“The Correction Is Beginning” In Florida
The Florida realtors have the December numbers out. “Sales of existing homes and condos in Florida were down in December. A total of 12,415 existing single-family homes sold statewide last month, a decrease of 28 percent from the 17,215 homes sold during the previous December, according to the Florida Association of Realtors.”
“Looking to Florida’s existing condominium market, sales also declined in December with a total of 3,788 condos sold statewide compared to 5,428 in December 2005 for a 30 percent decrease, according to FAR.”
The Sun Sentinel. “The median price of an existing Broward County home last month was $367,600, off $1,400 from $369,000 in December 2005. The year-over-year decline wasn’t as sharp as in previous months. Palm Beach County’s December median was $368,200, a $40,000 decline from $408,200 in December 2005.”
“Broward had 1 foreclosure for every 35 households in 2006, RealtyTrac said. Broward had 21,144 foreclosures last year, up 56.5 percent from 13,514 in 2005. Palm Beach County had 1 foreclosure for every 51 households in 2006. The county had 10,915 foreclosures in 2006, up 29 percent from 8,454 in 2005.”
The News Press. “Sales of existing homes plummeted 45 percent in December, compared to a year ago, according to FAR. The median price also dropped, from $322,300 to $262,500, down 19 percent from a year ago.”
“Percentage-wise, Lee County saw the biggest decline in the state. Statewide, the numbers of sales dropped 30 percent, while the median price saw a decline of 2 percent from $205,500 to $200,600.”
From TC Palm. “(FAR) says that single-family home sales in the Fort Pierce-Port St. Lucie metropolitan statistical area, which includes Stuart, dropped 27 percent to 330 closings in December from levels of the same month in 2005. Sales of existing single-family homes in the Vero Beach area, tracked by the Realtors Association of Indian River County, dropped 22 percent.”
“Prices on the Treasure Coast also declined from the previous December. In the Fort Pierce-Port St. Lucie area, the median home price fell 9 percent to $240,000. Vero Beach’s median home price fell 6 percent to $220,000.”
The Herald Tribune. “Pressure continued in December on home sellers to lower their prices. The median sales price for homes sold during December in the Sarasota-Bradenton market was $284,700, down 17 percent when compared with the same month last year.”
“Though Coast Bank officials are downplaying the financial turmoil brought to their business by a floundering Southwest Florida home builder, there are strong indications that the problems will grow in coming weeks.”
“Most of the $110 million in troubled construction loans that Coast has on its books were made to out-of-state investors, people more likely to walk away from their obligations to the bank.”
“Customers who bought homes are becoming more and more convinced that they were defrauded by a group of home-building, mortgage and real estate companies that lured them into risky real estate investments in various Florida developments during the market’s boom years.”
“Fernando Cacoilo, the owner of Jodfer Land Service, started clearing and grading home sites for CCI two years ago, and the demand quickly consumed his small business. Now he finds himself short $1 million.”
“He has filed 186 liens against CCI home buyers for bills of $3,000 to $15,000. ‘Fifty percent of my work was from CCI because they just kept pushing, pushing, pushing,’ Cacoilo said.”
“CCI kept him busy, but the company never paid a bill in full, Cacoilo said. Other subcontractors were strung along the same way, he said. ‘As long as we kept getting a check every week, we were all OK,’ he said. ‘My dumb ass didn’t pay attention to the billing.’”
“Before the work stopped, CCI principals were driving Hummers, and construction supervisors new pickup trucks, Cacoilo said. All the contact from customers that Cacoilo has had makes him wonder where the money went. ‘I keep getting calls from homeowners that I liened: ‘CCI drew $127,000 on my home, and all I got is dirt with a pad on it,’ he said.”
“Developers facing a downturn in the housing market want a freebie from Palm Beach County traffic rules. The Gold Coast Builders Association asked the County Commission for a two-year ‘blanket extension’ of building deadlines for all developments.”
“‘These guys always say, ‘Let the market decide,’ said Joanne Davis, spokeswoman for (a) watchdog group. ‘When the market decides against them, then they want government to decide. They can’t have it both ways.’”
“‘Too many homes got built because of the speculation boom,’ real estate analyst Bradley Hunter said. ‘The correction is beginning.’”
“Benderson Development’s plan to build 1,750 new homes next to a new mall seems a bit riskier. A glut of housing has other builders scaling back. ‘This project might be ahead of its time,’ said (consultant) Jack McCabe. Noting that the median price of homes sold in this market is down 18 percent from last year, McCabe said it is ‘an optimistic endeavor to start this type of project in a declining marketplace.’”
“Real estate agent Clay Hyslop’s client bought a two-bedroom condominium on Flagler Drive in 2005, but didn’t spend much time there and needs to sell it. Easier said than done in today’s housing market.”
“‘Sometimes there aren’t buyers,’ Hyslop said. ‘It’s like having the best lemonade stand in the middle of the desert.’”
“So Hyslop persuaded the seller to try something different: listing the West Palm Beach condo in a public auction Saturday in Hollywood. Roughly 160 properties, most of them in South Florida, will be auctioned at the event.”
“Nicole Hollander, president of Auction USA, said she expects plenty of below-market sales at this event as the housing slump lingers in this region. Some sellers in the auction paid $1,500 for the right to turn down the highest bid. But others paid nothing and have agreed to sell to the highest bidder, regardless of price.”
“Two sellers who tried unsuccessfully to list their properties in the auction broke down and cried, Hollander said. ‘There was almost a desperation in people’s voices,’ she said.”
“Richard Lane, a full-time investor, figures the auction is his best chance to sell his house in Hollywood. He bought a home with a pool early last year for $344,000. He said he sank $47,000 into renovations and put it back on the market in May.”
“Carrying costs are about $3,500 a month, and the longer the property sits unsold the more money Lane loses. ‘I’ve had a million agents call me and say they want to list it,’ he said. ‘But nobody wants to bring me a buyer.’”
The Orlando Sentinel:
‘Florida had 124,721 filings during the year, RealtyTrac said, or 1.7 percent of all households in the state. Metro Orlando had 12,271 filings during the year, RealtyTrac said, representing 1.8 percent of households. That placed Orlando as the 26th highest metro rate of foreclosures in the country. The highest rates were seen in Detroit, Atlanta, Indianapolis, Denver, Dallas, Fort Worth, Las Vegas, Memphis, Fort Lauderdale and Miami.’
BTW, I think the News Press may have been referring to one metro with those numbers. I’ll try to find out.
Yes that News Press article didn’t make much sense to me either (see my post below).
It says median dropped 19% and then later says that the statewide median dropped 2%.
And the Super Bowl is in Florida this year. How appropriate for the start of the spring real estate listing season should start where all the foreclosure action is. Am dying to see how many listings hit the MLS once Super Bowl is out of the way.
so from this and the Detroit numbers it’s fair so say at 2% you’re in total meltdown
what was 1991 ??? anyone know
‘As long as we kept getting a check every week, we were all OK,’ he said. ‘My dumb ass didn’t pay attention to the billing”.
Small business Rule #1: Pay attention to the billing.
At least he gave an accurate appraisal of his business acumen.
‘Fifty percent of my work was from CCI because they just kept pushing, pushing, pushing,’ Cacoilo said.”
And he forgot about the part where CCI was supposed to pay, pay, pay him? The guy ended up a million dollars short!
The way it’s playing out, it appears that many involved in the continuation of the RE boom thought they had hit the mother lode. Instead they’re royally hosed.
What the heck was in the water down there? Looks a lot like ‘gators from here…
I don’t know but it won’t flush down! Someone get a plunger!
Soft landings are for sissies!
good one.
“Two sellers who tried unsuccessfully to list their properties in the auction broke down and cried, Hollander said. ‘There was almost a desperation in people’s voices,’ she said.”
Capitulation?
In witnessing this event, which emotion would you have felt: sadness, or schadenfreude?
Schadenfreude 100% ! When sistuations like the housing market get as out of hand as this has there will be a lot of pain during the correction. I’ve learned many of my lessons in life the hard way, key word being learned. Lot’s of folks are getting ready/are in for a hell of a lesson, as it should be. Something for nothing is a pipe dream some bodys got to pay. Always have, always will.
“Schadenfreude 100%”
Hear, hear. Sometimes I think about the upcoming carnage and I feel bad for what’s about to happen. Then I remember all these IDIOTS with their Escalades and Rims and Plasmas and Boats and Vacations. Stupendously Stupid & Shallow American Sheeple, with their MINUS 2 PERCENT savings rate last year, most definitely have it coming.
Reality check will do ‘em good.
“If I do this wrong, it may hurt a little.”
“What it you do it right?”
“Then it’s going to hurt a LOT.”
Sadness. It is neccessary for markets to punish those who gamble their futures. It’s part of the great economic “circle of life.” But it would have been better for the market to have corrected more quickly so that FBs would be losing fingers in the machinery of commerce, not hands and arms. We would be in much better shape as a country if the RE bubble popped in 2003 or 2004?
Blame government policy, not the market, for the slowness and size of the coming correction. Expansion of credit to those who shoudn’t have it, rates kept artificially low for too long, excessive building permits granted in hopes of increased tax revenue. Markets correct far more quickly, and less painfully, when they are allowed to work unencumbered by central planners.
Well the market itself is arguably a product of government. Enforceable contracts, land titling, eviction of trespassers are all preconditions for a real estate market and are all brought to you courtesy of “The Government.”
This is completely wrong as a matter of history. The market preceded government and has existed in many places where there was no government. What the government provides is force, not markets.
The very reason that Manhattan was “bought” for a few clocks and blankets was that the Indians that sold it just didn’t have the same conception of land as property as the Europeans who paid them for it. It’s believed that they thought that they were getting the better part of the deal, little different than those companies that will “sell” you a star.
Even in the Middle Ages there wasn’t really a real estate market. Land wasn’t bought and sold for cash. Instead a variety of tenures were inheritable. The very idea of a free market in real estate would have been regarded with the disgust that we regard buying and selling of politcal offices or court judges.
Certainly markets in personal goods exist without any form of government. Posession is, as they say 9/10ths of the law, and is it easy to posess that which you carry. But posession of land requires that you deny it’s use to others, and this is difficult to impossible to do without the cooperation of your neighbors. And sitting down with your neighbors and agreeing to rules of behavior is the very ESSENCE of government.
Astonishing rule learned the first day of law school: without government, nobody owns land. They might possess it, but can not own it.
More like the “circle jerk” of life.
“unsuccessfully to list their properties in the auction” If their properties were in the auction weren’t they listed? Or should this have read ‘were unsuccessful in selling their properties at auction?
Good question? If the seller has an unreasonable price expectation might they auctioneer not accept them?
Pay to list with a reserve, no payment to list no reserve (auctioneer will get paid).
Can we see any of these auction properties online?
“Capitulation?” I’m in the panic camp.
approaching panic in Florida. Only approaching. Soon we’ll hit panic and then desperation.
By fall, Florida will be in Capitualation. But its going to take the slow steady process of going through the steps.
That reminds me, I haven’t checked the implode-o-meter today! (Why do I find tracking the sub-primes so facinating… oh yea, what we predicted is finally happening.)
Got popcorn?
Neil
Neil,
I was just thinking the same thing. this is exactly what we thought would happen. The reporting is a far cry from when I first started following this blog. At the time though, we were nuts, irrational and unfounded! HA!
Are there any archives to look back on. If not, maybe we can start a new blog “the best of the housing bubble blog”.
I would love to read old archives of the FB’s saying “there is no bubble”. and we are just jealous renters priced out forever.
I wonder what those people are doing now to fill their time before the bank comes takes back their property?
SKB
Well I predicted that the market for subprime loans would disappear. I didn’t realize that those loans were SO toxic that holding onto them would result in immediate death for the mortgage brokers.
Imagine for a moment you are one of these FB’s. You know your screwed, but your still in denial. You hear about this action, so you sign up and buy a few more weeks of denial, but now as the time approaches you start to realize that you must either get your sales price or face foreclosure and bankruptcy. The big day comes. Bids are coming in. Each higher bid raises your spirits. You get closer and closer to your price and your anxiety starts to turn to greed as you think you might actually make a few bucks. Then, suddenly, the bidding stops. You realize you are still well short of your needed “avoid bankruptcy” price. You look around the room feverishly hoping someone, anyone will “up” the latest bid. It doesn’t happen. The auctioneer closes the bidding at too low a price. The reality of the situation sets in on you. Your future is ruined. You have nothing left but to accept your fate. You become despondent, break down and cry.
Sucks to be them.
Cash back mortgage fraud to the rescue!
LMAO,
and you now owe the auction company $250 =)
CRY OHHHH CRY ME RIVVVVERRRRRR!!!! WE NEEED THE WATER FOR OUR CROPS!!!!!
LMAO, $1,500!!!!!
Ill be nice and let these flippers eat the peanuts outta my shit when they are starving. Nobody can say that I don’t have a heart.
Will you be serving, roasted,honey glazed, boiled or plain?
LOL. Excellent narrative IrvineRenter!
Mmmmmm….your tears are so yummy and sweet!
If they couldn’t sell, then they priced wrong. List your reserve price at $0 and you will sell with 100% success.
But they really can’t have a reserve price that is lower than the amount they owe plus their bank account and credit limit. Otherwise they’re really engaging in fraud because they can’t guarantee clear title that the bid price.
Excellent point!
oy
The Sun Sentinel. “The median price of an existing Broward County home last month was $367,600, off $1,400 from $369,000 in December 2005. The year-over-year decline wasn’t as sharp as in previous months. Palm Beach County’s December median was $368,200, a $40,000 decline from $408,200 in December 2005.”
“Broward had 1 foreclosure for every 35 households in 2006, RealtyTrac said. Broward had 21,144 foreclosures last year, up 56.5 percent from 13,514 in 2005. Palm Beach County had 1 foreclosure for every 51 households in 2006. The county had 10,915 foreclosures in 2006, up 29 percent from 8,454 in 2005.”
Prices should be dropping very soon at a signficant percentage with such a high foreclosure rate in these two counties. Hard to believe the median price only dropped less than 1% in Broward County YOY.
I think it will get ugly with the foreclosure rate.
i read that too and thought that cant be right. 1 in 35 homes foreclosing, that is an astounding number. How can this not be a banner of “Breaking News” on the CNN website?
Because it’s bad news. MSM does not cover bad business news, entill it explodes all over everone.
Notice it says households, not homes. Renters are households too, but rarely go into foreclosure. So the real number is higher than 1 in 35 homes isn’t it?
Somebody owns rental units, often investors. There is no reason that rental units can’t go into foreclosure.
my friend who timed his purchase of condo in aug 2005, has seen 15-20 (pre)foreclosure (NOD) out of 200 units just in last 2 months. A good 70% is investor units and a good portion of that is now section 8 housing …
I also see lots of defence folks getting rentals (gubment money)
The rentals are much weaker w/ promotions galore nowadays.
I have a vague recollection, that Palm Beach County only sold 12-14,000 homes in 2005 [check that figure??]…
The point being, that foreclosures are now approximating sales!!!
When foreclosures #’s go ahead, then we know we’re winning
CNN actually just interviewed John Karevoll, chief analyst at DataQuick Information Systems. He said: “So far, this isn’t alarming, but if we reach 2 foreclosures for every household, then I would start to worry about a possible softening trend”.
2 foreclosures for every household would indeed be alarming.
“That’s unpossible!”
Unpossible, you say?
I think you misunderestimate the magnitude of this ‘decelerating appreciation.’
Might I suggest you catapult the propaganda?
No, I called John Karevoll and he said that he deals in numbers and doesn’t factor in variety of qualitative factors. It’s a fairly simple model based on a handful of factors, and he will make a prediction based on standard error of 1. He’ll normalize it so there is very little, if any, probability of a prediction that will be skewed one way or the other.
Well there HAVE been alot of “second homes” sold…
I have a theory on why the price has dropped so little, so little as a percentage of what is listed actually sold, so the sales are not enough to be a good sample. otherwise I predict fraud somewhere. When I drive around, there are “reduced” signs everywhere.
I do not buy into these numbers either. I am from Vero and there was an article in TC Palm about three months ago stating that the median price in Indian River had dropped to $214k. I am looking for the article and will post if I can find it. Now the same paper is saying median price is $220k. The paper is just blindly reporting whatever the NAR is putting out. There is no indepenent verification.
Also, the article says there is only a 22% drop in sales from YOY (Dec. to Dec.). How the heck is that possible? Every Sunday in the local Vero Beach paper all sales/transactions over 25k are reported. A year ago the sales/transactions took up an entire page! Today, the sales/transactions do not even take up a quarter page. Again, I think it is just lazy, blind reporting.
I think what you are seeing makes sense.
Most subprime loans are made for homes that sell for the median price or less. So when subprime freezes up, sales on median priced homes and lower dries up. Assuming that the high-end market remains constant with hedge fund guys with their bonuses buying condos at the Four Seasons, the actual median selling price goes up. It makes for distortive statistics, as the actual price for an individual home is going down. But because only the high end homes is holding up, the median gets skewed in the short term.
Or am I off base here?
The small YoY drops from Dec to Dec are all about the seasonality of the data. If you look at a sales chart the sales in summer 06 were MUCH lower than 05. What happened was that THOSE house took longer to sell and bumped up the DEC numbers.
Fla SFH sales down 28% yoy, condo sales down 30% yoy,
Palm Beach County prices down 10% yoy.
Was posting just the other day that my Palm Beach County cousin, a veteran rehabber/flipper, had told me his realtor friends were saying that sales contracts are now more numerous than a year ago. Ha ha. I must phone my cousin and point out the actual December numbers, in case he listens only to his lying “friends” who would like to sell him X.
(Actually i should say not X but POSs. BTW, i wonder if the plural of POS should be PsOS.)
I still think it’s POS, the plural being implied by the context.
Certainly local radio announcers are careful to use RBI and not RBIs as a plural. OTOH, soldiers eat MREs.
From the story:
“”Sometimes there aren’t buyers,” Hyslop said this week. “It’s like having the best lemonade stand in the middle of the desert.”
I wish the reporter would have said….location…..location….location. He could have asked what’s going to happen to the stand if the desert turns into the dark side of the moon. (Pink Floyd’s Brain Damage plays in background)
As we learned a week or so ago water intoxication or hyponatremia is an all too real risk in these kind of situations so better not drink the lemonade or buy the house.
I think he meant to say a “kool aid” stand. There are plenty of people standing around watching, but nobody’s drinking anymore.
Am I reading this wrong or is this an extremely contradictory statement?
“Sales of existing homes plummeted 45 percent in December, compared to a year ago, according to FAR. The median price also dropped, from $322,300 to $262,500, down 19 percent from a year ago.”
And then they say…
“Statewide, the numbers of sales dropped 30 percent, while the median price saw a decline of 2 percent from $205,500 to $200,600.”
So which was it? Did the statewide median drop 19% or 2% ?????
As I said in the comments above, they must have been referring to a single market. And keep in mind FAR spilt out the combination SFH/condo reports last year, so I don’t know where the NP might have gotten a combined number.
Here is the annual breakdown, with tables at the bottom. Fort Walton Beach condos show their off 38%.
FAR put out two reports today. Annual and December.
We must keep in mind that the medians in the chart you provided are for calender year 2006 vs. calender year 2005. These numbers are obviously different than the December 2006 vs. December 2005 year-over-year numbers that the reporter in the article is apparently quoting.
Thanks for the chart Ben.
The 45% down and 19% down are Ft. Myers ONLY. The 28% and 2% down are state-wide.
Yes, the News-Press is talking about it’s local area ( Lee County) with the 45%, 19% down numbers.
“The Correction Is Beginning”
That’s very amusing. I’m sure the average seller wannabe of the past year in Florida would scream if he or she read that headline.
posted ““The Correction Is Beginning”
That’s very amusing. I’m sure the average seller wannabe of the past year in Florida would scream if he or she read that headline.
That’s what I say…I have been reading for over a year how Florida is getting stomped.
Don’t you have the feeling, though, that the commercials have ended, the lights have at last dimmed and the main feature is about to begin?
first the previews
But, wait, they haven’t warned us to turn off our cell phones yet
What’s sad is it will take a year to begin reading this headline in LA or the Bay area. Some areas (DC?) will drop yet remain in denial.
Cest la vie.
Got popcorn?
Neil
Yes, DC is in denial — already. The Virginia suburbanites around me still think this is just a bit of a pause on the long march skyward. Well, the homeowner ones, anyway.
Perhaps half the renters I know are the same way, thinking prices will still go up and wishing they could buy (yikes!), but the other (sensible) half are licking their chops at the prospect of a potential bust — or just simply sitting back and enjoying the spectacle as it unwinds here ever so sloooowly.
The beatings will continue until morale improves.
…the beatings will continue, and then Increase, in both frequency and severity, until morale improves…
aka
I’ll GIVE you something to cry about.
But I just read that we’ve reached the bottom? So “The Correction Is Beginning” means prices are going up again, right? Right? No?
I caught that to Tom,
I guess it depends what camp you are from and what stage of denial you are still in.
“CCI kept him busy, but the company never paid a bill in full, Cacoilo said. Other subcontractors were strung along the same way, he said. ‘As long as we kept getting a check every week, we were all OK,’ he said. ‘My dumb ass didn’t pay attention to the billing.’”
When i was just starting out an old Florida mason called this “getting mothered”, and warned me about it thank God. I watched a lot of guys get so far behind a GC that they had no choice but to keep working in hopes of eventually getting paid.
“I watched a lot of guys get so far behind a GC that they had no choice but to keep working in hopes of eventually getting paid. “
And builders need to keep building to keep getting loans and mortgage companies need to keep giving out loans so they can keep on getting fees and brokerage houses need mortgages so they can turn them into bonds and get their fees and on and on it goes until the music stops
I’m curious as to what % of the money owed the sub was used to string him along. I knew a small business owner whose biggest client owed her $40k or so. Every now and then client would throw her a bone - 2 or 3 thousand bucks, and that kept her happy. Well, maybe not happy, but “mothered”, at least…!
Its also a reflection of the margins charged by the subcontractors if they could be strung along for so long.
It’s different for each sub pgirl. The first time the sub doesn’t get his check he’ll go to the GC begging for at least X amount to pay his bills and then the GC knows what he needs to pay him to mother him along. Then the GC just has to throw in a little extra everytime tempers flare and before you know it the sub his so far behind he is basically an employee of the GC.
Woohoo!!! Florida houses for everyone!!!
Taken from another site:
“It’s like having a lemonade stand on a corner among a thousand other lemonade stands, in a land where nobody is thirsty and it’s always raining”
ROFLMAO
SKB
Hilarious!
That’s one of the best descriptions I’ve ever heard.
“‘Sometimes there aren’t buyers,’ Hyslop said. ‘It’s like having the best lemonade stand in the middle of the desert.’”
No, it’s like having the best “can’o’sand” stand in the middle of the desert.
At least you can still sell lemonade in the SW desert… not so sure about houses, though.
yeah, but foot traffic is a bitch!
You know, in another year, it will be like having a kool-aid stand in Jonestown the day after.
“Some sellers in the auction paid $1,500 for the right to turn down the highest bid. But others paid nothing and have agreed to sell to the highest bidder, regardless of price”
This will be interesting. Someone please post the results after the auction.
“But others paid nothing and have agreed to sell to the highest bidder, regardless of price”
Some sellers are smart enough to ensure they get out the exit door before this market takes a Cat-5 dump.
-“Before the work stopped, CCI principals were driving Hummers, and construction supervisors new pickup trucks, Cacoilo said.
Here in So Cal the principals drive Maserati’s and the foreman drive the Hummer Pickup Trucks.
California is ALWAYS at the outer edge of ridiculous.
Miami-Dade is holding much better than Broward or Palm Beach, it seems. The sales in the neighbourhoods I am tracking are close to 2005 level, and prices are just slightly below the peak, and waaay above 2004 prices (30-40% above).
The inventory is back up again though, and by April I expect it to be 20-25% above the Nov-2006 peak.
I wonder who is still buying in Miami. Are there enough reach Colombians and Venezuelans to keep buying these overpriced properties.
The prices for land in good places are obscene - .5 acre in Pinecrest will run ~700k, ih Gables ~1m.
reach = rich
I don’t think that the Colombians are buying much, as they have their own nice little bubble going, but they are at 2004 level, with all the over-building, and exorbitant prices.
Bogota is building high rises in the middle of slums all over the place, and these things are huge, like 20-30 stories high, and 6 or 8 condos per floor….
I am wondering how many sales are fraud and subtracting out cancels in those numbers. I’m wondering if any of the realotrs are doing property trades to make it look like sales are higher as well.
Any way to sort out realtor to realtor transactions?
A coworker is about to have one drop out of escrow (got the unreasonably long time to close thing happening). They are renting till the property closes while letting the prospective buys live rent free.
Still making a killing on the place if they move it.
Asking prices in Broward are still high, any reasonable explanation considering the foreclosure. WPB asking prices on th eother hand seem more in line with the market. Comments from the FL bears, please.
I have noticed that too. My best friend is down there and judging from recent sales, he could still make a very nice profit on his place bought in mid-2004 if he’d just get real and drop the price just a little. For fun, he and I have researched the property records for the mortgage obligations on some of his neighbors and I am here to tell you they are beyond scary. Some of them have paid full bubble price with suicide loans that adjust to something like 14 or 15%!!!!
That’s scary! Fun to be a financial voyeur.
Asking prices in Broward are still high, any reasonable explanation considering the foreclosure rate. WPB asking prices on the other hand seem more in line with the market. Comments from the FL bears, please.
Ok here’s the answer as I have plenty of friends in Broward and PB. They are leveraged to the max using HELOC to pay the IO loans.
They CANNOT lower their asking price or they lose money. Soon they will forclose - 9-18 months. Then the prices will drop!
This is probably accurate in many cases. Look at the Palm Beach Assessor’s website for the sales records of homes that appear to be languishing with high asking prices, and most of them were bought high. They literally can’t sell any lower.
Having said that, I’ve noticed (unscientifically) that many of the new listings in PBC are coming out lower than I have seen in the fall of last year. That is surprising if true, as my sentiment is that the ASKING prices didn’t change much all last fall.
By curiosity… how many other country besides the US don’t force losers in lawsuits to automatically pay for the other party’s legal expenses???
That’s because I expect a Tsunami of those here obviously. Even when people signed and knew what they were getting into, the value of a signature is now in doubt as a valid token of buisness dealing. I expect soon you will be required to give a DNA sample when getting a mortgage… yuk!!!
Lick this spot please…..
Is it just me or every week I read how a housing bubble is just BEGINNING in Florida. These headlines have been going on for over a year now.
That’s correct, it is just beginning. YOY numbers have hardly changed because of all the massaging of the numbers. The bubble exploded for 5 years, and it will probably take 10 years to completely deflate.
“Broward had 1 foreclosure for every 35 households in 2006, RealtyTrac said. Broward had 21,144 foreclosures last year, up 56.5 percent from 13,514 in 2005.”
And no one is calling on the MSM or local RE associations to account for their lies printed in the media in 2005 and 2006. Maybe this is clearly and example of why people should avoid the MSM, RE and their ilk when evaluating anything to do with housing or associated participants.
Well, I found the numbers of forclosures vs sales for 2005 vs 2006, in Palm Beach County….2005 [8454 forclose vs 13679 sales] 2006 [10915 forclose vs 8640 sales]… sales down vs foreclose up
In 2006 foreclosures exceeded sales? That’s got to be a little unusual, right?
Am I reading correct that Palm Beach had more foreclosures than sales in 2006? wow! Don’t get me wrong, that will become common in a lot of bubble zones. But to see it this early… is amazing. And yes, I’ve been a voice on how frustrating its been watching this slow train wreck… But I recalibrated my timeline and now am amazed to see foreclosures greater than sales.
So let’s see… six to 10 month delay to get a foreclosure on the market… that doesn’t bode well for home prices appreciation in Florida in 2007… or 2008!
Got popcorn?
Neil
The caveat here is how the FAR posts their sales numbers…
The sales numbers were for single family homes [yr over yr], and foreclosures were for “households”….
Orville Schadenfreude is a scary old man.
Palm Beach Post chose to give year over year numbers in their story compared to the Dec 05 to 06 numbers like Sun-Sentinel did. Let me tell you, my neighbors just put their 4/3/2 built in 2004 up for $299K and have already dropped to $269K. Unbelievable! I think 07 will be a nasty, nasty year. Bottom feeders prepare to feed in 08
amen to that
im looking for a condo under 75k in a nice florida area please do tell when this happens
Keep waiting…prices in some of the 55+ communities didn’t have the boom over the last 5 years. If that’s what you’re looking for, you may be priced in the market right now. Market rate, you might get a 1 BR box on the wrong side of the tracks.
“Nicole Hollander, president of Auction USA, said she expects plenty of below-market sales at this event as the housing slump lingers in this region. Some sellers in the auction paid $1,500 for the right to turn down the highest bid. But others paid nothing and have agreed to sell to the highest bidder, regardless of price.”
The bulbous head of reality is pushing past the sphincter of denial, finally! The folks paying the $1500 are futilely clenching their cheeks against the final, inevitable assault. I say SUBMIT and be done with it! This is getting good!
“The bulbous head of reality is pushing past the sphincter of denial, finally! The folks paying the $1500 are futilely clenching their cheeks against the final, inevitable assault. I say SUBMIT and be done with it!”
LMAO…
“she expects plenty of below-market sales”
Memo to Nicole: The sale prices ARE the “market” prices.
“‘Too many homes got built because of the speculation boom,’ real estate analyst Bradley Hunter said. ‘The correction is beginning.’”
Me confused. Thought soft landing was in the bag?
i thought we were running out of land?
i wish this type of action would head north
Don’t you suspect at least a few FL investers live in your hood?
i know they do gs but in ny it is all rah rah rah
no bubble here.
Roubini and Roach will get the last laughs…
And I bet a lot of roaches are enjoying all those empty Florida houses.
Turns out the landing strip was just a really thick, dark cloud formation.
“Hey, what’s a mountain goat doing in a cloudbank?”
–Obligatory FAR SIDE reference.
LOL! I used to quote that one all the time, but had forgotten about it! All time fave Far Side!
Thanks!
whats going on in Sarasota Florida? There was a big project planned for the corner of stickney point road and highway 41 in which they ousted dozens of mobile home owners to build a BIG mixed use project and yet i have seen nothing going on there for months
yet take a look at this:
http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20070125/NEWS/701250382/1060/SNN
That someone would decide where to live based on the quality of the local shopping mall both baffles and depresses me. “residents here are clamoring for more luxurious shopping opportunities, said Milt Flynn” - WTF!! Five minutes in any mall, looking at the people selling worthless crap from various kiosks, or girlymen selling $80 polo shirts at Nordstroms, is all I can stand.
And I’ve seen enough derelict malls to know that “shopping opportunities” is a completely ephemeral justification to buy a home somewhere. It’s like saying there’s a trendy nightclub nearby. This being Florida, once the fashion models move on that place will be a biker hangout, not that there’s anything wrong with that.
or the fashion models will end up dancing on tables
Now it is “what can I save” not “what can I make”.
“Sometimes there aren’t buyers,” Hyslop said this week. “It’s like having the best lemonade stand in the middle of the desert.”
Still in denial… to the foreclosing and thereafter those people will blame destiny, the phase of the moon and everyone else for “robbing” them from their entitled benefits.
Lemonade stands are also a trademark of young children doing their first business venture… how fitting!!!
Another nugget:
“Some sellers in the auction paid $1,500 for the right to turn down the highest bid, if they don’t feel it’s sufficient. But others paid nothing and have agreed to sell to the highest bidder, regardless of price.”
Ha ha ha some of those don’t have $1500!!! They are screwed… the house will sell at the REAL market price.
BTW, speaking of scary titles (“The Correction Is Beginning”), how about the title on PMI’s latest report: “Welcome to 2007″.
CNN News website has a story about how snow birds are staying in Florida for much shorter periods and their numbers are declining because they cannot afford Florida rental prices. Ah, yes. It’s all working out very well. Build a gazillion properties and retirees will buy them…NOT. Florida has always been a haven for those on fixed incomes seeking a place they can afford….NOT. Still, not to worry. They can go to Arizona where the property is cheaper……NOT. Okay, how about Nevada? NOT. A friend just came back from Nevada (Las Vegas) where he used to visit several times a year. He said, “That was my last trip to Vegas.” I asked him why? He said now that corporate America has totally taken over, it’s too expensive. He said corporate America has done the same to Disneyland. He now feels he is being “gouged” for every cent they can squeeze out of him. I told him the CEO’s of these cortporations have to do that. How else are they going to get those $200 million golden parachutes.
I haven’t been to Las Vegas in over twenty years, but I’m with you on Disney. Some of it is becoming an adult. When I was a kid, all I could see was Mickey Mouse and Goofy and the Space Mountain roller coaster. Once I grew up, the whole theme park became nothing more than a way to get money out of my bank account and in Disney’s hands as fast as possible.
Corporate Vegas is exceptionally well-designed to strip as much money out of awed tourists and drunken bachelor-party guys as possible — every casino restaurant works the “up sell” effectively, the pools let you sign for plenty fruity $8 drinks made with cheap rum charged to your room, and the bars are no better.
Oddly enough - the only good deals I got were lapdances on a slow night, and free drinks while winning moderately (all luck, I assure you) at $5 blackjack tables. In other words, the “sin” is still a bargain, but the legit stuff, not so much.
Well, Las Vegas corporate greed is one thing which certainly needs to be addressed but lets not get carried away here! Some things are tradition and I, for one, would be very upset if anyone tried to curtail the tradition of lap dancing. Keep up he good work, zeropointzero.
I’m in Vegas for the next couple of months and I can tell you that all the good stuff (lap dances, etc) are still here so come on out! Lots of bizarre people though.
Drove past several multi-family complex’s (condos probably) being built on both sides of 515 just south of Tropicana Blvd. Had to be at least a thousand in the framing stage. I’m going to go back and try to get a scope of the building. This is going to crash hard here, very hard.
Take a trip around the outer loop while your there.
The amount of new construction will astound you… especially those lines of three story box houses set six feet apart. Geez, you’d think it was Malibu beachfront — not friggin’ desert — the way they maximum SFH land usage.
LV is toast.
He’s just now thinking that corporate America has taken over Disneyland? I recall that 20 years ago when I had to pay $8 for a hot dog on the obligatory trip with the 4 year old. I felt like I was personally paying Eisner’s parachute. He needs to open his eyes.
“‘These guys always say, ‘Let the market decide,’ said Joanne Davis, spokeswoman for (a) watchdog group. ‘When the market decides against them, then they want government to decide. They can’t have it both ways.’”
I would have so much more fun reading this blog if it weren’t for the looming spectre of future government meddling. At what point will the political hacks come riding to the rescue with our cash in their hands?
Free market, my buttocks.
Good point, edgewaterjohn. I’m a liberal with limits but, unfortunately, the Dems are far more likely to step into the picture if we get a flood of news stories about Joe Sixpack’s being separated from his family because of foreclosures. Worse if they are on tv. Not good for politicians image and that’s all politicians care about.
That said, this mess could get so bad that government couldn’t even get their (so-called independant) partners at the Fed to install more printing machines and crank out a few more trillion dollars to bail out fb’s.
Not sure what they could do outside of lowering interest rates or giving the nod to 80 year mortgages. The main part of interest rates, unless they split interest rates into 2 types one for fb’s and another for everything else, are determined by foreign investment and the USA HAS to pull in billions from foreigners everyday just to service it’s massive obscene debt. Btw, forget Bush’s double talk on reducing the debt. Not a chance in hell of wiping it out in 12 years. He’s as good at predicting the end of that problem as is is at predicting outcome in Iraq.
For the Fed to be effective they would have to buy and forgive non performing loans. Maybe with some kind of means test to keep it from being “abused”. Set up a special website http://www.buyandforgivemymortgage.com have people enter their “documentation” and wa la the fed buys your mortgage and you own your house free and clear. It’s so simple it’s scary.
I can imagine a way. Have the Fed buy and forgive non performing loans. Maybe with some kind of means test to keep it from being “abused”. Set up a special website http://www.buyandforgivemymortgage.com have people enter their “documentation” and wa la the fed buys your mortgage and you own your house free and clear. It’s so simple it’s scary.
The builders association contends that forcing developers to ask for extensions one-by-one, as currently required, would tie up the county’s permitting process and leave proposed neighborhoods unfinished.
Developers have an ally in Commissioner Mary McCarty, who said she supports a blanket extension to help them. McCarty said the county took similar action during a housing market slowdown in 1992.
“It is the biggest industry we have in this county,” she said.
Translated: “It is the biggest industry to line my wallet with ‘campaign contributions’”.
Elected officials like her are truly the root of all evil.
I’ve said it before and I’ll say it again… the scope of this problem is so large as to defy any rescue.
Wait…Keep waiting. It is going to get a lot worse.
2 more lenders went out of business today. Housevalues.com is no longer selling mortgage leads. Foreclosures have just begun to skyrocket.
Once you see that home prices are constantly declining - then you know we are on the way to the bottom. We have a long way to go.
There are going to be builders, contracters, appraisers, title companies, mortgage banks /brokers and every other housing related business to a huge crack-a-lacking.
The adjustment is just beginning. It did not start 1 year ago. It started the last 3 months. HOA dues, in new communities, are skyrocketing due to un occupied homes. Pass the cost on to the people who live their I tell ya… HAH.
By the time FL government works out all the insurance and tax issues 20% of the population will be busted or on their way to the Carolina Hills.
This adjustment is long overdue and it is going to come with a lot of pain.
By the way, Casey Serin and the other two parasites are having a catfight. If you’re an attorney or work with contracts, you’ll enjoy the reading.
OMG hilarious, Mac.
This is what I got from scanning his site -
First, after believing the Parasites had some kind of plan to save his financial ass, he discovers: THERE IS NO PLAN
However, The East Coast Mentor really DID have a plan…(phew!)
“Right then, I remembered the offer from The East Coast Mentor and (he actually had some kind of a plan). And I thought how STUPID it was for me to rush into this deal with Erin/Joy without fully comparing both offers first. Yet another impulsive decision!!”
Then, it gets downright spicy…
Maybe seeing him sitting on the big blue ball made them hot?
BRAIN-STORM
it is amazing , prices have gone up not only in Miami but in many other cities. I can’t figure it out, anyone who has not bought a home before 2004 is out of the market one way or another. Rents vs buying still makes no sense and eventually when the flipper landlords realize they may not be in the buying business but in the landlord business, may want to increase the rents. We are forced in a major inflation and I don’t see prices drop to even 2004 levels ( when prices were high ). I live in Miami and don’t see much going on, prices are not coming down much if any and I can’t understand who is buying all this property?
What part of Miami? The parts I see on a semi regular basis are full of “make an offer” signs… My husband just hired a kid (ok, 30 yo person) who had a lowball offer accepted in Miami… (30% below asking) and before anyone says anything, YES we talked to him….
What probably will happen is that one day the bottom will just fall out. One day we go to sleep and wake up to headlines of towns and subdivisions that have been abandoned overnight:) Anyway, here in Tampa it is unbelievable. Last year, knowing were the marked was heading we decided to rent a new house as soon as they’ll hit the market, well we are ready and the market is flooded with rental houses with negotiable rents. Owners begging prospective tenants to rent their property… To be honest it is scary because this is only the tip of a iceberg. You can rent in areas that were not for rent just year ago. Needles to say we are not moving yet, to avoid catching the renters falling knife, -overpaying when there are more desirable rentals for less or renting from a landlord facing foreclosure.
Here is a funny mental image, the folks at Florida’s reality associated drinking heavily last night trying figure out how/what to spin late last night…, I bet that would have been a lot of fun to watch.
Most subprime loans are made for homes that sell for the median price or less. So when subprime freezes up, sales on median priced homes and lower dries up. Assuming that the high-end market remains constant with hedge fund guys with their bonuses buying condos at the Four Seasons, the actual median selling price goes up. It makes for distortive statistics, as the actual price for an individual home is going down. But because only the high end homes is holding up, the median gets skewed in the short term.
Example (on 7 homes)
2005 Prices Sold
500,000
450,000
400,000
350,000
300,000
250,000
200,000
Median Sale Price = $350,000
2006 Sales
500,000
450,000
400,000
350,000
300,000
(no lower priced homes sell, as subprime freezes up).
Median sale price: $400,000
Simplistic example I know, but you get the idea.
Or am I off base here?
That makes perfect sense to me.
How about breaking the median up into two tiers. The top tier; houses above $250k, and the bottom tier; houses below $250k. Show a median price for each tier. This should give a more accurate view of the market.
How bout finding a way to compare apples to apples. 1500 sqft house
in X neighborhood sold for Z this year and Y last year.
That makes a lot of sense, I’ve just looked a few hours at realtor.com and asking prices are still very high. Who knows, maybe just as quick as prices rose, they could very well come down. How is life in WPalm Beach or Brandenton? Wonder if I should throw in the towel and move. One thing about Miami, I like living here but don’t know if it is a good place to raise a child unless you can afford private school. My daughter is turning 10 next week and I worry about the middle school years.
It will take a while for prices to really come down. Many have pulled money out of equity to survive. And some are using that equity money now to play the stock market.