Sales Pace “Remained Slow” In January: FAR
The Florida realtors have the January numbers out. “The pace for Florida’s existing home sales remained slow in January, according to the Florida Association of Realtors. Statewide, sales of single-family existing homes totaled 9,382 last month compared to 12,906 homes sold in January 2006 for a 27 percent decrease.”
“Sales of existing condominiums in Florida also decreased last month, with a total of 3,007 condos sold statewide compared to 4,279 in January 2006 for a 30 percent decline, according to FAR.”
The Herald Tribune. “Sales of existing homes dropped 8 percent in the Sarasota-Bradenton market during January, which was one of the best performances statewide. But prices dropped 20 percent in the two-county market, the biggest decrease in the state. The median sales price was $284,400 during January compared with $353,500 during the same 2006 month.”
“The Charlotte County-North Port market reported a 20 percent drop in sales. The median sales price in Charlotte County-North Port during January was $199,400, a drop of 12 percent from $227,400 durign the same month in 2006.”
The News Press. “The number and prices of homes sold in Lee County fell in January compared to a year ago, according to statistics released today. According to FAR, the number of single-family homes sold with the assistance of a Realtor fell 34 percent in January to 492 from 751 a year earlier. The median price fell 7 percent, from $287,200 to $266,900.”
“For condominiums, the price fell 9 percent from $313,800 to $285,000 while the number of sales dropped 40 percent from 229 to 138.”
“Charlotte County’s price for single-family homes fell 12 percent from $227,400 to $199,400 while the number of sales fell 20 percent from 194 to 155. For condominiums, Charlotte showed a drop of 5 percent from $185,000 to $175,000 while the number fell 56 percent from 45 to 20.”
From MarketWatch. “Two home builders with operations in Florida said they’re seeing quarterly losses driven in part by the Sunshine State’s ailing housing market.”
“Hovnanian Enterprises Inc., one of the nation’s largest builders of homes, said Tuesday it expects to post a loss after charges for its fiscal first quarter ended Jan. 31. Hovnanian said it expects to book about $90 million in charges related to operations in Fort-Myers-Cape Coral, Fla., ‘due to a continued decline in sales pace and general market conditions, as well as increasing cancellation rates, during the quarter.’”
“Hovnanian said net contracts in its fiscal first quarter fell 23% from a year earlier. The company said the Fort Myers-Cape Coral market ‘continues to face increasing resale listings, including many home listings that were recently constructed and purchased by investors.’”
“Cancellations were 36% of gross contracts in the first quarter, or 29% excluding Fort Myers-Cape Coral.”
“Analyst Daniel Oppenheim said the expected charges are related to Hovnanian’s August 2005 acquisition of First Home Builders, a move to position itself in the Fort Myers-Cape Coral market. First Home builds in western Florida and provides financing.”
“Oppenheim, in a note, estimated the $90 million expected charge represents nearly the entire purchase price of the First Home Builders acquisition, which speaks to the ‘continued deterioration in the market.’”
“A tough Florida housing market also hit WCI Communities Inc. The tower and home builder said Tuesday it swung to a loss in the fourth quarter of $64.6 million, or $1.52 a share, as it booked real estate inventory impairment losses of $91.4 million.”
“The Bonita Springs, Fla.-based company said margins were hit by greater use of incentives and discounts due to rising inventories of unsold new and existing homes in its markets. ‘Our Florida markets, which account for approximately 85% of our business, experienced the greatest slowdown during 2006,’ said CEO Jerry Starkey.”
“In WCI’s tower business, the CEO said defaults and construction delays negatively impacted earnings. The net number of new tower orders for the fourth quarter was negative 22, as defaults of 27 were greater than gross new orders of five, WCI said.”
“Meanwhile, in the traditional home-building operations, revenue fell from a year earlier as 22% of buyers scheduled to close defaulted in the fourth quarter.”
From Reuters. “‘Because of the lack of visibility on demand, cancellations that we’ve experienced … we’re withdrawing the guidance that we provided previously and believe that the most important metrics for WCI to focus on during 2007 is cash flow and debt reduction,’ Starkey said.”
The St Petersburg Times. “In January, Tampa Bay area home sales plummeted 41 percent from a year earlier. Catastrophic? You wouldn’t think so if you counted all the Realtors still on the job. In Pinellas, Pasco and Hillsborough counties, only about 10 percent of Realtors have failed to renew their licenses and memberships.”
“‘The Florida Association of Realtors expected a 20- to 30-percent reduction. We got nowhere near that. We think most Realtors are remaining optimistic,’ said Heidi Beisner, president of the West Pasco Association of Realtors.”
“Not everyone abhors a thinning of the herd. Realtors like Beisner rate quality as important as quantity. And quality tended to slip in the 2005 housing gold rush. ‘Some people who had gotten lucky at first but didn’t have a lot of experience have left,’ she said. ‘It’s always good to know you’re dealing with a real professional.’”
“Southwest Florida’s large unsold-home inventory has crippled the new-home building industry and forced other builders to desperate measures. ‘I’ve got half the work I had a year ago,’ said Cape Coral’s Jack Organo, owner of Bennett Marine Contracting & Construction. ‘The phone just doesn’t ring as much anymore.’”
“When the housing market started to nosedive late in 2005, dock builders started sinking as well. ‘Our business is down exactly 58 percent,’ said Chris Mynhier, of Boat Lift U.S.”
“‘What we are going through is almost identical to what home builders are going through,’ said Organo.”
“A sagging real estate market is driving another market: unfinished single-family homes with weed-infested lots. There are 4,914 single-family homes for sale in Cape Coral, according to the MLS, said broker Scott Marinelli.”
“The falling price of homes in the Cape has contributed to the problem, said Paul Dickson, city building official. Investors who built homes now could be walking away from the homes they hoped would give them $30,000 or more in profit, he said.”
“A city-painted message warns people to stay away from the unfinished home at 1904 S.W. 54th St., which is about a half-mile from Cape Harbour’s two high-rise condominium towers at the southern end of Chiquita Boulevard.”
“‘Notice unsafe building city of Cape Coral’ is scrawled in red spray paint across the front and sides of the hulk.”
“The empty canal-front lots on the street list at more than $500,000. Off-water homes have been assessed at more than $300,000 in the neighborhood, stated (a) property appraiser’s Web site. ‘This house just turns people away,’ neighbor Bill Long said. ‘It brings down all our values.’”
“Robert Schaeffer also says the property values in his Southwest 12th Avenue neighborhood have been affected by the downward trend in home sales. ‘My neighborhood is far less than a few acres in size; however, look at what the neighbors have to face,’ Schaeffer said. ‘There are now a total of 41 homes for sale, rent or vacant in our neighborhood.’”
“Drive through Schaeffer’s neighborhood and it is a patchwork of nicely kept single-story, stucco homes and an overgrown mess surrounding vacant homes.”
“‘My neighbors are sick and tired of the way our neighborhood looks and sadly it is now typical of so many other neighborhoods in Cape Coral,’ Schaeffer said. ‘We want our neighborhoods to look like they did five or six years ago and not like a slum filled with abandoned homes and overgrown properties.’”
At the bottom of the first link are tables that have metro area detail.
Interesting how the Naples realtors have decided to play ostrich and not report the news because it’s bad. Anyone in FL have any anecdotal info as to what’s going on there?
The Case-Shiller Housing Indexes for National and metro areas:
http://macromarkets.com/csi_housing/map.asp
I think Naples folk are scared witless. I know many who own multiple homes, thinking RE could only go up. They content themselves by saying that a huge majority of Naplesites have their houses paid off completely. But I don’t think that is true. All my buddies are holding paper, and even though very well off, they also took out ARMs thinking that these places were better than the best way to get rich.
Does anyone else have any Naples intelligence?
This past weekend Veronawalk had a “sale” $10k to $60k off.
Across the street at Lely Resort were I happily rent, there were a couple dozen open house signs.
My neighbor had an open house, I didn’t see anyone come.
Thus I rent my $315k condo with $675 quarterly hoa and god only knows what taxes for $1050 a month.
Hey Ben, tx chick, Fl Market Maven , bantering bear, imploder, Neil, Sammy, and all you regulars:
I just today got a check for 60,000. Tax free also. Long story short, a buddy is trying to get me to invest in mutual funds with a company named edward Jones.
Just decided since all of you are also my friends here on Ben’s blog I would ask your opinions as to whether putting the money in a mutual fund at this time makes sense. Or maybe I should just put it in a CD and forget it for a while till we get some stability in the economy. I have to drive up to St Petersburg fl here at 4 PM florida time to go get the check. I cant wait to get back home and see what your opinions are. Thanks. Im lucky to have resources like all who post on bens blog. Im really looking forward to a lot of good advice and good opinions.
No. The market is in turmoil and has had a glorious run up. Now would be a bad time. Besides, he is not saying of those funds are loaded or unloaded and today, ETF’s are much cheaper way of trading market or sectors, than mutual funds.
Isn’t Edward Jones just a brokerage firm? Nothing special about them.
I you want to open and account, I suggest you could open an etrade trading account and bank account and get ~5% in their savings account. If you decide you want to trade, you can move under your own direction without need for middle man to take their account. You need to decide what he wants to do with the money yourself.
Be wary if you friend has a linkage to his advice. If he talking about “Dollar cost averaging” run !
(btw: Since you have some money come your way, I also have a good Dr. friend in Nigeria that has $100m in a bank account that will be lost by next week unless we move quickly to move it out of the country. Please IM me your account details, ss number and we can transfer it to yours for a 40% cut.)
Unreal. My offers taken on 30% of my index puts. They were “joke” offers.
Tx I had a sell price on my QID that I never thought would get hit yesterday.
Now I miss them.
That is I placed an order last night at at should’ve been a wishing price today and they got hit.
I know! Invest in Larry Cumblow’s goldilocks economy. He just said it’s still very much in tact. Contrary to DL’s slogan, “It’s a good time (FOR EVERYONE ELSE) to buy.”
I wonder if he’ll find anyone to blow after his program today?
txchick57,
I was hoping to find a post from you today. I figured you would be short and doing well. I shorted the market when it was only 180 points down (bought puts actually). I thought I was late to the party. When I checked back at 1:00 and the market was down over 400 points, I was elated. There are a lot of bulls groaning today, and I am walking on air. I suspect you are too.
“ETF’s are much cheaper way of trading market or sectors, than mutual funds.”
This depends. In the “old” days, when there were just a few ETF’s (which were mostly Indexed) and lots of Mutual Funds, this was generally true.
Now there are a lot of ETF’s (ETF’s are one of the fasting growing segments), and many of them have higher trading costs than some of the low-cost Mutual Funds (like Vanguard).
do your homework on that point and actually do the math about how much each will cost you. In my investing I’ve found some ETF’s are far cheaper so I buy those. And other times I’ve found Vanguard Mutual funds to be cheaper.
Overall I’ve found ETFs to have higher upfront trading costs, then lower holding costs. Thus, they work really well in MY portfolio when I can spend a LOT at one time. They don’t work so well when I’m buying smaller amounts. ETF’s are also nice if you’re jumping in and out of a fund since they trade like a stock. They’re also nice if you want to short or do other trading strategies. (I don’t do this though).
Lastly, I always try to put a counter point to the timing arguments. I totally agree that the current stock runup has been significant, and all signs point to a downturn going forward.
However, the market is NOT rational and it is NOT efficient no matter how much people will tell you that it is. Thus, despite the fundamentals, the equities market could take off even higher, nobody really knows. (look at what happened to the Equities market from 1997-2001, and the RE markets from 2001-2005… almost nobody foresaw that)
The markets can stay irrational far longer than you can stay solvent.
That said, today the markets are taking a beating. It started in Asia, spread to Europe, and is hammering the US Markets, which are down overall around 4 to 4.5% in just one day (so far)
It is the correction everybody has been looking for.
Now, back to timing.
Does this mean we’re corrected and we can go back to the mystical “Goldilocks” econonmy and stocks can safely rise from here since the anticipated “correction” has occurred?
Or is this the start of a huge stock selloff?
who knows?
Many will claim to know. but nobody really does. On CNBC tomorrow they’ll talk about how this was expected and how it was overdone and we have a buying opportunity
here and elsewhere that contains the Bears, they will say this is the start of a huge selloff as the Equities market finally realized the pile of poo that is our economy.
it’s all psychology! Economics is great for telling us why things happened in the past. It’s a horrible forecasting method.
This is not the big one. Not yet. The traders sure are twitchy, though. Seems someone finally thought:
“Wow. If Japan does well and raises its interest rates, the US looks less attractive, China flinches, and the carry trade unwinds while we have this massive housing inventory, all that money and credit sloshing around might actually evaporate! That might adversely affect my bloated bonus structure. I’d better do something, quick!”
“it’s all psychology! Economics is great for telling us why things happened in the past. It’s a horrible forecasting method.”
Have to disagree. Economics allows us to predict likely trajectories for the economy to follow when an event that impacts psychology occurs.
I would say run for the hills but you are already there
another “safe” option besides CD’s are Treasuries.
You can open a TreasuryDirect.gov account within minutes, put your money in there, and there are several choices for you (4 week 3 month, 6 month TBills, or 2, 3, 5, 10 yr TBonds as example)
Right now the 4 week and 3 month TBills are yielding about 5.1 to 5.2%, and there is no STATE tax on them… (there is federal tax)
And they can be automatically rolled so you can forget about them if you want
Just a thought. I personally think that Treasuries may be safer than CD’s right now, because who knows which banks are going to be “safe” from the fallout from the housing fallout.
one of the problems is that the safest banks offer the crappiest cd rates because of their “safety premium” whereas a bunch of the crappy banks offer higher rates. Even the big boys are not immune. HSBC and Wells Fargo and Washington Mutual come to mind as Big Boys that could have some problems going forward. Do you trust the FDIC????
There are other investments as well, but i’m at work.
If nothing else, you can put the 60k in treasuries short term as a safe place until you decide what to really do with it. (plus they yield more than many cd’s anyway)
good luck. wish I had 60k!
HIC
Housing Inspector, thanks for the advice. I, too, am looking for a safe place to park some $$. I am just not sophisticated enough when it comes to the stock market.
SShhhhhhh, I have one thing to say to you, Condos! SShhhhhhhh
Do you mean “grow house condos?”
No, I would not put it in a mutual fund. That’s the last place I’d put it.
Txchick, for those of us who have a lot of our money tied up in 401k/403b retirement plans that are heavy on stock market mutual funds, what do you recommend? The taxing authorities really ding you if you take the money out of the plan before you’re 59.5 years, so that’s not a good option. Your thoughts?
I moved all our 401k money into a MM until I see how all this shakes out. In times of turmoil, you can keep your chips on the table, or you can sit out a few hands.
Personally, I’m opting for the latter for that bucket. Of course, I have exposure to foreign markets as a hedge against a slide in the dollar with other buckets.
All those plans have money market options - you can park cash in those without withdrawing funds and incurring tax penalties.
Money market for now or some sort of cash equivalent.
What do you recommend for 401K plans that have options for purchasing gold funds and energy funds. Would you bail out of these now, buy more, or hold? Wait a couple days to see how things shake out?
QID made a bundle today.
Edward Jones is a retail brokerage that makes their money with high fees, load mutual funds, et. They were involved in a scandal several years ago because they pushed 7 load mutual fund companies (incl Putnam, Hartford) and rewarded their employees with vacations, etc.
They will charge you $50 per trade and the mutual fund companies they recommend will charge you 4%. You will lose money. I’d park it in a money market like Vanguard’s , and when the market bottoms out, then you can consider no-load mutual funds.
Which bank did you rob to get $60K tax free? Did you need to use a real gun or did you stop at Toys ‘R Us on the way over?
I wouldn’t touch mutual funds with a ten-foot-pole right now. As far as advising you where to park the money, that’s not something I’m prepared to do. I invest for myself and do pretty well, but am not inclined to advise others what to do with their money. Suffice to say, CDs are a better alternative than something that’s going to lose money, as most stocks most assuredly will. However, in an inflationary scenario - and I suspect the M3 is increasing by as much as 10% a year or more - I think precious metals are going to fulfill their safe haven role once again. Not advice, just my humble opinion.
I just read somewhere about a legal action against one Edward Jones broker, for putting some guy into something the court said, was a fraudulent action or something like that???
“According to FAR, the number of single-family homes sold with the assistance of a Realtor ” . . . hmmmm. Am I the only one to put on my skeptic hat on reading that line?
hang up the 05 number, then adjust for increased population /inventory
sorta like real vs. nominal prices
gets uglier
Take a look at this page
http://money.cnn.com/2007/02/27/news/economy/homesales/index.htm
In a nutshell:
Do you have a Pay Option Arm mortgage? Are you nervous higher payments to come? Tell us your story to be considered for a feature in Money Magazine - selected candidates will get a financial makeover. Send e-mails to _.
None of the above, but I’m making dough short on MTG.
Wanted: Seasonal Letter Openers
“Husband-and-wife owners of Good News Realty, Jose and Amarilys Lopez, vanished on Thursday.
Four days later, a police helicopter spotted three distinct shapes in the vast, thick brush north of Key Largo.
One was the couple’s white Toyota minivan. The other two were bodies, sprawled on the soil, shot to death just feet away.
Miami-Dade police said late Monday that the case was a murder-suicide. Jose, 42, shot Amy, 31, then turned the gun on himself.”
“The two had bought and sold several residential parcels in recent years.
They bought a house in Key Largo in August 2001, taking out a $450,000 line of credit, and showed it to a prospective buyer Thursday morning.
At the time of their deaths they owned three additional homes and a parcel of property in Marion County.
In November, they sold two residences they had purchased in 2005, earning $192,000 in profit on the two deals, county records show.
It was not clear why they were selling the Key Largo home, at 271 Anne Bonny Dr.”
Perhaps Florida’s housing bust pushed them to the edge.
Here’s the full article:
http://tinyurl.com/32qupz
That Tiny URL isn’t working for me.
http://www.miamiherald.com/884/v-print/story/25184.html
Whoa. I have an ex who is a Realtor(tm) down in the Keys. I know she has had a rough time for the last 18 months. I did warn her.
I’ve seen those lovey-dovey husband and wife team realtor ads and wondered how many of them actually hate each other while they are billing and cooing for the photographer.
Sad isn’t it? But this is the human side of this whole episode. There will be many many more suicides and knockdown dragout arguments about blame.
Enjoy your retirement Greenspan, you SOB.
Agree, the human toll is immeasurable. Wives, how about even your kid who feels inferior bec. he rents and other kids in school have big houses, new cars, expensive vacations. He may see the error of their ways soon, but that’s still tough to take when you’re 12 years old in the here and now, isn’t it? Yeah, renting in newport beach is rough life man…
I wonder when the realtor suicide body count will reach a bottom? Maybe DL can call that one a few times…
LMFAO!
American Beauty! In real life.
Darwinism at work!
My biggest fear for friends and family who are in too deep.
Huh. Choice one: The life of a hobo, living on the streets. Choice two: Dead.
I’ll take the hobo option.
From Bloomberg: FED reports mortgage delinquencies up significantly to 2.11%, from 1.72% the prior quarter. Sounds like we’ve already risen from a low level to something like average or somewhat more — on the way to sky high.
http://www.bloomberg.com/apps/news?pid=20601087&sid=avbeERteQZlU&refer=home
“We want our neighborhoods to look like they did five or six years ago and not like a slum filled with abandoned homes and overgrown properties.”
Too bad!
Wait, I have an idea. Why dont you and your neighbors buy those hosues. You can fog a mirror right? Then you qualify!
Real estate always goes up. Go for it!
But if your real estate always goes up, then don’t complain when your assessed value goes up too:
http://www.azstarnet.com/sn/related/171121.php
You got it right buddy!
I keep telling people about property taxes. They just wont listen and end up buying a 600k dump in my area and are shocked when they receive their supplemental tax bills.
“We want our neighborhoods to look like they did five or six years ago and not like a slum filled with abandoned homes and overgrown properties.”
Cape Coral was a sh*thole five or six years ago. I can’t imagine what it must look like now if they want the neighborhoods to look like they did five or six years ago. Probably the same stuff, just more of it. Plus, Del Prado Blvd. was a nightmare five or six years ago. It must be living hell by now.
So what’s wrong with wanting your neighborhood to go back to what it was like before a bunch of jerks ruined it? I wouldn’t say ‘too bad’, I’d say that this is going to be a big problem and is pushing down value for innocent people. Wouldn’t you be pissed off is the houses on both sides of you were abandoned and left to rot? Would that make yours any easier to sell? I’m not talking about making ridiculous profits, I’m talking about the very real loss of salability because of some aholes greed. I think it is a normal and reasonable desire to have a decent neighborhood and decent neighbors.
Good thread for this article… I think it will be the first of many…
Group sues over Save Our Homes
Owners of second homes ask judge to stop assessment cap
http://www.tallahassee.com/apps/pbcs…NEWS/702270324
Good luck with that. They must establish standing first. No chance. No different than moving into a state and having to buy a new license tag.
Even longtime residents are subject to the increase when they buy a new house. Why do you think nothing is selling?
Just like we predicted on this Ben’s blog….
“The strains, though, are not isolated to the subprime market. Delinquencies on adjustable-rate loans to prime borrowers rose to a three-year high of 3.1 percent in the third quarter of 2006 from 2.3 percent a year earlier, according to the Mortgage Bankers Association in Washington. Lenders are slated to reset as much as $1.5 trillion in adjustable-rate mortgages this year. ”
http://www.iht.com/articles/2007/02/25/bloomberg/bxecon.php
Stock market down big like it deserves. so which one of you guys pissed in the punch bowl? Maybe our beloved leader A. Greenspan had a hand in it. Bring on the pain.
wow… after 2:30pm (est) it looks like a freefall…. 500+ down for the Dow.
I wonder if the PPT will make an appearance?
Yep, right at 3 oclock. jeez, where did I put my tinfoil hat?
Before all of the bloggers are in tears for the poor second home tax payers. The typical assessment in Florida is about 65% of market value and it has always been that way. Ad Valorem tax representation in Florida is like pi$$ing up a rope. Keep in mind the property appraisers are elected here. Wink,Wink
“For the last several months I have been hemming and hawing on whether we have reached bottom,” said David Lereah, chief economist for the Realtors. He said that he believed sales have now stabilized after hitting a bottom in September.
Probably hemming and hawing because he’s a jackass. I wonder what will happen when things drop again? He will probablysay, we saw this coming or we were caught by complete surprise. But that sure doesn’t sound like what they are saying now. My best is on the surprise, except it won’t be a surprise to anyone with half a brain.
I think it is called “heehawing” for a jackass.
I was in both Naples and Ft. Myers last weekend. Naples is worse, but in both cities the building and development is a hideous, charmless, ruinous obscenity. I saw plagues of overpriced tract housing, many enormous areas cleared for yet more subdivisions, and half-built projects visible from I-75. I saw huge McMansion houses, packed close together, that can have no other purpose than to make people feel like royalty, whether that feeling is deserved or not–wait until the owners discover that reality is just a summertime electric bill away. I traveled through mile after mile of ugly sprawl sameness on six-lane roads that should be named after antidepressants, photographed, and placed next to the word “anomie” in the dictionary.
By far the worst was Collier Boulevard outside of Naples. Not too long ago, before it was converted into an “investment,” the adjacent landscape was relatively empty. Now the landscape was totally marred and topped off by three gigantic condo towers rising out of the mangroves as I approached the Marco Island bridge.
One friend in town from California asked me “does anyone here have a job that doesn’t involve working for a business advertised by neon signage?” I told him that he fundamentally had understood the nature of our job base here. I have lived in Florida for fifteen years, and I have never seen anything like this. We are headed for a catastrophe.
Rant off.
the best view is south of rt 4 bypass near Orlando- it looks like a mirage
tract homes w no trees in sight
Yes, and the billboard says “Classic View.” WTF??? Classic view of I-4?
Naples used to be the most beautiful town in Florida, with nothing on the beach except for one nice hotel. The main drag was gorgeous, without a single fast food restaurant or anything else: just manicured perfection, with all the beautiful palms down the median. You couldn’t even find a gum wrapper. Now, Naples may well be one of the ugliest towns in America, thanks to pretentious New Yorkers taking it over and building horrible palaces to impress the folks back home. The main drag really is a drag now, with fast food dumps, Rooms to Go, etc. crammed from end-to-end, and trash strewn everywhere. This is what our politicians call progress.
It happened to many quaint and charming towns and villages throughout the country. Local governments and politicians sold out. Some of these puppets are already being called on the carpet. There will be sweeping changes to local governments over the course of the next several years, as huge problems rear their ugly heads.
I agree with you about Naples. It is just the greed of people. It is looking more and more like Ft Lauderdale. Naples Bay has a number of very ugly condo projects.
You can rent a place for about 1/4th the cost of buying, so something has to give. Many people that I know that lost their shirts in the NASDAQ in 2001-2002 are the same ones that then jumped into realestate here. I hate to say it but they represent very stupid money.
In 1990-94 correction the Port Royal and Aqualaine Shores area of Naples experienced a 35% decine in listing prices. I expect this decline to be much worse…50-80%. I know that sounds very extreme but I know too many people that have little cash that are telling themselves they will be able to find a buyer for a house they think is worth $3 to $8 million.
There are many flippers that bought expensive places in 2005 and immediately added a million dollars to the sales price. They hoped to sell it in two years to get the $500,000. tax break and avoid the property tax jump their purchase caused. Now they are running out of time and are cash poor.
Many jerk realtors are with high priced properties they figured they would flip and they are stuck. Their incomes have collapsed and their costs are about to jump.
Naples appears very wealthy but below the surface is a huge problem.
Catastrophe doesn’t even begin to describe it, Snake. Things will freeze here worse than a Minnesota snowstorm. The self-important herd will be thinning really, really fast.
traffic was very light in Gainesville on Monday … the weather was nice, too, but it felt somewhat ominous …
will I have a job next year?
“For the last several months I have been hemming and hawing on whether we have reached bottom,” said David Lereah
WHAT??? Hemming and hawing my ass! He has repeatedly stated that is WAS the bottom (with his fingers and toes crossed). What a credibility-lacking A-hole! -you guys already know that, I keep forgetting…
All right - who’s been doing the quote collecting? Seems like it’s time to bring a few out.
“South Florida,” some idiot said, “is working off a totally new economic model that I just made up ten minutes ago.” - Day-trading Spaces: Real Estate Instead of Real Jobs, Wall Street Journal of Doom
Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors says that “South Florida is working off of a totally new economic model than any of us have ever experienced in the past.” He predicts that a limited supply of land coupled with demand from baby boomers and foreigners will prolong the boom indefinitely.
New York Times, Trading Places: Real Estate Instead of Dot-Coms, 3/25/05
**********
“I just don’t think we have what it takes to prick the bubble… I don’t think prices are going to fall, and I don’t think they’re even going to be flat. ”
Diane C. Swonk, chief economist at Mesirow Financial in Chicago, New York Times, Trading Places: Real Estate Instead of Dot-Coms, 3/25/05
weird … what’s with the phallic imagery?
My apologies if this is a double post.
********
Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors says that “South Florida is working off of a totally new economic model than any of us have ever experienced in the past.” He predicts that a limited supply of land coupled with demand from baby boomers and foreigners will prolong the boom indefinitely.
New York Times, Trading Places: Real Estate Instead of Dot-Coms, 3/25/05
**********
“I just don’t think we have what it takes to prick the bubble… I don’t think prices are going to fall, and I don’t think they’re even going to be flat. ”
Diane C. Swonk, chief economist at Mesirow Financial in Chicago, New York Times, Trading Places: Real Estate Instead of Dot-Coms, 3/25/05
Cramer just said we have a “subprime crisis.”
Oh, yeah? When he was on Chris Matthews on Sunday he said the economy was going to be fantastic and that big swinging di*k Hank Paulson was going to take care of everything. LMAO! What an a**hat.
Did he mention that he was touting residential RE as an investment and claiming to be “all in” personally about 2 months ago?
Of course not.
Sticking to my prediction:
“National Housing Crisis” will be uttered by some blubberhead on a news station on July 1 of this year.
I recall your prediction and at the time I thought: “too soon.”
I no longer think that is necessarily the case, for it could happen sooner.
When that announcement is made, it’s time to start buying the bargains.
HOLY SHIT. S&P just broke 1400! So sorry, Ben, haven’t seen anything like this in a couple of years!
I need a cigarette and I don’t even smoke!! LOL!!!!!!!!!!!!
Its a beautiful thing to watch. Lets see Bloomberg TV or CNBC try to put a spin on this one.
They are doing it already. CNBC immediately brought Cramer on, who said that he was “expecting” this correction and kept hammering that he had told everyone in January. Hmmm, no you don’t! Then it was Kudlow’s time to spin, the spinmaster, the spindester, the master of spinnisters, to defend how nothing has changed, the economy is great, profits are great, and how employment is wonderful. To make a long story short, I vomited on my keyboard.
Wow, too busy with work to read much, but 20% percent for a whole county???? My spousal unit is really sick of me telling him “I told you they will go down”.. but he is going to hear it again.
OMG, Fellow Bearish Traders!!!!!!! Woo-hoo!!!!!!! And that’s an understatement!!!
The PPT is struck in traffic!!!
Well, looks like it made it to the scene of the carnage… ~200 point bounce. Unreal.
STOCKS DOWN NOW OVER 500 points! WOW!
Suggested topic: “Do you remeber where were you the last time the DOW dropped 500 points in one day?”
I sure as hell do! I’m alive again! Been dead for 3 years now!
NEW YORK (MarketWatch) — The Dow Jones Industrial Average has closed with a loss of 500 points or more only three times in its history, according to data from Dow Jones Indexes. The biggest one-day point drop of 684.8 points took place on Sept. 17, 2001. The index fell 554 points on Oct. 27, 1997. It shed 508 points on Oct. 19, 1987. At last check on Tuesday, the index has fallen 367 points 12,265. At one point, it was down 546 points shortly after 3 p.m. With a current loss of 3%, however, the Dow Jones Industrial Average won’t even crack the top 20 in terms of one-day percentage losses. The 20th worst percentage loss for the index took place on Jan. 8, 1988 when it fell 6.85% or 141 points. Dow Jones is the publisher of this report.
Thanks; the only 500 pt day I remembered was ‘87.
Last week I had a real weak moment. I’ve learned a lot from people on this blog but am not at all where I need to be in terms of the market.
I pulled everything out late last year. I almost put it all back in last week. I know you can’t time the market but I thought well, everyone is saying that the market is at least going to 13,000.
I then thought over all of the evidence of the mania presented on this and other blogs. Thank God my rational side won out.
Same here. I was really beginning to doubt. I moved my 401K into stable value a little too early last fall and was kicking myself - still has a long way to go down for this neophyte to jump back in.
I sold almost everything last summer. I missed the latest rally, costing myself considerably in the process, but I was too uncomfortable about everything. This feels too much like a casino.
God, I thought I was the only one who did this. Thanks, guys, for reminding me that the smart money takes itself off the table early.
I got out last year too. It was making me sick with nerves to stay in it.
Even after it kept going up I felt okay about it because at least I could sleep at night.
I had one tiny bit left in there that I really wanted to get out yesterday morning and then got “too busy with other things” so it stayed in. LOL.
At least I know my timing’s pretty damn good- if only I’d listen to myself.
Yes. It’s been an exciting day.
DOW down 500 and dropping!
Buy, buy, buy!!!
The PPT is in full battle mode. It’s all good. There’s still 40 minutes and change to go in the trading day.
I’ve been very skeptical of the PPT theory but it is pretty nuts how the market just bounced right about 3 PM.
Trading curbs are on too.
Maintain your skepticism, friend. You saw a bunch of automated buy orders from the large brokerages.
And there was a hedge fund liquidation that took the market down starting ~1pm est.
That’s why I dumped most of my puts. The speed of that decline was not normal absent planes flying into buildings or whatever. What have you heard? Equity fund? Which one?
The PPT is in full battle mode.
If there was such a thing as the PPT, don’t you think they would have done something before the Nasdaq was down 80%?
You sound like a nut job when you refer to this. Stop it, you are too smart for that nonsense, seriously.
The poll on Marketwatch has 67% in the “this is a great buying opportunity!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!” category.
I would really like to see Ben post a topic on the market drop this afternoon. It is worth its own discussion.
I’m wondering if the Japanese and the Chinese will have the same opininion.
Down ONLY 330 now. A 170 point swing, TO THE UPSIDE, in a matter of minutes! Has this type of about face ever been recorded? No PPT? LOL.
All the time in the 1990 - 2003 time period. Volatility has gone dead now for 4 years and people have forgotten. This isn’t even in the top 5 of ugliest days I’ve ever seen.
It’s a buyers market
We’ve reached todays low plateau.
Dow down about 378 right now (’only’ 3%). I don’t think this is “it”, still too much optimism out there (silly money). Nice shot across the bow, though.
Seems to be headed south again a bit, but at any rate, days like today are like manna from heaven for a history buff like me. 2/27/07 - easy enough to remember.
lets not forget that we are at record stock margin debt, wait till tomorrow if some people have no margin left,, can you say MARGIN CALL and forced selling….
PPT out golfing today?
Finally! Prices are dropping here in J’ville, FL — negative 5 pct SFHs and negative 13 pct condos.
what PPT if I may ask.
Plunge Protection Team
M-Ville
That’s now settled.
When Japan hinted at raising rates last May the market fell out of bed. The debate then raged: do the markets need perennial free money to keep rising or can they go up on their own strength?
Japan timidly raised rates last week folks and today world markets are getting their heads handed to them.
The debate over what drove the markets up for the last three years is over. The central banks now have a clear choice to make: deflation or hyper-inflation.
Place your bets.
My comment: Ka-Poom!
The central banks now have a clear choice to make: deflation or hyper-inflation.
My money’s on hyper-inflation. Sorry Mish.
I’ll say this about inflation,, its hear, in the last week,, my favorite take out went up, the car wash, the doggies food, my morning coffee place too… and thats just in the last week
Yeah, one of my favorite bookstores that also happens to sell used DVDs just raised the price of every single used DVD from $6.00 to $7.00. Grr. That’s a sixteen percent increase for inventory already on the shelves! Those money-grubbing #$%^&*s.
But Wendy’s is now offering a value meal for $2.99.
Dave must have taught his kids well–they have to have smelled the recession at least three months ago. Good show.
People are predicting two interest rate cuts this year according to an article on Marketwatch….
“By JOE BEL BRUNO
THE ASSOCIATED PRESS
(Original publication: February 25, 2007)
NEW YORK - Investors are borrowing at a record pace to sink into the stock market, and the trend is raising concerns on Wall Street about what might happen if a major correction occurs.
The amount of margin debt, which is how brokers define this kind of borrowing, hit a record $285.6 billion in January on the New York Stock Exchange. Such a robust appetite, amid a backdrop of complacent market conditions, could leave investors badly exposed if major indexes are snagged by a market decline. Some could find themselves forced to sell stock or other assets to meet what’s known as a margin call - when a broker in effect calls in the loan.
Bulls and bears can continue to debate the direction the markets will take in 2007. But, one fact remains: The last time margin debt hit this level was at the height of the dot-com boom in March 2000, just ahead of a two-year decline.”
I think that that 200 pt 30 sec drop took care of a part of this liquidity problem. Now how many of those hedged positions resulted from HELOC cash outs?
“In WCI’s tower business, the CEO said defaults and construction delays negatively impacted earnings. The net number of new tower orders for the fourth quarter was negative 22, as defaults of 27 were greater than gross new orders of five, WCI said.”
I guess Jim Cramer saying buy pushed this stock up to where it is now from 23. BUY BUY BUY! Booo YAAAAA!
because if people actually looked at the numbers, they will know WCI is so screwed.
How in the world can Icahn hold on to this POS???
He’s acting as a front, a bimbo for the company, probably getting a kickback.
Jim Cramer and Larry Kudlow should consider a murder-suicide pact like that poor realtor coulple in FL. Booo YAAAA!!
Asian savers for years have been financing american consumption - slowing that down will be painful
Of course note China’s success itself has bee with their emerging capitalism - not their legacy communism/socialistic programs
Vix up over 60% today
UN-FREAKING-BELIEVEABLE
Wonder if all those funds who sell options for free money are happy right now. But they’re hedged, we know that. Sure.
I love my QID!
Not a happy day for me. You all may be cheering, but not everyone on this blog has gold bars and canned peas piled in the closet. I’m not too worried about the Dow per se, I’m just concerned about a recession. I’m trying to change jobs (move up) so I can get out of the urban apartment and into a nicer dwelling with, like, a lawn. And a recession is NOT a good time for new jobs.
One good thing, I’m not in debt.
If you’re debt free there might be more opportunities than you might think coming down the pike. Not too many folks are financially nimble nowadays (present company excepted of course) - those that are might just be in the catbird seat.
“Existing home sales likely will gradually rise this year and into 2008,
according to the latest housing outlook from the National Association of
Realtors(R) (NAR). “Home sales may appear weak in comparison with the
record surge in 2005, but they will be sustained at historically high
levels that are in line with long-term demand,” says NAR Chief Economist
David Lereah. As inventory levels become more balanced over the next few
months, analysts also expect to see some modest price gains.”
Is this from a tarot card or tea leaf reading session?
SKB
Palm Beach refuses to roll back taxes, instead pushes through a 16% budget increase. Got to love it:
http://www.sun-sentinel.com/news/local/southflorida/sfl-227commissiontax,0,5085880.story
“‘It’s incongruous,’ said Jerry Adler, who’s been trying to sell his four-bedroom, three-bath house in south Fort Myers for a year and a half so he can move to Tucson, Ariz. ‘The mortgage rates are good, the median price is down, building permits are down, employment is up, so what the hell does sales price have to do with it?’”
Please form an orderly line behind me to kick this ignorant fool in the nuts.