“Sellers Adrift In A Sea Of Properties For Sale”: Florida
The Orlando Sentinel reports from Florida. “Resales in the core Orlando market fell 34 percent in November to 1,597 homes compared with a year earlier, the Orlando Regional Realtor Association reported Tuesday. It was the largest year-over-year percentage decline so far in 2006.”
“Sellers, adrift in a sea of properties for sale, are feeling the pressure. ‘There’s a lot of competition out there,’ said George Martinez, who has been trying to sell his southeast Orange County condo unit without success for several months. ‘I can’t even find a renter, and I’ve been doing a lot of advertising.’”
“Orlando-area condo sales are now dropping even faster than single-family sales, down 44 percent in November from a year earlier, and the number that sold last month (245) was dwarfed by the Realtors’ 3,483 active listings. And that doesn’t include for-sale-by-owner deals such as Martinez’s.”
“The inventory of single-family homes listed by Realtors in the core Orlando market, 21,122, represented more than 13 months’ worth of homes at the current pace of sales, the most in nearly 11 years.”
“‘With inventory at an all-time high and interest rates at an all-time low, the present is a unique opportunity for buyers to find the home of their dreams under economic conditions that are unlikely to be replicated,’ says ORRA President Randy Martin. ‘The latest economic forecasts suggest that the real estate market correction is coming to an end and that home prices will not be going any lower.’”
The Daily Record. “University of North Florida real estate professor Sid Rosenberg says the Jacksonville area real estate market will rebound from anything resembling a bubble. ‘Compared to other markets in Florida, it is a lot healthier. However, we are fooling ourselves if we don’t think there’s been a slowdown,’ he said.”
“In June, the median home price in Jacksonville peaked at just over $213,000. Since then, it has fallen steadily and stood at about $197,000 as of October.”
“Rosenberg says the median home price needs to drop about another 15 percent. That would make the local median home price about $165,000. ‘A lot of people keep asking prices [that are] too high,’ he said. ‘This is normal. Some will drop their prices, and we will see slowing depreciation. Housing prices right now are about 13 percent too high.’”
The Sun Sentinel. “The worst of the U.S. housing slump is over, according to the National Association of Realtors, but some analysts in South Florida are more skeptical.”
“Analyst Mike Larson in Jupiter said he expects people to put their homes back on the market after the holidays, creating more of a glut. As a result, prices will continue to fall.”
“‘A peak in supply and a bottoming in prices? I don’t think we’re there yet,’ Larson said. ‘I think we’re looking at a relatively weak 2007 market.’”
“‘Three to five years may pass before housing starts and home sales return to their peaks,’ said John Lonski, chief economist for Moody’s Investors Service. Sales of existing homes probably will sink 7 or 8 percent in 2007, compared with this year and new home sales may fall 9 or 10 percent, he said.”
“West Palm Beach housing analyst Brad Hunter said short-term investors who bought at the height of the boom in 2005 might have to sell at a loss. If those sellers lower their asking prices, more sales will occur, helping the South Florida market rebound, Hunter said. ‘But people have been stubborn,’ he said.”
‘A peak in supply and a bottoming in prices?’
Some credit to the reporter for picking up on this.
it’s all about psychology now. falling prices will not bring people in until homes are cheaper. people won’t want to buy when they thing prices are going to fall.
From the WSJ today:
First-Timers Begin Looking At Houses Again
Lower Prices, Mortgage Rates
Lure Buyers Off the Sidelines;
Special Offers in Tampa, Fla.
By RUTH SIMON
The Wall Street Journal
December 13, 2006; Page D1
High home prices have helped drive many first-time buyers out of the housing market. Now, with prices falling in many areas, there are some signs that buyers are beginning to drift back.
“Now, with prices falling in many areas, there are some signs that buyers are beginning to drift back.”
Step right up, folks, and catch your falling knife here…
Ask those folks in Garden Grove about this…
I liked the part about the banker guy in Apollo Beach who paid $163,000 for a townhome.
I hope he works in that area. There is NOTHING, I repeat NOTHING around there except trailers, a dirty coal power plant, and a dirt racetrack where the rednecks congregate on Friday nights to see demolition derbys. (side note, is it derbys or derbies?, I’ll stick to derbys)
Someone caught a falling knife.
crispy & cole,
Garden Grove?
Try this:
http://www.ocregister.com/ocregister/money/housing/article_1381194.php
crispy & cole,
Oh…… that Garden Grove. She paid 870K for that? Uh honey the 70K the builder knocked off is the least of your worries! When I was in the service in Long Beach, CA most of the locals called it “Garbage Grove”? It’s that “roof farm” of the 405 before you get to John Wayne Airport right?
This is something I am now expecting, falling knife catchers. I recently met someone in their early 30s who is just bursting with desire to buy their first home. They are aware prices are falling, and they are aware inventory continues to build even if the winter stats do not show it. They know that speculators and marginal buyers abound. They know that down cycles do not end after 6 months, but after years. Still, they are chomping at the bit, saying that they might jump on a builder’s markdowns next year. The desire to “own” is simply too great for them. I did not know what to say, just kept my mouth shut. You can’t help these people, they want to get cut it seems.
south florida is still in denial. they is a low level revolt against insurance compaines, but it wont make houses sell any faster. people i know are begging to down size, in order to afford insurance and taxes. yet, last year the palmbeachpost said that 91% of south florida residents cant afford housing with a traditional 30 year loan with no money down. it wont be until the end of 2007 when you will finally hear the word “reality” when it comes to the housing crisis in south florida. everyone here still want to play rich but not pay rich and just cant face up to losing. remember when everyone in south florida said, price will never drop!
=)
“everyone here still want to play rich but not pay rich”
there’s some good catchphrases on this blog…I like that one and the “fake it before you make it” line.
appropriate
‘Fake it before you make it.’ True. You talking about the American Way.
It cracks me up to hear people talk about a “rebound” in the housing market. One question: At RECORD homeownership in this country, who and still sky high prices, who is left to feul this rebound? Or did the economists miss that one in class?
^LOL
Yes they did. The class they missed was the rentor who DO buy into the bubble hype.
dukes: you pretty much nailed it there. This is my most commonly used argument. As DinOR said once, the housing industry has pulled their book forward. The supply of buyers is exhausted. It is truly amazing that people cannot grasp this concept. Even when prices start falling in larger numbers, it will still take years to get back to market equilibrium. See you at the bottom!
CA Guy,
Well thanks for giving me credit there but it’s really something every sales person should have been taught in “month 2″! It’s not that radical a concept. I’ve known so many guys that went “all out” to win some kind of stupid sales contest and when they get back from Aruba, guess what? Tapped out.
I too am surprised, no shocked by the amazing predictions of an almost immediate turn around! HARM has done some research on peak to trough scenarios and the average is (.6) Meaning a 10 year bull run will take (on avg.) 6 years to revert to the mean. And we’re hearing this coming spring?
Right, so tell us NAR which is it? How can 2006 be the second best year ever and buyers be waiting for prices to drop? Sounds to me like they expect the record number of buyers every year now.
the NAR needs mental help. what I really hate is the whole mantra about “there is plenty to choose from and interest rates are still low.” that’s great, if you have billions, the problem is homes are not affordable. that’s the only thing that matters.
“the problem is homes are not affordable.”
That’s the only thing that matters in a declining market.
In an advancing market people don’t care what the price is because they know in 1 year it will be worth more then they originally paid.
shadash,
Good point. The perspective of buyers (for at least the last five years if not the last 15) has been focused on the “obvious” increase in price. Like any belief, it goes from being an opinion to “fact” over time.
Now that “fact” is being questioned by reality. Will it morph back to a mere opinion as prices drop? I can’t see how it won’t as bad news travels fast. When someone you know loses their job, does it NOT affect your perspective? Well how is it going to be different when stories proliferate about “normal” people losing their homes?
Now the fact may be that these “normal” people took extraordinary risks but that will not be easily discerned whether by friends or the public at large, will it? All people will see is someone like themselves getting blown up.
When and if this happens on a large enough scale I can’t see how it can’t destroy the myth that real estate “always” goes up. I think the myth was dented in the 90s but not destroyed due to the fact that it was mostly developers who were flattened and not individual homeowners (for the most part).
This time its going to be very, very personal and I don’t see how this huge emotional shift that should ensue will be overcome by anything economic much less by further “cheerleading” on the part of the NAR.
jag,
Excellent points. Somehow over the last several years rank and file American’s personal credit has become the pool of investment capital that in the past was provided directly to the builders through banks or hard money lenders. This kept the risk with those that best understood it and could take the hit. With the explosion in “2nd/vacation home” sales this is going to hit A LOT closer to home!
Americans have a love/hate relationship w/banks. We hate to have to jump through hoops to borrow the money but we love it when we see them take it in the shorts! Well, NOW who’s takin’ it in the shorts?
“that’s the only thing that matters.”
I respectfully disagree. Record for-sale inventories and falling prices also matter.
Add the ‘depleted buyer pool’ to the list as well. If one million homes dropped 50% in price, and the 500k fence sitters snatched them up, what happens to the rest, half price or not?
They don’t need mental help. They’re fine.
What people have to realize is that industry organizations like the NAR are not meant to provide the public with accurate information. They exist in order to disseminate propaganda that is helpful for their business. In this case, they are trying to create a spring rally because they know their business depends on it, and because they realize that without their propaganda, there may be no spring rally.
Here’s a helpful image: The next time you encounter publicity from an industry organization, think of the tobacco industry propaganda that smoking does not cause cancer. Do you really think that this type of dishonesty is not common in other industries?
Annata,
This has been the topic of much debate over at patrick.net. My take (FWIW) is that NAR crossed the line a long time ago. Saying it’s a great time to buy or sell a toaster or Chevy is one thing. They’re not investments. Once you cross the line and couch your product as an investment there’s a whole new level of scrutiny and regulation. Right now they’re having their cake and eating it too. Was it the Honorable Oliver Wendell Holmes that once said, “Why is it every time I ask baseball team owners a business question, I get a “spirit of the game” answer. When I ask them about the “spirit of the game” question I get a “business” answer?”
Right now the NAR lobby is enjoying this kind of a relationship w/Capitol Hill. Every time we ask them about affordable shelter we’re told it’s a hardball RE market. When we ask them hardball questions, well….. they’re just making an honest buck providing affordable shelter!
“‘Three to five years may pass before housing starts and home sales return to their peaks,’ said John Lonski, chief economist for Moody’s Investors Service. Sales of existing homes probably will sink 7 or 8 percent in 2007, compared with this year and new home sales may fall 9 or 10 percent, he said.”
Ouch… current prices certainly won’t hold unter a sales decline.
Although, I’m not the man from Moody’s, I expect a sharper drop in sales rate. Not a halt, but the failure of the subprime market is going to have a marked impact. The credit tightening… is almost here.
Neil
Neil - I’m beginning to come around to your (and others) view that the collapse of the housing market will be from the lenders side. More specifically, the biggest pool of buyers (particularly first-time buyers) are financially marginal at best, and rely on the subprime lenders. As the subprime lenders implode, that will take out most of the potential buyers. So while the desire to buy a house may exist (at a lower level than before), the ability to purchase will be non existant for a great number of people. And of course, the inventory will keep piling up.
CincyDad — keep in mind also that the long-long-term historic leve of ownership was about 63% and now is right at 70%. I believe it likely that most if not all of those additional 7% will give up ownership, adding further to inventory. Ugly all round.
This reminds me exactly of those infamous rah-rah quotes from the high and mighty during the 1929 crash.
“There will be no interruption of our permanent prosperity.”
- Myron E. Forbes, President, Pierce Arrow Motor Car Co., January 12, 1928
“There may be a recession in stock prices, but not anything in the nature of a crash.”
- Irving Fisher, leading U.S. economist , New York Times, Sept. 5, 1929
“Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months.”
- Irving Fisher, Ph.D. in economics, Oct. 17, 1929
“This crash is not going to have much effect on business.”
- Arthur Reynolds, Chairman of Continental Illinois Bank of Chicago, October 24, 1929
“This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan… that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years.”
- R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929
“… a serious depression seems improbable; [we expect] recovery of business next spring, with further improvement in the fall.”
- HES, November 10, 1929
“The spring of 1930 marks the end of a period of grave concern…American business is steadily coming back to a normal level of prosperity.”
- Julius Barnes, head of Hoover’s National Business Survey Conference, Mar 16, 1930
Anything sound like what the Real Estate talking heads are spewing out now?
“Home sales are coming down from the mountain peak, but they will level out at a high plateau — a plateau that is higher than previous peaks in the housing cycle.”
- David Lereah, Chief Economist, National Association of Realtors
“It’s impossible for prices to go down this year.”
- Gary Watts, Spokesman Orange Country Association of Realtors
“I don’t worry about new home sales,”
- James Glassman, JP Morgan Chase Economist
“There is no national housing market, so there can’t be a national house-price bubble.”
- Michael Youngblood, Managing Director, Friedman Billings Ramsey & Co
“If you own your own home free and clear, people will often refer to you as a fool. All that money sitting there, doing nothing.”
- Anthony Hsieh, CEO Lending Tree
“I think investors will have a good reason to come out here and buy again.”
- Jeromith Sutton, 2006, NAR Investment Advisor
“We’re now in the ‘middle innings’ of the current economic expansion, and the next economic recession is not yet in sight.”
- David Seiders, Chief Economist, National Association of Home Builders, Jan 2006
These quotes are amazing. Do you have a collection of these quotes? Can you put dates on the undated real estate quotes?
‘The latest economic forecasts suggest that the real estate market correction is coming to an end and that home prices will not be going any lower.’”
Are these guys all related?
If the outlook is so rosy, then why did the Fed just add the word “substantial” to their statement of concern about the housing situation?
Did you ask if they were all related or all retarded?
The former not the latter. I don’t want to offend the innocent folks who are mentally impaired by lumping them together with a bunch of realty shills :>
And lawyers around here (nyc) still don’t get it. I am deseperate for a job, and i must have contacted close to 40 in just the past 2 weeks asking them to retrain me as a paralegal for foreclosure work, and they all say we just dont have the business….. yet when they get swamped they wont have any time to train anyone.
That doesn’t surprise me for NYC. Move to Colorado, Vegas, or California. Preferably Colorado; it’s cheaper.
Texas. If you can move, email me off line and I can direct you toward possible employers.
gymnastgal32 at yahoo dot com
If you’ve got the skills and the demand is there; make money now and setup a better situation for the future.
Temp relocate to where the demand is highest….CO
Keep your contacts open and current in NYC
When the worm turns in the City, be ready to head back quickly….but on YOUR terms. If they have an urgent need and there’s no time to train someone, you’ll be in a much stronger position……
In confusion, there is profit.
so how does one get schooling to become a foreclosure paralegal?
Whats great is people don’t realize what the effect of declining sales numbers have on the value.
See, your property is worth 750K$ unfortunatly you can’t sell it.
Ahhh….
Eventually, he’ll be responsible for making full payments of $6,000 a month, he said, adding, “I don’t know how we’ll be able to pay that.”
“It’s not just the financial aspect. It’s the emotional,” Dunn said. “We can’t eat, can’t sleep. I can’t concentrate on work. This is all I think about.”
______________________
Too bad call David Lie-reah and cry on his shoulder!
Wrong spot - this was a bits bucket.
Nothing wrong with a good OT commercial during a thread.
Would this guy be giving money back to the builder if the home increased in value??
“Now, he says, his home is worth less than he owes, making it next to impossible to refinance before his $3,000-a-month payment doubles”.
I like how someone has injured them if the re-fi scheme they envisioned is no longer available due to prices failing to increase. I might be able to dredge up a little sympathy for the home value decline, but you should have had a plan for making the 6k payment when you bought the place.
jumping it ?
I bought LU at 20 couldn’t go any lower than that
No relief for those ARMs yet - latest LIBOR rates (although HFA claims they mean nothing):
LIBOR 1 month 5.35
LIBOR 2 months 5.35
LIBOR 3 months 5.36
LIBOR 6 months 5.35438
Add a spread of 200 to 350 bps…
And the recent strong economic numbers are making all the forwards go up.
“University of North Florida real estate professor Sid Rosenberg ”
Is this a Florida thing? I went to a real school and we didn’t have a “Real Estate Professor”
One of the best real estate departments is at the university of florida. The degree is “real estate and urban land studies”. They also have a very good degree in urban planning.
Yeah, so far so good down there….
Jim, the University of Phoenix is not a real school. Sorry to break it to you.
Easy there junior. When I went to school Al Gore hadn’t invented the internet yet!
Neither is the “University” of North Florida.
One of THE biggest scams to rip off the middle and lower classes.
Nothing wrong with UNF. It and UWF (West Florida) aren’t as well known as USF (South Florida) and UCF (Central Florida), but they are all good schools in their own right. USF & UCF are on par with UF & FSU, they just don’t have the heritage since they were both started in the 1950s.
Jim: not many universities have RE/urban land programs, but many of the better ones do. Here in CA, Berkeley and USC immediately spring to mind. I think it is a relevant topic of study. The problem now is that those in the industry seem to have forgotten their fundamentals. Kind of like Wall Street! That being said, there is alot of evidence that many of the brightest (and richest) RE practitioners are sitting on the sidelines waiting for the inevitable. They know that an “investment” selling at 5% cap is not a bargain or wise use of their capital.
I wonder how long it will be before the average homeowner in FLA, with the heart of a Boy Scout, Looks around and finds he can buy another bigger, better cheaper home, Lower his property tax without going to the board hat in hand, and then sends his old home back to the bank.
Sounds like a recipe for a Seminar.
builderboy,
Oddly enough many people seem to have been able to figure that out all on their own. In ways it really is instinctive. When we were kids throwing our own party, if it turned out to be a dud we’d just pack up and head to where a better party was goin’ on. You know, as in their folks won’t be back until AFTER the weekend? It’s just human nature really. I helped a buddy by cold calling some FB’s (mostly for a goof and market research really) and I came across several people that said, “You don’t get it do you mister, I don’t care if the “old” house goes back to the bank or even if I have a foreclosure on my credit report. I’ve now got a better, bigger home w/a lower payment and lower taxes!”
“Analyst Mike Larson in Jupiter said he expects people to put their homes back on the market after the holidays, creating more of a glut. As a result, prices will continue to fall.”
Who is Mike Larson and why is he saying something that makes sense?
He is quoted down here constantly in the PB Post, he is out of Jupiter (up the street from Palm Beach), and runs an investment group (I think). They do market research. He puts out some great quotes, and stuff that people really need to hear down here!
However, I find him just a bit bullish, thinking that we only have another year or so of downturn. That said; he seems to have an excellent grasp of the market, much better then my own, so maybe I should start listening to him!
Do a search of “Weiss Resarch”.. I am pretty sure that’s the name of his company.
Yep, I recognize Larson’s name as well, even out here in the other land of insanity, CA. It is odd, these bearish forecasters calling for only a year or two of downturn. I figure they know what is really on the horizon, you just have to read between the lines. Kind of like the Fed. Still, it irks me that more don’t say what is truly on their minds.
Here’s Mike’s blog site, though it’s not a “make a comment” one:
http://interestrateroundup.blogspot.com/
IMO, he does very good research and analysis.
i agree!!
very good blog!!
he also is writing for “money and markets”
OK tx everybody!
From Ownit website:
A final thanks and God Bless… blah blah blah. Now about the expenses:
FAQ’s
1) Is the company filing a bankruptcy?
Unknown.
2) Will we be reimbursed for outstanding expense?
Unknown.
3) Will AE’s be paid thru November??
Unknown.
Remember, folks… this is owned by Dallas Capital. Seems to me that there’s an argument for “piercing the corporate veil.”
“God Bless” my ass, hypocrite!