A Shortage Of Future Buyers, “And The Future Is Here”
The Naples News reports from Florida. “Two sales have been successfully completed since an Oct. 21 Naples residential real estate auction. The first house at 1430 Crayton Road sold to a Minnesota company for $660,000, according to records from the Collier County property appraiser’s office.”
“The market value of the Crayton Road house and land is listed as $788,257.”
“Announcement of Drake’s auction caused a stir two months ago. Some real estate professionals complained that there was no minimum bid requirement, and, for that reason, Naples Area Board of Realtors would not include the listings at the group’s Web site. Drake originally listed 51 properties, only 45 of which attracted bids.”
From Florida Today. “Brevard County’s housing market continued to be in the doldrums in November, according to the latest statistics from the Home Builders & Contractors Association of Brevard. The number of housing construction permits issued countywide in November was 235, down from 613 permits in November 2005.”
“‘It’s been pretty serious. It’s going to get a little bit more serious before it gets better,’ said Franck Kaiser, the association’s CEO.”
“How serious is it? The number of mortgage foreclosures in Brevard County has increased in recent months as housing prices have fallen and sales have slowed since last year, according to Kaiser and others in the local real estate industry. In places such as Palm Bay, ‘For Rent’ signs have become a somewhat common sight in front of homes.”
“A lot of it stems from investors who bought homes last year — when prices peaked, and they haven’t been able to sell at a profit, or even break even. ‘They can’t carry all that debt,’ Kaiser said. ‘They can’t make the payments.’”
“‘We’ve seen a spike in foreclosures,’ said Sue Pierce, owner and principal broker at Integrity Home Loans in Melbourne. ‘I just saw a foreclosures list with about 200 people on it from the Palm Bay area. A lot of them are investors’ who are stuck in the market. ‘Usually, you’ll see only a handful of names,’ Pierce said.”
“In Brevard County, the median sales price of an existing single-family home in October was $212,400, down 11 percent from $238,200 in October 2005.”
“Condominium prices dropped to a median of $179,000 in October, down 17 percent from $214,400 in October 2005, according to the latest statistics from the Florida Association of Realtors.”
The Gainesville Sun from Florida. “Gainesville home prices are the fifth-fastest growing in the nation, according to a list appearing on CNNMoney.com Wednesday. However, Carol Bosshardt of Bosshardt Realty said a lot of ’sales’ in 2006 were closings of sales made in 2005 when the market was stronger. ‘A lot of it is artificial,’ she said of the increase.”
“The increase is puzzling, Bosshardt said, because there is more supply than demand.”
“Deborah Minck, president of the Gainesville-Alachua County Association of Realtors, said she hopes the news will counter what she called negative and misleading press about a housing bust. That made people hesitant to buy, she said. At the same time, sellers responding to 2004-05 demand have created a large inventory of houses on the Gainesville market.”
“Despite the slowdown, she said 2006 will still be the third-best year on record.”
“(Realtor) Carolyn Quinones expressed surprise that Gainesville was in the top 5, but said that may have as much to do with a slowing national market as increases in Gainesville. ‘What I have heard in the past is that we tend to be behind the national curve by a couple months, maybe a couple years,’ she said.”
“The value of vacant land also continues to increase tremendously ‘because we just don’t have anymore of it,’ she said.”
The News & Observer from North Carolina. “Sales of existing homes declined for the second consecutive month in November, further weakening the Triangle’s most important industry.”
“Brokers closed on 5.5 percent fewer homes last month compared with a year ago in Wake, Durham, Orange and Johnston counties. The inventory of unsold homes rose 5.1 percent and the number of sellers scaling back asking prices jumped 11 percent, according to the Triangle MLS.”
“The $9.3 billion industry, which provides thousands of jobs, has been pinched by fewer numbers of transplanted buyers, who had helped drive the market to records in the past two years.”
“‘Now that we’ve seen a second month of similar data, this confirms where we are heading,’ Moody’s.com economist Michael Helmar said. ‘The forces pulling the nation down will pull Raleigh and Durham down, just not as low. Slower job growth, spent up demand for housing and higher adjustable rate mortgages will impact your area.’”
“Hundreds of sellers are slicing prices to sell homes. There were 3,650 homes with reduced prices on the market in November, or 35 percent of all listings.”
“Many brokers say they are losing sales because buyers can’t close on their homes in other parts of the country. ‘My agents say their clients tell them ‘we’ll do something after … my home out of town sells,’ said (broker) George Pittman. But ‘well-priced houses are still selling in this market.’”
“Glen Astolfi, COO for Cary’s DNJ Mortgage, said higher adjustable rates slowed sales. In 2004, adjustable mortgages with rates as low as 3.75 percent comprised 40 percent of his company’s loans. Now the lowest rate is 5.5 percent and adjustable mortgages comprise only 10 percent of his company’s loans.”
“Years of inviting interest rates encouraged potential home buyers to move up their purchasing decisions, which means fewer buyers in the market now, experts say.”
“‘Attractive interest rates have brought a lot of what we called future buyers into the present, which creates a shortage of present buyers when we reach the future and the future is here,’ said Bernard Helm, a Rocky Mount consultant who tracks Triangle residential trends.”
Raleigh NC was one of the last bubble markets to form. It really could have had a good run with +100% price increases if they’d just got started a year or so sooner.
I do a lot of reviewing of appraisals and I can tell you that 50% of the sales I review are cheapass condo conversions with sales prices under $140,000. The iceburg effect is that under the surface are all the highpriced inventory stacking up. Noone is buying who has any other option. We are stagnating and will for a long time here in Orlando. Sellers of existing homes are now competing with a ton of new distressed housing and we all know what that means. Who wants 30 years of accumulated dust etc when you can still have that new car smell even though it is a POS?
One report this moring was a sale for $370,000 and the contract was written pre-construction for $489,000 about a year and half ago. I read the contract and it had an addendum stating that the buyer was being given a red tag sale price of $370,000. So these asses can drop a price by $120,000 and still make a profit?
I suspect that if the guy had not gotten these concessions the builder would have to eat the whole thing.
dimedropped, what does your gut tell you about the magnitude and speed of the Orlando area correction? Any feeling of how it will progress? It sounds like your finger may be closer to the pulse than many of us here in Central Florida.
BCG-I am pretty close to what is going on here as you can tell from my vocation. I have been at this for many moons and I am primarily an analyst of commercial trends with a lot of experience in residential foreclosure work. Not so much in the residential mortgage arena. However, there are immutable forces which work in all areas and the one that has always spelled doom for any real estate genre is easy or creative credit. It burned down the S&L’s in the 80’s and this current situation will definitely make that look like a picnic.
Orlando is in denial. Orlando is almost always in denial on bad news as this area has always had a huge influx of monied people from around the world dropping tons of cash here. This has been the case since the late 60’s when Disney arrived.
Frankly I think there is a Florida ethos which says, “this is so great everyone will beat a path to our door.” It has been true up until this mess. This will change our area forever and I think for the better.
In my opinion we are sitting on about 60,000 properties which are investor owned. Minimum. The vast majority are IO arms. Many are huge firsts with piggyback 2nds. At least 70% of homeowners are equity tapped out having refi’d to the max.
Beginning in late spring the foreclosure rate here will begin to cook like a locomotive boiler and whole subdivisions will be in turmoil as more that 50% of some of them will be in some stage of foreclosure. One of the biggest issues will be to find the owner to serve the papers as they are foreign.
By summer prices or values will decline in most of the upper tier markets by as much as 30% in a fashion that will perplex everyone. The high end will collapse first unlike the past busts. The reason is simple, as there was more profit in the big stuff they built more of it. Same as the car industry. In case you haven’t noticed we don’t have all that many millionaires here. Just credit pigs. Poor people don’t get credit even if you have a good score. They get housing leverage but not credit.
There are a lot of sleeping pills being taken in Winter Park, Heathrow, Forest Lake, and Dr. Phillips areas right now. The takers are the owners of the truss plants, concrete companies, door manufacturers, drywall company owners, plumbers, builders, surveyors, flooring specialists, drape manufacturers, electricians, truck salesmen, supply houses, etc. You get the picture.
In the past 5 years there has been upward unsustainable social and credit creep out of all order with reality. The fall from grace will be precipitous and many will not be able to deal with it. Most will not.
We do one thing here and that is build stuff to service people who service people. Globally from what I gather we won’t have too many chasis up on the rack as this plays out. If globally we hit the wall and I think we are nearing it now, we are toast on a huge scale. If the service industry tanks at the same time as the credit implosion occurs look out below. The outmigration will devastate the whole south end of the MSA. The west side is teetering on the brink with over 14,000 properties langushing on the market.Tourist area.
The combinaton of rising taxes, insurance costs and stiffer credit guidelines will form a tornadic effect sucking business and homes down the drain. It is a perfect storm. Excess inventory, tighter credit, tapped out local gentry and production over a cliff coupled with outmigration.
How else could it end?
2007 will suck but will be a fond memory by 2008. There will be no joy in Mudville other than the magic mountain ride.
The retort “gird your loins” springs to mind.
Happy Holidays!
THanx for the report !
I live in Melbourne, FL, and its no different here.
I am waiting on the sidelines, waiting and watching the the prices drop.
Dimedropped — great, detailed report/analysis. Thanks.
I am a former Marine and served in VN. I liken this to the sound of an incoming rocket. You feel something is definitely not right, then you perk your ears up, then who hear a slight sizzle in the air which turns into a moan and a wail then everything flashes brightly followed by a thud and a vacuum as the explosion sucks the air out of the area. If you were lucky your ears rang. If not, oh well.
The air has a sizzle to it. Wait!!!!…….listen..
It is a very unpleasent experience!
One report this moring was a sale for $370,000 and the contract was written pre-construction for $489,000 about a year and half ago. I read the contract and it had an addendum stating that the buyer was being given a red tag sale price of $370,000. So these asses can drop a price by $120,000 and still make a profit?
Sure, why not, it’s like $18,000 worth of materials and $40k worth of labor.
16% off. Love it. And the only thing that moved. I’ll bet that couple thinks they got a great deal too.
I tend to think of it as 19% overappraised. Must have been a sweet deal….Oh no! CASEY! Put down the HUD-1!
Went to the Raleigh area recently to explore moving there.
It was VERY rural for my taste, but lots of construction going on. These issues kept me from making the jump:
1) Prices have nearly doubled there in the last 3-4 years. I looked at homes priced in the $500K range, which were selling at $350K only 3 years ago.
2) There is no “town” feel, just scattered developments of 50 new homes, located past miles of rural roads, often lined with run-down 1 or 2 bedroom “shacks” (for lack of a better term).
3) The schools are rotated every few years. So if you buy a house because it has “good schools” that may not be the case in 3 years.
4) Wages are not in line with the now-bloated home prices.
Perhaps if you got in there in 2001 or 2002, you could have picked up a nice house for $275K (if you could deal with the above listed concerns). But today, the prices have ballooned, killing the “value” factor which drew people to the area in the first place.
The Houston area has some great real RE values. There are many well established suburbs, and you are minutes from the 4th largest city in the country. For less than $400K, you can get a 3,500 square foot dream house in a perfectly-manicured suburb, minutes from work. And the construction is amazing compared to the junk built by Toll Brothers, et al. Some of the architectural features/amenities found on most homes for sale in that price range:
* Multi-zone central air (2 to 3 AC units)
* Granite counters, great kitchen cabinetry.
* Curved oak staircases.
* Arched windows.
* Gunite built-in pool with waterfall.
* 3 car garage.
* Extra rooms: study + den + game room + breakfast room + walkin closet (these are in addition to a living room, kitchen, etc).
* Many built-ins.
* Brick on all 4 sides of the home.
If you can find the work, it’s a good place to look. People are also much nicer there than in NY or CA.
UnRealtor - What do you mean by, “The schools are rotated every few years?”
Your house is in a school zone, and every few years your zone changes.
Just one little minus:
Stiffling humidity so awful, you’ll get the opportunity to take 3 showers a day, with requisite changes of clothing, after each delousing.
He’s still flogging Houston, eh? LOL. I went to high school and college there. Still have family in that hell hole. Now I’ll stipulate that it’s better than Dallas but that’s damning with faint praise. Houston is another one of those Texas cities where if you buy outside the loop (610 Loop) you better like the place cause you ain’t gonna be able to sell it.
How does that work that somebody can buy in a place where they won’t be able to sell? In order to buy, somebody must sell.
New stuff. That’s what he’s talking about.
Nobody buys used houses.
Well, not every place can be Beverly Hills. A person who views living in a gated community overlooking a golf course as a “hell hole” wouldn’t be pleased with much.
But I’d agree that resale/appreciation could be an issue, however a 3,500 square foot home overlooking a golf course, 30 minutes from work, would be the last home I’d need to buy.
3500 square feet? When oil gets to $200 per barrel and energy bills are $2000 per month, I certainly would not be happy in a huge house like that. What ever happened to the humble 1950s type of living conditions when families were huge and houses were small? Like 1,100 square feet? Do you always supersize your fries? Do you drive a Hummer? Are your sodas all 64 ounce ones? Can you fit through a door?
Graduated HS in Houston area. Wouldn’t call it a family oriented town - definitely more of a singles scene.
Stiffling humidity so awful
I spent a summer in Houston, never will again. By the time you get in the car and turn on the AC, your shirt will already be soaked with sweat.
Was there once for a convention in January, and standing outside to get some fresh air caused the clothing to get damp pretty fast. No, it wasn’t raining.
“2) There is no “town” feel, just scattered developments of 50 new homes, located past miles of rural roads, often lined with run-down 1 or 2 bedroom “shacks” (for lack of a better term).”
Welcome to the Carolinas. I see a lot of “just move to the Carolinas” attitude on this blog. The Carolinas is a collection of houses, plain and simple. Charlotte is soulless suburban hell, ditto Raleigh. Buyer beware if you think the Carolinas are going to be paradise.
Being a multi-generational Tar Heel, I’ll have to disagree with NYCityBoy, but just a bit. NC didn’t start urbanizing until “car culture” was well established. The heart of NC was the small town, usually built around furniture/paper/textile factories. Those have died and gone to China, and a lot of the charm of the state has gone with them.
Raleigh’s the state capital and has a pretty nice downtown with NCSU just down the block, but it’s ringed by a God-Awful beltline. NY is right on with Charlotte, though…..
Relocated Yankees have killed your state. CARY, NC - need I say more?
the quip is that Cary is an acronym - Containment Area for Relocated Yankees. I first heard that around 1997.
2002 transplant to charlotte from Northern CA. And yes the non town feeling is there in charlotte but raleigh is much much much worse. In charlotte there are places where they have tried to create the town feeling, and those are the POSes to avoid.
However I’d take the lack of traffic, the cheap $$$ for houses and year round decent weather over any thing else.
There are towns in NC though that have some old country charm (cos they are old country) … just not Charlotte and definetly not raleigh which looks and feels like sprawl and the whole city looks and feels like it.
Cool.
Cow_tipping.
I lived in Durham for 10 years and I have to differ with you a bit. If you like to be around major universities and like lots of local music etc. it’s a very nice place to live. It is a great place for scientists as there are many lectures and seminars you can attend. Also, the grocery stores are superior to any I have seen in the US elsewhere (NJ, CT, PA and now FL (Orlando)), Kroger and Harris Teeter are as good as I’ve seen for fresh vegatables, fruits, meat and fish.
I actually did like one neighborhood in the area — “Forest Hills” near Durham. But it was only about 1 square mile, and I hear the schools are horrendous in Durham, high crime, etc.
This was an old neighborhood, probably built in the 1930s.
Harris Teeter is great. Especially since you can usually find one every mile or so.
hey fellows,
i had lived in Raleigh for 8 years before the recent transplant, and would differ with unRealtor’s opinion of the place. If you are expecting a big town feel from the RTP area then you’ll be sourly disappointed. It’s a small city in a rural setting where you can live on 5+ acres of farmland and still have a 10 min. commute to a technical job. Surrounding Raleigh you have other country towns that still have a “main street” downtown with a small town feel to it. So if that’s what you are looking for, then its a great place to be, otherwise stay in one of the other megapolises i.e greater washington, NYC etc. As far as culture is concerned, its there, but takes a little planning; just don’t expect to be able to stroll down TimesSquare and catch a world class show.
In my opinion, the biggest advantage of the area is the range of living options available, you can find housing in safe clean neighbourhood from $65K all the way upto multi-million $ estates.
The RTP area did saw a big jump in developer activity in the last few years, but being late to the bubble party, there wasn’t the insane appreciation in the secondary market. So although there is slowdown in the sales, i don’t think there would be as big a depreciation in housing pricing, besides the housing mortgage costs seem pretty resonably aligned to the rental values of properties.
C’mon - seriously? I worked down there for some time, and I don’t think I ever saw a 10 min. commute around RTP. Personally, I preferred Greensboro, NC to any other city in NC. The biggest advantage in NC is access to great beaches and great mountains - the state has a diverse offering for outdoor activities, including some emerald mining if you can believe it! It’s one state that I will seriously consider come retirement.
dd
You need to check out Cary if you are looking in the Research Triangle area..
Prices are all over the place in RT and in Houston. Built out areas with great school districts are more expensive. Travel a few miles further out and you get great value. True bargains in overbuilt suburbs… One day soon they will be filled out too with owner occupants but by then prices will have skyrocked.
I see TxChick is still whining and bitching about Houston, Dallas and the great state of Texas. The glass is always 99% empty for this person no matter what. Seems hell would be living near a person like that. Just make sure you never rent an apartment or move to Tucson,AZ cause that lifelong renter might be your neighbor..
CARY : Concentration Area for Relocated Yankees
(they have a city regulation on putting up ‘open house’ signs… its like one sign allowed per house every two years, so if you are selling within 2 years, you need to check if the previous owners had used up the ‘open house’ sign allowance… )
We seriously looked at Cary a couple of years back. Job sitch looked pretty good from a software engineering standpoint, but since I already had a very good job in San Diego, we decided to stick it out here. Prices are not that low in Cary any more either…
But what would property taxes be on a $400K home in Houston? Maybe $10,000 or more? TxChick had some pretty scary numbers about TX taxes awhile back.
Sounds like “UnRealtor” has a Houston McMansion he’s anxious to offload. I smell fear.
Damm air conditioning is gonna run $600-700 a month is summertime if you can stand 75 degrees F inside.
“Despite the slowdown, she said 2006 will still be the third-best year on record.”
“Despite complete engine failure and the rapid descent, the altitude achieved was the third-highest on record”
…so just sit back and enjoy the flight!
How is it EVERY market is having the “third best year on record”….seems like at least one or two would have their best or second or fourth best year……
Remember, all housing is local
‘How is it EVERY market is having the “third best year on record”….seems like at least one or two would have their best or second or fourth best year……’
And next year is things go at a steady rate, then we will hear that they had their fourth best year on record.
The reason central Florida Has it’s 3rd best Yr on record. #1
.Late 80’s rush, then crash, #2. 2005, But boom actually ended summer of 2006, on it’s way down from a 44% YOY increase and has lost back 30% of that figure leaving a 14% increase to count for 2006. Hence, # 3. 2006 a 14% increase which compares to a Negative 4.5% yearly loss through 1990 to 2000. So that’s it’s 3rd best Year on record.
For a Simple example.
House sells for 100K Jan 2006, House sells for 144K July 2006. 44% increase. Then comes the Crash.
Same house sells for 114K in Dec 2006. Even though Prices are Crashing this Shows Housing up 14% for the Year. We’re Still doing Great! But don’t forget the $10,000 Cash Back at closing plus $3,500 in closing costs paid by the Seller.
Especially in Florida, our economy is all tied up in Real Estate, they can Manipulate the Numbers to read whatever they Want to try and extend this BS for Several Years.
I’ve know of Massive Manipulation of Comps on Property, IE selling to Partners with no cash to up the Appraisals,
one Developer Supposedly Paid One Million Dollars Each for a 20 Quarter Acre Lots in a Development where Individuals bought for 25K. Take 100 Lots . 80 x 25K - $2,000,000. 20 Lots at 1,000,000. Total 22,000,000 . Now Avg lot in this Community sold for $220,000 . Developers Lots now worth $4.4 MiL. Hocks them to Bank at $3,000,000 .
The Fraud here in Florida is Ridiculous. This is Just the Beginning.
They Just arrested one con-artist who zapped the Banks for over a 100 Mil. Not counting all the People he Screwed who never Got their Houses Built and Not have Contractors suing them for their Money.
If You are even thinking of Buying , Do a lot of research, Hire a attorney. Don’t believe anything You are told by an owner or a realtor.
This is going to end Badly. This is Just the Beginning.
According to the Brevard County’s website, there are 136 foreclosure sales from 1/10/2007 through 2/21/2007.
Its going to get worst.
Just had the following thought: Those of us that have been lamenting how long it takes to forclose (as it relates to lowering prices) can at least feel better that the recent spike in forclosures really relates to someone who got in trouble months and months ago. Obviously as the market is not getting better, this number should continue to grow significantly.
auction = reality
… I study nuclear science
I love my classes
I got a crazy teacher, he wears dark glasses
Things are going great, and they’re only getting better
I’m doing all right, getting good grades
The future’s so bright, I gotta wear shades…
LOL
stucco- i didnt know you could sing?
Truth be told, I am a man of many talents.
timbuk 3
“Announcement of Drake’s auction caused a stir two months ago. Some real estate professionals complained that there was no minimum bid requirement, and, for that reason, Naples Area Board of Realtors would not include the listings at the group’s Web site. Drake originally listed 51 properties, only 45 of which attracted bids.”
An attempt at market manipulation because no minimum bid is set? I am shocked I tell you, shocked, that a fine upstanding organization exuding impeccable integrity and business ethics such as the Naples Area Board of Realtors would take such a position.
The article in the “Naples News” mentions the 1430 Crayton Rd home in Naples (34102). It then says that the appraisal was $788,257. and the sale price was $660,000.
BS. Look up the value according to Zillow.com. The papers figure is based on the PROPERTY tax estimate. Why was that used? Because it provides a much smaller number of decline in a Prop 13 type state like Florida. The Zillow figure is $1,093,047…Look it up. The buyer paid $660,000. to buy this house but that included the 10% or $60,000. to the autioneer.
This means that if you paid the Zillow price last year and sold at that auction, you paid $1,093,000. plus expenses and recieved only $600,000. (after sales commision)
This is a 45% loss. The article by using the wrong value estimate and ignoring the cost of the auction sale implies a decline from $788,257 down to $660,000. That is only a decline of 29%.
The actual loss was 45%. This is a classic example of how the media distorts and leaves out information to serve their cause. All the while they have not lied.
I wonder if there instead might have been a technical reason. When you look at real estate web sites, the MLS ones, there is a price set. Most folks sort by price, but in any event you generally have to put a price in somewhere to search. It might have been that with no minimum, they had no entry for a required data field. If that is so, the fix, needed by ever-increasing numbers of auctions, might be to show $1.00 as the minimum and assume that savvy potential buyers would put $0/”any” as their lower limit.
“The value of vacant land also continues to increase tremendously ‘because we just don’t have anymore of it,’ she said.”
Another stupid comment from a realtor:
No more vacant land - hurry and buy today it may be gone forever…..
Wouldn’t it be funny if the FED cut rates 1/4 point and RE went up 15-20% for the next three years?
We would all hang ourselves!
Um, why would we hang ourselves? Its cheaper to rent now, it would just become even cheaper if the scenario you mentioned plays out.
That’s what I was thinking. I don’t think even REO prices are low enough now. Today in Arizona, a multi-million dollar home can be rented for $2k/month.
yes, but you know how David Lereah and all of the bottom callers would gloat. Might the thought of that not piss you off the least bit?
I don’t have a crystal ball, but Lereah predicted last night that prices will continue to fall in the hot markets. He’s the one who would be wrong.
These price levels are dangerous, for the economy, the banking system, etc. I just hope we can climb down without too much damage to the system.
not really… i’ll just yawn, keep renting and grow the cash pot… for a downpayment on an REO
Exactly. You can save a bundle while renting, very little as an owner. Also, let’s say the Fed rate drops 1/4 percent. How much would a long term mortgage drop? Actually, it probably would rise! In other words, “princes climbing” is the wrong answer. Thank you and play again.
Neil
“Wouldn’t it be funny if the FED cut rates 1/4 point and RE went up”
They could cut it to nothing and how long would that last? Prises are dropping,and the masses that speculated are having those loans come due.They bought ,and invested their savings inj the last ditch hope of continuing appreciation. Now they would need to bring money to the table to refi. Inflation is starting to get away from the FED so look for increases ,and we need foreigners to buy our notes. How much did congress just ask for the renewed war effort?…no, there’s no inflation. To your point: no telling how the markets will be moved to keep the wheels turning so watch the manipulations…Problem is, everyone loves you when you’re buying drinks,but once you start puking ,they can’t wait to toss you out the door.
If the Fed cuts now, there will only be more ghost tract home developments built out in the middle of the southwest desert, with a bigger inventory correction to come down the road. Cut away, BB — there is no way to rescue the housing market anyway…
A quarter-point drop would not restore the virginity of the hordes of FBs who have teaser-rate loans about to re-set. If your theory were plausible, it would have worked in Japan.
As others have noted, rents are decreasing as unsellable inventory increases. Living is getting much, much better for renters. That is not going to change anytime soon, no matter what the Fed does.
Wouldn’t it be funny if the FED cut rates 1/4 point and RE went up 15-20% for the next three years?
Wouldn’t it be funny if the Bank of Japan cut rates to zero and RE went down 50% over the next 15 years?
In Japan, they cut rates to .025 %, and property prices STILL went down 16 years in a row….
Banking industry still hasn’t cleaned up their mess
Gainesville is surrounded by nothingness with unlimited room for expansion. They have plenty of ‘it’ left.
I was in Gainesville about 10 years ago. In 1996 it was in the middle of nowhere. I was a bit surprised. I thought it would be a neat college town like the one I grew up in (Ann Arbor, Michigan). I was 100% wrong. There was NOTHING there!
Now, fast forward ten years later and according to this real estate person, Gainesville is as crowded as Hong Kong. No more land in Gainesville? GAINESVILLE??? lol!
Gainesville could double in size every week and build for 10 years without encroaching on anything. Cept the foreclosed horsefarms in Ocala.
And dont’ forget the recent quote from this moron @ U of F:
‘Long-term demographic shifts from the Midwest and New England bode well for the notoriously boom-and-bust state, said Dave Denslow, professor of economics at the University of Florida. Florida, which gained 430,000 new residents in the past year, is a popular destination for Latin American immigrants and retirees from northern states, Canada and western Europe.’
“People start thinking about buying a retirement home in their late 50s, and baby boomers are approaching that age,” Denslow said. “The demand for residential housing here is only going to get stronger through 2020.”‘
Talk about pulling figures out of his arse. The question begs: Is he:
A) An Idiot
B) A Moron
C) An FB
D) A RE Shill?
His quotes are pefect - to keep for the coming storm.
(and by the way, Florida added 321,697 people this past year - new figures from the US Census Bureau)
check lot prices on ebay
15 cents on the buck
Check my post on the Weekend Topics Suggestions thread regarding June Fletcher’s article in today’s WSJ about the crashing land market. But we all know by now that Realtors will say prices always go up no matter the underlying reality…
Wow ,so much for borrowing future buyers for present sales to get the third greatest sales year based on “get in now before the world comes to a end “.Wow, no more buyers around to buy from speculators , flippers , sellers in foreclosure and overbuilt tracts ?
“A lot of it stems from investors who bought homes last year — when prices peaked, and they haven’t been able to sell at a profit, or even break even. ‘They can’t carry all that debt,’ Kaiser said. ‘They can’t make the payments.’”
Well said. Moreover, it’s the outcome we all expected — speculators with little property attachment are the first to walk away from their obligations. Unfortunately, it’s just the tip of the iceberg. We still have all the excess inventory, subprimers, ARM resets, FBs, and so on in the pipe.
Yeah the REICs butt pipe for bad loans will be much larger and worn in three years. It will be so messy that the FED will give $10,000 to every buyer. Just like in the 80’s when the GOV subsidized solar crap for homes. When the subsidies ended the cost of solar stuff went down by 90%. A little Gov subsidy can go a long way. Welcome to the new paradyme, gov dole for all homeowners at the expense of all US dollar holders. We will have abandoned capitalism in favoring the new governmental model of the 22nd century COMMIFACISREPUBDEMOCONSUMERISM. The era of the first only SUPEROUGE power. We will be known for ponzi schemes, extortion, fraud and many other much worse things. All this will because we ignored the constitution and allowed FIAT currancy. I am not religious, but many faiths and secular writing throught history warn of bankers, money changers and those who lend or borrow. We embraced that which history told us avoid.
It is not all that bad, Rich. Every bursting bubble is followed by rounds of fingerpointing and promises to reform the system so that it “never happens again.” Read Galbraith’s “A Short History of Financial Euphoria” for the uplifting details on the brighter future which awaits…
To quote the most recent Rocky Balboa movie, what the REIC now needs is some “Good ole fashioned blunt force trauma”.
It ain’t the fall that kills ya, it’s the sudden stop! Deceleration Trauma.
i wish we had some trauma in san diego.
Can’t help but think of the headline of this thread. A shortage of future buyers. Kind of like there is a significant drop in the number of people in the age range where they buy homes and a significant increase in the number of people who want to downsize and sell extra (second / third) homes? This stuff was predicted by Harry Dent in 1999 and the haze will disappear and this will be clear in 2009 / 2010. Birth dearth!
We will see bargain ocean view homes in 2012. Save your money in T-bills!