“Prices Have Only One Way To Go” In Florida
The Orlando Sentinel reports from Florida. “Median home prices in the Orlando area tumbled sharply in March, just at the start of the critical spring buying-and-selling season. The median sales price for existing homes and condos sold by local Realtors fell by $15,000 from February to March, to $240,000, as sellers increasingly cut prices.”
“‘Prices are down because of the shift in supply and demand,’ said broker Lenny Layland. ‘Buyers are being picky.’”
“The inventory of homes for sale by local Realtors continued to swell to record levels in March, while sales fell more than 40 percent from the same time a year ago, the Realtor association said.”
“‘There’s no doubt sales are down any way you want to look at it. And they are down in every price range,’ said Stan Smith, a finance professor at the University of Central Florida.”
“The number of homes for sale by local Realtors rose to a record 23,547 in March from a revised 22,055 in February, a backlog that would take 14 months to clear at the recent sales pace. More drastic price cuts might be in store after the summer, prime selling season ends, Smith said, if the inventory remains stubbornly high.”
“Sales of homes and condos in March (were) down 42 percent from March 2006, when home sales were still on a hot streak. Existing-home sales for the broader, Metro Orlando area tracked closely with the core-market sales, down 42 percent year-over-year in March. Osceola’s sales were down 44.1 percent, Orange’s sales were off 43.7 percent, Seminole’s fell 43 percent and Lake’s slipped 31.2 percent.”
“The Realtors’ listings don’t include homes such as the one in Conway that Belle Isle homeowner Tom Wren is trying to sell on his own. He recently stuck a for-sale sign in the window offering the two-bedroom, two-bath home, with 1,076 square feet of space, for $210,000.”
“‘I figure I’ll give it three months,’ Wren said, before considering other options such as renting out the house once again. ‘It’s a entry-level house’ that should sell, given that homes throughout Central Florida ‘are all overpriced,’ he said.”
“Also, new homes are competing with many existing homes, pressuring prices even more. Shelly and Justin Braniff recently relocated to the Apopka area from Jacksonville, and (an) agent found them a new home from a builder’s inventory.”
“‘They discounted it over $100,000, and it has lots of upgrades,’ Shelly Braniff said. The four-bedroom, two-bath home listed for $429,000 but sold for just less than $300,000.”
The Herald Tribune. “The National Association of Realtors thinks the national median price for existing homes will drop this year for the first time since the organization began keeping records in the late 1960s.”
“‘My first thought was, ‘Wow, not even the spinmeisters at the NAR can sugarcoat the current market any longer,’ said Sarasota Broker Thomas Heimann. ‘My second thought was: I wish we’d only have a 0.7 percent drop in prices in our market.’”
“Sarasota-Bradenton’s median sales price dropped 9 percent in February when compared with the same month in 2006, from $324,200 to $294,500. Charlotte County-North Port saw flat sales in February and registered an 11 percent drop in prices, taking the market to near a $200,000 median sale price.”
“Heimann thinks that a recovery in the Southwest Florida market ‘may take a lot longer than even I anticipated.”
“While sales volume did pick up a bit during the last few months, most were for homes below $250,000, and most buyers used subprime loans. ‘As a matter of fact, 9 of our 10 last sales had 100 percent financing, and if the subprime market dries up, then that will have a certain impact on sales activity,’ he said.”
“Heimann is expecting that some areas of the region will see another 5 to 10 percent price decline. ‘It may well be into 2008 until we see a recovery and significant reduction in available inventory,’ he said.”
“‘It’s all about inventory levels,’ said Manuel Iraola, president of an online realty brokerage that sold $70 million worth of property in Florida last year. ‘Inventories have only one way to go, up, and prices have only one way to go, down,’ until the situation stabilizes.”
“The trouble in the housing market is coming from many directions, and involves buyers, lenders and mortgage originators, said Andrea Rankin, president of Sarasota’s Rankin Mortgage.”
“Roffers thinks buyers have enormous leverage right now. ‘There are 10,000 homes to pick from instead of 3,500′ and ‘plenty of sellers will work very hard to get a deal done.’”
From Reuters. “U.S. homeowners who bought a home with a subprime mortgage, and now face foreclosure because they cannot make their payments, may have an unlikely remedy: get another subprime loan.”
“‘If regulators come in and disallow subprime lending, we are going to end up seeing more foreclosures because these people just can’t get another loan,’ said Patrice Yamato, president of the Florida Association of Mortgage Brokers.”
“But debating the virtues of refinancing into another subprime loan may be academic, said Patrice Yamato, since funding for high-risk mortgages has evaporated.”
“‘Subprime lenders have tightened up so much that a lot of those subprime loans are not getting made,’ she said, so many homeowners are just going to have to brace for a payment shock or contemplate giving up their homes.”
The Ledger. “Central Florida has to emerge from the current real estate slump, which most likely won’t end until 2008, said David Lereah, chief economist for the National Association of Realtors.”
“‘It’s not good right now,’ he said. And it hasn’t been good for the past 18 months.”
“‘In August 2005 we peaked,’ Lereah said. ‘That was the end of the boom. We just went down from there. And speculators got caught with their financial pants down.’”
“Last year, Florida’s residential real estate went into a recession. ‘Prices got too high,’ Lereah said of the 2005 market. ‘They shouldn’t have gotten that high in the first place.’”
“And it has taken sellers nearly a year to realize the market isn’t in their favor, he said. ‘But we are headed in the right direction.’”
‘In August 2005 we peaked,’ Lereah said. ‘That was the end of the boom. We just went down from there. I suspect a long thread on this one, too.I wonder if anyone asked Davey-poo about this report, especially pages 5 and 6 - http://www.realtor.org/Research.nsf/files/Orlando.pdf/FILE/Orlando.pdf
(I downloaded all these reports several months ago - and I wonder why the NAR still has them up on their site)
August 2005 sounds about right. It took a full month to find a buyer for our Sarasota house (April to May 2005, settled in July). Just prior to that, houses in our neighborhood were being snapped up in a week or less.
BTW, I still remember our realtor asking how much we wanted to put the house up for. When we told her our figure, she said “That’s not high enough.”
How times have changed!
We put our Miami house on the market in August 2005, it sold -eleven- months later. Took about a 6-7% hit from what it might have gotten if we’d moved in late 2004 but believe me I am NOT complaining!
i listed in apr05 for$245,000 and lowered the price to $230,000 in aug05 and sold in 1 day for $225,000 to a flipper. 2/1 with no garage in runningsprings ca.92382. lot of preforeclosures listed there now. bought a new 3/2 3 car garage on oversized lot in kingman az for $192,000. 30yr fixed 6.25% loan. $ 1004.00 piti
Doghouse…I read the report from the link. How can anyone but the biggest idiots listen to anything that a Realtor has to say. It is pure BS on a constant basis. In any other business the economists and writers of that report would be fired for incompetantcy. All realtors should be regulated by law to keep their mouths shut on any type of forecasting or giving financial advice and simply perform their simple duties of showing houses and helping clients with the paperwork. Do they actually perform any other usefull service? The only reason I entertain the thought of using a realtor on my next house hunt is to open the lock boxes.
Right on OutofSanDiego,could not agree with you more .
During this real estate boom realtors really turned into rah rah financial cheerleader forecasters. To hear the CAR talking heads claim that borrowers could not afford not to buy was incompetantcy.
In my opinion the NAR/CAR/realtors/loan agents/builders went to far with the myths they created like “real estate always goes up “.
When the NAR has a campaign that states ,”Time to Buy “,that’s financial advice .If someone buys and they lose their house or lose money than it wasn’t the “Time to Buy “.
If a client asks a RE agent ,”what do you think the market will do “,than I think maybe they can give a opinion ,but realtors should make it clear that they cannot predict the future .They do have rules in most realtor codes that state that inducing panic buying and selling is not allowed ,or giving false material facts about a property or location is not allowed . So I really think this whole rah rah cheerleading during the Boom was a violation of those codes .
You are already seeing Lawyers starting lawsuits based on oral promises from the REIC that buyers relied on . It will be interesting how the courts rule on these lawsuits . IMHO ,the housing boom was a mania ,fueled by easy money ,but really a false market that should of been called years ago .
I notice that the NAR was clever enough not to put a date on the report. Nevertheless, it is not too difficult to deduce the earliest period in which it could have been written, given the statistics’ dates and the lag in coming up with those numbers.
“That was the end of the boom. We just went down from there.”
Wait a minute, I thought the Real Estate Boom Would Not Bust.
http://en.wikipedia.org/wiki/Image:LereahNotBust.jpg
that’s one creepy picture , of a house floating like that with a family looking on… as if aliens are lavitating the house out of reach of the family, very depressing.
got cash?
Have you noticed that they have recently changed the title of Lereah’s book “Are You Missing the Real Estate Boom? : Why Home Values and Other Real Estate Investments Will Climb Through The End of The Decade - And How to Profit From Them”
It’s now titled “Why the Real Estate Boom Will Not Bust - And How You Can Profit from It: How to Build Wealth in Today’s Expanding Real Estate Market” “Formerly Titled Are You Missing The Real Estate Boom?”
I find it endlessly amusing that the former title of Lereah’s book became so wrong bordering on comical that the title had to be changed. Not that the new title is much better but the references to “the end of the decade” have been scrapped. So Lereah now admits that 2010 became 2005, a 50% drop in his estimate. I wonder what else might drop 50%? Home values? His remaining credibility? His pants?
He just said “That was the end of the boom.”
He changed the title to “Why the Real Estate Boom Will Not Bust” Seems like he’s running out of options for book titles. Maybe he could try this
“Why Real Estate Probably Might Not Go Down Much, and Hey I’m Having A Seminar Next Week”
I can’t help thinking that the house is about to fall on the family, instantly crushing them to death.
Slim — instantly, or slowly and agonizingly? I’d feel bad about gloating if so many flippers and speculators hadn’t gloated to me on the way up.
My interperetation is that housing is over the head of the typical american family and that prices will eventually be subject to gravitational forces.
h_a_n aka passthebubbly
“Central Florida has to emerge from the current real estate slump, which most likely won’t end until 2008, said David Lereah, chief economist for the National Association of Realtors.
“‘It’s not good right now,’ he said. And it hasn’t been good for the past 18 months.
“‘In August 2005 we peaked,’ Lereah said. ‘That was the end of the boom. We just went down from there. And speculators got caught with their financial pants down.’
“Last year, Florida’s residential real estate went into a recession. ‘Prices got too high,’ Lereah said of the 2005 market. ‘They shouldn’t have gotten that high in the first place.’”
“And it has taken sellers nearly a year to realize the market isn’t in their favor, he said. ‘But we are headed in the right direction.’”
Wow. I guess hell just froze over.
You know.. I have another problem with that report. Aug 05? I think they are moving the “peak” further and further back in history, to make it seem like we have been in correction for a longer period of time.
Living in the middle of the bubble zone in S. FL, I feel like we have been maybe 9-12 months of correction. Not working on 2 years! Perhaps prices stopped shooting up, but prices have only really been dropping the last couple of months with any strength.
1 year down, 6 to go (normal RE cycle is 7 years, IIRC)?
Everyone in real estate knows the peak was 2005. They spent all of 2006 lying and giving illegal kickbacks and other legal incentives to mask price declines and keep it out of the press.
The peak is different times for different places, even within Florida. Many places around the country are just now hitting their peak and leveling off. Florida in general was earlier peak than most areas.
However the actual peak price-wise in Florida, at least according to the FAR, didn’t come until June of 2006, not 2005. All-time peak in FL was 257.8k that month. Prices had indeed stopped their rapid ascent in 2005, but leveled off for a year and had the brief echo-peak in 2006 before now falling significantly.
different times, different places: I agree with packman.
Some places in California held up pretty well until (say) January 06. In my Maine neighborhood, things were slow but prices were stiff through at least the spring of 2006. (Most buyers are cash buyers.) In the AZ RV parks where I lend, prices have yet to show any decline at all, and it’s not for lack of sales activity. In a certain way, perhaps the low-low end is contracyclical–some people decide to live CHEAP. However, I’m not counting on continued appreciation in the lot-and-trailer category.
However the actual peak price-wise in Florida, at least according to the FAR, didn’t come until June of 2006, not 2005.
If you are going to use Realtors stats to call the peak, then don’t forget to use the “Year Time-Lag”, thus it was mid/late 2005. I sold & closed 10/05 in Valencia, CA. I think I got the last overpriced peak price.
You got the peak in Valencia desmo . By mid 2006 one could get so much more house/sq footage for the money in Valencia . Do you know what has been happening in Valencia lately because I keep seeing the same listings in the MLS?
“The Realtors’ listings don’t include homes such as the one in Conway that Belle Isle homeowner Tom Wren is trying to sell on his own. He recently stuck a for-sale sign in the window offering the two-bedroom, two-bath home, with 1,076 square feet of space, for $210,000.”
“‘I figure I’ll give it three months,’ Wren said, before considering other options such as renting out the house once again. ‘It’s a entry-level house’ that should sell, given that homes throughout Central Florida ‘are all overpriced,’ he said.”
Well Tom so is your overpriced $210K 1000 ft home. Drop it by 1/3 and we will talk.
I’m from Orlando and grew up in Conway Estates, about a mile from Belle Isle. If that is a 1950’s house (likely, given the size), and if it does not have water frontage or view, then I’d say the price of that place should be one-half of what he is asking. Granted, he likely would get more today, but that’s what I think it could drop to by the time we hit bottom, if there is no taxpayer bailout. He’s selling what essentially is a knockdown, except it isn’t Winter Park and building a fancy house on the lot would be foolish.
With sub-prime borrowers drying up he’d be lucky to get half for a piece of junk like that. I recently moved here from NC, so I’ve been looking at some of those houses in the Miami slums. Ridiculous, why would anybody in their right mind pay over $100/sqft for sub-standard housing? Personally I don’t mind as much living in the slums as most other people do…if the price is right. Me thinks prices will go down 50+% over the next 3 years. Slum property at $100/sqft is still a pretty lofty valuation in my book.
I agree w/ Michael Fink. We are in the correction for much less than a year. The plateau might have begun in August 2005, but prices remained high till mid to late 2006. — Gordo
The peak in NYC area was May 2005, the week that NY Magazine had a cover that said “Is your house like a .com stock?”. We just had put our house on the market the week before. An 8% price cut two months later, it was gone in two weeks after that, at 11% off oirginal price (which was ridiculous - 200K over 2004 appraisal). We did it my realtor’s and wife’s way for 2 months, then I took over
…
Things stopped in the market that week for two months. Then a small late summer/early Fall bounce and then…whatever it is now. I suspect 10% down from our selling price.
Actually NYC prices have crept up 2-5% this year.
Does anyone have a working voodoo doll of DL? Anyone?
I had one, but my nephew thought it was PinHead and took it for his Friday the 13th collection.
“Last year, Florida’s residential real estate went into a recession. ‘Prices got too high,’ Lereah said of the 2005 market. ‘They shouldn’t have gotten that high in the first place.’”
David ‘It’s different everywhere’ Lereah’s comments are remarkably timely and prescient.
Oh wise one, at your crystal ball, give me but a little peek.
Without your guidance, my fortunes may not have peaked.
Had I taken your advice at the top, I would have piqued.
“Last year, Florida’s residential real estate went into a recession. ‘Prices got too high,’ Lereah said of the 2005 market. ‘They shouldn’t have gotten that high in the first place.’”
No, DL, prices got too high in around 2001-02. However, the subprime/100%/IO/Neg Am loan allowed it to continue to rise, dispite the fact that everyone was effectively priced out. 05 was just the end of the line, even for exotic loans. Now, enter 07. Exotic loans are gone. Prices still hover around 05 levels. What do you think happens now? (we all know DL will get it wrong again, but hey, it’s worth giving him the chance).
Also, I was working for a major municipaility yesterday who have been dramatically effected (though tax revenues) by the RE boom. They are very upset/scared about the possible rolling back of taxes to 01 levels.
If the plan currently on the table ever comes to pass, I anticipate many municipalites going BK. They should never have spent the money if the first place, but now to ask them to roll back budgets by 20-40%? Never going to happen.
Just leave the whole thing alone. Get rid of Save our Homes (as it is patently unfair) and levy the same amount of tax across ALL the people. Then wait. Prices are going to continue to drop, and that will slowly push down the tax burden.
Also… How much longer until the cry goes up for re-appraisals by people who purchased in the past 3 years? Especially peak buyers, we are probabaly 20% down on what they paid. Why is there not an outcry for reapprasial to reduce the tax burden? I am sure it’s coming, I just expected it by now.
Why do you expect a re-appraisal to help? Values are down across the board, so all the taxing authority has to do to compensate is raise the millage rate.
Yes, but the outcry would be deafing against that. You have to remember, FL has Save our Homes. During the run up in prices, nobody felt the increased taxes except for those who bought at the top. An increase in millage with hit everyone the same (crazy idea with taxes; equally assessing them and all), and the sheeple would be UP IN ARMS over that move.
Yes, they can raise millage. And perhaps they will at some point. Either way, I would expect those with high appraisals to berate the appraiser to come lower their taxable value.
FL cities are going to go BK during this process (if the tax rollback passes)… Mark my words.
Michael,
It really gets tiresome reading your rants against Save Our Homes. I am in FAVOR of SOH. The reason is simple.
You are now complaining about taxes being too high, thinking their will be a revolt.
SOH limited tax increases on housing to 3%. A reasonable amount. The municipalities could BUDGET based on 3% annual increases. The 20%, 30%, 50% annual increases in “appreciation’ were BULLSH*T, plain and simple. But as long as specuvestors were driving the market prices up, and RE Brokers/agents cheering and everyone in a frenzy, the appraisers gave the “new value” as the fair market value, including all the fraud.
WHY should I be forced to pay taxes on speculation?? The speculators should PAY The FULL AMOUNT of taxes they thought their “purchase” was worth. I never would have agreed to that kind of debt, and it was not “market forces”.
It was a mania. Taxes will level out, but I would have been forced to pay a 100% increase. To me, that’s not fair.
I wasn’t a speculator.
And, now the speculators can expect a 3% increase annual for HOMESTEAD properties. IF it’s a FLIP, then 20-30% increases are fine with me. That will force them to SELL THE DAMN THING NOW, driving down prices and driving down assessments, thereby driving down TAXES.
Get off the “unfairness” of protecting homeowners from speculators. It’s become tiresome.
Thank you.
I agree with Diogenes. People who buy overpriced properties in Florida should know well in advance what the taxes will be. If they plan to live in these properties, they also should know that their original tax bill can only go up 3% a year, maximum. Obviously, most do know this, since tens of thousands of out-of-state and out-of-country filppers falsely claim homestead exemption.
Nobody forced these destroyers to buy million dollar properties with zero down financing and liar loans, and the starting $25,000 annual tax bill (in South Tampa) is part of the price of pretending to be something they aren’t. Take away SOH, and hundreds of thousands, of long-time residents would lose their homes to carpetbaggers: “investors” who buy tax liens and often, eventually, take properties from the owners who can’t meet either the taxes or the “investors’” ridiculous interest demands. Is is possible that the legislators who concoct tax rates might be involved in this kind of get-rich-quick rubbish?
The tax rates themselves need to be drastically lowered. In Santa Fe, properties are taxed on 1/3 of their alleged value; here in Tampa, they are taxed on 100% of their alleged value, which sometimes exceeds the actual sales price. Santa Fe is gorgeous, Tampa is hideous. There is no logic to the system. And the billions in windfall property taxes collected in Florida over the past five or six years have magically disappeared. Take away SOH, and everyone will be paying a fortune, and I guarantee, local, county, and state governments will squander every last cent, and come back for still more.
And I agree with both diogenes and Incredulous. Completely. As I have said before, SOH is doing exactly what it was designed to do, which is SAVE the homeowner from being tossed out due to speculation. Fink’s bias against SOH seems to have something to do with the fact that he worked in local government. Two points: local government probably foams at the mouth over SOH, since it cuts off a source of additional income to feed the beast, and also Fink seems to have a desire to punish people into paying attention by sharing the misery through taxation. But he doesn’t address exactly how that works. Pitchforks and boiling oil would only get homeowners thrown in jail. Voting? Bah! By the time people were able to get around to voting local politicians out of office, they would have already lost their homes.
To be fair, I’ve advocated for Marco Rubio’s tax plan on this blog and taken my share of flames for it. But it is not an obsession for me.
Tiresome, indeed, diogenes. You and incredulous are tactful and well spoken and I thank you both for your insightful comments.
SOH is a shameful pathetic joke and an enormous failure. It’s a classic short term band aid meant to get crooks re-elected.
SOH is a shameful pathetic joke and an enormous failure. It’s a classic short term band aid meant to get crooks re-elected.
“an enormous failure.”
Failure for who? Works for me! And let’s examine Fink’s claim that SOH is “patently unfair”, which is patently untrue. Unfair to who? It’s unfair to the wealthy and maybe to the poor, both entities being parasitic on the middle income earners.
No it isn’t; it’s the only decent things politicians have done regarding taxes in Florida–EVER. Newcomers whine and complain, but if you take away SOH, the newcomers’ tax rates will not fall; taxes NEVER go down. All the homesteaders will simply have their taxes go up. People who wish misery on others so they can benefit (and this includes a lot of people on this board) rarely reap such rewards, but they do show their character, so the rest of us can dodge them. All the hurricane cheerers and depression hopefuls might have a change of heart if what they wished for everyone else happened to them instead.
Most voters in Florida probably don’t even own property here, so SOH doesn’t get politicians re-elected. Name-recognition counts more here than anything else, which is why the same do-nothings get re-elected time after time.
The above comments were in reply to Penina, not Palmetto. Incidentally, I don’t see how SOH could hurt the poor, since the few who own homes are certainly better off with a cap than without one. Where’s the harm to anyone? It doesn’t INCREASE anyone’s property taxes, which are not based on actual spending, but on made-up formulas carved in stone. All tax rates are far too high.
Without having any opinion at all on the pros or cons of SOH, I’d note that people who bought residential property here in Florida between 2005 and early 2007 will not benefit from it, though they may have intended to. The homestead exemption of $25K is a joke, relative to the cost of properties here nowadays. The SOH value that is “saved” is the over-priced amount they paid for their place and they will, as noted above, play heck in getting that valuation lowered now that the values of their properties are going down. So I’d think that only those who bought around 2001-mid-2004 are really skating.
SOH works for you until you have to move….then you’ll be screwed like us “kids” that are first time homebuyers. Sorry for some of us being bitter about picking up your real estate tax tab. Unless you would mind selling me your home at a 3% increase per year over the orginal cost would you? I think that is a REASONABLE increase in price. No? So your saying the value did increase more than 3% per year - hence SOH is not a clear reflection of the home’s value. Like all ballot initiatives, SOH is enormously shortsighted because it benefits the status quo at the cost of the future. We live in a Representative Republic, not a Democracy - the more power to the people, them more they will screw over their neighbor if given the chance.
SOH is a shameful pathetic joke and an enormous failure. It’s a classic short term band aid meant to get crooks re-elected.
People, people, listen up. Why are you so worried in the manner in which you are taxed? You know you are getting screwed one way or the other. The entire time people spend discussing the “tax problem” misses the point to the delight of the political class.
The problem is SPENDING, and more spending. Trying to make taxes fair is a red herring and misses the mark by a mile. The real issue is spending and it until that gets addressed, no form of taxation will be palatable than the next.
I rest my case.
How are YOU picking up anyone’s real estate tax tab? If you bothered to read the above letters, or zillions of others posted on this blog, you’d know that Florida tax rates have nothing to do with actual government costs. Take away SOH, and do you think YOUR tax bill will go down? It won’t. You have nothing to gain by doing away with SOH. Also, it should be transportable to a new residence. Anyone who moves starts the game all over. As long as you stay in your home, you’ll be grateful for SOH.
As for houses going up more than 3% a year, I seriously doubt it for the past thirty, excluding the bubble period. A 3% increase compounded annually eventually becomes a large figure. The legislature picked it, because at that time, 3% was about the normal rate of increase. And for all the taxes involved, SOH or not, what do we get in return from our governments?
Newcomers who complain about SOH are just pissed because they’re jumping in at the new prices, not the old, but doing away with it will not improve their lot one bit, and the increase in revenues will be gone overnight. You sound like someone with a handicap complaining about someone without one. I could complain about my grandparents living in opulence for what it costs to live in crap today, but what’s the point? Just because you’re envious of people with lower tax rates is no reason to make them suffer. They got here years before you did and lived in their homes all this time, not jumping from place to place. They deserve the security of SOH.
This is in reply to Paul, above.
Keep in mind that SOH allows for a 3% annual increase over the original accessment. So, unless prices drop all the way down to pre-2001 prices, most homeowners will have an annual 3% increase in annual taxes even though prices are dropping like a rock.
It will be interesting to see how the sheeple react when their homes are losing 25% to 50% of their values but their annual property taxes continue to go up by 3% per year. I have little doubt that there will be a movement to reduce the 3% rate within the next few years.
Good god. That’s what I get for having a busy day at work, I get verbally abused on the blog! Anyway, although I am all for a good debate, please don’t tell me not to talk, or that you’re tired of reading about my “crusade” against SOH. If you don’t like it, don’t read it. But I can do without snide attitude, thank you very much.
I realize nobody reads the old threads, so I will continue this in tommorow’s FL thread. However, just a quick response.
Local govt does NOT foam at the mouth over SOH. Not at all. The reason I rail against it is because I saw exactly what SOH allowed them to do, and how it totally insulated them from the ire of the voters. SOH is the BEST thing that ever happened to taxing authorities; it has allowed them to increase their revenue like nothing else. Take a look at this article for a quick primer:
http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20050921/NEWS/509210645/-1/SPECIAL09
Also, SOH only protects your value in relation to other people, not your mill rates! All SOH does is establish the unfair basis for taxes. Guess what? Palm Beach county could change the tax rate to 4% of value tommorow. SOH is not going to protect you! But they would never do that, because that would effect those that can actually vote.
Yes, I HATE SOH. And I am going to continue to post on it. The right way to “protect” homeowners would have been to cap the increases at the GOVT level, not at the “my house” level. And I am all for that kind of legislation. But SOH, as it currently stands is indefensible. It is a tool of the govt agencies to jack up taxes without any restraint (just don’t change that mill rate!!).
Long time Palm Beach County resident here. There’s no way we’re going to give up SOH, when every day we hear about another politician on the take. It’s like this - we’re at war with the municipal crooks, and we have our Kevlar SOH vests on, that we fought to get. Would it be great if you had those too? Sure. Are we going to take ours off and take our chances? No way…
SOH is a Ponzi scheme. Keep taxes low for existing homeowners by socking the new buyers with ever-increasing taxes. Just one little problem - it only works if property values keep increasing. Once they start falling, the wheels come off.
Look people - the answer is not to stick the new buyer with higher taxes than you. The answer is to get your local governments, which you elect, to get spending under control. Time to start making hard choices.
This is exactly the way it works where I have owned, which uses MVA taxation so that everyone with the same house pays the same amount of taxes, and every homeowner has an equal interest in keeping spending under control. What a concept.
And BTW, I would never consider living in Florida no matter what tax system they used. There’s plenty more for me to dislike about that place.
The cities had a windfall with bubble prices and (of course) just increased spending. However, like everything else about the bubble, it wasn’t sustainable. There is no limit to how high you can raise the tax rate, but there is a limit to how much money you can take out of an economy.
They will have to cut spending.
load your musket !
pols will try to keep it all
F*** the musket.
He with the biggest stick; wins:
http://en.wikipedia.org/wiki/Minigun
Got rounds?
they always spend ALL of the money
population is up 10% in my vcounty in 4 years while they doubled their take
Also, I was working for a major municipaility yesterday who have been dramatically effected (though tax revenues) by the RE boom. They are very upset/scared about the possible rolling back of taxes to 01 levels.
“but now to ask them to roll back budgets by 20-40%? Never going to happen.”
There’s one word for the community that can’t or won’t roll back the budget. RECEIVERSHIP.
Go back, get a copy of the 2001 budget and implement it. All programs and salaries and pensions go to that spending level. Don’t like it, quit. Plenty of potential employees out there who would love a gov’t job. The gravy train is over folks. Adapt or die.
Auger — pretty good suggestion and hard to argue with, IMO.
I think that one way the local parasites will fight back is by levying ever-higher impact fees for new construction.
“While sales volume did pick up a bit during the last few months, most were for homes below $250,000, and most buyers used subprime loans. ‘As a matter of fact, 9 of our 10 last sales had 100 percent financing, and if the subprime market dries up, then that will have a certain impact on sales activity,’ he said.”
Let me do the math for the Realtors ™ who do not seem to comprehend. Zero down is going away (too many defaults), thus those sales are gone. so for Florida, its looking like the take home pay for Realtors ™ will be 10% of what it once was.
“Last year, Florida’s residential real estate went into a recession. ‘Prices got too high,’ Lereah said of the 2005 market. ‘They shouldn’t have gotten that high in the first place.’”
And why didn’t you notice that last year?!? Prices will be dropping for a long time…
Got popcorn?
Neil
“‘As a matter of fact, 9 of our 10 last sales had 100 percent financing….’”
WOW! That is a horrid number.
WOW! That is a horrid number.
Yes. Florida is going to go into Depression. You will see continued job flight until those who work in the state can afford to live there. Even then, home prices will continue to drop until *nice* properties are affordable to those who work there (and thus attract jobs from out of state).
Got popcorn?
Neil
To be perfectly honest, some people will choose to 100% finance even if they could have put a little money down. So it may not be that 90% of the people who borrowed under the old rules can’t borrow under the new ones. I don’t know the market, so I can’t make a truely educated guess, but be cheerful, assume 50% (and a bunch of those qualify for a lot less than they would have under the old rules) and that still doesn’t spell fun for the real estate agents…
i financed 95% when i could have put 20 down because i’m a bit paranoid and like to have “take this job and shove it” money in the bank. i know i’m very unusual and not many people have 40k cash 5 years out of being broke in college but its nice to know i’m not tied down. by 1.5 years in the house (this summer) i will have 20% equity (helps to live in TX and get a decent house at 1.5x income).
When did the peak selling season become summer? Back in December they were saying that things would turn around when the peak season begins in early spring (or maybe even after the Super Bowl).
I guess in July they’ll be talking about the approaching autumn peak selling season.
Summer is not selling season in FL. It’s hurricane season; nobody buys a home in FL during hurricane season (unless you already live here, and are selling one to move to another.. Does not matter, same number of homes for sale either way). The spring selling season is all but over in FL; the snowbirds are migrating north (thank God, I lived though another snowbird season on I95!).
Next time big bounce for sales is really Oct/Nov timeframe. Depending, of course, on hurricane season. A bad season? Are you familiar with what happened in FL during the 1920s?
Sorry guys - I know you live there (or did live there), but I’ve got to point out that sales in FL do indeed peak in the summer, at least early summer (and late spring). Take a look at the FAR stats:
http://media.living.net/statistics/statisticsfull.htm
If you graph the sales, the peaks are indeed during the early summer. It’s easiest to see if you do 5-month or so averages.
W/regards to hurricane season - you’re pretty much right though - peak sales tend to be May/June/July whereas hurricane season is mostly August/September/October.
When you say “sales”, does that mean contract signing or closing? If a home closes in May, chances are the contract was signed in March or April.
The stats say closed transactions. So presumably the date is date of closing vs. date of contract, but I can’t say that for sure. If it’s date of contract, then that actually would push the peak out to late summer, so I doubt it’s that.
With mortgage tightening going the way it must…
I’m not seeing a good conversion rate between signed contracts and closings. ergo continued slower sales.
Is Florida past Fear yet? Its certainly leading the nation through this real estate cycle.
I hope the hurricane season isn’t too bad. I wouldn’t wish that on anyone. That said… the 1920’s season could be repeated…
Got popcorn?
Neil
Also doesn’t sold mean closed. What is the general time gap between signing on the dotted line and actually closing in florida?
I know in Ny if you decide to purchase something on march you would generally close on around may and that is when the propety is “sold”
In Florida, the normal time-to-closing is 30-60 days from contract signing. 90-120 days are possible, but the exception. The reason “sold” numbers are important is that they reflect sold-and-closed transactions. Sales (as in, for example, “new-home sales) reflect contracts, not closings. “Contingent” status nowadays, in Florida, is a useless number because it usually is super-easy for most buyers to get out of the contract, with deposit returned, in the first days of a contract. “Pending” is useful because those contracts usually close, but I never see “pending” numbers reported.
“Depending, of course, on hurricane season. A bad season? Are you familiar with what happened in FL during the 1920s?”
Mike, we’re going to disagree on this one again. A REALLY bad season will draw a ton of construction jobs. Available houses in good repair will fly off the market and we’ll see another rally…even if it is just temporary. A bad hurricane season would be a 24 - 36 month bandage on the housing problem.
(I’m a broken record:) ARM resets kicking into high gear this summer and worse this fall. No respite for Florida sellers.
“When did the peak selling season become summer?”
My Realtor® said it’s always a good time to sell. She wouldn’t lie to me, would she?
Curt…you got it wrong. My Realtor said it’s ALWAYs a good to sell OR buy! (…talking out of both side’s of their mouths).
I actually think some realtors are o.k folks, you just have to know what you are dealing with and always revert to the age old adage of Caveat Emptor.
Florida has another problem. Insurance companies are not continuing to write a lot of home insurance there or are charging two to three times more. I have relatives there and it is becoming a mess.
” Florida has another problem. Insurance companies are not continuing to write a lot of home insurance there or are charging two to three times more.”
That’s proof that insurance isn’t expensive enough. If it was, the companies would all be lined up to take your money. Sorry to be so blunt about it.
Sad but true…
If rates were high enough, European and/or Asian insurance companies would be entering the market en mass.
That bit about Katrina where insurance companies have to cover all liability in a hurricane even if it was excluded by contract has them all spooked… Not to mention the re-insurers have no incentive to cut rates. In fact, quite the opposite. Until the rates are so high that someone else chooses to enter the re-insurance business… this will only continue.
Got popcorn?
Neil
wow RE market “rebounding ” already
# 10 lethal mistakes for real estate investorsBankrate.com
As the housing market starts to rebound, investing becomes more appealing. But there’s a right way and a wrong way to go about it.
“The median sales price for existing homes and condos sold by local Realtors fell by $15,000 from February to March, to $240,000, as sellers increasingly cut prices.”
Everyone now, repeat after me: “Real Estate only goes UP!”
Pass the Kool Aid.
I like how our friendly Realtor(tm) massaged the word “increase” in the above sentence for feel-good purposes.
“Sarasota-Bradenton’s median sales price dropped 9 percent in February when compared with the same month in 2006, from $324,200 to $294,500. Charlotte County-North Port saw flat sales in February and registered an 11 percent drop in prices, taking the market to near a $200,000 median sale price.”
Not sure where he gets his 9% number - FAR shows 14% off (342k in Feb ‘06 vs. 294k in Feb. ‘07). January was much worse actually - 353k in ‘06 vs. 284k in ‘07 - a 19.5% drop. Generally the drop in that area is running about 18% so far when you account for monthly blips.
“about 18% so far” = hard landing
Yes.
P.S. I’m cheering it all the way, as eventually I’d like to get a place in that area. However it’s got a long way to go - prices are still up about 100% above about where I think they should be for that area. I’m looking for an overall drop of about 40-50%, adjusting for inflation and assuming it’ll take about 5-6 years to get there (it’s just over 1 year in).
It will undershoot. 40% to 50% will probably be acheived in 2009.
In 2010 or 2011 you’ll see the real bottom.
As I noted earlier, Florida’s problem is getting worse do to job flight. Until prices get sane enough to reverse that… the trend will only accelerate.
Got popcorn?
Neil
try early 05 for a comparison
25% easy in most FL locals
Bobby Z. in the a.m.
Lay lenny layland lay, lay low like lereah, the market’s dead
Lay lenny layland lay, lay low like lereah, the market’s dead
Whatever colors of b.s. you have in your mind
I’ll expose them to you and you’ll still deny
Lay lenny layland lay, lay low like lereah, the market’s dead
Stay lenny layland stay, stay with your man awhile
Just until, say May, let me see you him make you smile
His hands are dirty, but his clothes are clean
And you’re the best broker he’s ever seen…
Apologies to Bob Dylan.
“‘Prices are down because of the shift in supply and demand,’ said broker Lenny Layland. ‘Buyers are being picky.’”
It is a different group of buyers who are still in the market at this point. Subprime buyers tend to be a little bit on the indiscriminating side, as they have no skin in the game anyway.
That tends to happen when you’re actually intending to pay for the product your buying. Tends to make you a bit more discriminating in your purchase.
If you have ever had/used an corporate expense account, you know exactly what I am talking about.
Actually I don’t even waste my employer’s money. Given what we pay our CEO its probably a wasted effort, but I was raised to be responsible, regardless of what “everyone else” is doing.
Exactly. You don’t do it because of whom they are but who you are.
Not bad. I’m with you on that. If someone is reaming you on price, who cares if it’s you paying, or your boss/company paying - it’s still wrong and should be avoided, if at all possible. We’re talking principal here - and I think that most of us on this blog would change the oil in a rental car, if we drove it enough to where it was needed (but Avis didn’t know). Again - it’s who we are here.
“If regulators come in and disallow subprime lending, we are going to end up seeing more foreclosures because these people just can’t get another loan.”
Let the political blame shifting and propaganda war begin!
I’m reminded of a political cartoon at the close of the S&L disaster. A down on his luck man walks up to a bank teller window and asks “are you guys making any more of those loans you don’t have to pay back?”
Good one — we’ll probably see a recycled version before long.
We ain’t seen nothing yet. The loan availability has folded and gone away. Appraisal requests are down 90%. Funny, as it was guessed that 20% of loans were subprime and only when the subprime guys hit the wall did loan volume tank.
Headlines in the Orlando paper yesterday in big bold letters said, “Home values Plummet”. I guess that prety much let’s the cat out of the bag huh? This from a media in total denial up to now. Well, their Sunday paper was pretty thin with little advertising by builders so the pressure was off. Might as well let it fly.
In any event this is very good news when there is little of it going around. We are about to sit up, blow our nose, and take our medicine. It is gonna taste awful, and feel miserable, but necessary to get well. I, for one , am ready to get it done and get over it.
Let the games begin.
What dime said. Testify, brothah!
Saw this for New Tampa this morning…. http://tinyurl.com/2jrcpv
Short sale for $184K, previously bought in 8/05 for $210K. Sale prior to that was 5/04 for $127K. What dumbass buyer really thinks that a place appreciates 65% in a little over a year?
was it LIErahs?
anyone have his stock pics of 1999
“While sales volume did pick up a bit during the last few months, most were for homes below $250,000, and most buyers used subprime loans. ‘As a matter of fact, 9 of our 10 last sales had 100 percent financing, and if the subprime market dries up, then that will have a certain impact on sales activity,’ he said.”
Remember how turbos in older cars used to “kick” right before the car took off? The lack of subprime buyers is the turbo kicking this thing into high gear. If you thought the data from the last two months was bad, wait until the dearth of subprime buyers money jumps into the equation. I think that April/May’s numbers will scare the cr@p out of folks nationwide.
Mugsy — nice analogy — I like that, and it makes sense.
NAR is forecasting a 0.7 percent dip for the national median price after a 1 percent gain last year. The group also is estimating that existing home sales will fall 2.2 percent this year, compared with a previous forecast of a 0.9 percent drop.
Seriously, what’s with these decimal point predicitions? Can one really predict 0.7% or can we just call it 1%? Oh wait, we can’t call it 1% because that’s what prices ROSE by last year and we have to spin it to make it seem like not all appreciation made last year was lost.
Economists give forecasts to the nearest tenth to demonstrate they have a sense of humor. Except in the case of the nar, it’s merely pretense.
“The Realtors’ listings don’t include homes such as the one in Conway that Belle Isle homeowner Tom Wren is trying to sell on his own. He recently stuck a for-sale sign in the window offering the two-bedroom, two-bath home, with 1,076 square feet of space, for $210,000.”
I think that next year, this guy will gladly accept 100K for this ahem, high quality, spacious home.
BTW, I was pondering the effect of so many homes going on the rental market….just because you have a house for rent does not mean it will rent. IOW, if your house doesn’t sell because it’s a piece of garbage then it probably won’t rent out either. We renters aren’t dopes and we’re not going to live in a crappy house when there are so many to choose from. This will only add even more vacant houses to inventories.
As a point about rents…My dad has rentals in Cape Coral that I have been managing for the last couple of years. He has owned the properties 10+ years. Last week was the FIRST time we have had to drop the rent on a unit to get a renter. The rents are still
70% of everyone else,I could not imagine trying to make payments on units bought in the last couple of years…I truly believe the ugliness is just getting started.
Chris
Chris:
Got any idea of whether there are any value declines on the river on the Ft. Myers side near the bridge?
Fran,
Not a clue. I honestly think its going to take a loooooong
time for this to settle out. Why ? I am in Port Charlotte
now. On my street alone there are 20-25 empty lots for sale.
Nobody is budging on price. 35-50k per lot .
But wait…it gets better.
1 home is for rent with no current occupant.
3 homes are in foreclosure/foreclosed and not even on the
market yet.
My neighbor has his place on the market for the last 12-14
months. Not a single offer. Started at 249k,then239/229/219/
209/199/189/179/169 as of last week with still no offers and
it is a very nice place…
So on my entire street that only leaves 5 owners in good
standing.
I also noticed a HUGE new development off of I/75 near
mile marker 177. Who the hell is gonna buy all these places?
Chris
But wait…there is more !!!
I have friends who purchased a home on the river (cape coral side?) a couple of years ago who are selling. I think they bought for around 1.2m. They gutted the house and did not go forward with any renovations so it is sitting gutted and empty. Probably going to cost them a fortune in lost equity since all the value is whatever is assigned to the land with a housing shell on it.
I believe that Taco Bell Jeff from the SDCIA board has 2 or 3 new construction houses in Cape Coral. It is shocking that he chose a weak market for house rentals.
Plus, smart renters don’t rent from insolvent landlords. One reason to rent is so you don’t have to deal with maintenance. Many of these new “landlords” don’t have the funds or experience to keep the property maintained.
Renters aren’t dopes … maybe this is why the NYT ran this interactive graph to show whether it’s better to rent or buy:
http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html?_r=1&oref=slogin
Wow — that is the most sobering graph/calculator I’ve seen to date. In my case, break-even point to buy instead of rent is a minimum of 7 years; in all scenarios that include flat or declining market prices with rents rising no more than 3% p.a., break-even is “never.”
Most of the houses for rent in Tampa are of astonishingly bad quality or are in bad locations. I’ve also been amused at flippers’ obvious efforts to “improve” some of them. Because flippers heard somewhere that a 3-bedroom house is more valuable than a 2-bedroom house, no matter what, I’ve seen some hilarious efforts to add another bedroom, including just putting in a new wall. Another good one was converting the garage into a “master bedroom” by eliminating the garage door, adding a ceiling fan, and painting the concrete floor dark blue to hide the old oil stains.
“‘In August 2005 we peaked,’ Lereah said. ‘That was the end of the boom. We just went down from there.
And speculators got caught with their financial pants down.’”
Especially the ones that were listening to your utterances.
Got smug!
don’t miss this one
https://image.minyanville.com/assets/FCK/File/Stuff/ATT345361.txt
Where’s that poster named Debt Vulture? Our time is coming!
No doubt if we get a chest cold, the rest of world will have pneumonia.
You mean “guest workers” might have a tough time getting a mortgage along with the rest of us? I’m shocked, I tell you, shocked!
Think there is any connection with their large layoffs yesterday?
“The men the American public admire most extravagantly are the most daring liars; the men they detest most violently are those who try to tell them the truth.”
H.L. Mencken
Because most men would rather be lulled to sleep by soothing lies than lie sleepless worrying about unpleasent truths.
Had a friend just come back from the Orlando area. He said every 3rd house has a realtor or FSBO sign in the yard. They rented a 7 bedroom house for a week and it’s on the market for 261,000. The guy told him, he can’t keep it rented, because of everyone trying to rent to keep from foreclosing on their vacation homes. The area I’m looking at is small and the number of listings jumped from 320 to 450 in about 4 months. A lot of the boomers are NOT retiring to Fl, because they can’t afford to. They’ve mortgaged their primary residences to the sky and have no equity. A lot have either lost jobs, or their pensions have disappeared. Prices are going to drop a lot more than the NAR want you to believe. They act like we’re stupid and can’t add. It’s plain economics, supply and demand will eventually determine prices, no matter what sellers or realtors spin. If you have 100 listings and 2 buyers, better start the downward price spiral.
The whole idea that boomers would purchase these properties for retirement is just silly. On the whole, boomers don’t have enough money to support the idiotic real estate market in FL.
They can’t afford the mortgages.
They can’t afford the taxes.
They can’t afford the insurance costs.
What are they going to do, work at the Chick-fil-A to pay these costs???
Of course, had the last bubble continued unabated, and we had a 36,000 Dow Jones average at this point, they might have. But, that didn’t happen.
Because, sad to say, most of us are stupid and cannot add. Otherwise their tatic would never have worked.
The boomers are not coming to S. FL, that’s pretty much for sure. That area was for the previous generation. Every boomer that I have ever known (which, granted, is not that many) who has been to my home (in Palm Beach county) HATES it here. They cannot believe the traffic; the materialism, the lack of common human decency, the Spanish, etc… They look at me like I am crazy for wanting to live here.
Now, people my age (25-40)? They LOVE it here. It’s the promised land, women, bars, clubs, non-stop party (well, they are vacationing here, so, to them, it seems like a non-stop party).
I love it here as well; I think it’s a blast, and made a decision to move here right out of college just to be in this environment. But S. FL is NOT a place for middle or upper-middle class boomers. It’s WAY too expensive, and without HUGE money, there are just too many problems that they don’t want to deal with. Yes, if you can live on Palm Beach island; it’s a different ballgame. But for a typical boomer (under 2M in net worth), Palm Beach is not the place for you (nor is any where south of Palm Beach, look north).
Palm Beach -> Miami has become more like LA then a sleepy retirement community. It’s money, image, fake everything, etc. That suits me just fine; but that’s what the boomers are looking for (IMHO).
Mike I have to disagree on your age group analysis. I fall in the 25-40 group and everyone I know is either stuck in PBC or selling. As I said before one more hurricane and it going to be over for years there. We got out 2 years ago and are hated by our peers! If you are a single guy then I know what you are saying otherwise…..
Michael, I have to disagree with the $2M. I think it is more like the boomers’ median net worth is well below $1M. Most of it probably tied up in their house.
http://tinyurl.com/2wusrt
from article: “Another unfortunate fact that came to light is that most people aren’t going to retire rich. Although net worth peaks in the 55 to 64 age group, as would be expected, the median household has a net worth of only $248,700 (up 28.7%).”
Mind boggling unless this group 55-64 mostly have very good pension programs.
“Because, sad to say, most of us are stupid and cannot add. Otherwise their tatic would never have worked.”
I have taught math classes for adults, as has my wife (college level, she also taught high school). I am astounded about how poor many college students are mathematically (in introductory courses). I have friends who teach in other states, and they agree with me. It isn’t just that they don’t have algebra skills- many can’t add fractions, and don’t even have much number sense. For instance, you tell them they start with $10,000 in an account paying 4% annually, compounded monthly, and ask how much they have after 5 years, some people come up with answers >$100,000.00, and don’t even notice that the answer is way off. I imagine that these people have to trust mortgage lenders completely- it is really frightening that some of these people (I know examples personally) decide to become day traders or real estate speculators. No wonder the collapse takes them completely by surprise.
I agree about the affordability crisis and the lack of boomers rushing into Florida….
There is a lot of debt going around and the leading edge of the retiring boomers have discovered Tennessee, North and South Carolina, etc. as cheaper and “climate friendly” options. I personally know of three (3) families down here that cashed in their chips, sold at the peak and moved to TN or NC. They were old time FL residents like me and saw the madness for what it was.
“The Trend” is now for boomers migrating to the Mid-Atlantic states. FL is done.
The Boomer Ants have a “pheremone trail” that they are following to the Carolinas. The hurricanes ( past and future ), taxes, insurance, illegals and the humidity have all but erased that “pheremone trail” to FL.
Also keep in mind that this trend will probably strengthen, as early boomers make their retirement homesteads in the Mid-Atlantic states, future retirees, friends and family will follow the existing breadcrumb trail.
Retiring to Florida is now officially passe’.
USAA issued huge policy changes yesterday for FL. They refused to transfer my renter’s insurance from SD to JAX last night, and I’ve been with them 20 years. They also won’t cover us when we buy a house anywhere in the state of FL. We have been up all night reconsidering whether or not to try and deal with the FL madness.
Take it from me. I lived there for 37 years and the best thing I ever did was get out! It was nice 20 years ago but there are WAY too many problems now.
Ouch. I wonder if this means that they are going to drop exisiting customers. I’ve used USAA for renter’s insurance since I moved to S. Florida in 2005.
Retiring to Florida is now officially passe’.
SWEET!
My boomer parents are looking to retire to Florida. They are in their late 50s now and are only going to come here because of me and my son (their grandson). If they sold their house in Michigan they would only be able to afford a decent downpayment on a typical house here.
Their house is paid off and see no reason to get another mortgage. What they now plan to do is rent for a couple of months during the winter, which would be much, much cheaper than buying. And lets face it, they only like Florida during the winter. In the summer, Michigan is a much better place to be.
Have they checked out the 55-and-older communities? Down here in Broward, those communities have already hit dead bottom. One near me in Sunrise (decent area) has 1/1 condos going for less than $30K. SFHs in 55+ communities are in the low 100’s and dropping.
Gatorfan — do you have any links for some samples of those?
Never mind. I looked it up on realtor.com. It’s true.
Should have mentioned that everything under $100K is a condo. But still, that is darned cheap unless there is an undisclosed defect that affects them all. There are many units priced in this range and not very many different condo complex names. For a few months’ respite in the winter, that’s pretty darned inexpensive. Until a storm hits.
This from the Palm Beach Post
http://www.palmbeachpost.com/business/content/business/epaper/2007/04/12/m1a_WAGES_0412.html
As housing goes bust, local paychecks trimmed
By Jeff Ostrowski
Palm Beach Post Staff Writer
Thursday, April 12, 2007
How can Palm Beach County wages be falling in a period of record-low unemployment?
Blame the housing hangover. A federal study released Wednesday says county wages fell for the first time in years, and economists and business boosters point to the slumping real estate market as the culprit.
The county’s average weekly wage for the third quarter of last year was $756, down 1.6 percent from a year earlier, the U.S. Bureau of Labor Statistics said. During the same period, the nation’s average wage climbed 0.9 percent to $784.
The shrinking paychecks are an unexpected shift for a county that has enjoyed record-low unemployment rates and once led the nation in job growth.
“‘It’s all about inventory levels,’ said Manuel Iraola, president of an online realty brokerage that sold $70 million worth of property in Florida last year. ‘Inventories have only one way to go, up, and prices have only one way to go, down,’ until the situation stabilizes.”
And what do you suppose is helping push inventories skyward? Price and affordability perhaps?
Boy, that sounds familiar… Oh yeah, I said much the same thing a year ago. http://bubblemeter.blogspot.com/2006/07/its-inventory-stupid.html
Try this. Got puts?
http://www.theglobeandmail.com/servlet/story/LAC.20070411.IBNASD11/TPStory/Business
TXchuck: So that explains why stocks are overvalued and why the markets haven’t fallen? Very analogous to the painfully slow-motion housing implosion that we’re watching.
“The tools of conquest do not necessarily come with bombs and explosions and fallout. There are weapons that are simply thoughts, attitudes, prejudices — to be found in the minds of men. For the record, prejudices can kill and suspicion can destroy, and a thoughtless, frightened search for a scapegoat has a fallout all its own — for the children and the children yet unborn. And the pity of it is that these things cannot be confined to the Twilight Zone.”
Rod Serling
Man, I love the Twilight Zone.
NE FL prices revert to 2003 levels in two (2) more years. Hold steady (insignificant appreciation) for three (3) years. Then back to “normal”…. maybe.
Prediction: Gordo
Gordo reply:
Gordo, you finally made it down here to Florida….I’m over here in Ormond Bch….Just as Crazy as ever
Another super piece written by Janszen:
http://www.itulip.com/forums/showthread.php?t=1200
“Prices have only one way to go”
Resistance is futile!
“The spirit of the age is filled with the disdain for thinking.”
Albert Schweitzer
I have a friend that paid $385000 for a house in PGA Village in Port St Lucie FL at the height of the market in 2005 as an “investment”. Another friend just bought a larger house down the block for around
$250,000! Ouch!
YIKES!
Prices are tumbling by the week in sunshine state. lol!
A disaster for those dummies waiting for good times to come back.
Anyone have a Naples prices? Inventory up substantially. All those rich homeowners down there better wake up fast before another 25% is lopped off the top of that overpriced crib.
interesting comment from Reuters, sounds easy, but difficult in practice. I have buyers that have found a house and can not get the funding because the subprime space is very tight. I would expect that existing home owners will have an even more difficult time getting a subprime loan especially since a number of them are have a property that is worth less than the loan they are trying to secure. These owners are “up side down”. Not a good spot to be in.
- The Open House Network - ROpenHouse
They are jumping out of buildings down here.
http://www.sun-sentinel.com/news/local/broward/sfl-412falljump,0,3269058.story?coll=sfla-news-broward
It is a massive disaster. Anyone catch what that clown schumer is chirping about? Bailing out dopes. Kick these dopes out in the streets and live in homeless shelters. many better learn lessons from this mess not bail outs.
Bread lines forming will be forming across the country littered with fbers (dopes) realtors builders appraisors, landscapers, mtg brokers.
I got some moldy bread and stale water for them.
Spoke to some dope last sept. about how he and his family were buying rental properties in orlando to rent out and how great it was. When I questioned this or brought up points but excessive speculation did not want to hear about it. Now I am going to rub it the F”"” in.
I am making up a list of dopes and @$$holes I had to listen to boast the last 3 years about how rich and smart they are. Over the next 2 years I pIan on running into a bunch of them just to rub it in. It is going to be fun watching them squirm as I talk about the housing collapse and all the dopes bankrupt/underwater.
“The real problem is not whether machines think but whether men do.”
B.F. Skinner
Everyone is leaving Florida?
I just rented a house in the eye of the hurricane (palm beach county)
and will wait for the bargains to appear.
As housing goes bust, local paychecks trimmed.
http://www.palmbeachpost.com/business/content/business/…/m1a_WAGES_0412.html
Sorry, here’s the link:
http://www.palmbeachpost.com/business/content/business/epaper/2007/04/12/m1a_WAGES_0412.html