‘We Are Having Price Reductions Every Single Day’: FL
The Herald Tribune reports on Floridas bursting housing bubble. “Is the real estate market really ‘normal,’ as a Realtor was quoted as saying in the newspaper the other day? A look at the sales and listings statistics leads me to believe that a market that was unusually tight a year ago is now unusually loose. There are a high number of houses for sale and so few buyers that there’s a 20-month supply on hand in Sarasota.”
“Economist John Tuccillo says a balanced market has a six-month supply. The situation is similar in Manatee County. In January 2005, 776 houses were listed and 223 sold (28.74 percent). In January 2006, 2,627 houses were listed and 166 sold (6.32 percent).”
“‘That’s a 15.8-month supply,’ said realtor Ruth Lawler, who has sold Manatee County real estate for decades. ‘What we are seeing on a daily basis is more and more supply. Normal is what you are used to,’ she said, adding, ‘I’ve never seen the market change so rapidly in such a short period of time.’”
“This is what we call a buyer’s market, kids. You older homeowners know this already, because you remember the real estate recession of the early 1990s, or previous versions. ‘We used to pray a house would sell in six months,’ Lawler recalled. Now, at the current rate of sales, it would take almost two years to clear the boards, if no other listings came on the market in the meantime.”
“‘We are having price reductions every single day, and we’re talking tremendous amounts, as many price reductions as we have homes on the market,’ said Lawler. ‘It’s got to affect the price.’”
“But, you say, the headline in the paper said, ‘Prices up.’ Just because the median sales price goes up, that doesn’t mean home values are appreciating across the board. It just means that the houses that actually sold were more expensive than the houses that sold last year at this time. The number is skewed by expensive new homes that are selling.”
“But that will change, said (realtor) Steve DuToit, when sellers realize they have to cut prices if they want to sell houses. ‘Because we have more than double the normal inventory that we’ve had over the past years (and) sales are less than half what they normally are, it has the market very out of balance,’ said DuToit.”
“‘Sellers are “the last to know what is going on,’ said DuToit. ‘The numbers are clear: It has become a buyer’s market.’”
“But Tuccillo, a Sarasotan who is former chief economist of the National Association of Realtors, says the housing market remains on strong footing. ‘There’s no way you can’t interpret this as a slowing down of the market,’ he said. ‘But no market goes to pot unless the underlying economy goes to pot, and that’s not happening here. We’re going through a cycle. This is a marginal change downward and the market will stabilize.’”
And from the Daily News. “In January the number of homes sold by Realtors in the Fort Walton Beach-Crestview-Destin area dropped by 32 percent from January 2005. The median sales price of those houses was $225,500, down from $226,500 in 2005. The number of condo sales in January was down 43 percent from 2005. Median condo prices sank to $200,000 from $465,000 in 2005.”
“‘I think we’re on a plateau,’ said realtor Claudette Heinrich, who has sold properties in the area since 1970. ‘You’ve got fewer buyers and you’ve got more houses. It’s sticker shock for a lot of people.’”
“‘We’ve just done a 360 and we’re in a buyer’s market,’ said (realtor) Debbie Gericke. Dave Dorman, knows that better than most. He and his wife have had their five-bedroom house up for sale since September 2005. ‘It’s frustrating because we put the house up for sale and purchased a house in Chicago,’ Dorman said. ‘We have two mortgages we’re paying right now.’”
“He’s come down in price, to $798,000, but refuses to go too low. ‘We can’t fire sale the house where we’ll lose money on it,’ he said. ‘We can’t do that.’ Teresa and David Diluzio are in similar situation. They put their house on the market and bought a smaller one in the same neighborhood.”
“Ask Teresa Diluzio how long she and her husband, David, have been trying to sell their home and she laughs. She asks her husband. He laughs, too. They compare notes and decide their four-bedroom, 2.5-bath home in Raintree Estates near Bluewater Bay has been on the market for at least six months. The price has come down. Traffic has picked up a little. They try to stay optimistic.”
“‘We just missed the craziness,’ Teresa says, referring to last summer’s lucrative seller’s market. It’s been months and their larger house hasn’t sold, so now both of the Diluzios’ homes are up for sale. ‘Now what we’re having to do is we’ve had to put both of them on the market to see which one sells first,’ Teresa says.”
“‘Sellers are “the last to know what is going on,’ said DuToit. ‘The numbers are clear: It has become a buyer’s market.’”
Yeah, like you called this one yourself, you fu*king dolt. The whole RE establishment has been telling folks how RE only goes up and now it’s the sellers fault for not “getting it”?
This is going to be an unmitigated disaster.
How can so many people be so stupid? It’s like 10% of the population were pulled aside and let in on the joke and then made to watch as the other 90% got huckstered. WTF?
“Now, at the current rate of sales, it would take almost two years to clear the boards, if no other listings came on the market in the meantime.”
But…
‘There’s no way you can’t interpret this as a slowing down of the market,’
Somebody please open a window. Something smells awfully rotten in here.
The realtors are trying to find and recuit bag holders plain and simple. Remember that old game hot potato?
Anyone ever seen that show flip that house from the carolinas? I have to admit that ginger chick is kind of a hottie
The last show had them flipping a house on the riverfront but it was not sold at the end. I remember that they showed carrying costs at about $9500/month. I particularly enjoyed watching them set the price to sell. Just pulling the numbers out of thin air with no methodology. Great Fun! These guys are going to be floppers soon.
Yes, I think I saw that episode. It was when kevin, the contractor and richard the bossman were at odds over the1.2 million asking price of home. They did a great job with the house but I think they wanted over 2 million for it.
Yeah, the realtor said they should ask 1.9m but the contractor said that “ego” and “view” equaled 2.4M asking price. They will ride this one into the ground for sure (they had 1.45M into the project with 9.5K/month carry costs if I recall correctly.
Ego and view now thats a first. Since when did they put ego and view into a appraisal report. But it’s all the realtors fault yea right.
This show will be dropped in a hurry, as will many of the other dopey homeshows that fueled the runup. There will be a prevailing psychology about housing that will leave it one step below funerals on most bagholders’ minds. That’s when the bears get their rewards for waiting out the past 6+ years in disbelief…
These “home flopper” shows all came on air pretty much coincident with the market peak. That’s how these things usually work. By the time the mass media catches onto a trend, the trend is usually 90% over…if not already over.
ABC had a sitcom called “Hot Properties” that was more or less Sex And The City but all the girls worked in the same real estate office. It lasted maybe three or four episodes.
“Butt Tuccillo, ….says the housing market remains on strong footing. ‘There’s no way you can’t interpret this as a slowing down of the market,’ he said. ‘But no market goes to pot unless the underlying economy goes to pot, and that’s not happening here. We’re going through a cycle. This is a marginal change downward and the market will stabilize.’”
hey butt, sounds like you’re smokin a little pot yourself. i suppose that’s because you have a lot of free time on your hands lately.
‘That’s a 15.8-month supply,’ said realtor Ruth Lawler, who has sold Manatee County real estate for decades. ‘What we are seeing on a daily basis is more and more supply. Normal is what you are used to,’ she said, adding, ‘I’ve never seen the market change so rapidly in such a short period of time.’”
AVALANCE!!!
(sp) AVALANCHE!!!
In Sat WSJ print edition, lead article in Money & Investing (p. B1):
———————————————————————————————
Buying the Returned Home
As More People Walk Away From Contracts, Some Builders Cut Prices; How to Spot Deals
——————————————————————————————–
Nice of the WSJ to help the poor builders move their returned merchandise.
It must be really nice to be so loaded with dough that you decide it is in your best interest to walk away from an $80K deposit…
“How to spot deals”?
There aren’t any yet.
Best way to get a deal? Sit on your hands for 2 or 3 years. And it dosen’t take any effort.
Greater SD ziprealty inventory 3/4/06 = 17,358
Number of closed sales in Jan 2006 (Sandicor) = 1,876
Approximate months of inventory at recent rate of sales
= 17,358 / 1,876 = 9 months + 1 week
Good luck, SD home sellers!
GetStucco,
What are January’s numbers for Los Angeles and Orange County?
For February 2006 in SD, closed sales
1,201 houses
603 condos
63 2-4 units
51 mobiles
53 lots
1,971 total closed sales
Might end up being the best month of the year - I’ll bet a beer on it
SD total sales, February 2005 = 2,697
That’s a 27% decline, Y-O-Y.
The inventory around me is up 28%.
The more inventory grows, the worse it gets.
If that’s a rule, then all you have to do is watch the inventory - when it finally starts to contract, you know we’re close to the bottom.
The sellers are their own worst enemy, the more they panic, the worse it gets (Phoenix, for example)
Thanks to the readers who sent in both links. From the update:
The Daily News. “In January the number of homes sold by Realtors in the Fort Walton Beach-Crestview-Destin area dropped by 32 percent from January 2005. The median sales price of those houses was $225,500, down from $226,500 in 2005. The number of condo sales in January was down 43 percent from 2005. Median condo prices sank to $200,000 from $465,000 in 2005.”
“‘I think we’re on a plateau,’ said realtor Claudette Heinrich, who has sold properties in the area since 1970. ‘You’ve got fewer buyers and you’ve got more houses. It’s sticker shock for a lot of people.’”
“‘We’ve just done a 360 and we’re in a buyer’s market,’ said (realtor) Debbie Gericke. Dave Dorman, knows that better than most. He and his wife have had their five-bedroom house up for sale since September 2005. ‘It’s frustrating because we put the house up for sale and purchased a house in Chicago,’ Dorman said. ‘We have two mortgages we’re paying right now.’”
“He’s come down in price, to $798,000, but refuses to go too low. ‘We can’t fire sale the house where we’ll lose money on it,’ he said. ‘We can’t do that.’ Teresa and David Diluzio are in similar situation. They put their house on the market and bought a smaller one in the same neighborhood.”
“Ask Teresa Diluzio how long she and her husband, David, have been trying to sell their home and she laughs. She asks her husband. He laughs, too. They compare notes and decide their four-bedroom, 2.5-bath home in Raintree Estates near Bluewater Bay has been on the market for at least six months. The price has come down. Traffic has picked up a little. They try to stay optimistic.”
“‘We just missed the craziness,’ Teresa says, referring to last summer’s lucrative seller’s market. It’s been months and their larger house hasn’t sold, so now both of the Diluzios’ homes are up for sale. ‘Now what we’re having to do is we’ve had to put both of them on the market to see which one sells first,’ Teresa says.”
“‘I think we’re on a plateau,’ said realtor Claudette Heinrich, who has sold properties in the area since 1970. ‘You’ve got fewer buyers and you’ve got more houses. It’s sticker shock for a lot of people.’”
I think they are on the edge of a plateau where a landslide is underway…
Poor choice of words from Claudette. I’ve seen plateaus. If you walk far enough, you’ll find there’s a cliff at the edge of every plateau.
Here are some appropriate definitions of ‘plateau’:
—”Broad, flat-topped areas bounded, at least in part, by cliffs
—”A high area with a flat top that may be surrounded by deep canyons.”
—”Any comparatively flat area of great elevation commonly limited on at least one side by an abrupt descent.”
Alternative definition:
—”In psychology, a period in which there is no progress in learning.”
{“‘We’ve just done a 360}
what a genius!
wow…360 hein?…way to listen in geometry class, realt-whore!
GetStucco,
Maybe that was a Freudian slip. He meant to say “180″, but was secretly hoping the market would pick up this spring and things would turn around again.
“He’s come down in price, to $798,000, but refuses to go too low. ‘We can’t fire sale the house where we’ll lose money on it,’ he said. ‘We can’t do that.’ Teresa and David Diluzio are in similar situation. They put their house on the market and bought a smaller one in the same neighborhood.”
When the market puts his feet to the fire, he will drop the price, giving “fire sale” an entirely new meaning.
do these people think they can just get any price they want? is this guy obi-wan to think he’s going to magically get the price, not that the market wants, but what he wants?
john, remember you’ve got to “heat up the weather a little” first. that seems to be the missing magic ingredient.
And lets not forget that these guys are gaming the market to boot, moving down to a smaller house in the same neighborhood sounds like trying to make money in the housing market to me.
Ya know . . . people lost money all the time back in the olden days (more than 5 farking years ago). There is no guarantee you will make money when you buy something. If that causes you financial distress, then maybe next time you’ll rethink your overcommitment to real estate.
If he doesn’t like the “fire sale” concept, perhaps he would warm up to “bank sale”?
He doesn’t understand the meaning of “carrying costs” yet… But he will in a few years.
“Median condo prices sank to $200,000 from $465,000 in 2005.”
Is that a misprint?
It’s not a misprint. The January 05 and January 06 numbers refer to two totally different groups of properties. It’s a polarized market where condo refers to both $500K and up oceanfront vacation condos and $150K inland townhouses and apartments where the people who actually work here live. The oceanfront beach condo market has totally imploded and is seeing very few sales, but the $150K apartment market is still hannging in there on about 3/4 speed.
Wow, that’s a real bombshell.
That is precisely what makes these numbers so misleading, both on the upside and when they’re coming down. I would like to see price per sq. ft. data.
“This is what we call a buyer’s market, kids.”
This is what we call a Realt-Whore’s lie, kids.
“But Tuccillo, a Sarasotan who is former chief economist of the National Association of Realtors, says the housing market remains on strong footing. ‘There’s no way you can’t interpret this as a slowing down of the market,’ he said. ‘But no market goes to pot unless the underlying economy goes to pot, and that’s not happening here. We’re going through a cycle. This is a marginal change downward and the market will stabilize.”
Q. How do you know when an NAR spokesman is lying?
A. His lips are moving.
What do you call 1,000 realtors (whoops, Realtors) at the bottom of the ocean?
A good start.
I love this site, this “house” is barely more than a shack.
Marin PoS
Looks like something a guy and a few buddies could do as a weekend project. At 629000 you must be in some kind of a trance to even consider buying it. Not worth 200k.
Yeah, and they would have had to have been drinking to boot!
Is it leaning left?
It looks like there is just enough room for the field mice to enter the garage, stage right.
From today’s Daily Reckoning:
Where have all — the buyers gone,
Long — time a-after?
Where have all — the buyers gone,
Long time, ago?
etc.
“Oh when will they ever learn,
when will theeeeyyyy ever learn.”
This song is more appropriate than some people might realise. It tells of a mediaeval army going off to a battle where they get annihilated (the Scots at Flodden?).
The “flowers” were the good luck posies worn by the soldiers, given to them by their family/loved ones.
““‘We’ve just done a 360 and we’re in a buyer’s market,’ said (realtor) Debbie Gericke.”
i love it! 11 years of junior college down the drain!
(go smoke some pot with butt, lady….)
“‘We just missed the craziness,’ Teresa says, referring to last summer’s lucrative seller’s market. It’s been months and their larger house hasn’t sold, so now both of the Diluzios’ homes are up for sale. ‘Now what we’re having to do is we’ve had to put both of them on the market to see which one sells first,’ Teresa says.”
That’s a perfect example of the old saying ” Sell when you can, not when you have to.”
“Ask Teresa Diluzio how long she and her husband, David, have been trying to sell their home and she laughs. She asks her husband. He laughs, too. They compare notes and decide their four-bedroom, 2.5-bath home in Raintree Estates near Bluewater Bay has been on the market for at least six months. The price has come down. Traffic has picked up a little. They try to stay optimistic.”
They can laugh and stay “optimistic” all they want, but they won’t sell anything until their asking price falls. Haven’t any of these people taken an economics class? The most important thing that buyers look at is price. Somewhere between $1 and their asking price, the house will sell. Now they just need to start droping the price methodically to figure out where.
There’s a certain waiting for BRAC mentality in the area right now. The Air Force is adding a lot of positions at Eglin AFB starting in 2009, with no real plans to expand on-base housing, and there isn’t much land left south of I-10 that hasn’t been built out. So no one wants to drop too much now when the consensus seem to be the area will get a 10% population increase in about three years on top of normal population growth and that prices are going to pick back up then because of the land scarcity issue. (Yeah, there is still vacant land north of I-10 but that involves long commutes to jobs in the south part of the county, and an unfortunate closeness to the Alabama border)
Jill,
More like 2010-2011… and beyond that you are talking about 75%+ of those people coming being young single special forces… do you really think these folks are going to push a market that is up 100%+ in two years higher???
And you on base housing comment… wrong again.
They are working on privitizing the next project and building on base housing on the north side of Garnier Bayou…
In the end everybody “hopes” some magic solution will continue in this area, but its gonna crumble just like all the others.
The Garnier’s Bayou housing privitization deal is to replace existing base housing, which is crumbly and falling apaprt and nowhere close to meeting modern hurricane code and is going to get bulldozed when the new base housing goes in. The original plans were to keep the number of total base site-built units the same (and a net decrease in total housing units because of the closing of the trailer park), not increase it to what they needed for BRAC purposes. That housing program was in the process of happening even before BRAC.
Now because of BRAC, they’ve been thrown for a loop and will pretty much have to go back and redo all the original plans if they’re going to deal with the increase in one fell swoop. I’m guessing that what will happen is that they’ll delay demolition on the old housing units they’re supposed to be getting rid of, which isn’t exactly great.
As for demographics of the influx, it seems like it’ll run 50/50 between the Green Berets (younger families and singles) and the F-35 training group (skewing to older families because of experience needs)
I see prices as pretty much like they were in 96-00- mostly flat for the most part with a year or two of decreasing prices and a year or two of modest increases.
The low end of the market is reasonably stable at current prices- the price to rent a 2 bedroom townhouse in Ft. Walton Beach is about $900/month, while the sales price would be in the $120-$135K range. The ratios for long term investment buying at that price somewhat make sense, even if it’s not the good old days when you could buy for $65K and turn around and rent for $750/month, and we aren’t going to see those kinds of conditions again.
Once you get past the fantasyland that is Destin/South Walton, there are some sparks of reasonableness in the local market.
Your absolutely right, espcially with the Special Forces comment ( former 10 group SF). Most people in SF wont buy because of missions and re- assigments on ODA’s. To sit and wait is a pipe dream.
Buyers should be aware of any local idiosynchrasies as much as sellers (informed, of course, by their friendly neighborhood RE agent). Despite what they’ve been told, today’s buyers are NOT buying. The only thing to do is lower the price (unless you want to wait for inflation to take care of things after a number of years).
The YOY declines are starting! Finally the madness has stopped!
Florida’s Bust:
http://www.xanga.com/russwinter
I just got one of those realtor flyers. In my immediate area in coastal N. County San Diego, there has only been one sale since last September. About a dozen houses in the area have just been sitting and sitting and sitting ….”For Sale.”
There’s no bubble bust in Sedona, AZ. Can dirt get any cheaper? From craiglist/phx:
$245000 - 80 x 80 lot with 6 mature trees & older mobile home
Reply to: houseatarnold@hotmail.com
Date: 2006-03-04, 3:31AM MST
$245000 - SEDONA, Az, 80×80 lot with mature trees & older mobile home
GREAT property, 30 Ironwood Street, in SEDONA, ARIZONA 86351, VOC, for just $245,000.00.
View of Castle Rock from the back porch and the red mountains in the front.
Quiet neighborhood.
This lot is 80 x 80 in the Village of Oak Creek. It has several MATURE trees which are just wonderful in the summer.
The mobile home is 64 feet and can be used or moved. It is a 2 bedroom, 1 1/2 bath, office, Kitchen-Dining and livingroom open floor plan.
The value is in the land. On septic tank now but sewer line is planned and is already at the main road.
Virtual Link:
http://ts.rtvpix.com/tour/RE/tour.view.ltr.php?utl=RE-2464-DD5XXM-01
Well that works out to be 1.667 million on a per acre basis assuming the mobile is worhtless which it probably is. If that is not a bubble price what the hell is?
That’s not even Sedona, but Village of Oak Creek. In Sedona that mobile would be listed at half a million.
POS
Checkout “Hoping for Best in Home Sales, 2 Sides Sit Tight” on the FRONT page of todays’ NY Times online:
“Sometime soon — probably in the spring, the peak sales season — one side or the other will have to capitulate, many economists and industry executives predict.”
Repost from the ‘A Buyer’s Market Is Not At Or Near The Peak’ thread - I hope more people see it here. –scinic
Maybe you guys can help me explain this, from a real estate agent’s blog on his web site:
“It’s a Buyers’ Market - But It’s Not As Bad As The Press Says!”
“The median price declined in January, but that doesn’t mean all, or any, home prices are declining, it could be because a greater number of lower priced homes sold last month.”
Huh?
http://www.rogertheriault.com/index.php?blog=18
Look at Roger’s picture, barely out of puberty. His whole reality has been 20%+/year appreciation. Well, his real estate education starts this year! Welcome to the party Rog!
I’ll explain. When you measure sales, you are looking at a different set of houses selling each month. With a very large set, changes from month to month will be somewhat indicative of a trend, but not always. A few extra sales of cheaper homes can pull the median point down, and this can happen while everyone is still selling their homes for record prices.
(as an analogy, if you count the number of kids at the mall at 10am and then again at 6pm, you can’t generalize and say “Mall shoppers are getting younger! Film at 11!” but this is what the press can sometimes do with statistics…)
The two houses and purchasing dates the Diluzio’s are holding… think they got caught up in the red hot RE market last year thinking they found a quick way to riches???? Welcome to the other side…
118 RAINTREE BLVD
NICEVILLE, FL 32578
05-16-2005 325,000
11 HAMPTON CIR
NICEVILLE, FL 32578
07-16-2004 329,900
“But, you say, the headline in the paper said, ‘Prices up.’ Just because the median sales price goes up, that doesn’t mean home values are appreciating across the board. It just means that the houses that actually sold were more expensive than the houses that sold last year at this time. The number is skewed by expensive new homes that are selling.”
This explains the whole US market now.
Well I can tell you first hand that the market is not completely dead. I just listed and sold (multiple offers) a small condo in the Orlando area. On market less than 1 week. I think the reason it sold so quickly is that it is in the affordable first time buyer price range (listed $77,950).
Hell, 77.9K won’t buy a garage in most of the places followed on this blog. Ya did good!(but you are an anomaly)
Seems cheap– Link?
If this is the Dave Dorman that used to be the president and CEO of Pacific Bell (then SBC, now AT&T), I hope he loses his A$$ on both houses. Couldn’t happen to a more deserving person.