“From One Extreme To The Other” In Florida
The Herald Tribune reports from Florida. “Roughly one-third of investors who committed to downtown condo towers during Florida’s post-2000 real estate boom appear to be having buyers’ remorse. Buyers are bailing from a handful of high-profile Sarasota towers. Their movement is likely mirrored across the region and the state.”
“‘It certainly isn’t surprising in this market,’ said Lisa Rooks Morris, who, until last autumn, sold condominiums at one of downtown’s most talked-about addresses. ‘The market couldn’t be more different now than two years ago. It went from one extreme to the other.’”
“At 1350 Main, buyers are expected to begin closing today and Friday on units they snapped up during a 90-minute buying frenzy in May 2004. But not all 1350 Main St. buyers are likely to finalize their deal and move in. Of the 134 units in 1350 Main, nearly three dozen are being offered for sale, again, primarily by investors who planned to resell their residences for easy cash.”
“For one penthouse buyer in Rivo, a North Carolina investor who decided to walk away when the market turned, forfeiting a deposit meant losing $340,000. He isn’t alone. Sarasota real estate broker Marc Citrin is trying to get his sister out of a $148,000 deposit she placed on an Alinari unit.”
“‘As more condos come on line, I think you’ll see more and more developer take-backs,’ said (broker) Louise Guido. ‘A lot of condos were built without any real demand. There was investor demand, but no demand from buyers.’”
“In all, Guido estimates that there are nearly 500 condo units on the market downtown. The number of condos in the broader market has risen in recent months: from 4,155 to 4,797 since the beginning of the year.”
“Developer Piero Rivolta believes no other new condo project will start in Sarasota until late 2008. Guido isn’t even sure about that. ‘We’ve never had this kind of inventory on the market before. Is it two years’ worth? Four years? How do you project it forward?’”
The News Journal. “Doug Gooch, Pensacola Association of Realtors president, conceded that home sales for the first two months of 2007 in Escambia and Santa Rosa are 18 percent below the same sales in 2006.”
“While Pensacola-area Realtor Cheryl Young acknowledges it’s a buyer’s market, she is also adamant that it’s not a market in free fall. ‘People think they can come in with some wild offer on a property and the seller will take it,’ Young said. ‘Well, the sellers are not taking it.’”
“Florida’s once-booming housing market, now the most troubled in the nation, likely will bottom out this summer and slowly rebound in 2008, predicts Mark Vitner of Wachovia Corp.”
“‘Historically, Florida has been an inexpensive place for people to move to,’ Vitner said. ‘But Florida’s housing prices are now about 20 percent above the national average.’”
“The state’s continuing population decline, coupled with the ongoing insurance and property tax crisis, presents some worrisome issues for the state’s economy.”
“Vitner cited a recent Florida Department of Education report anticipating the state would add 47,000 additional students to its public schools in 2006. In reality, the state’s public school population grew by 470 new pupils last year.”
From WESH 2. “A surplus of houses for sale in Central Florida has made it difficult for buyers to get a loan, officials said. A growing number of homeowners cannot pay their mortgages.”
“According to foreclosures.com, 65 new foreclosures were posted in Orange County on Tuesday alone. ‘There was a level in the marketplace that opened the doors to allow people that probably should not have purchased homes in the last couple of years. Those doors are going to be shut now,’ Tawn Kelley, President of Mortgage Funding Direct, said.”
“Jeff Perdue of All Florida Mortgages said his loan officers have homeowners looking for fixed rate loans to refinance their adjustable rate mortgage. But because of the increase in foreclosures, the credit ratings they used to qualify for a loan then may not get them qualified now.”
“‘Those customers are going into default at that rate, then you’re going to be a little more hesitant to lend money to those same kinds of customers in that same qualification arena,’ Purdue said.”
The St Petersburg Times. “Threatened with lawsuits from scores of disgruntled customers, Coast Financial Holdings is deflecting anger towards the alleged source of its troubles: St. Petersburg builder Construction Compliance Inc.”
“Customers have asked their lawyers to try to relieve construction loan debts totaling $70-million. But on Wednesday, bank spokesman and adviser Tramm Hudson said he considers the legal moves displaced. It’s the builder, not the bank, that failed its end of the bargain.”
“‘They have other options,’ Hudson said of customers considering suing Coast. ‘They had a contract with a builder who defaulted on them. We were the lender; we were not the originator of the deal.’”
“CCI customers, some sitting on vacant lots on which they owe $85,000, have approached such offers warily. They include investor Mike Wood, with contracts on two CCI houses.”
“‘My attorney told me don’t start construction, don’t sign anything, don’t move forward until we get though the first round of negotiating with the bank,’ Wood said.”
The Daily Record. “Fifteen minutes. That’s all the time it took to transfer title to 10 pieces of real estate property from the homeowner to the lender Tuesday morning in the lobby of the County Courthouse.”
“It’s the foreclosure auction and it has become an almost-daily event.”
“According to Foreclosure Clerk Lynea Parrella, Duval County ranks seventh in the nation in number of foreclosures with one out of 133 properties currently making its way through the court system.”
“About three dozen people showed up Tuesday morning. In all 10 cases, the lenders were the successful bidders, which is usually the case, according to John Kearn who was there looking for investment property.”
“‘Another wasted day,’ he said. ‘As soon as the auction opens on a property, the plaintiffs show the rest of us bidders how high they’re willing to go. Unless we really want the property, out of courtesy we don’t raise the bid above the $100 minimum.’”
“Real estate attorney William Nussbaum was also at the auction Tuesday representing a lender. He said he thinks there are so many properties going on the block in Duval County because for the past several years, a lot of people obtained balloon payment and adjustable-rate mortgages.”
‘Lake Verna LLC is suing Husani for fraudulent inducement, claiming that the once high-flying real estate investor assured Meshad and Lakewood Ranch real estate agent Albert Myara that at least 260 homes could be built on the property, when the actual number was only half that.’
‘An investment group led by Warren Hickernell has had trouble making payments on a $1.9 million loan that was used to buy The Pearl Beach Inn on Manasota Key in July 2004. As a result, The Bank of Commerce in Sarasota started foreclosure proceedings.’
‘First State Bank is foreclosing on two properties owned by the family of Sarasota real estate investor James Russell Crain. Crain, who has racked up millions of dollars in unpaid bank debt during his 20-year real estate investing career in Southwest Florida, is linked to Neil Mohamad Husani in two ways: Both men used the same real estate attorney, John Yanchek, and both men flipped properties to themselves or partners in order to inflate the value of the real estate and increase the amount of money they could borrow from banks.’
‘We hope to get a judgement by March 26. If that happens, we expect the properties will be sold four weeks later on the courthouse steps,” Collier said.’
‘Kevin Kilpatrick had a good life in South Florida, but a new career meant he was free to relocate. The home price differences made the decision a no-brainer. In Broward, where he was renting a house from his in-laws, the median home price is more than $377,000.’
‘In southern Tennessee, about an hour from Nashville, he has 10 acres and a 4,000-square-foot home built two years ago. The price: $280,000. ‘We just felt we could have a better quality of life’ by moving, he said.’
‘Middle-income neighborhoods, as a proportion of all metropolitan neighborhoods, have been declining nationally - to 41 percent, from 58 percent in 1970. The study found that Miami-Dade County had the nation’s fifth-lowest proportion of middle-income households, barely ahead of perennial losers like New York City and Los Angeles. Broward fared nearly as badly, ranking 82nd. Palm Beach County placed 80th.’
‘The run-up in housing prices in South Florida is comparable to a lot of coastal areas,’ Berube said. ‘As a family moves up, there’s nowhere to go but out.’ As one indication of middle-class discontent, public-school enrollment has been declining - in Miami-Dade since 2002 and in Broward last year for the first time in more than 20 years.’
“…Crain, who has racked up millions of dollars in unpaid bank debt during his 20-year real estate investing career in Southwest Florida…”
Looks like this Crain guy has all of the qualifications to write books on RE investments, do $4,000 3-day seminars, and also do infomercials on cable TV.
“‘As more condos come on line, I think you’ll see more and more developer take-backs,’ said (broker) Louise Guido. ‘A lot of condos were built without any real demand. There was investor demand, but no demand from buyers.’”
Exactly Guido! However, a lot of developers foolishly used ‘investor demand’ to project future demand and they built up supply accordingly. What’s more, it explains the lack of buyers in today’s market.
“Guido isn’t even sure about that. ‘We’ve never had this kind of inventory on the market before. Is it two years’ worth? Four years? How do you project it forward?’”
You project it forward just like you did with the false demand. Far into the future.
and it is out of control in downtown miami. the idea of buyers for the amount of condos is unreal. the insurance alone will crush most people.
and now you got crazy man mario rubio (r) of miami dade to end property taxes all together. it will kill the budgets of every florida community. no one can buy enough to keep the economy going, because they still have to pay insurance and house notes. can we say the hand is getting feed by the developers! can one politician stand up and be honest and let the chips fall. no, the politicians help support the tax windfall and are afraid to lose their power for once.
in florida, there are blood on the street.
When I think of florida producing something I think of orange juice. Sure they got a disney park there but other then that orange juice perhaps some other foodstuffs. Nothing technological or industrial comes to mind. They might be better served designating some parts of it an agricultural county where the smallest lot would be 20 acres.
That’s the way it used to be, cyppok. And some of us liked it that way. We have no technology, but there is some industry, like phosphate mining. Some port activity. Tourism, but that’s tanking. International banking in South Florida.
The next big thing here is going to be the LEGAL industry, as evidenced by Ben’s reporting. Bankruptcy, fraud suits, housing defect suits, HOA suits, you name it. Any legal stuff related to the bubble is going to be a winner.
“Tourism, but that’s tanking.”
What is the tourism picture like in FL this winter? My uncle is a wannabe snowbird flipper in Sanibel (he and his wife ar “friends” with a relator - gag), and last year at this time he tried dragging my mom and her retirement savings into his mess. Now he’s on the phone again recently claiming that Sanibel is packed with tourists.
Besides helping me immensely with my studies in urban geography, this heaven sent blog gives me the ammo I need to discredit those fanciful schemes.
Snowbird flipping sounds like fun. What are the rules? Is there a league, or do you just grab one and flip them?
Oh, if only I could…
edgewater, I really don’t have any statistical evidence other than a report I read about six months ago and I can’t remember where I saw it. Possibly on this board. Otherwise it is anecdotal.
The tourists your uncle is talking about in Sanibel are probably day trippers. To be honest, there has been a bump in snowbird traffic for February and March, which is unusual, they tend to show up earlier. However, parts of the country got whacked with frigid weather later in the season, so I’m thinking some snowbirds who might have been tempted to sit out the winter changed their minds and came down to Florida after all. The condo where I am living was dead until a couple of weeks ago. Maybe it means snowbirds are still coming, but spending less time here.
Thanks, the fact that one of my uncle’s “investments” has been vacant at least six months is in line with your day tripper theory. It just always seemed to me that the fundamentals behind his actions were never solid. I used to travel to Orlando a lot for work (2002-2005), and after talking with long time residents there it just seemed like FL RE was a tricky play for amateurs from up north. Kinda like a gaint capital mousetrap waiting to spring.
I was in Sanibel last month.
Hadn’t been there for several years because the growth in the area makes me want to hurl.
at any rate, we went as day trippers even tho family owns in the area, had lunch at a local restaurant that ordinarily has a line out the door and a waiting list of an hour or more.
We walked right in and were one of three tables in the place-at prime lunch rush!!!
Amazing.
Same thing in the stores in Sanibel and Captiva and the beaches had parking spots open too!
I was there last month and can report that Sanibel and the adjacent mainland graphically demonstrate what happens when you pave paradise and put up a parking lot. There is tremendous construction on both the causeway (a new bridge span) and on the road leading to it. I commented yet again that the owner of “Bob’s Barricades” must be making a mint.
I’m not in Florida right now, but we own a seasonal rental property in a golf course community in Sarasota that we rent out in the winter season (and whenever else we can), and we are having a pretty good rental experience this year. Had one couple for all of Jan and Feb, and another couple for March and April. Not usual to get all 4 months. If we pick up any rental beyond these 4 months, would be pretty good. Word is that the club’s restaurant is also heavily booked/sold out, tee times are fairly heavily booked, etc.
The flip side is that there are about 70 homes, villas, club homes and condos on the market at the moment (out of about 800, as I recall). Asking prices run all the way from peak ‘05-06 pricing, down to price levels paid in late ‘04/early ‘05. Not low enough to induce massive buying - there has been maybe 4-5 properties sold altogether in ‘07 - and actually, nothing for 6 months before that. Will be a while before the correction is done, but most people don’t seem to be desparate to sell. Probably not as leveraged as most.
I will say this - I’ve owned and “operated” vacation type properties in Florida since 1998, and even at the price levels of a decade ago, they never positively cash flowed. Our motivation was to buy a place at the prevailing prices back then so that we would lock in an affordable price for when we got ready to go there full time, and rent it out in the meantime and defray some of the carrying costs. We expected a price increase in the new millenium because of the baby boomers, which is what had started to happen (prior to all the hurricanes in ‘04 and ‘05). IMHO, as I said, they won’t cash flow, and it’s too late (or, with the market dropping, too early) to be buying for appreciation. If someone needs to be in Florida for part of the year, frankly, they’re better off renting.
Cheers / M78
Florida used to produce technology. The first PCs were built in Boca Raton off Yamato and Congress back in the 1980s. Software industry was strong until 1995 when IBM closed its Boca plant. Software remained moderate until 2000 when outsourcing caused a mass exidous in the field.
Now Florida lives off of property taxes on mega mansions that line the beaches and intracostal. I don’t see Florida making too much money off of Disney World and oranges.
…orange juice perhaps some other foodstuffs.
Coconut toast spread. Yummy!
There is a surprising amount of DoD-related tech development in parts of Central Florida and also in the Panhandle. It’s just not a big headline kind of sector most of the time.
that will get hacked in 09
“I loath the military ”
remember?
That is correct. The biggest industries in this state are tourism, agriculture, and creating hideous and detestable urban sprawl. No one, at least in state and local government, seems to realize that the third industry damages the first two.
No kidding… They figured out ten years ago in Maryland that sprawl was killing the tax base as good farmland got gobbled up, and they were slowly trying to do something about it (after being conned by developers for years). Virginia woke up next, shocked to find that NOVA had turned urban while the agricultural areas were asleep.
But Florida still has a LOT of land, so they don’t take it very seriously… unfortunately the sunny metropolis is a resource eater. They’re starting to talk about water conservation in Florida. You heard that right… managing fresh water IN THE SWAMP.
Oops.
Maryland got smart quicker than usual about how necessary it is to try and preserve farmland–while they still had some left– and for one thing they developed a transfer-of-development rights program that a lot of places are now looking at as a model. Here in Thurston co., Washington state, we have lost so much productive farmland to ill-planned, gawdawful ugly, and natural-resource gobbling sprawl it is just appalling. People are starting to wake up and look at what we can do to address the problem. Hopefully coming up with a good TDR program will help, with ideas based on Maryland’s model.
And of course the continued housing/lending bubble meltdown is going to help save farmland just all over the place. Haw! More please!
Wow, I Iove to read this blog. Especially lately. I read the newest updates on sad ol’ DR Horton execs and New Century stock prices and then go off to argue with builders consultants and the county development department/review staff with a happy heart and a smile that gets bigger every day.
Actually, strawberries are Florida’s number one vegetable crop.
We also raise beef cattle to about two years, then ship them to Texas or whatever.
Cape Canaveral! something technological or industrial!
“Florida’s once-booming housing market, now the most troubled in the nation, likely will bottom out this summer and slowly rebound in 2008, predicts Mark Vitner of Wachovia Corp.”
And then he goes on to list all of Florida’s woes, which are not going away any time soon. What is he smoking? The only way Florida will bottom this summer and then rebound in 2008 is if prices plummet to pre-2000, insurance is free, all housing debt is forgiven and hurricanes and tornadoes are eradicated. Because building is still going on with a vengeance, I saw two new developments in my area going up yesterday.
Sign o’ the times:
Forfeiting a $340,000.00 deposit…
Because it beat the alternative of actually going through with owning the real estate.
One of my goals in life is to someday have $340K to walk away from.
What if the $340k deposit isn’t his….but is the bank’s he borrowed it from??? Nothing like paying off a $340k mistake…month after month after month after month after month.
I’d like to add this part of the article on Coast.
“In previous interviews, CCI representatives have denied Coast played as passive a role in the deals as Hudson contends. CCI singled out Phil Coon, the Coast executive in charge of residential lending, for pushing so many deals that CCI couldn’t keep up.
Coast fired Coon and his wife, Melissa, last month, the only bank executives to lose their jobs in the CCI affair.”
Tram Hudson is saying sorry, not our problem, but by firing the Coon’s, who were representatives of the company at a very high level and in with the builder, the are admitting wrongdoing but not. They are trying to have it both ways. This is a desperate attempt and Tram is doing exactly what they brought him in to do and he has no other option. This is about making sure the bank stays solvent.
Poor Tram. He lost the Repub primary for a Congressional seat against Vern Buchanan, who then went on to beat the Democrat Christine Jennings by 300 (gamed) votes. She is still contesting the election.
Bet he wishes he had gone to Washington instead of having to actually work to clean up Coast.
Wasn’t Tram Hudson the guy who made racial comments about who can and can’t swim, and he knows this because he’s from Alabama?
I think that’s the guy.
Hi all -
I posted this on a previous topic, but long after it was initiated. I think it’s worth repeating. The whole Coast debacle is just amazing to me - combination of innatentive borrowers, a crooked builder and probably some complicit bank people.
Re Coast Bank and CCI (builder):
This story is not just about greedy spec buyers getting burned by a turn in the market and defaulting on their obligations to the bank. Much more sordid than that….apparently, the builder, as part of packaging the entire deal for a buyer, arranged a construction loan with Coast. Builder then drew down on the loan/credit line over the course of several months or a year or so. Quite normal for construction finance. But no one - not the buyer, and not the bank, bothered to check whether or not the work was being done - no confirmation of milestones, no one looking at the job site, nothing. To me it’s amazing that the buyers wouldn’t have bothered to take a trip or two to make sure something was happening on their lot, and just as amazing that the bank would allow the line of credit to be drawn on without specific authorization or confirmation from the borrower. On top of all of this, CCI apparently stiffed many of its subcontractors for what little work had been done. So not only have the loan credit lines been drawn down substantially, if there is a structure moving towards completion, it’s now probably lousy with mechanic’s liens for unpaid for work or supplies. And it’s not just a loan here or there - Coast has 482 loans for homes supposed to be built by CCI. I forget how much of a percentage of CCI’s overall portfolio this accounted for, but it’s at least 20%, if not a lot more. This is all reported heavily in the Sarasota and Bradenton local papers (for Sarasota, go to http://www.heraldtribune.com). In my opinion, in this case there is probably a lot of responsibility on the part of the bank. I haven’t seen the loan documents, but I would be very surprised if they could just disburse funds without the borrower’s/buyer’s approval. In fact, from what some of the articles were saying, it’s a statutory requirement.
BTW, shortly after this scandal broke, Coast fired the manager of it’s construction loan department [the above referenced Mr. Coon], and also one of the top producers in that department, who just happened to be the wife of the manager [Mrs. Coon].
This almost reads like a novel - honestly, it would be a great feat of creative writing for someone to make this up.
I think that it would be more apropriate if Letterman(electric company, not late night) flew in removed one of the ‘O’s from the Coon’s name.
Can you imagine all the fun and schmoozing the builder had, with all the investors money, over the past few years? He must have had the time of his life. Sucks to be me. Or not.
“Florida’s once-booming housing market, now the most troubled in the nation, likely will bottom out this summer and slowly rebound in 2008, predicts Mark Vitner of Wachovia Corp.”
“‘Historically, Florida has been an inexpensive place for people to move to,’ Vitner said. ‘But Florida’s housing prices are now about 20 percent above the national average.’”
“The state’s continuing population decline, coupled with the ongoing insurance and property tax crisis, presents some worrisome issues for the state’s economy.”
Sure Mark.
1. Population is on the decline.
2. Foreclosures rates are growing fast.
3. Lending standards are getting tighter.
4. ARMs are starting to readjust (which Florida has more than its share of.)
5. Insurance and Taxes are killing people financially.
6. Job loses are mounting.
7. Inventories of RE for sale is moving up.
8. Sales are moving down.
Looks like we are near the bottom? What a joke!!!!!!!!!!!!!!
My thoughts exactly. I think the guy is shilling for David Liareah’s job.
Some people suspended disbelief during the market expansion; perhaps, others will do the same as the market contracts. At first, they will delude themselves into believing prices will stay flat. After it drops 5 or 10 percent, they will believe prices can drop no more. After it drops 15 or 20 pct, same response. Wash, rinse, repeat all the way to the bottom.
I wish it were only 5-10%
I’m close to signing a contract with a buyer to purchase my house. Original price was 229K and my neighbors said I was “giving away my house” but no interest from buyers… droped 217K…209…and finally at 199K all hell broke loose. Buyers coming out of the woodwork. As I bought the house in March 29 2005 at 178K and put in 8K into it, I do not beleive I was “giving away the house.” I stayed the 2 years for the cap gains tax rule. If I had to do it again, I would have taken my chances a year ago with the IRS and not reported it, maybe I’m wrong.
“my neighbors said I was ‘giving away my house’”
What were your neighbors’ price expectations?
They are selling theirs at 265K
Sounds exactly like where I just sold in MA. I had a townhome that was competing several other units. Brand new units sold at the end of 2005 for $250k. We started last April at $237k but the market started really tanking after that. After going down to $214 around Christmas we started getting a lot more interest culminating in 2 offers on the same day. Ended up selling for $203k (paid $174k in 2002) to a buyer putting 10% down. Interestingly, 3 other units sold for roughly the same prices all within a couple weeks of each other. The only units left are a couple ridiculously priced at $250k-$265k. They are dreaming.
My feeling is that there are people out there wanting to buy and $200k is a true affordable point for people where a $20k down payment is not impossible to come up with and the mortgage is reasonable. It really shows were prices need to be to meet what people can really afford.
my old man’s place in Fl is off 25%
“my old man’s place in Fl is off 25%”
Does that mean he finally sold it? Or is it just his wishing price that’s off 25%?
25% off what?
Whishing price - 2005 high??
“my neighbors said I was ‘giving away my house’”
They could always buy it, it if was such a good deal.
I had similar reactions as I kept chopping my price down. Even my own realtor made a comment near the end implying I was nuts for lowering the price so low, I said he could buy it if he wanted, a very uncomfortable silence followed…
“Even my own realtor made a comment near the end implying I was nuts for lowering the price so low, I said he could buy it if he wanted, a very uncomfortable silence followed… ”
That’s funny.
“Maybe I am wrong”? Yes, you have a moral problem about cheating on your taxes.
Is “population” decline the right term? From July ‘05 to July ‘06, Florida’s population rose by 300,000 instead of the 400,000 we saw before. Yes, we’ve heard the UHaul stats, but I think Florida is a very long way from seeing population decline or even stagnation.
FL population:
-300k as people leave the state
+400k illegals who move it the state
Positive population growth
Wait until the current construction projects close up or get stopped (by the bank).
That sucking sound you will hear is the Florida economy circling the drain.
You cannot get quality labor to do practically anything in south Florida. Ask anybody.
florida may not be losing population, but it is losing professionals and families. not only that, they are losing the service industry workforce by the ton. really, a family that earns 30,000 a year live in south florida now. the houses in the real hoods were at 200,000 in 2005. people lost their minds and the chicken are home to roost. when a region decline in student population for the first time in years, you have major problems. i live in boca and there has been 4 high schools in pbc built and 4 in broward since 2004. that is alot of inventory. everyone can play with the numbers. the reality is that everyone is trying to get out.
Analysts that didn’t call the downturn have no business expressing an opinion on when this event, that they couldn’t see coming, is going to end. Why wouldn’t this be the first question asked or researched by the press before going to the guy for an opinion?
‘People think they can come in with some wild offer on a property and the seller will take it,’ Young said. ‘Well, the sellers are not taking it.’”
This goes back to the whole thing about the difference between those who have to sell and can sell, and those who just want to sell but do not have to. This is a slow process and patience is a virtue here.
Pensacola, Florida
A copy of my comments on the pensacolanewsjournal.com web-site:
“Well, the sellers are not taking it.”
Well, that’s fine. If a seller doesn’t accept my offer, I’ll just move on to the next seller. In the meantime, more sellers put their properties on the market, thereby increasing supply and putting more downward pressure on prices.
I’m positive I can wait longer to buy than most sellers can wait to sell, especially those that have to sell or have adjustable-rate mortgages that are due to reset at a higher rate.
We’ll just see who blinks first.
“Well, the sellers are not taking it.”
Yes they are. In the shorts.
Buy the same house from the bank later at a much lower price then your original low-ball offer. Banks too shall learn!
please dont brag about the redneck riveria
You tell ‘em, Cheryl.
“While Pensacola-area Realtor Cheryl Young acknowledges it’s a buyer’s market, she is also adamant that it’s not a market in free fall.
Cheryl, please see JB’s post -
2007-03-08 07:15:18
(started at 229k)…dropped 217K…209…and finally at 199K all hell broke loose. Buyers coming out of the woodwork.
Does this mean that JB’s neighbor, whose home is listed at 265k, is one of the sellers “not taking it”?
And the patience is waiting for the expectations of sellers to change. Soon most of them will have to sell. And don’t think that HELOC that bought the boat and RV has anything to do with the home’s value…
Got popcorn?
Neil
A crazy thought just crossed my mind — Maybe some of these homeowners succumbed to the ruinous and totally false belief, under-written by loan brokers and the REIC of course, that the more money they borrowed from their homes the higher prices would appreciate.
Well, can if someone did a 100% loan on a purchase and was then able to refi with cash back or HELOC, say 50K cash, and then foreclosed later (& BK). Wouldn’t that be 50K profit. Sounds like a pretty profitable scam. I still say there needs to be more penalty for abusing credit, since it is really like stealing. Debtors prison.
The Daily Record. “Fifteen minutes. That’s all the time it took to transfer title to 10 pieces of real estate property from the homeowner to the lender …..
This is the new version of ‘Flip that Loan.’
Wow, blatant and admitted auction fraud. Ebay would be proud. Screw the FB’s one last time: No, the house didn’t sell at 30% below what you owed in an open auction, it sold at 99.99% below what you owed because we intimiadated the other buyers into not bidding at all. They even admitted it.
No, I think you misunderstood. In FL, you have to pay “doc stamp” tax on the deed transfer at a rate of $0.30/$100.00 sales price. So if the lender makes clear the minimum bid that they will accept and no buyer wishes to pay that much, there is no point in bidding up the value past the opening amount of $100.00
The way I read this is that the lender owes an amount that is probably greater than what any of these investors would be willing to bid so the banks end up with the properties probably at the amount owed to them.
The question is why the banks feel that they will be able to unload them for more? How long can the banks pile up properties on their books until they are forced to discount these properties to move them?
You are correct. If the judgement amount is $100,000 and nobody is willing to pay $100,000 at auction and the lender refuses to accept less than $100,000, they are on the hook for the $100,000 regardless of whether the deed transfer says only $100.00
It saves $300.00 recording it that way is all.
As to why they’re not willing to sell them at a loss, well, that’s a different story. I think lenders are just as greedy and optimistic as your garden variety sheeple. They aren’t willing to take a loss at this stage, no matter how small. I was at an auction the other day where the judgement was about $125,xxx and the bidding got up to $115,xxx and the lender still took it back. Retarded.
Also forgot to mention that the lender will hire out an appraisal or “broker price opinion” to get an idea of the value prior to auction. These figures can be way out in left field sometimes, so the lender may place an inflated sense of value on the property.
So its not just auction fraud, its tax evasion too? Theoratically, the actuion is supposed to set the market price of the properrty, and it is a barometer for reconciling the loan. in many states, purchase mortgages are non-recourse (bank can’t sue lender for deficiency judgment); but in almost every state, refi’s are with recourse. If the auction only brought in $100 because of intimidation, when it would have brought 60-70% of the note (even if that is less than the bank’s top price), that makes a big difference to the obligation of the buyer, even if its only in the amount of the 1099 for forgiven debt.
OT (also posted in bits bucket): I hear some discussion about rallies and option expiry in March. Could somebody please explain this?
I’ll try. There is a train of thought that as dates near option expirary dates, the market makers (THE PIGMEN !) “game” the market so max number of options expire worthless. If majority of options are “puts” which make money on market going down, they run the market up. If they are “calls” that hope market goes up, they run it up. They may also try both in that week to shake out weak hands.
Come monday after the friday, the normal trend will resume until next month.
To quote invetopedia.com:-
“An event that occurs when the contracts for stock index futures, stock index options and stock options all expire on the same day. Triple witching days happen four times a year: the third Friday of March, June, September and December.
This phenomenon is sometimes referred to as “freaky Friday”.
The final trading hour for that Friday is the hour known as triple witching. The markets are quite volatile in this final hour, as traders are quickly offsetting their option/futures orders before the closing bell. If you are a long-term investor, triple witching will have a minimal impact on you. “
btw: I kan’t spell..
“He isn’t alone. Sarasota real estate broker Marc Citrin is trying to get his sister out of a $148,000 deposit she placed on an Alinari unit.”
Wanna guess who sold Sis the condo? I wonder how many realtors no longer attend family reunions out of fear for their personal safety….
roflow
on house haters the realwhore is always the mother in law, friend etc
wow, wounder how much love there is now ?
So true and hilarious. My chest hurts from a bad cold and it’s worth the pain to laugh. Looks like reality killed the real estate star.
61% of retailers missed numbers, 42% avg. Sub-prime meltdown, etc, etc…Mkt is up 93pts. Even subprimes New etc are all up…un-F*@believable
But I wonder if this is fools’ money coming into the market? Rotating out of real estate and back into stocks, trying to put that money “to work” somewhere.
Bingo
Two questions.
1. How quickly can you “rotate” money out of real estate?
2. Do you think the Northeast’s and Midwest’s lousy February weather had anything to do with more retailers missing their numbers?
For these people, standard investments are so…..gauche. I’m laying odds it’s going to fine art objects….or bubble gum cards. As we speak, the “next thing” is in the works.
Don’t forget, the median price in Sarasota is down 18% year over year. That was a couple of months ago. This was interesting because it came a year after Lereah stated that prices there would probably never go down and it would take something like 30,000 job losses and a 9% interest rate for the prices to even fall by 3 or 5%. Neither of those happened…
Yeah, people should quit wasting their time with lowball offers my arse…
Look it up…
lieRAH owns sht in FL- can we get a list ? hope he bought when his book came out !
“The state’s continuing population decline, coupled with the ongoing insurance and property tax crisis, presents some worrisome issues for the state’s economy.”
Continuing population decline? Is this for real? When did it start? I thought my wife and I were the only ones who left Florida.
I wonder how much of the decline is from the “God’s waiting room” effect?
“Continuing population decline? Is this for real?”
Bill,
There are a lot of grass is greener types leaving the states. There’s also property value chasers trying to find the next big boom area at the expense of their homes and families. Banking, finance, information technology, health care, agriculture, and tourism still have a lot of jobs. Not everyone is leaving, but enough are looking for greener pastures that there is real decline.
On a side note, here in Palm Beach County I processed 3 families exiting the county for an out of state move and 2 were headed in from out of state new to FL. I also processed 2 returns that left and are headed back. That will be the new trend in 12-18 months.
Andy, I am not sure what you do but I am curious your thoughts on Palm Beach County School District’ stating that 150 to 200 families per week are leaving then add to the 99% overestimate by the State Department of education for students (2006). By the way I lived there for 37 years before I left and have recently talked to folks who still live there the general sentiment is how fast can we get out? Remember the census data is guesswork while school enrollment are hard numbers.
“Andy, I am not sure what you do but I am curious your thoughts on Palm Beach County School District’ stating that 150 to 200 families per week are leaving then add to the 99% overestimate by the State Department of education for students (2006). ”
The wife works for Palm Beach County schools. I can’t say what I do for fear of people with pitchforks showing up at my door. They’ve always played a shell game with the number of students. Every year they say, “If you don’t have XXX number of students in your building we’ll start laying off teachers.” This in a district that went 500 teachers short this year after going nearly that last year. It’s true that they are losing students. It’s not nearly 150 to 200 families…maybe 150 to 200 students. They also don’t factor in the students enrolling brand new. They won’t be counted until next year.
“Population decline” is an exaggeration that factually incorrect. I posted this above before I saw your comment, but what happened is that migration rates have shifted a great deal, but the population is still increasing by a few hundred thousand a year.
I’m a data geek, not a realtor.
Thanks. I didn’t think Florida’s population was actually in decline.
The middle class in Florida is in decline.
As long as there are multiethnic illegals willing to live 10 or more to a house and work,ahem, in the rapidly disappearing “agriculture and tourism industries” the population numbers will continue to be high.
And that’s when local governments become particularly rabid. The teat starts to run dry due to the flight of middle class, which pays the taxes. How are local governments going to pay for the health and education of all the babies being churned out by the illegals? Not to mention the expense of the corresponding rise in crime. Has anyone followed the saga of the kidnapping of Clay Moore? They finally located the kidnapper down in Mexico and are bringing him back. I guess he’d rather be in prison here than in Mexico. But just the manpower that went into solving that one crime was mind-boggling. Can you imagine what it cost?
No wonder local governments have their boxers in a wad about lowering taxes.
“…rapidly disappearing ‘agriculture and tourism industries’”
I don’t know what state you’re referring to. Agriculture is going nowhere. The middle of the state has remained untouched. Only those outlying suburban areas have lost jobs. Tourism hasn’t yielded despite some regional loss of business. As long as the sun shines and the mouse lives here tourism will be a staple.
“I don’t know what state you’re referring to. Agriculture is going nowhere.”
Hillsborough County used to be very agricultural. But I can tell you that in the past six years of being in semi-rural Hillsborough, many former orange groves, tomato fields and even fish farms have now sprouted housing. I’ve seen it happen. There is still farmland left, but way less of it. Sucks.
Sorry Andy, the middle of the State has not remained untouched. From Placid Lakes, Lake Placid, Seabring, Winter Haven, Clermont (lost all its citrus groves) into the rest of Lake and Marion Counties have seen a lot of lost groves.
Tourism, is true, hasn’t dissapeared.
JB, I wasn’t referring to the little groves. I’m also going to lump Seabring, Winter Haven, and Lake Pacid in outlying suburbia (as that’s what they were touted to investors). The FL co-op of orange growers (legal mafia) is still quite strong. The other major corporations aren’t giving up any major groves either especially with OJ futures where they are.
Sorry, but I beg to differ.
I realize that you may be looking around your area and seeing many oranges, but my nearly half century old eyes see that there are nowhere near as many farms as there once were.
The Citrus canker debacle was only one of the problems, but it encouraged citrus barons to sell their land to developers instead of fighting the good fight against the state’s ham handed “scientific evidence” of canker woes.
That alone wiped out the lime groves in South Dade County and NAFTA all but killed the factory farmers who row crop here.
Florida used to be the winter vegetable capital, now we grow houses.
If you ride around the state as I often do, you will see the changes.
But then again, if you have only lived here for a short time, it may not look too different to you…
“The middle class in Florida is in decline.”
True. The question is at what point will the population of illegals outnumber citizens.
Based on what data? Census numbers is guesswork at best (not 10 year numbers) while school enrollment numbers are shrinking.
“Based on what data? Census numbers is guesswork at best (not 10 year numbers) while school enrollment numbers are shrinking.”
I touched on this one earlier. They play a shell game and report what’s lost first. At the beginning of the next semester they’ll report new gains. You’ll probably find a yoy net loss of about 1,000 students next year in Palm Beach County. See if my opinion is right. I’m betting on yes. That’s not nearly 150 families per week.
I was in a local Walmart this past weekend and noticed legals outnumbered illegals 20 to 1 here in SW FL. It’s usually the other way around. Where did all the illegals go?
I have noticed this trend of affordable areas becoming unaffordable here in California. We used to have parts of the Southern Sierra, Mojave Desert, and Antelope Valley that fixed incomes or retirees could afford. Now all the decent homes there are $300K and up. Additionally the welfare methamphetamine addict element still has a choke hold on many of these communities. Ultimately, you buy an expensive home in a once affordable area and you are subject to the problems associated with entrenched mentally ill neighbors who are more than happy to separate you from your serenity and belongings.
“Real estate attorney William Nussbaum was also at the auction Tuesday representing a lender. He said he thinks there are so many properties going on the block in Duval County because for the past several years, a lot of people obtained balloon payment and adjustable-rate mortgages.”
Genius. Shear Genius!
Shear Genius!
I know this is not a Freudian slip . . . Shear as in sheeple.
lol
Hey Ben, have I been banned?
Every once in a while there’s a glitch. I thought I was banned a few days ago.
Many are heckled, few are banned.
What do you have to do to get banned?
Advocate buying now.
“South Florida,” he said, ”is working off of a totally new economic model than any of us have ever experienced in the past” according to a realtor who predicted that a land shortage will support higher prices indefinitely.”
- New York Times, Trading Places: Real Estate Instead of Dot-Coms, 3/25/05
___________________________________
Have not posted in a while, just a friendly reminder…
OK, good, I guess not. Maybe the link I tried to post was too long.
Anyway, hedge fund manager David Einhorn of Greenlight capital resigned from NEW’s board. (That’s the hotlink in my screenname for the previous post).
Trouble seems to follow this guy? He was apparently being spied on by Allied, a company he was shorting. WaPo report from last month:
http://tinyurl.com/292p5d
Damn it, I can’t get this David Einhorn link to post:
http://tinyurl.com/292p5d
Well, it’s all good now.
McDonald’s same-store sales are up. A cheap substitute seeing increased sales can be an indicator of lean times . . . although there’s nothing lean about that diet plan.
I think McD’s will be doing quite well over the next several quarters. Average cholesterol levels, not so much.
McD’s…..something I know quite, quite well. Same store sales have increased due to a couple of menu innovations, but mainly because of the corp directive to 24 hour operations. After that goes comp and they realize they couldn’t make a 25 hour day, extended breakfast hours becomes the focus. Long term plans are 24 hours…..and all menu items at any time. Nice concept but will require over $200k in capital investment per restaurant.
That having been said…..if you look at McD’s sales vs recession, it DOES lead in and out of recessions….fact. Factor out what’s driving sales to get a good picture of what’s around the economic bend. Another tip…..as if anyone reads what I write….check transactions instead of sales as it’s the true gauge of trends. Sales, especially first quarter, are higher because of recent menu price increases.
Interesting points. Thanks for the info.
They actually have some good menu options now, at least in the company-owned stores. Many of the franchise owners have been slow to adjust (hurting McD’s performance as a whole).
My closest McD’s is a pit! It’s too bad because there are good stores in this area, they’re just too far for a casual jaunt for me. Oh well, doesn’t kill me to make lunch at home.
At any given date, 80-85% of all domestic McD’s are owned by franchisees. The corp (McOpCo) CANNOT run them, or rather they run them into the ground, and then sell off to francisees to straighten out. Not every single one, as there are exceptions, but if the Area Sup. is doing a good job, he’s either promoted or hired by a franchisee. The schlep who takes his place has no where to go but down. What McOpCo usually does is have a patch of stores they use as “show pieces”….which lose tons of money, or as test stores for new concepts.
Don’t get me wrong, I’m not bashing McD’s…..just know their BS better’n anyone. (wink)
Several things they have done extraordinarily well at are premium coffee…..premium salad menu….dollar menu. Each region has special items they run for a limited time and are pretty good as well…..called “4th Flavors”.
Thanks for the inside info!
IMHO the large menu my stoke interest short term, but they kill the speed that used to be their hallmark. Mediocre (not terrible, just mediocre) food fast. A small menu meant that the food was ready to go.
Tell me! If you try to be all things to all people, you do NOTHING well. People come to McD’s for good food, priced right, served fast. Anyone can debate the definition of “good”, but fast, friendly, service and food, served hot and fresh were what built the brand. They went through so many stages of trying “healthy” fast food…..it’s pathetic. Fat = taste….
The WORST screwup was the microwave phase. It’s shit, but it’s HOT, so nuke it and call it great….a disaster! The other was “low fat shakes”…..any idiot knows high butterfat content makes shakes taste great…so what did they do? Removed it!
….don’t get me going….
“Newswise — Hopeful homebuyers in Florida should act now: The price is right as the state’s single-family residential housing market bottoms out, according to a University of Florida study released today.
“If you’re thinking of buying a house, there’s probably not much to be gained by holding out at this point,” said Wayne Archer, director of UF’s Bergstrom Center for Real Estate Studies. “It doesn’t look like prices are going to fall anymore.”
well, ther it is, bubbles done, everyone back to the bank for your loan.
“Florida’s Single-Family Housing Market Hits Bottom; Market Stabilizes
GAINESVILLE, Fla., March 8 (AScribe Newswire) — Hopeful homebuyers in Florida should act now: The price is right as the state’s single-family residential housing market bottoms out, according to a University of Florida study released today….
The exception is condominiums, which are overbuilt and prone to speculative and naive investors, he said…
For the survey, UF’s Survey Research Center asked a series of questions of 318 industry executives, real estate lawyers, market analysts, title insurers, financial advisers, market research economists, real estate scholars and other experts in the field. This represents an increase over the 183 respondents in the last survey.”
*******
Apparently, by adding more data points, they got the answers they were looking for - at least for single family housing.
Good for them!
Does the University of Florid have a vested interest , or is their academic aptitude sub-par?