What Worked A Year Ago Less Than Perfect Today: Florida
The Herald Tribune reports from Florida. “Faced with continued sluggishness in the high-end condominium market and little reason for short-term optimism, the owner of the land at U.S. 41 and Gulf Stream Avenue downtown has shelved plans for a 17-story luxury residential tower. Kolter Communities’ decision to suspend its Grande Sarasotan project marks the biggest casualty to date for Southwest Florida’s slumping real estate market.”
“Kolter officials said they intend to redesign their $210 million tower and its 144 units while the project is on ‘hiatus.’ ‘If we are going to add additional units to a market ripe with condominium opportunities, they are going to represent a broader spectrum of choices and amenities for luxury-minded customers,’ said Bob Vail, the Kolter Tower Division president.”
“Palm Beach-based Kolter, developer of the 830-acre Woodfield Country Club in Boca Raton and $3.7 billion worth of property in Florida, has adopted a ’similar strategy statewide as it pulls back from several projects,’ Vail said.”
“‘Every aspect of the real estate market and industry is going through adjustments,’ said Michael Saunders, president of the regional real estate brokerage powerhouse that bears her name. ‘They felt they needed to be honest and realistic about the market. They feel right now it’s the right thing to do to take it off the market until they see some definite trending up.’”
“The luxury condo market has failed to pick up as anticipated, prompting Kolter to acknowledge it had miscalculated. ‘What worked so well a year ago is less than the perfect solution going forward in today’s market,’ Vail said.”
“Southwest Florida could net a healthy number of visitors this winter, but the local competition for their business is fierce. People who manage hotels and condos are starting to realize that visitors have many, many options. A glut of condos is drawing bargain hunters to the mainland. Second, small hotels are seeing less advance booking.”
“Condos, which hold the bulk of beds in the area, are plentiful. Some condo managers are responding by holding rates in check, despite the wishes of their owners. ‘When you’re talking about rates, you’re talking about a different market,’ said Gloria Stephens, rental manager on Siesta Key. ‘You’re talking about how do you get visitors in.’”
“Occupancy rates in Sarasota, Bradenton and Venice apartment complexes dropped nearly 5 percent during the past year and could be an indication that average rents won’t rise much in the months ahead, according to data released Thursday.”
“‘Such widespread declines in occupancy likely herald reductions in rent growth rates,’ RealFacts reported. Sarasota-Manatee apartment complexes saw their occupancy rates drop from 97 percent to 92.3 percent.”
The Palm Beach Post. “One in every 51 households in Palm Beach County - almost 11,000 properties, entered some stage of foreclosure last year, nearly double the national rate.”
“In Palm Beach County, one of the most prosperous real estate markets in the nation during the boom, foreclosures rose by 29 percent last year, to a total of 10,915, up from 8,454 the previous year (one filing for every 66 households). The increases were higher in Martin County, according to a report.”
“When adjustable-rate mortgages began to reset at higher interest rates the once-booming residential resale market began to collapse. This prevented financially strapped homeowners from selling quickly to avoid foreclosure as wary buyers began to wait for prices to hit bottom. Many are still waiting.”
“‘The declining home sales have made it less attractive for investors, and made them less able to rapidly resell a unit,’ said economist Hank Fishkind.”
The Orlando Sentinel. “The Home Builders Association of Metro Orlando kicked off a marketing campaign this week to encourage ‘fence sitters’ that now really is a good time to buy a home in the Orlando area. Valued at nearly $1 million, the six-week multimedia campaign is appearing on local television, in print, on billboards and on a Web site.”
“Randy Noles, a local home-building magazine executive, characterized it as ‘the largest public-awareness campaign this organization has ever done.’ He said it comes at time when new-home sales are ‘clearly in a lull.’ The thrust of the campaign message, he said, is that the lull will not last. ‘Smart people buy in the lulls,’ he said. ‘You just have more negotiating flexibility.’”
“As of Sept. 30, the region’s 12-month start total for homes was off by 9.8 percent compared with the same period a year earlier, but the new-home inventory as of that date, 22,794 units, was actually down slightly and represented an 81/2-month supply.”
“The category of ‘finished but vacant’ homes was up sharply, however, from a year earlier for a second straight quarter, surging 123 percent to 8,179 units.”
The Tampa Tribune. “A slowdown in one industry can provide a big boost for another. There are so many homes for sale nationwide that the Bradenton-based company that makes the front-doorlockboxes used to gain access to housesis working around-the-clock to keep up with demand.”
“One local real estate group ran out because it underestimated how many devices it would need. ‘There are more homes on the market, and they are taking longer to sell,’ said Jeff Antrican, sales manager for GE Security, which manufactures the electronic boxes. ‘Our demand is higher than ever.’”
“GE Security produced 1 million electronic lockboxes in 2006, an amount sufficient to cover demand for the previous three years during the hot real estate market. Now there are 3.8 million homes for sale nationwide, up 30 percent from a year ago, according to the National Association of Realtors.”
“In the Bay area this year, more homes are on the market than ever, real estate agencies say. There are 17,154 homes for sale in Hillsborough County, up from 5,279 this time last year. In Pinellas County, the number has doubled to 16,320.”
“Local real estate groups that lease the devices to agents say demand for the boxes is at record levels. The Pinellas County Realtor Organization misjudged demand last month and exhausted its supply. Its agents have to wait until a new shipment arrives Monday.”
“Carlos Fuentes, president of the Greater Tampa Association of Realtors, said the group goes through 150 boxes every two weeks. Demand increased dramatically during the summer, he said, and hasn’t let up.”
When it rains it pours, folks. Overnight this blogs host had some system problems that took it off-line. This was unrelated to the database problem, that I hope is resolved now.
Hey Ben,
Glad to see you up and running again. Was the issue resolved by repairing the wp_contents table through PHPMyAdmin OR something unrelated? If unrelated, did you share the solution with other developers at WordPress?
The table was just a symptom of a larger database and memory issue. Really complicated.
Ben, Need more hard drives? It’s a bitch when you overwrite without deleting..LOL..BTW congratulations on being the biggest housing blog out there.
It was a cache thing, combined with a mysql thing.
hi ben
i feel with you.
hope its ok that i post this here instead of the bits buckets
lots of stuff
from the capitalized interest mani at wamu
to the reit bidding war for eop
to private equity and executive pay etc
have a nice weekend
http://immobilienblasen.blogspot.com/
thank god
i was really missing this blog
resmae and equifirst today, who’s at bat tomorrow. tgif.
????
January 19, 2007
To Our Valued Mortgage Brokers:
I am pleased to report exciting news from EquiFirst! Today, Barclays Bank PLC announced that it has signed an agreement to acquire EquiFirst from Regions Financial Corporation.
The acquisition by a premier investment bank of a leading non-conforming lender represents a strategic move for both Barclays and EquiFirst. Specifically for EquiFirst, this move reinforces our position as an industry leading lender by giving us greater access the capital markets, expanding our lending expertise, enabling us to create more first-rate products, and enhancing our ability to personalize services for our loyal mortgage brokers. As a result, we expect to deliver greater strategic value and stability for our mortgage brokers for many years to come.
The transaction will be finalized over the first half of 2007. In the meantime, you should expect “business as usual.” This transaction will not have any impact on your loan closings. You will continue to work with the same account executive and mortgage service team for all aspects of your relationship with EquiFirst. Furthermore, we will assure that our corporate activities will not get in the way of closing your loans on behalf of your borrowers.
On behalf of the more than 1,400 EquiFirst associates, I would like to thank you for letting us work with you in the past, and we look forward to many more loan closings together. Please know that we do not take your loyalty for granted. We know you come to us because you want a reliable, knowledgeable lender who will consistently close your loans in a timely fashion. I am very excited about what today’s announcement means for our mortgage brokers, our associates and our leading position in the ever-changing non-conforming mortgage industry – yet another opportunity for us to raise the bar on serving you and your borrowers with excellence.
Thank you again for your business.
Sincerely,
Jeffrey G. Tennyson
Chief Executive Officer
“In the meantime,…”
Sort of like the time between Saddam entering the room and taking the down-elevator.
Hope they got a large deposit from Barkleys
It would be cool if you had a hit counter Ben
Ben may not have a counter but other bubble blogs do and one such blog had a major spike in the number of readers yesterday. Check out the graph at the bottom of the link.
http://tinyurl.com/24v2ho
Yeah, this must have been all the junkies here (like me), hitting the substitute drug
I had dt’s…
…little reason for short-term optimism… shelved plans for a 17-story luxury residential tower.
Let’s be perfectly clear here. $210 million hi-rise projects make ocean liners look like Beckham when it comes to agility. “Short term” means 2-3 years for them and has absolutely no planning value for scheduling and construction purposes. The only way to stop something like this is for them to have hit an iceberg. And like an iceberg, 9/10ths of the problem is not visible. The REIC spin machine is going into overdrive and the compliant MSM is oblivious to their high pitched whine or the thud as the wheels come off. This morning message brought to you by the words allegory, analogy and cliche.
Glad to see the site back! I dug a little more into the Centex subdivision in WPB that is on the old par 3. I spoke with someone in the sales office. The lady told me the original start price was $299,999. They were having some “builders discounts” to move inventory. When asked how many were still available, she said “We have good availability now but they are going pretty fast.”
Sounds to me like it wasn’t enough of a haircut. The $100 per square foot I referred to is on the higher end models. Still, I think this is an indicator of things to come, especially after reading the foreclosure rates.
Ben, good luck with the net gremlins…..we know you’ll “git ‘er dun”.
What strikes me about the headlines is the local media campaign in Orlando. A million dollars for a six week campaign is pretty big bucks for ANY organization. Part of their high cost is a lack of planning. You can’t jump up and make that kind of media buy w/o bumping exisitng advertisers so the agency has to pay a huge premium for GRP’s. I’m having a hard time believing a $1M reach for a $700k buy. Anyone in media sales knows those extras are only given to advertisers who have a pretty big continuous presense in a market…..they chip in for those who buy GRP’s on an annual basis, their good customers they can count on year in and year out.
This tactic is a huge roll of the dice. Let’s see if they roll snake-eyes.
My 2cents worth on their $1M campaign.
I saw one of the TV spots this morning. There was a graphic of sand running out in an hourglass while the voice-over talked about increasing construction costs, declining inventory, interest rates and other fear-provoking points. Really shameless and will, in all likelihood, scare some uninformed buyers into action. I’m on the ground here and I think I can say with reasonable certainty that we will see more price erosion before the “Time2Buy” actually arrives.
Increasing construction costs? I’m involved with an ongoing development in the Naples area where they decided to rebid some road construction and similar infrastructure costs. The bid was 28% lower than the year earlier.
Good catch. Construction costs should not rise in a slowing market.
That’s only 43 homes worth of commisions. They’ll make their money back. There’s gotta be a least 43 more dumb-f$cks in that county that are waiting for the clarion call to jump in and buy.
The Sarasota realtors have a campaign similar to the Orlando one called Time2Buy. What gets me is that they are spending over a million dollars for this campaign. As a consumer, all that tells me is they make way too much money and I’m not willing to fatten their pockets. Adios to the realtor profession! I can easily find a home without their expertise!!
Builders have told me they legally can’t take the realtors cut off the top of the price. Hmm, any greedy lawyers up for suing? I think it’s unfair that I as an educated consumer should have to pay thousands of dollars more for a home because the NAR has protected themselves against smart buyers! Down with the NAR!
Are you in Sarasota / Bradenton now Lizzie? My parents are there.
Yeah, I replied on a post last week. We moved to Lakewood Ranch. Renting of course! Waiting for prices to come down to normal. Ha! I checked out foreclosures the other day. It’s unbelievable the number here! I don’t know how much longer those flippers can hold onto their flips! Realtors call and say we’re taking all offers. So many realtors are holding multiple properties! It’s just crazy!
I have friends in Lakewood Ranch. Nice area.
But in 2001/2002 friends bought a place for 185k back there and sold it in early 2005 for 700K and turned around and immediately rented it out from the investor. They just told me he has it for sale again and started at 900k and is now down to 600k as he has been bleeding on it every month. They moved out about 6 mos ago after the 1 year lease and it has been on the market ever since. I wonder when the greed will end?
We had looked at Lakewood Ranch back in 1998. It was hardly anything at the time. Homes were dirt cheap! What kills me in all this is that the developer has had this land for years and years! Lots at the height were probably going at 5 times over 1998 prices. The home we are renting is very similar to your friends old home. It was built in 2002. We couldn’t find records as to how much they paid, but assume no more than $400k. The specuvestor we rent from paid $750k in 2005. Tried to sell for $950k and lowered so many times! Finally desperation led to him renting! The only way we’d buy the house is if it went down to around $550k. Our landlord is losing money every month. I wonder how long he can continue to do so!!!!
“The Palm Beach Post. ‘One in every 51 households in Palm Beach County - almost 11,000 properties, entered some stage of foreclosure last year, nearly double the national rate.’”
That to me is staggering. I shudder to think of what this year will bring.
In looking at foreclosure.com and emailforeclosures.com - the numbers for FL, CA, and VA are going up *fast* the last few months.
They make it seem less out of control than it really is, it may be twice the average NOW, but not compared to normal RE markets. In normal RE markets the rate of foreclosure is something like 3 out of 1,000 , not 20 out of 1,000. So it’s really 7 times higher, not twice as high.
redesign their $210 million tower and its 144 units>>>
so roughly speaking, an average unit is about $1.5 mil? Who’s going to buy them for that much???? It’s a freaking condo! Just another sign of apocalypse IMHO.
Walnut Creek CA is building condos that start at $1mil.
Yesterday flipping through the channels I stopped at Kramers Mad Money. What made me stop was he was actually talking in a soft, calm(although creepy) tone. He was pushing WCI stocks! He said the bottom of the real estate market was months ago. Anyone else catch this?
With foreclosure rates, renting being cheaper, high inventory…. I don’t see how WCI would be a good buy. I don’t think you can bank on their land assets, as they seem to be depreciating!
cramer picked aapl,nyx as major growth stocks for 2007
they did grow, for a week or so now coming back to where he issued his buy, just another pump and dump
wall street is shameless
Don’t even waste yout time talking about that bastard Cramer amd all these TV fu-kers.
That’s what I’m talking about! Bunch of dorks who get paid to lie.
I am not familiars with the term “dorks”. Is it related to selling your A$$ ?
I know, I know!!!! Just couldn’t believe that he could be that stupid or unethical! From where I stand, you see the pain on the faces of those affected! There is no recovery in sight in my part of florida. And to tell stupid little investors that Florida real estate isn’t dead and on the road to recovery, is pure evil!
He looks like a mean and vicious bastard.
Watching CNBC is like attending an Amway rally every day. I had to attend for a friend once; it’s like brain washing. I only watch 20 minutes a day, for the market data, midday. What a bunch of shills and cheerleaders.
Yes, but they are luxury condos. If they were also upscale, exclusive, and prestigious they would be worth even more than $1.5 million each. They may even include some amenities.
“A slowdown in one industry can provide a big boost for another.”
Oh sure. Making electronic lockboxes is definitely going to improve our standard of living and our balance of payments. We are probably the world’s leader in bottle redemption too.
THE END.
LOL…so true! When I read that quote, I spit my coffee…really, I hope that someone here is compiling a quote list of all the “couldn’t get any better!” quips from these nitwits.
We also have more prisons that any other country in the world. Yea for us!!!
Would someone please share with me why the DC immediate suburbs are selling houses again. My heart is breaking as I write this. I see Under Contract signs everywhere and I look on public record and they all or most sold for asking price. Is the spring bounce that the Agents, Media cheerleaders influencing consumers decisions. Are the consumers giving in to the prices? God, I hope not.
seeing that at 10-12% off may 05 peak
fed gov has zero layoffs ever, so away they spend !
That’s the problem. These people live in a bubble. We have the same thing with our federal government in Canada. These people are part of the problem.
IMHO, dead cat bounce. I see the same in my area, small scale buying, and it’s the remainder of the “greater fools” who are listening to seminar hucksters, NAR media blitz, and their own greed…it’s a 10 year mindset that had people thinking they could get wealthy flipping property, and it’s still got a while to shake out all the dead cats out of the trees. A broker told me the ONLY ones he sees buying aren’t families, or people that plan on staying in the property…it’s still flippers…
There’s a flip attempt that just came on the market in my neighborhood. Half a block from a busy street. Looks to be a cosmetic fixup. And they’re asking (by this neighborhood’s standards) a pretty penny for it.
Inside the beltway SFH’s probably will do better than Loudon/Prince William/Howard county, just because they don’t have to compete as much with new development. Still, I’m seeing some Houses that would have sold in the $700k range in Alexandria now in the $600’s - like everywhere, buyers in the last two years who need to sell should be nervous and prepared for a haircut.
On the other hand, I think condos in Arlington & D.C. will face steeper losses than close-in SFH’s.
Fairfax & Arlington counties show Dec sales prices being 93.54% of asking prices - not what I’d call paying asking. Loudoun county is the same - it’s been running about 91-92% of asking and still at 93% in December.
A small sample size like just a few homes can be *very* misleading, so don’t bother. You have to look at stats to get the true picture. As misleading as stats sometimes are - they’re at least better than small samples of just a few homes.
While DC does have the benefit of being big-gov’t-driven, 9/11 caused an extreme uptick that has since leveled relatively. That uptick caused the big DC-area bubble. Long-term (15-20 years) DC will be good, but short-term (5-10 years) it’s still a bubble, and will continue down with the rest. There’s too much available land around to justify the current prices.
amen dude. i come to work today to find my officemate is looking to buy with his girlfriend! looking around columbia pike. my jaw dropped. it was funny hearing him talking to his dad about getting some downpayment cash from him and about how inside the beltway is a great investment, especially arlington! i didnt say a peep.
then my wife emails and is freaking out that there is a bunch of posts in a local forum she browses and they’re saying things like, “house down the street from me got 3 contracts with DOM less than 10 days!”, etc.
making me question the DC area bubble, help!
Recent editorial in the local regional rag here on the northshore in MAssholeland notes a statistically documented 25% (vs. 7% nationally) decline in the number of the state’s young adults (ages 25 to 34).
With $450k for starter homes, it doesn’t take a rocket scientist to understand the reason why.
New England is definitely undergoing a major demographic crisis, as a combo of old money, bureaucratic red tape, and the wacko environmentalists lock up any developable land.
Again, it’s all going to be a game of musical chairs, relative to who are gonna be the ones who get stuck to pay all the bazillion of dollars of pensions for legions of retiring public employee parasites.
Steer clear.
i live in sarasota and the condo building craze appears to be slowing down FINALLY. Long time residents are shell shocked on how this once managable enclave is becoming an overbuilt zig zag of ugly buildings with little or no thought to the infrasturcture
The problem is the folks running our local government are wined and dined by developers! We vote them in, so we are partially to blame. I know I’m guilty of in the past voting for the person where I recognize the name. I will never do that again! The politicians with the most money are funded by developers!
It’s so sad to see what has happened here. Went to Anna Marie Island the other day. It was just plain shocking to see all the for sale signs. It’s as if the whole island of Anna Marie is up for sale! That’s why I think anyone shelling out more rhetoric that we are on the recovery is pure evil!!!!
When a balloon pops it is left in the form of torn bits of rubber which is not repairable. No advertising (brainwashing) campaign will work to reinflate the bubble. They have to start over and blow up a brand new balloon. In fifteen years the NAR and homebuilders might be eligible for a new balloon to play with.
“One local real estate group ran out because it underestimated how many devices it would need. ‘There are more homes on the market, and they are taking longer to sell,’ said Jeff Antrican, sales manager for GE Security, which manufactures the electronic boxes. ‘Our demand is higher than ever.’”
“GE Security produced 1 million electronic lockboxes in 2006, an amount sufficient to cover demand for the previous three years during the hot real estate market. Now there are 3.8 million homes for sale nationwide, up 30 percent from a year ago, according to the National Association of Realtors.”
Anyone out there know what one of these gadgets cost? It is enjoyable to me to read about how the real estate industry is spending more to make less. I hope this bleeds them dry. Are they making Realtors buy their own lockboxes these days? Can someone comment on increased costs to Realtors these days besides the obvious one of marketing homes that aren’t selling? Hehehehe, love it.
I hope GE has another banner year selling those lockboxes.
Only 1 million/year!?! Wow… how long do they last? (I guess 3 years at best.) I too would like to know how much they cost. The cheapie home ones (not suitable for RE duty) were only $35. But I imagine its like cameras where the heavy duty housing is the big cost in professional models.
Off to run errands…
Neil
The fancy electronic ones that we use cost $100 each.
Any news on Miami? Whenever I read about prices going down that does not seem to include Miami. Today when I left the office a woman in the elevator told me how she had to work tomorrow because her office was so busy. I asked her what line of business she is in ( in my office building most offices are closed on weekends) and she responded that she was an appraiser. She also told me that she did not know what was going on but that all of a sudden they were “busy like crazy”. I have my doubts on Miami and (unfortunately, I am a renter) don’t see prices go down below Jan 2006 rates. Love to hear if someone has a different view ( I would love to be wrong,believe me!!)