Sellers “Getting A Little Impatient” In Florida
The Herald Tribune reports from Florida. “Barbara Simons is furious with Murray Sherry, the outgoing board president of the south Sarasota complex, and with everybody else keeping her from holding an open house to get out from under the condominium she inherited from her mother, to her a half-million dollars on the hoof.”
“Simons figures an open house or two could help the place compete for buyers. She listed her condo a year-and-a-half ago. Two price reductions, or $100,000 later, she still has no takers.”
“The current price range on Pelican Cove listings is $219,000 to $599,000. The top used to be $699,000, says Pelican Cove resident and real estate agent Tony Lingrosso. ‘There’s only been one sold in January. Asking $285,000 and it sold for $210,000. It needed some improvement.’”
“Now, there are at least 65 units up for grabs, not counting For Sale by Owners. That works out to nearly 10 percent of the stock, a worrisome figure to sellers who are reaching out for fresh solutions.”
From TC Palm. “Renters, take your pick: A two- bedroom apartment for $900 a month or a three-bedroom house with a garage and a yard for a little more.”
“With investors struggling to sell off the Treasure Coast homes they had hoped to flip, many are putting them on the rental market. The influx is forcing apartment complexes to offer move-in specials to compete.”
“‘We lost a couple last week that found a three-bedroom house in Tradition for only $100 more,’ said leasing specialist Sarah Strickland. ‘It happens all the time. There is a lot of competition right now.’”
“With 40 vacancies in its luxury lot, the property management company is offering a half-a-month security deposit and last month free, Strickland said. In some cases, though, she said that more motivated owners are ‘getting really creative’ with incentives.”
“The change in the rental market is slight and has happened over the past three to four months, said Casey Cummings, president of Ram Development. ‘It has impacted us a bit,’ Cummings said, adding that vacancy has dropped about 3 to 5 percentage points, but remains above 90 percent. Ram has started offering move-in specials, such as waived fees.”
The Tampa Tribune. “Two buyers in the stalled Trump Tower Tampa condominium say it is impossible for developers to finish the 52-story tower by the time their contract mandates. The buyers want their money back and have sued to get out of the deal.”
“The buyers’ attorney, Thomas Long, said his clients don’t believe the riverfront condo will be built and feel misled.”
“‘When you do a high-rise, particularly on land on the riverfront in a marshy area, you better make sure you can build it - before you start collecting the profits,’ said Long.”
“The suit says the buyers were lured into purchasing a $1.4 million condo because they believed Donald Trump owned ‘a substantial stake’ of the project. ‘Donald Trump has boasted that his partnership with SimDag is more than a licensing or marketing arrangement,’ the suit states.”
“Long said his clients have since learned that the developers paid the real estate mogul for the naming rights of the building. ‘If you look at the Web site, it says Trump is a partner,’ Long said. ‘Now, we don’t know where Donald Trump fits into this deal.’”
“Trump has said that the original developer paid him an undisclosed sum in exchange for naming rights. As part of the agreement, the developers must build the tower to certain specifications and standards of the Trump brand, but no one from the Trump organization is involved in the construction process.”
“Darryl C. Wilson, a professor of property law at Stetson University, said the suit sounds weak on the surface. ‘You have to give them a chance to fulfill their contract,’ Wilson said.”
“The plaintiffs made a 20 percent deposit in August 2005. The suit says the deposit consisted of $148,200 cash and a letter of credit in the same amount. Wilson said it may be too early for others to sue, but if these plaintiffs are awarded their money back, ‘it would certainly open the floodgates for other buyers to follow.’”
The Orlando Sentinel. “Spring is still more than a month away, but the for-sale signs are sprouting early this year as home sellers hope to elbow their way into an increasingly crowded field.”
“For Orlando-area homeowners eager to sell now, the numbers have gotten much worse, and the wait for a sale could be much longer.”
“Orlando Regional Realtor Association members recorded only 1,314 homes or condos sold in January, making it the weakest month for local agents since January 2002. The number of properties for sale in the core Orlando market rose by 1,729 to a near-record 21,266, and at January’s slow sales pace, that was the equivalent of a 16.18-month supply.”
“‘That’s a lot,’ said Janice Leckart-Smith, who has sold homes in Orlando for 15 years. ‘If you get an offer that’s halfway decent, take it.’”
“And remember: The Realtors’ listings don’t include thousands of other homes on the market for sale by owner, houses such as Bobbi-Jo Borges’, whose upscale Seminole County pool home has an $859,000 price tag.”
“Borges said she has been running a classified ad and advertising on Web sites for about a month, after listing the Oviedo home through a Realtor last year. So far, she has had no offers she thinks reasonable. ‘Lots of people are looking, but they’re just not serious,’ Borges said. ‘I’m about to reduce it to $839,000. I’m getting a little impatient.’”
“Gary Balanoff, VP of the Orlando Realtors group, said the local resale market for homes is ‘definitely challenging’ for sellers but offers opportunities for buyers. ‘It’s about as good a time as we’ve ever seen in terms of availability — across every price range,’ said Balanoff.”
“Balanoff said many listings hitting the market in recent weeks are condos or town homes, a category with more than an 18-month supply at the recent sales pace. Single-family homes account for about 15 months’ worth of sales.”
“The local Realtors’ January report noted that there were 3,648 condos for sale through their MLS, up 12.7 percent from December. Duplexes, town homes and villas accounted for 1,848 units, up 12.1 percent, while single-family homes totaled 15,770, up 7.6 percent.”
“Condo sales in January were off 47 percent from the same month a year ago, and association members said that’s good for renters because units that remain unsold are likely to be leased to tenants.”
“The competition is intense between existing-home sales and the many new-but-empty homes marketed by builders, Balanoff said, and builders generally have more incentives to entice wavering buyers. For people trying to sell a used home, he said, ‘You have to compete not only with your neighborhood but [with] the new-home neighborhood down the road.’”
‘ The end is not yet in sight for the troubles of the housing market. Economic growth continues to slow down. And there’s a risk of a credit crunch, SunTrust Chief Economist Gregory Miller said Tuesday. ‘This may not be the worst housing collapse in history, but it will be in the top three,’ he said.’
‘He said housing’s boom between 2003 and the second quarter of 2006 accounted for 16 percent of the growth in gross domestic product during that period, but in the last four quarters, housing’s decline has reduced by 23 percent the rate of GDP growth. He said the most pressure in the market appears to be in the luxury condominium sector, followed by luxury high-end single-family homes.’
“And there’s a risk of a credit crunch, SunTrust Chief Economist Gregory Miller said Tuesday.”
Thanks for the advance warning.
Risk of a credit crunch? Huh! It’s full blown in the subprime area and spreading. This guy is probably the least informed banker ever. Oh, I see the title now — chief economist. He is probably looking at 6 month old data and using dated models to booth.
The suckup guest on CNBC last night said the only trouble in the economy was the sub-prime and that it was isolated. The counter guest said a housing buibble driven recession is right around the corner. The blonde bimbette perma-bull host did not believe there was a bubble.
The legs are being kicked out from under the stool right now, as sub prime lenders go under and credit tightens. Reduced numbers of GFs to prime the pump and buy homes they cant afford.
It is over. Head in the sanders need to wakeup and smell the toast.
“…wakeup and smell the toast.”
Good one.
SunTrust is my mortgage company. And I feel comforted to know that its economist is SO on top of things.
1. Buy a spare mattress.
2. Place all your money under said mattress.
I think the gubmint will try to inflate the bubble away
“Will”?
How about “already is trying”?
todays orlando sentinel article
Sales of flipping decline in FL
Sales of homes in Florida owned less than six months fell again in the fourth quarter, as flat housing values continued to cool speculative quick sales known as “flipping,” according to a California-based online company that tracks sales and home values.
Homes owned for six months or less accounted for 2.4 percent of resales in Florida during the October to December period, down from 2.7 percent from the previous quarter and from 5.6 percent for the fourth quarter of 2005, according to HomeSmartReports.com.
Flipping in Orange County fell to 2.2 percent, just below the state average, the company said, down from 2.9 percent in the third quarter and 4.8 percent a year ago. Volusia County had one of the higher rates of quick sales in Central Florida during the fourth quarter, with 3.2 percent of homes sold held six months or less. That was up slightly from 3 percent in the third quarter but down from 5.2 percent in the final three months of 2005.
Are you telling me that the TLC channel was WRONG!?!?!?!
“Are you telling me that the TLC channel was WRONG!?!?!?!”
No, just inaccurate.
It’s not a “credit crunch’, with interest rates still at historically low levels, It’s “debt saturation”, with no more qualified borrowers. We need an educational piece on this topic.
Pass the popcorn, please.
Was talking to a relative who’s brother sold his place in North Jersey in late 05 for 350K and immediately bought a 250K deal in Florida.
Only problem is he just found out he could’ve rented the same house for $800 a month.
Yep, it’s finally starting to sink in that 1000s of vacant unsold homes= lower rents.
I wish my arms were just a bit longer so I could pat myself on the back better.
Actually, there are still plenty of subprimers who could get you a long ARM.
bought a 250K deal in Florida… Only problem is he just found out he could’ve rented the same house for $800 a month.
Ouch! Even with a 100% safe, insured investment he could pay his rent with just the interest alone (post-tax!) and not have any worries about maintenance, insurance, price drops. Oh well! Hopefully he can live there and it’s paid for, and if that’s the case, he’ll be OK. Not as good as renting, but OK.
Sorry, we are all out of popcorn. Florida is only serving crispy crunchy toast from coast to coast.
“The current price range on Pelican Cove listings is $219,000 to $599,000. The top used to be $699,000, says Pelican Cove resident and real estate agent Tony Lingrosso. ‘There’s only been one sold in January. Asking $285,000 and it sold for $210,000. It needed some improvement.’ Now, there are at least 65 units up for grabs, not counting For Sale by Owners. That works out to nearly 10 percent of the stock, a worrisome figure to sellers who are reaching out for fresh solutions.”
Darwinian selection will shortly commence.
“Spring is still more than a month away, but the for-sale signs are sprouting early this year as home sellers hope to elbow their way into an increasingly crowded field.”
Great! This means the spring bounce will happen early! I’m ready to go buy 30 or 40 investment properties all at 0 down with cash back at close. Some guy on TV sold me a $300 set of CD’s and DVD’s to teach me how.
Too bad buyers will be dampening seller expectations with extra strength Roundup. Expecations are going to shrivel and die in this firmly rooted spring of pain.
NAR told me we hit bottom. I believe them! I’m going to buy at least 30 properties AT asking price no matter what that asking price is. I’m going to finance 100% of the purchase price with a toxic loan. I’m going to retire by the end of ‘07. That’s final!
“I’m going to buy at least 30 properties AT asking price no matter what that asking price is.”
You Fool! I’ll outbid you!! HousingTracker updated today and there are an additional 500 homes for sale this week over last week- there is even MORE inventory to choose from!! That means that there has never been a better time to buy- the realtors all say so! I’ll buy ALL of the houses in the Orlando MSA!! Muuaha-Ha-Ha-Ha!! I’ll corner the market! I’ll be a mogul! I’ll be a land baron! I’ll be a real estate genius!
NO! You’ll never get away with this! I’M the Trump of 2007! I’ll own all of Orange County before I work my way to Indian River, Brevard, St. Lucie, Martin, Okeechobee, and Palm Beach! No Doc! No Income Verification! NOTHING!!!! I can have it all!
I think Casey is going to beat you to all these sweet deals, unless he’s busy bending over for his cellmate by then.
I already put a lowball offer in on the entire state of FL, and there are no counter offers. I Win.
“Gary Balanoff, VP of the Orlando Realtors group, said the local resale market for homes is ‘definitely challenging’ for sellers but offers opportunities for buyers. ‘It’s about as good a time as we’ve ever seen in terms of availability — across every price range,’ said Balanoff.”
What a joke! I was in Orlando this past weekend. I wanted to get sick. It is a nightmare to behold. The amount of development is beyond the capability of a person’s ability to comprehend. This is development just for the sake of development.
There are ungodly condos and SFHs everywhere. Of course there are many Lowe’s, Home Depots, Walmarts and malls. Sorry folks but those are not the economic engine to justify all of these high-end developments. They are supplemental to a community, not an anchor to a community. I see no viable economic base in most of these areas.
The desperation is apparent. We were in the Windermere Golf Club community and I think I saw 8 “for sale” signs before we got even half-way in. In other areas there was one sign after another. I could sense the desperation when the “for sale” signs turned to “for rent” signs. That was scary. This was especially prominent in high-end townhouse developments. How would you like to pay $500,000 for a townhouse and see a bunch of “for rent” signs in your neighborhood?
The worst thing I saw was a little condo development that was trying to look like old Miami motels. It had a sign that read “50 unique units”. In 5 years that sign will read “50 unique public housing units”. It was such a ghastly little development it was hard not to hurl.
Florida is done. They lost their minds and the L-Dopa injection is going to be a killer. How did it ever get this far out of hand? We need more prisons for the white-collar criminals.
” Of course there are many Lowe’s, Home Depots, Walmarts and malls. Sorry folks but those are not the economic engine to justify all of these high-end developments. They are supplemental to a community, not an anchor to a community. I see no viable economic base in most of these areas”.
You can triple this effect for So Cal. This so called job growth never reports the actual wages that supposedly go with it. I wonder - are these jobs Burger Flipping, Car Wash, Linens &Things, Sign Twirling?
Has anyone else been to Home Depot recently? On two recent visits to Tucson’s El Con Mall HD, the lack of foot traffic amazed me. Just two years ago, that store was PACKED.
St George, Utah just got their second Home Depot. I was at the old one this week. It was empty, like usual, with one register open and no line.
On a side note, I just saw the homes listed for the Feburary “Parade of Homes”. The lowest priced one is $500,000.00 and then the price goes up past $700,000.00 to 1.2, 1.4, 1.6, 1.9, 2.3 and all the way up to 6.3 million! Many of the homes from last year’s POH’s are still for sale.
Most of the local “housing bulls” that I talk with now admit that the home market out here has changed for the worst. It isn’t hard to see that the large numbers of retirees coming here with their housing equity dollars have largely disappeared and that locals are priced out of the market. So one might ask, “how can you expect to sale homes in this high price range, half a million to $6.3, when the average income in Washington County is around $38,00000″ ? The answer is the new commercial Airport.
Everyone in this town, from the local politicians to the waiter I talked to last night, think that the Airport will bring in more people and businesses and restart the home market out here.
So you see it is “different” here. However, I do feel sorry for those of you who will not have a shiny, new Airport to starve off the coming repercussions from the housing bubble crash.
Nice of you to visit. There is nothing like being on the ground and witnessing the insanity first hand.
So you noticed the vacant homes
The crazy thing is prices haven’t really started to plummet yet like in other parts of the state. When will Orlando get its comeuppance!?
Oh, its a comin’ baby…
http://www.housingtracker.net
Prices have not really plummeted anywhere in Florida (yet), in general, which is surprising. There are more and more examples of plummeting prices and short sales. This year my guess is it will increase exponentially and by 4th Q of 07 prices in general will plummet and we will be 50% or more down form the 4th Q of 2005 peak.
These dumbass sellers “falling from the Hindenburg”, clawing at the air, still living in spring of 05. (Great illustration)
The Sun Bank Guru see’s this market as the third worst ever. i’m guessing the other two would be the colapse in the early 20’s, which was pretty much confined to Florida and the Depression in 1929. Does anybody know if these are the “other two” of which he speaks or am I missing something?
This is going to get so bloody, we can’t even imagine. I don’t think the courts and law enforcement have the capacity to deal with all the fraud. While Fraud is a contributing factor, it’s not the main factor. You usually can’t have fraud unless you have both greed and stupidity.
If you look at all the factors, preditory lending, speculation, historically low interest, (thank you Uncle Al) ect., greed and stupidity were major factors.
Honestly, I’m a speculator. I’m greedy but I ain’t stupid. I use as evidence the fact that I have never lost money on real estate.
My last buy was Jan 2004, last sale was Dec 2004. I only own the house I live in. I’ve had it 10 years.
And for those moralists out there: don’t even tell me you wouldn’t buy your neighbors house if it was in foreclosure and a screeming good deal. We’re all greedy. Nothing wrong with a profit. The differance is we here on this and other bubble blogs aren’t stupid or dishonest.
A lot of us just want to own our own home, loser.
OrlandoRenter — actually, I believe they are starting to plummet, but you have to know where to look. It is all in the new listings. Forget existing listings altogether, because there’s too much ego tied up in most of them, IMO. But among the new ones, you’ll find surprising drops that look exactly like the advice we see in different posts: “Find out the lowest realistic comp that is for sale and price 10% less than it.” That is exactly what I am seeing. And as these properties sell, they lower the comps for the next new realistic listing. It seems painfully slow, to be sure, but it is working. Little by little, we will work our way back through prior years’ prices, until we hit bottom.
Me, I’m still planning to build (outside of Florida, sadly), because I think that is the sweetest deal of all at the moment.
You can count on some of these stores being closed. Home Depot is not in good shape and Walmart seems to be doing “a Kmart” - i.e., overbuilding it’s way into trouble.
standards of the Trump brand
Errrrrrrmmm …
You can’t license your name (trademark) to someone else unless you at least pretend to monitor the quality of the goods sold.
Fran — “pretend” can be a real stretch. Here in central Florida, Fat Boys BBQ started out as one ownership and then the name was licensed out and the quality varies a lot. The worst example I know of is Dixie Crossroads, the famous Titusville rock-shrimp restaurant. Eat there, then at the one in Orlando and tell me if you think there is much similarity in quality or value for money. So, while technically you’re correct, there is so much room for interpretation that the apparent stricture about licensing isn’t really worth much, IMHO.
so much so for the spring sales recovery. A lot of new additions to MLS but apparently buyers are just watching the prices fall.
“‘I’m about to reduce it to $839,000. I’m getting a little impatient.’”
Almost a 2% reduction. Wow. That’ll do it.
True - this women has a total disconnect.
and is probably HELOCed/ARMed to the teeth
‘Lots of people are looking, but they’re just not serious,’ Borges said. ‘I’m about to reduce it to $839,000. I’m getting a little impatient.’”
I loved that comment. Who’s not serious??
You think you should retire on a grossly over-inflations SFH with a pool??
Why don’t you get serious?? Try 280k and maybe someone will come up with an offer.
I’ll go 200K, sight unseen. This does include her paying closing costs, a trip to the Europe and a Mercedes, right? Make my Mercedes red….no silver….no, make it a Corvette, Z06, red or black.
“I loved that comment. Who’s not serious??”
Diogenes — agreed. Most of the lookers were serious lookers until they saw what they would get for the price. In the end, I suppose most of them were just like me — when I looked at a house listed for $500K, for which I would not pay more than $375K, I didn’t bring it up because of the haughty attitude of these sellers. I finally gave up on re-sellers and decided building is the best route, save for the terrific deal I haven’t seen yet.
She shouldn’t get too worked up about how much to reduce the price — the market will eventually set it for her.
Of course, there’s a lot of pain to be had and denial to be shed until then.
‘Now, we don’t know where Donald Trump fits into this deal.’”
Can anyone help him with this?
I remember a couple of years ago when the “Apprentice” winner was down here to promote the project. Now we find out that Trump was to have no role whatsoever in building it. I almost feel sorry for people who bought. Almost.
Yep, the Donald’s deals come with action figures…
Geez
It means the developers are just using his name to attract GFs/FBs with limited reading and research skills.
That’s a known tactic of The Donald’s. He has his people contact developers and offer the use of his name - for a sizeable fee - to promote their project. He tells ‘em that’ll spur interest and sales in their project, if people think he’s involved.
He offered a Minneapolis developer the use of his name on a project for $2 million. The developer told him to take a hike.
If The Donald is being told to take a hike, the housing boom is REALLY over!
While they stand and stare at the construction area with nothing happening and there money evaporating Donald sends out hot waitresses with free drinks just like at his casiono’s.
Almost all of Trump’s projects are licensing deals. Sometimes, such as at Trump Tower Chicago he gets a development fee and a piece of the pie, but he puts very little money into these projects. His company is all about marketing/licensing first/ development second. sounds like in Tampa it was a name licensing only and he is not responsible for development meaning construction and marketing.
“‘I’m about to reduce it to $839,000. I’m getting a little impatient.’”
It’s all pretty predictable. Most sellers still don’t understand that the actual “value” of their property is much lower than they think.
But what will happen is that all the average joes will “suddenly” figure out at roughly the same time what’s going on and that they better really drop their pants - if they are even in a position to do so.
But by the time this happens, the credit crunch will also be in full swing. So not many buyers out there, even at big haircut prices.
The whole system will lock up.
I think this is the last window to get out if you are a seller. JMHO
In oviedo no less. 20k of is like 150 bucks a month. If you are ever worried about 150 bucks a month while in the midst of contemplating purchasing a house that is 800k++ you should be beaten. And this lady shold be beaten for thinking that will solve it. At current trends one year ago that place would have been a million. Thats a funny thought in oviedo. Didnt a million dollar home used to mean something, like wow nice f@#%ing place, or you are doing really well. Today it means, who is your mtg broker or I need to get a pay option arm. Sick just sick.
Good point, jtcc. Everyone wants a Winter Springs address and nobody I know “wants” an Oviedo address. Whether it’s schools or snobs, that’s the plain truth. $800K in Oviedo sounds insane unless it’s a one-off mansion on a big piece of land and you don’t care who your neighbors are, IMO.
Sad but True
Agreed. The window (of credit, qualified buyers, somewhat limited selling competition) is closing rapidly. Unless the economy somehow takes off its impossible to see the fundamentals improving for sellers.
I don’t think the “awakening” will take very long this time. Too much access to horror stories this time around. When people realize the game is musical chairs…that if you don’t get ANY BID you’re TOTALLY screwed, that’s when denial will devolve to desperation.
Maybe a month or two? If/when listings really shoot up then even those in denial will get it.
“Unless the economy somehow takes off its impossible to see the fundamentals improving for sellers.”
In case you hadn’t noticed, the economy is going great guns. Even so, those who must sell are simply out of luck. Florida is toast.
Bill, A large portion of the economy has been the booming housing market. The numbers lag the presant, sometimes by months.
The economy is “going great guns” because most of the bad housing stuff has not happened yet. It’s just begining
The stock market is just like the real estate market. Again, it is overheated. It’s gonna pop again. It’s effect on the economy is part real and part imagined. If you buy a stock at $5.00 and it goes to $50.00, than plummetts to $4.00, you have not lost $46.00 per share. You lost $1.00
If you paid 300K for a house and have to sell it at 200K, someone lost 100K, in real hard cash. Also, some family is in need of a place to live and their credit is probably ruined. It will take people years to recover.
If this is the 3rd worst housing market, there will be a long
recovery time.
You are correct. Florida is toast. So is Cal, Az, NY, Texas, etc. I just hope this doesn’t trigger a severe recession.
It will trigger a “severe recession” or worse. There is an excellent relationship between great booms and horrendous busts. This is the most horrendous credit boom in history.
P. Bear: Sun Bank Wonk says the third worst. I think I agree with you.
For the car nuts, if any, on the board, I have an analogy to this. If you add methanol to your fuel, you’ll get a really solid boost in horsepower and torque. That is the equivalent of our current economy. But methanol brings with it a price — corrosion. That is the equivalent of the price for our current economic “well-being” — it is built almost solely on debt. Debt is methanol — works in the short run, but ruins the engine if it is used too long.
she sounds like her apartment is on park avenue or something in manhattan. only its in a lughzurious lake(swamp) surrounded lagoon(sewage drain) with views of mountain doves(carrion flyers) in a pristeen neighborhood (reclimated garbage dump site). (exaguration but still)
$859K to $839K. Imagine going to Walmart or Target and being bombarded by the store:
“We are practically giving this widget away. ”
“Incredibly marked down from $100 to $97.67!!!!!!”
You’d feel insulted and that you were being treated like a moron.
“Orlando Regional Realtor Association members recorded only 1,314 homes or condos sold in January, making it the weakest month for local agents since January 2002….”
That is back to post 9/11 sales levels which is simply horrid. I remember the scare of another attack in the area caused a major sales slump. No one wanted to live near Disney.
The American Population has been very spoiled. Mortgage rates are still incredibly low by historical standards. My first mortgage was 8.5% and that was the best rate for an “A” borrower many years ago.
What frightens me most, is how numb everyone has become to money. Finance another $100,000? No problem! Housing prices are booming and have moved up another 200,000 in 3 years? No Problem. I can afford it! Just let me take out another mortgage on a house that really isnt worth what it is.
I know…supply and demand. The illusion still exists. But in this age of “bigger, better, stronger, faster” the average American has been conditioned that debt is good and cheap money is normal. Amercians are encouraged to live paycheck to paycheck. We are encouraged to rack up credit card debt and take zero down mortgages. This psychology has been drilled into all of us. I fear what lessons our children are going to pay. Pay for the info-mercial and everything will be OK. You too can make a lot of money!
Why do we have a government that allows this? Why does society allow it? Shouldn’t we get tax deductions for saving? Shouldnt I get a tax deduction for investing in my childrens education? Why do I have to pay such crappy interest rates when banks are holding my money? Why do I have to pay taxes when I am buying stocks and investing in companies? Why are things tax deferred?
Why do companies go bankrupt, destroy pension funds and re-emerge again without any penalties?
When you buy and sell homes - why are you slaughtered with fees?
Why do you have to pay points on a mortgage? Anyone who pays points is a total idiot.
Can someone lend me 25 cents?
Can you spare a dime for an American down on his luck?
“Amercians are encouraged to live paycheck to paycheck.”
1 in 4 Americans say they plan on working until they are 70. Haaaaaaa! Unless you’re in a very select field (doctors, professors, politicians, tycoons) that isn’t going to happen. How full of yourself do you have to be to think any present day corporation will want you on their property that long? (fast food and retail excepted of course)
Wombat; You should run for President. Seriously. You have my vote. The problem is your post is sensible and addresses real proeblems.
Ron Paul hopefully will run. That’s plenty good enough for me. (No offense, Wombat.)
As part of the agreement, the developers must build the tower to certain specifications and standards of the Trump brand
This fascinates me. What exactly would these specs and standards be? Shouldn’t Trump be telling us, as part of marketing his brand so we know why we’re buying it?
Marshall McCluhan once said you don’t buy a product so much as buy its advertising. The folks that are suing effectively admit they were doing this.
Knowing Trumps track record, I wouldnt do business with a company/person that had anything remotely to do with the Trump
name.
Neither would I, but that just speaks to his being one of the best brand managers on the planet.
I misspelled McLuhan’s name, btw, before anyone corrects me.
Martha Stewart is doing a similar branding deal with one the national builders. Golf course communities do the same thing all the time when they use the golf course architect’s signature. Caveat Emptor!
Well, unlike with Trump, there’s a value-added component to most of the better golf course designers. IOW, you’re actually getting something above Brand X for your money. Can’t speak for Martha.
Caveat Emptor!
I think thats what Martha serves the people walking around the neighboorhood. She has on little white gloves and a silver tray full of it.
Amen. This type of trademark licensing is fairly recent, but has a long history. Anyone that honestly thinks that their local McDonalds, Domino’s, Choice Hotel, Citgo gas station or Ford dealer is owned by the company hasn’t been living on planet Earth very long or is incredibly dumb. If you want to know who you are dealing with, you ASK!
I think the only requirement is that you have your hair done like his. His hair screams Money!!!
Seriously, what Trump standards? Does he send his own team of building engineers down to make sure each stage of construction is done to “Trump standards”.
This is Trumps standard: “Am I making money? OK, meets my standards”
Hey big Don, I’m a capitalist too, but sometimes Bulls**t is Bulls**t
It is happening slowly but surely. What is interesting is the interplay between the financial interests. They are the key to unwinding the speculative increases. When the lending institutions stop the cheap money; the prices will tumble. gordo
Gordo — I think that, for the many of us who have been impatient for it, that moment of credit puckering has arrived. Immediately to follow is the widespread folding of the Robert Cote-coined “Wishing Prices.” 2006 was a slowing-down of the bubble and a turning of market psychology. 2007 could be a faster-than-anticipated turn of pricing strategies as the masses wake up and, as MrktMaven so aptly expressed above, smell the toast.
‘Lots of people are looking, but they’re just not serious,’
Guess I’ll get a lot more serious now that you’ve told the paper you’re going to drop your price. What an overpriced moron….
With just 10% of the units for sale, Pelican Cove is not in the worst of shape. One of the SF communities I drove through on our January visit to Sarasota had For Sale signs in front of 16% (one in six) of the homes, and our beachfront rental condo building had lockboxes on 20% of the doors. But nearby, older SF areas had as few as 2% For Sale signs. Good luck to them all; the snowbirds begin leaving in another six weeks, and hurricane season is less than four months away.
Honestly, these sellers had better pray for a Cat 5 to clear their slab. It may be the only way to get money out of somebody - in this case an insurance check.
In the story about the lady in the Florida condo complex, there’s been one sale since January, the price for that sale was $210,000, and she’s asking $500,000.
Several years ago, I watched an old newsreel made back in the 1930’s. It showed a navy dirigible landing at an airfield. The airship dropped mooring lines to the ground and about 20 sailors grabbed the lines to connect them to the moorings. The airship was caught in an updraft and several sailors were carried aloft as they could not let go of the lines before the updraft. One by one they fell to their deaths. One sailor, as he fell, was running and clawing his was through the air, as if he was trying to climb back up to the airship. This lady, and hundreds of thousands of other people, remind me of that sailor.
That would be a good picture to put on the cover of Times . They could call the title ,”Housing Market Running Out Of Rope.”
Clearview: Well said That about sums it up. Nothing really left to say.
God, people are stupid.
I remember seeing that clip as a kid.
I avoid dirigibles whenever I can do so without being inconveinced.
waaahoo: I avoid dirigibles too. My three ex mother”s in law and a couple of the ex-wives I can describe as “Hindenburg-ish”
in girth and shape.
Come to think of it, a couple of them have Sailors dangling from ropes too…and mechanics..and truck drivers…etc.
Just to head off the inevitable female knee jerk response, I ain’t no prize either.
FBM — don’t sweat it. It’s Valentine’s Day. The only ones who don’t want to consider you are already in the rack with someone else. To all the rest, you’re repairable.
Chip, thanks for the compliment (I think). V-Day, a 12 pack of Corona Light, Movies on the big screen. Lonely? I prefer to define it as solitude. I’m good at business but lousey at reltionships.
I posted this yesterday on another thread. It was at the bottom. I have updated it with some interesting info.
Here’s an update from one of the more infamous Tampa Bay flippers of 2006. Remember Jill Jackson? Bought 10 homes for $1.8 million in 2006 in shall we say, less desireable areas of Tampa, all on a $24,000 per year salary. Here’s a refresher: http://www.sptimes.com/2006/06/11/Tampabay/With_no_money__she_s_.shtml
I notcied that she was on the foreclosure docket so I e-mailed the writer of the article. He responded that she is now up to 8 foreclosures. He says he will revisit this situation once the lenders manage to get rid of the property. One of the homes she bought from Rehabber’s Superstore, was foreclosed on yesterday. The property was purchased by Rehabbers on 2/06 for $93,100. They then sold it one month later to Jill Jackson for $195,000. Equifirst gave her $195,000 to finance the purchase. Home was in les pendens four months later. Yes there were a lot of guilty parties in this transaction, but how does a lender not see a red flag when the sales price increases $102,000 in one month? I think it would be impossible to make that many repairs in such a short amount of time. It will be interesting to see what that property sold for in foreclosure. I’ll post when I find out.
I remember Jill.
My guess is that she personally made less than $10,000 for playing her role in those scams. She’s a single mom who makes $24,000/year. Dangling a few grand in front of her face would have made her sign just about anything.
The hangover for her is going to be a doozy.
Casery Serin should sell his wife and marry Jill Jackson.
lol
Home was taken back by US Bank (current loan servicer) for $100. Nobody bid on the home. Now a bank owned property. Foreclosure judgment was $207,000.
What an amazing article.
F-R-A-W-D start to finish, IMO.
Ol’ Jill will be sobing to the judge “I didn’t (sniff) know (cough, wipe away the tears) what (pause to let a single tear dramatically roll down the cheek) I was (sob) doing!
I’m (choke, sob) the (blows her nose) victim here.
Gimme a break. Little miss inocent will turn states evidence. Did she know the exact laws and rules she was breaking? Probably not. She was probably paid cash under the table. When that happens, even the not so smart amoung us should smell a rat.
But still the real criminals are the guys who set her up and used her and the lenders who eagerly wrote her checks and approved the loans.
No slowdown in building from the Sawgrass Mall (Artesia) south to the Doral area near the Okeechobee tollbooth.
Strange though seems like not much has been done on the two 22 story buildings (Tao condominiums) in the last month.
Pelican Cove is a nice condo complex in Sarasota, even though it’s a little old.
Still, a 2 bedroom/2 bath unit isn’t worht more than $100,000, in my opinion. That’s what they were worth in 1999, and that’s what they should sell for today. The maintainance on those aging condos is a killer.
A Sinking Sensation for Subprime Loans
The default rate for borrowers in the sector has jumped faster than anyone was expecting, raising risks for housing and the overall economy
by Joe Niedzielski
From Standard & Poor’s Equity ResearchThe gathering storm clouds over the nation’s housing and lending markets grow darker each day. Fueling the latest concerns is further fallout in the subprime mortgage loan market, where lenders offer financing to less-creditworthy buyers.
Global banking giant HSBC Holdings (HBC), the third largest subprime lender in the U.S., disclosed on Feb. 7 that full-year 2006 impairment charges at its U.S. mortgage unit would be 20% higher than the $8.8 billion or so that analysts had been projecting. On Feb. 8, New Century Financial (NEW), the nation’s second largest lender to subprime borrowers, said it expected to report a loss for the fourth quarter, and that it would have to restate its financial results for the first three quarters of 2006 (see BusinessWeek.com, 2/9/07, “Subprime Time Bomb”). Another subprime lender, ResMAE, filed for bankruptcy on Feb. 13, bringing the total failures to 21 since December, according to http://www.ml-implode.com, reports Action Economics.
Wrong-footed by the rapid deterioration in subprime loans, primarily those originated in 2006, lenders such as New Century have had to buy back a growing portion of these loans, which they had sold to investors and other financial institutions, because of faster-than-expected defaults. HSBC particularly identified second-lien or “piggyback” loans (loans made above a first mortgage, generally to help buyers come up with downpayments) in its mortgage book as those that could be hurt by higher interest rates as adjustable-rate mortgages (ARMs) reset over the next few years. HSBC acknowledged that some borrowers face fewer refinancing options amid slowing growth in home prices, and limited if any appreciation in their home equity.
Slo-Mo Flashback
With national home prices appreciating at a compound annual growth rate of around 6% from 2000 through 2005, subprime loans, many of which are tied to adjustable rates and include features that allow buyers to pay only the interest or make even lower payments, blossomed in popularity. Subprime mortgages accounted for 19% of all mortgage originations in the first half of 2006, according to the Mortgage Bankers Assn.
But the recent disclosures from HSBC and New Century indicate that the slowdown in the U.S. housing market could have a larger economic impact than previously thought. As a result of rising delinquencies and foreclosures, most banks and mortgage lenders are tightening underwriting standards, a move that may limit consumers’ access to credit. New Century said on Feb. 8 that its improved lending standards would result in a projected 20% decline in total mortgage loan origination volume in 2007, compared with a previous forecast of flat growth.
The trickle of bad news in recent months resembles a slow-motion version of 1998’s credit crunch following Russia’s debt default of that year and the unraveling of hedge fund Long-Term Capital Management. Back then, the flight-to-quality into U.S. Treasury notes and bonds, along with investors’ unwillingness to purchase securities backed by subprime mortgage loans, led to the eventual bankruptcy in 2000 of companies such as ContiFinancial, a former unit of grain giant Continental Grain. An ill-timed bet into specialty lending by life insurer Conseco—which bought Green Tree Financial, a leading lender in the manufactured home market, in 1998—played a considerable part in Conseco’s bankruptcy in late 2002.
Small Cracks in Big Banks
This time around, banks have pulled their credit lines to companies such as Ownit Mortgage and Sebring Capital Partners, leading to their demise. Small cracks in the mortgage-loan books at some of the nation’s largest banks have begun to appear as well. Subprime home equity loans drove material increases in overall mortgage losses for Citigroup (C), JPMorgan (JPM), and Wells Fargo (WFC) in the fourth quarter of 2006, according to research by Standard & Poor’s Credit Markets Services.
The homebuilding sector isn’t immune. Should buyers find it more difficult to qualify for mortgages, that could add to builders’ woes at a time when many of them are suffering from a glut of unsold homes and falling land prices. Toll Brothers (TOL), the nation’s largest luxury homebuilder, said Feb. 8 that orders fell by 33% in its fiscal first quarter, while it expected land writedowns of $60 million to $160 million for the period, exceeding estimates disclosed in December. Centex (CTX) wrote off $435 million and KB Home (KBH) wrote off close to $494 million for land and land options in their quarterly reports released in January.
Meanwhile, banks and other financial institutions along with global investors—many of whom poured into the U.S. residential mortgage-backed securities (RMBS) market in recent years because of the attractive yields on these bonds—may be exposed to souring loans. During the runup to and peak of the recent housing boom, total mortgage credit rose by about 10% annually from 2000 to 2005. In the same period, banks and other credit institutions became more exposed to mortgage debt in the form of loans and mortgage-backed securities. Total mortgage debt outstanding at commercial banks rose at a compound annual growth rate of 11% from 2000 to 2005, and at a rate of close to 7% at savings institutions.
Worse to Come?
But credit deterioration poses pitfalls for investors. Total delinquencies for RMBS transactions issued in 2006 averaged 12.61%, and loans considered seriously delinquent averaged 5.97%, according to research by Standard & Poor’s Credit Markets. And there are reports that jitters are hitting the derivatives market as buyers and sellers of mortgage credit protection battle it out, says Action Economics.
Delinquencies and foreclosures may get worse. One out of five subprime mortgages issued in the past two years is projected to end in foreclosure, according to a study released in December by The Center for Responsible Lending, a Durham (N.C.)-based research group. The group also noted that even when home prices were rising, subprime home loans fared poorly, with as many as one in eight, or 13%, of these loans ending in foreclosure within five years of origination.
Niedzielski is a writer for S&P Global Editorial Operations .
It’s like a big game of tag. Once the losses start to crystalize, you’re “it”. And you try to tag someone else to take it.
I wonder who will get tagged last?
Sensible Savers.
Taxpayers
I’ve noticed on Bloomberg that almost every manager than has a bond fund is now asked whether they have exposure to these bonds. One of them this morning responded that he had no exposure because he got out of them in early 2005 since the spread between Treasuries and these bonds was less than 300 basis points. If it was so obvious, you have to wonder why the MSM geniuses weren’t asking this question then.
I do wonder when reality will hit some sellers, there are two houses here we have watched now for a year, each has had only miniscule price reductions (less than 5%) with no action, one is empty the other occupied, the empty one has to cost someone at least 4K a month carrying costs and I guess the other one could be a “wish price” but they have open houses every other weekend. (nothing I would want to do, WAY too much dusting) so will it take 2 years? 3? the level of denial is incredible.
Well, if they have a mortage on it that’s higher than the offers they’re receiving, they’re either going to hang on as long as they can afford to make those payments, or they’re going to wise up real fast and walk away.
Many people are still trying to save their credit by avoiding foreclosure. Eventually, they’ll give up and forget about their credit. That’s when prices will really begin to plunge.
1st Q of 2008. You’ll probably buy both of them at a steal…..if there is no credit freeze or if you pay cash.
The foundation will crack with empty houses
This email was sent from one of the listing services I subscribe to, I almost snorted coffee on the screen:
It looks like the market is really heating up. The media hasn’t reported it yet but as agents we see the first signs of a turn-around.
The lenders are the second to see it as they process loan applications.
The press generally knows when the “sold” figures come in which won’t be for a couple of months.
Agents in my office have made 107 offers on homes since December and we are seeing a huge increase in January visit requests as well as buyer activity on our site.
When I request visit appointments for my clients, some of the properties are in negotiation or have just gone under contract.
This is VERY different than the market of the last year. Just thought you might like that feedback
since december? wow, and there are over 100K listings available in the area? oh yes, it is a different market, not the way you want me to believe though.
An offer is not the same as a sale. And what is “buyer activity” on a website? Last time I checked, most real estate sites were nothing more than billboards. And I have yet to see a real estate agency’s website that is set up to conduct e-commerce.
exactly, they are probably counting any click as buyer activity.
You should reply and tell them that you have been waiting for the turnaround so you could sell your house for top dollar and your glad that today is that day.
107 offers on homes, huh? How many of those were accepted? I have no problem believing there are people out there making tons of lowball offers.
I got the exact same ’story’ from a broker in upstate NYC.
Can anyone say marching orders from realtor’s office at their monday morning meetings are to spin tepid calls/sales into am amazing uptick in interest/appointments and inventory tightening?
I received the same email. It came from my registration in Zip Reality.
Just another putrid attempt to create a false sense of urgency. Realtor scumbags!
What’s up with taking 18 months to sell a condo? Especially since 18 months ago would be summer 2005. Sounds like Babs started with and held onto a wishing price, not a selling price.
Great morning for news if you like comedy.
Just watched Bullsh*tter Bernanke telling the serious faced Washington hack politicians that everything is rosy in the US economy. Within the space of 2 minutes, he said inflation is just over 2%. Total b.s because the true non-government non-cooked number is close to 7%. He said inflation is contained (lol) and because of job demand and thus wage pressure, incomes will rise and the current slump in property prices will be a thing of the past later this year and inflation in 2008 will be under 2%.
On the political front, a split screen showed the #1 bullsh*tter (the idiot in the White House) doing his usual yada-yada about how Iraq has started to turn around and his plan for bringing Freedom and Democracy to the middle east (lol) was working, yada-yada. That’s nice. If something that moron does actually works it will be the first time in 6 years.
However, my attention was really on Bernanke who continued to give a great comedy performance. As he was telling us about the great economy, the executives at Chrysler were planning to cut 10,000 + good paying auto jobs with benefits like health care. That means these Chrysler workers can now go out and get those $80 an hour jobs which have gone begging to replace those $55 an hour jobs so they can move up the property ladder and buy one of those $600,000 + properties which are now flooding the market and which will all be gone (according to Bernanke) at the end of 2007 as people rush to buy.
However, to pass the time while they are sending their resumes out and applying for those $80 an hour jobs, there are plenty of service worker jobs which have been created under the Bush tenure which pay from $7 to $12 with little or no benefits like health insurance.
My wife was watching my blood pressure rise as I watched this crap (from both of them) and she finally said, “Why do you bother listening to these people? They just spin the story to suit the moment. In a couple of weeks or months they will be back telling another story to suit the next moment and nobody will remember what they said at the last meeting.” Great insight.
Good post, Mike.
The employment thing baffles me. Over the last few years we have rarely seen job creation numbers that were sufficient to even cover population increases. And the jobs that are created have almost all been service jobs, government jobs and real estate related jobs.
Yet we hear endless drivil about nearly full employment. Manufacturing and other productive jobs continue to migrate overseas. Nobody I know feels secure about their current job nor about future job prospects.
My gut feeling is that we are being fed a web of lies and manipulated data that are the economic equalivent of the lies fed to us during the run up to the Iraq war.
With all the news about mass layoffs and plant closings in the auto industry, I thought that myself. Downwardly mobile people are not going to be reducing the housing inventory.
And anybody who does their own grocery shopping can tell you that inflation is higher than 2% per year.
She’s right. The Mass American Attention Defict Disorder.
Sometimes we are one big collective dumb ass.
That is just it with sellers in the housing market. They dont seem to understand that housing is both as free a free market as can be had, and a zero sum game. Unlike the Home Depot widget which was $100, which now sells for $97.50 (that was a great post)………
If the widget sold for $1 it would generate more interest, surplant other widgets which do the same job etc. Sure, cheap housing inspires more people to leave home, divorce, buy a vacation home etc but still, there are only so many people. Period. And unlike the widget, people do need a place to live. This is the classic definition of near inelastic demand.
So when inventory hits 16 months supply, what on God’s green earth are people thinking !!! Let’s have an open house on wednesday at 3:00am because no one has tried that yet ?!
There ARE sales every month. Closings every month. Widgets sell. Houses sell. It is all about what people are willing, and able, to pay, and as everyone as correctly stated , tighter credit with higher interest rates mean that people arent able, or willing, to pay.
At least in SoCal property prices are kept on a public access database, probably for property tax assessment purposes. There are a couple great blogs which show the absolute soaking flippers took. $100K in 6 months….etc. But those are the ones that sold. Hats off to those guys, they understood the gamble, the risk and the shirt loss and took that huge bite of @#$% pie.
This lady in Florida needs an extra big helping. Prices will drop to the point that credit/interest rates vs. inventory vs. demand allows. Arithmetic and reality will show where that is. For sure, we arent even close to that yet.
Luckily, i hear it is a great time to buy. Oh yes, and sell
And, strangely enough, it’s also a great time to rent, and refinance, and look into timeshares, and get a condo-hotel, and squat in abandoned building, and live in your car down by the river, and foreclose, and refinance again, and be foreclosed on, and ……
popcorn. You are correct again. The median wage can’t buy the median house in any Florida market. Supply, demand, wages, population all meld together to create market conditions. Sometimes enough people collectively loose there minds and we get out of balance. Everything is cyclical
I’m certainly not finding any bargains in the Northeast house rental market.
In a decent town, wannabe landlords are asking the equivalent of what a mortgage payment would be, and in many cases more.
Unrealtor, just start making rent offers at all the paces you check into. Eventually someone will see the bird in hand
Agreed. “Askin’” ain’t the same as “gettin’.”
Naples Board of Realtors say things are picking up. Realtors I know seem happy as hell and also say they are selling properties for the first time in a long time. what gives? Here’s a link
What gives? “False Bottom”
You’ve got to wonder. I was just down there and things certainly seem slow. Larger developers in the unincorporated areas of Collier County are lowering their price points. Still, it is from NAR which is reason enough to doubt it.
Aren’t they one of the ones who refused data to the NAR?
It’s a dead cat bounce…IMHO Buyers with pre-approved 80/20 from last year are rushing to buy before loan docs expire.
What gives?
They’re lying conmen.
The article you posted is statistical lies and nothing but an advertisement for Naple Realtors - desperate low life former strippers/pole dancers, toenail polishers and used car salesmen who will soon be returning to the only professions for which they are intellectually and morally qualified.
I spoke to a very successful realtor friend here in Naples. According to her sales are only 25% of what they were in 2006. That article is total Bullsh.t. The realtors I know have very long faces. There are a number of homes for sale owned by realtors here.
There are numerous annual rentals that have been up for rent for six months and no takers. Naples is toast.
The “Naples Daily News” this weekend had around 60% of the total paper with various realestate adds. The realtors and auto dealers have huge leverage. The result is an understating of the problems here.
Doing a 2nd round of aparment hunting this weekend… it “feels” like rents have dipped. Let’s see what I can get…
Got popcorn?
Neil
Neil do you counter offer on the rent amount?
I’ve always had good luck by being super nice to the landlord and telling them what a great place they have / should have no problem renting, etc., but unfortunately I can only afford X amount.
You’re not trying to rent from my friend with his empty house, then!
Some of his best tenant prospects tell him that same thing, and they have great credit, good jobs, and references in hand. And then he tells them that he can’t (read won’t!) charge less because he has to make enough to make his mortgage payment.
They walk, and he’s left with an empty house. Been over a year now! Good thing he’s holding out for enough rent to make that mortgage, eh? Else he’d be deep in the financial hole!
Oh, and then he wails to everyone within earshot that there are no decent tenants out there!!!
Yeah, and he’ll only have to lease it to the dumb one that signs for his demanded amount for the next 14 years to make up for the lost revenue in the meantime. How do you keep the “Oh, what a dumb ass.” look off your face?
It’s hard keeping that look off my face. Very hard. I think sometimes I just have to look away, at first anyway. Now I’m just used to it, after a YEAR of his tales of woe trying to rent the place out.
Here’s why housing is sooo crazy for me:
I make $2000 a week, take home about $5200 a month..
The Average house in my area goes for $400,000 , so the monthly carring cost would be around$3,000 (with a real amortizing mortgage) !! I can rent the same house here for $1000! I can’t afford to buy the house..but than who can???
I agree. Average (median) US household income was 46 K in 2006. median household income by state ranged from $32,589 or 26.7% below national median, in West Virginia (were homes are really cheap) to $57,352 or 29% above national median in New Hampshire. Connecticut came in at number four with a median household income of $55,970. California which had the highest median home price in the nation, and where home prices have far outpaced incomes only ranked number thirteen with a median household income of $49,894. So… who can afford to buy a house? Trump & co. But how many houses does he need? Looks like everyone is chasing the same 1% wealthiest Americans with their niche luxury markets. How long this will last? NO clue. Maybe as long as East Asia continues to buy treasury notes. If that stops, game over. Our dollars in the bank won’t be worth much anymore either though.
“…but than[sic] who can???”
Guess you mean, “but then, why would anyone buy at that price, relative to rent?”
The good news is that, increasingly, people are wising up to the difference and are choosing not only to rent, but to negotiate the rent amount. The tables have turned, big-time.
Looked at a 1,100 sq foot 1950’s ranch in S.E. Portland last week-end. Asking price was $399,900.. researched that owner bought in 1994 for $77,000.. I think something is wrong when you pay $400K to have meth addicts as neighbors