Speculators “Reap What They Sowed” In Florida
The Miami Herald reports from Florida. “The story of housing in South Florida in 2006 was one of waiting. Now the question is: Will 2007 be the year the market turns around? The answer lies in the mountain of homes across South Florida with ‘For Sale’ signs, the single biggest indicator of a market out of whack.”
“For every home that sold in each month of 2006, an average of 14 did not. The number of homes on the market doubled to almost 66,000, as sales dropped to their lowest level in a decade. At the current sales pace, it’s up to 16 months in Broward and 18 in Miami-Dade. For condos in both counties, it’s more than two years.”
“It’s a quiet Sunday afternoon in West Kendall, the third quiet Sunday afternoon in a row that Olga Alvarez has opened her house to buyers. ‘The house is priced well; there is just a lot of competition,’ says Alvarez’s broker, Leigh Fortuna. ‘Within one square mile, there are 42 other homes for sale that are like us.’”
“Alvarez is already throwing in incentives. One-page fliers proclaiming in big letters: ‘Seller will pay closing costs up to 3%.’ That shaves off $11,700. And the asking price for the three-bedroom, two-bath house is down from $399,000 when it was listed in October to $389,000. Plus, there’s a yearlong warranty. So far, it’s still not enough.”
“Alvarez and her husband bought their home in 2000 for $147,500. Since then, prices in the neighborhood have more than doubled. But it’s also harder to sell in the first place because many people simply can’t afford to buy.”
“The irony is that if Alvarez sells, she, too, will be priced out of the region. If Alvarez ever buys in South Florida again, she will be hit with much higher property taxes and insurance costs. ‘We’ll never be able to afford to live here again,’ Alvarez says matter-of-factly. ‘We don’t plan on coming back.’”
“It’s 2:50 p.m. Ten minutes left for the open house. The phone rings. ‘I thought it was the doorbell,’ Fortuna says. She’s only half-joking. Instead, it’s Zab Alvarez calling to check on things. His wife delivers the bad news. By 3 p.m., the open house is over. Not one person came.”
“The condo market is in danger of choking on its own leftovers from the housing boom. The supply of available condos has tripled over the past year. There are now almost twice as many condos as single-family homes for sale in Miami-Dade and Broward counties.”
“It will get worse before it gets better. More than 11,500 new condos are expected this year and 15,000 more next year, with the bulk coming to Miami-Dade.”
“The average condo asking price in Miami-Dade went down 12 percent in 2006 to $532,000. In Broward, it dropped 11 percent to $354,000. Peter Zalewski has compiled a database of properties that have seen a drop of $100,000 in asking prices or stayed on the market for 100 days. The single-spaced list now runs 27 pages.”
“Key West broker Melanie Crocker sums up the past year’s housing market this way: ‘It’s been tough.’”
“Both prices and sales fell considerably in 2006 in Monroe County, where the standoff between buyers and sellers has already given way to a down market. The median price for a single-family home went down 11 percent, settling at $625,000, according to a Miami Herald survey. Condo prices were off even more, dropping by 17 percent to $440,000.”
“Things were especially bad in Key West, where prices for single-family homes dropped 37 percent to $395,000. Condo prices fell 19 percent to $440,000.”
“Sales of houses in 2006 were down 38 percent from a year earlier. For condos, it was 47 percent. ‘There were no buyers because they wanted to see the prices adjust,’ says Crocker. ‘People are still wondering if we have hit bottom or not.’”
The News Journal. “Sylvestri Investments’ auction of 25 condos at Ocean Walk in New Smyrna Beach last weekend was either a desperate move or the bold setting of a new trend, but it has drawn criticism from some Realtors concerned about the area’s sagging condo market.”
“‘I’m getting calls from Realtors. They are saying the market is really bad and you are going to show how bad it is,’ said William R. Bone, president of the National Auction Group. ‘They are afraid the condos will sell real cheap and hurt everybody,’ Bone said. ‘Everybody’s property values are at stake here. But something’s gotta happen. Things will move at some price.’”
“On the other hand, some developers are watching Sylvestri’s experience, Bone said. ‘They are telling me, ‘Gosh, if you can do this, I’ve got others to sell.’”
“The 25 Ocean Walk condos sold at auction for an average of $290,000 each, Bone said. New condos at Ocean Walk usually range from $379,000 to $850,000 for a penthouse, said Rob Camporese, vice president of Silvestri Instruments.”
“Camporese said some of the condos being auctioned had been sold, but buyers walked away from the deposits. ‘Basically what has happened everywhere is people got caught up in the real estate market and some went out and purchased units. They continued to buy and roll, but they got caught in the roll,’ he said.”
The Palm Beach Post. “Buyers of canceled condo projects in downtown West Palm Beach are becoming increasingly angry, and frantic, over unrefunded deposits on units, and unfulfilled contracts.”
“Dozens of buyers fell for sales pitches promising gleaming high-rises. Instead they wound up with fading sales brochures. Most upsetting: Some buyers are having trouble getting all their deposit money back. That’s because some of their money was released to developers for construction, even though the condos weren’t built.”
“While some buyers are resigned to lessons learned, others are fighting back by filing lawsuits against the developers who they say failed to deliver. In the past two months alone, half a dozen lawsuits have been launched.”
“One particular lawsuit, filed by buyers David Weber and Amy Lichtenstein, seeks a lien on the 3-acre Opera Place land. In a Feb. 12 court filing, Opera Place says the Weber-Lichtenstein buyers aren’t entitled to share in the profits because the land was never improved.”
“Will this claim, and the other lawsuits, derail the land’s sale next month? ‘The property continues to be a vacant lot with a trailer on it. Construction never began,’ the motion says.”
“A lawyer for Weber pounced on this statement. According to Florida law, deposits can be released to developers for construction only. If construction on Opera Place never started, attorney David Gorman wonders, then why did Opera Place get half his clients’ deposit?”
“Behind all the numbers tossed around at the recent International Builders Show in Orlando are real people affected by the ups and downs in the housing market. Many of those people are hurting now. Badly. Either they can’t pay the mortgage, with disastrous results, or they’re stuck with a real estate investment that grows less profitable every day.”
“Many think flippers are getting what they deserve now: They ran up home prices with their frenzied buying, this argument goes, when they had no intention of living in the houses and condos they bought. Let them reap what they sowed.”
“Meanwhile, homeowners who weren’t playing market games and who need to sell are caught, too. A large sign at the corner of Flagler Drive and Almeria on West Palm Beach’s lakefront reads: ‘$1 million reduction.’”
“Another sign, this one on Olive Avenue a few blocks north of Belvedere, states simply: ‘Make me an offer.’ ‘There’s a lot of desperation out there,’ a local observer says.”
“The 25 Ocean Walk condos sold at auction for an average of $290,000 each, Bone said. New condos at Ocean Walk usually range from $379,000 to $850,000 for a penthouse, said Rob Camporese, vice president of Silvestri Instruments.”
OK, $279 vs. 379, using the lowest comp. That’s 27%. And we’re still only in the third inning.
And that is assuming that all 25 of those units sold were the 379K model. I kind of doubt that. Either way, I think it’s safe to say, AT LEAST 27% down.
Another orgy of bad news out of FL.
And on another front, the tax issue is really heating up down here. If anyone saw the meetings in PB or Broward, people are on the edge over this issue. Everyone is begging for relief, or more SOH type protection. What they don’t/can’t understand is that SOH is why this happened in the first place.
Taxes are up almost 100% since 01-02 timeframe. That’s just staggering. What’s even more staggering? Taxes only rose ~15% for those with SOH exemptions over the same time period. The inequity in tax law in FL right now is just beyond comprehension. On a related note, how long before people start to cry for reassesements (downward) on their taxes? I can’t imagine it will be much longer. Especially those who bought last year, I think they are definately 10-20% down, and should get that much of a break off their tax bills. Personally, I think that everyone should ask for one at the same time. Let the property appraiser know what an awful mess he has made (to be fair, PB appraiser does seem very fair, and aware of the horrible nature of the system).
Also, went to the capital grille in Miami last week. The construction down there is truly beyond words. You have to see it to believe it. I am not saying other places are not worse, but it is just unreal. There are so many cranes that it blots out the sun. I tried to count, and just got bored at 20+. And, I was only on the 3rd floor of a building. Imagine how many more you see when your in one of these POS condo high rises?
I was in Miami recently, on Brickell. I counted 10 cranes in 1-2 block radius around me when I was stopped at a red light.
All I kept thinking was “Man, I’m going to get one of these for cheap a few years from now”
you wouldn’t want the quality level in this construction … ever.
Especially not in a high rise. It’s bad enough having crap construction on mc mansions where you are pretty close to the ground and not actually attached to your neighbors.
Can you imagine the litigation, the arguments, and the special assessments?
I think it would be a good time to get into either construction defect law or bankruptcy law right now.
Many of those condos will end up as public housing units. They will have no real value unless you are willing to be a slum lord. Some of the “great deals” that we bloggers foresee will turn out to be some not-so-great deals.
Section 8 with granite countertops and marble entry. I wonder how long before there are soiled diapers and drug dealers littering the hallways of those highrises.
“Especially not in a high rise…”
in hurricane country.
“I was in Miami recently, on Brickell. I counted 10 cranes in 1-2 block radius around me when I was stopped at a red light.”
I was there this weekend for the Miami Boat Show. From Bayside, we were able to count more than 20 cranes. These obviously were condos as I don’t see much market in office buildings with balconies. It is truly a bizarre landscape and although many have mentioned it on this blog, I was in total disbelief until I saw it for myself.
Sounds like a great place for the US assisted living for the IRaq’ies immigrants Condo- lisa Rice wants to bring to the USA….
Fl. Co.,
How are boat sales?…Were there a lot of people at the
show?
There are more boats for sale by the side of the road down here than you can shake a stick at. Highway to HELOC Hell.
Has anyone on this blog read the 1977 John D. MacDonald novel ‘Condominium’? For those of us old enough to remember, the mania- especially as it relates to poor construction- is absolutely fantastic. As though one were caught in a time warp.
I think that if the politicians in Tallahassee were smart, the FIRST thing they would do is pressure the local taxing authorities to aggressively reduce assessments, in accordance with declining property values.
If we returned to the mean, in theory property values would be pre-boom and there would be no SOH outcry. Of course, theory is a whole lot easier than practice.
Chip,
Absolutely, because of the reluctance to lower mill rates, we have the massive outcry against SOH. If they had just lowered the rates somewhat to prevent these huge inequities, they could have kept this going much longer.
The politicans truly killed the goose that laid the golden egg. We will have to see how it plays out, but I can tell you, many cities are already starting to cry poor. I can’t imagine the outcry if they actually had to reduce the mill rates.
The part that gets me is the fact that they spend all the money and are pursuing increases in areas. In my city they want to add a special tax that they claim amounts to 60 dollars per year per standard house for a 110 million dollar building to house the police and fire offices and some other crap. Were is all the extra money they have been collecting. Its complete BS.
The words “politicians” and “smart” don’t belong in the same sentence, especially if it’s in Floriduh
Floriduh
I just know I’m going to use that in a post some day.
Wow are those prices going to drop for years!
27% decline and they think they can build another 8 buildings on that lot? I drive by Ocean Walk all the time on my way to surf the Wall @ Bethune and that place is huge already. The buildings are this large modern mediteranian design that’s nice looking but way overdone. Plus they are on the intercoastal side of A1A and don’t even have a view of the Atlantic. $280k to play Frogger on A1A with all those old, northern retires who shouldn’t be legally driving and ignore the pedestrian crossings? No thanks.
I owned a condo across the street from this place…On the ocesn.I sold it in Sept. 05. There has not been a sale since.
At the time, there were 70 units for sale at Ocean walk.
LOL on that video game reference. I can hear the music in my head right now.
IMO South FL will bottom down more than 50% from peak prices.
near term bottom = construction costs + price of buildable lot
long term bottom = price of scrap materials + shipping to Cuba
“In January 2002, 48 percent of all houses listed for sale in Miami-Dade were for less than $200,000. Now, it’s 3 percent”
wow
Prediction: In 2009 84% of all houses listed in Miami-Dade will list for less than $200,000.
Be patient everybody. From Maine to California, this will take a long time to play out.
..this is the most fun you can have with your clothes on!!
Git ‘er done!!!
I think Ms. Alvarez made a tactical mistake allowing this reporter to put her cost basis in this story. She’s got a lot of room to drop and now I doubt she’ll get any offers near her wishing price at all. Too bad. No sympathy here for this greedy biatch.
Good point. This woman has a TON of room to lower her price. Actually, the greed is rather disgusting…
You’re so right! $147,500 in 2000 should bring in $181,500 in a normal market 7 years later. Put that sucker up for $200K and destroy the comps. It will be sold in days!
Might be another wannabee equity locust on helocdown.
You want a 15% annualized rate of return ! What a pig! If the same happened here my 198K home would be worth 1.3M (in 14 years) I would be retired to a tropical island getting my brains #$%^& ….
That’s why Zillow.com is so beautiful; it has historical sales prices.
Zillow is going to get interesting. Once the formulas they use start showing a depreciating market due to the most recent sales data, I just cant wait to see old Jo Homeowner wet his pants at his latest zestimate.
The greed will take the rest of this year to wring out down here. People in this region - even the immigrants - are under such delusions of grandeur it’s dizzying.
I would think any wise person would check the property appraiser’s records first before buying as this information is so easily found, so that point doesn’t really matter.
SKB…did you say “wise person”.
That’s where you screw up, expecting rational behavior based on sound information.
I mean the people (like you) on this blog of course not the “general population”
SKB
You mean people like us.
Chcik, again what else can you say! Take 200K.
This is just exactly why we are where we are.
I bet Mr & Mrs A’s houshold income increased by the same ratio of what she paid for her house and what she want. How can they rationalize the asking price? Oh, right, in 2005 the guy across the street got 10% more….you mean the presantly unoccupied repo???
Sill me. Mrs A did say that when they sold they wouldn’t be able to afford to live their. She can’t afford her own house.
Word up to Mr and Mrs A: If you don’t really have to sell, don’t.
If you really have to sell, lower the price….a LOT!! Not 10%!!!
That less than my AARP discount on Movie Tickets!!
This can be a tough decision. I’ve commented before on my own situation. We would like to move to a different neighborhood. I would like sidewalks, another bedroom and a pool. Also, we currently pay for private school. We bought in 2001 and paid $180. We can easily afford our home. If we sell we will probably rent and continue to watch prices. I have two children and would not want to rent long term. However, we are only speculating as to the price drop. My price is already the lowest in the neighborhood. If I lower it to 300K or 350K, we also could be faced with a much larger mortgage in the future, depending upon how much prices drop. Currently, the neighborhoods I am interested in are asking anywhere from $700k to $1m. I think that is outrageous. We have no debt, make a great living, have plenty of savings and still are very hesitant. I don’t want to be paying for a house forever, nor do I want to live in my current neighborhood forever. I wish I had a crystal ball to predict exactly how low prices will go. I think eventually a 50% drop. However, I just don’t know for sure.
“I have two children and would not want to rent long term.”
I do not understand what does that have to do with renting a house? Why do people always say that about renting?
Do the kids care that you rent? All kids want is a nice place to play.
If I were you, I would list price it 20% below everyone else grab the money and rent until the market finishes crashing and then buy your nice house with pool etc…
You will kick yourself down the road if you do nothing.
SKB
The kids won’t care as long as they can stay in their rental and not have to move again. Also, rent will probably be more than our current mortgage. If we rent where there is a good public school, they can go there. However, I would not want them to continually change schools. That wouldn’t be fair to them.
You would think there would be lots of homes for rent that would be cheaper than what you are paying for mortgage, insurance and taxes in your area.
It’s a tough one for you, I can see that and I hope you do not find yourself seeing that 50% mark down and realize that it now also applies to your home too.
Man, if I owned a home in Florida right now that was purchased pre- bubble, I would not think twice about selling well below the comps and especially if I was not completely satisfied with it.
It surprises me that you are still not convinced after reading this site and I am sure others.
Best of luck with your decisions.
SKB
I think that SKB has given you very good advice. The other option is to do nothing. If you can’t add an in-ground pool without a reassessment of your house for taxes, can you add an above-ground pool without changing your taxes? If not, can you join a local country club with a swim membership? That weould have the added benefit of more friends for your kids.
Bottom line, in agreement with SKB, is that I believe it would be nutty to pay $700K for anything in that area right now, from what you describe. Any property that would be available for sale today at $700K, as a TRUE bargain, would be snapped up by REIC insiders before you knew about it. Little kids later remember (and care) little about their youngest years, least of which the size of their house or whether they had a a backyard pool. Keep your powder dry, sell your house after the bust for a lot less than you can get today, and buy the house of your dreams for a whale of a lot less than you thought you’d have to pay. All IMHO.
I completly disagree with any advice to sell now. Why put yourself through the stress of trying to sell in the worst possible market. If your home now currently cost less than it would to rent than just keep iving in it until you find the deal you feel comfortable with buying. Than you could rent your house and keep it long term.
Thanks for all of your advice. It’s very supportive. I am keeping my house on the market at present at approximately 40K - 50K less than everyone else as well as most recent sales. If I get lucky enough to sell below 30 -40K less than my asking, we will let it go and rent. If not, we will probably just wait it out. I really appreciate all the great wisdom that comes as a result of this blog.
The husband is already in Georgia waiting for her. Let the greedy little piggies hold on as the comps drift downward. Probably already bought a big house in the ATL and need all the equity they can get.
Well, really, something is worth what someone else will pay for it. So what if she makes some money. I’m not saying anything about greed or justifying her price, but she would be foolish to sell it for less than she can get for it.
Steveh;
You are so correct!!! You get a cookie!! Really, you are sooo right!!!
Thats the point, she isn’t there yet. She’s being an idiot. I agree, She would be foolish to sell for less than she could get. She’s not ready to go there, so she isn’t selling.
“Life stinks when your stupid” John Wayne. Steve, Her not you. I think you grasp ths situation perfectly!!
I purchased my house in CA for $179K in 1997, and sold it for $469K in August of 2005. Was I greedy? You bet! I see nothing wrong with Ms. Alvarez trying to be greedy. The only problem is, she is compounding greed with stupidity because she doesn’t realize the horse has already left the stable in terms of prices. Now, stupid I can’t abide…
Droog;
True, that. I’m also greedy, but not stupid.
Nothing wrong with making money. I’m sure you didn’t con the buyer into paying $469K. We’re all adults. You can’t be responsible for other people’s decisions, right or wrong.
The A’s problem is, as you say, greed or as I like to refer to it “being profit motivated”, mixed with stupidity.
“Life stinks when your stipid” John Wayne
Rocking-horse people reducing their wishing-well prices from 2006 by 5.5%. If this is how this housing thing is going to play out then it’s gonna be a lo-o-o-ong time before the penny hits the water.
i totally agree, the audacity of making herself feel like a victim with a 10,000 reduction, lower that price to 250,000, then see what happens, she will be priced out forever, s nonsense, in many cities in the carolinas, nice livable house are for sale for 125-150, and i mean a lot, and even some jobs available in same areas, she is so GREEDY
Today in the Palm Beach Post, Linda Rawls writes:
“Many think flippers are getting what they deserve now. They ran up home prices with their frenzied buying, this argument goes, when they had no intention of living in the houses and condoes they bought. Let them reap what they sowed.
That’s a harsh view, don’t you think? Whatever your viewpoint, one lesson from the current real estate market is clear: Real estate speculation is not for amateurs.”
At this point, it doesn’t matter what I think. The speculators that I know personally are strung out with 3-4 unsold homes and almost 5-figure monthly mortgage payments. It’s their behavior that has brought them to ruin, and not any ill wishes on my part. Good riddance!
I don’t think that view is harsh enough!
It’s not just speculators feeling the pain. Some homeowners are being taxed out of their homes. Prices moved from 150k to 400k in just 6 years! Incomes have not adjusted at this rate for homeowners to even cover the property taxes on their gains. Pretty soon homeowners may wish prices fall or they may be taxed out forever! Don’t you just love the irony of mania?
The only people being taxed out of their homes are those who aren’t homesteaded. They aren’t happy families with 2.5 children a mom and a dad with 2 dogs and a bird. SOH has protected actual year round residents.
That aside, I’ll put my spending cap argument back in. Repeal SOH and put spending caps in its place. There’s no reason my taxes should be allowed to increase more than 4 or 5% based JUST on the value of my home.
Andy,
I know you and I disagree from time to time, but in this area we are in complete agreement. Cap the spending, not the individual tax increases.
SOH is the best thing that EVER happened for rampant govt overspending. Why can nobody else see that? Oh, I forgot, greed is very effective at blinding most people.
There is not a flying chance in he** that will ever even make it to the ballot, let alone pass. Govt does not want it (because it would slow down the building of Taj Mahal buildings) and most of the voters don’t want it (because they have an artifically low tax bill already). But it is the right thing to do, and is also one of the only logical solutions.
I think the best thing that can happen, from a pragmatic point of view, is the passing of portability. That will immediately start a consituational challange, that will probably be won in court, which will remove the caps from everyone. Then we can really get the public behind the ideas of spending caps, not the crazy system we have today.
Mike,
A reasonable homestead of $75K or $100K would also solve the problem. $25K is not enough. $50K proposed by Charlie wouldn’t do too much…especially not as long as SOH exists.
Palm Beach County has been in a spending free for all since 2002. Now they don’t even want to maintain existing spending levels. They want to spend even more! On what? Pet projects. Until we get the crazies out we’re pretty much screwed.
The problem with 75 to 100 k homestead would be that some whole counties in fl would not pay any tax at all. It would work well for sfl however it would be disaster for the rest of the state.
I know of no area in the state that wouldn’t pay taxes at $75K. You could have a county by county exemption. You could also set up a “minimum” tax for those who would be set up to pay nothing or very little.
$25K exemption has been in place for decades!
I agree with Andy and Mike. There are some counties, like Dixie, that would suffer from a $75-100K exemption, but their population is so tiny that the state government could cover that with a dole.
Maven:
There is a prop tax cap on homesteads in Fla. I think it’s capped at a 1.5% per year increase.
There is no such protection on investment prop or second homes. my prop tax bill has gone up the max, 1.5%. My house is homesteaded.
You are correct. However, it depends on when you bought. If you are a long time pre-bubble resident, then you are probably taxed-in to your home but taxed out of your community. If you bought during the bubble and foolishly assumed like my buddy Bob your taxes would remain at the same level of the previous owner, then you are probably going to get taxed out of your home. Imagine paying bubble market value taxes for your current home year after year and you will get my drift. If you researched SOH and understood its inequities and never bought in the first place as a result, then you were probably taxed out of buying.
In reference to long time residents, however; some are being taxed out of their ‘communities’ rather than their ‘homes.’ If they sell and buy within the same community, their taxes are assesed at the new property’s market value and income has not kept pace with price gains (several percentage points above CPI) to offset the higher tax consequence. BTW, the cap is 3 pct or CPI; whichever is less.
Maven; You are correct.
Again, who would buy a house without first checking the……..Oh never mind. I’m getting a headache.
My advise “Start drinking heavily!” Bluto to Flounder, Animal House
During the Dark Ages this is how serfdom began. It’s too bad that owners can walk away from negative equity. Imgaine buying a distressed property with household staff attached.
When I was a kid and i would screw up, my momma would wup the tar out of me.
As an adult when I screw up, it costs me real money. I’d prefer the wuppin’, it’s less painfull
Why should the flippers be any differant? Can you say “consequences for your actions”? Unsophisticated Speculators are a big cause of the problem all us taxpayers are going to have to pay for. Who do you think will unltimately absorb the debt?
Consider this: You’re a flipper. You loose your a** on say 5 houses. You’re bust. Guess what you have? A huge write off. Oh no, it’s capital gains, so you have to have a capital lose to get a write off, right?
Wrong again batman. If you buy or sell more than two houses a year, the IRS can classify you a dealer and your gains and losses are ordinary income. In this case the flipper would be a dealer.
So, the flippers get a huge loss carry forward (or carry back, whatever works) meaning they pay little or no taxes until their future income (tax free) eats that up. Meanwhile, the real taxpayers money is used to “bail out” the banks, Fannie Mae, Freddie Mac, Freddie Kruger…whoever.
A pox on them. They caused it, we’ll pay for it and they’ll get a taxbreak. I say open up a can of wup a** and put it on ‘em!!
“If you buy or sell more than two houses a year, the IRS can classify you a dealer and your gains and losses are ordinary income. In this case the flipper would be a dealer.”
Although I hate taxes, I can’t make them go away. So I hope that the IRS devotes enough of their resources to catch these multi-flip “dealers.” They have screwed prices and taxes in my state and it will not be “the same again” in my lifetime.
Chip;
I’m with ya, man!
Unfortunatly “stupid” is not against the law.
From the tax perspective,a flipper that kept flipping until he ran out of greater fools could possibly be in a real sweet tax situation….or the reverse, oweing taxes, while being bust. You do not want to be there. It would be poetic justice. It’s a tricky situation, if you know what you’re doing and actually watching it, or better have a real sharp CPA that you talk with at least monthly.
Hey Flippers, it’s 10:00PM. Do you know what your tax position is?…didn’t think so.
Alvarez and her husband bought their home in 2000 for $147,500
And the asking price for the three-bedroom, two-bath house is down from $399,000 when it was listed in October to $389,000.
She could drop the price to 289K and still walk away with about 100K in profit provided she isn’t HELOC’d out the wazoo.
Even at 289K she won’t be able to move it. There are no buyers and those who would like to buy won’t because the word is out that the bubble is bursting and people are in pain because of their houses. Only those who have to buy will, but is there a such a thing as have to buy?-not. Like someone mentioned
before,sellers at this point are still in the stage of denial, by the fall things should really look very different as we are now only seeing the tip of the foreclosure iceberg.
Speaking of “the word is out that the bubble is bursting” - My girlfriend and I were having dinner last night when we over heard a guy two tables over trying to impress some bimbo about his real estate knowledge. He was saying how he was into “real estate development” blah, blah, blah…but then he says: “things have reallly slowed down though” I almost choked. Moral of the story, even the buffoons are now starting to realize.
I was at a Super Bowl party here in Tampa and silently listened with amusement as one guy described how hosed people in his neighborhood were. He related that they had bought in 2000-01, had seen their houses double in value, and had reacted by taking out home equity loans to purchase BMWs. Now that home values were falling, they were in trouble.
It’s been months since I heard anyone here talk about real estate as easy money. Still a few ignorant or wishful-thinking people making bad choices, though.
I think there are still plenty of people who have no clue.
Last night on a discussion forum I read on a regular basis, one guy posted about buying a 350K condo in the Las Olas area in Ft. Lauderdale because “it’s a good time to buy.”
He lucked out and the flipper rejected his slightly under asking offer. I told him he should wait at least few years because prices are only going to come down and that the South Florida market is totaly over built. So far I have heard no end of the whole “real estate only goes up” chants from other people posting there.
gotta link handy?
I agree, most people I know aren’t buying homes because they simply can’t afford to. They say things like I wish I could start building some equity but there’s just no way I could afford a house, the prices are ridiculous. The renters have become content with renting and gotten used to the amount of cash they have to go shopping with, the idea of their housing payment doubling and losing their spending money isn’t even a consideration.
In Florida everyone silently fears that once you buy a home SOH is going to trap you in that home unless some sort of miracle tax reform happens. Not very likely.
They say things like I wish I could start building some equity
They can. Buy treasuries.
LO,
I agree with you, and that is something we don’t talk about much.
I have become very content with my available spending cash every month. My rent is currently shy of 2K a month, and the home I live in last sold for 510K. It is going to take a massive amount of correction to get me to even consider to buy in; I don’t really want to change my lifestyle, especially not to be caught in the crazy FL taxation system.
Lot’s of people have predicted this, but I think I am going to be one of the “backlashers” against housing. It will almost have to be cheaper for me to buy then rent for me to want to do it, especially with the draconian tax laws down here. Losing my spending money, even though I could afford it, does not seem like a very good idea to me for a very shaky investment.
Intersting comment, and one that I can definately see happening in my everyday life.
“My rent is currently shy of 2K a month, and the home I live in last sold for 510K.”
Where are you living Mike? You can buy in Olympia right now in the $330K neighborhood. That’s down from $550K at peak for a “similar” model. You know Minto will change the name to prevent backlash from suckers that bought high.
Taxes: $555 monthly
Insurance: $182 monthly
P&I on 30 year mortgage: $1543
Monthly Total: $2,280
I’m not saying we’re there yet…but it’s getting closer. Don’t expect to see SOH go away. Just make sure you buy in as close to the bottom as you can. End of ‘07 or first quarter of ‘08 is my prediction right now. We’ll see if I’m a genius or just another one throwing out numbers.
Andy — $330K in Olympia as a “fair trade” for rent assumes two biggies:
1. that the $330K house is anywhere near as nice as the one Mike is renting;
2. That prices will not drop further.
My bet is that Mike will stay where he is, as would I. In Florida, we are well away from the bottom, IMO. In my own case, due to age, I believe we are so far away from the bottom in prices that I’ll move out of state to have a good quality of life for my final active years. Unfortunately, Florida is screwed until prices revert to the long-term mean. There is no political solution possible, short of Iowa bailing us out, that will change that.
I’ve been renting and looking for a quite a while. My Realtor doesn’t know that there is a slow down in the housing market.
Translated: Your Unrealtor doesn’t want YOU to know there is a slowdown in the housing market.
Fire her immediately.
I like her, but I don’t trust her. Here is another example. The FAA has placed a new flight path right over the town. The local newspapers say that Town Hall has a task force attempting to change it back. I get woken up at 3am by low flying planes. The NYT published a map of the new flight corridors. I asked the realtor if she knew anything about it. She said, “No one in my office has said anything.”
May be a true statement, but completely misleading. She and her company should get sued.
I like her, but I don’t trust her
People who are untrustworthy are just not worth the extra gray hairs. They often have enough charisma to cause people to “like them”, which is why they get continued business.
Really recommend finding someone who is at least knowledgeable enough to know that the market is in trouble.
Every Realtor that I’ve ever gotten to know has been slick with their answers. I don’t think I can find anyone better than her and I need her access to the MLS.
I like her, but I don’t trust her???????
Have you lost your mind???? You don’t TRUST her?? There are specific reasons why you don’t trust her. Fire her. There are a lot of smart, ethical realtors.
Unless shes hot and you’re boinking her, than maybe it’s worth the risk.
I’m with ya dude! (Thats the little head talking)
Unlike many posters here, I’ve had a lot of good experiences with real estate agents. But I would never continue working with one whom I did not trust. Sorry for the offense, but that’s in the “duuuhhh” category for me.
It’s sorta like fruit in the supermarket. If it smells bad, you don’t buy it. The dumbest kid in your class probably could have told you that.
Chip….he definitly has to be boinking her, no doubt.
The irony is that she admits that she could not buy at her asking price, and would be priced out herself. She should figure out which price she could afford, and that should give her a sense of a reasonable asking price.
That’s a good one. In addition, to taxing themselves out of the market South Floridians have effectively priced themselves out of their very own communities. Now, don’t you think everyone would be happier if prices fell?
“She should figure out which price she could afford”
No, because her area, like all other areas, has been “discovered” by The Rich (”we’re the next Santa Barbara/Malibu/Manhattan”). She probably thinks that she is a genius for buying a house in an area that The Rich eventually wanted to move to.
Just like every other real estate market.
“Some buyers are having trouble getting all their deposit money back. That’s because some of their money was released to developers for construction, even though the condos weren’t built.”
I bet this is because the “developers” made sure not to use any of their own money (if they even had money) and instead used the buyers money that was suppose to be used to build. Just a bigger example of those late nite TV commercials where they say you can be a RE investor with no money down
I wonder how many of these people who are losing their deposits balked at having them put into an escrow account when they bought because it costs a few hundred extra dollars to do so?
When I bought new construction in South Fl in 2000, I was told I could have the deposit held in an escrow. Of course when I asked to have it done the sales people tried to talk me out of it and were all kind of annoyed at having to fill some extra paperwork.
Been There;
As a Licensed Real Estate Broker in Florida, I can assure you the law says a deposit, when given to a Licensed Real Estate Sales Person or a Broker HAS to be put in an escrow account.
The developer can sell his property without licensed personel, but he still is subject to parts of the escrow law.
The Escrow Requirements are so Draconian, most Brokers do not have Escrow accounts. I use my Lawyer and his escrow account.
If you have a problem, or if anyone has a problem with escrow money call the Florida Real Estate Commission. FREC pounces on escrow irregularities.
Also, there should be no charge for putting your money in escrow. It cost the Broker nothing, save for some bookeeping expense, which he has to incur anyway. That doesn’t sound right.
Mike, I bought from a developer and had to pay to put the deposit in escrow. It wasn’t a whole lot, probably less than $200. I remember the sales person getting kind of pissy with me because I decided to escrow the deposit. She told me “we’re not going anywhere” and I remember thinking there was no way I was risking the 20K.
It’s all water under the bridge now. I sold the place in 2005 and walked away with more than twice what I paid for the place and left Florida, never to return.
‘made sure’ … to use other people’s money …
http://www.imdb.com/title/tt0102609/trailers
Those “get rich in RE” are still running with a vengance down here (Tampa/St. Pete) they also play on Sunday morning, at least yesterday. Can’t really understand that unless the time was purchased long ago. There have been an increasing amount of ad’s TV and radio pushing the “buy foreclosed property” Mantra over the last couple of weeks as well. Also to note is the increasing amount of for sale signs that are starting to appear and the addition of the little “REDUCED” sign placed on the signs that have been up since last Spring and even some signs that have had the Sale part covered with Rent. Looks like a good time to buy, should I buy 2 or 3?
Robert;
I like it when the signs have been up so long the paint fades and they start to colapse, i.e leaning over, warping in the sun etc.
I … can’t …resist…. ROBERT…You should buy, NOW 5, 10, 20,…or more!!! Don’t you listen??? This is the best time to buy!!!! Don’t miss out!!!!!
I’ve been drinking. Sorry. I got caught up….wait….it’s a GREAT time to buy…….a little relapse…….I think I peed myself….
“Can’t really understand that unless the time was purchased long ago.”
Actually, the infomercials pay a percentage of their sales for the air time so there’s no investment up front. The stations have to fill the time somehow and this is the cheapest way possible. Any income from them is gravy.
‘The condo market is in danger of choking on its own leftovers from the housing boom. The supply of available condos has tripled over the past year. There are now almost twice as many condos as single-family homes for sale in Miami-Dade and Broward counties.’
“As a dog returneth to his vomit, so a fool returneth to his folly.”
1st Peter 2:22
Sorry — Biblical scholars will be quick to point out I screwed up my reference, which s/b Proverbs 26:11.
ok, good reference, but couldn’t you have waited until I finished my coffee.. on the way to the movies downtown (about 4 miles) there were over 10 open houses yesterday… Amazing.
I almost spit out my own coffee on that one
At least there is some nutritional value left in a dog’s vomit.
Strange ,my dog did vomit last night but she didn’t return and eat it up ,(my dog is smarter than a flipper ).
Really I think the flippers are getting what they deserve because it was pure greed that moved them to buy these properties . The whole system supported the flipper greed (with TV shows showing people how to flip ) . During the bubble renters were put down for not getting into the money tree action .
God bless any renter that held out and didn’t buy in to the mania ,and I hope you people get a nice affordable house after everything is said and done for pennies on the dollar .One should be rewarded for being responsible,while the flippers should pay for their choice .
Oh, we will get that affordable house…we will.
In a strange but metaphorical way I have a story to relate.
My dogs eat their own poop. There is a pill you can give them that will stop them from doing that. A pill that makes poop taste bad!! I would have thought poop tasted bad enough already….which raises the questions who determines how bad poop tastes?? Would you like that job??
At anyrate, how would you determine how bad poop tastes and how would you develope a pill that makes it taste worse??
Questions to ponder, along with why don’t seller’s get it????
I caught a Realtor in my back yard, telling one of my dogs poop was really good to eat and if he didn’t eat it, he may not get a second chance. It is, he pointed out “a poop eaters market”
I’m thinking of eating poop. I mean if the Realtor said so, it must be true………
“As a dog returneth to his vomit, so a fool returneth to his folly.”
Or a like a gnat to a dog’s weiner.
“Or a like a gnat to a dog’s weiner.”
Dang, Palmetto… Someone please gouge my eyes out so that I can get THAT image out of my head.
“The average condo asking price in Miami-Dade went down 12 percent in 2006 to $532,000. In Broward, it dropped 11 percent to $354,000.”
And here’s why things are even worse than the above figures imply. In 2005, condos sold at or above the asking prices. In 2006, condos sold below the asking prices.
“Buyers of canceled condo projects in downtown West Palm Beach are becoming increasingly angry, and frantic, over unrefunded deposits on units, and unfulfilled contracts.”
It sounds like the buyers of cancelled projects have reached stage 2 of the housing bubble stages of grief…
1) Denial
2) Anger (Check)
3) Bargaining
4) Depression
5) Acceptance
http://survivingthecrash.blogspot.com/2006/10/five-stages-of-grief.html
I have a different take for the real estate cycle
1) optimism
1) optimism
Depression
2) excitiement
3) Thrill
4) Euphoria
5) Anxiety
6) Denial
7) Fear
9) Panic
10) Capitulation
I have this on my bulletin board.
http://bigpicture.typepad.com/comments/images/sentiment_cycles.jpg
11) Annihilation
12) Extermination?
13) Death
14) Pugatory
15) Reincarnations as Stock Brokers
Repeat the above cycle
11) Suicide
Can anyone explain to me how Zillow comes up with the values it states for homes? It appears they are “behind” on valuations. Are they 6 months or 12 months behind? Thanks.
Think chimpanzees with darts, and you won’t be far off the mark…
LMAO!
Like this one?
http://www.cramerwatch.org/
Whatever the formula is, it’s not based on reality. We sold last year (near Seattle) - initially the listing price and the “zestimate” were close, but after no offers we had to lower the price several times, while bizarely the zestimate ramped up over a few months until it was 100K above the eventual sales price. We knew all the comp houses and prices near us, and the zestimate made no sense. The house took 4 months to sell. Nothing else in the area was selling. Some houses were put on at “maybe we’ll get some out of state fool that doesn’t know the market” wish prices. Even now, zillow shows the actual sales price, but still has the same ridiculous “zestimate” not affected by the actual transaction.
Stucco:
ROTFLMAO!!!
Think blindfolded Chimps with darts
they’re right on in my hood 22151
were lagging 6 months
You’ll have to explore their website for details, but it’s some sort of proprietary formula. It’s likely a better tool in a “normal” market, but for one changing as rapidly as today’s, it’s far off the mark. Zillow in my neck of MD is at least 10% high, and many cases are even higher.
For whatever reason Zillow is always 10% to high from what is currently happening in my neck of the woods. My guess is that many realtors have been using Zillow to convince buyers to buy claiming that Zillow is a market appraisal .( I dare one realtor to tell me that many realtors didn’t use Zillow for this purpose if it suited them ).
‘It’s likely a better tool in a “normal” market, but for one changing as rapidly as today’s, it’s far off the mark.’
Bingo. You can’t price off the comps during an inventory correction.
according to a neighbor who is selling her house, zillow is off by about 100K (i.e zillow inflates the value of the house by 100k)
Zillow is about 10% high in Phoenix, if you compare to recent sales.
The fun one is checking the houses for sale on zillow, those are usually ~5% higher than the zestimates (15% higher than comps). I guess all those houses are just “different”.
Thanks all for the local market observations about zillow. So, zillow is still useful in the sense that taking at least 10% off zestimate can be the starting point for negotiations. Also, the falling trendline at zillow can be used in negotiations. After all, people would argue houses are not like stocks and prices tend to be sticky on the way down…so a falling trendline will not suddenly reverse.
Zillow is only useful regarding its data on some market comps . You would still need to check out those comps to see if they are comparable to the property you are interested in . Also Zillow can be behind on recent closed sales or sales that are in escrow . In some areas Zillow is off by a huge margin ,(more than 10% ).
I was living in Tampa is 2005. When I had my back operated on, I got to know the recovery room nurse. He owned - get this - three houses that he did not live in. He was thinking about selling them. This was in October of 2005. I knew then that the market in Florida was “maxed” out.
The job base will not support these prices. I also wonder about the “retirees” that are going to retire there. Hurricane evacuations will get tiresome. If a strong one hits, think about being 80 years old or so and having to deal with that. Remember the retirement homes in New Orleans during Katrina?
Roidy
Speaking of the Southern Cesspool, here’s one you can’t live without:
http://neworleans.craigslist.org/rfs/279505250.html
Braggin’ rights to the longest house on the street and features such as linoleum floors and asbestos roof. Who could ask for anything more?
My favorite part was “This home has many possibilities”
The best possibility would involve a bulldozer.
Down here, anyone who suggests using a bulldozer on the rotting crap that’s still standing is labeled a racist.
You’ll be proud to know YOUR hard earned tax dollars will be spent rebuilding houses which will be up to 8 ft below sea level……and continues to sink at the rate of 1/2 to 1 inch a year.
If you live in Houston, you’ll be happy to see it.
It is so much better to know that my tax dollars are building schools and hospitals in Iraq and then bombing them, and paying mad dividends to holders of Haliburton stock.
You are a racist because the only thing you have to say to those people whose homes you want to bulldoze is Eff you very much.
If your alternative is hey my black brothers and sisters come live here on the high ground with me…then not racist….but if like most people who are screaming “BULLDOZE” you would prefer the American citizens have the “decency” to hang out in the home while you bulldoze it then damn straight you are a freaking racist.
This has been another installment of simple answers.
Kennybabes;
“This has been another installment of simple answers.”
Allow me to add, “rambling, unitelligable and irrelevant answers”. Where the hell do you get racist out of any of this?
The only color anyone cares about on this blog is green.
You should start a bog “Icanfindracisminanything”.
These posters here have never said anything that remotely could be interpreted as racist. If so, half the bloggers would leave here and besides Ben wouldn’t allow it. Don’t try to start some racial fight.
Go complain on Hillary’s site.
Retro style housing back to when asbestos was popular.
Who could ask for anything more? Me, that’s who! I’m asking for lead paint to go with the asbestos roof and lino floors.
Maybe some lead paint?
“The irony is that if Alvarez sells, she, too, will be priced out of the region. If Alvarez ever buys in South Florida again, she will be hit with much higher property taxes and insurance costs. ‘We’ll never be able to afford to live here again,’ Alvarez says matter-of-factly. ‘We don’t plan on coming back.’”
We also could not afford to come back. I don’t see how a lot of retirees can afford to go there now. Unless the legislature can come up with a solution to the problem of high taxes and insurance, this is the death knell for Florida real estate.
I still have to send the kids to college, but I’m thinking Havana will be nice for at least winter get-aways.
why does legislature have to do anything? get the house prices to normal and affordable and the taxes and insurance will go down. The spec’s and out of stater with their second homes ran prices up - they should pay more - those of us who live here deserve SOH to protect us. Get prices down 50 -75% like they were in 2000 and the rest will follow
Well, Mr. Affordability, SOH is working great for you, but just wait ’til you (or your heirs) have to sell your house and potential buyers learn what their taxes will be.
When the county wants to raise taxes, they can’t get all the money they want from you, so they have to hit up the new buyer for both your share as well as the new buyer’s share.
As time passes, the discrepancy gets worse.
SOHers can never sell unless they move out of the state. More and more potential new buyers refuse to buy because they don’t want the astronomical tax bill.
Spending caps are a FAR better solution. SOH is the sucker solution- politicians are playing the homeowners for suckers.
“‘I’m getting calls from Realtors. They are saying the market is really bad and you are going to show how bad it is,’ said William R. Bone, president of the National Auction Group. ‘They are afraid the condos will sell real cheap and hurt everybody,’ Bone said. ‘Everybody’s property values are at stake here. But something’s gotta happen. Things will move at some price.’”
Mr. Bone, I’ve given this a lot of thought. From now on, your Delta name will be “Sucka”.
An Animal House reference?
I thought Bone was a good name for him, since that is what he’s going to give the local realtwhores.
These realtors are full of crap. How is affordable housing going to hurt everybody?
The irony is that their income is transaction-based.
….I would want my Delta name to be “Bone”.
“Face it Bone, you screwed up. You trusted us”
…yeah, in fact from now on, I will be known as “Bone”.
Look for me on “Desperate Housewives”.
“Oh, Bone..tell me again about ARMs and stated income loans” she purred
“Only if you promise not to scream again” Bone, said as he swaggered with the confidence of a Developer at a Condo Auction.
“Let show you the NINA” He said seductivly
“Nina???” she replied, panting, almost breathless
“Yea, baby…No Income, No Assetts” He smirked.
“Hey…I told you not to scream!!…..
Olga Alvarez has opened her house to buyers. ‘The house is priced well; there is just a lot of competition,’
Well, no actually if it is not selling it is not priced well. These sellers think that because buyers temporarily lost thier minds that it will go on forever. Olga your home is OVERPRICED, it is sick, the medicine for this sickness is to lower the price-OLGA-TAKE YOUR MEDICINE!
This jumped out at me too. Supply and demand.
The Alavarez’s are HELOC’D to the eyeballs, or they would hold a 7 day absolute auction starting at $299K or less….
Even if they got one bidder they doubled their money….what morons!
I want everyone to watch carefully what’s happening in Florida. Here we have the worst kind of environment for homeownership: rising taxes, a cavalcade of crooked lenders, the vulnerable non-working elderly who will need more and more police and social services to survive, low-paid labor with a tomorrowless future, a fleeing middle class, subpar schools and an endless supply of dead-end service sector jobs. I don’t know about you, but it’s sounding like America 2020 to me.
Another good post Quirk. I like it here, but I’ve written before that I doubt whether this state will have a liveable future. Large parts of it could become like Detroit, only with more theme parks, golf courses, and humidity. Not exactly a good place to be owning property. I think prices are one destructive hurricane away from outright collapse.
I’m not sure that the parallel fits, except that neither place will be a good place to own property. Detroit was abandoned by everyone that could afford to leave. Crime and riots. Then the affluent and then the middle class realized that they could leave Detroit and move to a suburb. Anyone that had the resources to leave did. The state built freeways, services and the jobs moved with them in ever expanding suburban circles. To make sure that no one wanted to stay, the city passed an income tax which meant that there was an additional economic reason to leave. Now Metro Detroit is screwed because the jobs have moved to
China, or Mexico or wherever. At one time, there were good incomes in Detroit. Florida’s median family income is still 15% less than Michigan’s and this was based upon a building boom based economy. Not saying one is better than the other. Both are screwed, but for different reasons. Florida’s fall might be more painful. No one in Michigan has ever been under the illusion that millions want to move there. They’re still living the old paradigm and Florida is about to find out what the new paradigm really is.
I’m been in Florida since 1980. One of the reason i came here was because everything was reasonably priced.
I agree, in the past 5 years, most of that has changed. This is a huge State, with millions of unoccupied acres. Believe
it or not, only 30% of the developable (is that a real word? you get my point) beach front property has been developed.
We ain’t running out of land. Theres lots of it. The wheather is great, save for the occasional hurricaine or tornado.
The mantra is that Floridas populations will continue to explode and RE prices will continue to skyrocket. I don’t see it. I agree with you guys.
Like the Mel said in Air America ..”Never make a move too Fast”.
This nasty REIC mess is still agitating in the washing machine and IT is bearly into it’s 1st(First) Spin and Rinse cycle. We have a lot more wash and spin cycles to go in this beat up old Whirlpool Washer before all the SCUM and GREED washes OUT and goes DOWN the Drain!
P.S. As we know, most discharge drains are normally located AT the BOTTOM of the Floor.
A spin cycle is a good analogy for Florida.
However, after getting out of the old Whirlpool, this load is going to be placed straight into a new Maytag for a 2nd wash. (And its one with pre-wash).
When one or two of the big mortgage companies go… then we’ll know the market is primed for its correction. Not until then.
Its a slow train demolition derby on iced tracks. Predicting when the impact will occur… is tough. Predicting that the fools partying in the car behind the 1st locamotive will get flattened… Not so tough. You can even see people 5 or six cars bailing out (the train is passing some ok sand and the landing won’t hurt THAT much).
Bummer if you decide to bail up ahead where the thistles grow… and some will stay onboard until the crunch.
Got popcorn?
Neil
Anyone seen the new ads on “how to make money on foreclosures”? This ponzi scheme is continuing. But what do I care. As long as there are GFs continually available to hold the bag on the way down it is great. 2010-2011 it is!
Please do not forget that SOH applies only to US citizens or green card holders…a foreigner legally in Florida year round sees his taxes go up dramatically..this is another form of discrimination that will drive Venezulian, European, and all foreign investors out of florida!
“‘I’m getting calls from Realtors. They are saying the market is really bad and you are going to show how bad it is,’ said William R. Bone, president of the National Auction Group.”
More attempts by self serving realtors to lie about and manipulate the market. Reminds me of Gary “15% is in the bag” Watts suggesting that realtors not put up signs so that prospective buyers wouldn’t know the true extent of the inventory in so. Cal.
“Bone said his office received 1,200 calls about the Ocean Walk condos and more than 500 people toured the property before the auction. “The Realtors keep saying these people are bottom feeders, but who knows where the bottom is?” Bone said.”
I like this guy - he is letting people know what realtors are really saying and also implying he doesn’t think the bottom is in.
There is a lot of information, there is also a lot of mis-information.
Obviously, realtors are optimistic. Most realtors dont make more than $40,000 a year and cannot read an MLS listing. I think looking for another home in FL was one of the worst experiences in my life.
When looking for a home I knew more about the properties than the real estate brokers. It was frightening and a clear indication of a bubble. You can tell I do not love realtors. Some are awesome, but they are few and far between.
All the indicators point to a severe housing contraction. Over supply, rising interest rates (and they will rise unless recession), bad credit, foreclosures etc.. The U.S. has conditioned everyone to take out more home than they can afford. This is all going to come home to roost. Our homes are NOT ATM’s.
Lenders are tightening standards across the board. Lenders are going to have to buy back a lot of crappy loans. They are going to go out of business. Lenders and construction employment numbers will suffer.
There are too many cons and not enough pro’s at this time.
It is a decent time to buy, I think prices will work 20% or lower this year in FL. If you have to sell, be prepared to get aggressive on your price and possible take a loss.
Be sure to watch the late night “you too can be rich in the foreclosure market” info-mercials.
The shoddy work:
http://bn9.com/content/36/2007/2/19/224829.html?title=Tampa+woman+crashes+through+attic+floor
NIMBY
http://bn9.com/content/36/2007/2/19/224908.html
Total denial
http://www.tampabays10.com/news/local/article.aspx?storyid=49478
“Alvarez and her husband bought their home in 2000 for $147,500. Since then, prices in the neighborhood have more than doubled.”
Apparently, they have not doubled. At the very least, sales at those prices have indefinitely retreated.