“Everyone Saw The Pot Of Gold” In Florida
NBC 2 reports from Florida. “New figures show the number of home foreclosures is sky-rocketing in Collier County. The numbers are in for 2006 and they’re record-setting. In fact, they doubled in just the last year. Everyone is rushing to sell and those who can’t sell are left without a choice and foreclosure is the only option.”
“Collier resident Jose Giraldo thought he would be able to flip his home quickly. ‘They said it was a good investment at that time, that we’d make some money so we went for it,’ said Giraldo.”
“But now his second Naples Park home is sitting on the market. He bought the home a couple years ago when the market was hot. He’s put thousands of dollars into fixing it up and he says the mortgage payments are just too high to handle.”
“Realtor Glenn Ginsburg says many people are finding themselves in the same situation, they’re in over their heads and are left without a choice. He says what started as investments are now ending as foreclosures.”
“‘Interest rates were at four percent, now it’s twice that,’ said Ginsburg. ‘Put it this way, it’s not unexpected.’”
“‘We are like in a cage, you know?’ said Giraldo. Giraldo doesn’t fear foreclosure, but he does fear his financial future. Right now, he’s paying $2,200 a month for the loan on this home plus the bills and his other mortgage. He says it is just too much to handle. ‘We have to take another loan, and just wait,’ said Giraldo.”
“But according to Ginsburg, the wait won’t be a short one. ‘I think we’re only seeing the tip of the iceberg,’ said Ginsburg. He expects the 2007 market will sink even lower, meaning foreclosures will continue to rise.”
The Gainesville Sun. “In the Gainesville MSA, 3,174 existing homes sold in 2006 compared to 3,993 in 2005.”
“Sherry Patrick, president of the Gainesville-Alachua County Association of Realtors, said the news affected buyers’ moods. ‘The national media started saying every single real estate market in the country was in trouble and people started reading that and thought, ‘I’ll wait for that to bottom,’ but it’s not going to bottom here.’”
“The slowdown in sales means more homes are on the market, currently 1,964 listed in Alachua County, Patrick said. ‘A year or two ago, there might be 700 to 800.’”
“That means homes are on the market longer before being sold and buyers have more time to choose. ‘A few years ago, they’d run out with their Realtor when something came within their price range and they knew they had to make a move right away,’ Patrick said. ‘They were going to lose that house if they didn’t make up their mind.’”
“The current availability of new homes that are priced to sell tends to inhibit sellers of existing homes from getting as much as they’d like to, said Steve Elwood, senior VP with Coldwell Banker/M.M. Parrish.”
“Agent Chris Curry said…many condos that have been converted from apartments are on the market. At the beginning of the year, there were 1,000 condos on the market with 250 selling per month, while at the end of the year 3,300 were on the market with 50 selling per month.”
“‘Everyone saw the pot of gold at the end of the rainbow and started condo-converting,’ he said.”
The St Petersburg Times. “Reeling from a string of questionable loans, Coast Bank said it alerted auditors this week to track $66-million it disbursed to build 482 investment homes in partnership with St. Petersburg builder Construction Compliance Inc.”
“The money certainly didn’t all go into completing the houses. Homes finished in the past 11/2 years in places like Sarasota and Charlotte counties number only in the dozens. CCI customers, many promised sure-bet investment houses for no money down, are asking one big question: Where are the millions withdrawn from Coast Bank in their name?”
“Jeff DeNight of St. Petersburg signed up for a CCI house in October 2005. Coast Bank has disbursed $80,000 toward his construction loan, but the insurance agent has nothing to show for it but a vacant lot on a block that DeNight called ’swamp land.’”
The Herald Tribune. “CCI, which was doing much of its work in North Port and Port Charlotte, stopped paying subcontractors in the fall, but customers say the company drew disproportionately on its construction loans. That means the borrowers are facing liens from subcontractors, and Coast could force them to pay the entire amount of the loan.”
“Homes are almost finished for 154, or 32 percent, of the loans. One investment banker who specializes in buying and selling distressed bank debt said Coast could still take big hits, especially on the vacant lots and half-finished houses. ‘The issue then becomes what’s the likelihood of repayment from the borrowers?’ said David Tobin in New York.”
“Tobin doubted that the borrowers or the bank could get the full value of the loans for the land, 482 properties in Pinellas, Sarasota and Charlotte counties. ‘Each time one of those defaults, and they gave to go sell the land, they’re going to take a 50 percent hit, or whatever the number is,’ Tobin said.”
“A lawyer representing borrowers, Thomas Carrero, said that considering the amount of cash drawn and the paucity of work done, he is starting to think that much of the $66 million released by Coast is missing. Carrero said he spoke with a lawyer who is representing multiple CCI subcontractors who are short by $1 million.”
“On Friday morning, the city of Bradenton Beach resolved on a rather large withdrawal at Coast Bank of Florida: $2 million. Coast was seen as the city’s unofficial ‘central bank,’ and had handled millions in various types of deposits for the city and library.”
“The financial blow to Coast could be magnified if city employees and vendors who had regularly used the bank also migrate elsewhere for Bradenton Beach-related transactions. Freedom Bank of Bradenton said this week that it has taken in $2 million to $3 million in deposits from former Coast customers. Other local banks seem to be having a similar experience, though there is no way to gauge the magnitude.”
The Journal Star. “The troubled real estate market in Florida has started to hit home in insulated Nebraska, however indirectly. In its latest earnings report, TierOne Corp., the biggest bank headquartered in Lincoln, reported its own consequences from what’s happening in real estate elsewhere.”
“The bank attributed the increase in non-performing loans and assets primarily to a $16.2 million increase in nonperforming residential construction loans. ‘These loans were made primarily to individual homebuyers on the west coast of Florida, which has and continues to experience a price correction in housing values and delays in housing construction,’ the bank said.”
“Ed Swotek, senior VP for investor relations of TierOne, explained the situation: TierOne goes through mortgage brokers to people building these homes, and has a direct relationship with the homebuyer, who’s financing construction with a 12-month to 18-month loan. Permanent financing happens later, either through TierOne or some other lender.”
“The local governments’ permit processes have been backlogged, Swotek said. ‘So what you have is a homebuyer who wants to have their second home built, they have entered a contract to build this house, the builders down there file for a building permit, and because of the backlog, nothing happens,’ Swotek said.”
“So the homebuyer has been paying interest on the construction loan, there’s no permit, no ground broken, and meanwhile, ‘there has been some cooling of housing values,’ Swotek said. ‘Some are just not making payments on their loan,’ he said. ‘They’re waiting for something to happen.’”
The Wall Street Journal. “Amid a continuing glut of homes for sale in most of the country, buyers should have plenty of choices and lots of bargaining power. In Miami-Dade, the number of existing condos on the market is enough to last 27 months at the current sales rate, says consultant Jack McCabe. The oversupply will grow, he says, as about 8,000 condos are expected to be completed this year and 12,000 in 2008.”
“‘It’s going to get bloody down here,’ Mr. McCabe says. He estimates that condo prices in Miami-Dade fell between 8 percent and 10 percent last year and will drop 20 percent in 2007. Eventually, he predicts, hedge funds and other investors will step in to buy surplus condos in bulk at huge discounts.”
‘ The Broward County Commission faces potential deficits of $5 million to $61 million each year over the next five years as it tries to meet sharply rising expenses with modest increases in taxes from property owners, a county report revealed Friday. ‘We have been through four of the best years the county has seen, with double-digit increases in property values. Those days are past and we’re going to be tested. So we have to raise taxes or cut spending, and I won’t raise taxes,’ Rodstrom said.’
‘At the same time, the county faces sharp increases in the costs it cannot avoid, she said, such as property insurance, health insurance for employees and retirement costs.’
‘Contractors at Providence didn’t get the memo about Polk County’s lag in new home sales and construction. The 2,200-acre Davenport golf and country club community is on track to build more than 4,800 homes over the next six years.’
‘While other local developments, including Indian Lake Estates, near Lake Wales, 8,200 homes; Ridgewood Lakes, off U.S. 27 in Four Corners, 8,100 homes; and ImperiaLakes, near Mulberry, 3,979, all have the potential to be larger, none is as far along as Providence.’
‘Reunion Resort, in Orlando, fell prey to becoming only vacation homes and rentals, she said. ‘It’s a totally different community over there. There aren’t any neighbors. It’s like a ghost town over there.’
‘We’re going for the family-oriented buyers,’ Rotondi said. ‘Many of the buyers are going to be local, but we also attract many buyers from the United Kingdom.’
‘And as for the sales market for new homes, Andrew Boswell, project manager for Toll Brothers’ Drayton Woods, said the typical buyer for Providence isn’t a first-timer. ‘The people that come here are going to know what they want,’ he said. ‘This is more for the second- or third-home buyer. These people are knowledgeable and have done their research.’
- Drayton Woods, said the typical buyer for Providence isn’t a first-timer. ‘The people that come here are going to know what they want,’ he said. ‘This is more for the second- or third-home buyer. These people are knowledgeable and have done their research.’
- I did not realize that people had money for ‘3rd’ homes…wages must be strong down there.
I work w/someone in CT who was going to retire in July. Well, needless to say THAT did not happen. He thought he was smarter than everyone. 100% of his 401(k) in company stock, etc. What a fool (Enron, anyone?). Anyway, now he cannot retire and his bank account shrinks every month…
I did not even get through this entire comment before I saw red.
‘We have been through four of the best years the county has seen, with double-digit increases in property values. Those days are past and we’re going to be tested. So we have to raise taxes or cut spending, and I won’t raise taxes,
WTF did you do with all the money from the past 5 years? It’s not like this is ancient history, it was last f*#*ing year!! Where did all the money go?
God, politicians piss me off. We are no longer enjoying double digit gains that we never expected, but now that they are gone, we are not going to have to raise taxes? WTF? How about lowering them, you got a windfall!
Time for me to go take my medication for this morning, that one just blew a “psycho” fuse.
just to gloat a bit Bloomberg in Nyc kept cutting taxes and overhead through the boom and was constantly critisised until now. They are now talking about cutting property taxes even though the money from construction etc has gone down.
NYC’s Mike Bloomberg has been doing a great job; the city has never been in better hands, his poll numbers are thru the roof.
NYC has a …”$3.9 billion budget surplus, due in large part to better than expected Wall Street earnings and real estate sales.
Bloomberg said he would like to see the surplus go to funding tax cuts that he unveiled during last week’s State of the City address, including a property tax cut that would reduce taxes on the average homeowner by about five percent. He is also proposing eliminating the city’s portion of the sales tax on clothing and shoes, and he would like to give a tax cut to small businesses.
“Remember, the property tax reduction, the sales tax elimination for clothing and footwear and the small business tax reductions are investments in our future,”…
http://www.ny1.com/ny1/content/index.jsp?stid=3&aid=66189
How about they let renters deduct some of their rent payments the way owners get to deduct so much interest? Oh, that’s right, we are in the “ownership” society. F#$k the renters that make up the biggest part of this city and pay the bulk of the taxes.
That is how you do a tax cut…you make a lot of noise about it, but make sure the group of people receiving it is small.
Mike, at least you rent. You can bail if it turns to total dogsh*t.
and the county didnot account for another possibilty: propert prices fall by ~20% next 2-3 yrs..
what then Jose?
“New figures show the number of home foreclosures is sky-rocketing in Collier County. The numbers are in for 2006 and they’re record-setting. In fact, they doubled in just the last year. Everyone is rushing to sell and those who can’t sell are left without a choice and foreclosure is the only option.”
The more the ship is sinking the more people gather on one side and then it just rolls over and sinks instantaneously…
Florida sellers’ delusions are spectacular, and many asking prices are still ridiculously high. No one is buying - at least buying legitimately! All the condo towers along the ocean have turned into flipperville, with owners in the average tower already hawking about 10-20% of its units. None sell. Open houses go on and on and on for months with nary a decrease in price. When you research the purchase prices you see why: any downward pressure and these guys are going to go belly-up into bankruptcy.
Services at condo complexes are starting to thin. Tiki bars are empty, parking lot lights are now dark, fountains have stopped running, fewer security personnel, slower repairs. They’re desperately keeping up luxurious appearances, but the reality for owners is sinking in very hard. Multiple assessments, postponed hurricane strengthening improvements, unpainted walls and ceilings. People here are starting to smell the ripoffs.
Flyers in the local rags advertise $10,000 loans for like $50 a month. We educated folks know who these are being pitched to: illiterate immigrants and the elderly widows - neither of whom are wizards of Wall Street when it comes to their finances. These financial rats are just feeding the uneducated even more debt and letting them explode.
It’s the last gasps of financial independence over here. Tax liens are multiplying, tons of pre-foreclosure listings, unpaid assessments, the list goes on.
Next, we’ll see the mysterious disappearances of immigrant owners, the torching of homes with multiple mortgages, and every small local bank like Coast Bank will start tumbling into bankruptcy one by one.
It’s so sad, but I called it exactly like McCabe and the rest of us so long before it happened that I feel strangely vindicated.
You are right on target Quirk. Especially about sellers being ‘unable’ to come down on pricing. We often think sellers are just ignorant or stubornly greedy; when, in fact, they can not lower prices without losing money. There is no flexibility. They can not bend… Only break. Gordo
Good post Quirk. Despite a story earlier this week noting that it’s “unclear” how many people live in some finished towers, this morning’s Tampa Tribune had a brief article about several condo buildings nearing completion in the Channelside area, saying the district was about to experience a “flood” of new residents, as if people actually bought units with the intention of living in them.
And this quote from Ben’s compilation of articles is priceless:
“The current availability of new homes that are priced to sell tends to inhibit sellers of existing homes from getting as much as they’d like to, said Steve Elwood, senior VP with Coldwell Banker/M.M. Parrish.”
No s__t! Steve, I find that the lack of wings tends to inhibit me from flying.
This is sheer negligence on the part of Coast Bank. When banks make construction loans, they create a line of credit upon which the builder can draw — in small chunks. Before each draw is released, the bank typically inspects the job site to ensure that certain milestones have been met: the framing is up, the roofing is done, etc. This prevents unscrupulous builders from absconding with the funds, declaring bankruptcy, and sticking the bank with a half-completed project.
Just one more example of how the checks-and-balances that have existing in the banking system for years went out the window during this period of mass euphoria.
Also, the bank should require the escrowee to pay the subs directly. They get a check in exchange for a lien waiver.
The construction loans i’ve used have been carefully scrutinized every step of the way, with lien waievers required with all payments.
I can’t imagine it’s just negligence - something illegal must be going on.
Another area were banks have failed in their duty .I don’t know who has been in charge in recent years ,but they need to be fired .
Also, during the housing gold rush its clear by the underwriting of loans that nobody has been doing their job .
The Coast Bank situation is the exact reason why bankers have a duty to be prudent with depositers money , pensions funds etc.
I’m stating the obvious, but with this easy money market people seem to think that money grows on trees and it’s not coming from someones assets or bank accounts .
Coast was definately poorly managed.
But doesn’t “Coast is toast” have such a nice ring to it?
I just warned my fiancee to move money out of a bank that seems to be overextended in the subprime area. “But they offer the highest rates on CD’s…” Get your deposits under $100k honey… they’re overextended. So we wait… but we’re not fence sitters, we’re spectators!
Got popcorn?
Neil
Neil — you’ve got it — I’ve been moving my money to safer places and will continue to do so. Better early than late, IMO.
Money doesn’t grow on trees, Ben just drops it from helcopters.
Checks and balances? What else should they do with their “printed money” then loan it out? Keep the money on the shelves in rapped plastic covers? Come on now, you know better.
Have you ever heard of reserves, or diversifying or checking on the project to make sure that the money is really being spent on construction? They kept releasing the money to CCI even though no work was being done.
I’m not saying that banks should not of loaned out money but it would of been far nicer had they loaned out the money to qualified borrowers who would of continued to be available had the market not gone into mania status and priced people out . In other words , a slower rise of the prices of homes would keep a constant demand for loans rather than this crash situation with inflated prices .
“and I won’t raise taxes,’ Rodstrom said.’”
Famous last words.
“May be I’ll raise some ‘fees’ here and there… But no taxes.”
Some smaller municipalities here have long used extremely punitive traffic ticket fines as a revenue-generating method. For anyone planning to drive long distances in areas off the interstate network, this makes a fuzzbuster a recommended investment. Notoriously bad: the Keys, and Northeast Florida.
Gulf Breeze is notorious in Northwest Florida. Best to stay 2 mph below the speed limit and minimize lane changes.
Can you imagine when things start to get tough what realtors will say then? “Suzanne researched this?”
Someone needs to come up with an “Imagine” song
Imagine
Imagine there’s no bubble
It’s easy if you try
No bottoming out below us
Above us only sky
Imagine all the people
Living for today…
Imagine there’s no taxes
and hoa and mello roos
Nothing to stop I/O and Arms
And no doc required too
Imagine all the people
Living life in debt
Imagine a 6% bonus
I wonder if you can
No need for greed or hunger
In a brotherhood of RE
Imagine all the people
Flipping all the world…
You may say i’m a dreamer
But i’m not the only one
I hope some day you’ll join us
And the RE will be as one
LOL !!!
Excellent !
Your song is so true . It was a big dream world with people running around like chickens with their head cut off trying to get a piece of the easy money for real estate investments until they couldn’t find any more greater fools .
Good one!
He says it is just too much to handle. ‘We have to take another loan, and just wait,’ said Giraldo.”
That’s the ticket dumb a$$, just keep digging yourself deeper and deeper into the hole. You can’t handle what you have borrowed already, so borrow some more, and some idiot will lend it. People like this deserve the what’s coming their way!
In a sane world, the loan would be denied putting an end to the vicious cycle.
IMO, what is going on at Coastal and the other lenders show that process is already beginning.
And you know Coastal Bank is only one of and untold number of banks that have done the same thing. In the next few years there will be a whole lot of unraveling going on, along with hearing after hearing in D.C. The deff, dumb and blind gang will be looking out for the people, as always.
Here’s an auction in Florida today. If there are any locals that can report on the results, it would be great.
http://longisland.craigslist.org/rfs/269107309.html
If you have been waiting for the Real Estate Market to Adjust,
Now is Your Chance To Get Back in the Game!
Seating is Limited . Reserve Your Space Now!
“Back in the game” That’s what started the whole damn mess, buying a home never used to be a game!
“Seating is Limited . Reserve Your Space Now!”
Seating is limited to the amount of chairs they can set up.
A new game of musical chairs? Start the music Mr. DJ. Let’s dance!
EBay has all 146 properties listed; and the offerings are varied. Vacant land, homes, and condos all over Florida.
Somebody could watch all these EBay listings and see how they ended up:
http://search.ebay.com/_W0QQsassZflsuperauctionQQhtZ-1
The results would give everyone a good pulse reading on just what people are willing to spend right-now-today.
I’ll bet many of these get pulled or don’t meet the sellers unrealistic minimum.
I wish I had the time to monitor these, btw I just checked EBay’s listings and they went from 146 to 142.
By the time I clicked on it, this posting had been removed. I’m impressed at how often the sunlight of Ben’s blog causes Craig’s List posts to vanish.
Here on the outskirts of Hogtown in Alachua county, there are plenty of homes that have been on and off the market since 2005 and still not sold. I would estimate that 30-40% of them are vacant.
Condocons are tanking and going back to rentals, new housing developments are infested with flippers who are trying to sell and can’t compete with developer prices and incentives.
This place is about 6-8 months behind S FL RE trends, by fall 2007 the true panic begin.
Repartments. One of my favorite trends in this stupid bubble, for a rather personal reason. When I first moved to FL I rented an apt, and was kicked out 9 months later as they became “Luxury” condos. First off, the word luxury being tied to these condos is just an insult to the english language. They were not bad apts, but they were not, in any stretch of the imagination a luxury apt, let alone a luxury condo!!
Anyway, after finding another place to live, I found later that the complex was back to renting, for less then I paid to live there 2 years ago. I told people there they were crazy to pay the prices (200K for 800sq ft, and this is NOT in center city, it’s kind of in the middle of a shopping mall). And was I ever right. The entire complex looking like a ghost town now.
Repartment. The new condo conversion.
I had the same experience (”The Crest at Waterford Lakes” in Orlando). Every day I pass that ghost town on the way home from work and laugh my ass off.
Were they drinking wine in the ads for the “luxury conos”? Ah, the lifestyle LOL
“At the beginning of the year, there were 1,000 condos on the market with 250 selling per month, while at the end of the year 3,300 were on the market with 50 selling per month.”
So at the beginning of the year you had a 4 mo. supply and now your have a 66 mo. supply. Wow, what are you going to have in 2008?
” Those days are past and we’re going to be tested. So we have to raise taxes or cut spending, and I won’t raise taxes,’ Rodstrom said.’” Wanna bet you don’t raise taxes? Probably will be in the form of a sales tax increase, room tax increase, etc all aimed at the tourist trade.
“The bank attributed the increase in non-performing loans and assets primarily to a $16.2 million increase in nonperforming residential construction loans. ‘These loans were made primarily to individual homebuyers on the west coast of Florida, which has and continues to experience a price correction in housing values and delays in housing construction,’ the bank said.”
My head is spinning; are they saying that residential construction loans were made to individual homedebtors??? Systemic risk is running amok, as chaos theory rears its ugly head in the real world! Can the bankruptcy of home debtors in Florida set off a tornado that demolishes a bank’s balance sheet in Nebraska?
http://en.wikipedia.org/wiki/Butterfly_effect
“Ed Swotek, senior VP for investor relations of TierOne, explained the situation: TierOne goes through mortgage brokers to people building these homes, and has a direct relationship with the homebuyer, who’s financing construction with a 12-month to 18-month loan. Permanent financing happens later, either through TierOne or some other lender.”
Maybe, unless the temporary financing falls right through the gaping cracks in the ground thanks to the effects of the subprime earthquake.
Excellent arrangement GS.
“Eventually, he predicts, hedge funds and other investors will step in to buy surplus condos in bulk at huge discounts.”
This sounds like the greatest shakedown ever in American history. I guess hedge funds will always have guaranteed access to easy money, too…
aha right… hedge funds usually buy things that generate cash not ones which eat it.
Yep… that doesn’t disprove they’ll buy condos in mass quantities at huge discounts. They’ll just buy with the intent to rent.
Cash flow positive.
We’re a long way from that. But I happen to agree with this prediction. Its just being made three years too early.
Got popcorn?
Neil
Then condo owners better plan on giving their units away for free. Taxes, insurance and HOA/management fees will eat any rent generated.
And when I say any rent, that’s exactly what I mean - too many units, not enough people.
How is a hedge fund going to make money buying something with such a high maintenance cost? I am seeing development companies dumping small commercial properties at prices with no premium (sold for present value of income stream), happy to let them go to local interests who don’t mind keeping a close watch on them.
Either that or they know something I don’t know (planning on steep inflation, or severe recession with tenant Chapter 11s dumping their leases). The smart money is heading for the hills.
Hedge funds are trying to time the market. I see huge losses for hedge funds in the next 3 years. Once everyone hates hedge funds like real estate then we will know it is time to start our own fund!
For anyone who knows the area, how about “The Landmark at the Gardens”, a highrise building that’s best attribute is that it is in the mall parking lot. Granted, it is a nice mall. Prices 700+ to live in a mall parking lot in a “luxury condo”. I think that this building is going to be another on the 60 minutes piece coming out in about a year “WTF were they thinking in FL??”.
I can’t find any good pictures of the Landmark, so I may have to go take my own. I will stand in Macys and take some pictures. I wonder if you have to pay more for “parking lot views” or if “facing Nordstroms” is a selling point?
http://www.emporis.com/en/wm/cx/?id=108142
A developer tried to market the “living in a shopping mall” concept here in our town in South Carolina. It went over like a lead balloon, but now that so many halfbacks are moving into our state it may just work. Who in hell would ever want to live in a shopping mall? It’s beyound me.
Women who like to shop . Course they don’t have any money left over to pay the mortgage .
Wait , I take back my post . Excuse me . Men and women who like to shop .
Sounds like Goose Creek.
Acually, it’s more like a park, and quite beautiful. No different from living downtown, but with better landscaping and less traffic.
Don’t underestimate wealthy Yankees, who love living where they can shop, and who think nothing of paying prices few natives could afford, or running up real-estate values and tax bills, hurting everyone except the lucky few. These are the same spreading parasites that have destroyed all of Florida from Key West to Tampa, much like the kudsu (sp?) some idiot thought would be funny to bring in from Georgia and throw off the interstate. When they’ve done with Florida and every other southern state, they’ll, doubtless, move offshore to all the islands they can, destroying them as well.
Of course, none of this could happen if not for the assistence of local money-grubbers, who never think of the effect on whole, but only of their own bottom lines.
“Sherry Patrick, president of the Gainesville-Alachua County Association of Realtors, said the news affected buyers’ moods. ‘The national media started saying every single real estate market in the country was in trouble and people started reading that and thought, ‘I’ll wait for that to bottom,’ but it’s not going to bottom here.’”
Sherry you selfish- realwhore, go ahead and blame the media, idiot.
It’s funny when you point a finger at someone because there are three pointing back at you.
As far as this effecting peoples “moods” I have been in a non- buying mood ever since the prices starting going up.
Thank God for the Media finally stepping out and saying something. You are completely insane when you say it’s not going to bottom here.
I hate reading such nonsense first thing in the morning.
SKB
Of course those idiots are blaming the media for the downturn. They sure as hell weren’t complaining on the way up. I must admit, I nearly drank the Kool-Aid myself. I mean, how else did we all hear about the incredible run-up in real estate prices other than the media? The media helped accelerate the price increases and I hope it helps to bust the bubble.
SHE’S RIGHT!!!! OF COURSE IT’S NOT GOING TO BOTTOM HERE. ‘IT’ HAS A LONG WAY TO GO BEFORE IT REACHES THE ‘BOTTOM’.
bright girl doesn’t even know what she’s saying..
Realtors(tm) down here are gettin’ nervous.
I am noticing in the free Real Estate(tm) flyers here in Polk County that most of the Realtors(tm) have removed their Glamour Shots(tm) pictures on their ads.
Just an observation.
Also, just got back from a huge Lowes this A.M. The store was empty and quiet and only two registers were open. This was at 9:00 am Saturday morning, at the prime hours of sheeple home-hoarding and consuming activity.
Things are already slowing down…alot.
Same here at a CA Home Depot — foot traffic seems much less than during recent memory.
From the Orlando Sentinel
Teachers, firefighters, police and other essential-services personnel who are being priced out of Central Florida’s housing market in Orange and Osceola counties got a boost Friday from a state program that awarded $10 million to build affordable dwellings for them.
The Florida Housing Finance Corp. board agreed in Tampa to distribute a total of $50 million among 11 projects statewide. Two of them, in Orange and Osceola, are expected to receive $5 million each.
http://www.orlandosentinel.com/news/local/orange/orl-mhousing2707jan27,0,4771740.story?coll=orl-news-headlines-orange
I SMELL PORK!
The low income tenement housing being built, will be totally unnecessary in a few years, when prices are 50% off current levels. Just a poor excuse to piss taxpayer money away and keep their builder friends working.
City of Bradenton DOESN’T SEEM to Trust it’s good old boy Favorite Bank ANYMORE with a of their $millions..
hummm …Err… IMHO This looks like the Pilot and Flight Crew are nonchalantly backing up the aircraft aisle toward the emergency doors while bucking on the only PARACHUTES here Folks.
They PLAN toFind another bank QUICKLY …Hummmmm No PROBLEMOS here Folks, sit tight and enjoy the rest of your Flight …Bye bye
BRADENTON BEACH — On Friday morning, the city of Bradenton Beach resolved on a rather large withdrawal at Coast Bank of Florida: $2 million.
The sum also included $620,000 from an account for the Tingley Memorial Library, said City Clerk Nora Idso, who helps oversee the small city’s $3 million annual budget.
The balance of the remaining $1.4 million was general municipal funds.
“We don’t anticipate any problems with the bank, but anytime you’re talking about public funds, you have to be careful,” Mayor John Chappie said, referring to Coast.
Idso plans to find another bank quickly
http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20070127/BUSINESS/70127001
This is really a flashing red light…Holy cow! Talk about bailing from a sinking ship! This whole thing seems to be unraveling faster ,and faster, and really, the show is just starting…..
Ladies and Gentlemen,
We’re cruising at 30,000 feet, course of north north west. We’re just going to open this door for a little ventilation.
ROTFL.
Coast is toast!
Got popcorn?
Neil
It’s a RUN…. The first one, I believe.
“The bank attributed the increase in non-performing loans and assets primarily to a $16.2 million increase in nonperforming residential construction loans. ‘These loans were made primarily to individual homebuyers on the west coast of Florida, which has and continues to experience a price correction in housing values and delays in housing construction,’ the bank said.”
“Ed Swotek, senior VP for investor relations of TierOne, explained the situation: TierOne goes through mortgage brokers to people building these homes, and has a direct relationship with the homebuyer, who’s financing construction with a 12-month to 18-month loan. Permanent financing happens later, either through TierOne or some other lender.”
“The local governments’ permit processes have been backlogged, Swotek said. ‘So what you have is a homebuyer who wants to have their second home built, they have entered a contract to build this house, the builders down there file for a building permit, and because of the backlog, nothing happens,’ Swotek said.”
“So the homebuyer has been paying interest on the construction loan, there’s no permit, no ground broken, and meanwhile, ‘there has been some cooling of housing values,’ Swotek said. ‘Some are just not making payments on their loan,’ he said. ‘They’re waiting for something to happen.’”
How can you be paying on a construction loan if they haven’t started to build yet? Who gives the builder all the money up-front, even before a permit is pulled?
Good Point. With a construction loan, the builder is paid by the bank in five draws. No money up front, 20% at foundation, 20% at rough frame inspection, 20% at dry-in, 20% at drywall finish, 20% at completion. These figures are typical, different tasks may be assigned different percentages by different banks, but the bank will send out a construction draw inspector to verify work to be paid on. The bank inspector should also verify that city/county inspections have been done, as well as obtain lien releases from anyone filing notice to owner. There are reasons for all this painful red tape. Bank failures are no joke.
Wasn’t this the same bank that gave a 300k credit line to the same borrowers on the construction loans so they didn’t have to put up a down payment ?
Unless it is Plannersbanc, and the first draw was used to purchase a race horse named “First Draw”. That is pretty funny.
Ooops Forgot to mention the Banks bad news …was delivered on a FRIDAY …hummmmm !
Is the city withdrawal of $2MM a font-page story, in the printed fish wrap version of the paper?
Wheres the f’in financial planning at Broward County? Just because they are government doesn’t mean they have to be morons. No Accountability…
This post has me speechless. Truly scary.
Well, could mean a lot. Anytime a tourtist towns city’s chump change Working Capital is moved from a quote “troubled” bank to another after long tern usage in a housing free for all like Florida’s, it would make me Wonder if I had any substancial money sitting on it’s books.
Exactly!
For those of you who know about the South Florida area, how far down do you think raw land prices will go in the Loxahatchee/Acreage area? When I first moved to SFL in 1999 land prices there were in the low 5 digits. Now on realtor.com a little over an acre is in the mid to high 100k range. Personally, I think the prices have far to go.
If folks recall, there was a huge run-up when everyone was talking about Scripps moving into the area. Isn’t it funny how there’s hardly anything about Scripps in the newspaper these days? You would have thought it was the second coming with all the hype in the Palm Beach Post and other papers.
Jan, Read this for the probable outcome! History is sure to repeat the way things are looking at this point…
http://xroads.virginia.edu/~hyper/Allen/ch11.html
credit to :DC-Too
Scripps is a total red herring. Take a look at what it really is. Yes, it will be nice for FAU to have a biotech company in the area. However, they expect to employ about 1000 people there 5 YEARS from now. Ugh, 1000 people making 100K a year (which, I will promise you, is not even close to the avg salary, probably more like 60K) are supposed to save the RE market 5 years from now when they get here? I think I will place my bets on the boomers buying up all the condos near the nightclubs downtown before I believe that one.
Total BS, yes it will be nice. Will have NO effect on S. FL RE as a whole, and exceedingly little on any RE that is not being purchased for the building construction.
Jan — all IMO — expect 1999 prices; biotech is now locked in big-time in east Orlando. I would bet on that market. Simple reason — 10-minute access to a major international airport with (from that area) very tolerable traffic.
So now we all get to see what happens with 5 years of ’supplyside’ economic lending… supplyside should be called easy, and totally unregulated, as in no checks and balances. well as we in florida will surely wittness, ’supplyside’ voodoo carries consequences.
Les, as long as the beer/catfish/hush puppy and beer/bar-b-que/hush puppy places exist, I’m a Happy Camper when I visit Polk County, florida.
Any news about the St Joe Company? Have they gone back to being a paper company?
Roidy
They are in the process, from what I can tell. I think that they have acted reasonably wisely and timely on all this, all things considered. Woe be unto their competitors.
There are plenty of people (Bubble bloggers for starters) who saw this coming several years ago so why the big revelations by “experts” now?
Are the majority of Americans uneducated sheep who are easily manipulated into economic self-destruction?
Where are the moral/ethical leaders of business and government today? Have they become extinct? Is that an archaic concept? It seems like there are no more “adults” left running the world…only children and monkeys.
What about the people running the RE industry infrastructure? As that infrastructure collapses who are the winners? Why did they cut their own throats?
Why was it all so obvious to a few of us that there was a cliff ahead but the vast majority of “lemmings” kept trudging forward?
Greed? Stupidity? Herd Mentality?……..Years from now we will ever have a 20/20 hindsight on the “why” and “how” of it all?
Sorry for the rant but I am awestruck at how people (evidently only a few) who still possess common sense and vision (e.g. Ben) saw this all clearly, warned people about it, and yet…here it is…unfolding EXACTLY as predicted.
Even PT Barnum would have been scratching his head at the sheer magnitude of this….
I bet right after the big stock market crash of 1929 people were saying ,”damn I wanted to sell ,I knew it wasn’t going higher “.
I don’t remember the main stream media questioning the housing boom at all during 2002-2005 and the cheerleaders(realtors ) were the ones that were given all the free press . Does anybody doubt that this was because of advertising dollars ? Advertising dollars can silence the media that is suppose to at least give counter views .
People like you SeattleMoose don’t need the media to tell you what’s happening .
I think alot of people (sheep ) thought if something was awry in the real estate market it would be on channel 7 news .
The one single factor that I find kept the party going was the lending became looser and looser as the housing mania continued and it didn’t stop until they ran out of GF’s, and people got priced out . Than the crooks stepped up to the plate for the last round .
It couldn’t unfold any other way than predicted because it was all la la land cheerleading hype and myth ,false short term demand ,…you name it .
Like Deep Throat of Wategate said Moose..”Follow the MONEY!” They all saw it coming and they knew exactly what they were DOING.
“One investment banker who specializes in buying and selling distressed bank debt said Coast could still take big hits, especially on the vacant lots and half-finished houses”
I would think that the half finished house would be almost worthless. A lot of money has already been spent, yet now after the time it takes to sell or court procedures it will be in bad shape if someone wants to complete it with much work having to be redone. Or the place will have to be bulldozed and started over. In either case I doubt that they will get much more then pennies on the dollar back
You can’t leave an unfinsihed structure up for long in a humid climate like Florida, and be able to salvage it without encounting a host of problems. General contractors are usually very reluctant to finish another builder’s job. Too much liability and uncertainty.
I do love them blaming the “media” for the bad news. I can remember about a year ago, watching 20/20 and a story on RE millionaires–videos of guys in Benzs with expensive shades explaining how much they had made on pre-construction flips and the mini-empires they were building, risk-free.
I don’t recall a single question about the viability of any of it on the part of the “reporters”…and I can remember thinking geez, I’m worrying about saving nickles and dimes and these guys are making mint without braking a sweat. Nothing greased this run-up so much as the dimwits who pass for “journalists” doing the gee-whiz stories on the easy money being made in RE. Anyone who spends time on Ben’s blog has to be convinced of the general inability of the mainstream media to critically assess any event.
If anything there is NOT enough news out there.
I have been following a site that talks about re-location. I see so many posts from people that are re-locating and talk about how they are shopping for homes. These people shopping have NO clue what is happening in the areas they are re-locating to. The media has not gotten enough information out to the mass public yet covering the USA as a whole. Most of the information I have been reading I get from State specific newspapers or sites like this one.
SKB
Accurate and timely information is usually valuable.
It doesn’t take much to do a preliminary research of an area and eliminate it quickly. Check the number of houses listed even if it’s only on the MLS. Look at how old the MLS numbers are to see how long houses have been on the market. Scroll to see how many are reduced, motivated seller, owner to pay closing costs, extra realtor bonuses, etc. Go to the county appraisal site and look at appraised values compared to asking price and the price originally paid, along with the year bought. Check the taxes. Pull up an area at see what the number of listed houses are in that area on the MLS then almost double it for builders and for sale by owners. It will tell you if an area is hurting. You can also check the unemployment numbers and the crime rate, however sometimes those statistics are old. If the numbers are bad, eliminate that area. If not, research a little further. Check all the tax rates and look for special assessments. Get on line and chat with people from that area to get their opinion of the economy where they are living. Just a few suggestions.
The MSM should be blamed, because everyone knows their worthless happy-talk coverage is of no consequence.
“Sherry Patrick, president of the Gainesville-Alachua County Association of Realtors, said the news affected buyers’ moods. ‘The national media started saying every single real estate market in the country was in trouble and people started reading that and thought, ‘I’ll wait for that to bottom,’ but it’s not going to bottom here.’”
—————————————————————–
self appointed guardian of high prices. No wonder sales are tanking, agents like Sherry are excluding buyers. In high school she was a fierce guardian of her exclusive clique. Perfect training for her current job.
The auction is a blood bath, I am watching live on Ebay, homes are going for 50% haircuts.
SKB
Woah !
http://cgi.liveauctions.ebay.com/ws/eBayISAPI.dll?ViewItem&category=28309&item=260079117702
Blood in the streets - all I can say is WOW ! Imagine the comps in that neighborhood now….
More examples:
http://cgi.liveauctions.ebay.com/ws/eBayISAPI.dll?ViewItem&category=28221&item=260072720256
Punta Gorda is toast…
Here’s a brand new 3/2 in Port St. Lucie. OUCH ! :
http://cgi.liveauctions.ebay.com/ws/eBayISAPI.dll?ViewItem&category=28309&item=260079123673
One bidder on this West Palm condo - LOL ! :
http://cgi.liveauctions.ebay.com/ws/eBayISAPI.dll?ViewItem&category=28221&item=260072712057
More examples to follow…
Brutal!
Holy shiite! That first one sold at $37.5 per square foot. No grafiti. Green grass and a tree in the front lawn. 1995 prices and granite countertops! F’n A!
Here’s the link to our little $ 75,000 bargain house on the Charlotte County Tax Appraisers website:
http://www.ccappraiser.com/Show_parcel.asp?acct=00952623485608&gen=T&tax=T&bld=T&oth=T&sal=T&lnd=T&leg=T
LOL!
Whoa — those aren’t haircuts, they’re eviscerations.
EBay link to completed FL SuperAuction “transactions” :
http://search.liveauctions.ebay.com/ws/search/LiveAuctionSearch?ahid=14714&ccn=Real+Estate&fis=2&frts=0&getresult=&isl=0&lc=1&sacti=20951
Enjoy
( Must have an EBay account and logon ID to view )
Miami Condos for 85 K !!!
Falling knife caught : http://cgi.liveauctions.ebay.com/ws/eBayISAPI.dll?ViewItem&category=28221&item=260072697556
Yeah baby!!
Ok, I watched for four hours, (need to get a life) I never even got to the gym before it closed but, it was so exciting and really made my day.
Here are some results:
Fort Myers house estimate 175-245 sold for 125,000
Esterofl (spelling wrong?) condo estimate 268-355 sold for 225,000
Bonita Springs house estimate 240-335 sold for 100,000
Poinciana house estimate 190-275 (no reserve)sold for 125,000
Poinciana house estimate 195-295 (no reserve) sold for 100,000
Naples condo estimate 2.59-3.29 (million) sold for 1.4 Mill
Naples condo estimate1.59-2.49 (million) sold for 900,000
Hollywood Hills house estimate 410-545 sold for 275,000
Hollywood Hills house estimate 325-475 sold for 175,000
Pembroke Townhouse estimate 265-350 sold for 175,000
Punta Gorda house estimate 200-275 (no reserve) sold for 45,000
There were moments where I felt inclined to bid, I held back considering site unseen..who knows if the house is stripped or not.
All in all it was such an amazing site to see. Some of the homes were so beautiful selling for half of their dream estimate. There were to many for me to write down, the auctions went very fast.
A couple of properties didn’t get one bid.
There was lots of houses, condos and land…everything went dirt cheap, a lot of condos went for 100,000 to 115,000 in Cape Coral.
As of 3:00 pm auction still going on.
SKB
Why not ?
Real Estate only goes up !
It’s different this time !
Buy now or be priced out forever !
LOL!
Thanks for the update. I can feel the excitement! Put some more stuff up if or a link if you find anything. This is so cool! Yeah!
Attention HBB shoppers the 50% blue light special light is going off over Florida!
Land: They aren’t making it anymore-
http://cgi.liveauctions.ebay.com/ws/eBayISAPI.dll?ViewItem&category=28221&item=260072706619
I looked at several of the houses for sale. The bids were all way over what I consider bargains, and the market values are laughable.
It looked just another gimmick way to sell properties.
Yup, I was at the auction. Prices for the areas I am familiar with (Dade and Broward) still seem really excessive. Other areas seemed to be low, But who knows how far “inland” these ones were.
OK Guys (and Gals) Long time lurker (over two years) and had a Saturday to kill. So I WAS THERE at the auction. I have the Headache from the loud music and 2 Auctioneers Yelling. Two chearleaders were there to entertain the crowd. I am sitting down now at my computer two try and make up a report…. Let me know what you want to know!
Captain John
Be sure to include seller reactions and comments, if you got any!
Try to give us a good feel for the things that can’t be quantified and the psychology of the participants i.e. were buyers/sellers demonstratably upset, nervous, confident, eager, talking it up, joking, straightfaced, etc. Where there any REIC types present (realtors, appraisers, brokers)? Good turn out/bad turnout? People there for business or a lot of looky loos? Did you pick up/overhear any good comments from people in the crowd? Was the auction successful or not?
Hi there. I’ll Try to give a good feel for the Auction. I can Post this again Tomorrow if there is a similar thread reoporting on this.
I know a lot of you were watching the auction on ebay. I had the good fortune to be there in person as I had nothing better to do on a Saturday than go to the Seminole Casino. I arrived when the sixth property was being bid on and left with about ten properties left to go (3.30 ish).
At the beginning of the Auction I would say that there was about fifty people in the room that would easily hold 500 and had seating for 400. There was a title company booth and a mortgage company hawking 0 down ARM’s. I was flabbergasted to see that they had two high school cheerleaders at the front to “entertain” the crowds (maybe they should have hired strippers!). I spend my time in Dade and Broward County and can only really comment on values of those properties.
The first 19 properties were all from the west coast of Florida that all “sold” for what seemed low money. However something was going on that to me, as no auction expert seemed fishy. Seven of these properties were “recalled” and re auctioned later on in the sale, one of them was “recalled” twice. Was this apparent on the ebay site? I thought that once the gavil went down then the sale was done?
An example, 25124 Macada Dr. Punta Gorda 33983. First time round the Auctioneer started off at 300K dropped down to where there was an ebay bid of $100K. About an hour later it was “recalled” Bidding started at the ebay price of 100K and the property was bid up to $150K in the room.
Another example. 4110 NE 23rd Ave Cape Coral. 33909. Auctioneer (there was two in the room alternating listings) started at $300K, first bid was at 100K ended up selling at 225k in the room. Half an hour later it was recalled. Bidding was started at the in room price of 225k. There were no extra bidders for the property. It was then recalled a second time somewhat later where bidding started at $100K again and got to $150K where it sold again. Strange. All Properties were sold Subject to confirmation, What does that mean, I thought that all bidders are verified before the sale starts?
If I had to guess many of the sellers at this auction were owners of multiple properties that were for sale today some were obviously developers getting rid of just finished inventory in a new subdivision (Cypress way, Coconut Creek) another was a condo converter, who was dumping units in Melbourne (some still with tenants). Those all sold for $100k each. I wonder what the comps WERE in that conversion?
Ok now Las Olas In downtown Fort Lauderdale. 1509 Ne 5th ct 33301. According to Broward county assesors office is owned by Mr. Richard Shannon. Purchased on 15th September 2005 (Katrina anyone?) for $560K. Sold at this auction to an ebay seller for $400K. This strikes me as Way too much still! From memory I think you could just about squeeze two townhouses on the lot if you knocked it down. In 1995 the place sold for $50,000.
Once Dade, Broward and Palm beach counties were done most people left. There was a lot of vacant land for sale with not a lot of interest from the room. I left when they moved on to Brevard County. I checked on the silent auctions for the 58 vacant lots –not much action if any. Most people were leaving…
There were only a couple of people that appeared to be the sellers at the auction. One typical South Florida Boob Job girl Mid 40’s red dyed long hair (makes a change from blonde) who seemed involved with the West coast of Florida Properties. She seemed “in” with the auctioneers, I wondered if she was the gal who had tried to sell a lot of places on the west coast of FL a while ago at auction and was trying again??? She seemed resigned and a little Grim.
I was at the front by the three people who were running the Ebay bids. They seemed to be involved with the relisting. A few couples wandered up when certain houses came up for sale stayed for a couple of properties and left with not much reaction. I saw no wailing or gnashing of teeth!
One Buyer in the room got upset when they recalled a property he had won for I think 125K and they (the auctioneers) claimed that there had been an ebay bid for $150K, He was pissed and was about to create a scene except that he was steered out the room by one of the girls!
I would say ther were about 12 to `5 bidders in the room, the rest were like me,- looky Loos!
If anyone has any specific questions about the auction I would be delighted to answer them.
“One Buyer in the room got upset when they recalled a property he had won for I think 125K and they (the auctioneers) claimed that there had been an ebay bid for $150K, He was pissed and was about to create a scene except that he was steered out the room by one of the girls!”
I don’t understand that “recalling” the property business. Too bad you couldn’t get a clarification what that was about. Sounds like they are trying to use the mysterious “ebay” bidder to stir up action in the room and vica versa if necessary.
Do they give out a rule book or procedures for auctions? I am not familiar with the etiquette but I suggest future participants request clarification when these incidents occur.
Post your report up early (fresh) in tommorrow’s Bits Bucket or Florida thread.
Thanks for the report!