“Prices Have Receded” In Florida
MyFox Tampa Bay reports from Florida. “In the 18 years Roz Fenton’s worked at the Pasco Clerk of Courts Office, she’s never seen this. ‘At least 60 foreclosure sales a week,’ she said. The files and files just seem to keep growing. ‘We’ve had more overtime in the office. We’ve had to pull in additional sources to help with the overload in the area,’ she explained.”
“‘You had a lot of investors that speculated and came in and bought properties thinking property values were going to keep escalating,’ said real estate investor Scott Wheeler. ‘Adjustable rates adjust, and they are consistently adjusting up at this point in time, and those homeowners would never have been qualified under the existing rates,’ he said.”
“Back at the Pasco clerk’s office, two weeks worth of foreclosure files are set to be sold at auction on the courthouse steps. ‘We conduct sales twice a week frequently. We’ll have as many as 10 to 15 sales each time,’ said Fenton.”
The Orlando Sentinel. “Consolidation within the home-building business has slowed dramatically, but the pace should pick up again in about a year, and some markets, including Florida, could see a ‘feeding frenzy,’ industry experts said Friday at the International Builders’ Show in Orlando.”
“‘Land is an issue,’ said Gopal Ahluwalia, VP of research for the National Association of Home Builders, as many builders have been canceling options on property or selling off tracts as demand for new homes has slackened.”
“Many large builders are willing to walk away from undeveloped property now because they are betting they will be able to purchase ‘better land at better prices’ a year or so from now, said Michael Kahn, president of a Ponte Vedra Beach brokerage and consulting firm.”
The News Journal. “Trying to determine where home sales will be the hottest this year depends on whom you ask. ‘It’s a little early to tell, but indications are it will be in the West Volusia area,’ said Tim Durkin, president of Mercedes Homes’ Volusia-Flagler division. ‘It’s pretty stagnant over there on the east side.’”
“Greg Antonich, a broker in Daytona Beach, said real estate agents lately have been dealing with ‘real buyers’ of existing homes, or people who plan to live in the homes rather than use them as investments.”
“‘Buyers are buying what they can afford,’ Antonich said. ‘Homes in the $175,000 to $225,000 range are what’s moving, primarily in nice, existing subdivisions in good areas where prices have receded to where they were a few years ago.’”
“‘Flagler is different. What’s moving is existing inventory of new products built before the fall in the market,’ Antonich said. ‘All that has to be absorbed before other things will sell, and then they have to be at attractive pricing.’”
“Builders in Flagler County each have 30 to 40 ’spec’ houses, with no buyers lined up before construction, in the pipeline, he said. ‘Hundreds of spec homes are moving, once incentives are added on,’ he said.”
“Sales at the Plaza Resort and Spa were in condominium-hotels, the units of which are rented like hotel rooms when the owners aren’t using them. As reported in The News-Journal last month, more than 25 area properties with about 3,200 rooms are condo-hotels, and more are planned.”
“The Plaza Resort and Spa, bought by Ocean Waters Development partners Charles Bray and Joseph Gillespie in the late 1990s, was converted into a condo-hotel as the two poured $70 million in renovations into it.”
“The partners own 69 properties so far, with two huge condo-hotels on the drawing board: the 33-story Blu and the 42-story Grand will replace about a half-dozen Ocean Waters properties on the beachside.”
An editorial at the Palm Beach Post. “Gov. Crist is making good on his campaign promises to save the Florida homeowner. Yet, one crucial ingredient of a comprehensive plan to save the state’s real-estate industry still is missing and not being discussed. Foreclosures in Florida are at their highest rates in years.”
“Many homeowners and investors are victims of ‘exotic’ mortgages, which allowed them to purchase properties with little money down.”
“Since it takes much longer to sell a home in a depressed market, and most of these people have lost the equity in their homes due to recent depreciation of values and negative amortizations, many people in foreclosure have no alternative but to go into bankruptcy. High pre-payment penalties make it hard to refinance.”
“In this crisis, the governor and the Legislature need to slow down the foreclosure process, eliminate or limit prepayment penalties and protect the consumer by slowing down the real-estate closing process.”
The Sun Sentinel. “Florida budget writers were handed grim news Friday, with a new report showing state tax collections falling far short of expectations. The report showed that January general revenue collections fell $108 million short of estimates. The plunge in sales tax receipts was especially dramatic, falling almost $71 million.”
“For the past three months, general revenue collections are nearly $160 million below projections. Amy Baker, the coordinator for the Office of Economic and Demographic Research, attributed the drop in sales taxes to a ’spillover effect’ from a slumping housing market.”
“With fewer new homes being built and sold, sales of everything from shingles and sheet metal to washers and dryers are suffering, she said. ‘[That] is having some feedback into sales taxes,’ Baker said.”
The Tampa Tribune. “Seventy-eight days. That’s the average length of time Hillsborough County real estate agents report it’s taking to sell their clients’ homes. That may not be accurate, however.”
“A flaw in the computer system that tracks listing data allowed agents to shield from buyers a clear picture of how long a property has been on the market, according to the Greater Tampa Association of Realtors.”
“‘Some agents were somewhat deceptive and massaged the numbers so it would look like they sold the property in two days,’ said Brad Monroe who sits on the board of the Mid-Florida Regional MLS. ‘This is false advertising.’”
“Consider the recent listing of this home in the Cheval neighborhood: The home originally was on the market for 161 days priced at $899,950. The listing was withdrawn, and then the home relisted for $799,950. It sold 34 days later for $793,500.”
“The MLS showed 34 days as the total number of days on the market, instead of the accurate 195 days. This kind of relisting skews the data two ways, said Tom Scaglione, president of the regional MLS. First, an inaccurate figure for days on the market was recorded. Plus, the data shows the home sold at 99 percent of the list price, when it actually sold for 88 percent of the starting list price.”
“Brenda Wade, an agent in Brandon, said she understands why agents want their listings to look new and has re-entered listings in the MLS herself in the past. Wade said she would wait until a listing expired and enter it back into the system, resetting the ‘days on market’ field, instead of extending the listing.”
“‘It can be to the advantage of your seller,’ Wade said. ‘But it’s not good for statistical purposes.’”
“The Mid-Florida Regional MLS, changed the system in December to add a new field including the ‘cumulative days on market’ in information sent to buyers and sellers. Now, relisting a home won’t reset this counter. The only way to reset it is to wait at least 60 days before putting the home listing back in the MLS system.”
“In another change, it is now a professional violation for agents and brokers working for the same company to relist a property, unless it’s been off the market for 60 days.”
“With a record number of existing homes on the market for sale, 17,154 in Hillsborough County alone, accurate information is important for buying or selling a home, Scaglione said.”
‘Philip W. Coon, the highest-paid and formerly third-highest-ranking officer at Coast Bank, has been fired, along with his wife, another bank officer. It was Philip Coon who, as head of Coast’s residential construction lending department, set up the bank’s relationship with Construction Compliance Inc., the now-floundering St. Petersburg-based home builder whose customers represented $110 million — or 20 percent — of the bank’s loan portfolio.’
‘Prudential Palms Realty and the Wellman/Moffatt Team are trying to sell a former 16-unit Siesta Key hotel as a resort-condominium. The units range in price from $392,700 to $653,900 and in size from 470 to 750 square feet.’
‘This property is unique in that it provides all of the conveniences of a home, but offers a great investment opportunity as well,’ Bob Moffatt, Realtor with the Wellman/Moffat Team, said in a statement. So far, one unit is under reservation.’
When I read these articles I can’t help but wonder what these people were touting as their ‘net worth’ at cocktail parties just a year ago. How many young millionaire RE tycoons have awoken with a giant hangover? What new psychiatric terms will be coined for those caught up in the RE collapse? Will the PC police be out telling us that we have to be more sensitive toward RE and their ilk? Ah, nothing like watching ‘living’ history.
Probably the same people who were going on about their hot “B2B” business opportunities right before the NASDAQ crash. I was on a bus one night in Cambridge, MA and this dude with a smug, nasal voice was going on about his “B2B” venture in a really loud voice. I hope it went “BK”.
B2B_2_BK!
The Siesta Key hotel … sounds like the Bates motel. 470 sq ft “resort condo” accommodations. Yeah, I’m blown away–NOT!
I could stay somewhere much nicer for a week for about $1000. 20 years*$1000 = $20,000, so why would I pay $400K for this privilege.
By “great investment” to they mean “giant money pit”? Because these sound like $59/night rooms in the off season. Good luck paying your carrying costs on *that*.
$0/night in hurricane season.
sorry about the typoes… I had food poisoning last night, followed by benadryl. I guess I still haven’t recovered… bloody toothless FL Dept of Health
RANT ON
I feel the need to illuminate another classic American ripoffs
Time share … you mean you just bought the right to rent a hotel room for next 20 years ? And payed up front for the whole package ? And since your not an extremely wealthy person you then financed the junk too and are now pay interest ? Which of course give the clown seller a huge wad of $ up front (This is what really p#sses me off) And a few years later the family is tired of going to the same place and you need to sell, sadly discovering that you will get 30% of your “investment” back ?
Ahh a fool & his money is soon parted
RANT OFF
“sadly discovering that you will get 30% of your “investment” back ?”
In the 1970s bust here in Central Florida, people were getting ZERO% of their “investment” back. They had to walk away and the new owner picked it up for the $500 transfer fee. A buddy of mine bought two primo Christmas-season units at Buena Vista for that — right place at the right time.
I wouldn’t be a bit surprised if time-shares are going for “zero” again before this credit bust is finished.
Maybe $59/night and they take 40% of that for property and rental management fees. That was the deal they were pushing at the MGM Grand when trying to sell their $2 million condos.
Wow, you can’t lose–if you’re Prudential Palms!
Funny thing is, I can’t imagine even snowbirds are that stupid. Heh, maybe that’s why it’s still for sale….
470 square feet? That’s a “suite” size room (sitting room with sleep sofa plus a bedroom and a bath). They will probably throw in a mini-fridge and a microwave as an “incentive.”
The beach on Siesta Key has a serious red tide problem for much of the year now. I watched a front-loader and a train of dump trucks working to clear the beach each morning we were there last month. We only walked the beach once, when the debris (which looks like dark, reddish seaweed) was relatively light. I started coughing after about 20 minutes, so we never went back.
That’s exactly what I was thinking. The living room/kitchen areas in the two-bedroom apartment I rent are about 470 square feet. There is no way I will ever pay $392,700 for the privilege of owning equivalent space. Anyone who does so, in my opinion, needs to have the word “imbecile” tattooed on his or her forehead.
A great investment … for the SELLER!
“Philip W. Coon … has been fired…”
What’s the point? They are all toast at Coast.
It’s CYA when the lawsuits get rolling.
“a former 16-unit Siesta Key hotel as a resort-condominium. The units range in price from $392,700 to $653,900 and in size from 470 to 750 square feet.’”
Yeah, that’s what I want. An old motel room with a fresh coat of paint for about 0.5 million.
Where do I sign?
That might be a fair price … for the entire motel.
Actually, the building is probably worth that much, the land a lot more. If they can’t sell, I see a tear-down in my crystal ball … assuming the tourists keep coming. You never know.
If the state passed this foreclosure moratorium, every Floriday bank stock would sink like a lead boot. This guy sounds like he is behind in his payments himself
Yes, I noticed that. It’s evidenced by the following quote:
” Spoiled by historically low interest rates, many of us entered into adjustable-rate mortgages several years ago that are now “adjusting” into extremely high payments. ”
Sucks for “us”, but “we” ain’t “us”. Funny how in a psychotic frenzied rising market, all risk consideration flies out the window. Or, alternatively, it sucks, Steven, doesn’t it?
“This guy sounds like he is behind in his payments himself”
It is a desperate request. More importantly, it reflects a rising pain-o-meter. So much so that this guy has lost his mind.
Is that even a possiblity? So people with homes get to live there for a year tax/mtg/HOA free because there is no possiblity of foreclosure? Take all that money, move it offshore, and let the foreclosure happen when you have a nice nest egg that is untouchable?
That’s BS! Is it even legal? I don’t remember there being any wording in mtg documents about the possiblity of a foreclosure moratium?
And, I agree, won’t this lead to massive failure of the banking system in this region? The nationals will probably be able to weather it, but what about the regional/local banks?
Of all the screwball ideas I’ve read relative to housing, such a moratorium is the worst. Imagine you’re a banker. “Fred (LO) — cancel all mortgage loan closing appointments. Meeting in my office in 30 minutes.”
Most of those homeowners and (particularly) “investors” the Palm Beach Post is editorialising about are basially victims of their own greed rather than any particular form of mortgage.
Your entierly correct.
The only thing that these mtg instruments allowed these people to do was feed their greed. If they had not existed, it never would have gotten this out of control, because it would have required lots of money at close (which, is like a foreign concept to most people today).
The greed has been allowed the thrive because of these loan devices. But they are not victims of the loan, only of their own bad investment decisions, coupled with an inability to do basic math; with a blinded by greed sprinkled on top.
Agreed Michael . These speculators will walk from their loan obligation very easy and they never took that promise to pay serious . These speculator type people who were looking to get rich quick are the worst loan risks yet they make up such a high % of loan volume from 2004-2006 .
Someone I know who approved loans for 27 years,(now retired ) told me ,”When are they going to learn that charging higher rates/fees to unqualified borrowers doesn’t make them qualified borrowers .The % of loan to value protects the lender not higher rate and fees. Some borrowers are not entitled to any loan .”
That’s an irresponsible op-ed piece in the Palm Beach Post. It basically says that no one with an exotic mortgage is responsible for his or her own actions. As is someone held a gun to their heads and forced them to take out the mortgage.
And even if it’s true that homeowners were “victims”, why would extending the foreclosure process help? It just delays the inevitable in most cases.
More debt does not help a drowning debtor. You cut up the credit cards and stop the debtor from getting in deeper if you want to help - unless the debtor can show compelling reason he will subsequently be able to pay his debts (a large inheritance is in the pipeline - waiting on lottery disbursements etc…)
… his/her cancer has gone into remission and he/she is returning to the workforce full time…
Seriously, some debt is incorrigible bad habits, and some is caused by medical emergencies, at least in the US. The hospital bills are ruinous, plus you lose, temporarily or permanently, your ability to service the debt. A double whammy. The other first world countries have universal health insurance … we have medical-bill-induced bankruptcies.
The genius of capitalism?
BTW, if I was holding a note (and given I have positive net worth and money in banks, I guess I am), I would much prefer a slightly lower return to cover the costs of health insurance than the nasty risk that John Q. Borrower gets really sick and can’t pay me back, or his medical bills are so high that he goes BK and I only get back 80% of principal.
In a survey of BK’s last year, they found that one of the top three reasons was medical bills. I don’t feel particularly sorry for those CC-addicted losers who are always drowning in debt, but when it comes to these medical bills–we’re ALL losing.
ps–I have disability insurance. Any working person should get it.
The first thing you should do if you get really sick is sell your house since you know you won’t be able to pay the mortgage.
I guess we need to have the government introduce universal housing too, since housing is getting so expensive and bankrupting so many people. Cuba and North Korea have universal housing. Why don’t we?
Yeah, that sounds like a great plan. Have a fire sale on the house, lose money, throw your family in the street… As I said, that’s why I carry insurance, so my bills still get paid when I’m sick.
Even if I leave my job, I can keep some of my insurance if I keep paying the premiums… However, with the medical, you get COBRA, and that’s it.
Many can’t get insurance b/c of existing conditions. If the insurers and insured are rational actors, then basically insurance will die because the low risk ppl drop insurance, and the insurers drop the high risk ppl. End result, no insurance, major household calamities, malaise, less small businesses formed because of economic fear, etc.
Universal insurance would make insurance cheaper, would help small business compete in the marketplace, and would improve quality of life. It’s been found (last year) that even with equal upbringing, education, and income, Brits live longer than Americans. It’s also been found that even high income Americans have typically had life events where their income plummeted, and a large percentage of Americans spent at least a year of their childhood in poverty. Instead of spreading the risks around we play social lotto. Does this make us stronger as people? All metrics of comparison would say no.
The big problem with universal insurance if you take a gander over at the UK is there is not sufficient medical resources to serve the population and you end up dying while waiting for care. If we are going to introduce universal coverage, which I understand will cover illegals as well, we need many more hospitals, doctors and clinics first to deal with the newls created demand. Don’t get me wrong, I have been on the other end of no insurance coverage too, but now that I have it I use it, and because I pay so much am inclined to use it for things that I may otherwise not use it for, like colds etc. Medical bills are as high as they are as a direct result of medical insurance. If doctors and hospitals had to bill real people they could never afford the charges and prices would be lower, just like real estate prices would be lower if loans were not as easily available.
Universal insurance would make insurance cheaper
The opposite would happen, as happens with all things government interferes with. There’s no incentive to be efficient, as they can always just raise taxes.
and would improve quality of life
Tell that to one of my formerly Candian friends. You should hear the horror stories of trying to get something done up there. *shudder*
Brits live longer than Americans
They’re also probably 25% less overweight. There are a million differences between the countries, you can’t point to one as the root cause without years of research. link?
Instead of spreading the risks around we play social lotto.
government healthcare = social lotto. Less choice, less flexibility, higher costs, lower efficiency, and tons more red tape. Government HC would do nothing that most Americans can’t do on their own, and with MUCH lower costs. No thanks.
Everyone I know who works in the healthcare industry tell me that they regularly charge more for patients who have insurance or are on medicare. People who pay out of pocket are normally given a 30% or more discount.
When you look at the average lifespan, take in account the higher level of drug abuse, traffic fatalities and murders in the USA. Canada with their universal healthcare has a huge shortage of doctors due to low government pay. They are talking about importing doctors from third world countries.
Great, just try making a claim.
A number of friends at work have made claims. They don’t want to pay up, but they do.
I doubt the description of our current crop of foreclosures are described as medical problem induced. These idiots thought they were going to make a load of cash on the next bigger idiot that came along and ended up holding the bag, or put better we are all holding the bag!
“In another change, it is now a professional violation for agents and brokers working for the same company to relist a property, unless it’s been off the market for 60 days.”
I had not previously heard about this change (may have been posted on this board but I missed it). Something to keep an eye on and report…but to whom? Does anyone think realtors will actually stop doing this? I wonder what the penalty is??
If you ever take the time to read the NAR’s hilarious Code of Ethics you will find it gushing with flowery utopian language about the importance of Realtors to society and high-standard, sacred trust gobbledy-gook. When compared to their actual conduct, it makes one want to take their Code of Ethics, roll it up and professionally violate them with it.
I printed out their code of ethics. Whenever I feel constipated, that ususally induces enough deep laughter to, um, work things free
Any Code of Ethics is worthless without oversight and enforcement. When you have a body like the NAR that’s so thoroughly sleazy from the top on down, a Code of Ethics isn’t worth the paper it’s printed on.
Penalty is having to watch David Leerah videos on ethics
If this editorial’s recommendations went through, it would be hilarious. There wouldn’t be another mortgage extended in the state - at all. Watch what that would do to Florida Home prices.
Lol, no more insurance, no more mortgage… I would buy in Gainesville. Little risk of hurricane damage on a house that’s been standing for 30 years. If the trees get sickly I’ll just remove/replace. Rockin’.
Might need that fire insurance, though, what with all the neighbors burning down their upside-down homes for the insurance money.
Little chance of hurricane damage to a house thats been standing 30 years? Tell that to Biloxi and Gulfport and the 150 year old beachfront mansions.
1/150 is pretty small. And with the cost of his home being so tiny (since demand would be tiny for homes in FL, because you’d have to pay all cash LOL), that’s a pretty acceptable risk level!
Some of the specific suggestions in the Palm Beach Post editorial would be hilarious if they weren’t serious suggestions. The first thing they suggest is “Declare a one-year moratorium on foreclosures” — a proposal guaranteed to make Florida the number-one state for mortgage fraud. The second would “would mandate that lenders offer distressed homeowners temporary - two- to five-year - straight-interest balloon mortgages amortized over 40, 75, or 100 years.” That makes sense: crazy loans are causing the problem, so let’s mandate more! What a moron.
a new gov agency in the making: dept of bad loan happiness
Yea, I really liked that part - give a guy who is 65 or older a 40, 75, or 100 year loan. Lets extend the pain to the next generation and the lender gets how much more interest? Some of these people would then be paying over a MILLION in interest payments. What lender would not like that?
These suggestions would just dumb the sheeple down even more. Instead of losing money and therefore learning to be more prudent and responsible, all these careless, greedy FBs would never learn there are consequences for their risky finacial behavior.
Of course prices have receded in Florida. Places like North Carolina are now getting the people who used to head to Florida and the demand just isn’t there to match the overbuilt supply. The trick will be to know when is the right time to try and steal a house in Florida.
Meanwhile, the Carolinas are thriving. Some of the demand in the Carolinas is from Floridians opting out.
The bubble under the linoleum gets deflated in one place but then rears itself in another. And on and on it goes.
That is why there is no need to rush into the buying process.
The Carolinas are indeed thriving. I checked all the real estate ads in the Sunday paper this morning. Most of the new community (builder) ads don’t even hint at incentives or price reductions. One that did offered their completed inventory at about 2% under “regular” pricing. I also scanned display ads for resale homes and didn’t see a single listing where the price was noted as being reduced.
Last summer there was a BIG surge in lot purchases and construction of spec homes by small, local builders in our community. Even my neighbor bought three lots and contracted with a builder for a house on one of them. I thought, “Wow, their timing couldn’t be worse.” As the houses approached completion, they began showing up on the local realtors’ web sites. I notice they are selling at a pretty good clip. My neighbor says he will soon be starting on his second spec house.
Actually, there are stories popping up in the newspaper (ex. Charlotte Observer) about rapidly rising foreclosures - exp. in the lower end housing…..
Like, wow.
“High pre-payment penalties make it hard to refinance. Especially hard hit by this are first-time homeowners, large families and lower middle-income seniors, who live from paycheck to paycheck. Those stuck in such mortgages, and experiencing recent increases in their insurance and tax payments, find themselves unable to afford to refinance to try to lower their monthly payments”.
I think that these buyers were motivated by one thing - GREED. Maybe they should have READ what they actually signed at the closing. Spending 15 or 20 minutes to actually read what they were signing or spending $500 or so for a lawyer would have saved these folks a lot of pain. I also cannot believe that someone living paycheck-paycheck should be buying a house. If the Florida legislature wants to help these people it will let them go bankrupt - we don’t need people like this screwing up the market for the folks who actually want to live in a house.
My FB buddy Bob says he was not motivated by greed. He feared never being able to afford a house in FL. When you combine fear with urgency and stupidity, you have the ingredients for mania and poor decision making.
Why would someone living paycheck to paycheck get an variable rate loan? Ten years ago, these people would have never qualified for a $100K loan, much less the $500K loan they got in 2005.
An ARM with a low teaser rate is the only kind of product a paycheck to paycheck person would qualify for at bubble prices. Hence, the subprime buyback implosion and increasing foreclosure and bankruptcy rates.
Hard sell by the bank? I went by an AmSouth Bank opening to get a free piggy bank and I had to listen to each bank division give its spiel. I had the manager flat out lie to me about debit cards vs ATM cards. I’m never patronizing that bank! Anyway, the loan officer started in on this hard sell to a black woman (renter) about how she could get her into a home for less that what she’s paying in rent. Now, naively I figured the woman must be overpaying for rent, because I knowing what I paid for rent, and what homes were going for in the hot (2005) gainesville market, I would pay a lot more (I had used a loan calculator using a pessimistic–8%–rate) in most parts of town; plus there are the high property taxes here, crazy GRU (energy) bills, and other nuisances. Granted, I was getting a good deal on rent, but most people do in G’ville because of all the college rentals.
I could tell the black woman was really falling for the pitch, though. It was a pretty hard sell, and if you don’t already know what your fundamentals are (as I did), it would be very convincing.
Basically, the banks prey on the naive. Here there is no shortage of ignorant people, but even smart, relatively well-educated people who are experts in other areas can be fooled by banks. Just because you’re good in one area, doesn’t mean you’re an expert in another. I am all for consumer protection laws. They’re cheaper than bailouts … as we’re all about to discover (again).
“…fooled by banks”.
We have all been drilled from a very young age that banks are a safe place for our money. The banking industry has evolved since that time. Your advice to be watchful of how the bank handles your money is very good. Example:
I bought a CD in January from a bank that had an advertised rate of 5.20%, after reviewing the paperwork I noticed that they only gave me 4.98%. So I called them up and asked them what was going on. Initially, I sensed that I was being spoken to as if I were a child. Then after leading him to the place on the web site that I saw the rate he said he would have to call me right back. When he called back he said that they were tape recording the call and he very nicely and enthusiastically said they were going to change my rate to 5.5% and pay me the difference in back interest.
Moral: It PAYS to watch your money and the people you have intrusted it to.
“‘Land is an issue,’ said Gopal Ahluwalia, VP of research for the National Association of Home Builders, as many builders have been canceling options on property or selling off tracts as demand for new homes has slackened.”
This gentleman is clearly a liar. I remember, very distincly, hearing from every RE agent in Palm Beach that we are out of land, and have been out for a few years now. Therefore, it follows that it is impossible that builders are trying to unload land, because there is no land to sell.
Out of land was the biggest myth every perpetrated on the homebuying public. I just don’t know how people got away with it, I was walking through downtown with a RE agent a year or so ago, getting the “out of land in WPB downtown” speech, just about the same time we walked past a totally VACANT city block. Not “prime for redevlopment” or “needs razing and rebuilding”. This was vacant, as in, a field of grass in the middle of downtown.
So, are we out of land, or not?
Creating a sense of urgency is the oldest trick in the Sales & Marketing book. I hope readers realize that is what the REIC is trying to do when it launches campaigns like ‘Time2Buy.’ Do not listen to these fools. It is a good Time2Rent and a good Time2Save your money until this debacle unfolds. Meanwhile, pay off high interest debt and strengthen your financial position if you have not already.
“I remember, very distincly, hearing from every RE agent in Palm Beach that we are out of land, and have been out for a few years now.”
Sadly, we have been out of land here in Tampa also. I was made aware of this tragedy by my hairdresser, the guy who empties the trash at work and the cashier in the cafeteria. All of whom, while quite happy to enlighten me, were at the same time perplexed as to how someone with obviously no common sense could possibly make the salary that I do.
In regards to the myth that we are out of land:
-there has always been plenty of land in Saskatchewan where I live, just not developmental land.
- the urban centers growth was restricted by the rural municipalities run by farmers that did not want to see good producing agriculture land change to housing developments. Hence the only available land was poor quality land that could not be used for producing crops or livestock nor was it suitable for development.
- it required extensive work and resources to make this land ready for development, this then drove up the price of a lot in any available development on this land.
-The comparison in pricing was to the extent that you can buy 160 acres of agriculture land for less than a lot to build a house on.
- further in 1990’s ,government farm subsidies started to disappear, the rural municipalities saw a cash cow in doing their own residential developmental on this poorer land.
-The development fees that they could collect became their new revenue source and prices were driven even higher with rural municipalities moving into this new business.
- this meant even less land for the urban center because the rural municipality is now using the land that they “might” have been able to secure in the past.
- result is that the urban and the rural are now fighting for the same tax dollars over the same land.
- this resulted in the developers paying top dollar to get tracts of land, and then they would play the rural municipality and the urban off, to see which would give them the highest density for building for the largest profit.
-If the urban had less conditions the developer would annex to the urban, if not then the development proceded in the rural
- all of this results in the appearance of less land for the urban centers. Not a shortage of land just a competition for the dollars.
- To this day the rural municipalities still control the amount of land that they will approve for development, thus they can control the demand or a supply of available land.
-They try to keep the prices high to maintain the highest assestment base possible by controlling the available developement land to subsidize agriculture.
- There is not a shortage of land, there is a shortage of available developmental land. So relators here are half right.
Yea it’s different Saskatchewa! lol
“Florida budget writers were handed grim news Friday, with a new report showing state tax collections falling far short of expectations….”
I guess there is no money for a homedebtor bailout. With slowing home and retail sales coupled with rising foreclosures, a lot of local governments are probably facing the same budget shortfall issue. As a result, these goverments might need a little bailing out themselves.
If anyone cares to go back a year or 2 on the blog, and look me up, you will see that I predicted this perfectly. I used to work for local govt here in FL, and I can tell you from first hand expereience, cutting back was not on the plate for anyone. They were too busy trying to figure out how to start some huge new project to burn through what (as I told them it was) was a windfall tax increase.
I have no idea how they are going to deal with a protracted period of falling home values (or even flat). It is not going to be pretty, that’s for sure.
“Florida budget writers were handed grim news Friday, with a new report showing state tax collections falling far short of expectations….”
They’ll have to either cut spending or raise taxes. Either option is not good for the Florida economy. We should start seeing the same scenario popping up in other parts of the country, over the next year or two.
Vmax:
Your right, I am sure, but here in FL we have another problem. Save our homes prevents them for reassesing values higher, and may put some controls on the mill rate increases as well (I am not sure, someone else jump in if they know).
Anyway, its not going to be easy for them to raise taxes; especially while SOH is in place. If they raise the mill rate, they are going to continue the foreclosure storm and make it more intense, as that is going to more negatively impact those least able to afford it (people who bought at the peak of the boom and are already stretched and underwater in their loans). So property values will fall more quickly, which will require them to raise mill rates more, and so on.
Cut spending? I don’t know if govt can actually do that!
The budget in most boom town cities is 2-3X what is was 4-5 years ago. It cannot be that hard to cut spending, where did all those 100’s of millions in windfall from permitting and tax increases go!??!
What do I expect? A storm of people demanding reappraisals in the next year. People who bought at the peak are now at least 10, and maybe 20% below their purchase price. And are paying taxes on the purchased price; they are going to demand to be reassesed (as they should) to lower their tax burden. Expect this to be a story in the next year or 2 coming out of FL.
They may not be able to raise property taxes, but they’ll propaly find other stealthier means of effectively raising taxes.
I aggree that cutting spending is not some thing govements like to do. Their power is in their budget size. Reduced budgets don’t boost politictians egos. Besides it leaves less to skim.
There will probaly be a combination of both reduced spending and increased taxes. Housing prices should be left to natural economic forces, prices will eventually come into line with incomes. Goverment intervention just slows the process and extends the pain. A quick adjustment then move forward from there is the best medicine.
According to your description Mike, some governments are damned if they do and damned if they don’t increase revenue. So, in addition to FBs, I guess we can add FGs to the list. A cut back in essential services (fire, police, school, and so on) is in the works.
““Builders in Flagler County each have 30 to 40 ’spec’ houses, with no buyers lined up before construction, in the pipeline, he said. ‘Hundreds of spec homes are moving, once incentives are added on,’ he said.”
“‘Hundreds of spec homes are moving…” Huh? Which is it…is the market down or are they moving inventory?
I personally am aware of the situation in Flagler county. People are indeed asking for insane amounts of money for their house, but in my opinion the downfall will be minimized due to the region being more hurricane proof due to its relative position in Florida. Some of the FBs in higher hurricane risk zones within the state might crowd this area for that reason only, although it would have to be retirees considering the piss poor job market.
Having trouble selling that apartment you bought as an investment? Don’t worry miami dade county is going to buy it from you to provide affordable housing!!! This from the same agency that allowed connected devlopers to use affordable housing money as their own personal atm. Fantastic
http://www.miamidade.gov/housing/property_proposal.asp
Unbestinkinglievable! As has been mentioned on this blog a number of times, Miami-Dade is a cesspool of third world corruption.
Wow!!!!!
Basic Requirements for Units:
1. Units must be located in Miami-Dade County.
2. Sale price of the units shall be less than $250,000. [!!!]
3. Preference will be given to units that are new (built within the last three years), to be constructed or previously constructed and converted to condominium within the last three years…
3. Units must be offered with an all-inclusive 12 month warranty.
4. Preference will be given to sellers that offer at least three units for sale in the same building or building complex.
5. Units should be no less than 650 square feet, air conditioned space.[wtf!!]
“3. Preference will be given to units that are new (built within the last three years), to be constructed or previously constructed and converted to condominium within the last three years…”
So speculators who built or converted without having buyers available will be bailed out. This is even though those same speculators were the ones who drove up home prices and either converted or demolished the affordable rental apartments in the first place. But I guess since most local governments are dominated by the RE industry we will be seeing this idea pushed in other localities. Maybe they should just call it the “Save Our RE Speculators” program.
Ugh..
There was nothing built in Miami in the last three years that fits these 2 critera:
Less then 250K
and
Greater then 650 sq/ft.
Actually, that’s an exaggeration, but that really, really cuts the field. I would guess that less then 1/10th of the condos scooped up by flippers in the past 3 years were under 250K.
If you dont want to move to the ghetto will bring it to you.
Do they have enough money to bail out the speculators? With RE prices dropping and tourism down, there will be less tax dollars available. The Feds are $9 trillion in debt. There is only so much they can do.
I know HUD is already buying brand new houses and putting sleazebag into nice middle-class neighborhoods. That will be coming to an end soon as the country goes into recession. Working class people will not put up with being thrown out of their homes while the welfare class gets a free ride.
I’m starting to fatigue. Not in a “capitulate and buy” way, but a “get it over with” way.
I’ve been following several hoods in Pinellas County and the disparities are showing, but every so often some nut buys at 2006 prices and screws it all up. And I heard about a popular apartment complex going condo… this as there is a failed conversion down the street. Just bizarre.
I’m glad I latched on early to Ben/Patrick, but the slow-motion train wreck is grinding me down. At least rentals/rent in my area are stable and/or falling slightly.
I think there is A LOT of knife catching happening in the ≥200k range.
Muggy: I’m starting to fatugue too.
What I am doing is watching my market very carefully and looking for the “$100 corvette”, you know, the deal thats so good it’s a no brainer. Getting easier to find, but still scarce There is a second wave of stupid money that thinks “foreclosure” means “bargain”.
I came away from the last foreclosure auction shaking my head in disbelief.
From a long time real estate investor: Keep thinking like you thinking. There are still people not thinking.Our time will come.
Hilarious rebuttal to the Palm Beach editorial:
http://wallstreetexaminer.com/blogs/wheeler/?p=80
Helicopter, thanks for the GREAT link. I was feeling a little down today and then I read that and nearly killed myself laughing. The ad at the end for the plastic surgeon slayed me! ROTFLMAO!
Helicopter: I second that. Great Link
I’m in Florida so I emailed it to Florida’s Governor and my Congressman. Why do I waste my time?
Just pray the Gub’ment does not get involved in this and try to fix it. The Market is and will correct itself. They don’t need to mess with it. Greenspan, with 1% interest rate, intended to mitigate the DotCom bubble indtead created this unintended consequence of unrealistic price appreciation and exotic, now known as toxis loans and all the other factors that make the real estate market a train wreck today. We should have taken the pain when the stock bubble burst. Instead we have a worse situation to contend with now.
I bet Hillary could fix it!!! Hey, this is great weed….I’m having some real cool hallucinations…..wait…it was ME!! I fathered Anna Nichole’s Baby….got the munchies..see ya dudes….
Anyone seen the movie, “Idiocracy”? The first 5 minutes about sums it up…
Look at this dumb ass link. This guy will explain to all of us why there ain’t no bubble in Fort Lauderdale
What this moron doesn’t (how could he not) know is that sales are way down, prices are down and continuing to slide and inventory is way up in Ft Laudersale / Broward County.
Ya gotta give him an A for effort. The scary thing is he might actually believe his own BS.
http://www.andyweiser.com/