The Market Is Stagnant, To Say The Least
The Guardian reports on Florida. “Florida’s over-saturated luxury housing market has caused Taylor Woodrow to abandon plans to build a massive $180 development. The builder paid more than $31.5m for the land at Clearwater Beach in 2005 and planned to build a 15-storey tower. A second tower was to house a condo hotel with 78 suites.”
“‘The spring selling season for our high-rise tower division in Florida has been very poor,’ CEO Ian Smith said. ‘Market weakness persists in California and particularly Florida and conditions have worsened in certain submarkets within those states.’”
“Taylor Woodrow wrote down its US assets in February, also at a cost of £40m, but the continued weakness of the overall north American market had led to speculation that values have fallen even further.”
“‘We missed the curve with Clearwater Beach,’ said spokesman Tim Knight, explaining that the Florida condo market staggered to a halt before pre-sales could be booked. The tourist town has lost thousands of hotel rooms over the last few years as developers razed buildings to cash in on the condo boom.”
“Real estate experts say there are already 800 unsold condos available in the Clearwater area and tens of thousands across the state. In the Miami area alone, 20,000 new units are scheduled to come to market by the end of next year.”
“In Florida, the company said although the locations of its sites were ‘excellent,’ the high-rise market had weakened ’significantly’ and it wanted to save costs by suspending sales efforts for the business until market conditions improved.”
“‘In the particular areas we’re looking at where we’ve been taking provisions we’re looking at price declines of around 100,000 to 150,000 stg,’ Smith told analysts. ‘I should say these are not starter homes, but reasonably high-priced homes, 700,000 to 800,000 usd homes.’”
The St Petersburg Times. “Could Clearwater Beach become a hotel haven again? Many of the old mom-and-pop motels that once dotted the shoreline have been bought up and torn down to make way for glitzy condos.”
“But with the slow housing market and many condominium projects at a standstill, Pinellas County leaders are talking about creating incentives that encourage developers to build hotels instead.”
“‘I don’t think that our citizens and our tourists really want us to look like Miami Beach,’ Commissioner Karen Seel said.”
“Clearwater Beach has seen big condo developments gobble up thousands of hotel rooms in the past half-decade. ‘I think right now the condominium market is stagnant, to say the least,’ Mayor Frank Hibbard said.”
“The architectural plans for Trump Tower Tampa may not be set in marble and glass. The Miami development company negotiating to take over the much-delayed Tampa high-rise suggests the project be revamped to reflect a changing real estate market.”
“‘I think there will be a project built there,’ said Eric Fordin, a project manager at the Related Group. ‘But I’m not sure what form it will take.’”
“That means what’s been marketed as the tallest condo skyscraper on Florida’s West Coast, with 52 stories and 190 condominiums, could be downsized.”
“Since its sales launch in February 2005, Trump Tower has trumpeted itself as not just the highest skyscraper, but also most luxurious residential address.”
“The timing turned out to be poor for developer SimDag LLC. Banks have shied from financing the $300-million building, wary of a housing downturn that has tossed thousands of unsold condos onto the Tampa area market.”
“One possibility is that SimDag will cut ties with the project entirely. ‘Part of SimDag would love to be involved in the deal,’ Fordin said. ‘Part of them would like to go home.’”
The News Press. “The number of permits pulled for single-family homes in April was down throughout Lee County. That’s about 17 percent fewer than in March and 69 percent less than the same month a year ago.”
“In Cape Coral, city officials reported 115 permits were pulled, down 74 percent from April 2006’s 439. Fort Myers builders pulled 40 single-family permits, down 70 percent from March’s 135 and down 38 percent from April 2006’s 65.”
“‘Hopefully now that we have been skating along the bottom like this, basically going back to the numbers of four years ago, now it will pick up,’ said Michael Reitmann, executive VP of the Lee County Building Industry Association.”
“Metrostudy’s Southwest Florida market research director Brad Hunter noted the first quarter of 2007 saw a marked decrease in new home construction: 887 single-family home starts compared with 1,558 in the first quarter of 2006.”
“Also, he said, ‘The drop in units under construction suggests that a significant decline in finished vacant inventory will soon follow, providing substantial relief from the downward pressure on prices.’”
“As the residential permits stay at low levels, said Mary Gibbs, head of the county Department of Community Development, ‘I’m looking at eliminating 19 positions in the budget this year’ because not as many building inspectors and plan reviewers are needed.”
The Orlando Sentinel. “Mortgage woes, higher gas prices and a ‘perfect storm’ of other financial troubles have caused personal bankruptcies to spike in Central Florida so far this year, according to the latest court records.”
“Nearly 1,300 personal-bankruptcy cases were filed in Orlando during the first three months of 2007, nearly twice as many as during the first quarter of last year.”
“Personal-bankruptcy cases for the entire Middle District, which extends from Fort Myers to Jacksonville, jumped nearly 80 percent in the first quarter, to 5,308 filings, compared with the same period a year earlier.”
“A Lake County couple , who spoke only on the condition of anonymity, tried to sell their home late last year to pay off their bills, but the house wouldn’t sell in the slumping market. Finally, in March, they filed Chapter 7 bankruptcy in Orlando federal court.”
“‘This didn’t just happen overnight,’ the husband said. ‘We’ve been fighting these bills for three years. But everything’s just been snowballing against us.’”
“During the five-year housing boom, many of those headed for financial trouble were able to refinance their mortgage, experts noted, to extract equity that could be used to pay off debt. But now, with home prices flat or in decline, that option is often not available.”
“‘Prices have tapered off, and there’s no more equity to refinance with,’ said Doug Neway, an Orlando consumer-bankruptcy lawyer. ‘There are many who want to save their homes, but some people are in such bad shape, they really just need to walk away from them.’”
“This year’s first-quarter personal bankruptcy filing’s are up 97 percent from a year ago. Many people are now taking huge hits from ill-advised purchases made during the housing boom, especially those who financed their homes with adjustable-rate loans, which are now ratcheting higher to unaffordable levels in some cases.”
“‘There has been a perceptible increase in filings by people who are trying to prevent foreclosure,’ said Jonathan Alper, a bankruptcy lawyer in Lake Mary. ‘I don’t think we’ve begun to see the full effect of that.’”
The Gainesville from Georgia. “Jody and Shelley Ray’s dream house went on the market in October and six months later, a ‘for sale’ sign still is posted in the front yard of the four-bedroom, three-bath house.”
“‘It’s frustrating,’ said Jody, who now commutes from Gainesville to Marietta. Real estate agents have regularly brought prospective buyers, but have yet to find a new owner.”
“The Rays are not alone. The once robust resale market in Gainesville is not as strong as it was a couple of years ago.”
“Ed Phillips, executive VP of the Homebuilders Association of Georgia said that throughout the state there are pockets of good and bad news. ‘It’s all over the map,’ Phillips said. ‘There are places where it’s dead.’”
“He said that some areas have too much housing inventory on the market, adding that builders statewide are taking a conservative approach in building speculative houses.”
“‘I think the banks are helping lead that effort; nobody wants to get caught,’ Phillips said. ‘Our business is down, but in Georgia I don’t think you’re going to see problems like huge devaluations that we have seen elsewhere.’”
“‘I have seen people having to come down on their prices, taking less than they would two or three years ago, because there is so much competition out there,’ said Susan Barkley, a mortgage specialist in Gainesville.”
“The Rays have done just that, dropping the listing price of their home. They are optimistic that they will find a buyer during the busy home-buying and selling season that takes place toward the end of May.”
“Taylor Woodrow wrote down its US assets in February, also at a cost of £40m, but the continued weakness of the overall north American market had led to speculation that values have fallen even further.”
I am hoping that pound sign and the appearance of this story in The Guardian is an indication that British investers will get to share a large measure of the pain felt by American investers in the latest Florida land bust.
“I am hoping that…British investers will get to share a large measure of the pain felt by American investers in the latest Florida land bust.”
I would be on that happening. Double whammy. Imagine having bought such an asset only to watch it’s resale value dropping at the same time as the value of the dollars for which it would sell is dropping, too.
its
bet
LOL — yes, “bet.” “It’s” versus “its” is one of my pet grammar-error peeves — I don’t correct others, but hate to make the mistake myself.
Who are all the folks drinking kool aid in the stock market?This run up is ridiculous.I think it is institutional investors trying to manipulate the market.They are trying to draw the little guys in by makeing it look like we are going to run to dow 15000 or something.
When the Australian housing market tanked, their stock market took off.
“…their stock market took off”
I wonder in which direction?
The feds used to raise interest rates to slow down inflation. Once Big Business Ben decides to sale the plummeting dollar the stock market will crash hard. The longer the fed goes without bringing the rate up the crazier the hedge funds will get and the harder the crash will be.
When the US stock market tanked housing really took off. Going from bubble to bubble. First the hunting and gathering age, then the agricultural age, industrial age and now the information or bubble age.
I agree, arizona. Major head fake here. And they are so good at it, I have had some thoughts (just thoughts, mind you) about putting some money in the market. And I can resist, because I know better, but I am tempted. And if I am tempted, I can just imagine that many like me are being drawn in.
EVERYone around me is convinced the market is headed into the stratosphere and that nothing will deter it. They think I’m a stupid, little girl for being skeptical. We’ll see…
How quickly people forget about the last stock market bubble.I guess they are eager to lose more of the heloc money now.
The problem with bubbles, as we have seen, is that they keep going way up past the point that you think is crazy.
I know little about the market, except that I know a lot of people who are in it by virtue of their 401K designations. Lots of those “investors” are long purely from not paying attention. Not sure if it has any relevance or not. To me, Mr. Ignorant Stock Holder, it suggests that there is a constant influx of money into the market that will be untapped until more babyboomers reach retirement age. I know, I sound like an idiot and it’s much more complex and global than that, but if I’ve learned anything from the housing bubble, it’s that there’s a lot of money that can be made by following the masses, stupid or not, just as long as you get out before the bubble bursts. wtf do I know.
You’re not stupid at all. While the Dow has been hitting new highs, most people haven’t noticed that the NASDAQ is only at half of what it was at its peak. It makes sense to diversify into foreign stocks, foreign currencies and commodity stocks (gold, uranium, for example). The Dow will eventually take a big hit.
I have several mutual funds and I begin to worry if I should also invest into foreign companies as well. Robert Shiller stated that he has 60 percent of his funds invested in stocks which are in foreign companies. I’m indecisive on whether I should pull it out of mutual funds and let it sit in a cd or whether I should invest into foreign companies (since the $ seems to be tanking)?
diversify none can predict the future, well except for this foolish housing bubble and evn then its uncertain when it will bottom.
I think I underestimated the amount of earnings growth US companies are getting from oversees markets.I recently heard that the s&p 500 are now getting 40% of their earnings oversees.Everyone and thier brother is now pouring money into foreign equities as well as real estate it appears.
The foreign profits aren’t up much more than before. What’s happening is the exchange rate is different. As the dollar loses value American products that are exported generate a higher profit when the money is exchanged back in to American dollars.
Yep, but that means that the dollar price of the stock also rises (even if it doens’t mean much to a foreign holder (who’s currency losses are likely similar to the stock gains). In Zimbabwe, current hyperinflation king, there are companies that trade both there (in local currency) and in London (in GBP). Interestingly, the Zimbambwe listed stocks have out performed the City listed shares (converting both results to GBP).
What you should NOT do is move from a mutual fund to a CD and back into a mutual fund (even if it’s a different one). This is especially true if you intend to make these transactions over a short period of time (say 1 year or less). Otherwise, you are creating considerable risk for yourself. Making rapid-fire moves across investment types - CDs, funds, stocks, bonds, etc., is a risky proposition to say the least.
A much better idea if you plan to move to switch assets from a U.S.-focused mutual fund to a foreign-focused fund is to go direct from fund to fund, with no CDs in between. This is what is known as a lateral move. By moving money sideways (staying within a given asset type) you are not adding unnecessary risk into the equation.
Move this money from fund-to-fund in smallish amounts and do so incrementally. This further cuts your risk. Do not do it all at once.
MAJOR CAVEAT: There will be times when you want to make big moves across asset types, say from a stock fund to a CD. Those times are: (1) when you’ll need a chunk of money for upcoming college education costs, a house purchase, etc., and, (2) when you are convinced that the market is going to take off after a major collapse, OR crater after a significant run-up.
Toward this end, your job is two-fold. (1) to understand what ‘getting out of hand” means in terms of cold, hard facts/market fundamentals, and, (2) keeping an eye on the investing behavior of friends, family and all the Joe and Susie Blows you can. If too few people are not skeptical enough, become wary.
And as I and others have said - always be willing to forego some of the gain in favor of solidifying/pocketing signficant profits you’ve already made. My goal is 80/20 (I’m willing to lose out on 20 percent of potential gain to secure the 80 percent). Yours should be what you are comfortable with.
Getting in stocks now would be a mistake.
But if you have been in stocks over the last 4 years, now is the time to convert some of the profits to cash, well at least I am. The secret is to not be greedy. I have done well over that last few years and it’s time to get out. Now I may lose out on some profits going forward but hey at least I wont lose anything like the schmucks who where greedy and stayed too long at the 2000-1 party.
The same could be said of the RE market. A lot of people made out by selling in 2005.
“Now I may lose out on some profits going forward but hey at least I wont lose anything like the schmucks who where greedy and stayed too long at the 2000-1 party.”
That was me and never again. Looking to take some money off the table this time
How is the dow at 13,000 a bubble? In 2000 it was at 11,000. A 30% increase in 7 years doesn’t scream bubble to me. It makes perfect sense now that housing is no longer a good investment people will put it in stocks.
“Who are all the folks drinking kool aid in the stock market?”
CNBC
Cocaine larry is still cherleading the goldilocks economy everyday.He must get paid a lot of money under the table to be a cheerleader for wall street.
And PBS’s Nightly Business Report. For those who don’t like the shrieking style of the CNBC bulls.
It’s this simple: the large institutional investors see value in stocks. They are buying. Bet against them at your own risk.
Somewhere out there Gekko is proud of you. Stucc misses the Gekko. I can sense it.
He/she seems to keep him/herself busy at the SDCIA blog. Jeff’s “issue” seems to have turned into a morph of Casey and name-your-soap-opera.
Are large investors finding value in the Zimbabwaen stock market? After all, it was the best performing market in the world last year. Of course, the answer is no. Welcome to inflation nation, where everyone earns stellar returns, but only the insiders get rich (by selling, not buying) while most grow poorer.
I disgree that there’s a bubble in the stock market right now. A P/E of 16 does not a bubble make. Or indicate. A P/E of 16 indicates a market that is priced fairly from a historical point of view (111 years). It matters not that we are breaking all time highs. Profits are record-breaking as well. Dow 13,000 is just a number. In itself it means nothing. Nor does Dow 7,000 or Dow 20,000. If valuations can be justified/supported by profits, then all is well.
It is not the DOW, but SP500 is the one which is bublicious I think
The above idea is true for the S&P, NASDAQ, Russell 2000, Mid-Cap, etc. The ‘number” - in this case, S&P 1,500 - again is meaningless in itself. If market valuation can be justifyably supported by corporate profits, then all is well.
Right now, the profits of corporations within the S&P justify the 1,500 level. All is well. Whether they will continue to do so in the short- or long-term remains to be seen. No one ever knows that.
rebuttal:
http://www.prudentbear.com/articles/show/2006
I read that late last night. Sort of an adult’s “monster in the closet.”
Didn’t mean that as sarcasm — it’s a scary piece.
This article cites James Stack. One thing I remember about this guy is that he was an uber-bear at the end of 94 (and had been for many years apparently), right before the market took off in 95. Just one of the many wrong-way talking heads that keep appearing on the idiot box and other media without regard to their track record on predictions.
Thanks for posting that. It’s interesting, but it doesn’t change my mind. Facts are facts. Fundamentals are fundamentals.
Market bears and bulls are incapable of altering facts, as much as they may try. And that includes real estate bears and bulls, too.
The stock market and housing market run in cycles. Stock market bears have lost out on a huge run-up the past 4 years, whereas the real estate bulls of the past four years now are getting kicked in the ‘nads.
Of course, now that the bullish real estate cycle is kaput, there’s sudden new interest in stocks. ‘It’s a new bull market!” Actually, it isn’t.
I’m sorry to burst the bubble of anyone out there, but you’re four years late to the stock market party. There may be a few drinks left at the bar, but last call may be arriving soon (it’s hard to tell as no one has a clock). The bar backs may decide to shut the doors at any time, now that there’s lots of people showing up at the door, late arrivals all.
I’m always amazed by how many market bulls and bears consistently put themselves in positions to lose. Most seem condemned to repeat past mistakes.
The best thing about stocks is that you can dollar cost average into them. This will help smooth out the fluctuations. Not so when you are talking about a house. The price you pay the day you sign the mortgage is the price you pay forever. This will cripple those that bought at the peak.
PE ratios are very poor measures of market value. The reason is that both price and earnings are variable. You need a constant to measure valuation.
Dividends in the end are the best measure for that is what a company pays over time. The current Dow dividend is 2.5% which is 20% lower then the 1929, 1973 and near the 1987 level. It is over valued….. Take a look at book to market value another valuation and the message is the same.
The stock market, real estate market and yes commodities are all going down. Deflation is the enemy. The government may try to lower interest rates. It did not work in 11/29-32 as the discount rate rate fell from 6 1/5% to 1 1/2%. At some point the government won’t even be able to cut rates due to probable weakness in the dollar after the 2008 election.
Get this straight. We do not print money. We use the banking system to expand money and if fear takes hold there will be no stopping the liquidation and deflation. Have a nice day.
Deflation is “so” early 1980’s…
Not gonna happen this go round.
You are assuming that dividend payouts signal the amount of cash a company has on hand. Not so. Growth companies the world over seriously trimmed dividend payouts early on in the 1990s because of investor interest in achieving growth over income. Tax law changes over the past 20 years effectively put an end to investor desire for dividends. Unless you’re seeking monthly income payouts from your investments to your bank account, dividends are useless.
Growth companies recognized that and stopped offering them.
Any long-term investor who nowadays invests their money in the stock market to earn dividends is a dumb ass. After taxes and inflation, chances are good that you’ll lose money. You might as well throw your money in a savings account at a bank and earn 1-2 percent annually. At least there it will be FDIC insured up to $100,000.
Incidentally, to compare markets of 25, 50 and 75 years ago to today’s marketplace and regulatory/taxation environment is ludicrous. It’s like comparing an RCA Victor 78-rpm phonograph to an I-Pod. Meaningless.
I believe the term the WSJ used to describe the bull run in this morning’s paper was “panic rally.” That sounds like a healthy market to me…
I love this kind of stuff. Thanks, GS. It tells me two things:
(1) Investor sentiment is incredibly bearish - the word ‘panic’ is indicative of flighty pessimism, not bullish optimism - which means the market is okay for the time being (1-3 months minimum), and,
(2) I guess it’s time to start keeping a watchful eye on the mindset of individual investors and stock valuations. The goal? Watch for signs of insanity and lunacy among those entering the stock market.
Thus far, from 2003 to now, the stock market has been populated by sane and rational investors. That’s typical after a major blow-off like we had from 2000-2002. Neophytes and lunatics left the market, swore it off forever, and promptly joined the burgeoning real estate market, because “real estate always goes up!”
Idiots. Why is it that people decide it’s time to invest in something after prices have doubled and tripled? Would they go buy a car from a dealership selling it for $25K when they can buy an identical car down the street for $20K? No. But people routinely do that with stocks and real estate. *Sigh*.
It’s so hard to fathom the mentality.
Sorry…back to the topic at hand. If the number of lunatics trying to recapture their losses in real estate by switching into stocks gets large enough to be problemmatic, it will reveal itself via increasingly unjustified stock valuations. When valuations get unreasonable enough, I’ll get out with my 80% plus profits.
Then I’ll get my own popcorn and join Neil on the sidelines to watch the carnage and determine my next move. If all goes well, I’ll be selling my stocks about 4-6 months before the real estate market bottoms out. That would be sweet!
Assuming that ‘panic rally’ means ‘flighty, newly-minted real estate bears leaving for stocks’, I actually agree with your statement, “That sounds like a healthy market to me.”
No sarcasm implied or intended. Surprised?
Panic is a good thing, at least in the short term (1-4 months). Unbridled, unreasoned optimism is a sign of impending doom. If sheeple haven’t learned that after these last two manias, I’ll guess they’ll have to learn it during the next mania, whatever form it takes. Manias comes in threes.
Being a contrarian has its rewards. Lots of them.
“One possibility is that SimDag will cut ties with the project entirely. ‘Part of SimDag would love to be involved in the deal,’ Fordin said. ‘Part of them would like to go home.’”
SimDag needs to make up its mind.
The part of Simdag that likes to build towers wants “in”.
The part of Simdag that likes to make money and not get a financial ass-pounding wants “out”.
Yesterday, weren’t there some realistic assessments coming out of FLA?
Today it’s back to the REIC playbook:
“‘Hopefully now that we have been skating along the bottom like this, basically going back to the numbers of four years ago, now it will pick up,’ said Michael Reitmann, executive VP of the Lee County Building Industry Association.”
“Also, he said, ‘The drop in units under construction suggests that a significant decline in finished vacant inventory will soon follow, providing substantial relief from the downward pressure on prices.’
I’m not surprised to find out they are bipolar over in Florida. Why else would they get into this situation in the first place?
Phillygal, we all have a tendency to put hope over experience. It generally works out very poorly. The Florida REIC can continue to dream and be deluded but I’m doubting that will change reality. Let them spew their nonsense. Deep down they know they are toast.
What amazes me is that despite years of inventory, they can still find GF’s…
Eventually FL Real estate will become price right again… eventually the retires will migrate down there again. But the fact is that any midwestern retire is priced out unless they were a VP.
Florida is going to become the #1 toasted state. They’ve driven out too much business. Look at school enrolement… when the medical costs shoot up (due to rising nurse and Doctor salaries…)… it will only get worse.
Got popcorn?
Neil
The naples Board of Realtors updated their website.
For those of you who don’t know, the Naples’ Board refuses to report their numbers to the Florida Board, because they claim that the Florida Board’s report doesn’t accurately reflect the true market conditions in Naples.
LOL
http://www.naplesarea.com/realtor-issues.asp
Prices are falling. Sales are down. Listings are up.
All of this, of course, indicates that Naples is a strong market.
Interesting. I like this comment:
“With Naples Area Board of Realtors® members reporting continuing increases in showings to qualified buyers and pending sales indicating improved activity, the expectation is that the market will maintain an upward push.”
If you actually look at the graphs, yes there MAY be a slight upward trend from the 1st quarter into the second in sales, but that happens every year. What they don’t say is that overall, each year since 2005 has been getting worse and will continue to do so.
“…continuing increases in showings to qualified buyers…”
HA! The “eyeballs” metric is making a comeback.
All you need to know about the Naples market…
“Inventory: As of April 1, 2007, there were 12, 123 active listings on the market. With 4,183 homes sold in the previous 12 months, it is calculated that the current inventory represents a 35 month supply. “
But that assumes a sales rate matching the last 12 months. The supply could be much, much larger than 35 months.
the local sarasota news channel 6 had a interview with a luxury home builder who was hocking a huge 6 million dollar “house by the lake” and i kid you not he stated that “foot traffic has been phenomenal” He added that people in this level of income can afford just about anything. What a joke! A whole bunch of ugly overpriced mansions by a “lake”! The “lake” is just a big hole that is drying up. Hmmm just like the Florida realestate market!
People in the income bracket that can afford to buy a 6-million dollar house would rather buy in the Caymans.
I hope they can afford replacement cost as well (or at least insurance). I visited Grand Cayman in August 2005 and saw a lot of 7,000 to 10,000 square foot homes situated about 2 feet above sea level. Later that fall a major hurricane (can’t remember the name) drilled Grand Cayman with a direct hit.
I was in Grand Cayman in July 2006. They were still rebuilding after a hurricane that hit them in late 2005. The whole island is something like less than 20 feet above sea
level. If you believe the global warming predictions, your Grand Cayman mansion may be underwater in a few years.
Hopefully the lake has a name on a map at the county office — not a developer’s sales propaganda. No name, no lake — retention pond.
Anecdote from a large local Tampa Bay RE brokerage and management company: one in seven homes in Hillsborough County are in some stage of foreclosure. Front desk person on duty mentioned that yesterday. Awesome!
This can’t be accurate. Foreclosure-dot-com lists 2,790 pre-foreclosures and 150 foreclosures in Hillsborough County;
http://www.foreclosure.com
Yahoo’s foreclosure site lists About 3 thousand for the area.
http://realestate.yahoo.com/Foreclosures
They probably mean that 1 in 7 of the houses listed for sale are on the market due to pending forclosure.
‘Our business is down, but in Georgia I don’t think you’re going to see problems like huge devaluations that we have seen elsewhere.’”
This is good news - no devaluations in Georgia. I will now plan my summer vacation to Georgia to begin house hunting. WTF!
No, but perhaps I’ll try GA in winter, since my summer is solved (ME). Hmm.
Anecdote from Ft Myers area. Mortgage broker friend reports that because only 1 out of 4 (conservative estimate) loan applications results in a qualified buyer, they have to add broker positions (commission only) to process applications. I personally think the business model is broken beyond their ability to repair it without drastic overhead reduction but I’m staying out of it.
“they have to add broker positions (commission only) to process applications.”
Commission only for paper pushers. Wow. I’d rather take a receptionist job for an hourly wage.
That won’t exactly retain talent… oh wait, the other choice is to go back to being a shoe salesman… Due to the decline in families, that might not be so good…
I guess they could actually get trained in something and become a bar tender? Naaa… too much work.
With work tough, its going to make it much harder to get a table waiting job too…
With GMAC losing so much on sub-primes… you know it will only continue to tighten.
1 in 4? That’s shocking…
Got popcorn?
Neil
I would be more impressed if the applications were failing because the appraisals aren’t hitting .75% of the buyers not qualifying sounds right .Can you imagine if in 2002 or 2003 the lenders tightened up as they are doing now .Look at how many projects would not of been built and how much loss would of been spared .
What they did to Clearwater and the whole strip from Clearwater to Johns Pass was terrible.
The cool thing about the Pinellas County beaches was that there were all those cool Mom and Pop motels that you could get on the cheap….especially from April through September.
I used to enjoy taking over a cooler of steaks and beer and get a rooom across the street from the beach, park the car, and not have a worry all weekend.
Cost : ~ $ 200.00 for the room, beer and food. For an entire 3 day weekend.
But no more.
Greedy as$holes ruined it for everybody.
“Greedy as$holes ruined it for everybody.”
Testify, Brothah Les! For me, this is probably the most damaging aspect of the bubble, especially for middle income earners. Many of the simple and inexpensive pleasures of Florida have been trashed, either by the greedy REIC, or by low lifes and illegals.
For someone who tries to live within or even below their means and save on a moderate income (for Florida. The Florida moderate income would be poverty in Cali), it is a nightmare as modest neighborhoods become infested with all sorts of lowlifes. I can’t blame some of these people for going into debt to pay rent or medical bills or gas. They are just trying to stay safe and keep going until things get better, not trying to make a killing on real estate. These are the people I feel badly for. Renting in a place where rental prices are modest has become somewhat like a falsely convicted innocent man entering a prison where he realizes many of his cellmates are thugs, rapists and gangbangers.
Hence the value of sharing rental property, if one has friends/family to share it with. Higher rent = better neighborhood without increasing $$$/sq ft.
DOES ANYONE know anything about the ushomeauctions.com auctions…is there a lot of competition…do the properties sell at fair market value…or below?
If you haven’t been to around a minimum of 50 auctions and know the score…
Stay the hell away.
From the Guardian article re: Taylor Woodrow
“It is now evaluating what to do with the land, with the local council hoping the condo plan will be replaced by one to build a full-service hotel.”
http://sptimes.com/2005/10/08/Northpinellas/Adam_s_Mark_memories_.shtml
Their stock is up 2%.
Great article, used to be places like that in South Florida from Miami to Boca Raton and everywhere in between. The lady’s right, that was one of the great things about Florida, you could feel affluent and have a great time, with only a few bucks in your pocket. Even as recently as 2000.
.I think that this city (Clearwater Beach) will suffer a double whammy as the loss of those hotel rooms is going to give their tax revenue in the future a significant haircut. Future visitors will be staying in other towns, and the city will lose the revenue from other tourist related business such as restaurants…
The only things that performs worse than General Motors auto division is their mortgage division:
http://www.bloomberg.com/apps/news?pid=20601103&sid=aIllWAiP.q9s&refer=us
“May 3 (Bloomberg) — General Motors Corp. said first-quarter profit fell to $62 million, dragged down by bad loans at the GMAC LLC finance unit and continued automotive losses in North America.”
The results were hurt by the $305 million first-quarter loss at GMAC, the auto and home lender that was wholly owned by GM until 2006. GM holds a 49 percent stake after selling the rest to a group led by Cerberus Capital Management LP.
A “sharp downturn” in the U.S. mortgage market pushed GMAC’s Residential Capital LLC unit to a $905 million loss compared with year-earlier earnings of $201 million, GMAC said. The parent company injected $1 billion in equity into ResCap this year through April to shore up the unit’s cash position.
GM Chief Financial Officer Fritz Henderson predicted “considerable improvement” in the subprime “maelstrom” at GMAC’s mortgage unit, with lower losses this quarter. ”
“Maelstrom”, that’s a little less optimistic than the “light at the end of the tunnel” from yesterday….
Jeez, it’s not enough that their auto division continues to hemhorrage cash, now they had to inject a $Billion into the mortgage division to shore it up.
The cartoon accompanying today’s WSJ article shows a broke FB holding his foreclosure notice, standing next to a tearful investor holding his mortgage-backed bond certificates.
But the damage is contained, right?
We NEED to build more Land NOW !
We’re running out of places to STACK these over-priced POS and the HOLDING Pattern is getting FULL.
NAR Spring Bounce is Cancelled due to FRAUD, Lack of STUPID Money and General Buyer APATHY !
” They are optimistic that they will find a buyer during the busy home-buying and selling season that takes place toward the end of May.”
Amazing how they keep pushing back the busy season. It was supposed to pick up right after the Super Bowl weekend in early February. End of May? Just before the start of hurricane season? With all the snowbirds gone? I don’t think so.
The snowbirds have flown away from Arizona too.
“The company said although the locations of its sites were ‘excellent,’ the high-rise market had weakened ’significantly’ and it wanted to save costs by suspending sales efforts for the business until market conditions improved.”
So much for the “Location, Location, Location” mantra!
Great post from Craigslist Sarasota/Bradenton area. Instead of linking, I’m providing the full post, because it will probably get doinked any minute now. Wow, I feel this person’s pain.
Housing Market in Sarasota/Bradenton Area
——————————————————————————–
Reply to: see below
Date: 2007-05-03, 12:09PM EDT
No, this isn’t an ad - it’s an observation.
I just returned from Huntsville, AL.
Imagine my shock to find a 4 bedroom, 2 bath house for rent for $950/mo with a $500 deposit.
This is not an exception in this area - in fact, that’s the high end on much of the rental market. Most 3/2 are going for about $800/mo.
And guess what, the areas they’re in are beautiful. Not the slums of Huntsville. No! Great neighborhoods with many amenities.
And the houses that are for sale - again, 3/2 available regularly between $70 - 90,000. Taxes - $400/year and less.
Actual homes that are still affordable.
In fact, the expensive houses seem to be the ones that go between $120 - $170,000. And those are pretty great houses.
What would that get you here? A 2 bedroom, 2 bath block house that cost the original owner $6,000.
Why was I in Huntsville?
Because I can no longer afford to live in this area.
I’m a professional person who makes a good living and at the end of the month I realize it’s taken almost everything I’ve earned just to get by. No luxuries, no money to have fun with - really, nothing left over.
Whatever crash hits this area has been earned by greedy people.
I just browsed some rentals in the Sarasota/Bradenton craigslist section. Their rents don’t seem ridiculously high to me. 2BR, 2BA sfh renting for $950. I only wish I could get that in my area.
Palmetto, thanks for posting this. Parts of Alabama are gorgeous, but please, no New Yorkers. Alabama is meant to be leisurely, not fast-paced and trendy, and it is certainly not a place to move if one wants to impress the folks back home. Most likely, they’ll be laughing.
David Lereah’s latest. In an evil sort of way, he’s very good at what he’s supposed to do….
David Lereah, the NAR’s chief economist, predicted that home sales will be “relatively sluggish” in the second quarter but that a “modest uptrend” is on the horizon for the second half of 2007.
Housing Vacancies and Homeownership (CPS/HVS) 1st qtr 2007:
http://www.census.gov/hhes/www/housing/hvs/qtr107/q107ind.html
………………………….1st.q…2006_____2007
All housing units…………….. 125,373____127,266
Vacant:
Year-round…………………. 12,176 13,392
For rent……………………. 3,685 3,956
For sale only……………….. 1,580 2,179
Held off market……………. 5,841 6,169
alabama does have great housing bargains. i rent a four bedroom two and one half bath house - vintage 1911 - 10 ft. ceilings, pocket doors, historic neighborhood to a single woman - she pays me $175.00 - to go to $250.00 in July. there is afordable housing in some places. i find myself thinking that detroit probably has similar bargains. anyone in detroit comment on that??
You wouldn’t want to do that. I’ve lived in the South, including some areas with homes like those and in Ann Arbor (distant edges of suburban Detroit). Take my word for it. There is no comparison. You can get a house cheap in Detroit. Maybe even free since there are so many abandoned. Some of them are beautiful old construction. The only problem is that you might have a tough time surviving the trip in to see what you bought. I felt like changing cars just to avoid attracting attention. Reminds me of “Escape from New York.” I wouldn’t go in some of those neighborhoods in broad daylight.