“There Aren’t Many Buyers” In Florida
TC Palm reports from Florida. “The number Treasure Coast residents falling behind on their monthly house payments has soared in the past year. According to Realestat.com, St. Lucie County had 151 property owners with late payments in March, up from 52 a year earlier. Martin County’s late payments climbed to 37, up from the seven recorded in March 2006.”
“‘Who knows how bad it’s going to get,’ said Richard French, president of the Broward County chapter of the Mortgage Bankers Association. ‘It’s a little scary to think about.’”
“Escalating home values from 2000 to 2005 caused buyers to overextend themselves. Many took out short-term, adjustable-rate mortgages and are seeing their loan payments spike as interest rates rise.”
“‘I would also fault the people that bought second homes and didn’t need them,’ said Brad Hunter, director of West Palm Beach-based Metrostudy. ‘Some people bought with the thought of wanting to make a killing and flip the house for $100,000. Now they realize they aren’t going to sell for a profit.’”
“Don Santos, past president of the Treasure Coast Builders Association, said the situation is due to the poor lending decisions of the subprime market and local people losing jobs in the construction industry. ‘It just created this perfect storm that we’re in now,’ Santos said.”
“‘We saw a 321 percent increase in foreclosures when you compare this versus last year,’ said Merle Dimbath, Treasure Coast economist in Stuart.”
“Dimbath’s percentage included Palm Beach and Brevard counties which had 1,207 combined foreclosures started last month. ‘That is not a pretty picture…I think it’s going to take the rest of this year and into the next year to run its course,’ he said.”
“Bill Fruth, president of an economic consulting firm based in Palm City, predicts 2007 will be a ‘bloody’ year for foreclosures.”
“‘This isn’t the end of it and it’s going to go on for a couple of more years,’ Fruth said. ‘During the last half of 2005, people paid extremely inflated prices for their homes and now they owe more than what the home is worth.’”
The Ledger. “A glut of new home inventory continues to bog down Polk County’s real estate market. Last month, building permits for single family homes dropped to 393, nearly a 48 percent decrease from 750 in March 2006.”
“Following the 2005 housing boom, builders were left with an overabundance of homes. That, coupled with hesitant buyers, has caused the market to slow down, making it a prime time for home buyers, builders say. They can now be more choosy in their choices in homes.”
The Miami Herald. “Florida’s powerful housing industry is hoping state lawmakers’ bid to revise property taxes will inject life into the anemic real estate market.”
“Single-family home sales have plunged more than 20 percent over the past year in Miami-Dade and Broward counties, as the number of homes for sale has hit a new high. At the current pace, it would take two years to sell all the single-family houses on the market and nearly three years to sell the condominiums.”
“‘This is the single biggest issue in the home-building industry right now,’ said Silvio Cardoso, president of the South Florida builders’ organization. ‘Property taxes are strangling the market’”
“Still, many builders reacted coolly to a Senate proposal for rolling back taxes to 2005 levels, since home prices were high then. ‘The Senate bill doesn’t make any sense at all,’ said Cardoso. ‘That is the peak of the market.’”
The Bradenton Herald. “The dismal housing picture and low wages are two key reasons the Tampa Bay region, including Manatee and Sarasota counties, is lagging economically in a comparison with other Southeast regions. Those were the results Tuesday from Tampa Bay Partnership’s third economic scorecard.”
“The region’s housing permits dropped 36.6 percent in a year. Job growth also declined by 1 percent, pushing Tampa Bay from first to fourth in that category. ‘Clearly, a red flag for the region’s economy,’ the report said.”
“‘Tampa Bay ranks last in home affordability because it has the highest home prices and the lowest household income of all the comparison regions,’ the report said.”
“The housing situation did not surprise broker Nancy Allen, but she said the cost of housing locally is on a downward slide.”
“‘What we still see is the imbalance is so dramatic between the amount of inventory, homes on the market both resale and new, compared to the amount of buyers, which is miniscule,’ she said. ‘And so we’re living in a buyer’s market, but there aren’t many buyers there. It’s forcing our prices lower because of supply and demand, it’s the same reason it went out of control in the other direction.’”
“Tampa Bay home prices were 25 percent higher than those in Raleigh-Durham, 46 percent higher than Atlanta’s and 68 percent higher than Dallas’, the report said. However, the household income here is less than the other regions, it noted.”
“‘It’s starting to be a drag on the whole economy,’ said Larry Henson, for the Tampa Bay Partnership.”
‘More and more Floridians find their American dream of homeownership ending on the steps of the county courthouse. In Jacksonville, the foreclosure rate jumped 38% in 2005 over the previous year. In 2006, it climbed again. ‘Every day, there’s just blood in the streets from the families and the homeowners who are devastated by the loss of housing,’ said attorney April Charney with Legal Aid.’
What devastating loss?
Zero down homebuyers are only out the excessive monthly mortgage payments they have been making compared to what they would have paid to rent an equivalent residence. Not much loss there.
Serial refi’ers who once had equity and a managable mortgage payment are only devastated because of their stupidity.
Someone on this blog quotes John Wayne as having said (in a movie I presume), “Life’s hard when you’re stupid.”
Life’s hard when you let other people think for you.
“Life is hard. Life is harder when your’re stupid” - John Wayne
Thanks for the correction.
“there’s just blood in the streets”
LMAO!!!
Who would have thought that phrase would be used to describe this mess??
There are no buyers in Florida, period!! The state’s median household income is 50K and the median price is 240K… For first time home buyers, the median household income is 34K; no one can afford to buy a house. Add to that, more than 23500 homes on the market in Central Florida alone… It’s the simple laws of supply, demand, and affordability. Until home prices drop to the pre bubble prices, we’re only going to see more foreclosures, more inventory, and more of the American Nightmare.
But 10,000 people are moving to Florida every second! There MUST be buyers!
A coworker of mine is moving to Jacksonville. No way could he and his wife afford a home in California. But he’s listened enough to lease for a year. By the end of that year, the carnage will be obvious.
But Florida has priced themselves out of retirees (discussed on bits bucket) and low cost business. They are going to have a depression soon. Its going to be scary down there…
Got popcorn?
Neil
If your friend lives in non-coastal California, he won’t find more affordable homes in Jacksonville. We have friends from Riverside County California that found the homes actually more expensive in Jacksonville once they moved here. They sold their renovated 1950’s ranch in Redlands and expected to find a steal in Florida. What they found was the same house in the same neighborhood was about $100k more here. The real difference for them was that there were less nice neighborhoods in Jacksonville than in California. The median home price is less than in non-coastal california, but the median priced home is a 1200 square foot concret block crap shack built in the 50’s with a leaky roof. If your friend lives in a coastal city though, things will be much less here.
Avg home price is only 5x income. I’ll just put you in a 5/50 with a 2% teaser and you can let your grandkids pay the interest.
sure they are… but how many are leaving and how can the newbies afford anything when 60% of the jobs are service related
“no one can afford to buy a house.”
Well, actually, you are only partly correct.
People can afford to buy a house at an interest rate of 1%. They just can’t afford to pay off the loan if the REAL interest rate is 6%. So, we just need to find financial mechanisms to lead to “affordability”, you know, the affordability products that helped so many people get into homes.
I propose Congress helps promote more sub-prime lending by some from of buyer subsidy so we can get back to having affordable housing.
Wasn’t that the Greenspan Plan? Then, if we can just get everybody to agree to higher prices, all the re-finance and HELOC problems will disappear. Poof!!
Thank God for the miracles of modern finance!
Mike’s plan to save FL RE:
Lower MTG interest rates to 0 (as in, negative Fed IR).
Offer 30 year interest only loans at 0% interest.
Remove all prop tax in FL.
Subsidize homeowners insurance on someone else’s back (don’t care who).
Volia! Affordability problem solved!
I will go buy South Beach as soon as this plan passes. That’s all I am waiting for!
Now that’s a “Time to Buy” campain!!
aladinsane’s way…
I prefer the Sons Of The Pioneers version~
Not a word needs to be reworded.
All day I’ve faced a barren waste
Without the taste of water, cool water
Old Dan and I with throats burned dry
And souls that cry for water
Cool, clear, water
Keep a-movin, Dan, dontcha listen to him, Dan
He’s a devil, not a man
He spreads the burning sand with water
Dan, can ya see that big, green tree?
Where the water’s runnin’ free
And it’s waitin’ there for me and you?
The nights are cool and I’m a fool
Each star’s a pool of water
Cool water
But with the dawn I’ll wake and yawn
And carry on to water
Water, water, water
Keep a-movin, Dan, dontcha listen to him, Dan
He’s a devil, not a man
He spreads the burning sand with water
Dan, can ya see that big, green tree?
Where the water’s runnin’ free
And it’s waitin’ there for me and you?
Cool, clear, water
Cool, clear, water
Sing at the end: “please give the donkey some water” . . .
I want to see is the Fed hikes rates. They need to more than ever but holy smokes will that cause a complete cratering in the housing market. On the other hand, if they don’t hike then watch inflation continue on a rip roaring path. A bona fide, 21st Century Solomon’s Choice.
What inflation?
I read the latest “CPI reports”. Inflation is a concern they say, but “contained”.
The prices of everything I don’t need have been brought down by cheap foreign imports. As long as I cut back on food, gas, medical care, education, home purchases, and other luxury items, then I’m set for the coming economic expansion. What, me worry?? I believe the FED.
It is funny the way you put it. The core rate is composed of luxuries and excludes necessities. It is the rate of the rich who don’t have to worry about necessities.
I’m really glad I will pay less and less the longer I wait for a plasma TV or a Dell Computer because inflation is “contained.” The problem is, my wife comes home from the grocery store these days with two plastic bags of stuff and then she announces we just paid $100 for those dozen or so items. Glad there’s no inflation!
I have constantly wondered what the heck is actually in the CPI number; apparently now I know! It’s Escalades and Hummers…
I used to argue with people all the time about inflation; How can inflation be 2.5% when home prices (which typically account for 20-40% of a persons ENTIRE budget) are going up 30% a year?? That makes NO sense to me!
Then, someone told me (I think it was here) that housing is not figured in the inflation number.
That makes perfect sense. Let’s base inflation off the cost of bubble gum and boob jobs, or maybe Alpackas and buttermilk.
WTF, how can the biggest single monthly expense in most households not be part of the inflation number??
I think that the housing component of the CPI is based upon rental rates, not house pricing.
Real estate prices are inclued in the CPI in the form of owners equivalent rent which is based in part on actual rents and “owners equivalent” rent. Owners equivalent rent is supposed to reflect the opportuinity cost of renting your own home regardless of whether you own it outright or with a mortgage. My guess is that they have been understating this calculation throughout the boom. Now that home prices are falling they will most likely change the formula, ala the NAR affordability calculation.
CPI = inflation minus inflation
“If someone were to rent your home today, how much do you think it would rent for monthly, unfurnished and without utilities?”
According to Mish’s Global Economic Analysis this is the actual question asked for the CPI determination of equivalent risks. This is a sham.
http://www.bls.gov/cpi/cpifact6.htm
I’m betting the price checkers for the BLS are heading for those new condo / builder line areas
wow ,that would bring the numbers down
Thank you for being so astute with your comment “Until home prices drop to pre bubble prices…”
If 03,04, & 05 prices were artificial, wouldn’t it just make sense that we exclude them in any trend analysis to project where prices “should” be, or are going to be?
Artificial highs beget artificial lows.
There are no buyers in Florida, period!! The state’s median household income is 50K and the median price is 240K… For first time home buyers, the median household income is 34K; no one can afford to buy a house. Add to that, more than 23500 homes on the market in Central Florida alone… It’s the simple laws of supply, demand, and affordability. Until home prices drop to the pre bubble prices, we’re only going to see more foreclosures, more inventory, and more of the American Nightmare.
You state that medium income in Fla is 50K. I think it’s closer to 31K.
my old mans place
pool/dock
listed 1.1 mill
he’ll take 750k
is that a crash ?
Why is he so motivated? Is it taxes, insurance, or something else?
has 2 homes- just left for TN summer palace
FL place has davitts / cage unresticted Gulf access
still can’t get a bid
Can I ask what “cage unrestricted” means?
Also - you’ve got my curiousity piqued a bit. Eventually I’d like to get a nice place on the water down there, though it’ll be a few years. My impression is that the truly high-end places in FL (i.e. places on the water) aren’t being hit as hard as others, in part since they’re not as subject to speculation, in part because the “barrier to entry” for building a place on the water is so much higher. I’m curious to hear from the Florida folks if that’s true though.
When I say “on the water” I don’t mean dinky development lakes or canals - I’m referring only to beach or open-water access places.
It’s not exactly what you’re after, because the 40-year-old development I’m talking about has deep-water canals, but the places are priced around $900K and yet rent out for $2500/mo or less on an annual basis. What fool would buy one if there are any still for rent?
I’ll buy one.
… in 2020 when they’re $500k instead of $900k (and rent is $3500).
P.S. flatffplan - how much did your dad buy the place for? Just wondering.
“My impression is that the truly high-end places in FL (i.e. places on the water) aren’t being hit as hard as others…”
Your impression is screwball wrong. That’s where the most insane speculation occurred. I know what I’m saying.
We own three places on water,two in ft.lauderdale area,one in keys ,the keys area high end sales have picked up some.Ft.Laud. waterfront is slowly selling at maybe15% less than peak prices {ocean access waterfront} but dry lot homes seem to have no buyers !
$499K is a crash…he is just being smart today!
That means less $$$ for you kid, when he passes away.
Yes, and why do you keep advertising it? This isn’t Yahoo Real Estate.
Maybe there was a good reason the Spanish gave up Florida?…
Ha ha - you know the answer to that. I’ll oblidge.
No gold there.
We already were talking about this in the Bits Bucket, but since it is FL centered, I thought I would reopen the topic here.
FL has a “tax relief” plan in the legastlature somewhere that plans to remove property tax and replace the revenue with a sales tax. This is what I think:
Also, as much as everyone knows I hate SOH, I truly think that this is a red herring.
The reading I have done says that; if everything goes well, the first “tax relief” that we can see will be 09-10. Anyone want to gander a guess as to why they would want to swap (or partially replace) prop tax with increased sales tax around that time? I will hazard a guess and say that the govt econ people know that we are going to see more massive deprecation, and anything that they do (with prop tax) is going to result in decreased revenues (because of decreased values). So, right about the time the housing market starts swirling around the bowl, we swap prop tax for sales tax? Hmm.. I might have my tin-foil on this morning, but I think that this is just a plan to keep tax revenues high in the face of a busting housing market?
What about my other tin-foil guys out there?
There are a few plans on the table, you can read about them here:
http://www.palmbeachpost.com/politics/content/state/epaper/2007/04/19/a18a_XGR_proptax_0419.html
As the old saying goes, “call in the dogs and pee on the fire”. Florida native and long time appraiser here. It is too late and anything is to little.
I am reviewing reports daily and the bottom has fallen out. With so little push we are seeing losses in the 10’s of thousands in short order. In as little as 4 months huge drops. It all began with the new year, as you can see it in the data.
Concessions have done little to spur activity. Sales so far this month in metro Orlando area are about 800, this from 1800 a year ago. INventory is around 70,000 marketwide, MLS be damned. I am in the field and can count. The only spring bounce we got was the Coeds at UCF.
As to depression, you can feel it out there. I have never heard such desperation in the voices of people ordering appraisals. Many of our clients are lenders in Ca. and they are feeling the pressure as well. It is not hit the number pressure but how quickly can you turn it around so we can get paid?
For the first time in my career we are checking the box “values are declining”. The bankers are having a hissyfit about it but when I included a few articles as exhibits they got off it. They know it but hate the black and white.
Lenders are cutting values on their own. Many appraisers are still appraising properties for more than the contract price. Yep! I cut em’ every time.There is no excuse for any value over contract price as there is no better evidence of willingness on both parties part.
Fraud is rampant! I have personally discovered 3 cases this past week and I have limited data at hand. If I had all the state and counties have I suspect there would be in the neighborhood of 30-40% fraud rate. When I say fraud I mean “boot” off the record and off radar. Kickbacks, freebies, payments somewhere else, etc. We don’t have enough jails for all of the people involved in fraud. For some reason they seem to think it is justifiable.
I starved during the so called good times, I am busy as hell now. That alone tells me something. Kinda glad.
dime, I really enjoy your posts, they are some of the best on-the-ground anecdotal reporting of the state of the Florida housing market I have seen, IMHO.
I was hoping to see you post, I had a question for you. Every once in a while I check the HUD repos for sale in Florida. Over the years, Jacksonville has always led the market in HUD repos, it’s almost a running joke. But last week, I was shocked, I tell you, shocked, to see that Polk County all of a sudden had a huge spike in HUD repos, on a par with Jacksonville. Wow. I’ve never seen so much in Polk before. Why Polk? Any idea?
Yes sir- Polk is the most depressed county in the state. From 70 million boxes of fruit to 7 million. I am from winter haven and that county has has been toast for a long time. HUD foreclosures have been non existent for about 5 years as HUD has not been a player and also they had no foreclosures due to investor activities.
Looks like HUD/taxpayer is up to bat in the game of stupid.
They will totally blow it as usual. Giving away the cheese.
Funny, I am glad we are tanking. At the same time I feel guilty for feeling so. But I don’t think we are gonna run thru fields of poppies to Oz. More likely an ambush.
In the pit of my stomach I feel I am missing the true depth of this and it could change lives in a very bad way. I mean even those of us who saw this coming. In Viet Nam it was called point and also the “wetass hour”. Out front is not a good place to be. You just have this eery feeling of something wicked is about to pop up. When I got it, it always surprised and scared me even though I was expecting it.
Thanks for the update.
“As to depression, you can feel it out there.”
A lot of second home snowbirds are abandoning Florida for good as a result of higher taxes and insurance. When they leave, Florida also loses sales tax revenue. That’s why some are arguing to abandon SOH. Keep speculators and second home owners alive is the new REIC mantra. Florida’s economy and some home owners are experiencing Death by a Thousand Cuts.
As value plummet, so do tax revenues.
Govt has NO intetion of going back to 2001 budget levels, so they must move that burden to something that is not going down faster then a … on Sunset strip.
I really think that’s the idea; move the burden to the non-crashing assets. And once we get the rebound in housing, put the prop tax back.
Maybe I am giving them (politicans) too much credit, but this seems like a very shrew and intelligent way to keep the coffers full while mitigating the damage in the housing market (it will still crash, just more slowly, and, frankly, they no longer care anyway).
It’ll all go down eventually, so they’ll still end up in the same boat.
Michael Fink: Could you help me out with SOH. S’il vous plaît What does SOH stand for? I understand that in Florida, property taxes are based on selling price so that if you bought twenty years ago you don’t pay much taxes but if you bought 2005 you pay top dollar. Is that right? Also this tax structure is now chasing away buyers?
As a former Florida resident, let me reply.
SOH stands for Save Our Homes. It’s a law that was instituted quite a few years ago that limits the annual property tax increase of an individual’s or a couple’s primary residence if they claim Florida as their home state (driver’s license, registered to vote, etc.). The base tax is set in the year after you buy your house. If you bought for $250K in 2002, your tax is based on that price and is capped at 3% a year increase. If a FB came along and bought your home for $500K in 2005, his initial property tax will be almost double what you paid in 2004, but then it will rise just 3% a year from there. It will be FAR MORE than double that of your/his long-time neighbor who bought for under $100K back in the early 90s.
Investors, snowbirds, etc., don’t have SOH caps. We have friends who lived half time in MD and FL for many years and for some strange reason claimed MD as their primary residence. The tax on their FL property has gone through the roof in recent years.
Well, Maryland has a similar law. ISTR that the taxable value for state property taxes goes up by a maximum of 10%/yr and for county taxes by a rate (3% in my county) determined by the county. So if their Maryland house is worth more (and it may well be) it may make sense to get the Maryland deduction instead.
Today’s master of the obvious (moto)
“‘It’s starting to be a drag on the whole economy,’ said Larry Henson, for the Tampa Bay Partnership.”
‘It’s starting to be a drag on the whole economy,’
He got the sentence mixed up…should be:
The whole economy is in drag.
Drag (clothing), slang for any costume, but particularly for clothes of one gender worn by the opposite gender
Will Floridians abandon property taxes and SOHs for a sales tax only system?
Florida is kicking around the idea of replacing prop tax with sales tax.
Anyone else think this is a way to bailout the overextended buyers? What about a way to maintain revenue in the face of crashing home prices?
I think its a horrible idea, btw, just curious to see other’s opinions.
I think it’s a horrible idea because it will really kill the renters, you know…. the people who have been smart, not buying into this craziness. The argument is that landlords will pass on the property tax savings to the renters… Call me skeptical, but with as many desperate FBs out there and greedy landlords, what on earth makes people think the savings will be passed on?? It will also hurt long-term homeowners because they will more than likely spend more $$ in sales tax than they would in property tax. And not only that, but it will kill businesses. There is sales tax on commercial leases.
The law as currently proposed would only cover “homestead” property. Second homes, apartment projects, acreage, everything else will still be taxed. This is a really bad idea and would require changes to the Florida State Constitution. That is, the public would vote on the issue.
It’s probably not good for the state or its current residents, but it would attract a fresh crop of snowbirds who would do their shopping (other than for houses) in their states of summer residence. In fact, if Florida replaced prop tax with sales tax, I would possibly buy a house in Florida in the summer of 2008 (when the worst foreclosure wave is in full swing).
Horrible idea overall. Great idea if you’re a rich landowner. Sales taxes hurt the poorest people the most because they’re the least able to afford it. The rich can travel out of state or buy off the internet and avoid the sales tax.
There needs to be a happy medium with taxation. Spread the pain around. this is way too tilted towards the landed gentry.
You are wrong. There is a commonly held fallacy that sales taxes are regressive. They aren’t. If I have a modest income, most of my spending is — or should be — going toward non-taxable items: unprepared food, medicine and basic living necessities. The people who have more disposable incomes are likely to spend more, and have more of a propensity to buy taxable goods (cars, jewelry, electronics, etc.) Besides, the “burden” of a sales tax is more uniform — less wealthy people generally consume a disporportionate share of government services (”free” emergency room care, social services) etc. so they ought to share the burden. And, if I have $20,000 a year in taxable spending — probably a liberal estimate for a family of modest means — that’s an extra $400 a year. So where’s the “burden?”
Since the only person I ever knew in Boca was named Bob, I have to ask you if you’re a friend of Bill Hogan.
So, if poor people pay almost nothing because their purchases aren’t taxable, and people of modest means don’t pay much because the rate is fairly low (2% in your example) and rich people avoid the tax at least on large items because they can, where the heck does the revenue come from?
“Anyone else think this is a way to bailout the overextended buyers?”
Yes, it is an attempted bailout. However, unless it gets to the voters immediately, what’s the point? People want relief now not 2-3 years from now. What’s more, if the measure fails in 2008, it would be tantamount to cruel and unusual punishment for those who held on waiting for relief.
Furthermore, rural counties with less sales tax generating transactions and fewer retail businesses are going to lose revenue while counties with more retail businesses gain. How are rural counties going to pay for schools and other essential services? Will property values fall in those counties and increase in cities and more developed counties as a result?
Furthermore, what happens if some counties get the option and elect to keep the old property tax system? You could see retailers rush to the borders of those counties for the lower tax sales benefits.
That deal died last week.
“That deal died last week.”
Dead or alive it WAS hear me WAS a good option. Fact is the “renters” getting hurt so badly already shoulder the burden of property taxes, just not directly. Also would make our gotta have it now society think about unnecessary purchases.
When it comes to overall impact, when spending decreases (and it will) all local municipalities will be hurting. That will cause more responsible government spending.
Florida is kicking around the idea of replacing prop tax with sales tax.
Anyone else think this is a way to bailout the overextended buyers? What about a way to maintain revenue in the face of crashing home prices?
I think its a horrible idea, btw, just curious to see other’s opinions.
Sorry for the double post. One more interesting article I saw this morning about FL just came to mind.
The WSJ today did an article on the “myth” that baby boomers want to retire into the inner city condos that Toll Bros has been building for them. Their study also found that most of them don’t leave the area at all, but may move into a smaller/more exburb home.
I wonder if anyone in FL reads the WSJ except for me?
Hmmm.. That would explain much of the financial literacy problem I see down here.
I saw that WSJ article as well. I predate the boomer generation by four years. Every time I’ve read an article in the past that talked about how retiring boomers were going to move back to the city I just scratched my head and thought, am I that different? Are boomers really going to be happy putting up with the noise (boom-box cars, gunfire, sirens) and pollution that the city offers?
Comments, boomers?
boom-box cars, gunfire, sirens
The idea was that boomers were going to retire to the downtowns, not the ghettos.
(edge-boomer, conceived in the war and born after it) - I think you are right, Bill. I find congestion pretty difficult and prefer small towns where I am likely to know the clerks at the bank and grocery. OTOH, some friends in my own age group enjoy not having to drive at all, so are pretty happy in NYC (how’s the public transit in Miami?)
(how’s the public transit in Miami?)
What public transport??
Carry a gun and you’ll do just fine.
I would rather eat flies.
Florida’s proposal to wipe out property tax in favor of sales tax goes far deeper than the housing market.
As far as higher sales taxes go, sales taxes as the chief source of income for governments are the wave of the future. It’s inevitable, because what with all the globalization and immigration, income and property taxes just aren’t practical. Rampant tax evasion is already going on in other countries like Brazil. The Florida House has studied this and realizes that if states don’t get ahead of the curve and get on board with sales tax, the federal govmint will get there first and states will be sucking hind tit, begging for their share. This way, the states that eliminate property and income tax in favor of the sales tax will be in the driver’s seat, taking back state’s rights and exerting more control over their collective destinies, deciding what share the federal govmint gets when it finally bows to the inevitable and eliminates the income tax. This goes far deeper than just appeasing property owners. It has to do with the future of the state and the country, for that matter. It’s about time the federal govmint was decentralized, anyway. The states that get on board with this will be the firstest with the mostest.
Florida’s proposal exempts food, medicine and housing from this tax. The basic necessities are exempt, so the poor won’t suffer. Yes, fuel will take hit. That’s maybe the only area where the poor will see a burden from this. But we’ll cover that with vouchers or something like that.
Yep, there will be a lot of howling before this is over. But provided the law is written such that property taxes are revoked permanently in favor of the sales tax hike, it’ll pass. Many may not like it, because old habits die hard, but property and income taxes are toast, they are just too unmanageable and unequal, in the way they have been implemented, and will only get worse.
I’m conflicted about the idea of replacing (somewhat) progressive taxes with flat taxes. I suspect the impact of consumption taxes will still be felt most by lower/middle income groups - an impact graph would probably be bell-shaped, actually, hitting middle-class hardest, since they wouldn’t get the subsidies that the poor would.
I also wonder about “service” taxes. Will we stop at material goods, or would services get taxed as well (they’re a potentially bigger income stream)? Then there would be a general increase in prices for almost everything.
On the other hand, there’s a long-standing tradition that you use taxes to discourage behavior. “Sin” taxes are based on this idea. Environmental groups like the idea of a gasoline tax for this reason. I believe we as a society would be better off with less consumption, so that’s a point in favor of the taxes.
To conclude this unseemly waffling, I think Florida will be an interesting “guinea pig” for the flat tax idea. If the citizens vote to give it a try, we’ll all learn something from the experiment…
“On the other hand, there’s a long-standing tradition that you use taxes to discourage behavior. “Sin” taxes are based on this idea. Environmental groups like the idea of a gasoline tax for this reason. I believe we as a society would be better off with less consumption, so that’s a point in favor of the taxes.”
THE PROBLEM WITH LESS CONSUMPTION IS THEN YOU WOULD COLLECT LESS MONEY.
Heres a tip for Florida….try less spending.
“THE PROBLEM WITH LESS CONSUMPTION IS THEN YOU WOULD COLLECT LESS MONEY.
Heres a tip for Florida….try less spending.”
And that would inevitably happen if we eliminate property tax. This would elminate much of the whole byzantine property appraiser and clerk of the county court property tax collection systems. Right there is a huge savings, while the sales tax system is already in place.
Those who will howl the most about this are vested interests in local goverment. What property appraiser is going to want to see his or her whole department practically wiped out? What, you mean homeowners will no longer come crawling to me to appeal their property taxes? Why, that’s positively un-American!
Yep, there will be local government fiefdoms crapping their collective shorts.
“so the poor won’t suffer”
Wouldn’t people without property or those protected by SOHs including the elderly see a tax increase?
“those protected by SOHs”
There wouldn’t be any SOH if property taxes go away, it won’t be needed. Look, in my business, I could avoid sales tax on those items I purchase for re-sale. But I pay the sales tax anyway, for two reasons: one, I believe in Florida and am happy to pay the sales tax. Call me a schmuck, but that’s the way I feel. Two, if I ever get a sales tax audit, my accountant will be informing the auditor that the audit will expand to include my claim for all the back sales tax I paid, but didn’t have to, in order to pay the accountant’s bill. Call it my “audit insurance fund”.
There’s no tax that exists that everyone is happy with. Our progressive income and property tax system was meant to ensure that wealthy people paid more because their use of the common wealth benefitted them more. But we all know that it hasn’t worked out that way and that the wealthy have gotten around it big time for years with deductions and system gaming that isn’t availabe to others. So middle income earners are parasitized and bear the burden of supporting both the wealthy class and the welfare class. This points up the inequity of property and income taxes. Consumption taxes will be a much fairer distribution of the tax burden. They are also much more manageable, so costs of administrating the system come down, since the system is already in place for collecting sales taxes. Middle income earners will benefit the most from this and that, too, is fair, since middle income earners have been hurt the most by the current income and property tax systems. Will people try to get around the sales tax? Of course. That will always happen. They try to get around the current systems, too. But sales and consumption taxes are the most fair and easiest to track and enforce.
“Call me a schmuck”
O-kay…
ROTFLMAO!
P.S. No ill will, debate.
Whatever, mrktMaven. Taxes are necessary, much we may not like them. Otherwise we’d be driving down rutted dirt roads, if even that. Speaking of rutted roads, I posted about my time living on the border of Connecticut and New Yawk. New York has sales taxes, state income tax, local income taxes, you name the tax, New Yawk’s got it. Now Connecticut has income tax. But back in the day when Connecticut had no income tax, when you crossed over from Connecticut into New Yawk, immediately the roads became pocked and rutted in the income tax state, as opposed to the smooth roads of the sales tax state. The more you tax, the worse it gets. Income and property taxes ensure you have lousy infrastructure and wasteful boondoggles.
We have a top heavy, corrupt and non-repsonsive federal government, completely disconnected from the people. Income tax has enabled this. The way for states to take back their power (so their National Guard doesn’t get co-opted to fight and get killed in Middle Eastern sand pits so oil company executives can make millions in salary and bonuses) is by wiping out income and property taxes in favor of sales taxes. And we need to do it BEFORE the federal govmint catches wise and institutes the national sales tax. If the Federal govmint does it first, then the Federal govmint decides which states get that piece of the pie. If the states do it first, then the states decide how much of their pie the Federal govmint gets. This is how the people take back the US.
“We have a top heavy, corrupt and non-repsonsive federal government, completely disconnected from the people.”
If you are against big gov’t, why are you willing to transfer all that power from your local government to Tallahassee? Who is going to know what’s best for your community, Tallahassee or you?
“If you are against big gov’t, why are you willing to transfer all that power from your local government to Tallahassee? Who is going to know what’s best for your community, Tallahassee or you?”
Have you ever been to a Hillsborough County Commission meeting or followed a televised one? I’ve done both. ROTFLMAO!
Palmetto,
I agree with what you say (for the most part) about the sales tax swap out. I do think that the burden will be more equally distributed; however I just have trouble with it because, in my eyes, it’s primary purpose is to bail out the flippers/speculators.
As you have said (and I agree) those with SOH that bought right (ie, not during the bubble) don’t have a tax problem. If they leave the system alone, the values will continue to collapse until those who buy, once again, will not have a tax problem. Now, I still think SOH is a bad law, but, at the same time, I don’t like govt intervention into the market (which a sales tax swap out certainly is), and kind of think that the right tact to take (much like the Fed) is status quo and leave it alone.
I also support a tax cap on the govt agencies (as the primary tax control mechanism), but, honestly, at this point…. Just leave it alone already. If you’re not going to take the right actions (which, I know, we disagree on), just leave the stinking thing alone and let the market work it’s magic.
Michael, you have hit on a point that we almost never mention. Tax CHANGE is the greatest “intervention” of all, no matter what the content. I have often wanted a constitutional amendment putting a 20-year moratorium on all tax changes … but of course the amendment would itself get amended in a shorter time! If only we had some stable system: people could do their best to plan for the future, and the waste industry of tax-preparation would diminish drastically. I am not an Edmund Burke conservative in most ways, but the ever-rising stream of legislation sucks up most of the intellectual energy in the American economy.
Palmetto,
I agree with what you say (for the most part) about the sales tax swap out. I do think that the burden will be more equally distributed; however I just have trouble with it because, in my eyes, it’s primary purpose is to bail out the flippers/speculators.
As you have said (and I agree) those with SOH that bought right (ie, not during the bubble) don’t have a tax problem. If they leave the system alone, the values will continue to collapse until those who buy, once again, will not have a tax problem. Now, I still think SOH is a bad law, but, at the same time, I don’t like govt intervention into the market (which a sales tax swap out certainly is), and kind of think that the right tact to take (much like the Fed) is status quo and leave it alone.
I also support a tax cap on the govt agencies (as the primary tax control mechanism), but, honestly, at this point…. Just leave it alone already. If you’re not going to take the right actions (which, I know, we disagree on), just leave the stinking thing alone and let the market work it’s magic.
Mike, you have asked that in the future, I skip your posts on SOH. Out of respect and courtesy to you, I fully intend to skip your posts. Just so you understand why I don’t respond. I am merely complying with your request.
palmetto
Here in California there has been (in past times) much
discussion about replacing the current state income tax
with a VAT (Value added tax).
No discussion (as far as I know) about elimination property taxes.
On the surface, seems similar to the Florida proposal you
describe. Agree? / Disagree? Comments?
I don’t know much about California’s proposal, octal, so I can’t speak to that. From what little I do know about California’s tax system, it appears to be complicated, unfairly distributed and unworkable. If there’s no discussion of eliminating property taxes, then it wouldn’t be similar to Florida’s plan.
I look at this whole issue of taxes on a macro level, not so much about how it will or will not affect the housing bubble, although that plays into it. If the housing bubble has become the impetus in Florida to eliminate property tax, then perhaps one day I will be happy the bubble happened, although for now I think it has been one of the most miserable financial events to have taken place in the history of our country.
With globalization and immigration going along as they are, the national income tax system is burnt toast, it just won’t be able to be implemented. It has been a joke for a long time, enabling middle income earners to subsidize the wealthy who don’t pay it and the welfare stateists who don’t pay it either. Upper middle income earners are being eaten alive by the AMT, due to rampant inflation. Income tax systems are just not practical in a global society. Brazil is an excellent example of this. Read the article “City of Fear” in the April issue of Vanity Fair. LA and Miami will go the way of Sao Paolo under the current tax systems and that is truly frightening. They are already going that way. So sales and consumption taxes will eventually replace income and property taxes. I’d far rather the states got ahead of the feds and implemented first and then dictated to the feds how much of the sales tax pie they will get, rather than the feds do it and make the states beg for their piece of the pie.
Took a one day seminar on VAT once. Hugely complicated. Did not result in elimination of the tax enforcement system. But they did seem to think it was less subject to fraud/lying/etc. Of course, this was for a European country that had both VAT and income tax.
Spring bounce in Broward County, FL???
http://www.ewm.com/trendx/report.asp
http://www.ewm.com/trendx/
I eagerly await the monthly update at the EWM site. It was updated this morning.
Some highlights in Broward (where I live):
Units for sale: 39,016 compared to 19,337 just 14 months ago (a 102% increase)!
Average day on market: 102 days compared to 52 days just 14 months ago (a 96% increase)
Average price of units for sale: $448K compared to $525K just 14 months ago (a 15% decrease)
What interesting is those stats do no include all the new construction that is coming online in the next twelve months. For those who live here, have you seen Miramar/Pembroke Pines lately? There seem to be new condos and townhouses under construction on every corner. Or, how about West Sunrise? There are 5,000 units coming online with the three HUGE projects (Tao, Artesia, and Metropica) all priced well over $300K.
Who the heck are going to buy all these units when there is 40K units already on the market?
“Who the heck are going to buy all these units when there is 40K units already on the market? ”
Rich Baby Boomers who made boatloads of money from the Dot.com craze are coming with sacks of money to buy many houses and condos. They want to retire in luxury and will keep not just one house, but several. That is the “new paradigm”.
Additionally, with the devaluation of the dollar, RICH oil sheiks and foreigners from Europe and South America will be buying them as Summer Homes. They will sit empty most of the year, but that isn’t a concern to them because they are RICH!
Also, many middle-class and homeless people will be buying them with NO MONEY DOWN mortgages, because real estate is the BEST INVESTMENT………ask David ( Are you missing the REAL ESTATE BOOM) Lie- a- rah! Don’t miss out!.
The market possibilities are endless. We just need a little more financial leverage to get this market back into full swing for the summer bloom!
You have not been paying attention! …..And don’t forget, Real estate is your road to riches as “IT ALWAYS GOES UP”…….BUY TODAY!!!!
Crap! I wish I would have known this. I feel like a huge dumb*ss for selling my house in January 2005 and moving into a rental property.
I guess I’m just another fool throwing his money away on rent, paying my landlord’s mortgage, and missing out of the continued appreciation of RE.
Good thing I keep my Realtor@ on speed dial — I better call him quick to get back on the road to riches.
Engle is also building Monterra. A 1600 home community in cooper city. The first section (Estada) is estate homes starting in the mid 600’s. Across the street, they are building darlington heights a townhome with garage community.
Despite my best efforts, some friends of mine are closing on a house this month. These are people that live paycheck to paycheck, don’t have money to pay utilities, and are terrible with money. They are buying a house that MAYBE is worth $360-$380,000…. and they are paying $480,000. The house has been sitting vacant for over a year and half and has many, many flaws. It’s a20+ year old house that needs major upgrades. Funny thing is, they won’t show us the inspection report. I know there are things wrong with the house. Apparantley the appraiser they hired is a numbers hitter, because he is usning comps from over 6 months ago on larger, upgraded houses that sold for $600k in his comps.
These people have NOT done a budget. They don’t know what their taxes, insurance, or mortgage payments are going to be. It’s reallya sad affair because the wife is totally clueless and the husband is hiding everything from her. He is the type that HAS to own a home.
They will really flip when my lease is up and I rent a house for 1/2 of what they are paying that is nicer, in a gated community, etc.
We tried to talk to them, but they are brainwashed they are getting a “great deal”. Sad, very sad.
I feel bad because I know within 6 months they will be fallingbehind on the mortgage payments.
You can lead a horse to water, but you can’t make them drink it, but you can drown them in it.
You can lead a person to knowledge, but you can’t make him think.
Where is this “great deal?”
How many square feet?
Andy,
it’s a 4/2/2 2000 sq ft ( yes $240 a sf ft).
4/2/2? $480K? Breaker’s West?
no,, don’t laugh. Central Boca Raton. Two realtor friends of mine and a mortgage broker just shook their head when I told them.
Central Boca? CENTRAL Boca? ROTFL over and over and over again. Wait…ROTFL…I can’t contain myself!
House is worth $380K at current market. In a year it may only be worth $330K or $340K.
They’ve been seen at cocktail parties with Casey Serin.
Spring bounce in Broward County, FL???
http://www.ewm.com/trendx/report.asp
http://www.ewm.com/trendx/
Interesting: what I note is that there was a big inventory increase in all price ranges in the first half of 2006, but the only price ranges in which the inventory increase continued steeply are the lower price ranges, suggesting that the inventory source now is foreclosure rather than builders.
A communique from the governor a few days ago…
Faith based precipitation?
“Florida’s Governor Crist strongly encouraged people to conserve water and pray for rain as the drought impacts increase in severity.”
“Florida’s Governor Crist strongly encouraged people to conserve water and pray for rain as the drought impacts increase in severity.”
Well, people must have been praying harder in the Tampa Bay area, because we got a pantload of rain recently. Even last night we had some precip, and that’s unusual for this time of year. Bring it on!
Be careful what you pray for, you might get it.
Hurricanes provide large amounts of rain.
Bought a house in Martin County in 1972 for $18,000. According to FRB’s CPI calculator, inflation makes this house now worth $88,500. According to MLS, similar houses are currently listed with widely-varying prices but typically around $195K, 2.2 times what they “should” be in my view.
CPI is hugely understated. See the shadowstats website for further info. I’m too lazy (well, just don’t have the time) to do that math but based on the real inflation rate your house is “worth” closer to $200K than $100K.
More fun from the Drought Impact Reporter…
http://droughtreporter.unl.edu/map.jsp?&src=&daterange=month&c_ot=on&c_wa=on&year2=2007&year1=2007&c_ag=on&day2=19&scn=nv&day1=19&c_fi=on&c_en=on&month2=4&month1=3&c_so=on&Cmd=sv&st=Florida
Yesterday’s aqua crime blotter:
Jupiter police informed their officers of a law about throwing lit cigarettes, matches, or cigars from car windows with the intention of enforcing it. The law, passed in 1935, states that it is a misdemeanor to throw these lit materials from a car and can result in a fine up to $1,000 or a year in jail. The Palm Beach County Sheriff’s Office and the Florida Highway Patrol, among others are also enforcing the statute because the drought conditions are severe that the fire danger is very high. No one has been charged with this offense yet.
el lay:
A dress rehearsal…
Some utility systems are struggling to supply enough water during the periods of time that watering is allowed. Lawn watering is permitted from 4am to 8am, but with so much demand during that time, water pressure falls when many automatic sprinkler systems turn on at once and may create water shortages. Some utility companies have requested a variance to the recent water restrictions, while other areas don’t follow the restrictions to maintain water pressure. Marco wants a longer watering period to keep water pressure higher. Those in Lee and Collier counties who get water from county utilities should have no problems. The Mediterra community in Resource Conservation Systems’ service has experienced problems. Approximately 150 utilities systems have requested variances. So far 79 have been approved and 22 have been denied.
HAH!!
Time for my Crocodile Dundee impersonation.
Drought??? That’s not a drought. THIS is a drought.
http://goulburn.local-e.nsw.gov.au/roads/1439/1853.html
2 1/2 years of Level 5 and counting.
At Level 5 it’s quite simple. “All use of town water outdoors is banned.” The council aim is 150 litres (40 US gallons) per person per day.
(Goulburn is a large [by Australian standards] regional centre about 1/3rd of the way to Sydney from where I live. It’s the first significant town up the highway.)
I just knew i’d lure in an Aussie…
Learn an Aussie phrase…
Fair Dinkum
I’ll let someone south of the border, describe what it means~
So if you used too much water, in a construction zone, would your ticket be twice as much?
Residents will receive tickets instead of warnings for using too much water or watering at the wrong time because the drought is so severe. People may even receive up to 60 days in jail for violating water restrictions. Lake Okeechobee is four feet below its normal level, which is a record low for the lake.
Water is unevenly distributed in Florida. In actual fact, Florida probably has more fresh water than any state, most of it in springs and aquifers upstate. If you drew a line through the state of Florida to cut it in half, you can see that most of the problems come from the lower, way overdeveloped half of the state.
This is another reason I am for the elimination of property tax in favor of sales tax in Florida. The day is coming when the Federal govmint will attempt to force states such as Florida to export their water to California and the southwest. BS on that. In the early days of posting on this blog, I used to see posters from the Western states state that Floridians should keep their hands out of the wallets of other states concerning the issue of hurricane risk being spread nationwide. Fair enough. The western states can stay away from our water and pray for snow in the high Sierras.
Export water to California and the SW?
….how? By what engineering process would this occur? A giant aquaduct? Do you know what you are talking about?
Never mind, the statement was simply too idiotic….don;t bother replying.
Easier to carry people, than water.
“By what engineering process would this occur? A giant aquaduct? Do you know what you are talking about?
Never mind, the statement was simply too idiotic….don;t bother replying.”
Oh, I just HAVE to reply.
Aqueducts? Good Lord a’mighty, what century are you living in? The days of the Roman empire? Ever hear of the Alaska Pipeline? Were you aware that we landed people on the moon? That there’s a space station up above us? That Russia plans on constructing a giant tunnel to Alaska?
But just for your information, the export of Florida water is already underway. Nestle Waters (French company) owns the rights to Crystal Springs up by Zephyrhills, Florida and pumps it out, bottles it, and exports it all over the country and maybe even the world, for all I know.
Do you know where LA gets its water today?
You are down to 2 reservoirs, one about 1/2 full, one about 3/4’s full.
There is no more.
Shoulda built a string of desalination plants along San Onofre, but nobody wanted it in their backyard.
You built a subway nobody uses, instead.
Prime Folly.
The City of Los Angeles has their water provided by the LA Department of Water and Power. About half of it comes from the Owens Valley along the eastern Sierra Nevada mountains, through the 1st and 2nd Los Angeles Aquaducts. They also get some water from the Southern California Metropolian Water District and from local wells.
And the MTA Red/Purple Line subway is very well used. According to the MTA web site, over 120,000 people use it daily. During peak hours, it is standing room only. On the other hand, it has also created alot of new mixed use development along some of its stations, mostly in the Hollywood and North Hollywood areas.
The City of Los Angeles gets its water from the LA Department of Water and Power. DWP gets about half of its water from the Owens Valley on the eastern side of the Sierra Nevada mountains. The rest of it comes from the Southern California Metropolitan Water District and from local wells.
And the MTA Red/Purple Line subway is heavily used. According to the MTA web site, 124,000 people use it daily. Myself included ($3 for a one day pass…. beats the $3.35/gal at the gas station). The subway has also has created a lot of new mixed-use development along its stations, especially in the Hollywood and North Hollywood areas.
H20 no mo soon
sorry for the double post. it was my first time posting and i didn’t know it took several minutes for it to appear.
Plenty o’ water up here in the rainforest, thanks. Just don’t tell them Arizonans.
Well, watch those rainforests, sleepless. The southwest will be looking for your water.
Don’t think I haven’t thought about it.
California has asked for (demanded?) our electric power in the recent past.
OT
is there any software that follows transactions from a cash flow statement to the balance sheet and income statement ?
Rule # 1 in the news game…
Always end on an up note~
Golf courses in Bonita Springs are adversely impacted by drought. The fairways have turned brown, while lakes shrink and form a brown ring as the water level falls. Officials at one local golf course have planted vegetation to help prevent erosion. On the positive side, golf balls roll further than they do in green grass and fewer balls get lost.
Oh yeah. I remember golfing one dry summer in PA and driving the ball to within 30 yards of the green on a 360 yard par 4. The tee shot got to the crest of the fairway’s rise and bounced and rolled the rest of the way. I still didn’t par the hole!
drive for show, putt for dough
From all appearances…
They didn’t have water to fight this fire, only tractors?
A 25-acre brush fire burned in Cape Coral. Special tractors have arrived to help with areas that continue to smolder. The Caloosahatchee district of the forestry division had the highest average drought index of all of the districts in Florida at 679, where 800 indicates driest conditions and 0 indicates the wettest. No people or buildings were harmed in the fire.
“A 25-acre brush fire burned in Cape Coral.”
Uh, and how many thousands of acres in Collyforneeeah? Hmm? Collyforneeah hasn’t used water to douse fires in years. Just red powder dropping from the planes like manna from the heavens.
Why would you use tractors, if you had fire retardant?
We are incredibly vulnerable here, where we made an intelligent actor, lord of all~
2005 was a magical winter, my favorite of all my years here.
There was so much water, more than i’d ever seen.
Nature is set up to handle wet years and the outskirts of the city of the angels blossomed green and I saw waterfalls i’ve never seen before, all over the place.
A rich year for plants to grow to the sky.
Last year was no slouch either, that brush just kept growing.
This year:
Bone dry.
All those plants living heloced lives (bad water consumers, they drank it up when it was around) got sizeable and now they are turning into tinderboxes.
Were we to bring our troops back, it would serve 2 purposes.
We leave with our tail between our legs, and mostly intact.
It also gives us a few months to use their athletic abilities to better prepare ourselves for quite the drought.
They’ll double as firefighters, rather easily.
It’s a tough job and hey, they’d still be “fighters” and regain some dignity, from a lost cause in the Middle East.
And everybody thinks firemen are the cat’s meow…
A Win-Win
Simple, really.
A sign of something oh so very wrong, in B’field…
Several hundred fish are dying or are already dead in the Kern River in Bakersfield. It is believed that drought is responsible for the deaths.
aladinsane,
What’s the source for that news?
http://droughtreporter.unl.edu/map.jsp?&src=&daterange=month&c_ot=on&c_wa=on&year2=2007&year1=2007&c_ag=on&day2=19&scn=sv&day1=19&c_fi=on&c_en=on&month2=4&c_so=on&month1=3&Cmd=rv&st=California&co=Sonoma
Gee, people don’t make that much money in the Tampa Bay area. That’s a shocker. And we’re just realizing this now?
My opinion is that housing prices in many areas of Florida reached their all-time high, forever, in the summer of 2005. Whatever the future brings, it will not be kind to us.
Perhaps we can move all those back office jobs to Upstate New York. Just wait another couple of months before inviting the relocation decisionmakers up for a tour.
Perhaps that’s a way to work off the inventory. Have millions of people have one house Upstate and one in Florida, with duplicate offices, and migrate like the Buffalo.
For fish fans, having to move to Buffalo would be oh so cruel…
I posted about this last year, but a fair number of Floridians, including myself, were born in upstate New York. Sending us back to Buffalo, Syracuse and Rochester would result in bad attitudes all the way around, but I actually think a “reverse migration” could happen, for example if we ever lost the ability to run our air conditioners around here.
Hey Richard French,
Where the F”"”" were you 3-4 years ago warning these dopes?
Shut the F”"”" up now. Your commentary is 3-4 years to late.
“Don Santos, past president of the Treasure Coast Builders Association, said the situation is due to the poor lending decisions of the subprime market and local people losing jobs in the construction industry. ‘It just created this perfect storm that we’re in now,’ Santos said.”
Hey dope many saw this disaster building the last several years, but of course we weren;’t bagging these dopes and making big bucks either. Another to late to comment so called expert.
House prices need to go down alot to increase affordability even with high taxes.
I want huge price concessions when I buy screw this choosy line.
“‘It’s starting to be a drag on the whole economy,’ said Larry Henson,
this guy won’t get on Kudlow’s show
DIMEDROPPED
exceelent post keep us informed. maybe you can pass on a few of these shady deals to authorities to stop it.
already done
“‘This isn’t the end of it and it’s going to go on for a couple of more years,’ Fruth said. ‘During the last half of 2005, people paid extremely inflated prices for their homes and now they owe more than what the home is worth.’”
———————————–
what is the other side of the inflation coin? deflation
I , for one, am sickened that the government (US TAXPAYERS) are about to pay via a proposed bailout of these greedy FB’s. Why should the rest of us pay for the stupidity, greed, and fraud of these people?
Let’s just change the name of the USA to USSR and get it over with.
“I , for one, am sickened that the government (US TAXPAYERS) are about to pay via a proposed bailout of these greedy FB’s”
The ones who ARE able to afford a more reasonable rate on their mortgage SHOULD get another chance. I have a client who’s at 15.625% now that their teaser rate is gone. 15.625%! Think the bank would still make money at 7%? You better believe it. Think he’d be able to make payments at 7%? More than likely.
USSR?
I, too, disagree with any bailouts. It’s not very popular with HONEST Americans like you and I.
But you can’t possibly compare the situatuion to the USSR. Poor analogy.
I hate to say….but this kind of irrationality ONLY happens in America. In no other country, socialist or otherwise, would such a thing possibly occur. Trust me.
Clientelle…
This will take about 10 minutes to sink in~
http://www.cluborlov.com/ClubOrlov/ConfSlides/index.html
Thanks so much for this wise and wry little treatise. A man after my own heart.
With or without a bailout, we are already paying in the form of US-Dollar depreciation. Some good examples: NZD/USD up 12% in 6 months, AUD/USD up 11% in 6 months, Euro/USD up 8.3% in 6 months, British pound/USD up 7% in 6 months. The accompanying inflation in the US will also increase our income taxes automatically by pushing more people into AMT territory, since the limits there are not indexed. Fed talks big about inflation but is not doing a d*** thing about it.
“Tampa Bay home prices were 25 percent higher than those in Raleigh-Durham, 46 percent higher than Atlanta’s and 68 percent higher than Dallas’, the report said. However, the household income here is less than the other regions, it noted.”
This is certainly a mystery, since Tampa is abysmally ugly and depressing; is overrun with people on welfare; has no green spaces or open vistas (unless you live on the edge of one of the bays); has filthy air, incredibly high crime, illiteracy, and venereal disease rates; is miserably hot and humid most of the year; is junked up with billboards on every square inch of roadside. And, in general, looks very much like Hell on Earth.
Nobody has yet been able to explain to me how a place this ghastly and user-unfriendly could be so expensive, or why so many people would want to live here. I decided years ago that someone had cast a glamour over the whole area, because no NATURAL law could explain what was happening. I used to think that New Orleans felt creepy and decadent, especially in the French Quarter, but Tampa now has surpassed it.
A very accurate description of Tampa. TY
I thought this was NORMAL. You mean it’s not??
I’m not as harsh as you are on this town. We have plenty of streets that are as ugly as any streets you’ll find anywhere–Dale Mabry Highway, East Fowler Avenue, Nebraska Avenue, SR 60 in the Brandon area, and Kennedy Boulevard come to mind–and I tend to agree with you about the billboards. On the other hand, I’ve been in 33 states and have found few places that I like as much as here. That’s why seeing our nicest areas perverted by house-flippers and builders of “luxury residences” is so painful.
My vote for the ugliest city in the U.S. is Houston.
I’ve never been to Houston, but I understand it has about the same awful weather we have.
The builders and flippers destroy a lot, don’t they? I wonder how these people live with themselves.
I’m surprised that people are rationally discussing completely replacing FLA property tax with a sales and use tax.
Because this will never happen. If it did, it would be very difficult for the state gov to come back later and enact a new property tax. You are just being set up by phoney debates and extremes.
Instead, what will happen is this: “In the spirit of compromise and fairness to all our people, even the most impoverished, deserving, and unfortunate, we will only enact a small sales tax. But so that this is not a burden on the middle class, we will also reduce the current property tax to compensate.”
That way, once everyone is appeased with the fairness, they can start to raise first one tax, and then the other, year in and year out.
After all, this is the way most of the rest of the country does it.
I agree! I found the idea of tax restructuring to be completely bogus, the whole point is to install a new tax and then increase either as needed to maintain the governments expenditures.
For better or for worse, sales and consumption taxes are inevitable to replace income and property taxes, which are becoming WAY too complicated and expensive to manage and administer in a global economy.
We may see some tinkering and jiggering before income and property taxes are completely wiped out, people are always reluctant to let go of what they know, but they just won’t work and states need to get ahead of the curve before the inevitable happens and they end up begging for their share of a national sales tax from some dictatorship.
If I’m not mistaken, Florida already has a 6% general sales tax. The prop-tax swap idea must involve a hefty increase in sales tax. (?)
This tax swap will never happen as the resident voters are the beneficiaries of the deal. The people who pay are not residents. It is like a tourism tax. If you ain’t from round here, get out your checkbook. Same deal as traffic tickets.
The only area of the state where there is support is south Florida. Not enough of them live here.
I can tell you what is going to happen. The seller is going to pay for SOH.
All Florida has to do is pass a law requiring towns and sellers to inform buyers and lenders of their future property taxes, prior to the consumation of a sale.
The lenders will take those taxes into consideration when deciding if the borrower can decide the monthly nut. If the property taxes will be higher, the mortgage payment — and sales price — will have to be lower. Otherwise, no sale.
Those Floridians who oppose SOH should just lobby for full disclosure and wait a year. Then tell homeowers that what they save in property taxes they will give back in the end, if they can sell at all.
Florida law already requires that buyers be informed of the property taxes THEY will be paying based on the price of their purchase, not what the current owner is paying. Realtors are required to provide this information, and buyers are supposed to sign on the dotted line indicating they’ve been advised, blah, blah. Trouble is, either Realtors are lying and filling out the forms themselves, or buyers are not reading what they sign, or playing stupid afterward. If there was and is as much fraud involved in the real estate bubble as we keep hearing about, we should put all the out-of-work Realtors, mortgage brokers, and illegal unskilled laborers to work building crappy, stucco-sprayed prisons, where they can then all happily live together with the crooked bankers, Wall Street wheelers and dealers, and politicians who abetted this fiasco.
Incidentally, I ran a spell-checker on this and it insisted that “Realtor” had to be capitalized: Who came up with this bit of pompous hooey? We don’t even capitalize “god,” except when used as a proper noun.
Subprime bailout… The lenders are only going to help or modify loans of people whose house is their primary residence. They are NOT going to help investors with 3 or 4 houses keeps them.
From the lenders standpoint it is better to have the borrower remain in the house with a restuctured loan than to foreclose. Doing a loan modification will minimize the lenders loss. However, it should be noted that not all borrowers will be able to modify or restructure their loans. Loans that have been placed in a mortgage back security may not be able to be modified as per the mortgage backed security documents.
As of now this is not going to cost the taxpayer anything. However, it should be recognized that approximately 40% of restructured or modified loans ended up in foreclosure anyway.
One added note to your observation. Back in the day HUD tried restructuring the loans and they prolonged the pain for 1 year at most and the people lost their houses anyway. Mel Martinez was the culprit buying votes.
Also, real estate hounds are being hammered due to job losses. Nothing you can do to revive that corpse.
I find it interesting that nobody pointed this out.
If, I say IF property taxes were abolished and only homesteaded properties were tax free (that sounds cool, doesn’t it? All you gotta do is make Florida your primary residence! Snowbirds and speculators with more than 1 home be damned).
Anyway, people don’t even notice that they pay property tax when they have a mortgage. It’s just a part of their monthly expenses. If that expense went away and the monthly mortgage payment went down then people would have more money in their pockets. If folks pay taxes on meals they eat out but not meals they cook at home I can guarandamnty you that people will not spend as much money eating out. In this imaginary world if the sales tax was say 9% or 10% then people would notice where there money is going and be less apt to buy things which get taxed…
Anyway, I thought it was an interesting avenue of thought…
Houston actually is not that ugly, it is in parts but has great parks a great downtown and the medical center is amazing. Moved from Miami to Houston. No beach in Houston or pastels. Unlike any Florida City–Tampa, Miami etc.., Houston has low housing prices and jobs, jobs, jobs. In fact Housing has over 35 fortune 500 HQ’s and–all of Florida has 4. So even if its somewhat ugly to some people life for me and my family is far more pretty in Housint than Miami–I earn 30% more hoousing costs 50% less and I have great benefits. Give this Miami Cuban Houston over any place in Fla–a lot of my Miami family have seen it and are now wishing they had moved here back in 2005!!!! Now they are stuck as slaves to their house.