The Housing Bubble

Some housing bubble reports from Florida. “Florida’s biggest private landowner, the St. Joe Co., has at least ‘a couple of generations of supply’ in raw land to sell and develop, much of it near the coast, company executives said Wednesday in Orlando. While hurricanes the past two years have slowed resort and home sales a bit, much of the company’s 838,000 acres are within 10 miles of the Gulf of Mexico and will become more valuable in time, and the company can be patient, St. Joe President Kevin Twomey said.”

“‘We are in this for the long term,’ Twomey told analysts during the conference. ‘If we don’t sell today, we will sell tomorrow.’”

“But St. Joe’s relatively optimistic outlook and prediction that baby boomers will keep boosting housing and second-home sales was not uniformly shared by analysts at Raymond James. ‘The economy and the housing market are now entangled in a very delicate and circular relationship, whereby they are both dependent upon each other for stability,’ Raymond James analysts Rick T. Murray and Paul D. Puryear and research associate Andrew Fenton said in the report.”

“‘A disorderly slowdown in the housing market could lead to some destabilization of the economy, given the consumer’s reliance on home equity over the past several years to drive strong spending. At the same time, the housing market needs the economy to remain fairly stable in order to turn the current slowdown into a soft landing and avoid an all-out crash,’ the report said.”

During the third annual Luxury Living Showcase, developers sat down to discuss the future of real estate in the Manatee-Sarasota area. ‘When the market was so hot, people would buy anything just to have their dream, their place in the sun,’ said (broker) Michael Saunders. ‘We think we have an adjusting market and things are just fine,’ Saunders said.”

“There’s not a bubble anywhere that I see,’ said Al Piazza. He said the fact many investors have left the market is good as far as developers are concerned.”

“Piazza, who has helped develop properties in Miami and is developing a project in downtown Sarasota, said he doesn’t see any bursting bubble. ‘We saw investors disappear and the crowd control problem is over, but now we are selling to real buyers,’ Piazza said.”

“Saunders said the market would continue to support all of the new homes in each price range. ‘It is a more measured inventory and a normalization compared to where we were just six months ago,’ she said. ‘When we hear about people reducing prices because they won’t sell, it is probably because they were too high in the first place. It’s time to get real.’”