“A Grossly Overheated Market”
The Tampa Tribune reports from Florida. “Home builders should offer incentives or slash prices to sell off hundreds of thousands of vacant new houses glutting markets nationwide, housing experts warned Wednesday at the International Builders Show in Orlando.”
“‘I’m telling builders that we absolutely have to move these houses’ before the real estate market will rebound, said said David Seiders, chief economist for the National Association of Home Builders.”
“The Tampa Bay area is among the places with an oversupply of new homes on the market. There were 4,606 vacant new homes in the Bay area at the end of the fourth quarter of 2006, an increase of 1,700 from the same period a year ago, according to Metrostudy.”
“More than 34,000 existing homes are on the market in Hillsborough and Pinellas counties, according to local real estate trade groups.”
The Orlando Sentinel. “The industry still faces challenges brought on in part by overbuilding in 2004-05, when real estate speculators were among those snapping up houses, a phenomenon that resulted in hundreds of thousands of homes sitting unsold across the U.S., said Seiders.”
“‘There is a seriously large inventory,’ Seiders said, now that demand from investors has cooled and the market is struggling to return to more normal supply-and-demand levels. He said the industry overbuilt by about 400,000 units nationwide over a period of several years, though that number now is being whittled down.”
“Other economists who spoke Wednesday forecast that a rebound wasn’t likely to occur until later this year, and it could be a weak recovery because of high home prices.”
“‘Affordability is at the heart of what drives housing demand,” said Frank Nothaft, chief economist for Freddie Mac, the mortgage giant that helps provide liquidity for the $8 trillion home-loan market. ‘House prices have shot up so much over the past five years, it will take time for affordability measures to gradually improve.’”
“He said the industry still faces ‘a rocky road.’”
The Palm Beach Post. “Home prices will continue to slide for the rest of 2007, Berson said. For 2007, home price appreciation ‘is likely to move modestly negative,’ said Berson of Fannie Mae.”
“‘We’re not at the trough yet for single-family home sales,’ Nothaft said, noting that home prices will have to fall further to burn through the current high levels of housing inventory.”
“That’s not what the more than 100,000 home builders, Realtors and other industry representatives attending the four-day show at the Orange County Convention Center wanted to hear. But most acknowledge that today’s near-record level of homes follows a five-year run-up in home prices, fueled by low mortgage rates and investor dollars.”
“Nowhere was that more true than in Palm Beach County and the Treasure Coast. The median price of an existing single-family home in Palm Beach County soared to a peak of $421,500 in November 2005, plunged to $365,600 in October 2006 and ended the year at $368,200, according to the Florida Association of Realtors.”
“Median single-family home prices for the year in Palm Beach County posted a 10 percent annual decline from 2005.”
“The local condo market, however, ‘is not out of the woods yet,’ Berson cautioned. ‘There’s been a huge swell in price weakness in condos,’ he said. ‘The falloff was bigger in condos because they’re more like a commodity.’”
“Seiders of the builders association placed some of the blame for falling home prices directly on builders’ shoulders. ‘I told Congress we overbuilt the market by 400,000 units,’ he said.”
“Berson agreed. ‘Inventory overhang (unsold homes on the market) is causing price weakness,’ Berson said. ‘If builders had anticipated that, we wouldn’t see these price declines.’”
“The record backlog of unsold inventory nationwide is causing sellers major headaches, he said. ‘It means having two houses for sale on your block at the same time when you put yours on the market, which causes you to lower your price,’ Berson said.”
“Even though new-home builders have slashed prices and offered everything from upgraded appliances to free closing costs, they need to keep aggressively selling, Seiders said. ‘Because of builder giveaways, margins have taken it on the chin,’ he said.”
“Half of the builders surveyed said they cut prices in the fourth quarter of 2006, and 80 percent made non-price incentives, such as buying down interest rates, Seiders said. But builders need to do more, he said. ‘Builders have gotta keep up sales efforts and gotta keep inventory going down. The vacant units for sale are critical.’”
“Other factors besides overbuilding contributed to the housing market slowdown, the economists acknowledged. The lowest mortgage rates in a generation, aggressive lenders and record rates of real house-price appreciation that drew in investors also helped cause ‘a grossly overheated market,’ said Seiders, spreading the blame.”
“One of the worst effects of the housing market decline has been the rise in foreclosures nationwide. About 30 percent of homes that enter some stage of foreclosure get taken back by lenders and become part of the massive unsold inventory of homes, Seiders said.”
The Dallas News. “Berson blames speculators for a lot of housing’s woes. ‘We don’t think we have seen the bottom – the reason is not the core housing demand but investors,’ Mr. Berson said.”
“By some estimates, buyers of investment and second homes accounted for more than 30 percent of recent home sales. Many of those investor-buyers are now bailing from softening housing markets. If investors dump houses on the market, it could further depress prices in some areas.”
‘Like its sister company Florida Rock Industries Inc., Patriot Transportation Holding Inc. expects the drop-off in housing construction to affect its results this year. President and CEO John Anderson said the business got off to a strong start in fiscal 2006. But ‘in the middle of summer, things stopped,’ he said.’
‘Earnings at Fort Lauderdale-based AutoNation were flat in the fourth quarter, hurt in part by the housing slowdown rippling through the economy. Mike Jackson, AutoNation’s CEO, attributed the stagnant performance to a tough economy and lackluster housing markets in Florida and California, where the company generates half of its revenue. The slowdown in residential construction hurt sales of pickup trucks, he said.’
‘Long term, we’re very confident about our positions in California and Florida,’ Jackson said. ‘But in the near term, we’re going to be working through this speculative housing market and the disruption it’s caused.’
‘Facing door-closing jumps in their tax bills, a group of Palm Beach County marinas got their property assessments cut by a collective 40 percent, taking more than $132 million off their values, county figures showed Wednesday.’
‘We believe our properties were not being appraised correctly. This validates what we’ve been saying all along,’ said Ray Graziotto, president of Jupiter-based Seven Kings Holdings, which owns four marinas in Palm Beach County.’
“The largest reduction by far was for the Palm Beach Yacht Club in Hypoluxo, whose owner, Leo Berman, has come under scrutiny this week because of his business connections to County Commissioner Warren Newell. A special magistrate in late December reduced the boat yard’s assessment from $28.4 million to $9.4 million. But it’s unclear whether the ruling will stand, because the county’s $14 million purchase of part of Berman’s development rights - the foundation of his tax appeal - has come into question.”
The lies, politics and temptations are remarkable when someone wants to add or expand a marina.
Makes me feel good knowing my Dad’s house is in Palm Beach county….I’m sure he’ll appreciate making up the shortfall in tax revenue…
OT. Does anyone know where I can get published rate quotes for subprime 1st and 2nd mortgages. None of the big lenders publish rates they make you fill out an on line app. I’m doing some research, not borrowing. Thanks!
Still, there are some builders doing spec construction:
http://www.courant.com/business/hc-ctreal0208.artfeb08,0,3776967.story?coll=hc-headlines-business
“Many developers are scaling back plans for new homes, but there are still a few willing to take a chance on building homes in the hope that someone, someday soon, will want to buy them.”
Is anyone familar with Ibis in West Palm Beach? I would like to purchase a house there but I am really worried that the prices will continue to fall. When I was there looking last week, there was no, zero, nada, traffic at the open houses. The agents were basically begging for an offer. I think prices will fall another 10 -20%. Especially as these investors, flippers, ok total idiots realize that it is costing them $50,000 in holding costs each year. I think my best bet will to buy one from a bank that has foreclosed on the borrower.
squat in a rental - cut the lawn and pay utlilties
buy in 08
Very familiar, I have a few friends right in that area.
Ibis is pretty far out west, and to get to downtown during rush hour is a nightmare. It is a very safe area, and if I remember, has a good school system (not sure about this one, check for yourself).
Anyway, what are you looking to spend out there? As I (and others, DAP for sure) are familiar with the area, just the basics. Asking price, SQ footage, any big positives/negatives (pool/good or bad location in the development, etc). That’s really all it takes, all these developments are so “cookie cutter”, its very easy to arrive at a fair value.
Anyway, I am very curious, give us some of the details about one of the homes you most liked, let’s see what we all think as far as value.
I know Ibis. I have a friend who works at the golf club there. I have played there several times, decent courses but nothing outstanding.
I am sure the homes on/around the golf club are goofy-expensive. I am not sure about how many condos are in the area. I am sure the condos will get crucified though. I would think the home prices would drop in Ibis. Any “cookie-cutter” developments could be in real trouble as those areas are prime for the loose lending and speculation. I would think many of the older developments are owned by the members of the club who probably don’t care about the value of their home or have HELOC’s. Overvalued is overvalued in my opinion. I could see 20-30% declines out there. It is in the middle of nowhere. I suggest you rent, keep you credit score high and keep saving $$$ for a down payment. Patience will be rewarded.
Mike Fink, when we headed to the Blue Martini for drinks?
Soon buddy, very soon. My GF’s rents are in town this weekend, perhaps I can sneak out for a few hours one night this weekend. Made it out to Safari on Sunday, my god the women in this area are just insane.
Sorry, I know that is OT, but sometimes we are all doom and gloom. Look the the beauty around you sometimes and enjoy life a bit. Especially those of us that live in FL, we do live in a wonderful area. That does not mean home prices are not going to drop by 50% from the peak, but my god, if there is a better place to be a young, well off professional, I don’t know where it is. Problem is, finding that job down here is very difficult for almost everyone, as evidenced by our 50-60K median household income.
Keep advertising that wealth, buddy, and Florida’s miscreants will draw a target on you bigger than on David Copperfield.
Ibis is pretty nice but as mike says, it’s way out west. Right now prices are all over the place. Depending on whether you’re looking at a long-term investment to live in compared to a short term hold and flip it could be time to start low-balling.
If someone has the home priced at $399K, even if the other homes are $450 - $500K you can still jump in with an offer in the upper 200’s or low 300’s. Don’t be afraid to do that with all the homes you like. There are over 100 homes available in that development alone. Prices range from $269K to over $3 million. You will not run out of sellers.
Most people on this board will agree. We don’t really know where bottom is. I wouldn’t rely on 10 or 20%…not on any number really. If there is a home you like, it’s in your budget, you plan on living in it as your primary residence, and you can steal it away from someone desparate…go for it. If you’re buying to flip it, you’re not going to live there long-term or because you think bottom is here, you’re going to be a bagholder like everyone else.
how about deteriorating offers
250 toady 5 k less per day and dead in a week
I like that! I’ll pay you $250K for your McMansion today. You better let me know now because next week it’s $200K. Keep me waiting longer? How about $150K. Beautiful! It’s payback time for the buyers.
I worked for a short-lived affiliate of the NAHB in the early ’90s, and our company exhibited at their national conventions. It was always interesting to watch the high-rollers as I manned the booth, walked the floor, and attended the seminars. They were obviously flush with cash and their wives were decked out in jewelry and designer clothes. What’s missing from this article is any indication of attendance. We know realtor ranks are thinning. What about builder ranks? And among the survivors, how many passed up this show to save a few thousand bucks?
Assuming you’re talking about the International Builders’ Show, the local paper today says, “The show, expected to draw more than 100,000 people, began Wednesday and concludes Saturday. It is not open to the general public.”
So actual figures likely will be out late Saturday or on Sunday.
New Jersey -
New Jersey has added 59,700 jobs since December 2000 of which 53,700 have been government jobs,” Otteau said.
The private sector has lost about 120,000 of the higher paying jobs in professional and business services, manufacturing, information and financial employment. From a real estate perspective, Otteau said this job loss equates to 31,000 home sales at $750,000 per house or 23,000 at $1 million per structure.
“New Jersey has added 59,700 jobs since December 2000 of which 53,700 have been government jobs…”
I went to census bureau web site where I found that New Jersey’s population grew by almost exactly 300,000 from 2000 to 2005. Add another 60,000 for 2006 and that gets you to 360,000. So the state added over 50,000 government jobs to serve an additional 360,000 people?
One new state employee for every 7 people? Holy cow!
Now you know why New Jersey’s taxes are so high.
By “state employee” I mean county and local as well. That includes teachers, firefighters, etc. as well as bureaucrats.
There’s a table on MSN Money today - it ranks NJ #1 for property taxes - no wonder.
The property tax stories and figures I’ve been reading on this blog have become downright scary lately. Locally, our hit is coming this fall in Chicago.
I do believe that number (having lived in NJ myself) but other areas are just as bad (or worse) but because of crazy laws (Save our Homes, Prop 13) the overall tax burden does not look as high. However, for those buying in today, at the crazy prices, they are most definately paying an insane amount of tax as compared to value of the home. Mill rate in most of Palm Beach is right around 2% of sale price. 500K home, 10K/yr tax. That imho, is very expensive.
Perhaps the overall burden is not so high, but I inherited my intolerance for property taxes from my folks. As unrealistic as it probably is, I shrink from the thought of paying five figures over and over again for something I already own. Call me old fashioned and out of touch, but I simply refuse to see the sense in accepting what has become an alarming trend on property taxes nationwide.
some are scared of terrorists- I fear gov unions
He said the industry overbuilt by about 400,000 units nationwide over a period of several years, though that number now is being whittled down.”
So Mr. Seiders and Mr. Berson agree, this huge inventory is a serious problem. Compounding the problem is tightening lending standards, which were long overdue. How about we have a few bourbon and waters while discussing a possible rate cut. Oh yeah, we might have to throw some gold overboard too, but who needs that crap.
“Is anyone familar with Ibis in West Palm Beach? I would like to purchase a house there but I am really worried that the prices will continue to fall.”
michael f, Falling prices are what we are aiming for. Why on God’s green earth would you be worried that they would? I think you are on the wrong site my friend.
This blog is pro bubble crash, a lot of us on this site are planning on purchasing homes too but when the timing is right.
SKB
TOL numbers out this morning…worse than expected. Cancellations rates are improving but net orders are down 33% yoy. NYC area humming along according to CEO….everywhere else is weak; very weak.
If this doesn’t symbolize this revolting bubble, I don’t know what does.
http://dallas.craigslist.org/rfs/275355047.html
Ft. Smith, Arkansas. $425K “executive” house. Ever seen Ft. Smith, Arkansas? I doubt the collective income of the whole city is $425K.
never been there but that seems like a lot.
Ft. Smith is nice.
There are no doctors, lawyers, or even plumbers there who could afford a 425K house. That’s about 35K per year pre tax in int and taxes.
$120 per sq foot? Cheap.
Cheap by California standards. A brand new 3000sf house in the surburbs north of Dallas costs $180K. I’m sure the Dallas area has alot more high paying jobs than Ft Smith, Ark.
I used to live in NW Arkansas.
Some “executive” probably paid 12 times earnings for this place.
At that price, at least it’s got a sprikler [sic].
While blog posters, in the interest of fast and free exchange, are sensibly tolerant of a moderate level of grammar and spelling errors, it baffles me that people trying to sell something for hundreds of thousands of dollars do not take time to thoroughly proofread their copy. Worse, I often see such errors, and very outdated information, in regular professional Realtors’ listings. Seems like their brokers would get off their butts and scan the offices’ ads periodically, as part of their contribution to the income process.
TOL houses: guaranteed for five years, then they fall apart.
NEW , on of top 5 subprime lenders is bleeding today..down by 30%.
we know that lenders repackage the mortgages into securities (MBS etc) and sell to the investors all around the world but
……Like many mortgage lenders, New Century doesn’t keep its loans; it sells the loans to banks and investors. The deals normally have clauses allowing investors to force New Century to buy back a loan if the borrower misses an early payment…….
so repurchase means the risk is still w/ the lenders.
the storms are gathering fast!
Now is the time to short countrywide financial!
‘House prices have shot up so much over the past five years, it will take time for affordability measures to gradually improve.’”
why can’t they just lower prices…why do we have to spend more to get less?
“‘Affordability is at the heart of what drives housing demand,”said Frank Nothaft, chief economist for Freddie Mac
Well, there’s a forward looking solution….GS, is this what they mean by a self-correcting feedback loop?
By the time things to the “Affordability” stage…people will be more concerned with their job status then there “home-owner” status.
“Berson blames speculators for a lot of housing’s woes. ‘We don’t think we have seen the bottom – the reason is not the core housing demand but investors,’ Mr. Berson said.”
I found this probably the most funny statement I’ve read this week. Ehem (throat clearing), just about darn near everyone, thought of a home purchase as the primary vehicle to make money, displacing the idea of a home to live in. Mr. Berson and the “core housing” demand he refers to including investors (speculators), WAS EVERYRONE.
ps. bumped into some lender account executives at a friends office up in Seattle area. No kidding, they drove straight from LA in a van and were making the rounds at local mortgage broker offices. Said, everyone is focusing on Washington State due to better market conditions. Guess we will avoid the problems outside our state lines.
S-Crow wrote:
“Guess we (Seattle area) will avoid the problems outside our state lines. ”
I don’t think I’d bet the farm on that. We were harder hit by 9/11 than most areas and it took longer for us to get back to the party. Commercial jetliner sales have been rather good but as we saw in the early 90’s, and again following 9/11, they can turn around in almost a heartbeat. Our other income drivers are also mostly in the high end. Sooner or later, we’ll get a chance to lick our wounds.
Bunkferd-
I agree. My Dennis Miller sarcasm was on.
goldilocks isn’t so blond this morning. her roots are beginning to show.
“By some estimates, buyers of investment and second homes accounted for more than 30 percent of recent home sales. Many of those investor-buyers are now bailing from softening housing markets. If investors dump houses on the market, it could further depress prices in some areas.”
Why not sell all the FL housing stock to buyers from UK and Netherlands? People here still can’t get enough of real estate, lending is as crazy as it can be (also for second homes) and most FL prices are a steal compared to Old Europe ..
btw, I’m still seeing ads on Dutch investment forums that promise 20-25% annual return on investments in FL real estate. Sounds a bit like a stretch in a depreciating market …
Great idea. That’s where they should market them.
Be great if foreigners ended up holding the bag on this one.
Give a nice infusion of cash to the US homebuyers.
foreigners are already holding a big chunk of the bag; some of the biggest EU pension funds are heavily invested in US mortgage paper and Fannie/Freddy stock.
NHZ posted “Why not sell all the FL housing stock to buyers from UK and Netherlands? People here still can’t get enough of real estate, lending is as crazy as it can be (also for second homes) and most FL prices are a steal compared to Old Europe ..
From Ben’s Bloomberg link:
“”Still, HSBC won’t sell the U.S. unit nor leave the consumer- finance business in the U.S. It will seek to make loans to immigrant communities from Asia and Eastern Europe in Texas and Florida, Geoghegan said.”
Looks like they got that memo….just different immigrants.
Sorry for confusion. The Bloomberg link is under the Going for Volume thread.
yeah … it’s evident that they didn’t learn their lesson yet.
From N.J. considering Boca Raton to live. Anyone have info on the community of Saturnia? (gated dev off of Yamato) Never been there but looks good on the web.
better watch the tracey ulman episode on the month of the rat
Thanks Michael Fink and Bad Andy. Here is more information on the house I was looking at in IBIS
http://www.thetelchingroup.com/Palm_Beach_Gardens_FL_Ibis_Golf_Country_Club_FL_listings/ywgr2aveqzv.shtml
The only negative with this house was that it did not have a pool. The asking price was $399,000. There is a $319,900 first mortgage option arm with a rate currently I am guessing between 8.5% and 9%. (Libor + 3.4%). This person who purchased the house I am also guessing bought this house to flip because he owns another house in Ibis and this house is vacant. Taxes are $10,100, insurance is at least $3,500, and the HOA is about $400 per month. I am guessing his monthly mortgage payment is now between $2,400 and $2,500 and that is…assuming he is not paying the minimum and having negative amortization. Plus last June he took out a $150,000 home equity line on his primary residence. The holding costs on this house I am estimating to be around $4,000 a month and that does not include utilities, or interest on the home equity loan. This house is costing this “investor” some serious cash each month.
I really liked the house and IBIS (three really nice NIcklaus golf courses), and for me it would be a second home/vacation property/investment property. Plus I like being west (not as conjested) and if I were to live there I would probably not be working. I would most likely rent it out during Jan, Feb and March and was told I could get about $4,000 a month. The asking price is $399,000 but the agent was begging for an offer of $370,000.
The first problem I have is that I would not be living there full time for about 5-10 years and at the present would most likely use it less than four weeks a year. The second problem is that no matter how I ran the numbers paying anything above $225,000, I just can’t get them to work, without have major negative cash flow, even paying 100% cash (from a sale of another rental property to defer those taxes via a 1031 exchange) and getting the house for $350,000, I would still have negative cash flow. I highly doubt the investor would sell for $225,000 which would be almost $100,000 less than the mortgage and $175,000 less than he paid. For the numbers to work the price of the house needs to drop to around $225,000 which it may. This would substantially reduce the real estate taxes.
Sooner or later some of these investors/flppers are going to lose their properties via foreclosure. At that point the banks may consider $225,000 for this property or a similar one just to get it off the REO list. Remember the banks do not want to own property, they are not in the real estate business, REO requires them to set aside more capital decreasing their leverage, and it takes additional people to manage a REO portfolio, they just want it gone.
Michael
I applaud you for working the numbers, so many people don’t (which, is just… Well, let’s say, it makes my head hurt). I don’t think that there is any way you should buy that home at the current price, as evidenced by the numbers you provided.
400K for 2500 sq/ft is not that bad, but the carrying costs in FL are devestating, and there is no way your going to rent that for anything north of ~2K a month.
At $100 per sq/ft I would really consider it (~250K). However at 399K, it’s going to be a cash eating alligator. Remember the carrying costs and reduce the price of the home by the same amount.
There is no way this will work as an investment for many, many years (if ever). If you can’t make a property flow positive with no morgage.. Well, then it’s not just a bad investment, but moves onto a horrible investment.
Wait another 2-3 years. I have a feeling, especially in those western communities, you will see 100-125 dollars per sq/ft. I really believe that, especially since the land that these homes are sitting on has nearly no value at all (because there is so much of it out there).
$4000 a month? Who exactly told you that?
I wouldn’t bet on the $4000 a month. I know of many seasonal rentals which have gone vacant this season. For example, I know of an oceanfront condominium tower where owners are advertising rents for $4,000 per month but are “privately” accepting $1,400 or less. I don’t know whether a home in Ibis will attract more prospective snowbirds than an oceanfront condominium, but I am sure you will be subject to the laws of supply and demand.
Nice house, but if you aren’t going to live in it for five-ten years, then why not wait til then????? There will be homes just like it waiting for you! You could rent a very nice home for much less! If you have the cash to cover the carrying costs without counting on $4000 a month rent, then go for it! I doubt you could get $4000 a month in rent! I rent a nicer home with a POOl, for almost half that! Without a pool try $1800 if you are lucky!
Amen, and the numbers are going to get worse from the ownership standpoint and probably get better from the rental standpoint. Michael F: Are you a doctor by any chance? This sounds like my brother the doctor every time he feels like buying yet another house that he doesn’t live in and won’t for at least 5 years.
Wow $4000!!! Last year I rented a 4/4 in lasolas (Ft Lauderdale) with 100 ft deep water, Ocean access, Pool etc. All on a 5 month winter lease for $3800. I know I got a good deal, but $4,000 WTF! -will never happen.
With all due respect you will not in this or next decade get 4000 for that house. Whoever gave you that number is either criminally negligent or just plain criminal. I lived in PBC for 30 plus years and trust me now is not the time to buy. Wait till next year and that house will be 290 with the pool!
“The only negative with this house was that it did not have a pool. ”
So you dont consider these things to be negative
“Taxes are $10,100, insurance is at least $3,500, and the HOA is about $400 per month.”
At 1500 a month what else could you call them.
And this case illustrates why the decline make take a while and why it will bo so devastating. That 150k should enable this specuvestor to make the 4k holding costs for awhile. In general I anticipate these fools with multiple properties to have all on them, including their ACTUAL residence forecolose upon. Those who got maximum HELOCs at peak can probably hold out through a couple of “silent springs” waiting for the market to improve. And when they get foreclosed upon they will be seriously insolvent. If they’re upside down 200k apiece on several properties, it could be awhile before the banks and otherw holding the paper know just how bad the situation is.
wow entire HB sector crashing anything related
no spillover here folks- move along
reits will be next
“One of the worst effects of the housing market decline has been the rise in foreclosures nationwide. About 30 percent of homes that enter some stage of foreclosure get taken back by lenders and become part of the massive unsold inventory of homes, Seiders said.”
The rise in foreclosures are not an effect of the housing market decline, but of the unrealistically high prices paid for these homes by folks who could not afford them. This effect was masked by rapid price escalation, since debtors were able to continuously take on more debt to satisfy current debt, ultimately leading to our current situation.
“since debtors were able to continuously take on more debt to satisfy current debt”
That is the definition of a Ponzi Scheme.
http://en.wikipedia.org/wiki/Ponzi_scheme
New Centry Financial taking a huge hit today off almost 30%
yowzaa
They found out the hard way that giving out 125% loans to people with sub 600 credit scores was not a good idea.
Well it was a perfectly fine idea (at least from a business if not moral viewpoint) until they ended up having to take the loans back and/or keep them.
no, it was a rilly rilly bad idea from the get-go.
g. r. e. e. d.
Probably not a good idea with people with 750+ scores either!
2003: “we’re running out of buildable land; buy now or be priced out forever……….”
2007: “‘There is a seriously large inventory,…..the industry overbuilt by about 400,000 units….”
In past centuries these guys sold snake oil!
Yea, they were running out of land because the homebuilders were busy building 400,000 extra homes on it.
So what do you all think will happen to the Orlando market? Asking prices are down 9% and inventory has doubled.
I compare it to a department store that bought to much inventory of a hot item and now cannot sell it. What do they do? “Clearance Sale!!”
What do you think?
Down in FL visiting my parents in The Villages (luckily no tornado damage for us). Took the kids to Disney via the turnpike and the new 429 toll road. While on the turnpike I noticed a Pulte development.. Verde Ridge. There are acres and acres of cleared land with street lights up and only a few houses. There is a huge 6ft brick wall around the property and not a tree in sight. It will be interesting to go by again in 6 months and see if it looks exactly the same as it did this week. There are also some other developments along the turnpike that went up last year. You can literally see into the back windows from the turnpike. The resale on those will be horrible. Here in The Villages I have noticed the same houses for sale in my parents village that were for sale back in Nov. with some small price reductions. Their village was built about 6 years ago so they got their house at a reasonable price. The area where the tornado hit was only a year old. I wonder if anyone will run into problems with their insurance trying to rebuild?
Just as people were speculating about in increase in arson, I could imagine crews going through developments right after a hurricane trying to make SURE that the houses were total losses.
I saw a story about some brand new town houses getting smashed up in port st lucie a few weeks ago. The weird thing was that they only destoyed things that had a lot of value like smashing the toilets and cracking the granet counter tops (I guess you have to replace the whole thing). The developers had “no comment”, but the police said that whoever did this must of had access to the house, as there were no signs of forced entry. Did anyone else catch this story?
When I said I could rent the house in IBIS for $4000 a month that was only for “the season” or three months, the other nine months it is going to sit vacant.
Plus the other thing to consider, is if you want to join the Country Club there, well that is another $65,000 initiation, plus around $800 a month in dues.
I think am going to wait until I can move and establish Florida residency thereby saving me a boat load on my Maryland income taxes.
I will be eligible for retirement in 931 days when I turn 50. However after walking about 6 blocks here in DC today in 15 degree weather maybe that house is worth the $400,000. Just kidding, even if it was 0 degrees here that house is not worth $400,000, though it would be nice sitting by the pool with a ice cold beer.
Way too many houses and condo for rent for season for pennies on the dollar. Also tourist seaon very light this year.
I’ll second that. Roads considerably less crowded and you can actually get into restaurants.
Sitting by the pool in February is nice, but that’s about the only good thing about Florida.
From Tampa,
Many, many, many empty houses for sale here. I was cruising realtor.com here for the first time in a long time on Sunday and only about one house in 20 that had interior photos had any furniture in them. It also looked like someone had gone to great expense to remodel them, most had brand new kitchens.
Empty, empty houses leading to empty, empty bank accounts, leading to empty, empty loan departments and on and on and on.
“What goes up must come down, spinning wheel has got to go round, talk about your troubles its a crying sin, ride a painted pony let the spinning wheel spin.”
This carrosel is spinnging so fast now that if you have not gotten off already then there is no way you can jump off at this point without getting hurt-badly. Remember that those who were promising a soft landing got off when they could lightly step down.
I just got the local board of realtor data for Orlando. Just Orange and Seminole County
YOY Inventory 06 18,500 07 28,000
sales closed 06 1,917 07 1,314
days in market 06 46 07 90
expired 06 532 07 1,426
Days on the market is interesting as the typical listing is 90 days.
This tells me that most listings are expiring.
Dimedropped — yes, expireds almost tripled. The Spring Rush should be entertaining. What no one seems to have gotten across to the “Entitled-price” sellers is that everyone who might have bought their place already has shelter; the rent those potential buyers is excellent relative to wishing prices for sales; and the renters have waaaaay more time than the sellers.
Reminds me of the siege of Vicksburg, though it was my side that got screwed in that one. Lesson learned, nevertheless.
Yes, but it took a hell of a long time including unsuccessful efforts to change the route of the Mississippi. Might take as long for this one. Based upon Kubler-Ross, they aren’t even to bargaining yet.