Faced With A Meltdown In Florida
The News Press reports from Florida. “Scott Ayers is about to become a landlord, whether he wants to or not. Wryly referring to an ‘unintended consequence of the current real estate market,’ Ayers has decided to rent his Gateway home after trying to sell it for about six months.”
“‘If you don’t have to sell your house right now, then don’t sell it, and try to rent it while you wait for the market to correct itself,’ says broker Larry Simons. ‘Over time the rental money you get should help you keep it going until you can sell it. If you aren’t in a hurry to sell or aren’t in a hurry to buy is when you get the best bargain.’”
“‘It really is a renter’s market,’ says Betsy Morgan, director of property management for Prudential Tropical Realtors in Trinity. ‘Some owners have determined it’s better to rent and wait out the market. Other people bought property as an investment to begin with, but that was before the market softened and they found it was hard to sell these houses.’”
“Barbara Ford, who has a new home in the San Marino section of Miromar Lakes, will try to rent it out for a year. ‘The builder put lots of extras in there and it’s really a nice place. We were very surprised when the market slowed. We just didn’t see it coming. That’s when we decided to keep it off the market for a while,’ she says.”
“Many Realtors are still selling homes, albeit at prices lower than a year or two ago. Would-be landlords have to make those same adjustments.”
“‘The first thing we tell somebody is that they have to be realistic about what they can get for the house if they lease it,’ says Simons. ‘You aren’t going to make your mortgage on a half-million-dollar house with what you get for leasing it. Just as you have to price the house reasonably to sell it, you have to do the same then with a lease.’”
The Orlando Sentinel. “Twanda Thompson doesn’t want to lose her home. Like many would-be homeowners with below-average or poor credit, the Orlando woman took out a ’subprime’ mortgage during the housing boom to buy a place she really couldn’t afford.” Now her adjustable-rate mortgage is three months away from a boost in interest that will increase her monthly payment 30 percent. More increases lie ahead, and she already is delinquent on her loan.”
“‘I’ve been on an emotional roller coaster,” said Thompson. ‘I’ve worked so hard to get this far, to have a home and raise my children. To lose ground now is not acceptable to me.’”
“In Florida, nearly 93,000 subprime-loan homeowners were in the lurch as of February, according to First American. And during the previous year, the state’s subprime-foreclosure rate tripled, while its delinquency rate shot up 72 percent.”
“Local experts say turnover in homes financed with subprime loans may already be contributing to the region’s housing slowdown. The inventory of homes for sale through the Orlando Regional Realtor Association, for example, has nearly doubled since January 2006.”
“‘You have to look at the two different sides of the coin,’ said William Weaver, a real-estate professor at the University of Central Florida. ‘The problem is a lot worse now than in the past, and it is likely to get even worse.’”
“Many subprime lenders have collapsed this year, making it harder for financially strapped subprime borrowers to find someone willing to refinance burdensome loans with adjustable rates. ‘That part of the market has come to a screeching halt,’ Weaver said. ‘And when these mortgages adjust, they are going to adjust with a vengeance.’”
The News Journal. “It’s a question Terry Daniell hears a lot these days. As an office manager of a nonprofit credit counseling service in Pensacola, Daniell helps people repair their credit and avoid mortgage foreclosure.”
“‘Primarily, more and more people are coming in, and the first thing out of their mouths is, ‘How do I save my home?’ Daniell said.”
“In Escambia County, during the first three months of 2006, for example, there were eight residential single-family foreclosures with an owed-loan value totaling $437,500. By comparison, there were 23 residential forecloses in Escambia the first quarter of 2007. The owed-loan value was $2.95 million.”
“‘Both the increased number of foreclosures and the increased dollar volume are significant,’ said Al Muller, president of Pensacola-based Metro Market Trends. ‘In my opinion, we are at the very beginning of this surge in foreclosure activity.’”
“Muller said Metro Market Trends, which tracks housing market data throughout the state, is seeing foreclosure numbers in other Florida and Alabama counties that are more alarming than Escambia’s.”
“Flagler County, for example, went from one foreclosure in the first quarter of 2006 to 31 in the first quarter of this year. And neighboring Baldwin County, Ala., has seen an increase from 23 in the first three months of last year to 102 for the same period in 2007.”
“At the heart of the problem is falling home prices, exacerbated by insurance and property tax issues, and a worrisome rise in the number of defaults in the ’sub-prime’ lending market.”
“If their property’s value has declined significantly, as many have in Pensacola recently, their equity is essentially nil. ‘As this housing decline continues, there are just more and more permutations that fall out of it,’ Muller said.”
“‘What’s really different here, what’s being lost in all this, is that people being foreclosed on today are not in the same kind of financial crisis as 10 or 15 years ago,’ he said. The combination of easy mortgage money and falling homes prices makes it much easier and less costly for someone to consider foreclosure.”
“‘Today, if a home is worthless, people will just walk away from it,’ Muller said.”
The Palm Beach Post. “It’s no paradise at the Eden condo in Boca Raton. During the recent condo-conversion craze, the Eden was among the first projects to promise buyers a hip lifestyle in a downtown setting.”
“But four years after sales first started, the project remains a hulking eyesore, partly gutted and nowhere near done. Work on the conversion has started, stopped, started and now stopped again.”
“Now comes word that two of the complex’s four buildings won’t be finished anytime soon. Meanwhile, residents who have moved into the first building won’t be enjoying their clubhouse in coming days. Work on the 8,000-square-foot facility has ceased, and several subcontractors have filed liens in Palm Beach County over unpaid bills.”
“‘It’s ludicrous,’ said Rick Salzman, an Eden condo-unit owner. ‘What are these guys doing?’”
“Antsy buyers don’t know what to do. Reports are some buyers are getting their deposits back, while others are being sued for trying to get out of closing on their units.”
“Faced with a meltdown in the housing market, Lake builders have launched an aggressive campaign aimed at persuading county commissioners to say ‘no’ to dramatic increases in impact fees.”
“Builders say they’ve never been so alarmed. ‘Lake County used to be an affordable-housing location for families,’ said Jim Bible, president of the Lake County Home Builders Association. ‘Now people are being priced out of the market.’”
“The fear is that raising impact fees could further dampen a housing industry that is already in a ‘depression,’ according to Don Magruder, general manager of Leesburg-based Ro-Mac Lumber & Supply Inc.”
“Magruder said the county has seen a downturn in the housing market since last year. But the bottom has fallen out of the housing market. There has been a nearly 50 percent drop in residential building permits in unincorporated Lake since 2004. The decline prompted the county this month to lay off 12 employees and two paid interns in its building department.”
“Ro-Mac also has been hard hit. Magruder said the company was forced during the past year to lay off more than 200 of 505 employees.”
“County Commissioner Jennifer Hill said affordable housing has long been an issue for Lake County. She questioned why home builders are so concerned about it now.”
“‘Where were they when property values were skyrocketing?’ Hill asked. ‘Property was being flipped all over the place. Homes were being sold and resold as much as three times a year.’”
‘Home builder Lennar Corp. wants to kill its contract to buy 1,219 acres in western Palm Beach County, arguing that the deal was tainted by the corruption conviction of former County Commission Chairman Tony Masilotti.’
‘Lennar notified Palm Beach Aggregates Feb. 15 that it was pulling out of the deal, a month after Masilotti pleaded guilty in federal court. With the housing market deteriorating, the company had informed development regulators last summer that it was scuttling its plans for the property.’
‘The deal had been revived in August, after Palm Beach Aggregates agreed to cut the $300 million price to $200 million, plus bonuses depending on Lennar’s profit from lot sales.’
100M dollar price drop in the land cost (33%). Hmm.. I thought we were out of land, and that the price of land was a “fixed” cost that would only go up.
Anyway, this just proves the point. houses can be built for FAR less then they have been built for, both in labor and land costs, over the past 5 years.
Still looking for 1/2 price from peak; and in some areas, I am beginning to think that 1/2 off might not be enough (downtown WPB in the condo glut area, for example).
FL continues to crash, and the legistlative bodies continue to play footsie with the tax issues. I have really changed my view on this in the past month or so. Now I just want them to leave it alone. Any change they make will destablize the market (in one way or another); just let it ride. The tax problem will fix itself once houses are selling at 50% of peak value.
Mike you are dead on. SOH will always be a drag on real estate prices. Insurance costs will also keep real estate prices in check . Prices will be reasonable again within 2-3 years. This is a slow moving asset crash.
The tax problem will fix itself once houses are selling at 50% of peak value.
Assuming that the county appraisers actually appraise the properties at the price they get sold for. How can we be sure that will happen.
Still looking for 1/2 price from peak; and in some areas, I am beginning to think that 1/2 off might not be enough
I think it will be 1/3 to 1/4 prices from peak. 1/3 from peak would be fair market value. All those $600-700k houses where really $200-230k houses.
However, I don’t see how the knife will magically stop falling once it reaches fair market. After all, prices are determined by the margins. A few foreclosures in a city brings down prices everywhere. It’s the cheapest available house at a given quality that determines the selling prices of all houses.
So I think that we will see below fair market prices before the bottom is reached. I think that 1998 prices are fair-market since wages have not increased at all in south Florida and the economy is much worse off. I think we will see 1992-1995 prices at the bottom.
Any other opinions on this?
PHOENIX INVENTORY BREAKS ABOVE 60,000!!!!!!
Bubble central is PHOENIX!!!!
Wow, I wathched the Pheonix market go from a normal, very affordable maket to a boom market to a bust in 3 years. I used to go to Pheonix every month for work starting in Dec. 03-Dec-04. I lived in LA and I remember being shocked that you could buy a nice house in Pheonix for 150-200K then over night it started booming for no apparant reason other than people in other areas made RE appreciation money and it spread to Pheonix.
I remeber meeting a 30ish girl in a restaurant in Phoenix that had become a realtor recently and she was making a killing, wonder how shes doing now. It is funny, I lived in Florida in the 90’s and I knew a girl back then who had become a day trader. She had no business or investment experience but thought the tech boom was her golden egg, of course she lost every thing like all other in that period. 5-6 years later you can interchange these two girls(and I am sure thousands of others) and thier situation is the same, we keep repeating our mistakes. So many people think they can make big money with no education, training or work. I had a teacher once that called this type of person “unconsciously incompetent”, they dont know what they dont know and in the end they always lose.
The for sale signs in Phoenix area are just incredible. There are some neighborhoods that 50+% of the houses are all for sale. Un-freaking-believable. And just wait. The worst is yet to come between late 2007 and 2009. 2008 is going to be a slaughter year IMO. It’s when sellers get it that those bubble prices are never coming back and start dumping properties as well as the year that the bulk of subprime loans that were taken during 2006 reset. The housing worst is yet to come.
A common denominator for these people seems to be their lack of savings after the house of cards comes crashing down. They can make huge commissions during the bubbles, but somehow their either squander it all away, or lose it all after doubling down one time too many.
I think that it helps to be “unconsciously incompetent” to have a job like this. How else can you peddle misinformation with a straight face? It has to help to have no understanding of basic economics. Its so much easier to say “everyone is doing it”. A sibling tried to talk me into flipping houses in DFW last year. When I said no way, its too risky I was told: “everyone is doing it”. To which I replied: “Thats’ a sure fire sign that its NOT a good idea”. Needless to say, my sibling is now stuck with a house that they are trying in vain to sell (they have a tenant).
” A sibling tried to talk me into flipping houses in DFW last year. When I said no way, its too risky I was told: “everyone is doing it”. To which
This is wild, I went through the same thing with a friend who said I should flip houses to because, “every ones doing it”. Now he too is stuck with several houses that are worth less than what he owes, he is seriously thinking about walking away form them. How many stories like this will be uncovered in the coming year or 2?
Many citOC, many.
How many times have I consumed goods and serivces feeling really great about the particular product or service? Most products and services are basically just barely good enough to begget survival in the marketplace.
When I have questioned car repair counter help why they want to repair my car a certain way they do not seem to be very knowledgeable. Most of these businesses are only offering the lowest cost way to fix things, but I sometimes prefer a higher cost method that will avoid additional problems later on, and trying to get businesses that are used to doing things the same old way for years and years to do things to my satisfaction can be like pulling teeth out of a cow. (Sometimes I just say the hell with these people and I fix it myself.)
Most recently I had a valve adjustment and the timing belts and other maintenance items on my Honda performed by an extremely highly competent individual. He is a one man band shop, so when you speak with him about your car you are talking to the CEO and Master Mechanic and Customer Service all in one. I felt very, very good about paying him $517 for his services. Anytime you are paying fair prices for highly competent work you are making out like a bandit, compared to the alternatives.
I have not felt good about the delivery of my medical services many times. To a certain extent, I feel as if I am better off avoiding medical services entirely.
It is not surprising to me that RE is a magnet for the “unconsciously incompetent.” Many of these Realtors (TM) can not grasp even the most fundamental concepts of economics, yet here they are dispensing fiduciary advice. Most do not have an education, or if they have the four year degree it is as good as toilet paper.
Got 10% down?
Human greed knows no bounds. If get quick rich schemes actually worked, the rich would outnumber the poor. After all, at least 30% of people try get-rich-quick schemes.
phoenix homes for everyone!!
and the popcorn pops itself.
We all knew it was going to break 60,000 this month, but its still stunning. (Ok, as the days dropped off the calender I admit to wondering why it hadn’t broken 60k)…
But this is the start. Phoenix, Florida, Detroit, Las Vegas, Scramento, and a few others are just going to break the mortgage system; its no longer local folks. We’re all going to see it drop.
Oh yea… we’ve been talking about this for a while (some much longer than I).
Got popcorn?
Neil
I mentioned this a couple days ago, but I’ll repeat.
At lunch Friday a co-worker was talking about having found a renter for his $375K house he bought un Goodyear 2 years ago.
Seems all those extras (free pool and kitchen upgrade) and considerations (cash back at closing) convinced him to drop down a deposit on a $500K house several months ago.
He’ll only have a few hundred bucks a month negative cash flow for couple years while he waits for the market to recover.
The people he is renting to are 26 y/o, 3 young kids, and 2 big dogs. How much damage could they do to a $375K house… Nothing compared to what the falling market is going to do!!!!
Agreed. These people who will rent and wait for the correction to pass will screw themselves. Here is how:
Negative Cashflow every month. Insurance and taxes. Wear and tear on the house. Having to pay a property management company or manage it themselves. Stress. Hours of lost sleep. Watching your home decline in value. Watching your renters tear the place up. Having to take them to court maybe. Having to wait those months it doesn’t rent out while waiting for new tenants. Having to chase renters for the rent money. Watching rent values plummit while home values plummit. Wishing you would have sold a long time ago.
Yeah, sounds like a no brainer here.
Perhaps they will be good renters and actually pay their rent - every other month. Of course, eventually they could be kicked out and exchanged for no renters at all.
This could get ugly.
Many of these new “landlords” think that all that is involved in being a landlord is simply picking up your check every month. Little do they know all that is expected of them.
I have been told by several acquaintences (former landlords) that you should only become a landlord if you don’t mind becoming a bitter, twisted and misathropic individual.
Hey, I resemble that remark!
You meet some of the world’s most bitter and unhappy people as a landlord. You also meet some wonderful happy people. But man, the nutjobs can really get you down. Some people go absolutely psychotic when they have to deal with their landlord, other tenants, their neighbor’s kids/pets, life, etc. As a landlord, you end up on the wrong end of a lot of this crap. I’ve been doing it for 30 years, and every time I think I’ve seen or heard everything… someone surprises me, and not in a good way. I will definitely be switching 100% into passive investments when I retire.
“He’ll only have a few hundred bucks a month negative cash flow for couple years”
Good thing he’s apparently in Arizona. The cash flow loss in Florida would be much greater, as almost everywhere here the incomes do not support traditional rent calculations on these houses. The buy might have paid $375K, but in most places he’ll be lucky to get $1,600-$1,800 a month in rent, assuming the tenant is responsible for exterior maintenance. If I were the FB, I’d throw in the yard and pool service, just to make sure it gets done. Better to have a hungry, pretty alligator, than a hungry, ugly one.
I miss seeing those long run-ups in inventory that Phucktheflippers used to post. Does he still post here?
Maybe on invitation — suggest you post this question in the Bits Bucket, if you haven’t already.
buy 1,219 acres in western Palm Beach County
Who would buy any large tract of land in western Palm Beach county or any western part of the east cost of Florida?
You are practically guaranteed that the state will take your property for 10% or less of its value in your lifetime using “eminent domain”. How many Florida home and land owners have been screwed over in just this way?
We were very surprised when the market slowed. We just didn’t see it coming.
Once you admit this, don’t you have to stop and ask yourself what else you aren’t seeing?
Orlando FB Twanda Thompson bought a house she “couldn’t really afford” and now her ARM payments will reset 30% higher. She says, “I’ve worked so hard to get this far. … To lose ground now is not acceptable to me.”
She reminds me of contestants on “Deal or No Deal” who refer to their immediately preceding decisions as “work” and their rejection of the buyout offers as “courage” . Gambling is gambling. I admit if I were playing D/ND, i would turn down certain buyout offers. But in real life, buying stuff you can’t afford has consequences.
‘I’ve worked so hard to get this far, to have a home and raise my children. To lose ground now is not acceptable to me.’”
Sorry Twanda .. your hard work did not qualify you to purchase that home - you were allowed to purchase it.
…”To lose ground now is not acceptable to me.’”
Is it only me, or does that last line just ring with a sense of entitlement?
Maybe if she stamps her tiny foot, the Housing Fairies will come and make it all better. It works for 6-year-old princesses, sometimes. Not.
Sorry, I don’t normally join in the ‘BWAhhahahahhaah!!!” conversations, but, good grief, woman - that’s like anouncing that its ‘not acceptable’ that she’s 5′ 6″, or that the daytime temperature is 85 degrees f…stop telling us it goes against the grain of your moral fibre, and deal with it.
Rant off.
I don’t believe her loan has even reset yet.
D’oh!
Not even reset? Looking at the graph from the Credit Suisse report, we see resets just drowning the market this summer and getting worse all the way until Christmas.
Got popcorn?
Neil
The article says it resets in 3 mos.
The FBs are starting to freak out before the actual resets hit in mass reminds me of how animals and insects freak out due to the pressure drop before a hurricane strikes.
In nature’s realm…
When you don’t own a house, it’s pretty easy to get away.
…”To lose ground now is not acceptable to me.’”
Doesn’t matter if it’s acceptable to her or not, the house will be foreclosed on, she’ll be out. The end.
Next.
Pssst… F el lay, bears repeating:
You went up to 69 drought impacts today, an increase of 3, from yesterday’s tally.
http://droughtreporter.unl.edu/map.jsp?&src=&daterange=month&c_ot=on&c_wa=on&year2=2007&year1=2007&c_ag=on&day2=29&scn=nv&day1=29&c_fi=on&c_en=on&month2=4&month1=3&c_so=on&Cmd=sv&st=Florida
2 read between the lines stories, from the blog:
“Alligators are being seen more frequently in southern Florida as they move in search of wetter habitat, stated an officer with the Florida Fish and Wildlife Conservation Commission. People need to be very careful around lakes and canals and supervise small children. Airboat operators also note that navigation in the Everglades is becoming increasingly difficult due to low water levels from drought. An airboat operator reported that he has to be careful to stop in sufficiently deep water so he doesn’t get stuck.”
“Palm Beach County has stopped issuing warnings and has become more aggressive about catching water restriction violators and fining them. Code enforcement officers have been working extended hours to include the nighttime and even monitor water usage information for individual addresses. Fines from citations issued by the city range from $25 to $150 for a first violation. Repeat violators may be fined $250, have to appear in court, or may lose their water service. Roughly 500 citations were issued in Boca Raton last week. Forty-eight citations have been issued in West Palm Beach since April 16.”
So cruel is your Mother (always bat’s last) Nature, that she’s decided to wreak havoc on one our wealthier haunts, perhaps a cautionary tale, audible only to those that listen to her very heartbeat?
Oh, Palm Beach:
Belated congrats on being bestowed in June 2003 by the Robb report, as America’s “Best Place To Live”
http://en.wikipedia.org/wiki/Palm_Beach,_Florida
Alligators are being seen more frequently in southern Florida
Especially the sort with 4 walls and a roof.
Isn’t the Robb Report intended for a super-wealthy audience? As for the drought, this traditionally is Florida’s dry season. Once the summer rain pattern ensues we and the gators will be fine. Anyone trying to flip his or her house or condo, however, is screwed regardless of the weather.
Many are trapped in a world of past performance, weather-wise.
England just endured their hottest April ever.
Since records started being kept.
In 1659.
Friends of mine were down in Weymouth last week and said the beach was wall-to-wall towels and umbrellas.
In April??
When I last lived in London, you were still wandering around the house in thermal socks and sitting on the radiator, in April.
“Twanda Thompson doesn’t want to lose her home. Like many would-be homeowners with below-average or poor credit, the Orlando woman took out a ’subprime’ mortgage during the housing boom to buy a place she really couldn’t afford.”
Well if she really couldn’t afford why did she get a loan? Because some mortgage lender probably committed fraud. All the lender wants is the fees. Earlier this year I had a lender email a GFE and in addition to the 1% brokers fee there was a $4000 administrative fee. How many fools have been sucked into situations like this?
Does any one else have the feeling that once this thing really gets going there are going to be thousands of these stories of fraud that will dwarf the S&L crisis, I am afraid for the economy.
Oh… it will make the S&L and TechBubble look “small time” in comparison.
There will be a million people that deserve jail, but no space to keep them all.
Be afraid…there is good reason IMO.
When all this first started to unfold, most of us concluded that at the end of the bust we’ll have returned to a pretty normal balance of homeowners versus renters. Now I’m wondering if there might be a decade or two in which rental demand exceeds the long term mean, as those burned, or nearly burned, in the crash retain long memories of what it did or almost did to their fortunes. Much like the long-term saving and spending habits of the generation most affected by the Depression.
“‘If you don’t have to sell your house right now, then don’t sell it, and try to rent it while you wait for the market to correct itself,’
Smart move, instead of taking a 10% hit on the price now wait and take a 50% hit later…financial genius at work!
This sounds like really bad advice. It’s not good to sell at the bottom, but there’s no evidence that we are at the bottom.
Waiting for the market to correct itself translates to watching it go lower in value.
In the mean time you get to collect rent…which barely covers taxes and insurance.
Right now you might still be able to sell your house reasonably fast if you price it 20% below peak value, at least in Miami. If you can do that and come out ahead or break even by all means sell. If you bought near peak…good luck to you, you’ll need it.
Yeah, I was thinking the same thing. RE could go down for another 5 years, what then, some times you have to cut your losses and bite the bullet. No one wants to “Take thier medicine”.
For the under 5 set, I reccommend st. joseph’s children aspirin.
For the financially challenged, bury a bottle of ST Joseph’s children’s aspen in the back yard upside down. Same affect as the more expensive statue.
“…while you wait for the market to correct itself”
That’s what the market is just starting to do NOW, idiot! Of course I mean correcting prices DOWNWARD. That guy meant upward
It makes no sense to sell my Yahoo Shares at $80 a share.
I’ll just wait for the Nasdaq to correct itself.
OOPS!
“It really is a renter’s market,’ says Betsy Morgan”
lol, it was a seller’s market, then a buyers market; now it’s a renter’s market! I guess someone finally figured that out that perhaps the best view is from the sidelines.
Third time is the charm!
…and it will be for some time to come.
I think I’d be afraid to rent from one of these people. I’d worry I’d come home one afternoon to find a foreclosure notice on the door.
Time to do background checks on potential landlords. They won’t be doing them on you though. They are desperate and will take anyone who can fog a mirror.
This is from Ben’s “Palm Beach” post above - and I found it real interesting…
“It’s too soon to tell. It was only in January that residents voted to sell their tiny town to a Boca Raton developer for $510 million. The deal would make millionaires out of many of the residents. But the downside is residents won’t see any money for two years. The deal’s deadline is March 2009.
That creates opportunity for Michael Horton of the Horton Group in West Palm Beach. Horton recently sent Briny residents a letter offering them the chance to get their money now instead of waiting two years. In an interview, Horton said he’s working “on a few” deals to buy residents’ mobile homes and give them instant cash. Horton would assume the gamble of the Boca developer deal.”
—————
So the residents can cash-out now, thanks to Michael Horton. The article doesn’t say how much, but if it’s 50% of what they will ‘get’ in 2 years, they’d be crazy not to take it - for, as we all know (but Mr. Horton may not know), they’ll be lucky to see 10% of that value in 2 years. This is a fun story to watch. We may want to set up an informal pool to see who gets closest to calling the day when the first word of this buyout deal getting scuttled gets out into the media.
One of the Briny Breezes “jackpot winners” was VERY smart and took $670,000 last month:
http://oris.co.palm-beach.fl.us/or_web1/details.asp?doc_id=16305098&file_num=20070121114
Outstanding - there are ALWAYS dingbats with money that will “invest” in something certain to fail. (I was one of them in the dot-com days, but not at nearly the level of this dingbat) I hope he enjoys living in his 670k trailer.
Yes, I agree that Briney Breezes is a very interesting case of, “Who’s yer Gator?” It will be worth a full MSM piece, interviewing each resident and learning why some took their money and ran and others were so greedy that they let it all sail away into the sunset. Most of the latter, of course, will opine that they didn’t want to leave anyway.
“‘I’ve been on an emotional roller coaster,” said Thompson. ‘I’ve worked so hard to get this far, to have a home and raise my children. To lose ground now is not acceptable to me.’”
What a loser. Ms. Thompson embarrasses herself. She’s an insult to people everywhere who endure hardships not of their own making. This hardship is her own fault because she got greedy. I guess her own greed is unacceptable to her, too.
Ms Thompson doesn’t want to “lose ground” as it’s “not acceptable”, what is she going to say when she “loses ground” and the house that is on it?
SKB
I assure you that Ms. Thompson is not embarrased by herself. She is proud of what she does.
It hurts so good.
“County Commissioner Jennifer Hill said affordable housing has long been an issue for Lake County. She questioned why home builders are so concerned about it now.”
“‘Where were they when property values were skyrocketing?’ Hill asked. ‘Property was being flipped all over the place. Homes were being sold and resold as much as three times a year.’”
I’m glad some county commissioner somewhere in Florida is asking this question. But, too little, too late. Where were the commissioners in all the counties while this was going on? Were they brain-dead? Don’t any of them know a con when they see it?
Florida is in freefall and it is going to get worse. It is like a rudderless ship and the folks in Tallahassee are sitting there, pulling their puds. Having completely screwed up the insurance issue and inflicted MORE pain through pandering to the insurance companies, they are now trying to figure out how much they can screw up the tax situation. I took a ride around my local area yesterday, through a number of the new developments I’ve only seen from the road. I was gasterflabbered. Half done, most of them, some units occupied, some empty, all look like deterioration is starting to set in. Postage stamp lots, houses butted up against each other, weeds growing, For Sale signs hanging by one corner, flapping in the breeze.
On a positive note, however, I did a cursory realtor.com search of lower priced homes in East Pasco county and was gratified to see that some have returned to 2000 prices, when I first looked in the area. Mind you, some of these date back to the 1930s, many are frame construction and not in desirable areas. However, it is a start. Pasco is going to take it on the chin worse than any Florida county, IMHO, because of the sinkhole issue. Houses there will probably have to be purchased all cash at some point, because insurance will be next to impossible to get.
My brother in law is leveraged into eight Pasco properties, right at the peak. He actually camped out in front of new developments to get in line to buy houses. The exits from this mess have now been chained.
You better send him some lube, that lad is going to get an ass-pounding!
“leveraged into eight Pasco properties” — great choice of words there, R.J. — that leverage he thought was going to make him big money on little down is going to instead put all its extra weight directly on him.
Eight of ‘em, huh? Some more details, please — has he been doing this a long time? Has he ever made some money on real estate investing/flipping? Is there an exit strategy? Is this a source of family angst?
I don’t wish him any ill will or worse luck than he already has. Hope it works out better than it sounds at first glance. Ugh.
Wow. He’s totally hosed. I can’t see how he sleeps at night, unless he is very heavily medicated.
Another thing: with Tampa Bay gas almost at $3 per gallon, anyone living in Wesley Chapel or south Hillsborough and commuting in an SUV has to be feeling some real pain. My opinion is that houses in those places reached their all-time high, forever, in 2005. The “correction” will be permanent.
A friend of my brothers has a place in Leesburg (Lake county). He recently took a job up north. The guy cant even find a realtor to list his place. Is he overpriced…nope,actually way below market and can rent with positive cash flow…There is that much open real estate now.
Chris
Affordable housing is the only market. Layoff employees and higher them back for less. Buy materials at lower prices because of a glut. Yeah, there can be money to be made, but not at the high end. In the meantime, all the other flippers who have to compete will lower their prices.
hire not higher.
“The fear is that raising impact fees could further dampen a housing industry that is already in a ‘depression,’ according to Don Magruder, general manager of Leesburg-based Ro-Mac Lumber & Supply Inc.”
Uh oh, people are starting to use the D-word. Interestingly, there was also a reference on one of the MSM nightly news shows yesterday to the great depression in relation to current wealth distribution. Of course, the resilient consumer will pull us through though, right?
That’s right. Keep purchasing. Go team! Me? Umm, I got a bad ankle and will have to miss going to the mall today darn the luck.
county and state gov’s could start by firing anyone w the title deputy/assistent/undersecratary
my mother lost her elase 1400 sq ft on golf course $1200
no sweat, she’ll be back in the fall at $1100
The Orlando Sentinel. “Twanda Thompson doesn’t want to lose her home. Like many would-be homeowners with below-average or poor credit, the Orlando woman took out a ’subprime’ mortgage during the housing boom to buy a place she really couldn’t afford.” Now her adjustable-rate mortgage is three months away from a boost in interest that will increase her monthly payment 30 percent. More increases lie ahead, and she already is delinquent on her loan.”
“‘I’ve been on an emotional roller coaster,” said Thompson. ‘I’ve worked so hard to get this far, to have a home and raise my children. To lose ground now is not acceptable to me.’”
How hard does one really need to work to buy something they can’t afford?!@
I can easily go out and get that 2008 Porsche 911 Turbo I long for tomorrow, but I’d rather not end up on Discovery’s “The Repossessors” television show, plus my wife would kick my ass and that’s enough embarassment!
-X
Those time-bomb sub-prime loans where not designed for regular homebuyers so they should not of been marketed by the REIC to begin with to the general public . Those adjustable loans that carried big payment increases were designed for investors and there should of been a high requirement for a large down payments on them because they were “investor loans “.
Had the REIC just stuck to affordable loans that people qualified for the market would of contracted in about 2002 . Incomes use to always cap how high the market could go .Instead we moved into liar low down loans and the fake mania market . Borrowers were willing to lie to get loans and take on payment they could not afford in the future .
To make these time-bomb loans that would force a borrower into default , a need to refinance ,or need to sell ,wasn’t lending .The REIC should be ashamed of themselves for peddling these toxic loans on the public based on the contrived myths of ,”real estate always goes up “and “you can’t afford not to buy “.
The borrowers got caught up in the mania either out of fear or greed but they really could not afford the loans long term .
In order to sell these loans the scum lenders/realtors had to either lie about the loan terms or they gave the borrowers a song and dance that they could just refinance out of these crappy loan terms down the road .Now borrowers are finding out that money is not always available and prices in real estate can go down . Can the REIC be busted for their oral promises that they now can’t deliver on ?
Usually a contract is a contract ,but cases have already been filed by FB’s claiming they were victims .Can borrowers be let off the hook because they believe a mass self-serving PR campaign that they could not lose in real estate ? Can borrower get bailouts claiming they were stupid ? IMHO the borrowers were gambling and a adult should know it when they are expecting a future event to take place such as real estate going up .
The truth is a borrower should never take out a loan that they can’t live with long term and a lender should never make a long term loan that a borrower can’t repay long term . No bailouts .
Remember, due to Twanda’s sense of entitlement, she doesn’t get embarrased.
It’s laughable hearing these debt zombies talk about keeping their house and how they earned. They earned SH#!. Save up a damn down payment FIRST so you can value and appreciate the effort when you buy something. To many debt zombies roaming around with to many things. These are the same debt zombies that bid up the price of houses to stupid levels cuz they can’t value anything.
memo to Florida from NAR:
To: Twanda Thompson
ALL is WELL !
P.S. Watch THOSE Alligators..They’re LARGE and they BITE !
Watch THOSE Alligators..They’re LARGE and they BITE !
are you referring to the actual animal or the mortgage payment?
Florida is starting to look more like The good, the bad and the ugly.
Duel: http://www.youtube.com/watch?v=sXldafIl5DQ
Music: http://www.youtube.com/watch?v=ZKlxyoPNaFI
–You’re gonna have to earn it–
Florida proper, should secede from the US like the Couch Republic of Key West did in 1982 and open a massive Casino.
http://en.wikipedia.org/wiki/Conch_Republic
They could call it “The Republic of Panic” and people from all around could go there and Gamble with Houses.
Ooops…Somebody has ALREADY thought of that one ????
“The Republic of West Florida was a short-lived republic, consisting of parts of present day U.S. states Louisiana, Mississippi, and Alabama. After just 34 days, the U.S. Government forcibly annexed West Florida and incorporated it into the Florida Territory, later to be divided up among the aforementioned states.”
http://en.wikipedia.org/wiki/Republic_of_West_Florida
The Couch Republic?
Try Conch.
Most Americans are part of the Couch Republic.
Dry Humor?
el lay
F el lay
Left corner pocket and right corner pocket, One shaken, one stirred.
Kurtz: Have you ever considered any real freedoms? Freedoms from the opinion of others… even the opinions of yourself?
The horror!
Desperate Craigslist Listings.
Sarasota
http://sarasota.craigslist.org/apa/321031611.html
http://sarasota.craigslist.org/apa/320715760.html
http://sarasota.craigslist.org/apa/321049323.html
This is a funny quote in the one below:
“THIS HOME REGISTERS A 9+ ON THE WOW FACTOR METER”
I don’t even know what the WOW FACTOR METER is? Can I buy one?
http://sarasota.craigslist.org/apa/320866598.html
ALMOST NEW HOME FOR RENT, must be one of those CFHI deals. No pictures of the house. Is it still under construction : )
http://sarasota.craigslist.org/apa/320645207.html
Homes here are right on top of eachother. See for yourself. Oh I think they want $1475…
http://sarasota.craigslist.org/apa/320577031.html
http://sarasota.craigslist.org/apa/320529697.html
As expensive as the homes are above…. the rents that is… it is still not enough to cover the carrying costs. These people will bleed and as they bleed the home will continue to lose value and get wear and tear. I don’t know what they were thinking. Carlton Sheets students perhaps?
Yeppers.
The last one says cats and dogs are ok. What happened to the “no pets” landlords? They became animal lovers all of a sudden?
Got 10% down?
Ha Ha Ha Ha. What a laugher. The first Sarasota listing is Rosemary place. There are more crackheads and street hookers and hoodlums around there than you ever saw. What a laugh. they want 1400 dollars a month. What a joke. I would never let my kids near that area of town.
“‘It really is a renter’s market,’ says Betsy Morgan, director of property management for Prudential Tropical Realtors in Trinity. ‘Some owners have determined it’s better to rent and wait out the market. Other people bought property as an investment to begin with, but that was before the market softened and they found it was hard to sell these houses.’”
It’s a renter’s market, sheeple! Get with the program, and dump that mortgage before you are underwater forever!
Last month I spoke on the phone with a Boca Raton resident. He is getting his house for sale but is very slow going about it. I suggested it may be wise to pick up the pace so that he can get his house on the market sooner, since sub-prime lending has started to disappear and not too many people in FL have $40k for a down payment. He told me it is different in Boca Raton for a certain very compelling reason.
There is a very large building in that area that was leased to IBM before they pulled out years ago. A local municipality is negotiating a deal to get a very large pharmaceutical firm into that building. Rumors have it that they are looking at complete occupancy of this very large facility, providing many high paying jobs, and saving the Boca Raton area from the nationwide collapse in RE. So no, he is not concerned about hurrying up with his repairs and collecting his lottery winnings of $400k on his 3/2 1500 sf 40 year old building. Besides, it is sitting on a 1/3 acre lot with a deep back yard, and the houses across the street are sitting on typically .21 acres.
My best guess is that his house will go on the market on or around late summer or early fall, just in time for the precipitious drop of pricing of the swelling inventory of REOs.
Got 10% down?
Could it be the IBM building that Bill Gates visited when they got that huge contract with IBM to offer an operating system?? : )
Actually, yes. In the docudrama “Pirates of Silicon Valley” the IBM campus was briefly shown. I think they digitally added rolling tumbleweeds to the footage.
Then maybe they could get Microsoft and / or IBM to buy it and turn it onto a museum or something.
You got it.
The “building” in question is actually a campus composed over several large 1-2 story buildings on the south side of Yamato Ave between I95 and Military Trail where Congress Ave ends.
This campus was owned, not leased, by IBM. It is where the first IBM PCs where manufactured, OS/2 was developed, and many hardware and software innovations where made. I worked there in the nineties and have quite a few IBMer and ex-IBMer friends who worked there as well.
The campus was sold by IBM to TRex Corp back in 1996 or 1997. TRex turned it into an office park. Recently a couple of strip malls with restaurants have been built there.
A builder is starting a housing development there with single family homes starting at $1.1 million (not nearly worth that) and townhouses for about half that price. I don’t see people buying million dollar houses living next to townhouses, especially when it’s right under the flight pattern for the Boca executive airport.
As for the “very large pharmaceutical firm” that tcm_guy mentions, the firm is called Scribbs. Although Scribbs was considering the old IBM site for its new site, some politician did some manipulation of tax deals to get Scribbs to choose a different site. I think it’s now in Jupiter, FL, but I’m not sure. So, no Scribbs will not save Boca Raton from the housing collapse and it will not provide jobs in Palm Beach or Broward counties.
As for IBM, they are still here. A few years ago they consolidated their smaller offices in Ft. Lauderdale and West Palm Beach into a single 4/5 story building right by the Congress exit of I95. However, they have been downsizing again recently. They just axed most of the ViaVoice people. Actually when I say downsizing I mean replacing American developers with Chinese ones. I guess since the Chinese are shorter, it still counts as downsizing.
That would be Scripps, not Scribbs. Come on, man, read a newspaper.
What’s a newspaper? Oh yeah, those printouts of Dilberts and other news websites.
The “p” letter on my keyboard is upside down.
All IBM is run by now are bean counters. Have you seen the software from IBM lately? Most of it is crap. Lotus Notes, DB2, Websphere. Puhlease. I’m surprised they do so well, but their business model is selling crappy software and then nickel and diming you to death.
But hasn’t this been IBM’s business model all along? I believe that a cottage industry emerged whereby IBM customers would buy IBM mainframe hardware but then run somebody else’s software. Hasn’t Big Blue’s dominance of the mainframe business (and their crappy software) occurred under the watchful eye of their bean counting CEOs?
IBM makes its money selling you service and outsourcing contracts. IBM takes over your IT dept. They keep some of your key IT employees, and any job that does not need to be on site (like physically setting up computers and netwoks) is offsored to India, where your ex-employees replacements are paid about 1/5 of their predecessors salaries. This is how IBM makes billions in profits every year.
Sure, IBM still sells mainframe and enterprise hardware (they sold their PC biz to Chinese Lenovo). Also of interest is that IBM is complete offshoring its procurement and supply chain departments to China, all the way up to the VP in charge.
The bitter truth for anyone working in the US is: unless your job requires face to face contact with customers, it can (an most likely will eventually be) offshored.
I work in that complex. I think “Scribbs” is “Scripps” which has moved north, where residents claim it is going to save Jupiter and Palm Beach Gardens real estate (yeah, right(.
Oh yeah every town has a coming attraction that will make the market leap again. In Orlando it is the new medical school or the childrens hospital. Fact is these places bring in some people but they primarily hire within the community as that is part of the deal for them to receive preferential treatment.
The only new expansion that would save us is to relocate another state here, say New Jersey.
I thought New Jersey already relocated to Broward County.
You mean the rumored 5th Disney theme park isn’t going to rejuvenate Orlando’s sagging house market? Say it ain’t so! I mean, gosh, think of the thousands of low paying jobs that will be generated!
I’ve been looking for a small house to rent for over a year. I can’t find anything for less than $1800/month that isn’t in the ghetto or right on the railroad tracks. Any advice on how to find a descent house to rent for a decent price? Craig’s List sucks. It’s all switch and bait.
Low ball them.
Yes. Lowball them. The worst thing about the strategy is that it might take time…might. But there are so many desparate landlords that they’ll take lower offers.
Relocate to someplace cheaper?
I just came back from a auction at 23 Forest Drive, Cooper city Fl 33026. The place was for sale at $380k for at least 8 months. It sold today at $285k, BUT there’s a 10% buyers premium plus throw in say another 5% in assorted closing cost.
$327k doesn’t sound like much of a bargain to me. She seem happy though.
Every notice that it’s just women buying right now? I guess they can’t ignore their nesting instincts. I think those instincts are going to cost them $100k-300k.
Then she will need to find a rich sugar daddy.
Their instincts are going to cost some poor guy who will lose his money. You don’t really think she’s going to use her own money do you?
She was pretty cagey, but she mentioned something about needing a place for she and her kids. I got the feeling it was a divorce.
She was bidding paginate someone over the phone. What that bidder a shill? The world will never know…
paginate = against Spell check strikes again
“Zealous new investors going into a hot field, chasing market momentum and betting huge sums on the belief that this may be a new era: it sounds disquietingly like the late-’90s day traders who went the way of the Pets.com sock puppet. Does the parallel bother Keith Weaver, who is contemplating ditching his job as General Mills operations manager for the real estate biz? Nah. “We might be riding that wave,” he says. “But the wave is there. So I’m going to get on it.” Weaver’s plan is to ride south, into the Florida market. Max Kaiser, make room.”
TIME MAGAZINE COVER STORY 6/5/2005
http://www.time.com/time/magazine/article/0,9171,1069097-1,00.html