Media Should Act Responsibly & Promote Property Values
The Florida Today site has this housing bubble update. “Construction permits for new homes in Brevard County surged in January above the previous year and month. Area homebuilders agree there is a general slowing down in local real estate, with existing homes typically staying on the market for as long as three months, more than double the amount of time from a year ago.”
“Even so, many local firms that build production and custom homes say they aren’t scaling back projects, but instead are adding more perks, thousands of dollars in incentives and spending more on advertising to entice buyers. That follows a nationwide trend of cooling home sales, with the Commerce Department recently reporting that January sales of new single-family homes fell 5 percent, the fourth decline in seven months, and the backlog of unsold new homes hit a record.”
“Analysts say many of the large homebuilders have seen sales falter, which is affecting business nationwide. Toll Brothers and KB Home expected sales to not meet projections, while Centex is lowering prices for homes in some areas as much as $200,000.”
“New homes, though, are staying on the market longer, said Tony Ayala, a realtor in Melbourne. To shorten those times, builders are ‘offering incentives, in the amount of thousands of dollars or fancy’ extras that usually would cost extra, he said.”
“Palm Bay resident Karen Waite decided to sell her 1,300-square-foot house in South Florida for $175,000 and buy a bigger, 2,765-square-foot home in South Brevard. ‘South Florida is so crowded, and it’s unaffordable,’ Waite said. ‘What I got for my home here, I couldn’t find it anywhere in Broward’ for the same price.”
And the Sun Sentinel got another critical letter to the editor. “I agree with the recently published letter stating that the South Florida Sun-Sentinel is hurting the real estate market in South Florida. But it is not just the Sun-Sentinel, it is the entire media that are scaring potential buyers.”
“The 30 percent-plus appreciation of the last few years was clearly not sustainable. And property prices, taxes and insurance costs are unquestionably high. But there is no reason for so much doom and gloom. Long term demand is bound to continue driving prices higher.”
“Compared to some other highly desirable areas of the country, our prices are still low. Our economy is highly dependent on real estate and its related industries such as construction, investing, mortgage lending, appraising, inspections, etc. A long-lasting slowdown in real estate sales will eventually trickle down to harm much of the South Florida economy.”
“So the media should act responsibly and be positive. Promote our area’s property value, for everyone’s sake.”
I’d encourage any SE Floridian to write a response to the Sun Sentinel and to this ludicrous letter and point out how this insanity is clearly not “for everyone’s sake.” The editors of the Sentinel seem interested.
I’d do it myself but was published recently in the Sentinel and can’t submit again for another 60 days.
I think published letters that go against the BS of the RE industry can help drive some nails in the coffin of this thing.
I’ll do it. I’m not in S FLa but I’ll pretend I am. I’ve never submitted a letter to a newspaper that did not get published.
Go girl… Do it!
It’s easy to do online.
If you get to the stage where they are considering you they call you to confirm the spelling of your name and the fact that you indeed wrote it.
Good Luck!!
The nails are in place, but not firmly hammered down just yet.
thats the paper’s firm policy - no one more than once every 60 days?
i think no one should buy that fishwrap more than once every 60 days.
“So the media should act responsibly and be positive. Promote our area’s property value, for everyone’s sake.”
(Mr. Rogers voice) Can you say “scared flipper”? I knew you could.
The hell with the media. Most of the time they are way behind on whats really going on. They are usually clueless on what they cover.
Oh the rain is a nice sight today here. Having some good coffee and enjoying your posts
Now the buyers are going to come out and that was the only thing holding them back… the drought .
Congrats on getting water! I wonder if it’s the same system that has been giving us snow on the central coast.
Hail storm in Pismo this morning, snow all around. My trout streams and the trout need the water, season is open all year except for steelhead. Sellers still in denial here. Condo hotel had an auction for 14 units. Got their d-ck broke off. At least a part of the buyers are smart and intuitive.Very few sales, newspaper real estate sections have doubled. Still very little negative reporting as they want the advertising. Crash baby crash!!!
The media are at that difficult point where they must choose between continuing to make misleading statements in the face of overwhelming evidence to the contrary, or else joining hands with Ben’s bloggers.
WE ARE NOW ALL BUBBLE BLOGGERS.
Ben:
maybe you should show this to Jon Lansner as an example of why we are skeptical here about even-handed newspapers.
Then the media should also be promoting the stock and bond markets “for everyone’s sake”.
they do
Yup–Larry Kudlow’s show being a prime example. And don’t even get me started on Cramer’s show!
Again, Jumbo’s show is a moneymaker. You can fade it til the cows come home. LOL. Don’t take away one of my easier trades
Somebody has to find the sheep on which the big boys can unload their overvalued shares…
This site was posted in last nights comments. ‘Miami is ground zero for the housing bubble,” said real estate consultant Jack Winston. “It’s going to be severe in Miami, and it’s going to be problematic in West Palm. We’ve built too many units (condominiums) compared to the projections for real users.’
‘Nearly 81,000 condominium units are under construction or in the planning stages in the greater Miami metorpolitan area, which represents the largest boom in Miami’s history. Already, however, real estate agents are reporting price reductions and some buyers of units have backed-out of deals. In the Florida panhandle in Panama City Beach more than 5,000 preconstruction condo buyers have either backed out of deals, forfeiting earnest money deposits or cancelled reservations for condos all together. Mortgage rates have increased and could hit seven percent this year, which would be enough to slow the housing market, according to Fishkind.’
Ben — “VALUES” (typo in your title)…
Thanks for mentioning the PCB condo implosion. I’ve been wondering when that was really going to start to go down. Friends back in Michigan have been asking me about buying vacation condos down on the Redneck Riviera, and I’ve been saying all along to wait until the 2008 vulture (bankruptcy) sales if they wanted cheap Gulf front.
Yes, a flipper that wants to hang their albatross around any other person’s neck.
My earthlink ‘word of the day’ today is CRAPULOUS….. verb: Definition - sick from, or marked by, excessive drinking.
LOL…. I think a better definition is ‘ The opposite of fabulous, e.g., horrible, as in ” That house they’re trying to sell down the street is just crapulous!”
LMAO
There’s gonna be a bagholder. I just don’t want it to be me. So, please keep blowing air into the bubble, just enough so it doesn’t burst and just enough so I can unload at a tidy profit.
Thank you for behaving responsibly.
These people are sheep who deserve to be impaled!. When the forecast calls for rain, should the weathermen say it is sunny outside?
Articles which paint a falsely rosy picture seem like a great way to keep the subprime lending scam going for a bit longer; need to find more lambs who are willing to enjoy living in a nice home for a few years in exchange for a future trip to the sacrificial alter of bankruptcy…
The Saturday WSJ has two articles on subprime lending — one is the RHS column of page A1 (Millions Are Facing Monthly Squeeze On House Payments), and the other is on page A6 (Home Equity Loans Level Off). If anyone has electronic access, then a posted link to these veiled warnings for rich guys to “look out below” would be appreciated!
A front page graph shows just how wild the subprime lending debauchery has become; it shows subprime originations bubbling up from about $100K in 1996 to maybe $650K in 2005.
Subscribe to WSJ or read in library, the news reports are very good, just burn the opinion page. Read marketwatch.com, it is free and has good articles on housing.
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Brief excerpt
“Now the initial periods are coming to an end on many of these loans, leaving borrowers to face resets of their interest rates that can cause monthly payments to shoot up between 10% and 50%. More than $2 trillion of U.S. mortgage debt, or about a quarter of all mortgage loans outstanding, comes up for interest-rate resets in 2006 and 2007, estimates Moody’s Economy.com” Dr. Christopher L. Cagan, director of research and analytics at First American Real Estate Solutions, Santa Ana, Calif., plays down the threat to the economy as a whole from resets!! Dr. Cagan examined adjustable-rate first mortgage loans made in 2004 and 2005, including refinancing. He figures about 7.7 million of these loans are outstanding, representing $1.888 trillion of debt. About 1.4 million of those households face a jump of 50% or more in their monthly payments once their initial low-payment periods run out. Dr. Cagan says an additional 1.6 million face smaller increases that are still likely to strain their finances. He figures about one million households eventually will default and lose their homes to foreclosure. That would cause about $110 billion of losses for lenders.”
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Subscribe to WSJ and read the free marketwatch.com
“Subscribe to WSJ or read in library, the news reports are very good, just burn the opinion page.”
Spot on!
Interesting note.
My Mom and Dad, who live in NH, saw a news spot last night about people who are selling and waiting for the bubble to burst and prices to decline…..
novasold
thought NH went down in early 05
Bahstins big party was over in early 05
Low property values are in society’s best interest. High property values are only good if you think that housing should be a ponzi scheme and you are one of the first “investors” in the scheme.
I would amend your statement to “low and stable property values” — rapidly rising prices have the distortionary effect of creating the false impression that real estate makes sense as a long-term buy-and-hold investment. Given the money drain of PITI, society will end up loosing a great deal by having a housing stock greatly in excess of needs.
“So the media should act responsibly and be positive. Promote our area’s property value, for everyone’s sake.”
What amazes me is not that someone was ignorant enough to spout such self-serving nonsense, or that the reporter included it in his/her draft, but that the paper actually published it—as if were worthy of consideration.
Outsider,
In all fairness, the paper does have the responsibility to print various points of view. My only problem with this article is that they did not publish it under the title “Self-Serving Idiot”
All evidence of a housing bubble is now coming to the surface. With the other central banks raising interest rates, I don’t think even the U.S. government can stop a pop.
Most democratic countries’ central banks do not have the balls or the single-minded organization to outright pop an asset bubble.
Now, the chicomms have it right. Their single minded fiscal and monetary policies to kick the sh*t out of the Shanghai bubble. G-span had no eggs, and Europe hasn’t had any for 20 years. To suddenly grow some and take on the credit expansion is not really what they are doing; just reacting to eroding markets in an attempt to shore up some economy in the West. It’s self-serving to the core, so don’t think anyone is doing anyone else any favors. It could easily be dubbed the “Paper War” and in future generations they may comprehend the barbarity of it all (both to others and its citizens).
This raises an interesting question: Is the Shanghai bubble bursting operation quarantined from the rest of the world, or is there a chance that this housing-market equivalent of SARS could spread to the West?
“Compared to some other highly desirable areas of the country, our prices are still low.”
OK…this is what kills me. I’ve been hearing this crap in Florida for over a year now. Yes, prices USED TO BE low in Florida (probably as recently as 2 years ago). But this is completely untrue now, especially in South Florida. I wish these lemmings would check their facts before simply repeating the lies they are being fed by realt-whores.
I am still at this moment of the opinion that houses will only come down about 10% nation wide by the end of the year. The bubble should really burst in late 2007 and early 2008. By then most speculators and enough regular homeowners will not be able to hang on when interest rates are around 7.5 to 8.
I recall 9% back in the early to mid 90’s. With the concerted efforts of foreign central banks in conjunction with our fed, 8-9% isn’t that far off.
All depends on the rate at which sub-prime debtors turn their keys over to the lenders. A lot of REOs at once and you’ll see 20%-30% in a flash depending on the dimensions of the bubble in any given area.
Home ownership is at an alltime high. There isn’t a lot of homeowner demand left, so prices will drop to below traditional RoR for rental use, which is 40%-50% down from here in many markets…
I’d probably agree with 10% nationwide, fully aware that the degree of the plunge is just guesswork. However, IF we’re looking at 10% national declines, you can bet the houses near me will be tanking!
-A San Diegan
My wife just called me while driving around SD. She made a wrong turn, which led her through huge tract developments with an astonishing number of newly built, vacant SFRs. It is really amazing that the myth of “no more land to build on” is still frequently repeated in the media!
“So the media should act responsibly and be positive. Promote our area’s property value, for everyone’s sake.”
MY TAKE on this:
LET THE HOUSE OF CARDS FALL WHERE THEY MAY… have the blood bath and pity party- then GET ON with promoting your area as you would like.
THere is no reason to prop up a false pretense and prolong the pain. GET OVER IT! Take the hit to the community, rally to “re-build” the economic structure (on something other than real estate) and enjoy the town you so profess to LOVE.
This would be my take on ANYTOWN U.S.A. that may be b!tch!ing about the media spoiling the boomtown run. GET OVER IT, adjust to the “NEW ECONOMY” and make a life for yourself (ourselves) without being golden handcuffed to the real estate market.
ISN’T THAT what all great towns eventually do? San Francisco, for one… didn’t grovel in their own demise with the dot com bust. They got beyond it and EVOLVED.
I love this advice blubblebeliver
Thanks Howzing Whizerd
(note spelling on both posts, but I do appreciate the “atta boy”. )
I think that’s what’s great about blogging. We can all voice our opinions on things, have a fair debate, and maybe even have an effect on the trollers and other lurkers that are wanting to learn about the nationwide bubble. Thanks again to Ben!
Sorry , I cant see worth a damn anymore
To Sara Carballosa of Delray Beach, FL, author of that beautiful piece of work in the Sun-Sentinel:
You were doing so well Sara, “So the media should act responsibly..” and then it all fell apart ” …and be positive”
Sara, Sara, Sara -my dear girl… I know it’s such a mean and nasty world out there but it is not the Media’s job to be “positive” about any issue or story.
Can you imagine –
“A man was killed yesterday in fiery accident on I-95. Fortunatly, the driver of the vehicle had a large life insurance policy so his wife and children will actually be better off financially now that he is dead.”
googled carballosa and delray — think she’s any relation to luxury RE agent Joe Carballosa?
http://64.233.179.104/search?q=cache:gkydNsKtot8J:www.carriagetradeproperties.com/listings.html+carballosa+AND+delray&hl=en&gl=us&ct=clnk&cd=1
From the Palm Beach County clerk’s web site:
http://www.pbcountyclerk.com
Joe & Sara Carbllosa
1041 Bauhinia Road
Delray Beach, FL 33483
This is from a “Notice of Commencement” recorded 2/24/06 for work Solty’s Plumbing is doing on their new house under construction at “The Seagate”…
Typo… Joe & Sara Carballosa…
hahahah - thanks scinic - of course it all makes sense now!
Great catch. Too bad the paper didn’t find and disclose that.
Finish it, ‘He also beat both her and the children and served time for the abuse. As well as being a pedophile he had two other wives in Utah. They also didn’t mention the fact that he had a record and had done time in Kansas for real estate fraud and bank robbery’. Please add
Just kidding ! Don’t take it so personal.
Housing bubble or not, south florida is a great place to live. I cannot imagine living anywhere else. I am a home owner and so the ride of risign prices is enriching me (on paper atleast).
South Florida has a lot of offer…especially for a first generation immigrant like myself. Every coin has two sides…..south florida has traffic problems, hurricanes, etc. For me, the pros outweight the cons.
Having said that, real estate prices are out of control. They need to come down. At the moment, only the upper middle class and higher can afford to buy a decent house or condo.
The media can influence the housing market, but cannot make a housing market boom or crash by news stories. The media is a catalyst i.e they can make more people aware of the bubble and make it go down faster, but the media cant create a bubble.
This will be my first housing market downturn as an adult and a home owner…..am watching it with great interest.
I agree, I’m in Broward and recently I got an opportunity to work from home full time which means I could move anywhere in the country. I’m a renter so I could have went somewhere cheaper or somewhere where a nice house is 200k. I considered all 50 states and none of them apealed to me so I decided to stay in South Florida.
Hell man, did you consider the bahamas? How about the rest of the planet? Surely you can find someplace better than broward?
Outside of the US isn’t an option for me.
I’ll take suggestions if someone knows a better county inside the US.
San Diego. (I guess I should keep this a secret!)
Just add beaches, drier weather, no hurricanes since 1858, and beautiful mountain scenery, and SoFl becomes SoCal.
The media cant make predictions . THey can interview people who
make predictions , they can be bias and only interview people who are positive about the housing market , or, they can give balanced coverage . Its clear the media thought the bubble warnings were from crackpots and madhatters .
It is also clear the media should not have asked the captured experts if they wanted a clear opinion. Too bad almost all the experts are somebody’s hired gun these days!
New York Experts are saying ” No the housing bubble in California “.California Experts are saying “No the housing bubble on the west coast “. Florida saying the housing bubble in England . Everybody is bias even when the numbers are staring them in the face . I suppose this is because so many people are property owners and nobody likes to think they live in a bubble
Housing Wizard,
I guess we’re the MUTUAL ADMIRATION SOCIETY this morning. This, and your above post- are “right on” as far as my opinion is concerned.
I agree to a small extent that the media cannot CREATE the bubble, in and of themselves… HOWEVER- I think they have great IMPACT to propogate the FRENZY of what became a very abnormal, national real estate phenomenon.
It is my belief that the local media outlets for ANYTOWN U.S.A. just naturally began writing about local real estate, the price increases and eventually began reporting on frenzy of real estate.
It has not ceased to amaze me that this has happened in literally hundreds of towns, if not thousands of towns across the nation. It’s not like some specialty, boutique town was the isolated incident- it has infected/affected even the most basic, blue collar towns across the country, as well.
I believe that the low interest rates made it attractive to investors (early on), and the bragging of what $$$’s were made- no doubt filtered in to the mainstream public… pretty soon you had every Tom, Dick, Mary + Jane “investing in real estate” because of these stories, combined with The Donald, Rich Dad/Poor Dad and Anthony Robbins all selling tapes and books on getting rich…
Over YEARS of watercooler chat about “how much money everyone is making”- it got to mainstream Media including NATIONAL MEDIA (about the WHITE HOT, Sizzling RE Market!)
Well, fast forward another 6 months or so and I predict the “Johnny Come Lately National Media” will eventually jump on the band wagon that things have drastically changed. CNN etc. will eventually be talking about the national RE market like they reported on Katrina… “look at the devastation, look at these poor souls, blah blah blah.
Anyway, I’ll shut up now
Let’s place the blame for the “Bubble” where it should lie:
Ben Jones
Hear! Hear! Shutdown this site, and the housing bubble will reinflate. I mean, with nothing to read or comment on, what else are we going to do other than BUY! BUY! BUY!
BUY! BUY! BUY! SELL! SELL! SELL!
“So the media should act responsibly and be positive. Promote our area’s property value, for everyone’s sake.”
LOL. I bet this jackass blames the trees waving for making the wind blow.
“So the media should act responsibly and be positive. Promote our area’s property value, for everyone’s sake.”
What she is really saying is
““So the media should act irresponsibly and be lie. Promote our area’s property value, for the flipper’s sake.”
“So the media should act irresponsibly and lie. Promote our area’s property value, for the flipper’s sake.”
If the media had been acting responsibly since day one, we might not be in this mess.
You guys need to keep in mind the central objective of a for-profit media outlet, which is to sell ad copy. The news reporting has to have a sufficient whiff of truthiness to convince readers that it is worth their time to subscribe, but also to be spun so as to not alienate advertising clientele (which is often heavily concentrated in RE).
GetStucco ,
You just stated the main reason why we haven’t been getting balanced reporting from the media .
I believe homebuilders are going to ride this thing all the way down. They bought a lot of their land years ago, and can afford to sell at years ago prices and still make a profit. They will keep building until they can no longer make a profit (basically until they’ve ridden the the price curve all the way back to 2002 prices or lower).