“Why Buy? Rent Cheap And Wait For Foreclosures”
The Tuscaloosa News reports from Alabama. “While 2007 is set to be a big year for condos, it may also mark the beginning of moderation in what has been an explosively growing market since 2004. (Developer) Bill Lunsford said the market has changed significantly since his company began work on Summit Condominiums, a 108-unit complex along Veterans Memorial Parkway, in 2005.”
“‘The market is not anything like it was when we started that project,’ Lunsford said. ‘We sold, in one afternoon, 57 units. I don’t think I could do that right now.’ That may be because the condo market is approaching saturation.”
“A survey of the Tuscaloosa market found that about 1,400 condo units were ready to be occupied, or would be within the following 12 months. ‘That seemed to me a very large number for a town this size,’ said Leonard Zumpano, professor of finance (at) the University of Alabama.”
“The number may be even higher. The Tuscaloosa News found about 32 condominium projects, including apartment complex conversions, on the books at the city planning department, which translates into more than 3,000 units. ‘I suspect some of these that have been planned may never be forthcoming,’ Zumpano said.”
“But there is little risk that the Tuscaloosa market could collapse as did those in San Diego and Miami where rampant speculation pushed prices beyond sustainable levels. ‘I don’t think it’s a predominantly speculative market,’ Zumpano said.”
The News & Observer from North Carolina. “Rising with the help of cranes and soaring values, condominium towers are multiplying like subdivisions in the sky. Condo units in the city’s core are expected to increase from about 450 now to nearly 1,000 within two years. By 2011, there could be more than 2,000.”
“The rise in condo numbers and prices can go too high. Overbuilding has taken the sizzle out of condo markets in Miami, Las Vegas and elsewhere. ‘There’s a lot of risk,’ said developer Gregg Sandreuter, who is building a new 170-unit condo complex. ‘Anybody who says it isn’t is just not understanding reality.’”
“Out-of-state investors are queuing up alongside empty nesters and young professionals to buy. But there are signs of caution. Some developers have shelved plans. Others have abandoned them.”
“‘I felt it was a lot less risky than if I bought it 10 years ago,’ said Scott Scherer, a Los Angeles resident who recently paid more than $320,000 for a condo in the partially built Palladium Plaza. ‘I wonder sometimes, ‘Is this puppy going to appreciate at all, or is it going to be flat?’ he said.”
“Investors will have to be careful, said Bernard Helm, president of Market Opportunity Research Enterprises. ‘For those who are building condos because they hear the market for condos is hot, there are going to be empty pockets,’ he said.”
The Guardian reports on Florida. “Agents admit holiday home prices in the sunshine state are down 10-15 per cent from early 2006 but many vendors say the fall is over 20 per cent. This is despite Florida being insulated from much of the US housing bubble, as 30 per cent of sales in some areas are to foreigners, a third of them British, says the National Association of Realtors umbrella group.”
“‘I don’t know why investors buy in Florida. The properties aren’t high quality in the main, there’s little to do in the winter and prices are falling,’ says Rupert Lee-Browne of Caxton FX. ‘There has to be a compelling reason for Britons buying in Florida given the precariousness of its property market,’ says Lee-Browne. ‘But there isn’t one.’”
The New York Times. “Until now, deep-pocketed Wall Street tycoons and foreign investors benefiting from a weak dollar seemed to be holding up the luxury real estate market even as the low-end fractured. But there are signs that some high-end real estate developers are also being hit by the slowdown.”
“Last night, a condo-hotel developer who was a partner with celebrities in selling luxury perches from Miami to Chicago let the mortgage on the Royal Palm Hotel in South Beach, a trendy section of Miami Beach, expire.”
“‘This is the first of what will probably be several high-end developers who had a number of luxury projects,’ consultant Jack McCabe said. ‘We’re going to see some where the banks take them back. We’re also going to see a lot of litigation.’”
“‘The financing was based on a successful condo-hotel conversion,’ said Larry Kay, for Standard & Poor’s. ‘My understanding is that the conversion or renovation is moving forward. But there have not been units sold to date.’”
The Palm Beach Daily News. “Developer Jim Engel of Palm Beach…started sales for Central Park Plaza, two blocks west of the Intracoastal Waterway. Pre-construction prices range from the upper $200,000s to $1.5 million, and Engel needs to sell 40 percent to begin building.”
“‘To be sold out in six weeks … that’s history. But shortly, people will realize that now is the time to be in the driver’s seat,’ he said. His timing trails that of planned condos that aren’t going forward. But Engel’s team is intent on offering new luxury units at a time when some developers can’t.”
“‘We took a gamble, but Donald Trump and Jorge Perez, the two geniuses, announced Trump Tower Palm Beach a week after’ American Heritage introduced Central Park Plaza, Engel said. ‘Either we’re all dumb, or we have insight.’”
“After tracking the downtown market for 18 months, Palm Beach broker Pamela Hoffpauer, concluded, ‘West Palm Beach is not overbuilt, it’s undersold. People are evaluating more carefully,’ she said. ‘There are only 700 completed and unsold units in our market.’”
“Palm Beach broker John Pinson, past president of the Realtors Association of the Palm Beaches, disagreed. The city has a glut of completed units and new units up for resale, and some buyers ‘are forced to close or lose deposits,’ Pinson said. At the same time, ‘owners are willing to rent for extremely low prices just to stop the bleeding.’”
“A few weeks ago, renters could choose from among 220 two-bedroom units in downtown buildings that sold for up to $500,000 per unit, Pinson said. Tenants can get into a full-service, amenity-rich building for $1,100 to $1,450 a month, ’so why buy when you can rent cheap and wait for foreclosures?’”
“Pinson predicted the market will improve, but possibly not until after the 2008 election. ‘The absorption of excess inventory will take some time to work out, maybe years,’ he said.”
The News Press. “It’s a little easier for someone in Lee County’s work force to buy a house these days. Prices have come down dramatically in the past year after a long runup. The median price of a single-family-home resale, for example, reached as much as $322,300 but had fallen by 17.2 percent to $266,900 in January.”
“Still, it’s not easy to lure people in jobs such as teachers, firefighters, police officers and nurses to this area. ‘The minute they start looking at housing, they get cold feet,’ said Tim Ficker, VP of operations for the Shell Point Retirement Community near Sanibel.”
“Real estate broker Denny Grimes, of Denny Grimes & Co., follows residential prices for The News-Press Market Watch annual real estate symposium. Grimes said good buys with new homes are available for as little as $150,000 in Lehigh Acres since prices came down.”
“‘I just listed a brand-new house on a freshwater canal in Cape Coral for $255,000.’ At the height of the housing market in 2005, he said, ‘freshwater lots alone were $170,000.’”
“With land prices so low, he said, people looking to buy should still consider building their own new house, said Jim Morrissette, president of Troy Development in Fort Myers. He said lots in Lehigh that would have cost $50,000 in 2005 go for as little as $16,000 today.”
‘TALLAHASSEE — Having enjoyed the budgetary uphill on the housing market roller coaster in recent years, state leaders Monday will endure the inevitable downhill, with state economists expected to cut as much as $800 million from the amount expected for the 2007-08 budget year.’
‘House leaders and Crist believe that dramatically cutting property taxes will spark another real estate boom - a ’sonic boom,’ in Crist’s words - that will again increase collections. ‘I think that will restart our economy, have a lot more sales of homes and purchasing, and make people want to buy,’ Crist said.’
Ben, you should have reiterated this quote instead:
“Florida is experiencing a time of economic correction,” Pruitt said. “The cost of living is increasing; property insurance and property taxes are higher; and while we can work to reduce some of the burden on our citizens, we will never be a ‘low-cost’ state again.”
That’s the real story. No matter what the housing bubble’s result, Florida is an expensive place to live and has been artificially cheapened in recent decades by a weird and unfair tax system that will soon end.
And NO, it will not mean the elimination of property taxes, so Floridians please stop focusing on that fairy tale.
“Floridians please stop focusing on that fairy tale.”
Non-Floridians, get your wagging fingers out of our faces and out of our pockets.
Taxes are tools of social engineering. Income and property taxes penalize earning, saving and owning. Which is why the rich find ways not to pay those taxes, ways that aren’t available to middle income earners. Consumption taxes level the playing field, encouraging people to earn more and save more.
I’m not a non-Floridian, Palmetto. Stop it, please.
Although I usually agree with Palmetto’s observations, I have to disagree with his analysis of the benefits of getting rid of property taxes.
Given that the government is going to spend at least X dollars a year, it’s going to tax the people for those X dollars one way or another. It may borrow for some of the money, but that just means more taxes in the long run.
If the property tax is eliminated, then all those $100 million dollar mansions on the Intracostal — you know, the ones that are literally over 100 times the size of your apartment — will stop paying a crapload of taxes. I have no idea how much, but I know it’s a hell of a lot.
The government will simply get those tax dollars from someone else, specifically the middle class. The poor can’t pay, an the rich already have their toys or will just register their yachts out of state.
All taxes have the undesired affect of being penalizing. The question is who ends up being penalized the most. Eliminating property taxes would penalize the middle class, and reward the ultra-rich. That’s why the republicans want it eliminated. It would greatly increase the rich-poor gap and Florida will be populated only by supermansions and ghettos.
It is nice to think that we could affect government policy by withholding tax revenues simply by buying less in protest. Sounds good on paper, but I doubt it would work in real life. Politicians are greedy and will find a way to circumvent that power. I don’t know how, but history tells me they will find a way with that much money on the line.
Furthermore, eliminating the property tax will encourage more speculation, particularly from out-of-state and out-of-country investors, and keep housing out of the hands of Floridans
Here is what I suggest. First, limit the total tax basis what was collected in the year 2000. Second, allow the tax basis to increase only to account for inflation (3-4%) unless the general population approves a referendum for “emergency” spending or a permanent increase.
Third, eliminate Save-our-homes and have accurate appraisals. These appraisals can be fair-market or current-market. It doesn’t matter because how I am proposing we use them.
Fourth, provide a standard $X deduction to any property that is a primary residence. Let’s say X = $200,000 in year-2000 dollars adjusted annually for inflation. The exact amount can be worked out by accountants. If you’re house is worth less than X, then consider it adjusted to $0. If your house is not a primary residence, then your adjusted appraisal equals your unadjusted appraisal.
Fifth, add all the adjusted appraisals to get a total “adjusted value basis”.
Sixth, tax each property an amount of adjustedApraisal * adjustedValueBasis / taxBasis.
This will have many effects. First, lower class Floridians who barely can afford housing will pay zero taxes. Second, middle class Floridians will pay zero to near zero taxes for a middle class house. Third, the taxes you pay will not increase or decrease significantly after adjusting for inflation. So you won’t be tax out of your home, and the purpose behind Save Our Homes will be accomplished.
Fourth, you won’t be penalized for moving to another house of equal value. Fifth, your heirs won’t be penalized if they move into your house or try to sell it after you die.
Sixth, the ultra rich, the vacation home owners, and the investors will carry more of the tax burden. This will cause, #7, a decrease in the cost of home ownership in Florida and #8 a reduction in the rich-poor gap. #8 causes #9, a decrease in violent crime and #10 a decrease in the need to spend money on police services, city repairs, etc.
I’m not saying this plan is perfect, but I think it would be a lot better than what we have now and what the sales-tax proposal would give us.
What does everyone else think about this?
“What does everyone else think about this?”
I think you should submit it to Charlie Crist, Marco Rubio and your state representative. They have said they are looking for ideas.
Ultimately, the “cure” is to let the housing bust take its course. And put the insurance burden on that coastal property.
“we will never be a ‘low-cost’ state again.”
Tell that to Michegan.
Going for volume, I guess.
By how much should the sales taxes be raised to cover for abolition of RE tax?
Sales tax would be raised 2% in order to eliminate property taxes for FL homeowners….It is shocking that this is even being considered and it shows that the folks in high places in FL are very aware that drastic measures are needed or huge pain is right around the corner.
I don’t know why the idea is so shocking. It’s visionary. As I’m typing this, there’s a local program discussing the issue. Residential rent, food and prescription drugs are exempted now and would be under that plan as well. Florida is still a great place for the poor in terms of benefits. It sucks for the middle class, though.
What?! Florida good for the poor? Not!
The only reasons that Florida is attractive for poor people have nothing to do with gov’t. It’s called the weather. Rich land, beautiful country, bananas and figs in the backyard and balmy air.
While Florida isn’t as bad as some states (*cough* Virginia *cough*) when it comes to making the poor suffer, it certainly doesn’t come close to the kind of support provided in, say, Massachusetts.
I mean, witness the county-by-county attempts in FL to provide some moderate health coverage for the working poor–versus the statewide programs in Mass. And look at how the poor and middle class get screwed by developers, insurance agencies, hucksters and scamsters in Fl, while in Massachusetts a strong regulatory environment and activist Attorneys General keep the fraudsters of the white or blue collar variety in line.
I have been low income or a student in MA, VA, and FL. MA was bar none the best place. Unfortunately, the job environment was poor, which is why I reluctantly had to leave. VA was miserable, while my current county in FL is liveable. But calling this land of crummy century old shacks, unaffordable insurance and energy rates, awful health services, substinence level jobs (if that, given the slavery-like undocumented farm labor regime), racism, lousy schools, cruel juvenile “justice” system, high crime rate, broken courts and prison system, ignorance, arrogance, and scamsters around every corner a good place for the poor? You have to be out of your everloving mind.
Well, now, not gator, since I’ve been paying taxes for the poor’s health care around here where I live, I decided to see how their system was. And I dropped my worthless high cost POS HMO like a hot potato in favor of paying sliding scale according to income for the same health care. And lemme tellya, it beats the tar out of what I was getting. A lot cheaper, less of a wait, better doctors, etc. Only drawback is the lead time for appointments. Not half bad, I’m telling you.
I don’t have a problem with that. I’d still assess property tax on all total assets above the state median price, as well as anything within 1/4 mile of the coast.
mmm, a proposal after my Georgist heart.
Prop-13 gave away the store by exempting all property, even massive railroad grant land holdings, from fair-market tax rates.
Georgist prescriptions make so much sense to me that I’m flustered how no one either knows, understands, or buys into them.
Please stop entertaining this pipe dream. Spare yourself the disappointment when the business lobby shoots it down. God, when will Floridians learn? YOU CAN’T HAVE SOMETHING FOR NOTHING.
“God, when will Floridians learn?”
We were doing just fine until people came here from everywhere else telling us how to do it better like where THEY were FROM. Including other countries.
OK, then I guess we’ll be learning again how to do it better. There are enough crooked politicians in this state that will be happy to show us how.
I for one would like to see property tax replaced with something more fair. Here in CA the “Answer” was prop 13. If our sales taxes worked like this, long time residents would pay just a percent or two, while new residents would pay 20% or more to make up the difference. Everyone should pay the same, and clearly taxes linked to a comodity item like housing has become is wrong, since taxes can go up and on the other side down dramatically. Local governments cannot easily balance their budgets and owners can end up in serious trouble. If a 2% sales tax increase would do it, I would be all for it. This would be fair on everyone.
I agree, GH. But unfortunately, the carpetbaggers to our respective states have ruined them (CA, FLA) financially. Including illegals. I propose a heavy tax on anyone moving to our states during the bubble. That’ll settle the argument.
I remember when I moved to California for graduate school in 1998, the state was imposing a $300 “smog impact fee” on vehicles newly registered in the state. This was in addition to the normal, excessive vehicle registration and smog check fees. A couple of years and a lawsuit or two later, I read that California had lost a constitutional challenge to the fee at the State Court of Appeals level, and that California was not going to attempt to bring it to the State Supreme Court. Another six months or so later, I received a check for the $300, plus some modest interest. You had to apply on-line or by mail for the return of your unconstitutionally collected fees, despite the fact that the state DMV had the address of just about everyone who paid the fee, except maybe those who had left the state in the interim.
As anyone familiar with Caalifornia’ss public school systems knows, Prop 13 has been an absolute catastrophe for education. It’s a model for what NOT TO Do!
The 2.3 cent additional sales tax would only drive the division of rich and poor in Florida. Renters will potentially foot the bill for the reduction in property owners taxes. Renters, primarily made up of low to moderate wage earners will not see any reduction in rents, but will have to pay the additional sales tax for the benefit of homesteaded homeowners. Of course, homeowners are all for it. Why wouldn’t they be? the 30% of the state’s 18 million population pays the price. Totally unfair.
Not to mention that when we enter a recession late this year or early 08 how many programs, and many critical public services, will have to be cut due to the REDUCTION in state sales tax. Then what happens?
In my opinion, a rollback in property taxes to the 2001 level, with modified tax portability within MSA’s and local and state wide spending restrictions is what is most likely to unfold. We’ll see.
I’m a renter and moderate earner who fully supports the plan. Of course, from a philosophical viewpoint, I support consumption taxes in general because they encourage earning and saving.
However, if we get a recession as you suggest, prices could very well roll back to 2001 and so will the taxes, so we would might actually get the rollback without having to do a thing.
California spends more per pupil adjusted for inflation than when Prop 13 passed. We have a constitutional amendment that requires 40% of the general fund to be spent on ‘education.’
What killed education in California is: teachers’ unions, non-Whites (excepting the high-IQ oriental asians), dumbing down the curriculum for non-Whites, and redistributing property tax revenue statewide, rather than letting White communities keep their money for their schools.
And just to reiterate how stupid how state is, we just recently passed a bill taxing incomes over $1,000,000 an extra 1% to fund mental health. What the heck is that? Sure, soak the rich, but why does ‘mental health’ deserve to get the exclusive benefit?
Sorry to reply to my own post, but I’m not defending Prop 13, per se. I am defaming the character of the education system; Prop 13 may have issues, but the school system can’t blame it’s problems on Prop 13.
Looks like from your perspective us Californians threw the wrong people into the concentration camps last century!
Geez, Jack, you’ve generally been a voice of reason in the Florida reporting of the housing bubble. However, anyone who clicks your link will discover that your clients are:
“Institutional investors, developers, lenders, brokers, and appraisers involved in commercial real estate multimillion dollar decisions” (as quoted from your website)
So of course I expect you to lobby on their behalf. Many who belong to those industry groups were some of the wonderful folks who brought us the housing bubble, not to mention massive employment of illegal immigrant labor. How fair is it for developers to dump those illegal immigrants on the Florida communities for health care and education of their children?
“if we get a recession as you suggest”
What the hell was I thinking, posting a statement like that? We’re already IN a recession, it’s just that recognition hasn’t taken place yet.
Pouring money on public education is like trying to put out a fire by throwing gasoline on it. It simpley feeds the corruption, waste and fraud that pervades our public schools in California.
A teacher in the Irvine, CA district once told me that in her district they employ one Administrator for each Teacher. How is that for waste and corruption. Here in San Diego, the law requires that when a new Administrator is hired three applicants have to be considered. The person in charge of these hiring decisions brings in her friend (who will get the job) and two unqualified applicants …
Now for the logic - Our schools get several times the funding they did 25 years ago and are worse by the same factor in terms of results.
My point on Property taxes however is that they should be stable and equitable. We have a circus where 10 families living in ten identical houses pay completely different amounts. Generally a transfer from young to old scheme …
why rent ?
squat plus utlities and minor yard work
will even feed the squirrels
Right. You’re only one picked lock away from the American dream.
“You’re only one picked lock away from the American dream.”
…or a shattered window
“‘I just listed a brand-new house on a freshwater canal in Cape Coral for $255,000.’ At the height of the housing market in 2005, he said, ‘freshwater lots alone were $170,000.’”
A freshwater canal means you DO NOT have access to the Gulf or ICW. I can’t imagine why you’d pay extra for a ditch at the end of your back yard that likely attracts alligators.
cape coral is the pits - it’s like using Flint MI as bubble demographic
Lehigh Acres is my favorite recycled Florida land scam. Hurry up!!! They’re not making any more empty streets!!!
The view from space:
http://maps.google.com/maps?f=q&hl=en&q=lehigh+acres+florida&layer=&ie=UTF8&z=13&ll=26.629046,-81.650906&spn=0.070435,0.172005&t=h&om=1
Rick
“ditch at the end of your back yard that likely attracts alligators.”
It’s not a question of “if”, it’s “how many”……
After placing them on the ESL, population exploded. A sure sign of gators is no sign of dogs.
“This is despite Florida being insulated from much of the US housing bubble, as 30 per cent of sales in some areas are to foreigners, a third of them British, says the National Association of Realtors umbrella group.”
LMAO. The funniest thing I’ve read in days.
was that published in 05 ?
WTF !!!!!
That could be a great way to make up for the trade deficit. Sell vastly over priced properties to foreign investors, who later sell at big losses. With the dollar down about 30%, over the last few years, most have already taken a bath.
The GBP was worth $1.85 in May 2004. Yesterday it closed at $1.93. More of a light sprinkle than a bath.
I was thinking in terms of Euros.
It worked with Japanese GFs…oops, I mean investors in the ’80s.
“‘We took a gamble, but Donald Trump and Jorge Perez, the two geniuses, announced Trump Tower Palm Beach a week after’ American Heritage introduced Central Park Plaza, Engel said. ‘Either we’re all dumb, or we have insight.’”
No, you’re all dumb. Look around in the market your building. Do you really think that the lack of very expensive, high end condos is the problem??
“After tracking the downtown market for 18 months, Palm Beach broker Pamela Hoffpauer, concluded, ‘West Palm Beach is not overbuilt, it’s undersold. People are evaluating more carefully,’ she said. ‘There are only 700 completed and unsold units in our market.’”
And you lady. WTF are you thinking? Where on earth did you get these numbers? I think most people would count a few 1000 condos in the downtown market sitting empty right now (some not on the market, some under construction, and some just chilling the air in the building). 700? I think there are that many in the Courtyards, 610 Clematis and The Tower alone. Forget all the newer buildings.
610 Clematis, btw, for anyone who does not live here, is amazing at night. The buiding looks like a towering huge shadow, with one or 2 lights on every night. I am exaggarating (because there are 100s of units), but the occupancy is so low it really is staggering.
Wouldn’t you at least buy a few light sensitive night-lites or a reading lamp on a timer to make it look like somebody is in the place? Or are the “investors” so broke that they can’t afford $30 at Walmart for the timer and reading lamp?
They can’t afford the electricity.
don’t be too hard on that bitch broker…she’s prolly sitting on 3 flips that are riding up her crotch about now…if she does not sell soon she may go postal
That’s what I was thinking. She’s a MULTIPLE bag holder. And she is looking for some GFs to bail out her sorry RE arse out. She is making these ludicrous statements because she thinks she can still find them.
“‘We took a gamble, but Donald Trump and Jorge Perez, the two geniuses, announced Trump Tower Palm Beach a week after’ American Heritage introduced Central Park Plaza, Engel said. ‘Either we’re all dumb, or we have insight.’”
If the name “Trump” is associated with a project, it is dumb. Donald Trump is a tool.
The Learning Annex is sponsoring a Trump seminar in Toronto next weekend. Looks like people there have already figured out that Trump is a bozo. There is now heavy advertizing that the entrance fee has been slashed from $179 to $99. You couldn’t pay me to go watch Trump spout his baloney.
Trump will return. He’s “big enough” (at least in ego) to make a come back.
But Palm Beach condos? There won’t be a need to build another one for decades. My dad wonders if Florida will become like Florida in the early 1950’s… everything was built two decades before with only peripheral construction/new technology going on (e.g., phone centers for that new fangled invention circa the 50’s.).
Oh well…
I pick up the keys to my new apartment Friday… so YAWN.
I’ve renewed by season pass for a year (to be a spectator). No way I’m getting into the game for a long time. Oh, I will… but not until the field is a bloody mess.
Got popcorn?
Neil
In So Cal the price dropped to $59 and you can bring a friend for free. You too can make a fortune in RE!
“After tracking the downtown market for 18 months, Palm Beach broker Pamela Hoffpauer, concluded, ‘West Palm Beach is not overbuilt, it’s undersold. People are evaluating more carefully,’ she said. ‘There are only 700 completed and unsold units in our market.’
http://www.housingtracker.net/askingprices/Florida/Miami-FortLauderdale-MiamiBeach/
Undersold! LOL! The patient isn’t dead, doc, he’s just underbreathing!
LMFAO!!!!
Maybe Pamela means “that you can see at any one time”. Now if you go to the NEXT block, you can see another 700.
No surprise coming from her. RE agents are only capable of thinking in terms of what they can sell.
Why rent?
I have better things to do than putter around HD all day and maintain a house all night: sleep, work, work out, carouse, and travel. Home maintenance is slavery.
For those who are building condos because they hear the market for condos is hot, there are going to be empty pockets
Love the double entendre.
“After tracking the downtown market for 18 months, Palm Beach broker Pamela Hoffpauer, concluded, ‘West Palm Beach is not overbuilt, it’s undersold.”
My sons diaper is not stinky, it is under-clean. Problem solved! When will these people stop with the smart-sounding but desperately obvious lieing?
Reminds me of the skit from the movie Airplane! with captains Oveur, Unger and Dunn. Except the condo market in flawda ain’t over anything or under anything; it’s flat out Dunn.
““With land prices so low, he said, people looking to buy should still consider building their own new house, said Jim Morrissette, president of Troy Development in Fort Myers. He said lots in Lehigh that would have cost $50,000 in 2005 go for as little as $16,000 today.” ”
Who in the hell would want to live in Lehigh 15 miles east of the highway out in the swamp! Crime is rampant there too!
Do these real estate “professionals” and paid cheerleaders really expect to avoid the crash by talking real estate up? Just because they say the sky is clear and blue, that doesn’t mean a damn thing to the hurricane rolling in.
These people are either complete morons or they are liars. Either way, we have a lot of human rubbish in this country.
With every one of these pseudo-optimists, it is a matter of faith that Florida, or their little piece of it, will not be affected by falling prices, that local condos will soon be taking off, and that the bubble can be reinflated. Apparently, our governor thinks he can reinflate it all by all by himself by lowering property taxes, as if prices and credit sleight-of-hand are irrelevant.
I was speaking to an architect who does big ticket jobs around the world, and he insisted there was no real estate bubble where he lives in Tampa, because everybody wants to live there, and prices will never go do. Well, his neighbors are trying to unload their overpriced house by throwing in a boat, furniture, and car.
Since every gullible, superstitious loon on the planet thinks that his location is magically protected from a collapsing bubble, but not from the benefits of an expanding one, there is no point in saying anything, except that yes, there really is a monster hiding under the bed, and another in the closet just waiting . . .
SW Florida Realtors expanding:
He expects 2007 to be the company’s second best, and 2008 to be its best year ever.
“As soon as people get a little confidence they’re going to start jumping in,” Wood said.
Naples Daily News
Say what?
‘I don’t think it’s a predominantly speculative market,’ Zumpano said.”
Yet another university professor (UP) teaching our kids the RE thing wrong. What is it with these UPs?
It’s called Selective Perception. Marketers are not affected by it of course
This is because he got stuck holding the rotten potato and wants to pass to someone else.
Lets address the quote that Ben Jones posted:
“House leaders and Crist believe that dramatically cutting property taxes will spark another real estate boom - a “sonic boom,” in Crist’s words - that will again increase collections.”
And I think Ben missed the best one:
“I think that will restart our economy, have a lot more sales of homes and purchasing, and make people want to buy,” Crist said.
So, as we all know that perception trumps reality with markets, at least for a short while and sometimes indefinitly as the perception creates a new reality, the question should be addressed.
Will the public buy into this? I asked this question weeks ago. I asked if this was not just a blatant attempt to prop up prices by making the cost of ownership less, hence a higher cap rate that Joe Blow can relate to.
My question remains. The question is not wether this is a good idea; but rather, will they be able to sell this idea?
The public will take lower taxes, count on it. Then a few years from now they will be bitching about roads falling apart, pools closing, parks not being maintained, filthy roadsides covered in trash, not enough police. . Huge budgety deficit. etc. Welcome to post Prop-13 California.
Yep, and many of the people who voted for Prop. 13, the lower-middle class, were hurt worst by the reduction in services. While the upper-middle class areas are doing pretty well; we support our public schools, libraries, parks, etc. with private money.
“‘The market is not anything like it was when we started that project,’ Lunsford said. ‘We sold, in one afternoon, 57 units. I don’t think I could do that right now.’ That may be because the condo market is approaching saturation.”
Okay you sell 57 condos in an afternoon in Alabama - and that’s not speculative investment? Can’t be a bubble in Alabama - they told us it was only on the West Coast, Florida, and a few places in the Northeast.
You know, when this is over, and we get through the inevitable pain and suffering, it is going to be a very funny episode to read about. Twenty or thirty year or a hundred years from now, people will read about stampeding, wild-eyed Alabama condo buyers with wonder and amazement. “How could this ever have happened!!??,” they will ask.
Of course, very few will learn anything. Speculative mania will no doubt seize the world again. You gotta wonder what the next “sure thing” will be?
“But there is little risk that the Tuscaloosa market could collapse as did those in San Diego and Miami where rampant speculation pushed prices beyond sustainable levels. ‘I don’t think it’s a predominantly speculative market,’ Zumpano said.”
It may not be a predominantly speculative market, but at this point I don’t think any area is immune to a collapse. It’ll be a ripple effect thing.
I wonder sometimes, ‘Is this puppy going to appreciate at all, or is it going to be flat?’ he said
There’s a third possibility that never seems to occur to people like this.
Tuscaloosa is booming since all of the major tech players are relocating there. Plus, of all the New Yorkers are cashing out of their $8,000,000.00 condos and moving down to the good life. Combined with a shortage of land and immigration, I don’t see prices ever falling in Tuscaloosa.
Condos in Tuscaloosa. The world has gone mad.
I think I said the same thing a few weeks ago about Sheboygan, WI.
I spent the night at a military base not long ago in their next door neighbor city of Birmingham. After checking in the military staff gave me a map of the city and drew a box around a nearby sector with the advice of “don’t go into this part of the city or you will most likely be a murder victim.”
The elephant hunters are also relocating there! Why?
Because, The Tusks-are-loosa!
(Thank you Groucho!)
Renting is also better if you are a sucker for AOL’s leftist headlines of scientists warning of mass extinction due to effects of industrialization on climate. It’s only another disguised call for enslaving humanity, making the sheople so alarm that they would be willing to give up economic freedom for the elitist leaders (in the temples of Syrinx? - Rush’s 2112 song). If you believe those headlines, you may as well stay portable. If you live in Florida you may be knee deep in water should there be global warming. If you live in New Hampshire, you would get your cajones frozen should there be global cooling. If you have a house in one of those places, you could be a big loser so may as well stay portable.
Thanks Demo leftist tree hugger thugs for needlessly scaring the world population.
It’s interesting - I write this while on vacation in England, where the Conservative party has been proposing all sorts of extreme environmental legislation, including a progressive tax on plane flights (one domestic flight per individual per year would be permitted, after that increasingly large taxes would be imposed). They are hosting former VP Al Gore for a VIP visit (presumably via airplane!!) and are calling themselves the “Goreys” instead of “Tories” to celebrate the occasion. Also, the head of the conservative party, a Mr. Cameron, recently spent 2000 GBP to install a windmill on top of his house in Kensington, but “it later emerged” that the lack of much wind in London rendered this device essentially useless.
I know this sounds like a parody, but I swear to you that I am relating news straight from the Sunday paper today.
Oh yeah, there’s also a measure being proposed to prohibit anyone, including parents, from photographing children in public places (parks, sport events, etc). This is supposed to discourage pedophiles. I don’t know what it is about British culture, but every time I visit here, I swear the word “paedophile” shows up more often than nearly any noun in their newspapers.
And yet, at nearly $2 to the pound, their currency is kicking (ha, pounding) our currency’s ass. Thanks GWB!
Oh yeah, forgot to mention there’s a real estate bubble going on here.
Prices look sort of similar to San Francisco or New York City, except they have pound signs in front of them instead of dollar signs, so the prices are actually twice as bad as they look.
I looked at today’s newspaper - huge section about buying real estate abroad. Florida was sort of the cheap-ass option, with destinations in the Mediterranean being more widely advertised and much, much more expensive.
The only recognition I saw that there might be a bubble were a few tut-tuts about the mortgage meltdown in the USA (considerations of this were largely confined to the likely effect on UK stock markets) and a mention in passing in a letter to the editor that today’s levels of credit and housing prices are “unsustainable.”
When I was in London last month the Tube cars were full of “Interested in Property Abroad?” ads. So nice of those wacky Brits to externalize their housing bublububbuble to the rest of us.
I have a question for you Europeans. NHZ used to post a lot about the Netherlands, and now you are posting about England.
You wrote: “Prices look sort of similar to San Francisco or New York City, except they have pound signs in front of them instead of dollar signs, so the prices are actually twice as bad as they look.”
To me this is incomprehensible. How can it possibly be this high? For example, SF costs about $700,000 for the median or so.
So we’ll say the median price of a home in SF is around $700,000. If you take that in Euros you get:
700,000.00 GBP = 1,352,826.93 USD
On a 30 year fixed at 6.35% that comes to a mortgage payment of $8330/month, NOT including taxes or insurance.
there must be some type of govt program/tax break/income credit or something that allows for this?
I’m having a hard time understanding HOW these statements can possibly be true unless there is something I’m missing (like conversion rates or income or tax breaks or something).
I can’t believe the average Londoner is paying over $9000/month in mortgage payments. That is unless you are severel restricting “London” to just the core of London or something. Then that would make sense (similar to Manhattan 1BR apts going for average of $1Million)
But even Manhattan (also very expensive) quickly becomes cheaper once you get off the isle.
what am I missing? Because if I’m not missing something, then THEORETICALLY housing prices in the US can go that high as well… (but common sense would say they cannot).
Well I’m not European - I am a Californian visiting London at the moment, but I am the one who said “Prices look sort of similar to San Francisco or New York City, except they have pound signs in front of them instead of dollar signs, so the prices are actually twice as bad as they look.”
I should qualify this statement. I am staying in Kensington, and the assertion is based on very cursory inspection of the prices of houses advertised in the windows of real estate agents on various streets in Kensington and Chelsea.
Well, upon doing a bit of research, I find that Kensington and Chelsea are the most expensive districts in London, with a median house price of GBP 895,000. The prices in these districts do indeed bear a strong resemblance to those of your typical San Francisco neighborhood, but with pound signs instead of dollars.
However, apparently the rest of London is considerably less expensive - the median price is GPB 322,104, the median for a detached house is GPB 628,239, semidetached GPB 361,619. I’m not sure how the square footage compares with SF, but I would guess not too dissimilar. I’ve seen almost no detached houses here, even on a long bike ride into some of the outlying districts (as far west as Kew Gardens, as far south as Brixton, didn’t go all that far north, not much past Regent’s Park, haven’t gone very far east yet), so I’m not surprised that they are very expensive.
Most of London’s buildings are rather dumpy looking from the outside - even Kensington looks like nothing all that special. You’re definitely paying for location I guess. Granted, a random house in San Francisco is fairly dumpy as well, but at least it’s not made of ugly brown brick. I happen to have arrived during a period of very nice weather (similar to San Francisco in the spring) so my perceptions are not negatively colored by the weather - the place is simply filled with neighborhood after neighborhood of rather ugly nondescript residences. I hope to hell they are nicer on the inside than on the outside, at these prices.
Despite its fairly mediocre architecture, I do like it here. The reputation for bad food is overblown - there are quite a few appealing restaurants (though again, the price is 2x what we would pay, once you do the exchange rate). There are a hell of a lot more Starbucks than last time I was here (I think maybe zero last time, in 1998 or so) - I have mixed feelings about that, but at least you can find passable coffee now. There are bike lanes just about everywhere, so that’s a great way to get out and explore if the weather is good. The subway is still among the best in the world, but they seem to be repairing an inordinate number of lines/stations at the moment.
I’m not sure if I can past URLs without losing the post to spam blockers, so I’ll attach the URL in a reply to this message. But I found the statistics at the first BBC UK site upon googling for “house price london” without the quotes.
Here’s the page with the house price data:
http://news.bbc.co.uk/1/shared/spl/hi/in_depth/uk_house_prices/counties/html/county37.stm
Thanks for the reply jbunniii
My goal wasn’t to attack, rather to see how plausible a “permanently high plateau” could be. NHZ has posted several times about similar sky-high asking prices, and I’ve heard similar from my international friends.
I agree, places like Kensington are VERY expensive, even moreso than many american luxury markets. It’s incredible how expensive it is there.
And no question about it, the prices for everyday stuff is much higher in europe compared to the US (partially due to their higher taxation).
Don’t forget to keep your receipts! Upon reentry to the US, I THINK you can get some of the money you pay in sales tax back. (I’ve done this with Canada and Netherlands and France in the past)
Keep looking around for us, and keep posting, the WORLDWIDE housing boom is of interest to me/us.
I’ll have to disagree with you on the food assertion however. British food is disgusting. But they have GREAT Indian restaraunts (I think even better than in India) and we also ate at other good foreign restaraunts there.
HIC
I am a dual national (US and UK) My entire family lives over there, and yes somehow realestate prices are off the scale. Even rural areas in Wales give San Diego a run for their money, while London continues to hop skip and jump and has become the most expensive city on earth. My folks don’t know where all the money comes from, since wages are low compared to here as are rents oddly enough.
Anyway, I visit a couple of times a year, and don’t like what I see there any more than here - for different reasons though.
It appears that if Britons don’t agree to sign up for the new ‘voluntary’ id card system won’t be allowed to have passports.
http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=441329&in_page_id=1770
I’m surprised we haven’t thought of this yet!
You, sir, are apparently insane. Keep it up, it’s humorous.
The short term prediction for New Hampshire is that global warming shuts down the usual jetstream flows thereby causing a return of persistent extreme winters.
Climatologists had a nice argument about global warming and continued to get on with things. You could learn quite a bit from those you consider Demo leftist tree hugger thug scammers.
From the NYT article on Miami:
>
Morons. There is no guarantee that a project built from the ground up will be completed either.
Amazing, huh? It’s actually kind of the other way around. At least with a conversion you’re looking at more than a weedy lot when it all goes to #$^%.
I am a bubble believer in Orlando but I have had 5 houses in my subdivision on the market for over a year. 3 of them went pending this past week. Could be a dead cat bounce.
What were the prices?
wait until the loans don’t go through
Yeah I thought about the lending process too. That is now a real hurdle. This subdivision is primarily 50 + age group so it may not be an issue. One house which is next door was a definite flipper and he started at $410,000 a year ago. It is pending at $369,000. Based on what he did and the year hold I am guessing he lost some money.
I am just amazed that 3 would go pending in a matter of a week.
My exwife put our home, hers not mine, on the market in Winter Park over a year ago at $779,000 and reduced it several times to the current $649,000 and she got 2 offers in 3 days. I think she will accept one of them at about $600,000 in the end.
My impression is we are going to have a lot of activity this spring here in Orlando. I also think it is an aboration and will not last nor have a significant impact on the inventory as builders are still slammin em’ out.
I’ve noticed a bit of action in the Waterford Lakes area but only on houses with significant price reductions (e.g., $250k for 2000 sq. ft.). But I also have been tracking inventory throughout the Orlando area (via realtor.com and ziprealty), and it continues to rise. Since Feb. 1, inventory is up approximately 10%. So even with a dead cat bounce, I don’t think sales will outpace or even break even with inventory.
“‘I felt it was a lot less risky than if I bought it 10 years ago,’ said Scott Scherer, a Los Angeles resident who recently paid more than $320,000 for a condo in the partially built Palladium Plaza. ‘I wonder sometimes, ‘Is this puppy going to appreciate at all, or is it going to be flat?’ he said.”
Good news - neither of the above!
Got that right, it is going to “gasp” depreciate = the third viable option. Especially since no one will be able to qualify for a loan that big as credit tightens.
LOL! The downside of the undersold parameters indicate a softening of the upside due to internal market pressure during the 4th quarter which will result in the disinflation of asset appreciation.
Ok then, I suggest everyone RUN! We are screwed. RUN! RUN! Get DOWN! Dere iss a bomb in dere! Take my hant!
Memo to NAR and the REIC Gang:
From: Frugal Potential HB BUYERS of America:
Subject: Housing Market Condition Diagnosis and Prognosis Consultation.
All HEMORRHAGING is Controlable…EVENTUALLY !!!
THINK about IT. Hugs
P.S. My Bill is in the MAIL.
hilarity from the NY Times article in the main body of this topic — say what you want about Nicky Hilton — but this Falor guy is the real idiot for going into some kind of partnership with her:
In February, Mr. Falor sued Paris Hilton’s sister, Nicky, and her agent, Paul Fisher, over their former proposed partnership to open in South Beach the “Nicky O” condo hotel. The hotels, he told The Miami Herald, were supposed to feature cupcakes with turn-down service. Mr. Falor started a partnership with Ms. Hilton less than a year ago to redesign the Blake Hotel in Chicago and the Breakwater-Edison condominium in Miami under her name.
Court documents state that she failed to meet her plans to design the Blake Hotel’s interiors, misrepresented herself as having experience in hotel design and gave parties for herself and friends that never promoted the projects. He says that Ms. Hilton owes him more than $1 million on hotel rooms, public relations fees and travel.
“Nicky and Fisher intended to use the Falor group to promote Nicky and underwrite a lavish lifestyle for both Nicky and Fisher,” according to court documents. Ms. Hilton and Mr. Fisher did not respond to e-mail messages and phone calls.
Sarasota Herald Tribune article talks about where we are with respect to the bottom.
http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20070311/BUSINESS/703110531
Fantastic article. Says it all.
“After tracking the downtown market for 18 months, Palm Beach broker Pamela Hoffpauer, concluded, ‘West Palm Beach is not overbuilt, it’s undersold.”
Uh, yea, sure, whatever you say. If brains were dynamite this lady couldn’t blow her nose.
Re Broward County…I am tracking inventory in the Miramar/Pembroke Pines area (on Zip). I’ve noticed declining inventory for the past weeks. Any comments from the FL watchers? Pausible explanations?
Many people in our area just gave up and decided to stay put and some others are waiting for it to get near the end of the school year. No real reason for the drop as activity is just beginning to show signs of life. Closings are the key not contracts.
From the Palm Beach article—Housing supply is shrinking in South Florida. Seems unlikely.
“We believe the real estate business is like any other. It’s based on supply and demand. And local economists tell us the supply is shrinking. So we want products available for when the buyers are here,” Engel said.”
Tenants can get into a full-service, amenity-rich building for $1,100 to $1,450 a month, ’so why buy when you can rent cheap and wait for foreclosures?’”
LOL. The local realtors must be shuddering with horror to see such words in print.
Great way to start out a week. Housing bubble bursting and subprime could be bringing the economy down due to loss of consumer confidence
http://tinyurl.com/2s4ezm