seminars for their agents to help them open the eyes of sellers and get them more realistic. He publishes a newsletter that actually has some truth and reality in it.
I think they have 260 agents or something crazy so I would expect experiences to differ…
Bryan, I think you are right about regional differences in groups of agents. Although I’ve never had an actual transaction with a Beggins agent, I did have a pre-listing consultation with one a few years back. Useless. A year before the peak of the boom, a Beggins agent put a home three houses down the block from us under contract at an unheard of (at the time) price for the neighborhood and walked around distributing doorknockers proclaiming the price. I’ll never forget the image, she had a helmet of stiff short blond hair and one of those high, large, proud behinds that paraded through the streets of the neighborhood swaying all over the place like a conquering army. I will admit, the price got my attention. After the deal closed, the house went immediately on the market again for another $25,000.00 more. Ultimately, this led to my decision to sell, so I will give Beggins props for that.
In the late fall of 2005, when I started on this blog, I ran into another Beggins agent who looked very much like the one I described earlier, at a local Circle K. This was when the market started to tank. This agent had a real pushn’shove attitude, so I asked pleasantly “How’s business?”. She bared her teeth at me and gave me a snile (cross between snarl and smile) and muttered “Fantastic”, which I knew was BS, because I had just spoken to an old hand who was retiring from the business and knew this market like the back of her hand. Shortly after that, Craig Beggins published one of his newsletters about market expectations in the local weekly paper. Maybe you’ve been reading different newsletters, but I found his “editorial” to be one of those soft-landing PR type deals without much reality to it. But I also understood that since they sold so much real estate around here and rode the boom up, a dose of actual reality would probably cause a riot by those to whom they’d sold at the peak.
Bryan, to give Beggins some more props, they do train their agents very well, from what I’ve heard. They must be doing something right, because they have a LOT of agents, more than any other firm around here. They are also extremely aggressive, which is good for their clients. But I think they really did cheerlead a lot during the boom and contributed to the unrealistic expectations around here and I don’t feel they’ve given their clients a dose of the kind of reality they should be giving, like Anson is. South Shore Tampa Bay is burnt toast. It used to be a semi-rural, low expense, slow sort of place with fairly good access to Tampa. The sort of development that has taken place around here is criminal and to the degree that Beggins was cheerleading the boom around here, I’m not fond of them. And I wonder what they are going to ultimately say to the people they sold houses to at the peak and who are now underwater with payments, taxes and insurance.
Glynn said. ‘That’s what these big builders do when things slowdown, they lay off people.’”
Doesn’t the term ‘lay-off’ imply temporary; these sheep have done been sheared and are on their way to the packing plant.
> Doesn’t the term ‘lay-off’ imply temporary
Not in my ears. Temporary lay-offs have been replaced more and more with final lay-offs in corporate America. Here in the Twin cities, workers at the Ford plant are laid-off in masses, and their jobs ain’t coming back. If, on the other hand, someone is fired, I assume a cause.
Sorry for the repost but I couldn’t resist….
Premonitions of a bubble on the verge of popping do not ruffle those who are bullish on real estate. In Miami, Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors, predicted that a limited supply of land coupled with demand from baby boomers and foreigners would prolong the boom indefinitely.
“South Florida,” he said, “is working off of a totally new economic model than any of us have ever experienced in the past.”
http://www.nytimes.com/2005/03/25/business/25boom.html?ex=1269406800en=b316d38e6ef945a0ei=5088partner=rssnyt
Thanks for the smile (again)!
“I just don’t think we have what it takes to prick the bubble,” said Diane C. Swonk, chief economist at Mesirow Financial in Chicago, who was an optimist during the 90’s. “I don’t think prices are going to fall, and I don’t think they’re even going to be flat.”
And furthermore…
“I just don’t think we have what it takes to prick the bubble,” said Diane C. Swonk, chief economist at Mesirow Financial in Chicago, who was an optimist during the 90’s. “I don’t think prices are going to fall, and I don’t think they’re even going to be flat.”
I know what I’m going to say isn’t going to be popular but here goes .
Realtors should not make any predictions about prices going up or down . There is a clause in most Realtor “Codes Of Ethics’ that discourage making future predictions because of the panic selling/buying aspect of it . That is what makes the last 5 years of up market predictions so unacceptable by the Cheerleaders .
While in alot of cases being positive is considered “sales puff “,the outright National Campaign by the NAR/CAR etc. to promote that “real estate always goes up “, was a very questionable activity .This is especially true since people relied on that self-serving sale ploy to the point of mania on a National level .
If your a realtor and you have clients you have to be very careful about what you say to you clients . Realtors would be better off just showing the property .
Back to the subject of insurance, I just told my insurance agent to drop my coverage here in the Tampa area (12 miles inland). I’m incensed by having to pay a fee to citizens insurance on my State farm bill. In effect all homeowners are being required to subsidize the insurance for some of the wealthiest homeowners in Florida. (Those using Citizens mostly have very pricey waterfront properties) . Plus the wind coverage went up $2,000.
I’ll put some money away each month for repairs if a storm hits.
One problem for anyone thinking of doing the same thing is that the insurance companies are prevented by law from selling you fire and theft insurance if you don’t have wind coverage. So if you don’t want to pay the high wind coverage cost you have to go bare on all coverage. Talk about unintended consequences.
I think this will happen more and more as the cost of subsidizing some people who live in bad areas or who have bought badly constructed buildings gets passed onto others. People will then start looking to buy outside of flood zones, buy something built out of quality materials instead of fake stucco and wallboard, and maybe even buy real shutters instead of fake plastic ones. And then put the money they save on insurance into their own bank account to take care of them if things go bad.
eyeknow, that’s fantastic. I’m assuming you don’t have a mortgage and can do this. It is a huge step, and I thank you for giving us the heads up. I did hear something about insurance being offered in the future that doesn’t include wind coverage. It is one of the solutions being bandied about.
I disagree. It wasn’t “questionable” for realtors to flog the “RE always goes up” it was downright unethical.
I do agree all realtors should do is show the property, but also a) qualify buyers ability to pay for a property b) make an effort to understand the primary needs of a buyer and match them with appropriate properties.
A good real estate broker should no more “ethically” sell an inappropriate property as a stockbroker should sell an inappropriate investment. Why they aren’t regulated (to some extent) in this regard as are brokers I don’t understand. Stockbrokers (and their firms) are exposed to legal actions when they put, say, older people or less wealthy people in historically riskier investments. Heck, if anything a better case can be made for holding real estate brokers accountible for “appropriate” transactions given the fact that so much of a person’s financial well being is exposed in these deals.
Frankly, the more I think about it, the more outrageous it is. A higher standard for stockbrokers (who rarely totally expose clients to a single asset category risk) than for real estate brokers who OFTEN expose people to complete financial ruin.
I agree and I like your post even better jag than mine because what you say is so right on . The NAR turned into a cheerleading group with a bunch of cult followers that pushed it into a National mania . it was just ….so wrong….
“Comment by palmetto
2006-12-07 11:08:50
eyeknow, that’s fantastic. I’m assuming you don’t have a mortgage and can do this. It is a huge step, and I thank you for giving us the heads up. I did hear something about insurance being offered in the future that doesn’t include wind coverage. It is one of the solutions being bandied about. ”
Correct, if you have a mortgage the terms of the mortgage will require that you provide proof of insurance.
I can’t blame the mortgage companies for that, but it does meen that the insurance companies have a lot of leverage over you. Guess that’s why States try and regulate the price.
It is all financial, they feed off each other, mortgage and insurance industries. There are a number of groups, like Homeowners Against Citizens, who are trying to get the lawmakers to change things, but no luck so far, just higher insurance bills. There needs to be a mass mortgage riot, where enough homeowners make offers to their mortgage companies that they will continue to pay the mortgage, but not the insurance. If enough do it, the banks have to cave. After all, better to keep getting a payment than face mass foreclosures.