Prices Are Coming Down To Normalcy In Florida
The St Petersburg Times reports from Florida. “Ballooning tax bills fueled a storm of citizen unrest that now has state leaders searching for a fix. But the root cause of the tax revolt was a record surge in property values over the past few years.”
“On both sides of the bay, however, there are signs of a market decline not seen in years, and if the trends continue, owners may see some relief on their tax bills in 2008.”
“Joni L. Herndon, a Seminole Heights appraiser, works in both Pinellas and Hillsborough. Herndon said that from December 2005 to March 2006, condos at one Carrollwood location were going for $254, 000. Now, she said, they’re at $218, 000.”
“In Pinellas during the first three months of last year, the median sale price of a home was $212, 000. In the first three months of this year, the figure dipped to $198, 000.”
“‘This year you’ll see declining values,’ Herndon said. ‘But the tax relief will probably come later, not this year.’”
“For Pinellas County Property Appraiser Jim Smith, the downturn that has taken hold is the market’s returning from orbit to solid ground. ‘Now things are starting to get a little bit more real,’ Smith said. ‘I think prices are coming down to normalcy.’”
The Associated Press. “In Miami, the rush of condo building and speculative buying has slowed to a crawl, said real estate agent Penni Hurley. Florida’s foreclosure filings rose 54 percent from a year ago to 14,303 in March, or one filing for every 511 households.”
“‘The market was on steroids, and now it’s going through a much-needed correction,’ Hurley said.”
The Miami Herald. “Soaring property tax bills are making it increasingly burdensome to buy or keep a second home in Florida, raising questions about the future of a real-estate niche that’s long been a mainstay of the state’s economy.”
“‘A few years ago, people wouldn’t ask about taxes,’ said Carlos Justo, principal of Sol Sotheby’s International Realty in Miami. ‘Now the tax issue is the single-biggest factor why a lot of transactions don’t happen.’”
“Justo said one Venezuelan client who has owned a Miami Beach home for nearly a decade has listed it for sale after growing weary of the escalating property taxes.”
“Coldwell Banker, the largest real-estate brokerage firm in Miami-Dade, has tracked a 20 percent drop in second-home purchases in 2006, following a 10 percent decline in 2005.”
“‘I just lost a sale because of taxes,’ says Jennifer Macia, a Realtor who specializes in waterfront properties.”
“Spanish clients who plan to spend part of the year in Miami were close to buying a waterfront home on Key Biscayne, she said, but they balked when they saw the $260,000 property tax bill. ‘It was a $14 million property, and had it not been for the taxes, I would have had a deal,’ Macia said.”
“Roughly one-third of the homes in Miami-Dade and about 40 percent of those in Broward aren’t covered by the homestead exemption and cap on assessment increases, available only to permanent residents.”
“‘It’s a huge market,’ said developer Edgardo Defortuna in Miami. ‘Second-home buyers definitely need to be included in any changes in Tallahassee, because they are the ones paying the most. They have been impacted the most by high taxes the last four or five years.’”
“Homer Thompson. a retiree who lives in one Miami home and rents out another in Kendall, says taxes on the nonhome-steaded property, some $8,458 last year, are eating up his investment.”
“‘I’m trying to hold on to a second home that I lived in before my marriage in 1975, hoping to pass it on to my children,’ he said. ‘I paid $38,200 for the house, and since 2000, I’ve paid more in taxes than I paid for the original price of the house.’”
The Star Banner. “While existing-home sales in the Ocala area last month continued to rebound, the number of homes sold was down 33 percent from the same month a year ago when the local real estate market was still red hot.”
“Bert Meadows, of Meadows Realty, said the real estate boom of the last couple of years was an anomaly, and said most Realtors would be happy to see sales figures similar to those witnessed in 2003 or 2004.”
“‘I think it was an unusual time in the market,’ he said of the frenzied sales period.”
“There’s still lots of inventory on the market. Realtor Judy Disney-DiFranco said she’s seeing more homes are being listed than are being sold and prices are falling. Buyers have the advantage, she said.”
“‘It’s still a buyer’s market,’ Disney-DiFranco said. ‘It’s a good time to make a really good deal.’”
One of the topics of discussion on the local PBS Friday night punditry program was property taxes. My head was swimming and it seems Tallahassee just can’t get it together. I wish they’d leave it alone already. Just let the market correct and force the county property appraisers to appraise in accordance with the market.
Palmetto — I’ve wondered the same thing. Assuming prices keep tumbling, it should not be too long before current market values are back in a “reasonable” range relative to the taxes. What will be interesting to observe is how quickly the assessors respond to request for revaluations based on the new market.
“What will be interesting to observe is how quickly the assessors respond to request for revaluations based on the new market.”
I’ve rarely known govmint employees to respond quickly to anything. Pre-bubble, when I owned property, I had to clear an easement and get a variance to make the property legal and sell off a piece of land. Took me the better part of a year. During the bubble, the county gov couldn’t move fast enough to fast track zoning changes and permits for builders and developers. Post bubble, there’s no incentive to revalue, they want that money. So I say the process will be slow, slow, slow. So much the better, it will speed the decline here.
The solution to all this appraisal garbage is to require the county to buy the real estate at the appraised price (or some fixed percentage like 90%) if the owner so chooses.
In practice this would be a sort of “reverse haggling” where the owner can say, “Ok, if you appraise this property at this value, I’m selling it to you”, “Hold on now, we’ll lower the appraisal 20%”.
This would quickly establish true values for appraisals and avoid bubblish behavior by appraisers. That’s assuming we have any economy left in the next few years.
And when the owner sells it, if he gets a price over the appraisal, he can just write the overage to the county appraiser. Touche.
The solution to all this appraisal garbage is to require the county to buy the real estate at the appraised price (or some fixed percentage like 90%) if the owner so chooses.
What a wonderful idea. Use the greed of the county governments against them. So sweet!
This was proposed in central Florida many years ago — I think it was when prices were rising because of the unrequested appearance of The Mouse. Never got anywhere, but it did increase the amount of light that shone on the assessor’s office and their practices.
“‘The market was on steroids, and now it’s going through a much-needed correction,’ Hurley said.”
Bad things happen to people who abuse steroids. Sometimes even death. Is this what is going to happen to the RE market?
No, the realtors are just going to get small balls.
This will be worse for the female realtors.
“Bert Meadows, of Meadows Realty, said the real estate boom of the last couple of years was an anomaly, and said most Realtors would be happy to see sales figures similar to those witnessed in 2003 or 2004.”
What they mean by this is that the commissions are drying up.
“Spanish clients who plan to spend part of the year in Miami were close to buying a waterfront home on Key Biscayne, she said, but they balked when they saw the $260,000 property tax bill. ‘It was a $14 million property, and had it not been for the taxes, I would have had a deal,’ Macia said.”
Me thinks they didn’t tell Macia about concerns with their cash flow… I’m pretty sure $260k didn’t sink the deal. I’m think either their investments or income were at risk. The market in Spain is turning fast!
Got popcorn?
Neil
They were buying an investment. Afterall property always goes up, but will it go up by 260k a year? They weren’t really buying it to live in!
Also, on the Venezuela guy who sold his condo, he had to. Chavez just repoed all of his crap in Venezuela and he has no dinero.
I have a hard time relating the someone’s tax problem when they buy a $14mill property.
Sorry Charlie. Real Estate agents sacrificed their futures in the bubble also. They should have been saving their windfall gains. It will take a decade for real estate to recover. In the meantime, I hear they are hiring a lot of chicken de-featherers at Tyson.
Also, as I noted in the Bits Bucket (with a hat tip to Key Lime Toast), we’ve had a development that went bust in SouthShore Tampa Bay turned into Section 8 housing. The “re-settlement” from Tampa and St. Pete is underway.
Does anyone know how a bubble development goes Section 8? I’m curious. Does some vulture investor get a low cost govmint loan with the agreement to rent to Section 8 tenants? Or would this be a public housing project that the county took back for taxes? Inquiring minds want to know.
Palmetto what are your thoughts on Section 8? I can’t stand subsidized anything and don’t like the fact that people get these kind of handouts with regards to housing, what are your thoughts?
I am not fond of handouts, either, but I did watch a show last night, I think it was Bill Moyer’s Journal, on how housing the homeless stablizes many of them and enables them to get a leg up and in the long run, is cheaper than leaving them on the streets and dealing with the crime and putting them in jail. Sometimes people get bad breaks, especially single mothers with deadbeat dads, and need a leg up. But how do you weed them out from the subsidy careerists? I am conflicted on this issue.
I
Maybe I’ve become cynical, but I blame the single mothers who have deadbeat dads. After all, the chose those deadbeats for mates, denying the opportunity of husband and father to far worthier males.
If we didn’t bail out those mothers, then women would choose their mates more wisely because they have to (like previous generations did) and life would improve all around.
Spending tax dollars to fight natural selection worsens problems in the long run.
Dan, Great Post. Fantastic. You hit the nail on the head. The women of today get too many breaks and they know it. This is why women today choose the “badboy” type while the “niceguy” finishes last.
Back in Mom’s day and Grandma’s day the honest good guy who worked hard and treated a woman well was rewarded by her attention and companionship. Good luck today if you are a good guy. You will lose out to the bad boy.
Society is far worse off due to what you have described.
That’s all true….but the reverse is true as well. A lot (not all, but a lot) of men dump nice women for the high-maintenance bitchy ones because they’re more “fun”. This has happened to me a number of times when I was single (I am now happily married to a bona-fide Nice Guy)
Those end up financially ruined in 10 or 15 years. My workplace is full of these guys who are in their late 30’s/early 40’s. They’re either miserably married or going through a hellish divorce, either way to a woman who is used to getting everything she wants.
I have as much sympathy for these guys as you have for the women who only want jerks.
I nice for the government to subsidize housing for the poor. Government subsidies do not have the power to stop housing prices from falling. I have no fear of the bubble coming back.
I don’t see how politicians can find a way to bail out middle class homedebtors, and I really hope they don’t. Government subsidies, IMHO, should be for the neediest people, not for average people who make bad decisions.
“Government subsidies do not have the power to stop housing prices from falling.”
In fact, I think govmint subsidies speed a decline in values. Speaking just for the small local area in which I live, even the non-subsidized housing immediately around the subsidy housing goes into decline. People with pride of ownership get driven away by the activities of some of the subsidized housing residents.
For example, I’ll bet some of the buyers in one of the brand new “upscale” developments around here will be in for a rude shock when they find out the apartment complex that the development backs up to is subsidized farmworker housing. LMAO! Would I like to be a fly on the wall in some of those homes when the rapiachi music gets cranked up on a Friday night. Or when the bullets start flying in celebration of Cinquo de Mayo, the 4th of July, Memorial Day, etc. Any excuse to shoot a gun off.
“Government subsidies, IMHO, should be for the neediest people, not for average people who make bad decisions.”
Depends. A single mother who made a bad decision and married the wrong guy and then followed that up with the bad decision of having children, should she get thrown under the bus with her children? What about the perpetual alkie? He’s made a bad decision, but maybe he’s a war vet who was driven half mad and finds solace in alchohol. Should he get thrown under the bus? You’d have to define what “needy” is.
Some of those “average people who made bad decisions” have paid the freight in the form of taxes for many years. They have subsidized the needy, the corporate welfare, the sleazy politicians, the illegals. So they made a bad decision. They should be able to take out subsidy in the amount of what they paid in.
I have mixed thoughts on this. I know a guy that has a bunch of 3-families and he rents to Section 8. He maintains his properties well (he got them really cheap many years ago) and from the description he provided, their living quarters are better than his and mine. This guy is an engineering project leader/manager and I’m pretty sure he makes a very good salary.
In Texas in the late 80’s entire apartment complexes were purchased by the government and re-habed and turned into Section 8 housing. This was under Regan’s direction to move from subsidizing new construction to assist with the rehabilitation of existing housing.
This allowed favored developers to receive these funds. It ended up with Pierce, the head of HUD under Ronald Reagan, taking the Fifth Amendment, and refusing to testify at the hearings regarding the misuse of these funds. Several of his aids were indicted for their part in the schemes.
In my area, the apartments purchased were all primarily one bedroom units. Since single mothers were for the most part the intended recipients of this housing. This for some reason was not discovered until after the reconstruction was completed.
The market was on steroids
Steroids bulk you up and leave you strong.
Coke or Ice are probably better analogies, and in FL the high has just about gone…
I’m thinking PCP for this market.
Imagine if Wavy Gravy were a real estate agent
prices would go loop de loop
I’m tired of this “buyers-market” crap.
A buyers-market exists at or near the bottom, not at or near the top. Since it’s really hard to identify the bottom, the thing to do, is to simply let it pass. The bottom will be behind us when for 4 to 6 consecutive months inventories decline, foreclosures decline and median prices rise. Then it’s time to buy. You will have missed the absolute bottom but can be sure you’re not about to be sucked into the deep, deep, abyss that still lies somewhere ahead.
No need to rush, housing moves slowly. It’s OK to miss the bottom by 6 or so months. Don’t get aboard a ship that’s crashing, burning, and sinking.
Houses are still selling around here, regardless of taxes and insurance, but not as fast and certainly not for the prices they used to sell for.
I agree houses are still selling and like you said for less money, but my God the amount of inventory is staggering is it not? As ARMS continue to reset how much more inventory is still to come to the market and as banks fire sale the continuing mounting pile of foreclosures it does make one wonder where the bottom lies?
Last fall the condo inventory just passed 2 years - as of this morning it is at 33 months. Getting real close to 3 years!
” it does make one wonder where the bottom lies?”
In Florida, bottom lies in pre-2000 prices, IMHO. To make up for taxes and insurance. The local govmints are reluctant to revalue and lower taxes, but it will happen. It will just take longer and will come when they realize, like the realtors do, that some money is better than none. I do think Florida realtors are now anxious for people to start dropping their prices so they can at least make some sales. The local govmints will follow suit eventually. They don’t collect taxes on abandoned property. Banks that took back foreclosures don’t want to pay taxes on the property, either, so they will really be looking to unload.
In Florida, bottom lies in pre-2000 prices, IMHO.
I agree. I thinking $100/sq ft for a middle class house. But it might go back to 1990-1995 prices before it starts recovering.
The real question is, how long will it take.
“Buying houses now”… only fools would buy now in a falling market. Of course sheep follow a leader, go in heards and think little as a individual.
Actually, the sfh’s I see selling in Miami (good areas, not the crqp built in the last 5 years along the turnpike) are still selling at the peak prices.
In Pinecrest and Gables, it did not even go back to 2005 prices, many houses are still selling at the 2006 peak. And though the volume of sales is below 2005 level, it’s still way above 2001-2003 in these zipcodes (according to PropertyShark website).
I beg to differ. The bottom will be when prices are not more that 3 times median incomes and it is cheaper to buy than to rent.
Until then it will remain a sellers market.
Although it should, that may not happen. Not on the Florida coast, there are other market forces at work than just local median income.
Well in that case prospective buyers should continue renting. While some may see this as throwing money away, they will be throwing more money away by buying. As Benjamin Franklin once said: “A penny saved is a penny earned.”
Hey guys, what ever the measure, I think we will all agree that this is not nearly the time to but yet. Things have slowed but prices haven’t returned to normal in most areas, and that is the real issue. For me the bottom or at least a time to buy will be when prices are approximately 25% higher than they were 10 years ago in bubble markets(if that makes any sense).What I mean by that is go back to a normal market and figure appreciation about equal to inflation or slightly more, which for 10 years might be 25%, in many areas they are 200-300% higher than 1997 so yes we have along way to go.
The funny thing to me is our society has gotten so spoiled and has such a sense of entitlement that people want to complain before they have even had any pain, just my feelings-sorry for the long post.
“people want to complain before they have even had any pain,”
LOL! Reminds me of when I wuz a pup, if I cried over getting a whupping from my parents, they’d tell me to zip it or I’d really get something to cry about.
That said, I think we’ve been in major pain here in the US since at least 9/11 and we’ve just been under anesthesia. The anesthesia is wearing off and the supplies of anesthesia have just about run out.
That’s fine crazintheoc but which inflation numbers are you going to use, the BS inflation numbers or the real inflation numbers which run 3 to 4 times higher?
For me the bottom or at least a time to buy will be when prices are approximately 25% higher than they were 10 years ago in bubble markets(if that makes any sense). -crazyintheOC
I agree except I would use roughly 35%. That’s 3% compounded annually.
I also look at rents. Rent prices crystallize the amount of value in a property absent any speculative dreams.
I think we’ve been in major pain here in the US since at least 9/11 and we’ve just been under anesthesia. –Palmetto
This is only true for people addicted to living beyond their means, especially in terms of housing.
GDP has increased. New technologies are coming along faster than ever. Advances in biotechnology and nanotechnology could be as revolutionary as the transistor or penicillin.
The jobs are different from what they were in the past. But the average person can still find training to get good jobs. If they go and buy a house that costs five times their income, though, it feels like major pain.
There are always people who make bad decisions. This time it’s particularly annoying to me because people I know who should know better do it who want to suck everyone else into their world of over spending. Overall, though, my instinct is that things are not that bad. I think we’ll see a little inflation that will mask the coming declines in prices, and it’s on the next fad.
Advances in biotechnology and nanotechnology could be as revolutionary as the transistor or penicillin.
Biotech and Nanotech: THE NEXT BUBBLE!!!
Get in now before you are priced out forever!
Seriously, biotech was a major stock bubble back in the 1980s. Lots of people lost lots of money investing in it.
The thing about biotech and nanotech is that advancements are entirely unpredictable. It’s not like Moore’s Law. You can go decades with no advancement and then one day the industry advances 20 years.
And what pray tell are these forces? Do you think it’s special on the Florida coast? I live here on the Florida coast , and it is not special here. Do you think Florida is operating under a new dynamic or something? It isn’t.
Agree that it is currently a stupid FOOL’s market .. With the economy slowing (autos, RE, …) and nutcase financing evaporating, the return to “normal” is starting. When prices in the hot areas around here i.e Northbrook IL return to say ‘02 - ‘03 prices + compounded rate of inflation. then we are close. Currently there are “starter” homes, built in the ’50s (a 2/2 ranch, 1000 sq ft) for sale @ 439K that sold for 255K in ‘02, IMHO are worth no more than 300K. In this town a home like this is at the very bottom of the market, only good for a teardown for a Mcmansion. The cool thing is the 1 - 3 Mil jobs are sitting … and more are being built T I M B E R
“…most Realtors would be happy to see sales figures similar to those witnessed in 2003 or 2004.”
Yeah, most realtors would like to see a sale regardless of how things were in the past.
I don’t know why they’re saying that there will be tax relief. A city needs a certain amount of money to operate and when property tax values go down, they just raise the tax rate to compensate.
You make out better if your house price appreciates slower than everyone else or falls faster than everyone else. But most homoaners don’t like that despite the lower taxes.
In my area, people complain a lot about property taxes but they keep voting for more spending. I live in a very small place so I get hit with higher property taxes but pay less in absolute terms for the services that I don’t use anyways.
Oh politicians will lower taxes to get elected, then when things get bad and there is no police because they cant pay them, a crime fighter will get elected and jackup taxes to fix this mess.
pick your poison.
“For Pinellas County Property Appraiser Jim Smith, the downturn that has taken hold is the market’s returning from orbit to solid ground. ‘Now things are starting to get a little bit more real,’ Smith said. ‘I think prices are coming down to normalcy.’”
Everyone’s seen this graph (except maybe Jim Smith):
http://forum.themarkettraders.com/read-m/26/6829/6896
Imagine a cat 5 storm right around, I dunno, month 9?
Month 9 would be September, right? Which is when Florida experiences the most hurricane activity, or threat of hurricanes, anyway.
Yep, things are looking pretty ugly all around in FLA. Gonna be a long, hot summer. And may I also say, the tension in the air is palpable. You can feel the simmering anger underneath the surface of the smiles and the “Hellos and howdydos”. It’s also present on the road.
But before the rain the drought. I’m expecting fires along I-95 in north Florida this week. And BTW everything is fine here - I just heard last week from an investor that this is just a little blip, that beach property here has never gone down. I’m assuming all the finished but unoccupied condos in south Jax Beach were just built as flipping stock.
Great chart RJ !…so if I read this correctly we will be having the amount of arm’s, toxic morts resetting equal to or greater than the current month (4) until month 23? That chart speaks volumes to the future of this recovery?
It looks to me that the real “meat,” in terms of the kind of deal many of us are looking for, is in the period between months 29 and 59, when a high volume of Alt-A’s pile onto the Tits Up Express. Presumably, those would be somewhat-to-much better quality homes, on average, than the ones owned by subprime borrowers. Intelligent Alt-A holders will see the train coming and bail well early, but who know what those numbers will be.
“In a suit seeking class-action status that was filed in Leon County Circuit Court in February, the second-home owners claim that the Save Our Homes law — by saddling out-of-staters with a disproportionate tax burden compared to Floridians with homestead status — violates U.S. constitutional guarantees of unfettered commerce, interstate travel rights and equal protection.”
This will be interesting. SOH getting shot down would devastate property values.
Rhetorical response, for the most part: how often do out-of-staters turn over state tax issues that benefit in-staters?
Taxes are the single biggest reason for lack-of-sales? Not for me. Not to justify what people are taxed in Florida, but at least one could give a good run at an argument that there is some benefit to be had for paying property taxes. And taxes in Florida are now about what they are in most northeastern states anyway.
The real problem is insurance. Many people pay more per month towards property insurance than they do towards principle on their loan. Now, that’s a problem.
Portability of SOH is being slung around, and word has it that the governor is going to enact it. But how can this be constitutional? Wouldn’t that give different tax-rates, at the time of purchase, to people on the basis of which state they live in? Then again, I confess to not being a constitutional scholar.
My best friend lives in West Palm Beach. He sez Palm Beach County is down to a 20 day supply of water because of the drought. If true and you add this to the insurance, tax & over building problems………..well, it could get ugly. Any comments from you locals?
“He sez Palm Beach County is down to a 20 day supply of water because of the drought.”
When you overdevelop, paving over the land that re-charges the aquifer and cut down trees that create micro-climates, drought is inevitable. Deforestation can turn tropics into savannah. And I’m no tree-hugger, but there has got to be balance.
I’m not local, but here’s the latest in things dry from Palm Beach…
“West Palm Beach has entered phase 3 water restrictions after South Florida Water Management District (SFWMD) issued an emergency order. The emergency order provides up to 30 million gallons of additional water for West Palm Beach via M Canal, which is currently nearly empty, to be stored in Clear Lake for the city’s drinking supply. An alternative would be to use water from the L-8 reservoir or the city’s wellfield, which is reserved for emergencies. The emergency order is void on October 31 or sooner with written notice. Under the new restrictions, residents may water only one day per week between 4am and 7am. Hand watering is permitted twice a week between 5pm and 7pm, depending on one’s address.”
“The South Florida Water Management District added 14 emergency pumps to supply water to farmers to the south of Lake Okeechobee. Water restrictions forced the farmers to reduce their water consumption by 45 %, but the inability of the pumps to supply water has actually resulted in at least a 50 % water use reduction. Growth of sugar cane has been stunted by the drought.”
When hurricane “Oblivion” comes ashore with 12″ of rain (and 140MPH winds) it will solve all their problems!
Why do you think USAA pulled out of the florida home insurance biz a few weeks ago?
I heard. They strongly encouraged me to switch my motor home to another carrier because they want out of the RV business as well. I still have them for my auto/umbrella policy but switched out for the RV.
So if the smartest brains in the insurance biz are running for cover, shouldn’t you?
Water in Florida? There will be plenty of water in Florida - in fact I am betting that in 30 years all of Florida south of and including the Lake Okeechobee area will be under water as Global Warming is now on an unstable and unstoppable run.
FloridaAtlantis
Flatlantis
“that in 30 years all of Florida south of and including the Lake Okeechobee area will be under water”
It seems to me, if that were the case, these waterfront properties around here would already be being encroached upon by the water, but I just don’t see that happening and I’m not hearing about it, either. The only thing I’m seeing and hearing about is the flooding in South Tampa when there is so much as a sprinkle of rain and the water washing over Bayshore Drive when it gets windy, but Incredulous tells me it has always been that way in Tampa, so I dunno what to think about this underwater business. Seems to me, if it is only 30 years off, we’d already be seeing at least some waterfront property drowning and that’s not happening.
Take a look at the island of Greenland - 7000 feet of ice on it! Thats over a mile high and this is not a small island. The ice on Greenland is melting at a tremendous rate. Think about this - the albedo of ice is close to 98%. As the ice melts dark colored earth is revealed the albedo of this is only 30-50%. This means that as the years go by more and more of the sun’s energy will be absorbed by the surface and Greenland will start to warm thus causing the ice to melt faster and faster. The oceans will rise by 3-4 meters if just half of this ice is melted - most of southern Florida is only 1-2 meters above sea level. Oh and by the way Antarctica will be melting as well.
Altitude is everything.
So basically you’re saying it will be like a rock gathering speed as it rolls downhill? No gradual encroachment? I really am curious about this. Seems to me some of the coastal properties would be experiencing encroachment from the sea here in Fla.
Glaciers in Greenland are melting at up to 8 times as fast, as experts had thought they would…
A rock gathering speed, yes.
Some folks even think that as water slips through the crevasses it might act as a lubricant and the whole ice cube slides into the Atlantic in 5 -10 seconds. Can you say Tsunami?
That wave would wash over all of Florida except for the far northern part.
The distinct possibility of southern Florida being under water in 30 years or less has me worried about buying too. I was talking about this very issue with a home-owner friend last week. His stance was, “what can I do about it, I’m already stuck anyway so I’ll just hope for the best.” Of course, he’ll be 80 in 30 years, and I’ll be just 60. Makes a bit of a difference.
At least there are a whole lotta people in South Florida who know how to build boats in a hurry, out of almost anything.
yes and tons of em live in DADE county too.
Greenland was once farmed - about 700 years ago. The global cooling did them in. Glaciers melt in some parts of the world, and are growing in others. These are facts, but nobody wants to acknowlege them. I’d look to the land mass and geography that existed several hundred years ago if you want to be REALLY safe.
Funny, I remember being scared to death as my teachers warned of the pending ice age when I was in grade school 30 years ago. Wonder if that will come back in vogue in my lifetime?
dd
Did teachers really warn of pending ice age? or is that something people just like to say online?
There was constant chatter about the cold weather in the 1970s and phrases like “coming Ice Age” were often used. Go back and look at things like the Science Year Books in the 1970s. I recall one front-page exclamation from around January 1977 which showed a satellite map showing that every state in the union had at least some some snow cover - thought to be a first. Climatologists in the 70s were also very quick to blame the cooling climate on man. Unusually cold weather led to the creation of the ski industry all over the Carolina mountains and was partially responsible for the second oil crisis in the late 1970s. It didn’t really start getting unusually warm until the 1990s.
“In a suit seeking class-action status that was filed in Leon County Circuit Court in February, the second-home owners claim that the Save Our Homes law — by saddling out-of-staters with a disproportionate tax burden compared to Floridians with homestead status — violates U.S. constitutional guarantees of unfettered commerce, interstate travel rights and equal protection.”
This will be interesting. SOH getting shot down would devastate property values because many more people would be forced to sell.
I live in FL and I know Ben posts a lot about FL but let me tell you. Things are a WHOLE LOT WORSE than in these stories. It is BAAAD.
Thanks ben for putting the information out there. I wish I could put into words how bad it is, but it can be hard.
Well let me try.
insurance is skyrocketing, that is if you can get a policy. The government is trying to do something but they are just making it worse. Property tax assessments keep going up. Gas prices are increasing. People are losing their jobs in construction. Foreclosures are at an all time high. I could keep on and on.
Harvest time for the bubble waiters.
My partner at work just had his homeowner’s insurance go from $1100/yr to $5000/yr. Luckily for him, he can afford it but I can’t imagine all of these other people that are already in over their heads with mortgage payments…..
So what do you do if you can’t pay the increase in insurance?
You don’t pay it and hope that if a Hurricane blows your house down that President Bush will come with a bailout.
But don’t the owners of the house (the banks) require insurance? What happens then?
I’d like to see someone test this, auger. Haven’t heard it happening yet, but it would be interesting to see what the bank does. If I were the bank, I’d be tempted to accept it, as long as people paid the mortgage. These days, anyway.
As best I recall, if you have a mortgage, you don’t get to close until you have presented proof of insurance. The lender either sets up the escrow of your property insurance or requires you to sign a statement that you promise to retain and pay for it at all time during the loan’s duration. I leave it to the legal eagles to comment on whether the bank can go after you for fraud, or some other means of chasing your remaining assets, if your house blows down and you are proven to be uninsured.
The mortgage company will “force place” insurance on your property. Your note provides for this. They will purchase insurance, and you will be liable for the premium. If you do not pay the premium amount, it is added on to your principal balance, and becomes just more borrowed money.
Well after yesterday/last nite,I can say we are in for a world of hurt here in Florida.
I went to the r.v. show in Ft. Meyers last nite with the parents. My dad has been looking to upgrade in the r.v.world.
The show was pretty much dead…as in nobody at the place. The parents spot a unit they like. We check it out. You could see the drool running out of the salesmens mouths. List on the r.v. was 147k. The parents had wanted to stay under 100k. Dad looks worried
and says “Our goal was under a 100k”. The salesman happens to be the owner of the business. He breaks out pen and paper and scribbles…He looks up after a few minutes and says “The best I can go is 97.5k”.
Holyeeeee cr@p…I was thinking maybe 10-15k off the first time around. Oh no,he cut 50k off list, off the bat.
I can not imagine what kind of bloodbath is gonna come out of this real estate mess but I guess if ya have cash and great credit the deals are bound to be around….
Chris
So, did they buy?
House on Wheels.. the next hurricane comes and they can just leave…. but those things suck gas.
Yep, Sure did,just got back.
Show is pretty dead. Owner said a few lookers but nobody serious.
Chris
Barbara Corcoran said that the summer selling season will start right after the NFL Draft! You better hurry and buy now or be priced out forever!
Cobra, Just as homes at these prices…tell Dad to rent. Show him the cost, depriciation, Ins. on that thing.If you put that 100k in a CD it would more than pay for the actual time you use the thing.
That thing will be worth? 50k after signing the papers and driving off the lot..Rent !
“For Pinellas County Property Appraiser Jim Smith, the downturn that has taken hold is the market’s returning from orbit to solid ground. ‘Now things are starting to get a little bit more real,’ Smith said. ‘I think prices are coming down to normalcy.’”
Still got a long way to go Jim… a long way to go till we reach “normalcy”.
Hmm! Return to “normalcy”.
Didn’t Warren Harding campaign on a return to “normalcy”, and didn’t that soon lead to the Great Depression?
I think so : )
I pay $950.00 a month to rent a nice 3 bedroom 2 bath a few miles from the beach in Destin, Fl. If I bought this house, I’d pay $800.00 a month (combined) for property taxes and insurance alone! Why in the world would anyone buy a home in Florida in this environment? There are so many homes for rent locally, my landlord can’t raise the rent on me. Real estate is DEAD here.
That seems to be true throughout the state. I don’t know of any area in Florida where rents are rising. Rents either are flat or, in increasing numbers of cases, declining. Some alligator food is better than no alligator food.
Look at this on City Data… Desperate people LOL I think they are realtors or brokers.
http://www.city-data.com/forum/florida/12546-ernesto-incredible-shrinking-fla-real-estate-2.html
A quote from the link above
“Just spoke to a friend up there along the coast and her insurance was dropped. YES DROPPED. She was lucky enough to get insurance through Allstate Ins. Her insurance went from $1,000 a year to over $5,000 a year.”
The George W. administration may have its collective head in the sand when it comes to the relationship between hurricane severity and global warming, but that doesn’t mean the insurance companies aren’t paying attention:
http://www.boston.com/news/local/massachusetts/articles/2006/08/06/homeowners_may_feel_heat_of_global_warming/
Anyone remember this quote by the arrogant Michael Saunders? She owns a large RE brokerage presence in Sarasota, FL.
“Infrastructure, affordable housing and sustainability were just some of the issues addressed by a panel of experts Thursday during Michael Saunders & Co.’s fourth annual Luxury Living Conference.”
“‘We’re never going to be able to have affordable housing in Sarasota, so let’s shut up about it and worry about transportation,’ Saunders suggested.”
Looks like prices are dropping like a rock Mrs. Saunders, so we better talk about transportation when people will be riding buses instead of using Heloc’s to pay the gas bill.
A couple of weeks ago I was at the car wash in Arlington Heights IL (a clean & prosperous town) and while getting the beast cleaned, a 30ish woman came and asked for a few bucks to buy gas! Her credit cards were maxed out & no cash on hand (me I carry a reserve of dough in the wallet, no CC debt, …). She was driving a mini SUV and dressed like a typical middle class soccer mom (I gave in) HOW ARE YOU GOING TO PAY THE MORTGAGE & FOOD !!! Is this an abnormality or shades of Christmas future (gulp).
The answer is always no.
That’s almost always a scam. Saw one run in Bradenton, FL, less than a year ago. Decently-dressed blue-collar type with a small gas can approaches you with a similar story.
Many years ago I designed the shelf allocations in a small supermarket chain. One of their stores was in Santa Monica, CA. While I was working there, a couple approached me and asked for a donation just to feed their dogs. I gave them a modest but meaningful amount of money. I was there for several hours resetting a section of the store. After I left, I noticed them eating in a more-upscale-than-I-could-afford restaurant up the street.
I was scammed! At least I didn’t sign any documents that would affect my FICO. However, it raised my “street smarts” up a level, sadly, to increase my distrust of my fellow man. Realtors?? Seen them, dread that. Been there once. Once was enough!
“‘We’re never going to be able to have affordable housing in Sarasota, so let’s shut up about it and worry about transportation,’ Saunders suggested.”
She’s an arrogant tool, and she’s wrong. I am considering moving there because the rental market is way less expensive than Tampa Bay.
Yes Palmetto, but there’s always some problem in Sarasota, such as contaminated drinking water, and the traffic in the tiny downtown is terrible. It’s also hotter and brighter in Sarasota than here (ghastly Tampa).
I believe that eating out is a lot cheaper in Sarasota, especially if you don’t mind doing the early-bird of having your main meal at lunch. The large percentage of retirees forces restaurants to be max competitive over there. Good eats.
She’s right about the transportation part you know, it’s just the people needing it will be the large amount of folks being foreclosed on who will need transportation out of town
Her transportation to get out of town ahead of the angry mob.
Michael Saunders is the Toni Everett of Sarasota.
Florida is the new Financial ‘Wild Kingdom” from now on. State and local Property Reassestments, plus New and Improved added “Service Charges” ARE coming down the pike Big Time.
Even if the local Gov’ts increase the Milage Rates. That is going to Cost cities, banks, lenders on down the line to the CONSUMERS aka rhe HomeDebtors.
Residents may worry about getting sunburn and getting caught by seasonal storms but here will be FEW that Escape the “Revenge of the Alligators” in Florida.
Thanks to Governor Charlie Crist : )
The very same guv that asked the citizens of FLA to “pray for rain”?
Charlie of the moist, sympathetic brown eyes. He means well, but I just don’t know what he can do about any of this. I don’t know really how much pull he has, but he may surprise us yet. It must be killing him to realize that Florida’s two US Senators are so impotent, they couldn’t do anything about the drilling that will take place 45 miles offshore in the Gulf. Think red tide is bad now? Got sludge?
Oh yes Pray!
Except a major study found that when people prayed for sick people at hospitals more of the sick people died.
That’s good.
Out of the wreckage coming our way, perhaps we can stick a wooden stake in our assorted religious belief systems that all originated in a time, when mankind was afraid of the dark…
Wow aladin, I’m not religous, but even I think that’s a pretty ignorant idea.
We can step forward into an age of reason, or forever be held back by ancient standards that bear no resemblance to the way we live our lives today.
I’m for going forward.
“‘I’m trying to hold on to a second home that I lived in before my marriage in 1975, hoping to pass it on to my children,’ he said. ‘I paid $38,200 for the house, and since 2000, I’ve paid more in taxes than I paid for the original price of the house.’”
Gee — why not ask your kids if they’ll pay your net loss each year, until they inherit it? That would be a decent, “parent-y” thing to do. If they don’t want the deal, sell the house for what you can get and put the net into some sort of investment that you can leave to them, instead.
“‘It’s a huge market,’ said developer Edgardo Defortuna in Miami. ‘Second-home buyers definitely need to be included in any changes in Tallahassee, because they are the ones paying the most. They have been impacted the most by high taxes the last four or five years.’”
Now that is the most outrageous proposal I’ve yet read about the property tax problem in Florida. Maybe there was a word omitted: “…because they are the ones paying ME (Defortuna) the most.”
I thought that was hilarious too. Our legislature is pretty screwed up, but even it won’t favor people who don’t live here at the expense of people who do. Perhaps an attempted constitutional amendment is next, with the assorted constituencies of the real estate industry hoping that a clever ad blitz will convince residents to vote against their best interests.
I’ve been looking for a house in some of the not so fancy neighborhoods in Miami. I haven’t really seen prices drop in those neighborhoods. On the other hand I don’t think there’re any sales either. I see the same houses I looked at 3 month ago still on the market with new ones added daily. Sellers are stubborn and buyers….well, I don’t think there are any for these type of properties. I am renting until the cost of onwership comes somewhere close to the cost of renting. With all the over supply of condos in the pipeline rents will probably drop as well over the next couple of years.
actually, if you look at PropertyShark, you’ll see there are plenty of sales. Not at 2004-2005 levels, but 2001-2002 for sure.
I agree that there was no drop in prices, maybe some drop in “wishing prices”.
It’s a challenge, but i’ll try and combine “It’s a small world”, with “Heartbeat, it’s a love beat”, in honor of realtor Disney-DiFranco…
It’s a world devoid of laughter and full of fear
Heartbeat, it’s a deadbeat
It’s a world of dashed hopes and jeers
And a deadbeat is a bad vibration
There’s so much debt that we share
Oh, a deadbeat is a deadbeat
That it’s time we’re aware
And when we meet it’s a bad sensation
It’s a small world after all…
Just throwing out my own numbers:
If I stay in Florida, I will not consider buying until post-hurricane season 2008. My lease is up soon and I might even try to lock-in a two-year.
So… maybe the summer of 2009?
The “Help Me!” & “Must Sell!” signs are in full bloom today (Pinellas County)
Neil,
I have cash-flavored popcorn, rental-flavored popcorn, IRA-flavored popcorn, money market-flavored popcorn & some extra discretionary-flavored popcorn.
Sorry Alad, I have no golden-buttery popcorn. I don’t have the stomach for that.
I always ask the young adults manning or womaning the concession stand at the movies…
“Just what is in golden flavoring”? when they ask if I want “butter” on my popcorn?
I’ve never gotten a satisfactory answer.
You probably don’t want the real answer…
partially hydrogenated soybean oil with some flavorings
What makes Florida interesting, is they are our Australia…
6 months to a year ahead of the rest of the states, from a drought perspective. Bad juju is just around the corner.
Where to stick all those Floridians?
Failed rustbelt states with Great Lakes full of 25% of the world’s supply of freshwater.
Back to the future?
“What makes Florida interesting, is they are our Australia…”
alad, STEP AWAY from the doobies. Cali way more resembles Australia than Florida does.
South Florida is just overbuilt and poorly planned. They’ll be a-coming for our water up here shortly, we’ve got plenty of it in the springs and rivers, but I predict the northern counties won’t let go of it so easily. Hillsborough and Pasco counties already learned what happens when you make a deal with the devil, like they did with Pinellas County.
We have mountains as high as 14,495 feet to catch precip, here in the Golden State…
Whaddya got?
“We have mountains as high as 14,495 feet to catch precip,”
So does Australia. Which makes Cali even more like Australia. Both got mountains, no precip.
We got precip. We had a bunch of precip here a couple of weeks ago in the Tampa area.
Australia has a scrawny 7,000+ foot peak in the middle of nowhere…
That’s it.
California has The High Sierra, 400 miles long and 50 miles wide, littered with hundreds of 12,000+ peaks.
Melting glaciers?
“Melting glaciers?”
In Florida? LMAO! Seriously, though, for anyone tempted to buy into the preposterous thesis that Florida is the Australia of the US (sheesh, alad, you about gave me a hernia with that one), we have a ton of fresh water in the northern half of the state, in the springs and aquifers. We get dry in the spring, we’ve got a month to go until the summer storms start. We just had a bunch of unusual rain here in the Tampa Bay area. Yes, we do get wildfires, some seasons are worse than others. South Florida’s problem comes from overpopulation and overbuilding and some far sighted planners warned of this many years ago, but nobody listened. Australia’s problem has been prolonged by many years, probably a combination of man made and natural cyclical factors. Florida always complains during the dry season and then complains about all the rain and storms during the summer.
Look, dude, I live here. Over 25 years and I’ve seen it all. Florida’s so called “water problems” are easily solved, Australia’s problems are serious. And so are Cali’s. You need precip for the mountains to catch. But hey, if the big quake hits, the mountains will become the new Hawaii.
palmetto…
http://droughtreporter.unl.edu/map.jsp;jsessionid=E990B370630B1EF5B0C813478AD5166A
Florida has 66 Drought related impacts, California has 14.
I urge you to read each and every one of those 66.
I am gonna agree with palmetto on this.
Florida has a infrastructure problem…Not a freshwater problem. The stupid politicians wont dig lakes to keep freshwater in to get thru the dry part of the year.
When it rains nothing is saved, it pretty much all runs to the ocean…..
Chris
I urge you to read the 66, as well.
De Nile is a river.
There is short term solutions,but the fact is over-pumping ,and increasing drought is a real problem. Ever increasing frequency of sink holes are directly related to over pumping…
In that link, change the one-month default value to the one-year one. All of a sudden, Florida drops back two notches and Texas is the Holy Cow! Then start changing the sources. NOAA’s shows no problems at all for Florida. The only source that shows Florida as being in deep kimchee is the “media” one.
Hi again! On this weeks trip down Gulf Blvd. from Clearwater Beach to Reddington Beach, I noted probably 25 more For Sale or Rent signs. There were only 2 properties with big, red SOLD signs.
Further, I say heck to giving a snowbird tax relief. The only part of Florida’s economy they support are the earlybird restaurant tabs and the cheap Florida themed furniture purchases they make when they first buy their little piece of Paradise. Full-time residents seem to forget that they don’t pay any State income tax. If they want to reduce property taxes for Florida residents, then make-up the difference with a State income tax. Those that really can’t afford the current real estate taxes probably wouldn’t be paying a state income tax either. For the rest of the whining leaches, I say “tough sh_t.”
There is no bottom. A bottom assumes that there is some form of stability in the market. Knowns if you will. We have none in Florida. Will insurance go up or down or none? Will taxes go up down or remain the same? Will people leave as opposed to come to Florida? Will the builders continue to pop out houses like crazy as they are now? Will boomers come? Will boomers flee the craziness and the collapse of the infrastructure?
The permutations of change and dynamic influence boggle the mind. Truthfully I can see a scenario wherein we are in the 70’s and 80’s numbers on housing.
Let’s just take one situation. Taxes remain at current levels. A Category 3-4 comes ashore in the area of Ft. Lauderdale and and sweeps north and then Northeast across the state. Mortgage rates go up due to lack of liquidity or worldwide issues.
All the insurance companies are gone. No insurance and the state deal is toast due to no capacity to fund it. No sales can take place without insurance. A real estate ice age. Oh the government will react but the damage will be done.
I can come up with various situations that will curls one’s hair. I do think one of them will come true.
Category 3-4?
Many people in Florida probably cannot wait until Hurricane season starts. They are also probably praying that the mother of all hurricanes (strongest Cat 5 on record) hits there hood and destroys their home so they can get out from under the debt.
Well maybe not the real homeowners, but I bet the flippers are!
“…I bet the flippers are!”
Makes me wonder how many flippers obtained their insurance under false pretenses — stating that the property was their principal residence, or not a rental property or whatever. Count on the insurance companies to hire a lot of people to ferret these out and deny claims accordingly.
they balked when they saw the $260,000 property tax bill. ‘It was a $14 million property, and had it not been for the taxes, I would have had a deal,
If they can buy a $14 million property, they can pay $260K/yr in taxes. It’s only 1.86%. This is why we need to keep the property taxes. It keeps the ultra-rich from having a free ride. What’s spending $14 million on a property, if you get to sell it for as much as you paid for it, adjusted for inflation, 30 years later. It’s basically a zero-cost transaction. Somehow, I doubt that insurance and maintanence are linearly proportional to the base value.
In any case, if you can’t afford the taxes, you can’t afford the house.
By the way, how the hell do you become the real estate agent who gets to sell $14 million houses? I’d like that job. It’s not like real estate agents actually do anything. The show the house, talk sweet, and if it sells it sells.
The commission must be like 700K for that one sale (5%). That’s several years worth of income. How do you get that kind of job?
I’ll tell you how you get that job. You get a Florida real estate license, then you sign on at one of the “high end” firms like Toni Everett or Michael Saunders or whoever. If you’re a guy, get a sex change. You’ll need a blonde (bleached) helmet head, a high, proud bubble butt, some tight clothes and a late model four door car, a Lexus if you can swing it. It helps if you’ve got a hatchet face and real aggressive but servile manner. Talk real fast and nervous. And don’t waste time with anyone looking for a place under $900,000. That’s the figure you have to work up from.
“‘It’s still a buyer’s market,’ (Realtor Judy) Disney-DiFranco said. ‘It’s a good time to make a really good deal.’
Judy, when is it NOT a good time to buy. I hate realtors.