“It’s Falling Faster Than It Went Up” In Florida
The St Petersburg Times reports from Florida. “As the housing downturn consumes their livelihood, home builders and Realtors soothe themselves with a steady mantra: The seas are turbulent now, but retiring baby boomers will keep the market afloat. Researchers at the University of Florida suggest they may have a point.”
“That’s the conclusion of a report ‘The Florida Housing Boom’ published this week by UF’s Bureau of Economic and Business Research.”
“A UF survey of real estate professionals released this week by the Bergstrom Center for Real Estate Studies held that prices have already bottomed out. That view isn’t universally shared: The number of homes for sale in the Tampa Bay area, about 40,000, is quadruple the inventory of 2005. Oversupply tends to drive down prices.”
“The bureau’s research economist, David Denslow, predicts that higher home prices will force Florida employers to increase wages. ‘We’ve got to adjust to the fact that Florida is now a higher-cost state,’ he said.”
The Tampa Tribune. “Whether you’re trying to sell your house or contemplating buying a home, there’s one question on everyone’s mind: Has the housing market bottomed out yet?”
“There may be a glimmer of hope, however, according to a study released Thursday by the University of Florida. ‘I expect that for most of Florida, prices are as good as they’re going to get,’ said Wayne Archer, director of the Bergstrom Center for Real Estate Studies, which conducted the report. ‘This is comforting news.’”
“The university surveyed industry professionals, including real estate lawyers, title insurers, financial advisers and real estate scholars. There were 318 respondents.”
“Some analysts and economists are doubtful and were quick to question the report. ‘I see absolutely no scope for rising prices this year,’ said Per Gunnar Berglund, senior economist with Moody’s Economy.com. ‘I think prices have a bit further to go.’”
“The median sales price of existing single-family homes in the Tampa-St. Petersburg-Clearwater area was $214,000 in January, down 7 percent from December and significantly below the real estate market’s $239,900 peak in June, according to data released last month by the Florida Association of Realtors.”
“There were 1,768 sales in January, down 41 percent from a year ago and down 27 percent from December’s sales volume of 2,438. More than 34,000 existing homes are on the market in Hillsborough and Pinellas counties, according to local real estate trade groups.”
“Berglund says inventory levels in the Bay area are more than twice the normal level. It would take more than 16 months to sell all the houses, Berglund said. ‘The ratio of homes on the market has risen way above the six-month supply that is considered equilibrium,’ Berglund said.”
The Bradenton Herald. “A shaky house of cards built with loans to countless borrowers who should have never qualified is about to come crashing down, experts believe. Locally, that could mean that an already stagnating housing market may see even fewer buyers in the future because lenders will be tightening loan guidelines, or in cases like New Century Financial, not writing new loans.”
“Warren Herman, senior lending officer with Premier Mortgage Funding Inc. in Bradenton and Sarasota, believes the subprime fallout will be limited, although his company is suggesting caution for the time being.”
“‘They’re suggesting we hold back on these loans right now and see how the fallout happens,’ Herman said. ‘It will stabilize and it would be an opportunity for banks to make money on people who are recovering. There’s always good that comes out of something that is seemingly bad.’”
“Patrice Yamato, president of the Florida Association of Mortgage Brokers, fears the impact tighter loan guidelines will have on Florida. ‘I’m afraid we’re going to take a lot of people out of the market here in Florida,’ Yamato said. ‘I’m also afraid we’re going to be prevented from helping folks keep their homes who could have been helped through these loan programs.’”
“Although stories abound like the one in a recent Forbes article involving an hourly Target worker who was able to finagle financing on a $696,000 home, some subprime loans can actually help homeowners get out of trouble, Yamato said.”
“‘Let’s say they went delinquent on a mortgage and got into trouble and we’re able to put them in this option ARM for two years until they could get out of trouble,’ Yamato gave as an example. ‘I understand the pre-emptive strike (by lenders) but I think they may actually be causing what they are trying to prevent. We’re not going to be able to help homeowners who are going to need help. I’m afraid for how it’s going to affect our marketplace.’”
“But John Bancroft, editor of Inside Mortgage Finance, says tough medicine is needed to prevent future defaults and foreclosures from subprime loans.”
“‘Certainly, for many borrowers, they’re going to have a more difficult time finding replacement financing,’ Bancroft said. ‘But I’m not sure that’s a bad thing because obviously getting into those types of financing in the first place wasn’t such a great idea for them. I think generally this kind of medicine is good all around.’”
“Florida ranked No. 3 in foreclosures in January, behind California and Texas, with 11,709 new filings. As of Friday, there were 633 properties in Manatee County and 742 in Sarasota County in pre-foreclosure, according to RealtyTrac.”
“Herman said lack of financing availability, coupled with rising property insurance costs and taxes, may put a temporary dent in Florida’s housing market.”
“‘You have a lot of people going out of the state. They can’t afford to stay,’ Herman said. ‘We’ve been through this boom cycle where the fish were jumping in the boat. Now the lenders and Realtors and mortgage brokers actually have to put a line in the water.’”
The Times Union. “WMC Mortgage Corp., a unit of General Electric Co., is shutting down its Jacksonville office and laying off 68 employees.”
“The announcement from the company, which decided to discontinue some of its subprime lending operations, comes as subprime lenders across the country face increasing loan defaults and skittish investors and creditors. Jacksonville, in addition to facing a high foreclosure rate on local loans, has a wide base of processing centers for financial services companies.”
“WMC Mortgage will no longer give loans with no down payment.”
“Wachovia senior economist Mark Vitner said that Jacksonville’s exposure to the contraction being experienced by the mortgage market is greater than average but that he didn’t expect the difficulties experienced by subprime lenders to carry over into the rest of the mortgage industry.”
“‘It’s not driven by a deterioration in credit quality but by fraud,’ he said. Vitner said many subprime borrowers exaggerated incomes to receive loans.”
The Orlando Sentinel. “Condominium owners in the Metropolitan at Lake Eola, a downtown Orlando complex that was converted from an aging hotel, are complaining that they bought into a property rife with problems.”
“A lawsuit filed in state Circuit Court by the Metropolitan at Lake Eola Condominium Association seeks to have the condos’ developer repair everything from the roof to the heating-and-cooling systems.”
“As many as 50 percent of the owners who bought from David Eichenblatt, the Atlanta developer, later resold their properties to others for big profits during the height of the home-buying frenzy, the developer contends. Those higher prices paid by the resale owners may have led them to think their properties were comparable to the new condo-tower units rising all around the Metropolitan in downtown Orlando, Eichenblatt argues.”
The News Press. “For a number of people who tried to buy a house as an investment in 2005, 2007 has become a bad year. For the second time in 30 days, a builder has filed more than a dozen lawsuits against buyers who contracted to buy houses then opted not to close.”
“The problems revolve around a soft housing market and appraisals that are lower than expected because of the number of homes on the market.”
“Real estate experts say it could become common for builders to look to the courts to make up money lost on houses they already have built but are unwanted. ‘I think you’re going to see it more and more,’ real estate attorney Kevin Jursinski said.”
“He said buyers often don’t have much of a remedy if the contract states they can be sued if they don’t close. ‘It’s like playing poker and the other side knows your hand,’ Jursinski said. ‘You can’t bluff.’”
“This week, Advantage Builders of America filed lawsuits against 13 people, four from Southwest Florida, each for more than $15,000 in damages and attorney’s fees. In February, the builders of Sail Harbour, a south Fort Myers development, asked the court to force 29 people to complete payment.”
“Jursinski, who has practiced real estate law for 25 years, said the houses that people bought two years ago as investments have depreciated because the market is flooded. ‘Now they’re walking from their contracts,’ he said. ‘The builders are wanting people to close.’”
“For Mark and Kerry Trenkamp, of Fort Myers, the Cape Coral house they contracted to buy from Advantage Builders in August 2005 was going to be a new home. Then it became an investment. ‘We were kind of looking out there to move,’ said Mark Trenkamp, one of the 13 being sued. ‘Then the market went so bad.’”
“Cape Coral attorney Bill McFarland, who represents Advantage, said the company is just asking for what its contracts state. ‘They can’t stick their heads in the sand and hope it goes away,’ he said.”
“McFarland said many banks are opting out of loans with buyers, which leaves builders developing a house that can’t be funded. That has been happening when houses don’t appraise for the loan amount. ‘Nobody wants to be responsible for the shortfall,’ he said. ‘It’s a mess, and it’s going to get worse as things continue.’”
“In the Sail Harbour cases, investors said they were misled about aspects of the properties and the company took too long to build their units. The company is asking the court to force 29 investors to buy houses on which they didn’t close. Jursinski said the soft market is affecting banks, buyers and builders. ‘It’s a trickle-down effect,’ he said. ‘We’ve got a big, big supply to get rid of.’”
“McFarland said the supply is going to take years to drain. ‘It’s the stuff that was written in ‘05, in ‘06 that is still out there,’ he said. ‘The market fell fast. It’s falling faster than it went up.’”
‘Grandmothers, puppies and children are on the short list of likely victims if Miami-Dade has to start swinging the budget ax, according to County Manager George Burgess.’
“An agreement to sell a package of loans held by Brasota Mortgage Co. worth about $2.7 million to a third-party investor, which should help wind down the complex case more quickly, was announced Friday. ‘I’d like to wrap up Brasota and, in order to do that, there’s no sense us sitting around for three years collecting $3 million in mortgages. I’m going to sell them,’ explained McHale.’
‘Local governments in Broward County might get to cash in one more time on rising property values as disparities in the tax system continue to grow, early projections from the Property Appraiser’s Office show. ‘People need to start screaming that we need to do something about property taxes because people are leaving the state,’ Roberto said.’
like you gots your fire and PO-lice
all BS it’s the school babysitting programs that need the chop
the teachers unions rule the World
i was in florida last week. there were so many houses on sale; it’s crazy. there was a definite, palpable sense of frustration and maybe even desperation. this is so far from the just last year.
I just got back from a business trip to the Tampa/St Pete area. Last year it seemed like most of the FOR SALE signs were concentrated in the newer sub-divisions: this year they were EVERYWHERE. Even in the old, established neighborhoods along Bayshore Drive (lots of beautiful old homes, along with newer but still tasteful mansions and condos) it seemed like every third house had a sign out front. I smell fear….
I noticed even people who bought in my neighborhood sell after passing the two year mark. I don’t think it has anything to do with the tax break, I think around 2 years and 6 months people start looking at their ARM which will adjust and after exploring new financing say to themselves we have to sell. Throw in a HELOC and they are trapped.
“because people are leaving the state,’ Roberto said.”
Is this really true or have they just stopped counting absentee homeowners and investors?
I love the attitude that “we can help people who are in trouble with loans but giving them more loans”.
it still hasn’t sunk in that money isn’t free.
I know she is not a gobmint employee, but there are lots of these scrambled eggs for brains morons in state, local, and fed gobmints.
Got 10% down?
There used to be an anti cocaine comercial on about 20 years ago. It went like this. I need more coke so I can work longer so I can make more money so I can get more coke so I can work longer…….. and on an on.
During this typing my point of view has changed from the lending scenario looks the same to….. lets just give the FB’s free cocaine so they can work longer.
“That’s the conclusion of a report ‘The Florida Housing Boom’ published this week by UF’s Bureau of Economic and Business Research.”
Hmmm. There is a whole bureau of them. ‘Nuff said.
w assistant deputies and goons-all will give themselves raises
considering the FNM and FRE deals the sheople will keeps their heads down and pay their taxes
Someone emailed me the FU report, mentioning how ‘cogent and thought out’ it was. It’s a survey…of RE professionals. I scanned it; there is no mention of prices and incomes, nothing on historical price levels or comparable rents.
On top of that Ben there is about twice the inventory they are reporting. I would bet not much shoe leather went into that report. My guess is they sat on their asses and pulled data from public sources and most of their sources have not been in the field.
I am out there every day and I see noone save an occassional Dish installer of a few subs finishing up. Boots on the ground are the key to understanding the full scope of this thing in Fl.
Boots on the ground are the key to understanding everywhere. My friends who are active RE investors and builders saw the peak coming and got out a couple of years ago. The only ones who stayed in are the passive investors.
Are you telling me the specuvestors who bought RE over the internet will not be successful in the long-run?
Kindas reminds me of the Literary Digest telephone survey of the 1936 presidential election predicting that Landon would defeat Roosevelt by a landslide. That sample was skewed with affluent respondents (voters with telephone service during the great depression), and the pollsters did not correct (filter) for this bias.
Sounds like the Bureau is desperately trying to manufacture something that the local RE people can point to as credence and/or evidence that RE is not tanking.
Who is funding this report?
Got 10% down?
I just looked at the sample group and concluded it was poorly designed and fraught with REIC bias.
That was my impression exactly. Were potential buyers surveyed? After all, we are the market for this inventory. I’m also trying to understand how so many universities can have “centers for real estate studies.” Three guesses as to who funds this type of bogus scholarship, which sounds a lot like the Tobacco Institute questioning the adverse health effects of smoking.
I wrote a couple of days ago that the three biggest industries in this state are tourism, agriculture, and inflicting urban sprawl upon us. The fourth largest industry is lying.
I too noticed the lopsided population surveyed. And the contradiction implied in the recovery strategy: it’s “baby boomers” who are going to save the Fla market, but it’s “wage increases” that are going to make housing more affordable. I can speculate that “baby boomers” who come to live in Florida are not there in search of “wage increases,” and in fact would find them troublesome (in terms of making day-to-day services more expensive).
I have a bunch of boomer friends who are Canadian. Many were planning to buy in Florida to have some place to go in the winters. But they are well aware of the prices for homes, the taxes, the worry about having their investments blown away in a hurricane. A number have now switched their sights on Mexico preferring the different culture. But the talk now is to just rent for the winter season and not plow a bunch of cash and worry into another home anywhere else. Too many things can go wrong.
And here in Hog Town, home of the UF Bureau of Economic and Business Research, everyone is holding their breath hoping this place is different than the rest of Florida.
Yeah, sales are definitely very slow in Gainesville. Only the cheaper stuff is selling - the mean price of homes sold in Jan and Feb 07 is around 160-something based on public records
Whatever happened to just losing your
deposit on a house if you don’t close on it??
Can they really really file a lawsuit???
Friends of mine are in this postion in Fort Myers?
I lost a deposit on a condo a couple years ago.It was only 1500.00 so it wasn’t too bad.In the meantime the prices dropped from 190k to 150k.
Clients walking away from their promise to buy a spec house can be sued if there is a clause in the contract which says they can be sued. Apparently, this type of a clause was written into same. A good lawyer for the developers would have covered these contingencies… Just in case of a situation like this.
The whole purpose of a contract is to assign rights and obligations to establish what may or may not be done by either parties. The judges may find extenuating or mitigating circumstance which alter the the outcome of these suits; but going into the courtroom, the buyers are probably on the short end of the stick. gordo nyc
Clients walking away from their promise to buy a spec house can be sued———
That makes sense, and they should be, the spec builder is counting on their money to finance the project.
But a Builder doing a 100 homes will probably have some of of a wiating list and I really dont think a Judge will force the “buyer” to close and to lose even more money.
A waiting list? What year are you living in? 2004? Oh you mean a waiting list of people trying to get out of their deposits?? I agree with that!
The problem I find with the builders making the buyers buy the house is that the prices have gone down so they might not be able to obtain financing now on the house based on the original terms of 2 years ago . How can a court force a party to buy a house if a lender won’t even go on it based on the original terms . Wouldn’t the lender have to do a current appraisal . Buyers that agreed to pay cash for the property might be in a bad position regarding being forced to proceed wth the contract ,but contracts that were subject to financing were a conditional sale .
Also the builders were dealing with alot of sub-prime lenders 2 years ago that might of pre-approved these borrowers and alot of those lenders might be history already .Can’t the builder just be happy with getting the deposit ? Those builder contracts were so one-sided 2 years ago anyway .
If the buyer was smart he had a financing contingency written into the contract which might get him out of a forced purchase. If not, then a judge would be obliged to rule in favor of the developer; and the sale could be forced thru.
More likely, there would be a settlement that would give the developer the seller’s original deposit, an amount to cover the developer’s court costs, and then an agreed upon amount to cover his “losses” meaning the loss the developer would suffer becasue the value of the home is now lower than it was when the contract was signed.
Most real estate contracts give the seller one of two options if the buyer fails or chooses not to close. 1- Keep the deposit as “liquidated damages” and sign a release that states the buyer is off the hook and no further action will be taken. 2- Return the deposit and sue to make the buyer go to settlement under the original price and terms of the contract.
But it’s the seller that has the option. Once the lawsuit is filed, seller and buyer can choose to negotiate some other kind of settlement- maybe an additional payment by the buyer to get off the hook, maybe a price reduction by the seller if the buyer will settle.
It’s easy to get out of the contract. Just tell the lender that you’re unemployed and you cannot get financing. The other option is to temporarily lower your credit rating by paying everything with your credit cards. After your loan application is rejected, you can pay off the cards. The developer cannot sue you if you cannot get financing.
The first question to ask before you sue anyone is “Can they pay?” Assets first, then damages incurred and liability (determined by the contract). Many of these people have nothing to take. Suing them is a waste of money and time. Any wise plaintiff will run an asset search first before going to the courthouse.
“Although stories abound like the one in a recent Forbes article involving an hourly Target worker who was able to finagle financing on a $696,000 home, some subprime loans can actually help homeowners get out of trouble, Yamato said.”
This is way the whole system is screwed up . Beer Me !!
I can’t find a link to that article. Can anyone help?
http://www.bradenton.com/mld/bradenton/business/16872212.htm
John,
Thanks. I guess I should have specified the Forbes arcticle
Yes, let’s have someone dredge up at least 3 people who have been ‘helped’ with a subprime loan. Ignore all those other stories that abound about the downside…that’s just noise!
“That’s the conclusion of a report ‘The Florida Housing Boom’ published this week by UF’s Bureau of Economic and Business Research.” Whose members all have vested interests in keeping prices up. People who read this and believe it may run out and buy houses, and homeowners who read this and believe it may hang onto their hilarious wish prices, but I live here in Tampa, and I can see what’s happening. Even in the most expensive neighborhoods, sellers are throwing in cars and boats and anything else they can think of to unload their overpriced properties without lowering prices, because as we all know from the NAR, we’re just going through a minor, temporary, much-needed, welcome slump that will correct all imbalances withing two or three more weeks, so that realtors can start lining people up to bid on cracker boxes again.
I saw a FSBO that said “Keep the Pontiac in the garage if you want!”
Read: my wishing price is totally negotiable.
Ben, I’ll tone it down; the “boomer” article got the blood pressure up a little…. my apologies.
I had a new Pontiac once, and it was ALWAYS at the service garage getting one thing or another fixed. ‘nuther reason why not to keep this Pontiac in the garage, just get the lower price.
Got 10% down?
Amen!
Expert= Shill
This is a selling strategy I don’t get. Why try gimmicks like throwing in a car when lowering the price by the equivalent amount should work better? How does this benefit the seller? I understand why builders would do this, but no individual home owners.
It benefits the seller, because the junk thrown into the deal isn’t worth nearly as much as it appears to be, and is all depreciating in value, so by the time the property sells, if it sells, the homeowner has managed to turn his aging crap into prime new dollars.
Look. Anyone buying in this environment is an idiot already. If they read some idiot written article that makes them afraid, you offer them some idiot incentives to come back and make that idiot purchase.
You don’t have to be Terry Schiavo to understand this stuff.
The worst part of this is now realtors will be sending out mailings to sheeple quoting from this report. Some suckers will probably fall for it, but if so, then the axiom of ‘A fool and their money…’ applies anyway.
That “boomer” article is such a joke. There are 2 types of boomers
1. The ones that still believe “the good life” is somewhere in the southeast
2. The ones that figured out downsizing and staying put/snowbirding with seasonal rentals is where it’s at (the forthcoming McMansion bust in the NE)
Those that fit into category 1 - at the very least - are eyeballing places other than FL (TN, NC, SC et. al). If I had a dollar for every yankee and half-back talking about all of the ________ville’s I’d be madly rich.
I’d also have to pay myself. I can’t return to NY, and I doubt I’ll stay in Florida beyond 3-5 years.
I am one of your statistics. I just retired. Initially the plan was to buy in Ormond Beach. Live year round. Now I have plans to rent in OB and buy a permanant home elsewhere… Probably Boulder CO. gordo nyc
Hey Gordo,
About 2 years ago my parents’ boomer circle starting retiring - most of them a part of the middle-to-upper middle class that will be retiring en masse’ from decent jobs in “corp. America.”
I believe this *will* have a huge impact on a lot of different things. I just don’t think it will be the savior of Florida real estate. We have to recognize that while many boomers were drawing up retirement plans, investors leap-frogged them and priced them out of the market. And for many boomers (like my parents), it’s not about affordability, it’s about common sense and numbers.
My parents can afford Florida prices, it just makes no sense for them to assume that much risk for 2-3 months of snowbirding.
They also have the option of travelling wherever they’d like.
They can publish these articles all they want. It’s not an accurate picture of what is actually happening.
My parents and a lot of their friends are retired. They rent a lot in Yuma AZ for about $5K a year. They bought a brand new Park model trailer for $40K. Most of their friends have done the same. They have a ball down there.
Other people we know rent a seaside condo down in Mexico. They move to a different location every year. Still others have a truck and trailer or a motorhome.
None of these people are buying a place in Florida !
Right , it was just hype by the REIC . The REIC had to explain to younger speculators ,who were going to buy all these home they wanted to market to them , that “rich baby boomers and snowbirds “were the future buyers of these investment flips .
Sure some baby boomers/snowbirds were buying when the prices were cheaper ,but not now . When people retire they look for cheap housing . True that some baby boomers drove up the prices in some areas from 2002 to 2005 but eventually high prices kill the market .
Boomers saving the Florida real estate bubble is a myth. First of all, the ‘boomer’ effect is going to be spread over 15-20 years. The bubble is going to hit bottom in two or three years.
Second, the boomer to Florida formula is based on cheap houses and living expenses in Florida. Everyday, it is becoming more espensive to live in FL compared to other possible states like SC, NC, TN and AL.
Finally, boomers have their retirement monies in their houses; and after this bubble those funds are less than what they had hoped for. A lot of boomers will be working when they thought they’d be retired. Gordo nyc
And let’s not forget the study that came out a couple of months ago that stated that 89% of all boomers want to retire near where they currently live.
When we “involuntarily” retired back in 2002, Florida was the dream destination. Low housing costs (compared to DC area), low taxes, no winters. What’s not to like?
Now it’s high housing costs, high taxes, high insurance and hurricanes too. Still no winters, and I must admit we suffered through our first winter here. But we’re glad that we are gone.
“I must admit we suffered through our first winter here.”
But you are almost out of the woods and although the winters in Florida are a dream, the trade-off is the blanket of humidity that descends sometime in May and lasts through October. That’s six months that most people couldn’t survive without air conditioning and Florida has been very lucky not to have had any major extended power outages. Imagine being trapped in a condo during a power outage in August/September.
Add to the hurricanes the increased spring fire risk, with all the new development. Ah, I love the smell of a Florida springtime muck fire in morning.
Image being stuck in a condo without a/c or power for weeks? Don’t have to. Remember Wilma in 2004? Yay, I was out of power for a month. So were tens of thousands of others. We will be again when (not if) the next cat 4 or 5 hits.
I still think that rolling (planned) power outages are going to be the norm in FL. Nobody is building new power plants in the SE, and they have been squeezing more out of older power plants by phasing in newer technologies. But eventually, they will run out of capacity.
Got 10% down?
Another BOOMER MYTH is the notion that they want to spend all of their proceeds from the sale of their “raised a family home” on a new home somewhere else.
Health care, grand kids, camper, vacations… I can think of a million things. Most of them don’t want th hassle of calling the plumber at 4:00 am and mowing the lawn.
GORDO nyc reply
Nice new house down the street from me in Ormond, for rent @ …..GET THIS….$1200/mo…flipper stuck in the middle. Was for sale @$300K…nice gated golfing community….
By the way, just to kick the Tampa/St. Pete region while it’s down, there is a serial rapist in St. Pete targeting elderly women. “LOCK YOUR DOORS” stories usually ding prices too. I still predict a a marked increase in violent crime as this whole thing unwinds.
A very sunny place for the shadiest of people.
Q. How much infra structure building was started in Fl and LV based on faulty homeowner data (i.e. bought by flippers how never moved into the area)? I see property taxes in these cases rising even with falling property values. Won’t be long before the state of NV has a state income tax.
In Florida, there is at least one proposal circulating in the state legislature to drop ALL property taxes and make the revenue up by hiking the sales tax, I believe by 2.5 percentage points to 8.5%. Everyone’s really in a frenzy about the insurance/tax burden down here due to the double-whammy of hurricane-driven insurance rate hikes and property value-driven tax hikes (at least for those not homesteaded and therefore protected from big yearly increases by Save Our Homes)
Drop the property tax and save the rich people a bundle. Jack up the sales tax and really stick it to the poor people. That plan is immoral.
Yes it’s immoral. But how many poor people vote?
In Florida we don’t allow poor people to vote. Remember the 2000 election?
Seems to me you don’t allow smart people to vote, either. Of course, they’re a pretty low percentage in FL.
Actually, the plan is to drop property taxes on all HOMESTEADED property. I am intrigued by the idea, because it would appear to be about more than just the current residents, but also a way to stem the flow of out-migration from the state. Of course, for that reason only I could be against it, but as a resident, I like the idea of owning a home outright, with no mortgage or taxes.
As to penalizing the poor, I really don’t see how, if necessities like food and shelter are not taxed. Of course, transportation would be a burden, but as to shopping, I do my shopping at thrifts and second hand shops. I don’t need plasma TVs, X-boxes and rented furniture suites. Many of the “working poor” in my area have these things. I don’t. They also drive some nice financed autos and I drive a paid-for sh*t box. And I don’t qualify for the nice subsidized housing the working “poor” are “entitled” to around here. I make too much money, but not enuf to rent the “lugzhurry” condos here. There’s a HUGE disparity in housing around these parts. When people talk about a war on the middle class, I see it. In this area, if you’re middle class, your choices are either to bury yourself to pay an outrageous rent on a “lugzhurry” condo or apartment, or in being frugal, live among some pretty questionable neighbors in lower income accomodations. This has happened in only the last five years. All the decent little mom and pop middle class rental homes and apartments disappeared, either to development or to “investors” who “have to get” X amount to cover their mortgage, taxes and insurance.
This law will penalize the poor plain and simple. In counties like Collier and Lee hundreds of millions in income will be lost if the law goes through. It also requires 2/3rds majority to pass. Abscentee owners will dump more property on the market since they will be screwed (even more). Many so called “homesteaders” do not live here. If the state dug into this they would find a huge source of tax revenue.
Bottom line the law will not pass.
Add to that is the fact that once a tax is in, it NEVER goes away. They’ll do like the Congress did with the estate tax, higher and higher exemptions from 2001 through 2009, then back to what was in 2010. Budget problem solved. Taxpayers still get screwed. You’ll be likely to have a 9% sales tax AND property taxes.
Actually, I think it is zero in 2010, but then goes back to what it was.
“Bottom line the law will not pass.”
In Florida, what Marco Rubio (Speaker of the House)wants, Marco Rubio gets. Plus, since the residents would be the ones voting for it, and they stand to benefit, I’m betting it would have a good chance of passing. The insurance companies would love it, since it would allow them to keep on with their rate hikes.
If absentee owners dump more property on the market, good on ‘em, cobber. Agree with you about the “homesteaders” that don’t live here. I think the state will start digging into this in the near future.
marco rubio is an idiot. some developers came up with this crazy idea to get people holding both ends of a knife. create some movement of properties and have people spend more money on junk within their homes, so developers can justify the cost of the home. it is such a sucker move, if florida pass this law, it will be a real exit out of florida when people see what is really going on. no winter in this state worth a cat 4 or 5. the government dont even respond to hurricane hit areas anymore. that zero lot slab is all that will be left, while you will be living in a tent. it is amazing how many people forgot about hurricane andrew. south miami dade never really recovered. marco is like the rest of the miami politicians, just criminals.
In Warren County, KY they are talking about a new tax on insurance premiums. Are house insurance premiums taxed in other places by the county gobmints?
Got 10% down?
Umm, I haven’t seen any “infrastructure building” to match all of the condo development here in Miami. The airport is perenially under construction, but other than that, I think the property tax windfall must be going into more important projects such as teaching underpriveleged kids that it’s OK to have 2 daddies.
“‘It’s not driven by a deterioration in credit quality but by fraud,’ he said. Vitner said many subprime borrowers exaggerated incomes to receive loans.”
This guy might be puffing the magic dragon. Yesterday Ben reported 51 pct of mortgage borrowers are prime, 27 pct are Alt A, and 14 pct are subprime. In addition, no one is buying subprime paper anymore as result of developments in the ABS market.
Therefore, how can 14 pct less buyers not have a detrimental impact on future housing sales, prices, demand? Equally or maybe more importantly, how can 14 pct more sellers because of subprimers’ inability to refinance not have an impact on supply?
I doubt anyone will be able to get loans substantially exceeding thier ability to pay any more, so I would take that 14 % as a starting point.
Hmm, I’m a baby boomer ready to retire… I look at the home prices in Florida…2-3 times the prices in other sourthern states… Where do you think I’m going to go…
I agree BBF, I am starting to look as well, and my thinking is the same as yours.
Coworker is going down to FL in a few weeks to start scoping out a retirement location, will be interesting to see what he reports back. He reads the local news online and said he doesn’t see much mention of housing bubble issues. I think he’s been reading about Orlando.
I know a baby boomer couple retiring that just bought a RV instead of buying a second home .
That’s what we did last year. I took early retirement and the Mrs. wants to hit the road. Keeping our house- the mortgage was history about three years ago and now we don’t give a rat’s a$$ about RE. If we don’t like the neighbors we just change neighborhoods. No matter where we go, we’re home. Never figured I’d be driving a bus for fun, but I’m getting more comfortable with it. We drop the towed Jeep and break out the flyfishing gear. Many places to camp for free out west for short stints. Probably start to put together a short list of places we want to spend some serious time- Yellowstone, the Ozarks, New Brunswick (NOT NJ), Lake Chelan… Like the Who says, Goin’ Mobile
My family is doing the same as you, since 04. The only difference being we didn’t keep any real estate. Doin the Yosemite gig starting monday. It’s been fantastic! We are going up to the pacific NW this summer and hoping to systematically torture any old school chums/friends in between destinations by setting up in front of their homes (preferably in the middle of the night while they are asleep). Good fun!
As long as you move it and don’t leave it. My brother parked his in his front yard (not in the street) at Ft. Myer’s Beach house. First he got complaints from his neighbors because the thing is huge and didn’t move. His response was that they already thought he was “trailer trash.” If you’ve ever priced one of those things, you realize that isn’t true. Next he got a visit from some local official who informed him that he couldn’t park it under the power lines. So, he is going to pave his front yard and move it from under the lines (and solve the grass cutting problem).
Naw, we just blow into town for a day or so. No one gets their panties in a bunch if you are only there for a couple of days and not causing trouble. We just leave otherwise.
Big motor homes parked in front yards become eyesores pretty quick, imo.
True. Hell to have to juggle vehicles or take a cab to it.
That’s what we did. Now we don’t give a rat’s a$$ about RE. Keeping the house- its paid for, but we now have flexibility to change neighborhoods whenever the neighbors get too annoying. Making a shortlist of places to spend serious time-Yellowstone, Lake Chelan, Atlantic Canada (while we’re still allowed in that country). Like the Who, We’re goin mobile…
Hmm. To an Alaskan, Costa Rica and Florida are about equally exotic. Wonder which one is cheaper?
“Condominium owners in the Metropolitan at Lake Eola, a downtown Orlando complex that was converted from an aging hotel, are complaining that they bought into a property rife with problems.”
I admit some marketers are scum but how can buyers not anticipate repair problems after purchasing dilapidated product? I’m getting steamed. I’ve gotta take a walk.
“The bureau’s research economist, David Denslow, predicts that higher home prices will force Florida employers to increase wages. ‘We’ve got to adjust to the fact that Florida is now a higher-cost state,’ he said.”
What? What? What?!!!?!?
And this guy is an economist?
Lower the prices!
I’m guessing he wrote this because he’s about to ask for a raise.
Are you kidding? He works for a university. They don’t ask for a raise. They come automatically and without regard to competence.
Funny, I live in one of the costliest areas in the U.S. (Silicon Valley) and wages here are increasing at UNDER the rate of inflation for seven years now. Employers are in no rush to pay more here, why Florida ?
But there was a time when big employers would pay premium wages in the Bay Area and NY compared to their other lower-cost locations. Don’t know for sure, but I think those days are gone.
Right. And let’s magically make employers in the state pay higher wages, and get the money from . . . where?
Employers are not going to increase wages. No company is going to say, we really ought to raise wages even if other companies haven’t yet. Companies will continue to follow the philosophy that people are willing to work for less because of the good weather. Florida has always had below average wages because people will sacrifice material goods for good weather.
I can attest to the fact that in Central Florida a full 70% of the loans originated in the past 3 years are either ARM’s or piggyback 100% financing with seller concessions. $6000 to $10,000 per loan in concessions doesn’t sound like much till you multiply it times the number of sales.
Without subprime money we are toast as noone has any money to put down. In many areas the builder reduced sales have undercut the buyers who purchased in the past 2 years and this has put entire subdivisons downside up.
I had a call for an appraisal this past week and I pulled the last sale on the subject property which was late 2005. I then pulled the latest sales and the developer had cut the same unit by $50,000 and topped that off with other concessions within the past 6 months.
The owner asked me what he could do to refinance out of the adj ARM in place at 105% of his purchase price as he had elected to make a lower payment.
I told him that based upon his current balance and the impact of the builders reduction he would have to come up with roughly $67,000 in cash just to get even and on top of that the subprime meltdown would probably require his ponying up another 10% downstroke for the new loan.
Oh and there is a prepayment penalty of $11,000 on the exsiting ARM.
All I heard was an expletive and he hung up on me.
That guy is in a world of hurt…
—> $67,000 in cash just to get even
—> 10% downstroke for the new loan
—> Prepayment penalty of $11,000
—> Delivery-confirmed 4.8 oz. envelope to the lender $5.22
The sound of jinglemail relieving another FB of another future McGrowhouse…
PRICELESS
Sadly he is the norm and not the exception.
That dude is going to be hurting The sad fact is that he used an ARM to afford the place. This will lead to BK, broken family (divorce), … Only if he had chosen to use a fixed rate loan when the mortgage were 5 - 6 % ? at the time, he would be under water in ‘07, but still living. When I bought here in Hainesville in a SFH development (1993) it took the developer a few years to finish the project and it would have been a poor choice to sell out or expect price gains when you are competing with an 8000 lb gorilla
Never buy at the front end of a development for just that reason. Always buy at the end after you have a pretty good idea what is going to happen.
Sorry, dimedropped. Sounds like a case of shooting the messenger.
Info from the trenches. Good post!!!
“A UF survey of real estate professionals released this week by the Bergstrom Center for Real Estate Studies held that prices have already bottomed out.”
LOL yeah right, here in Key West half the island is for sale
In the rest of Keys they are canceling Condo projects left and right.
I find the workings of the minds of cheerleaders in real estate amazing. The new “rules” which are slowly coming into play where mortgages are concerned, because of the collapse of sub-prime loans, are based on the old “rules”. Gee! What a surprise! That is, if you want to buy a property you will need a down payment and good credit. In the last 6 years of this mortgage madness, we have seen many people, many with bad credit, taking on ridiculous mortgage monthly payments (which they couldn’t afford) with NO down payment. I think we can safely assume that the majority didn’t have enough saved for a down payment because they didn’t have enough lefty over from income.
Now let’s add up the facts. (A) They didn’t have a down payment - now they need a down payment. (B) In the meantime, the down payment (they do not have) would now be much larger because of the property price increase. (C) These foreclosures we are seeing are because they cannot afford the mortgage payment re-sets for the property they bought with no down payment.
The bottom line is we have people who cannot afford current prices having to save up for a bigger down payment (because of price increases) to get into a property they cannot afford anyway. And let us not forget that a big slice of those who bought in the last 6 years had bad credit or low incomes which would (in normal circumstances) preclude them from buying anyway.
Oh, yes. The bottom is in (lol). Now is a good time to buy (lol). There are some great bargains out there (lol).
Even more scary are the statements from these idiots who think retirees are going to flood into Florida and soak up all the inventory. Sorry, guys. Bad news. Even ignoring the fact that Florida’s inventory of unsold homes is through the roof, the cost of living in Florida with it’s property insurance and property tax, will drive retirees AWAY from Florida.
I have a sneaking feeling this mess is still in the VERY early stages of what will turn out to be the bursting of biggest asset bubble (including stock market market and tulip bubbles) the US, or the world, has ever seen.
Not to mention, this whole “retiree” canard has already been accounted for in the price increases driven by specu-vestors. Kinda like when Amazon.com was trading on the basis of future sales over 30 years away.
If you need a real fact to confirm we are in deep doo doo go to your local Home Depot or Lowes and look at the overflowing stocking levels in the hardware section aisles. The nails for the pneumatic guns were overflowing and stacked in the aisle
And let’s imagine for a moment what these facts will mean for China. That will be a double-owwie when those orders from the Yankees stop coming in. A global meltdown is on the way, spreading from Fort Myers to Beijing!
“The market fell fast. It’s falling faster than it went up.’”
Take this statement and multiply across all the other U.S. markets that were driven by massive speculation. Not fundamentals. Not baby boomers. Not “everyone wants to live here.”
Does anyone else think this could end up worse than the NASDAQ meltdown, because of the “extreme” leverage involved?
It’s hard to see how it WON’T end up worse.
This will make the tech bust look like a tea party. Unless of course they can invent another bubble to cushion the blow. Then that bust will be the greatest bust of all time. Unless they can invent another bubble to cushion the……..
Markets may change but human nature doesn’t. Where there is greed there will be shills. Here is a news items from Chicago in 1836:
Source: Harriet Martineau, Society in America, Volume 1, New York: Saunders and Otley, 1837
I never saw a busier place than Chicago was at the time of our arrival. The streets were crowded with land speculators, hurrying from one sale to another. A Negro, dressed up in scarlet, bearing a scarlet flag, and riding a white horse with housings of scarlet, announced the times of sale. At every street-corner where he stopped, the crowd flocked around him; and it seemed as if some prevalent mania infected the whole people. The rage for speculation might fairly be so regarded. As the gentlemen of our party walked the streets, storekeepers hailed them from their doors, with offers of farms, and all manner of land-lots, advising them to speculate before the price of land rose higher. A young lawyer, of my acquaintance there, had realized five hundred dollars per day, the five preceding days, by merely making out titles to land. Another friend had realized, in two years, ten times as much money as he had before fixed upon as a competence for life. Of course, this rapid money-making is a merely temporary evil. A bursting of the bubble must come soon. The absurdity of the speculation is so striking, that the wonder is that the fever should have attained such a height as I witnessed. The immediate occasion of the bustle which prevailed, the week we were at Chicago, was the sale of lots, to the value of two millions of dollars, along the course of a projected canal; and of another set, immediately behind these. . . . Whereas, wild land on the banks of a canal, not yet even marked out, was selling at Chicago for more than rich land, well improved, in the finest part of the valley of the Mohawk, on the banks of a canal which is already the medium of an almost inestimable amount of traffic. If sharpers and gamblers were to be the sufferers by the impending crash at Chicago, no one would feel much concerned; but they, unfortunately, are the people who encourage the delusion, in order to profit by it. Many a high-spirited, but inexperienced, young man; many a simple settler, will be ruined for the advantage of knaves.
Great quote. I read something similar that was written by a woman about the 1930’s Florida real estate bubble. It’s amazing how eerily similar the greed is over the course of time.
The Chicago market in 1836 fell 80-90% and heralded what was know as the “Hungry Forties”. This was probably a worse depression then the 1930’s. The the 1840’s depression was world wide with Ireland getting crushed. The equivalent of the Federal Reserve (Bank of the US) failed and the world moved to the left.
The “Communist Manifesto” was written in 1852-54.
In the late 1888 San Diego real estate fell over 80%. Both declines part of the Kondratieff Wave Cycle. This is the time of Wiliam Jennings Bryans “Cross of Gold” speech which advocated a silver standard to help reflate out of the depression.
There is “nothing new under the sun”.
There must be something perverse in human nature that makes people prone to fall for these Ponzi schemes (aka speculative bubbles). I am still chucking over the World Plus Ponzi scheme, which suckered over 40,000 people- and the premise of the scheme was so dubious (selling frequent flier airline miles!) Like the present bubble, the last act was to send in the lawyers, who executed the wounded…
http://www.anchoragepress.com/archives/documentcec0.html
“‘Let’s say they went delinquent on a mortgage and got into trouble and we’re able to put them in this option ARM for two years until they could get out of trouble,’
___________________________________________________
CROOK!
They are an FB and now you want to put them an POA? That will make things better? What a joke! Does this guy belive this.
Ok, who besides realtors was in the 300+ study???? Insane. Just what kind of miraculous occurance will have to occure to reduce the inventory, lower taxes/insurance and convince people to purchase 1200 sq foot homes for 400K?, inventory rises daily, nothing is being sold, ridiculous.. I may begin drinking early today. this kind of crap just provides false hope and misinformation
If I was one of the people running the Univ. of Florida I think I would be embarassed and mad as hell that these so called economists at my school are publishing this kind of crap. It calls into question what is the value of anything published from their so-called Bureau. Maybe it’s their way of telling the business world, “Expert opinions for sale. Cheap rates! You write it, we print it”
This is all part of the “business/government PARTNERSHIPS” of the new era. I think this is a Republican concept of governance. Government should be run like a business. It rids itself of inefficiencies….blah, blah.
What it really does is encourage graft, and salesmanship. Have you notice how more and more agencies like to spin reports to provide positive reinforcing data, from employment figures to the stock market??
Expect more of this in the future. No critical analysis, just a feel-good “survey” of future expectations. It makes me puck!
The rule is simple. Follow the dollar. Government shouldn’t be run like a business or otherwise. The problem is that those in government always think they know better because they have the luxury of using force to implement their ideas. The market might have problems, but once you start to tinker with it by “adding liquidity” through printing and spending while at the same time taking from someone else to fun the grand scheme, all it does is take it to a higher peak and a lower trough. Sooner or later it will go back to fundamentals. The scary part of this is when everyone, including government is up to their necks in debt and the whole thing melts down, the sheeple look for a “savior” and are prepared to give them anything to save them. E.g., Hitler in 1930’s Germany.
Too true. And the Univ. of Florida can join hands with Harvard’s Joint Center for Housing Studies, the Anderson institute at UCLA, and the knuckleheads at George Mason U. All are publishing misleading and useless info, and yeah all are funded by RE interests. So much for the sanctity of academe…they’re all out there in the mud hustling for bucks.
Greed, not business, made them take the money and publish misleading reports. I am glad the internet is around so that their lies can be referenced years from now.
future games for savers ?
SWZ switzerland
PID foriegn dividend growers
MF malasia the only oil exporting Tiger
cash ?
any others ?
Last evening, I drove Gulf Blvd. from Madeira Beach all the way through Clearwater Beach. The amount of inventory on the market, and yet to be built and thrust upon the market, is unbelievable. Whatever these sock puppets at UF are smoking, keep it the hell away from me. There is no doubt in my mind, significant pain awaits many “investors”.
This is my favorite bubble strip to cruise. This is also the strip that convinced my wife I am not crazy (for the most part). One night we were out to dinner and all of the restaurants were packed, but there sat rows of condo buildings with dim lights and nobody home. I have some incredible photos of all of this…
Anyway, my wife said, “Whoa, there are a lot of homes for sale!”
Here are some of my photos of that strip:
http://i117.photobucket.com/albums/o72/muggyFL/Karma.jpg
http://i117.photobucket.com/albums/o72/muggyFL/Exodus.jpg
http://i117.photobucket.com/albums/o72/muggyFL/Karma2.jpg
http://i117.photobucket.com/albums/o72/muggyFL/Madeira.jpg
But, if it’s so valuable, why are they selling it?
Don’t you hold on to things of value and liquidate things you value little?
I don’t understand. I was thinking everyone wanted a Florida Condo! Do you mean I can still get in on a ground floor opportunity?? Oh! Thank God! I thought I was priced out forever. That’s what a Mad Beach Realtwhore told me 3 years ago. Even the wait staff at the local restaurants were buying these “appreciating assets” and expected to retire any day now. Go figure. You mean it may not come true…………Tell me it’s not so.
Thanks… your exodus shot says it all!
Never underestimate the power of human stupidity.
Robert Heinlein
Most of Estero is the same way, but then again, a lot of the beach front condos have been absentee owners for years. For the most part, they were bought many years ago. Only the dumb ones paid $500,000 for 900 square because of the sunset and “this is a good investment.”
“There may be a glimmer of hope, however, according to a study released Thursday by the University of Florida. ‘I expect that for most of Florida, prices are as good as they’re going to get,’ said Wayne Archer, director of the Bergstrom Center for Real Estate Studies, which conducted the report. ‘This is comforting news.’”
Not only is the study a fraud but this comment doesn’t make sense either. “prices are as good as they are going to get” would imply that GOOD = LOWER PRICE, which I think makes sense from my perspective. “This is comforting news” however, makes no sense. If lower prices are “good” and prices will go no lower because they are “as good as they are going to get”, then WHY would this be comforting news? Wouldn’t a comment that they could go even lower be comforting news in the context of this statement?
The guy is a moron with an agenda.
Have you ever noticed that the MSM never talks about the lack of affordable housing . Instead we got the rah rah cheerleading for unqualified buyers going on sub-prime loans .I am getting sick of the REIC trying to justify the sub-prime lending by saying that it got people into houses . Was it fair to raise the over-all property taxes based on sub-prime bogus lending ? Was it fair to raise the prices based on this faulty demand of the uqualified buyers and speculators ?
It’s only after the fact ,with all the property in default that the MSM is starting the acknowledge the problem . I would like to just see one big news source address the issue of why sub-prime lending drove the prices up . The MSM likes to talk about the sub-prime lending but that are not connecting the dots on why this sort of lending drove the prices up beyond reason .IMO the people just do not understand why real estate inflated the way it did in such a short period of time .
Actually, in the past couple weeks, I’ve heard at least 3 people acknowledge that falling home prices will be a GOOD thing! These were mainly CNBC interviews and one guy in a local paper, embedded/hidden in a huge article.
So while it hasn’t become a rallying cry yet with the MSM, the rumblings of “cheap RE = good RE” have begun.
And like every other trend we’ve noted over the past couple years, I expect this one to grow also.
In one of the CNBC interviews, the guy was very adamant that a dive in RE prices, while painful for some individuals and the US economy in the short run, would be healthy for individuals and the US economy as a whole in the long run.
He nailed it. Truer words were never spoken.
The subprime was their answer to getting affordable housing to people that couldn’t afford it. Don’t you know? There is a constitutional right to be a homeowner. They crow all the time about how homeownership is at the highest level ever. All funded by the government sponsored Ponzi scheme with Fannie, and Freddie and Sallie.
Wow! The second photo is amazing.
And certainly not unique down here.
“The bureau’s research economist, David Denslow, predicts that higher home prices will force Florida employers to increase wages. ‘We’ve got to adjust to the fact that Florida is now a higher-cost state,’ he said.”
WETF? Talk about the tail wagging the dog. If this were the case, the average wage in San Diego would be aboput $250,000.00!
“If this were the case, the average wage in San Diego would be aboput $250,000.00!”
What, you mean it isn’t? Gee, all the big swinging dick “investuhs” who came to Florida from Sandyaygo tell us everyone there is rich, rich, rich. Here’s the line I loved “Oh, no I don’t LIVE in Florida, I only invest here. I’m from Sandyaygo.”
A buddy of mine took a GF from SD to the cleaners last year. Had a beach house in Daytona listed for 2.2mil (bought in 03-ish for 1mil-ish). No takers and a bunch of other houses popped up for sale in that price range. They dropped the price to 1.9 and it immediately sold to a GF “investor” from San Diego. At last update, none of the other houses had sold. These “investors” are mostly idiots with access to cash.
The only good-paying jobs in Florida are gubmint jobs. The tourism industry pays $10/hr. Other than that, there are a few internation corporations in Miami, but not nearly enough to support prices.
$10 and hour? When did we get a raise?
Not state gubmint, and DEFINITELY not county/local gubmint. My wife got just over minimum wage and lousy benefits when she worked for the county property appraiser’s office (don’t ask which one) in Florida. Compare that to the PA Turnpike toll takers who were making $18+ an hour back in 1995.
Anyone want to go to Michigan? My sister and her husband worked in beehive jobs for the state up there for about 25 years, both retired at 50 with lifetime medical and $90,000 a year in pensions. Anyone wonder why the US auto companies and every business that can move out of the state do? Comerica, largest bank from Michigan just moved its HQ from Detroit to Dallas citing a “lack of growth,” Pfizer closes a facility it hasn’t even finished. Based upon the taxes I paid for years, it sure as hell doesn’t surprise me and the Governor, Mayor, et al were SHOCKED! Of course, they all have their pensions…..
In the florida lingo increase wages translates to leave a bigger tip.
Bellingham, WA. median household income would be around 150K. If you’ve ever been through here, you know what a joke that is.
Yep. things got out of control.
The St Petersburg Times reports from Florida. “As the housing downturn consumes their livelihood, home builders and Realtors soothe themselves with a steady mantra: The seas are turbulent now, but retiring baby boomers will keep the market afloat. Researchers at the University of Florida suggest they may have a point.”
OH GOD!!!! U of F post graduate morons just gave Realtors in Florida a glimmer of false hope!!! “The Baby Boomers will save us!!!
just a few facts:
1- the babyboom began in 1946. IF they retire at 62 (early), the first boomers will retire at the end of 2008
2- Who will all these retiring boomers from up North sell their houses to, when most markets have 1 or more years supply of inventory and sluggish sales?
There are a lot of other points, but whats the use. This will only tend to make idiot sellers keep their sale prices higher and make the misery last longer.
There is no solid evidence the Baby Boomers will create another RE boom in Florida or anywhere else.
….and it gets even worse:
“The bureau’s research economist, David Denslow, predicts that higher home prices will force Florida employers to increase wages. ‘We’ve got to adjust to the fact that Florida is now a higher-cost state,’ he said.”
Go ask your boss for a 30 to 50% raise so you can buy a house. Wages are determined by what your employer can sell his goods and services for and who is competing with you for the job.
Granted, RE prices will exert a small upward pressure on all products and services but when the guy who bought his house for a reasonable price in 2000 in Florida can work for below what you’re getting, you just lost your leverage. MOST PEOPLE live in housing they can afford. The recent run up in RE prices does not effect everyone. In fact, most people are effected very little if at all.
Right on, Mike M. It’s the housing and people at the margin (in both senses of the word) who are screwed. Most homeowners in my area bought a long time ago, and many are retiring in place (myself included). How can we afford to when neighboring homes are selling for $1M? We paid far less than $1M, and didn’t get cute with cash-out refis. And inventory for the past few months here has been 0-2. No greed, no problem.
SF; Good points and good strategy.
I live in Florida and I love it here. I’ve also had my primary residece for a quite a while so the cost of RE doesn’t effect me.
Except, I usually invest in RE and you don’t want to do that now. The time is coming…again. I’ll just wait until its safe to go back into the water.
I don’t see the world retiring here and driving prices way up again. Florida will continue to grow and people who like Florida will move here, as long as it is economically feasable. People who are retiring typically don’t go places where RE prices are insane.
Prices over time will appreciate with incomes, with the inevitable anomolies like we are in now. I wonder what will cause the next one?
‘I expect that for most of Florida, prices are as good as they’re going to get,’ said Wayne Archer, director of the Bergstrom Center for Real Estate Studies, which conducted the report. ‘This is comforting news.’”
“The university surveyed industry professionals, including real estate lawyers, title insurers, financial advisers and real estate scholars. There were 318 respondents.”
OOPs! They forgot to ask the buyers…..
Realtors (TM) are not “financial advisers.”
Got 10% down?
bedub;
Who the hell does these survey’s? Graduate students, interns etc.
And as you so acurately pointed out, who do they ask? Industry professionals! God I thought that baby boomer s**t was behind us.
“OOPs! They forgot to ask the buyers” Bingo.
Don’t leave out Brevard County Foreclosures