Buyers Have Selection And Negotiating Leverage: Florida
The New York Times reports on Florida. “For several years, the defining images of Florida’s frenzied real estate boom were crowded open houses and speculators flipping preconstruction condominiums. But since the market sputtered in mid-2005, as sales fell and inventories soared, property auctions and price cutting have become commonplace.”
“Bargains are available for houses below $500,000 because of a bloated inventory of standard two-bedroom, two-bath condos. ‘We have a ton of similar properties out there, so what is going to make the decision? Price,’ said Spencer Haynes, a broker in Naples. ‘You are going to get a better deal.’”
“For some sellers in Miami, discounting is the best way to close a deal. In April, David Holtzman sold his 4,200-square-foot house in Bayside, but only after knocking more than $100,000 off the list price.”
“Built in 1925 and recently renovated, the house had languished on the market for six months. At one point, Mr. Holtzman removed auction signs from neighbors’ lawns, fearing they would discourage prospective buyers.”
“‘It was just bad luck to be caught in the tail end of what used to be the strongest housing boom in history,’ said Mr. Holtzman.”
“When Marsha Wolak, a real estate agent-turned-auctioneer in Sarasota, on the Gulf Coast, held an auction in the city last month, 26 properties of the 90 being offered found buyers, including vacant lots for under $30,000 and condos in the $300,000 range. But high-end properties, like a $4 million gulf-front home, went unsold.”
“Ms. Wolak reasons that investors are willing to take a risk at the lower end because they can eventually build on a lot or rent out a house. But, she said, ‘it is tough for someone to speculate on a multimillion-dollar house because they don’t know if the value will go up or down, and there’s a chance of it going down.’”
The Herald Tribune. “Though the developers of the 17-story 1350 Main St. condo tower in downtown Sarasota have been remarkably successful in getting buyers to close on their units, one is putting up a fight.”
“Warren Silver of Bangor, Maine, sued in March to get out of his $480,000 contract. But Sarasota Main Street rapidly retaliated with a counterclaim, stating that Silver ‘had no right or justification to terminate the purchase agreement.’”
“The Southwest Florida office market is beginning to feel the impact of the downturn that hit the residential real estate sectors beginning in summer 2005.”
“‘Commercial always follows residential,’” Dan McLeroy, an agent who leases office space in the Sawyer Oaks complex. ‘As long as residential is off, the office market will trend downward.’”
“‘People don’t realize the tremendous impact residential real estate development has on the local economy,’ said Joe Hembree, who owns a Sarasota commercial real estate brokerage. ‘Mortgage brokerages, title agents, real estate firms, building contractors and subcontractors that were expanding during the boom are not expanding now.’”
“‘We have three floors, and two are not rented,’ said Bill Keenan, whose Fort Lauderdale company erected the 75,500-square-foot structure.”
“Abbie Forrest’s company moved to the Bank of America building on Sarasota’s Main Street. The space was previously occupied by Roper, which moved and was willing to sublet its old space at a deep discount. ‘We got a good deal,’ said Forrest.”
“‘I want to purchase space,’ Forrest said. ‘But I didn’t want to purchase this year because I’m uncertain about interest rates. If they go up, the office market will plummet.’”
The Naples News. “In Naples, there’s still a nearly three-year supply of homes on the market. Last week, there were 11,800 single-family homes and condominiums in the MLS. In the past year, about 4,000 homes sold in Naples.”
“‘There is more inventory every place. But I don’t know a community to especially pick and say, ‘OK that one is really struggling,’ said Spencer Haynes, president of the Naples Area Board of Realtors.”
“In Lee County, there are more than 15,000 single-family homes and another 9,600 condominiums on the market, said Brett Ellis, a partner with The Ellis Team in Fort Myers. ‘What’s good for buyers right now is that they have excellent selection and they still have some negotiating leverage,’ he said.”
“In the first quarter, there were 939 closed sales reported in Naples. That was down from 1,250 in the same months a year ago. The median home price in Naples was $399,512 in the first quarter, down from $443,950 a year ago.”
“Particularly tough is the $500,000 and under market, where there is a ‘ton of inventory’ because investors overbought in 2004 and 2005, hoping to take advantage of rising prices, Haynes said.”
“In season, developers slashed prices during weekend sales and offered higher commissions, trips and even Rolex watches to real estate agents to encourage them to sell homes in their communities. Some developers put off or even canceled projects this season because of the competition.”
“‘Developers don’t want to keep feeding the pipeline when they’ve got inventory standing there,’ said Michele Harrison, president of the Collier Building Industry Association.”
“Chris Elizabeth Griffith, a new home specialist in Bonita Springs., described the season as odd and unpredictable. She had some unusual phone calls, many from buyers looking to get out of their contracts.”
“Some buyers ended up renegotiating their contracts for a lower price, while others walked away from contracts at closing because the homes were valued at less than they agreed to pay, she said.”
“During the season, Griffith saw sellers get really low offers and she warned her clients to expect that in a down market.”
“Realtor Tom Doyle said many homes on the market in Collier County are still overpriced, though the median price has dropped. There’s as much as a 30 percent difference in pricing for the same home because sellers are still too optimistic. He estimates that a third of the homes listed for sale in Naples were bought in 2005 or later by so-called flippers.”
“‘There are still far too many people who have not adjusted to today’s reality,’ said Ellis. ‘If you’re not priced at the market, your home is not on the market. If you’re at the right place you’re going to sell.’”
While all the really bubbly areas are now saddled with massive oversupply and too many liar loans about to reset, Florida adds hurricanes, high insurance costs and high taxes to its burden.
Good luck!
This is why New renovations is a problem, what if i dont like NEW and rather have old, and cheap? Most of those homes have probably vanished.
============================================
“For some sellers in Miami, discounting is the best way to close a deal. In April, David Holtzman sold his 4,200-square-foot house in Bayside, but only after knocking more than $100,000 off the list price.”
“Built in 1925 and recently renovated, the house had languished on the market for six months
Your so very right. Those houses built in 1925 were some of the best built houses in the nation. The junk they’re building today will never hold up that long. I recently appraised as house that was built 5 years ago, a true McMansion. I couldn’t believe the wood rot on this house. 1/2 of the rear wood siding had recently been replaced. The trim around all the windows had rot. I could push my pencil right thru the wood trim. It was like putting a hot knife through butter. The trim looked just fine to the naked eye, until the pencil inspection. I would take up this entire blog to report all the issues with this house. I’ve never seen a house with so many problems. Of course the Realtors blew a fuse when I reported the conditon of this house to the lender in my report and needless to say it did not appraise out. The buyer walked away. The best decision of this life. This house was a true “train wreck”.
I wouldn’t mind reading more — all this stuff about pricing and selling of houses, but very little about the houses themselves. I wouldn’t want to buy anything built after ~1997 or so.
“I wouldn’t want to buy anything built after ~1997 or so. ”
You should have plenty to chose from as most buyers, at least locally, want 10 years old or less.
You should have plenty to chose from as most buyers, at least locally, want 10 years old or less.
So true. Older houses are “dated”: small kitchens and bathrooms, lack of super high ceilings, no “open” floor plans, etc.
Of course, buyers forget to take into account just how hard it is to keep up a house with double high ceilings (just to keep the windows clean is a chore). Huge kitchens and bathrooms take longer to clean as well.
Older houses are “dated”: small kitchens and bathrooms, lack of super high ceilings, no “open” floor plans, etc.
I actually prefer “dated” as long as it’s in good shape. My brother has a dated bathroom with pink and blue tile. I would love to have that - I’d decorate around the tile.
Anything 10 years old or younger is either too big, “attached product,” or a Del Web 55+ instant community. Not much middle ground.
Please do post more on this important topic. I too am dismayed by the poor quality of new construction.
I looked at a house once that had an attached garage on the front. You know the type. Two-story squeezed on to a 35 foot lot.
Anyway, I looked at the ceiling of the garage. Some builder had put his foot through the roof (built with chipboard, not plywood). Rather than patch the hole or replace the chipboard, they had laid shingles right over the hole!
This was a typical late ’80’s house.
Seems like a lot of us want to hear more. Me too. I’ll be a first time home buyer someday and while waiting out the bubble, I am trying to learn as much as I can on the structural issues as my knowledge there is pretty much zilch. I’ll probably end up going through at least 2 structural appraisers when I’m ready to buy.
It would suck that I waited out the housing bubble only to end up with a home where I sneeze and blow out the support wall.
Of course the Realtors blew a fuse when I reported the conditon of this house to the lender in my report and needless to say it did not appraise out. The buyer walked away.
Needless to say your name will come up at the next area Realtor’s meetings so it can be added to their unstated “black-balled” appraiser list.
And you’ll be forever shit-canned from whatever the financing arm is of the listing agency franchise aka Cendant Mortgage for C-21.
The rewards for doing your job well.
I’m sure that there was plenty of cr@p built in 1925. But 75 years of Florida weather and some teardowns and rebuilds mean that the worst of it is gone. That’s one of the reasons that you have to be careful comparing old and new. Most of the 18th century housing in this country wasn’t stately mansions. But much of it that remains is.
Our family’s house in Maine was built in 1880 and is as solid as a rock. The house I’m renting in Santa Barbara was built in 1959 and is also wonderful. I was told by a friend who is an architect that the U.S. building codes were revised in the late Seventies, so that anything built after 1980 is probably going to be less long-lasting and sturdy than what was built before. Anyone know if this is true?
The best built homes (on average) would be from 1931-39…during the Depression when the only builders left in business were the best ones (at least most likely). Having owned two of these and a 1980 built house, there is no comparison. Not to mention the cookie cutter neighborhoods most of these newer built homes are in.
By 2010, there may be some good builders left in the business and they will have been forced to build better quality by then.
what if i dont like NEW and rather have old, and cheap? Most of those homes have probably vanished
During the boom, I found that old and cheap didn’t exist, but it wasn’t because of the old having been renovated; it was because stupid-ass people were willing to pay new construction prices for “old world charm,” with no price reduction for all the work needed. Yeah, the knob-and-tube wiring (a fire waiting to happen) and terra cotta drain pipes (with tree roots growing into them) are really charming.
“the knob-and-tube wiring (a fire waiting to happen)”
Actually, knob and tube wiring is superior in terms of fire hazard to the contemporary stuff UNLESS it has been altered by homeowners.
When I bought my house, I found out it had knob and tube wiring. My insurer wouldn’t cover it. (my house built in 1909)
So I called 8 (yes eight) electricians to rip it all out and put in the new stuff. Every one of them said “wow, that’s a shame, and in your house it should NOT be done”. (in my house, the wiring cannot be easily accessed, since it’s behind plaster walls etc, thus it hasn’t been altered)
It is very hard to get an arc across knob and tube wiring due to the distance between wires (in many homes the wires are on opposite sides of a joist/beam), UNLESS an amateur has gone in after original installation and made modifications. if modifications have been made (like splicing wires) then it’s a huge fire hazard. But if they have not been spliced, it is LESS of a fire hazard as the new wiring, where the positive and negative are so close that arcs are more common.
every one of them turned down what would have been a $5,000 job and every one of them suggested I switch insurance carriers. So I did that instead.
anyway, I’m not an expert, but I was surprised that all the electricians said the same thing and recommended keeping it!
Actually, knob and tube wiring is superior in terms of fire hazard to the contemporary stuff UNLESS it has been altered by homeowners.
The problem with knob & tube, from a fire perspective, as I understand it, is that the coating disintegrates and people tend to overload their circuits which causes heat in the wires that can transfer to the old wood and cause a fire. It also lacks the 3rd-wire ground protection that modern systems have.
BIZ BUZZ: UF professor says now is the time to buy
http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20070507/BUSINESS/705070559/1007
First… love the username!
From the link:
Grant Thrall, a University of Florida land economist, said he believes the state’s real estate market is poised to rebound in the not-too-distant future. But first, Florida’s Legislature has to get its act together on taxes and insurance.
Yea… exactly what is the legislature to do about insurance? Its not like at today’s prices there has been a rush of insurance companies into the state…
Got popcorn?
Neil
“Grant Thrall, a University of Florida land economist, said he believes the state’s real estate market is poised to rebound in the not-too-distant future. ”
In geological terms, 100 years is the not-too-distant future.
“Yea… exactly what is the legislature to do about insurance? ”
They plan on passing a law against hurricanes. Should be about as effective as their laws against drugs.
These ‘researchers’ at Real Estate Centers at Universities really get my goat. It is well-known in the (big) business community that a good way to influence public opinion AND coopt regulation is to buy up all the experts in your field, via grants and creationg of ‘Centers’ and ‘Institutes’ at Universities. The Uni’s are really pimping out their reputation as homes of impartial scholars, for cash.
won’t take 100 years to correct…just 3 to 5.
what a dork!
I wonder what he thinks will fix the problems in Phoenix, Vegas, California, and the Northeast?
-EXTRA-EXTRA-EXTRA-EXTRA-EXTRA-EXTRA-EXTRA-EXTRA
“UF professor and Herald reporter Michael Braga allow themselves to be shamelessly pimped by the RE industry by making claims and predictions they pull straight out of their @sses.”
Braga, when asked for comment said:
“I’m practicing ‘new journalism’, you just write, predict, and claim whatever you want without worrying about any research or facts. Besides, the value of my house has fallen a lot lately and that has got to stop! BUYBUYBUY!”
Universities get a free pass these days because everyone is terrified of criticizing ‘education’. But really, how worthwhile can ‘getting an education’ be if colleges are staffed with clowns like this?
Universities get a free pass these days
The problem is not the Universities; it’s the lure of the dollar and recognition. Look at pimps like Hannity and Limbaugh - these guys sell their souls daily under the credibility screen of radio and television. As long as there’s all upside and no downside to making reckless remarks, people are going to make them. This is what capitalism breeds: in a society that bases success on money, and in which dollars flow in the direction of people who generate controversy, the truly smart people are the ones like this “clown” who do whatever it takes to legally make a buck.
Most university professors are “clowns”. They have little practical experience. The key to capitalism is to have the guts and emotional control to take risk. Many professors are hiding out in colleges. They do not have training to develop emotional control under the stress of decision making.
I agree that capitalism is out of control as it was in the 1920’s and a correction is due. Many leaders on Wall Street are despicable. The situation is not black and white though. Socialism has its own problems.
Colleges today charge to much for their services. One of the reasons the cost have become so high is various loan programs under the guise of helping unfortunate students. This has allowed Universities to raise prices. Loans that on the surface appear a kindness entrap students in debt just as home loans trap home buyers and supported high prices.
If Republicans represent the capitalist class I would say they are people that are short term cruel and long term kind. Democrats tend toward the socialist view and therefore are short term kind and long term cruel.
I hope the reasons for the above statement are obvious.
“Colleges today charge to much for their services. One of the reasons the cost have become so high is various loan programs under the guise of helping unfortunate students. This has allowed Universities to raise prices. Loans that on the surface appear a kindness entrap students in debt just as home loans trap home buyers and supported high prices.”
Have you been following the story that’s developing about the student loan scandal?! Millions of dollars seem to have flown away from government coffers into the pockets of these lenders:
http://www.nytimes.com/2007/05/07/washington/07loans.html
So does Liz Scheffler….WHO?!
http://www.suburbanchicagonews.com/beaconnews/classifieds/homes/371427,5_7_WA05_SCHEFFLER_S1.article
That’s a RE ad, not an unbiased story.
Welcome to the world of Chicago area real estate “reporting”. That’s why I started the blog.
I’m looking forward to the follow-up story where Liz tells us what house(s) she is buying, or what houses she is trying to get close family relatives into in this market. C’mon Liz - it’s move-up time, or time to liberate all that equity you’ve got.
Also - what are the odds that she is currently selling an investment property of her own right now? I’d peg it as at least 50-50.
And don’t forget Nicaragua
http://www.chicagotribune.com/classified/realestate/realestate/chi-0705040942may06,0,7324008.story?coll=chi-classifiedrealestate-hed
Thrall blames virtually all of Florida’s housing woes on hurricanes and property taxes. He doesn’t even bother to explore or explain why the taxes went up; it wasn’t the millage rates that increased, it was the selling prices that screwed the comps for anyone not under SOH. By completely ignoring the credit bubble as the root cause of Florida’s housing price problem, just as elsewhere, I think Thrall paints himself as uninformed (unforgivable for someone who is *teaching* this stuff to college students) or a REIC shill. Wish the brighter students would come up with an “Unthralled” button.
“‘Commercial always follows residential,’” Dan McLeroy, an agent who leases office space in the Sawyer Oaks complex. ‘As long as residential is off, the office market will trend downward.’”
Just 6 months ago they were proclaiming how strong the commercial building was in Florida - it would absorb all of the residential construction workers who were laid off.
what is the usual lag time between commercial and res ?
12 months or ?
Two quarters (6 months). The commercial market in Florida has been floundering for ober a year.
Bank of America Eliminates Closing Costs
so they cut out the mort brokers or back the cost into the loan
or a little of both ?
No - they probably just roll them into the loans.
I know Lenox loans also eliminated closing costs too. The guy on the ad (on CNBC) says specifically that he makes good money on loans without closing costs, so they are NOT rolled into the loan.
he is featured in Money Magazine’s most recent (quite bearish) RE episode…
‘vedi Napoli e poi muori’
Saying from the old country…
“See Naples and Die”
Bank of America eliminates closing costs
http://biz.yahoo.com/ap/070507/bank_of_america_mortgage.html?.v=4
Same outfit that wanted to give illegals VISA cards and mortgages. This is getting too weird for reality.
Glad I have no business with B. of A.
I got rolled into a Bank of America account after Fleet was bought.
These morons have idiots workin’ in their branches.
To keep the story short…I made a deposit of $10k to be split between a CD and funding for my checking account.
Before it was all over, I ended up with a $2400.00 overdraft charge to my linked VISA card at 24.24% interest.
3 months later and the problem still isn’t solved.
Screw these chucks.
Ya think they are getting desperate for warm bodies with decent FICO scores?
they’ll offer you this with a catch, 15.00% on mortgage
Two years ago they were offering HELOCs with zero costs to the consumer — no appraisal fee, no credit-check fee, nada.
I’d be amazed if there were no prepayment period/penalty, since they are amortizing some closing costs into the loan. But if they truly offer these at competitive APRs, then it looks to me like just good business practice. They never pursued the subprime bottom-feeders, to my knowledge.
I keep hearing this (like in this article):
” ‘If you’re not priced at the market, your home is not on the market. If you’re at the right place you’re going to sell.’”
Sure, price is hugely important. But, the locations of some of these developments and rehabs make them worth almost nothing. I saw a new development the other day that sat right next to a massive power relay complex. And I mean right next to it…
I’m always amazed at where people are willing to buy houses. We have lots of ‘em built right next to major highways. It used to be that when the highway came through, people’s houses were de-valued. Now, they’re advertised as “Easy access to major arteries.” Yeah, easy access - just walk out your back door.
That’s because buyers often have long commutes, so being close to the freeway saves time. I wouldn’t buy a house within a few miles from a freeway, the hum of the freeway carries very far.
I bought my condo because it backs up to Chattahoochee National Park land- you actually walk out my back door into the forest. However, about 1 1/2 miles downriver is the perimeter, 285. In the evenings when I walk into my woods, I can hear the hum of the traffic. It is faint, but it annoys me slightly. And to think I looked at a place right on 285! When you walked out back the sound actually pounded on you. I could not get out of that complex quick enough.
Even worse for railroad tracks, if it’s a busy line.
Back in ‘04 we were looking at some orders to Tampa so we went house hunting. Found a development in Brandon where the lots backed right up to a railroad track. The sales lady told us not to worry b/c they were building a 6 ft privacy fence around the perimeter. She also told us that the train only comes through during the day so if you are at work you won’t even hear it. Luckily we didn’t get the orders to Tampa!
The Realtors (TM) in Bowling Green, KY are very slick. They are very good at hiding what they do not want you to see. There are listings on the MLS for housing developments off Cumberland Trace Road, a road that runs about 30 yards parallel to I-65 between exits 22 and 26. These houses do not have a link to a map, but all of the other listings in Warren County have a link to a map.
I have looked at a rental house on Chipley Court and I can tell you the noise is deafening! It is especially horrific in the rain, when the 18 wheelers drive by with their high pitched twine.
They didn’t even bother to put up any noise barriers to the interstate. This would be too expensive for the builders/developers. This is what happens when the people in local gov’t own land everywhere in Warren County, and they want to get their return on their investment.
Got 10% down?
When cemeteries in the 1950s-1960s began building cheap concrete mass-mausoleums with exterior drawers exposed to the elements, nobody would buy them. So the funeral industry came up with the term “garden crypts,” and immediately everybody wanted one. The manipulation of people with simple words is so magical that it was once a secondary definition of “witchcraft.”
The above is for Mikey(2)
They always neglect to note that some of these POS new houses and condos will not sell at any price. Have you ever been to an auction and seen items get no bids at all? Just look on ebay. Price is not always an issue when the demand just isn’t there.
“When Marsha Wolak, a real estate agent-turned-auctioneer in Sarasota…..
Well, that is a rare example of a realtor who overcame all the Kool-Aid served in Florida. Smart Marsha…
“Ms. Wolak reasons that investors are willing to take a risk at the lower end because they can eventually build on a lot or rent out a house. But, she said, ‘it is tough for someone to speculate on a multimillion-dollar house because they don’t know if the value will go up or down, and there’s a chance of it going down.’”
Yup. In Vegas I’ve always noticed there’s more action at the $5.00 black-jack table than at the $1000.00 one. Kinda the same thing, isn’t it?
“‘It was just bad luck to be caught in the tail end of what used to be the strongest housing boom in history,’ said Mr. Holtzman.”
Can anyone suggest any good links to learn about buying properties at an auction? (I’m in L.A.) I tried googling it and came up without much, but I’d like to learn. Where do I go…how do I do my research…etc…?
School of hard knocks…
article about a first-timer
http://www.latimes.com/business/local/la-fi-auction30apr30,1,7984087.story
A good place to learn the auction biz in the city of angles, would be the monthly L.A. public administrator auction, that offers goodies of every persuasion, (no real estate) and most importantly, is a no reserve auction, and they take credit cards. It’s in Pico Rivera.
It’s low key, informal and fun.
If you die in el lay, w/o heirs, this is where your stuff turns up…
Sorry to be so negative, but after reading a fair bit about auctions here and elsewhere in blogdom, it seems like you’d be Nemo in the midst of those three sharks if you were to try it without hiring a pro to help you. How to hire a pro? Beats me, but if it were me, I’d start by going to the city/county building department and asking a few inspectors who they’d recommend. Also ask tradesmen who have very strong reputations.
How many days until FL hurricane season starts?
I was down in Sarasota last week. People down there are still saying crap like: “This is the bottom. Prices go up from here.”
Of course, these are the same people who, 18 months ago, were saying that prices would never fall.
FL’s RE market hasn’t even begun to crash yet. What’s happening down there right now isn’t ugly. Ugly hasn’t even woken up yet.
Give it a few years. You’ll see soccer moms in the Brandon Wal Mart parking lot, trading sex for a tank full of gas for their SUV.
Never try and reason with the real estate & hurricane season…
Hurricane season starts June 1st. Hopefully predictions will be correct and we will have a slightly below average season like last year.
Hopefully these predictions are wrong:
http://hurricane.atmos.colostate.edu/Forecasts/2007/april2007/
On top of that, if the wrong spots of the gulf coast get hit we’ll definitely be seeing gasoline shortages as well. There isn’t the inventory margin to handle disruptions from a major hurricane this year.
Yes, but the Dow will be at 20k then so everything will be great. Boooooyaaaaa!!!! BUY!Buy!BUY!!!
George, Like you, I think the show hasn’t even started. Things are dropping off, but the real carnage lies ahead…..
Michael Saunders says we will never have affordable housing in Sarasota so they should worry about transportation instead.
“In Naples, there’s still a nearly three-year supply of homes on the market. Last week, there were 11,800 single-family homes and condominiums in the MLS. In the past year, about 4,000 homes sold in Naples.”
That “three year” number was calculated using flipper-frenzy selling rates. What about now, when your true buyer pool is no longer qualified, and your investors went *poof*? The selling rate is plunging over a cliff. All those overhange times need to be adjusted upwards, way upwards.
Don’t forget all of the home-made for sale signs you see when driving around. I am seeing more and more every day and nobody seems to be counting them.
About a year ago I saw a handmade sign (on a piece of shirt cardboard no less) that stated “Now is the time to buy!” followed by a phone number written with a scrawled marker. Some wag had crossed out the word “Now” and penned in “Later.”
I find it hard to believe that anyone would take someone who couldn’t even afford a professionally-made sign seriously - I’d like to find the guy who wrote in “Later” and buy from him.
I was under the impression that “Now & Later” was a candy.
“The selling rate is plunging over a cliff. All those overhange times need to be adjusted upwards, way upwards.”
Last night I read an economic analyst, referenced here by a poster, who believes that what you are observing results in a vacant-home overhang that would take 7.5 years to liquidate.
another so called “experts” will be humbled again by calling an extremely early bottom.
Buffett calls the housing market sick and that it will take time to bottom.
Who to believe? some academic Prof who has never held a real job or a guy that owns real estate brokerages, building material companies.
As a long-time reader, occasional poster, the Florida blogs have a special place in my heart:
Tampa ( Hillsborough County ) did nothing to help me retrieve my son when my ex wife stole him from me 7 years ago.
Hillsborough County LOVES to issue arrest warrants without investigation. Bidness & Moms rule in Florida.
As I flew back & forth from another bubble area here in Sacramento trying in vain to see my son in Tampa, the observations and comments from this board were invaluable.
Nothing like first-hand knowlegde to confirm what was happening in both markets . . . and of course when I tried to talk about pending real estate crashes anywhere I was met with ridicule. I have seen for myself many of the areas discussed in these blogs, and have to say most comments are very accurate.
I have to go back to that festering humid hellhole known as Florida yet AGAIN . . . leaving Sacramento tonight … driving accross this beautiful country . .
I’d like to take a moment to thank each & every poster on this board …. reading the comments, both good & bad, has eased my heartache a bit re my stolen son, and provided a real life confirmation of what is actually happening in the world, with the main topic of real estate.
Watching FL crash & burn is bittersweet !
Reading this blog gives an accurate & unbiased window on the day-to-day events of life / thanks to all / please keep it going .
We aim to please. Watching FBs writhe in pain brings us all the greatest of joy!
Sorry about your son. I’m a Floridian and I think Tampa is an armpit. Whenever I go there or Jacksonville I feel like people are regressing into ignorance. They still wear mullets in Tampa, fer chrissakes. Hillsborough County is a backwater Suburbica (or Generica–take your pick) that vainly attempts to masquerade in urbanity. Tampa is most famous for being the winter home of the Yankees. It is only significant as another city’s sandy beachless playground.
As for RE crashes, I agree that Florida is set for a fall, but it won’t be as far as you think. Real estate here is only moderately overpriced versus California’s ridiculously overpriced real estate. That means that the loss of selling lower than the market isn’t as great here and there will be more incentive to move a property, even if for no profit. Faced with losing $10K on a Florida house vs. losing $100K on a California house, people would try harder to keep the CA house. Plus Florida has a high attrition rate (deaths outnumber births rivaling only Arizona and New Mexico) which leads to new residents scooping up the widow’s remains.
Florida’s problem is there’s no major industry save for smiles (tourism), oranges (agriculture and mining), and elder care (retirees and their attendant care). We have import/export operations (as you have in CA), but they are mostly off the books and the lion’s share of the profits are exported to another country (where they have very sophisticated processing labs, I’m told). CA has better entrenched industry than FLA (aerospace/aircraft, electronics, shipping), but America as a whole needs to wake up and start making things again or we’re all gonna look like Compton did when Boeing left.
I read that quote by Warren Buffet. Regarding the U.S. housing downturn he said:
“My guess is that perhaps continues, perhaps for quite a while,”
I thought it was funny how this comment went more or less unreported.
Heard on the ’squak box’ this am where the guest said now was the time to dump financial stocks as subprime was going to be affecting the prime lenders soon. I’m really waiting to see the effects on WaMu, WF and BA.
“‘People don’t realize the tremendous impact residential real estate development has on the local economy,’”
Sorry, but the people I know do realize and that’s why they still have money in their pockets.
I’m another long-time reader and very occasional poster. About 18 months ago I started to “short Florida”. That is, I shorted (or bought puts) on builders, banks, mtg. companies, cruise lines, etc. that operated in Florida. My idea was that Florida had so many strikes against it that the most extreme pain caused by the housing/financing mania would be felt in Florida. I have done well with this strategy (though I would have done better if I had listened to TexChic and covered last summer and re-shorted in January). Have I run out the string? Should I move on to greener pastures or is there more to be squeezed out of Florida’s disasters? I respect the readers of this board and really am interested in your thoughts.
We’re just getting started in Florida. You can almost never go wrong betting against Florida when the politicians try to tinker with taxes or insurance, so watch the upcoming special session in June. If gas keeps rising, bet against Florida. If they build the oil rigs 45 miles off the coast, bet against. If interest rates go up, bet against.
Also, the TV is on in the background as I write this. There’s a promo for tonight’s local news regarding plans to build an ethanol plant in the middle of Tampa!!!!!
I shorted Rinker, which produces cement mainly in Florida, Arizona, and Nevada. I was way up on my short until Cemex came in and bought it for around the price I shorted it at.
What a drag. I think Cemex will end up with buyers remorse, but it doesn’t help my pocketbook….
“Built in 1925 and recently renovated, the house had languished on the market for six months. At one point, Mr. Holtzman removed auction signs from neighbors’ lawns, fearing they would discourage prospective buyers.”
Can one do this???? It seems a bit disingenuous to remove auction signs from NEIGHBOR’S yards to try to sell your proberty. let me guess, he did fully disclose that half his block is up for auction when he closed… right…
In Florida, good chance it is illegal, either by virtue of the trespass, or theft, or because of some specific statue. You can get in big trouble for removing a political candidate’s sign, for example.
Price reductions in Broward County (Miramar and Pembroke Pines) are slow to materialize. Also observed that a few listings are increasing their prices after significant days on the market. Visited a few open houses…in many cases I was the only person in sight, except for one where two other persons turned up; a SFH (POS), approx 1, 600 offered at $375,000. The realtor was surprised at my disgust!
Florida housing will rebound differently than other markets because people worldwide recognize the Mouse, oranges, and beaches. The only other place wit that combo (California) is still at least 2-3x the cost of Florida (the other people’s money mines of Hollywood and Silicon Valley led people to act very irrationally when it came to price). Plus, Florida is an entry and stopover point for visitors and immigrants, especially those from the Caribbean and South America. Those folks never think a plane to Mobile is the answer. Until that changes, I see Florida real estate dropping some of the found money of 2002-2006 but not dropping to the undervalued times of 1996-2001.
Big Daddy — possibly, but California has big-time jobs and Florida does not. Tourists, retirees and underground railroaders cannot make up for that difference, IMO.
As a more extreme comparison, there are places in Mexico, less than two hours from the border, with weather exactly equal to the best of California’s, but housing prices that are a small fraction thereof. Mexico, too, attracts tourists and retirees and that is totally insufficient to make their land prices competitive.
Big Daddy, You’re sounding alittle like “it’s different here” . While I agree it possibly may not fall evrywhere in Fl. at the same level, Any coastal or metro areas will be creamed, which is about 75% of the home values….
Here’s alittle Fl. history in case you never read this..
http://xroads.virginia.edu/~hyper/Allen/ch11.html
Have to agree with this. Florida doesn’t have the income base to support 02-06 prices without funny loans, that is why the prices will and have to drop below bubble $ and will probably drop even more as this bubble has created craters and confusion in the overall economy
Boomers in the midwest have lost pensions, must keep working way beyond social security age, and many owe almost as much on their house as it is worth. You can’t retire to the sunshine state without income to live on. With Florida houses at least 1 1/2 to 3 times the price of midwest US houses many boomers are going nowhere but here. You can’t live in Florida on social security and make it. Average price of a house here is $70-$100 sq. ft. These people are not moving up to $125-$300 per sq ft houses anytime soon. Worse a lot of boomers that bought 2nd houses in Fl used the equity from their first house to get the loan. Which one do you think they are going to try to get rid of or walk away from.
File for Bankruptcy in FL and you get to keep your house?
Buffalo is an affordable place to retire, I hear!
Once the customer relations policy of; no returns allowed, has been established, there will be no more customers.
In a lot of states you can file for bankruptcy and keep your house. However you have to be able to make the payments on the house. A lot of these people we’re hearing about do not come even close to having enough income to make the payments, let alone insurance and taxes.