“If This Isn’t The Bust, It’s A Sobering Slowdown”
The Naples News reports from Florida. “After a rocky year in 2006, local Realtors expect the market to smooth out in 2007. ‘You know I’m optimistic,’ said Wes Brodersen, past president of the Bonita Springs-Estero Association of Realtors. ‘If I wasn’t, I wouldn’t be in real estate.’”
“In the Naples area, the year ended with more than 11,000 listings, a 16-month supply of homes, on the market. That could increase by 1,000 or more this month, with the height of season.”
“In Lee County, there were 13,330 single-family homes, and another 8,559 condominiums listed for sale on the MLS last week. That works out to a more than 17-month supply of single-family homes and about a three-year supply of condos on the market.”
“There seems to be an end in sight to the down market, said (broker) Brett Ellis in Fort Myers. ‘I’m starting to see a pick-up over last year, and I think what we’ve just come off of is a year of heartache and misery as buyers sat on the sidelines waiting sellers out to come down on prices,’ he said.”
“Now, sellers are starting to listen to the Realtors and adjusting their prices to where they should be instead of where they want them to be, Ellis said. ‘Last year there was not much buyer confidence,’ he said. ‘The market felt like it was floating in space. It was quiet. It was eerie because the buyers weren’t there. They weren’t on the same wavelength as the sellers. So nothing happened.’”
“Since prices have come down in Southwest Florida, there are more buyers able to afford to make purchases, he said. A small home that sold for $170,000 in North Fort Myers in March is now on the market for $130,000. A condo in Cape Coral that was listed at $275,000 has recently been reduced to $230,000, Ellis said.”
“Homes are not worth today what they were last year, or even six or eight months ago,’ he said.”
“Since the end of 2005, property values have fallen an average of 20 percent in Southwest Florida, said Ellis. Transactions were off 40 to 50 percent for single-family homes throughout 2006 in the Naples area, compared to a year earlier, he said.”
“Realtors don’t expect to ever again see the kind of run-up in prices that sellers experienced in 2005. Median home prices appreciated 40 to 50 percent. ‘That was stupid and everyone is paying for it now,’ said Brodersen.”
“With the cool-down in the market, some Realtors have left their jobs for other careers or have moved to other states seeking better opportunities. Ellis said 2,500 members of the Realtor Association of Greater Fort Myers and the Beach did not pay their annual dues on time. The deadline was Dec. 15, and it has been extended to January to help those who might be hurting for money, Ellis said.”
“If those Realtors don’t renew, the association will lose almost 40 percent of the primary board members, he said. The association’s membership grew from 2,735 in July 2003 to 5,884 in July 2006.”
“The market may not have hit bottom just yet. But the bottom might be around the corner. ‘Buyers know they have more leverage than they did at any time throughout last year,’ said Ellis.”
The St Petersburg Times. “In a Jan. 1, 2006, column on the transforming power of redevelopment, I wrote this: ‘People who visit North Pinellas a year from now will be shocked by the differences.’ Well, maybe not so shocked. That’s the problem with new-year predictions. Stuff happens.”
“A year ago, speculators were gobbling up land here, and their appetite seemed insatiable. Their starry-eyed optimism rubbed off on government officials.”
“In that column a year ago, I forecast that the place most transformed in 2006 would be Clearwater Beach. The column also predicted that the sounds of construction would ring across downtown Clearwater, where numerous residential and retail projects were supposed to get under way during 2006.”
“So here we are at the end of 2006, and the picture has dimmed. If this isn’t the bust that follows a boom, it is at least a sobering slowdown. Now, those pretty artists’ drawings are nailed to posts erected in front of vacant lots where there is no movement except the wind swirling the dust. Projects large and small appear dead in the water, and ‘For Sale’ signs sprout like weeds.”
“Developers avoid talking about missed construction deadlines, or they try to put a good face on changes in their plans. New construction hasn’t stopped, but it has become the province of those developers with the deepest pockets and the most experience.”
“On S Gulfview Boulevard, only a ragged chunk of the old Holiday Inn Sunspree remains, to be replaced starting early next year with Cheezem’s Marquesas condominium. What about the other beach projects that were supposed to kick off in 2006? Next to the Marquesas site, a lovely sign announces ‘Enchantment - Emerging in November.’ Make that November 2006. But no Enchantment rises yet on Clearwater Beach.”
“Next door, the Clearwater Grande condo tower was supposed to replace the squat Quality Hotel, but those plans are shelved for now. Nearby, the 13-story Entrada condo project is on hold.”
“Where the Adam’s Mark Hotel once welcomed guests, a developer’s plans for a condo-hotel have been delayed. On down S Gulfview, there is no sign of the Marbella and Sienna Sands condominiums, plans on hold. The old Days Inn eyesore is gone, but property owner is talking with the city about allowing the empty lot to be used for temporary beach parking. And I’ve touched on only the biggest ones.”
“One bright spot, for those who rent, is that the conversion of rental apartments to condominiums appears to have slowed in the second half of 2006.”
‘You know I’m optimistic,’ said Wes Brodersen, past president of the Bonita Springs-Estero Association of Realtors. ‘If I wasn’t, I wouldn’t be in real estate’….Realtors don’t expect to ever again see the kind of run-up in prices that sellers experienced in 2005. Median home prices appreciated 40 to 50 percent. ‘That was stupid and everyone is paying for it now,’ said Brodersen.’
He can claim a monopoly on optimism if he wants, but some were calling this market ’stupid’ last year when it was happening, and optimistically expecting the market to correct.
‘The national slowdown in the housing market didn’t take long to come home to Bonita Springs-based WCI Communities Inc. The luxury builder laid off more than 500 workers as profits fell off by more than 73 percent in the third quarter to $10.7 million.’
‘WCI certainly wasn’t alone. Other builders with business here — Pulte Homes, Toll Brothers among them — reported sales were off pace in the fall. WCI said it has curtailed land purchases to concentrate on selling existing inventory. The company also took a $14 million charge on its books for walking away from land options for three projects.’
‘Most of that money came from options on land for the Sabal Bay golf course community in southern Collier County.’
‘The song economists are singing for 2007 is soft and slow. Housing is the biggest factor of all in Florida. It accounts for about 15 percent of the state’s economy, in Denslow’s estimation, far larger than the 10 percent it pumps into the nation’s economy.’
‘Mark Vitner, senior economist for Wachovia Securities, says the decline in home prices and sales that began in early 2006 in Florida has not yet ended.’
‘Denslow and Vitner say soaring property insurance premiums add to housing’s troubles in Florida, but they can’t be blamed for what’s really ailing real estate. ‘They may make housing slow down a little bit worse than otherwise,’ Denslow said. ‘But prices have risen so much it has reduced affordability.’
Another good one from the St. Petersburg Times today:
Flipper’s new approach: Lower price
“Bruce Sparks painted a bright red “4 SALE” sign on his home’s roof in September, hoping to attract a buyer for his waterfront home.”
“It was a desperate attempt by a man who had hoped to flip the house for a quick profit the way so many investors had done before him, when the real estate market was still booming.”
Heheh
“Next to the Marquesas site, a lovely sign announces ‘Enchantment - Emerging in November.”
That’s on the site where the Best Western Seawake still sits (I presume — haven’t been there in about 6 months).
I asked one the desk people when she expected the hotel to be demolished, and she wasn’t sure. I told her not to worry, it would never happen and that she’d still have her job. She asked “How do you know that?” I said “Trust me”.
“There seems to be an end in sight to the down market, said (broker) Brett Ellis in Fort Myers.
I wonder if these people truly believe the house fairy is going to pop out this spring and start another run in RE? Even if the FED drops rates it ain’t gonna happen.
Tuesday, May 16, 2006
Brett Ellis, a Realtor with The Ellis Team RE/MAX Realty Group, said the market has found the basement and there’s nowhere to go but up. Prices have fallen as much as they are likely to, he said.
“I think it’s going to pick up again, but people don’t yet realize it’s in the basement now,” Ellis said.
When buyers realize that, he said, they will behave like fire ants: “When they bite, they all bite at once.”
[Ellis] sees a turn-around coming.
“What most of us saw in the first quarter was that most people didn’t want to be the first one back in the market,” DeSalvo said. “No one wants to be the first one buying at the wrong time.”
Now is the time to get back in the market, Ellis contends.
“Anyone who can buy now should buy now or he’ll look back and wish he did,” he said. “I think the best time to buy is probably April or May of 2006.”
“Homes are not worth today what they were last year [2005], or even six or eight months ago [June/April 2006],’ [Ellis] said.”
Now is the time to get back in the market, Ellis contends. “Anyone who can buy now should buy now or he’ll look back and wish he did,” he said. “I think the best time to buy is probably April or May of 2006.”
Crisrose,
I emailed those two qoutes to Brett at topagent.com
And the reply:
” I already own a home, so I didn’t need to buy any.
However, I did buy a
condo and a home, both in June.”
Brett Ellis
According to the Lee County property assessor’s website, he does indeed own several properties - two which have a homestead exemption:
21-45-24-43-00000.4709
23-45-24-08-00000.1460
What’s a homestead exemption do?
It reduces your house property taxes if it’s your primary residence.
You cannot claim homestead exemption on two Florida properties. This is illegal. It can only be claimed on a residence (one has to live there). This clown realtor knows that; somebody should turn him in.
Unless you trust your spouse and each of you own one home in just one name. That’s a standard dodge.
I know of one where the condo is in the husband’s name, is homesteaded and he is never there, but the wife is — never mind that she is not on the deed. Makes me barf that local tax assessors so not track down these simple cases of “misrepresentation.” In this particular case, the owner is a “holier than thou” who preaches about corporate honesty.
I like this one:
“Last year there was not much buyer confidence,” he said. “The market felt like it was floating in space. It was quiet. It was eerie because the buyers weren’t there. They weren’t on the same wavelength as the sellers. So nothing happened.”
We’re just not tuned in properly.
“I wonder if these people truly believe the house fairy is going to pop out this spring and start another run in RE?”
Nah, she’ll see her shadow and run back into her cave. I think that means 3 more years of declines.
Old wives tale: Everytime you point your finger a fairy dies.
Bernanké fairy with his magic wand.
“And I’ve touched on only the biggest ones.””
That is the truth. For those of you who had followed my postings on Clearwater Beach the past couple of months, I only highlighted the ones on the NORTH end of the island. We kind of crossed paths with the City’s Beachwalk area, but I did not include all the properties Diane has listed here to the south. The place is a mess.
Nonetheless, it was PACKED to overflowing for the Outback Bowl introductory ceremonies at the Clearwater Beach Hilton. There was no room to move and traffic flowed endlessly on and off the island.
One point of amusement. You may recall the Monaco Resort I have mentioned several times. It is a conversion single story Canadian project with studios starting at 159k. Been on the market for about a year and half, and still mostly un-occupied, or so I thought.
This past week-end, about 75% of the parking lots were filled. I thought perhaps they were finally getting sales.
But, alas, I noticed the sign in the parking lot: ” ALL-DAY parking for $10. See front office”
I guess you have to get the money where you can because you obviously can’t find anymore suckers for those POS.
‘But, alas, I noticed the sign in the parking lot: ” ALL-DAY parking for $10. See front office”’
Funny! Ha! An 18 month supply of homes for sale. Incredible, these articles are! My 20% loss in 1996 was a deal where I had it for sale for 6 months. I thought that was bad. Alas, it was a $20,000 loss.
So Brett Ellis sees an end in sight and the listings where he is involved are 17 month supplies? Sure. There will be 15 month supplies in a year from now when prices are 12% lower. 12 month supplies in 2008 when they cut prices another 10%…and so on. An end to 17 month supplies sounds great to Pollyanas.
it sounds like one big junkyard - desolated deliverance
‘You know I’m optimistic,’ said Wes Brodersen,
Maybe Wes should go into religion business and tell us about his optimism on a second coming or life in heaven.
wes@exit01.com
Bonita Springs-Estero Association of Realtors
“This isn’t the Bust”
*quack*
the year ended with … a 16-month supply of homes … That could increase
*quack*
a three-year supply of condos
*quack*
There seems to be an end in sight … I’m starting to see a pick-up over last year
*quack* *quack*
the buyers weren’t there … nothing happened
*quack*
Homes are not worth today what they were … even six … months ago
*quack* *quack*
Realtors don’t expect to ever again see … everyone is paying for it
*quack*
Realtors have left their jobs … moved … seeking better opportunities
*quack* *quack* *quack*
the association will lose almost 40 percent of … members
*quack* *quack*
the bottom might be around the corner… *quack* quack* *quack* “This isn’t the Bust” *quack* *quack* quack* *quack* Will someone get those *#%&$(@s out of here!
The point of this deranged new years morning post? If it looks like a bust, sounds like a bust, talks likes a bust, and chases your wallet like a bust, it’s probably a bust and you are probably in denial.
LOL!
“New construction hasn’t stopped, but it has become the province of those developers with the deepest pockets and the most experience.””
Something’s not right about that comment, but I can’t quite see what it is.
I took it as the weak developers are already being thinned from the herd (BK), while the stronger developers are finishing what they can to recoup what they can.
$159K one bedroom condo-hotel rooms… The rest of the Tampa Beaches (South of Clearwater, Indian Rocks, Redington, Treasure Island, St. Pete Beach) is all the same crap.
You can see rooms for under $200K, but whatever the cost the buyers only cover about half their monthly expenses with the rental income…
This has always and still continues to amaze me. In fact, the ONLY thing selling on Treasure Island is “Bilmar” condo-hotel rooms for about $200K. Freaking humans. Never understimate the power of stupid people in large groups.
I read a realtor article where he was talking about the value of these condo-hotels because you could spend a few weeks a year at “your” room. I didn’t even bother with the cost-analysis…
That’s nothing. the last commercial project I worked on was condo-hotel rooms that sold for 400k.
Try getting that back in a 3 month season at $200 a night.
Hiroshima and Nagasaki weren’t atomic bombs, they were unfortunate explosions.
Little Boy and Fat Man had soft landings, too.
http://en.wikipedia.org/wiki/Fat_Man
Just like the bubble, they were detonated mid-air for maximum impact.
Collateral damage…
so when is it a bust- they’re off 20%
need 40
give us anumber bro
I’m tracking Montgomery County, Maryland and inventory is dropping quickly and Under Contract signs are popping up like crazy. Is this the false bottom or are the buyers giving in? I hope it’s not the latter or I’m going to be hating life.!@#$%^
“…inventory is dropping quickly…”
Compared to last month or to the same period a year ago? Inventory drops substantially over the holidays almost everywhere. There is so little activity at the moment that even year-over-year comparisons are problematic.
I guess it’s those Under Contract signs that are bothering me
An increase in transactions over the holidays is exceptional.
I’m assuming it peeps that need to buy and sell no matter what the market is doing.
Our NVa realtor friend, who grossed six figures each of the last 20+ years, got just ONE commission check in 2006. Talked with her recently and she says phone traffic into the office and showings started to pick up in November. That’s normally the start of the holiday slowdown.
She is once again optimistic. Time will tell.
If a realtor gets 2 calls a day and then has 5 calls on a day……in their feeble minds it is a BOOM! One reason the phone rings on the holidays is people are off and have little to do waiting to celebrate so they call around on properties. Half of these folks are calling to find out about someone’s house down the block to see if the market is still falling.
You might be seeing spillover from other counties. Montgomery county is very desirable. If prices drop even a little there, people who were going to buy further out might buy in Montgomery county. If so, inventory should still be building in further out counties while their buyers move in.
Sounds a little anecdotal for a solid comment.
Is the number of under contract homes equal to the amount of inventory reduction? Are people just pulling inventory off for the holidays? Are people pulling homes off for good (meaning 2 fewer transactions)? What are the actual number of transactions? Are these contingent on the sale of the old home?
There is a price point at which someone will buy. When prices have been unreasonably high for so long, we begin to think this is the norm. Any reduction looks like a bargain.
This is not the bottom. This is still the top. We have not even had our little 2007 recession yet. The Gubmint has a few bullets left for the battle.
I think this period (the last 4 months) has a lot of inertia - we’ve reached a kind of balance. But at some point the market will tip and momentum of all the silly, toxic loans will take over.
it appears that it is about the same.
IIRC, Bethesda was the most educated town in the US in 2005, and the 2nd most educated in 2006. The trend shows that Montgomery County is clearly losing intelligence.
The balance I’m talking about is the desire of the people involved in RE to keep the prices high vs. market realities.
On the ‘Keep-the-Bubble’ side you have:
- Agents
- Investolators
- Mortgage Brokers
- Home Builders & Subcontractors
- Governments - Local, State, and Federal
- Wall Street
- Banks and other lenders
- MBS buyers
- Sellers
- Ignorant Buyers
On the ‘Pop-the-bubble’ side you have:
- Priced out and Saavy Buyers
- Market Forces
That’s a pretty unbalanced picture. Plus, it’s only in the past 12 months that market forces have left the ‘Keep-the-bubble’ side, and only in the past 4 or 5 months that market forces have solidly been putting pressure on the bubble.
This is going to take some time to play out. There will be bumps in the road that look like bottoms. But eventually the market forces will have their way, and they are on the bearish side now.
Let’s add “homeowners” to the top list.
On the ‘Pop-the-bubble’ side you have:
- Priced out and Saavy Buyers
- Market Forces
That’s a pretty unbalanced picture
Yes its unbalanced, but not the way it might appear. Market Forces trump everything else. If you have more physical supply than households to live in it, prices must fall.
and Vietnam was just a police action, not a war…
Cheezem….What a great name for a developer.
Sparks, who could not be reached for comment, bought his 1960s ranch-style home in March. He paid $1.32-million for the property, which last sold for $275,000 more than a decade ago.
Sparks then put the two-bedroom home back on the market for $1.6-million, hoping to realize a quick profit.
Instead, he found himself with a home that did not sell, even with a bright red rooftop sign.
Faced with foreclosure, Sparks dropped the price to just over $1-million and, according to Doyle, is taking any reasonable offer to the bank to forestall foreclosure.
“We hope this will be a short sale,” Doyle said. “We have several offers the bank is considering.”
——————————————————————————-
So losing a few hundred Ks is now a hopeful situation… geez!!!
That or waiting that the $US drops enough so the rest of the world can pay that much for a house here… of course for them it will be like paying $100k back in 1995 for that ranch.
An ugly, nonecological, 1960’s ranch style piece of mold with old plumbing, spiders in the rotten walls, old heating, substandard electricity with insufficient outlets, ugly design inside and out, no insulation or fiberglass asbestos insulation, basically, an inhabitable teardown.
un-inhabitable
Wow! 2755 realtors in July 2003 to 5884 in July 2006.I live in Upstate New York and we grew from 300 to 650 realtors during the same period. Our population is around150,000 people in 2 counties. It all becomes relevant to where you live…
“Realtors don’t expect to ever again see the kind of run-up in prices that sellers experienced in 2005. Median home prices appreciated 40 to 50 percent. ‘That was stupid and everyone is paying for it now,’ said Brodersen.”
That is a very incorrect statement. I’m not paying for it now, nor do I expect that most readers of this blog are doing so.
i suspect alot of the poor pity me stories you will hear or read in the years to come will say my life took a turn for the worse after the bubble years when my real estate related job was lost and i went into debt,lost the house,car,wife,husband etc etc
this has got to be ugly
True. When Debt comes IN the Door…Love goes OUT the Window. These RE Wizards are broke and trapped in their Agents Dream Homes. Can’t make the payments, can’t Re-fi and Can’t sell the moneypits. Throw in a few bankruptcies, divorces and job losses and you’ll get plenty of Real Estate action in 2007-08. Whats Love got to do with it Flippers…This IS business.
Sparks, who could not be reached for comment, bought his 1960s ranch-style home in March. He paid $1.32-million for the property, which last sold for $275,000 more than a decade ago.
Sparks then put the two-bedroom home back on the market for $1.6-million, hoping to realize a quick profit.
———————————————————————————
No sympathy here! Burn baby burn!
But the bottom might be around the corner.
But it depends on where you are and where the corner is. If I’m in CA and the corner is in Germany…
We went from Silicon Valley to Florida for 10 days around Xmas & saw a number of “interesting” (in the Chinese sense of the word) items…
Particularly, there was a lack of traffic in the touristy areas:
http://www.viewfromsiliconvalley.com/id288.html
And a glut of inventory at ridiculous prices:
http://www.viewfromsiliconvalley.com/id289.html
We have at least two more chapters on our observations forthcoming, so stay tuned…
Thanks!
spot on description
Developer Courts Fla. Mobile Home Owners: Some Fla. Mobile Home Owners Stand to Become Millionaires if They Agree to Sell to Developer
Did we bounce off the bottom already? Wow. Must of missed the headlines….