The Housing Boom’s Demise In Florida
The News Press reports from Florida. “Florida’s stagnant real estate market sunk Bonita Springs-based WCI Communities Inc. to a first-quarter loss of nearly $16 million, the company said Tuesday. ‘The first quarter was a tough quarter with no broad signs of improvement, particularly in Florida,’ CEO Jerry Starkey said.”
“Revenues for the first quarter were $340.6 million, compared with $570.7 million for the first quarter of 2006, a 40.3 percent decrease. Starkey blamed stalled sales, declining profit margins and contract cancellations for the shortfall.”
“WCI’s new orders for the quarter fell 41 percent and the total value of new homes and condominium units dropped 53.4 percent over the same period a year ago. In all, gross margins on new homes were 16.6 percent, down from 22.8 percent a year ago. For condominium tower units, contract cancellations put an even greater squeeze on margins to reduce them to about 1 percent, down from 24.8 percent a year ago.”
“‘Obviously, it was not a very good quarter for the tower business,’ Starkey said.”
“More than 250 Lee County home builders each could save about $6,000 as they cope with contractors who have abandoned them. County commissioners voted Tuesday for an ordinance that will allow home builders with expired permits to renew them for $100 instead of paying thousands more.”
“‘It’s a real problem out there,’ said Commissioner Frank Mann. ‘We have these homes being vandalized, creating eyesores, and they would remain that way for the foreseeable future unless we did something.’”
The Herald Tribune. “Incorporated in 2003, Golden Rule Construction Group. was soon besieged with orders to build and repair houses, apartments and offices across Southwest Florida. But like so many ventures during the recent real estate boom, Golden Rule’s success proved fleeting.”
“In a way, (co-owner) Keith Chandler Powell’s story is a familiar one in Southwest Florida: His construction business took off in 2004. Thinking the boom would last forever, he spent too freely and ended up in bankruptcy.”
“Larry Ekstrom contracted with Powell to build an $850,000 house in Port Charlotte. ‘We gave him $40,000 upfront and he moved dirt around a little. Then we gave him $80,000 more and he couldn’t get anything else done.’”
“Ekstrom ended up having to settle with Powell’s unpaid subcontractors before hiring another builder to finish his house.”
The Miami Herald. “It’s about to get a little easier for South Florida renters. The sharp jumps in rental rates of recent years are finally starting to flatten out. There are now more vacancies. And thanks to a weak housing market, some condo and house owners who can’t sell have decided to become temporary landlords instead, giving renters more choices.”
“Heidi Williams just started renting her 1,030-square-foot Brickell Key condo from an individual owner for $2,100 a month. That’s after her agent negotiated $200 off her rent each month.”
“‘I was actually surprised because I’ve never gotten that break,’ said Williams. ‘In my mind, they were just saying, ‘Let’s get it rented.’”
“Another sign of better times for renters is the return of incentives from landlords desperate for leases. Of 408 large market-rate apartment complexes in Miami-Dade, Broward and Palm Beach countries surveyed by Jack McCabe’s firm, about 10 percent offered concessions such as one month’s rent and other incentives. That’s up from virtually none in 2005 and 2006.”
“‘They don’t normally do this unless they see their occupancies drop,’ McCabe said.”
“These landlords are now facing competition from a new source of rentals, condo owners. Some of these owners never planned on renting their condos out, but figure they might as well pay their mortgages through renting while waiting for the housing market to brighten.”
The Times Union. “In the boom years, some home buyers bought their American dream, and with clever loans that kept early payments low, it was a bigger dream than ever. Now, those adjustable-rate mortgages (ARMs) that took off at the turn of the century are set to adjust, and if owners aren’t careful, their dream will end with the housing boom’s demise.”
“Hank Oltmanns, president of the Northeast Florida Association of Realtors, says so far, most of his past customers have been able to find ways out of ARMs that stretched budgets thin, but he expects that won’t be the case for long.”
“‘It’s going to happen. This market is going to get some people who are going to be at that point [of adjustment] and not be able to refinance because the equity isn’t there or another reason,’ he says.”
“Patrice Yamato, president of the Florida Association of Mortgage Brokers, says that the next few months will most likely bring a dose of reality to many owners. The subprime market in particular, in which buyers with poor credit took loans with high rates, will be rocked by adjustments, she says.”
The Orlando Sentinel. “It’s take a real estate agent out to lunch week. This is from a post that I decided to share with the entire class. ‘This market has just about put me out of business. Listing that don’t sell, sellers won’t lower their prices, huge marketing overhead, gas, dinners, it’s just too much I’m going into bankruptcy soon! Buyers have all but dried up! I’m going to have to sell something else just to feed myself.’”
“Gosh, how far we’ve come from sticking a sign in the yard then waiting for a dozen speculators to bid up the price another 20 percent.”
“This brings up an interesting issue. A good chunk of Central Florida’s job growth since 2004 has been in, you guessed it, real estate!”
“When the business of houses takes a hit, a lot more than the cost per square foot takes a hit. A sizable chunk of the economy takes a hit, which, impacts the cost of housing. It is quite the nasty circle.”
“Not only do house prices have to get back to a sustainable level, but the percent of the workforce in real estate has to return to its proper share of the economic mix.”
“This brings up an interesting issue. A good chunk of Central Florida’s job growth since 2004 has been in, you guessed it, real estate!”
Yea… that was a bubble too. Expect commissions as a function of GNP to drop hard. Gee… poor realtors/mortgage brokers who also have their alligators biting.
Got popcorn?
Neil
Not just realtors. We are talking landscapers, electricians, plumbers, a/c guys, drywall, concrete, painters, framers, stucco, roofers, cleaning ladies, cable guys, irrigation, bug men, just to name a few… Not to mention all of the businesses that these people support when they used to spend money. But the slowdown only affects a small portion of subprime loans, Right???…
It trickles through the whole economy for sure.I am really wondering where the US economy is headed due to the real estate debacle.With the easy money drying up, it is a time issue I think.I am bearish as usual but seem to be in the minority again.
Right. Add to that furniture stores, appliance stores, and all their suppliers.
Furniture stores are dying. Near our new apartment an entirely new retail complex has gone up specializing in furniture and home outfitting…
I expect we’ll decorate from the going out of business sales…
Got popcorn?
Neil
and me - I sold GPS for 6 years
wow, is that over
but it’s only FL , right
Don’t forget civil engineers, surveyors, planners, etc.
I’m thinking the food places in the Chilis/Applebees/Ruby Tuesday/Fridays category will get killed and the bottom end of the fast food market will pick up. All of those $50 for a family of four (not including alcohol) places boomed on home equity money, I’d bet.
Those Florida realtors, mortgage brokers, construction trades people, etc. need to move. WSJ article today says house prices are still going up in places like (ahem) the Carolinas and the Pacific Northwest. I know that very few of the weekend newspaper’s builder ads for new communities here mention anything about discounts, upgrades or concessions.
Pacific Northwest like in Seattle? the Seattle Times just had an article a couple of days ago saying Seattle is bucking the trend with rising median home price.
I always say the median home price is a croc b/c as builders build larger homes, the median price obviously has to rise. People just don’t get it.
Most of the new development have a 2800-3000 SF as the smallest home for sale. And most of the average home is around 2300 SF at best.
Sleepless, I was surprised that the median was going up ANYWHERE. They also didn’t talk about sales volume and number of listings and DOM figures.
I do know that sellers in my community are holding their prices, but sales volume is down considerably and inventory has been rising steadily in the last 12 months.
The pacific northwest is about done with price appreciation. Inventories are rapidly rising, and transactions falling. Lots of toxic loans and speculation there.
I always say the median home price is a croc b/c as builders build larger homes, the median price obviously has to rise. People just don’t get it.
That’s exactly what happened in northern Colorado.
Yes, median price is not as good an indicator as same home sales price. Gordo
I’m thinking the food places in the Chilis/Applebees/Ruby Tuesday/Fridays category will get killed and the bottom end of the fast food market will pick up. All of those $50 for a family of four (not including alcohol) places boomed on home equity money, I’d bet.
$50? Only if two are eating from the kiddie menu. I have noticed a big spike in casual dining prices these past few years. Entrees that used to go for $10-11 now go for $13-15. Add a $2 coke, a shared dessert and tip and it can easily hit $20 per person.
It might finally be time for people to start using all those fancy kitchens with granite countertops and high-end appliances. I know a surprising number of people in my generation whose culinary skills don’t extend beyond pouring a bowl of cereal.
I eat out 5 or 6 nights a week. Wish I knew how to cook but boiling water is tough for me.
http://tinyurl.com/3dpmtw
Buyers want out of contract causing headaches for builders, lawsuits, etc.
“Dennis Freeman, an attorney in Aventura, Fla., said he is representing a family who bought a roughly $1.6 million condo in a waterfront high rise, expecting a private entrance. But, he said, the family has now learned that the door to the garbage chute, which is shared with neighbors, cannot be locked. “The privacy of my client’s apartment has been lost,” said Mr. Freeman. He is suing to rescind the contract.”
I imagine their are a lot of folks digging through their contracts trying to find a way to get out.I think the biggest issue is getting your deposit back if you cancel.If it is a small amount then probably a not an issue to worry about I guess.
“But, he said, the family has now learned that the door to the garbage chute, which is shared with neighbors, cannot be locked.”
Why didn’t I become a lawyer. I love this stuff!!
“Why didn’t I become a lawyer.”
Because you have a soul
“the family has now learned that the door to the garbage chute, which is shared with neighbors”
Is the “garbage chute” a “garbage chute,” or is the attorney referring to his client’s condo is such a piece of overpriced sh*t that it might as well be a garbage chute? That would make the family “garbage,” I guess. Or at that price, “garBAhge”
I will bet an $18 lock can be found and attached.
“my clients have learned, to their horror, that there will be other people living in this condo building. This will interfere with the total seclusion they thought they were going to get when moving into an area of 6 million people stuffed into an area 6 miles wide, and need their deposit back”.
So much for “containment”…Marketwatch has a report on Toll Bros. where the CEO is quoted to the effect that “the impact of stricter lending standards arising from problems in the subprime market is negatively affecting affordability at lower price points”…related detail from this link that backs up the connection between subprime issues and Toll’s typical customer is “About 70% of cancellations in the latest quarter were from contracts signed more than nine months ago. “This means that buyers are typically cancelling closer to closing, likely due to price or inability to sell their existing home, instead of financing issues that typically occur earlier in the process,” wrote Banc of America Securities analyst Daniel Oppenheim in a report to clients”…
Are you able to post from prison mr peterson?
Har har…luckily for me there are usually 5 or 6 Scott Petersons in every town bigger than about 75,000 population.
Scott -I understand, due to my common name, I have gotten other students’ grades, other peoples’ checks, and ass-chewing phone calls that weren’t for me personally!
Tom Gray
“CEO Toll also cited as “bright spots” a handful of markets — New York City, Hoboken and Jersey City, N.J.; Dutchess County in New York; southeastern Connecticut; the Philadelphia metropolitan area; Raleigh, N.C.; Dallas and Austin, Texas, and parts of Northern California. ”
Sorry Toll Brothers, its not that bright here either, homes are not selling so look elsewhere.
Family friend used to work for Toll. While there, he created a slogan. Here it is:
Toll Brothers Homes:
Guaranteed for five years. Then they fall apart.
That’s interesting–they must have the pr working well for them, because my friends I’ve talked to out in Arizona consistently talk about toll bros being the “luxury, high quality” home builder. One did just move in last September, we’ll have to see how his house holds up.
and hurricaine season is just weeks away…
florida will welcome the rain once half the state is on fire.
http://news.yahoo.com/s/ap/20070509/ap_on_re_us/tropical_weather;_ylt=AjuH1CCD29PVfTVUfRrvEnKs0NUE
“Subtropical Storm Andrea had top sustained winds around 45 mph Wednesday morning and didn’t appear to be much of a threat, the National Hurricane Center in Miami said. Still, a tropical storm watch was issued for parts of Georgia and Florida, meaning tropical storm conditions are possible within 36 hours.”
An early sign of the hurricane season thats ready for impact.
I have lived in Florida for many years - Jacksonville, Ponte Vedra, Okeechobee, the Keys, Palm Beach county, Punta Gorda, Marco Island. I was a police officer in the 70’s and 80’s in Palm Beach county. I have always respected hurricanes - in Belle Glade, site of the deadly 1928 killer storm, I remember as a young police officer, responding to a call of human remains plowed up in a sugar cane field. The medical examiner was able to establish that the skull dated back to the 1928 storm - nearly 50 years later and still recovering bodies from that storm ! I now live down in the Keys. Every year, these storms go rumbling past. In 2005 we got Dennis, Katrina, Rita, and the big one (for the Keys) - Wilma. I am always amazed at the cavalier attitude of many of the locals. Most refuse to evacuate, instead choosing to ride it out and party. They are dancing in the mine field. When (not if) the next big one rumbles through, I’m afraid many will lose their lives. For a chilling account of what can happen in a big hurricane, read this :
http://www2.sptimes.com/weather/HG.3.html
Here’s a link for the 1928 Belle Glade storm (second deadliest hurricane in U.S. history) :
http://www2.sptimes.com/weather/HG.2.html
Second deadliest being the operative word. If you’ve ever been to Galveston or heard about the 1900 storm, you aren’t surprised that the entire town appears to have been built in the Victorian era. Pretty much wiped the island clean. One of the risks of living on developed barrier islands.
You’re right - the 1900 Galveston storm was the ‘Grand Daddy’ of all U.S. hurricanes, body count-wise. A couple of years ago I read the account of that storm in the book “Issac’s Storm”. Scary stuff. Most of us down in south Florida know the hurricane drill well. Regardless, every year, starting in July, I still get that pang of anxiety when storm season cranks up. I knew Vernie Boots, the man interviewed as a survivor in the 1928 Belle Glade storm, from my days as a police officer in that area of Palm Beach county - very nice, down to earth fellow. I never had the heart to discuss the storm with him, but I alway noticed this aura of sadness whenever I ran into him.
“One lawyer recently took out an ad in a Palm Beach newspaper reading: “Do you want your money back? Your contract for purchase of a new house or condominium may be illegal…To see if you are entitled to a refund, call us for a free consultation.”
Yes, call us and we will get your deposit back however, our fee equals your deposit amount.
minus epsilon
“To see if you are entitled to a refund, call us for a free consultation.”
To clarify: this means that we only want the ‘plum’ cases so if you contact us we can pick and choose those with the biggest reward while expending the minimum of effort and finances.
True sign of a plaintiff’s lawyer. #1 Does the defendant have something to take?, #2 How big are the potential damages, #3 Is there any way, no matter how small, to prove the defendant did it?= Fee for me….
Hope “springs” eternal.
http://heraldtribune.com/apps/pbcs.dll/article?AID=/20070509/BUSINESS/705090716/1007
You can always count on the Herald/Trib for a little pump, pimp, and spin.
I heard D. LIErah on the radio the other day, in his last couple of weeks working for NAR. He tried to be a bit upbeat about RE, but even he essentially said that S. Florida was swirling down the price toilet. If DL admits that S. Florida is sunk, it is sunk.
JungleJim ,
Yep, I work in Sarasota off i/75-bee ridge,everybody at work is saying “Thank god the worst is over !!!”.
The average wage here is about 40-45k. I lost count of the number of people i work with that own 300k dollar homes near here. Not to mention the number of new cars in the parking lot…
But not to fear Sarasota/Bradenton is special,yes someone said that to me yesterday…
Chris
“But not to fear Sarasota/Bradenton is special…”
Yes…prices will drop especially fast when the bubble finally takes the big pop.
Indeed the prices in Sarasota/Bradenton appear to have hit a bottom for the last 3-4 months. But that’s only a short period - way too early to be calling a real bottom. I can almost guarantee it’s a dead-cat bounce. Inventories are still sky-high. The Sarasota/Bradenton prices have gotten hit much worse than FL as a whole - about 16% drop vs. about 6% for all of FL, and I think S/B are just getting a breather waiting for the rest of FL to catch up some. FL prices are still headed down though - not even a dead-cat bounce - if that continues (I’m sure it will), then S/B will also start back down again.
Usually FL prices are highest in the summer, and back off some in the fall. I look for the shills to “uncall” the bottom in late fall when prices will continue their downward plummet.
“I’m going to have to sell something else just to feed myself.”
Ah well! Nice while it lasted. Now back to the old trade you were plying before the boom…
Is the ranch interviewing for homeless realtors again?
Sounds like a marketing opportunity at the ranch. “They did it to you, now you can do it to them. Your agent is waiting for you, there’s never been a better time…”
ROTFL
That one needed a coffee alert!
“They did it to you, now you can do it to them. Your agent is waiting for you, there’s never been a better time…”
And this time they don’t WANT a deposit.
“this time they don’t WANT a deposit. ;)”
My guess is the clients will insist on “shooting one their way” anyway…at least the sucker will know who they are in this deal :-).
Is she hot ????
Chris
Another spillover from the RE collapse- pole dancers’ pay will drop due to all the competition for jobs. I wonder whether that has been figured in the economic models…
“A good chunk of central Florida’s job growth has been in real estate….” Exposing yet more lies in government employment numbers like the lies contained within government inflation numbers. Thousands of illegals, working outside the government fake numbers, are being laid off from their jobs which range from skilled positions like plumbers to grunt work. Today Helicopter Ben will be on stage in Washinton and telling us, “Inflation is still under control but we are watching the numbers closely.” Plus, “We are concerned about the sub-prime market but we feel the problem will moderate later this year.” Manipulate, manipulate, manipulate.
“[T]he percent of the workforce in real estate has to return to its proper share of the economic mix.”
Ain’t that the truth. We could do without two-thirds of our realtors and ninety percent of our “real estate investors.” They can go back to their previous jobs, to the extent they still exist. Now that half the state has been paved over and turned into an overpriced commodity that nobody wants, Florida is now officially the wrong place at the wrong time.
If Realtors ™ didn’t get talking points from the NAR they’d be complete idiots.
Okay, all of you employers out there: Are you going to hire any of these ex-Realtors? And what about the ex-real estate investors? Want any of them?
Headhunter front lines assessment. Mortgage Brokers are beating down my door to get into other industry sales opportunities. None of my clients want them. Anybody but them, really. I ask candidates how many cold-call, outbounds sales did you initiate in the mortgage industry in a week? They look at me with the confused “you mean the phone doesn’t ring off the hook and I make 150K” eyes. There is a backlash.
“Headhunter front lines assessment. Mortgage Brokers are beating down my door to get into other industry sales opportunities. None of my clients want them.”
Mr. Green Card (a braggart illegal Egyptian immigrant who married a relative of mine to get residency) had been cleaning up in the mortgage broker biz till the bottom fell out. He closed his office and ran his biz from his house for a while, then tried co-owning a cheap cafe (not enough income to support one family, much less two). He then claimed he was gonna buy a car dealership - one of the Big Three, not a little indie. Yeah, right.
He’s finally found a job working in the finance department of a car dealership. With car sales dropping off a cliff, we’ll see how long that lasts.
My wife just hired one for a sales position (tropical fish wholesaler), much to her regret. She had a big sob story about how dead real estate has been, and how she needed to pay her bills. Once hired, this gal called in sick on her first day ! She was late half the time, called out sick four additional times within her first 2 weeks (we found out she was out showing properties) and last Friday she failed to show up at all for work - no call, nothing. I guess working a real job was just too much for her. It will be interesting to see if she has the nerve to show up and ask for her final pay check
“We could do without two-thirds of our realtors and ninety percent of our “real estate investors.”
And 100% of our developers.
Way OT, but fascinating discussion on higher education costs in the US. The main article is about culinary school hype-v-reality, but the comments sections has morphed into one about huge undergrad and post-grad tuition costs (likened in a number of instances to mortgages) and wage stagnation:
‘Top Chef’ Dreams Crushed by Student Loan Debt
Readers’ Comments
Oh, don’t tell me that. My niece is studying to be a pastry chef.
The jump in tuition is largely due to lower state funding (at least for state schools). For example, tuition at U Maryland jumped 20% (or was it 25%?) in one year a few years back because of a lack of state funding. IIRC, GMU raised tuition 10% and froze wages for a year. In 2003, only 8.1% of the University of Virgnia’s funding came from the state (down from 27.9% in 1985). UVA has seriously considered buying out the state and becoming a private university.
all gov subsidezed items are always above inflation
med
college
600$ hammers
anything gov touches turns to expensive sht
The point is that it aint subsidized (or barely).
Hell, take a look at private univeristies. Their tuition is much higher, and they’re not always better than Big State U.
ALL higher education is subsidized; has been since the the invention of the “student loan”. Tuition didn’t take off until the government guaranteed cheap money paid back slowly.
VA state funding for higher ed is up 22%
check the facts jack
http://www.fcta.org
So the state could increase their funding by 22% on top of the 8.1% of TOTAL funding that was mentioned above, and still be at a rather low value, say 10%. You guys could (maybe) both be right, but you both need to get more details together in one place.
However, I seem to remember seeing somewhere that the state government doles out something on the order of $10k per uni student, so that 8.1% or even 10/11% value seems to be low. Correct me if I’m wrong; I’m too lazy to do the legwork on this, but I’m more than willing to endure verifiable corrections of what I just said.
Slide 7: http://tinyurl.com/26q69b
check the facts.
True story from my upbringing: I can recall suggesting the idea of student financial aid to my parents. This was back in the 1970s, and out-of-state tuition at their alma mater, the University of Michigan, was already a bear.
No way was their reply. What I didn’t know at the time was that my folks had been saving up for my college education since I was a baby. (And this was back before the 529 plans we hear so much about these days.)
Both of them also had fulltime jobs while I was in college. And this was back when the neighbors cluck-clucked about my mother working outside the home, and, gosh, what did that say about my father’s abilities as a provider? My mother and father kept right on working . And they ignored the neighbors.
I got my degree without having to worry about repaying student loans, and for that, I’m eternally grateful.
Since my Michigan years, I’ve taken courses here and there, but I’ve never taken on debt to pay for any of them. My philosophy is that if I can’t afford the tuition, then I should find other ways to acquire the knowledge. My alternate methods include things like going to the public library, finding mentors in the fields I’m interested in, doing volunteer work, and using the Internet.
Where there’s a will, there’s a debt-free way.
So un-American, this “saving” money.
I admire your parents enormously. My folks helped me through school. I’m not as stingy on the debt–if the loan helps you get an education that will better your income and/or your life, then I can’t criticize. The return should be more than sufficient to pay back the debt. You shouldn’t stay a $10 hourly employee in a dead-end job if for $40k in debt, you can become a salaried $50k employee with potential upward movement.
But you should be damn sure to take that debt just as seriously as any other debt you have. I know some folks that are playing the “I’m going to defer my federally subsidized loans as long as I can by taking basketweaving courses pass/fail at the local JC.” game. That angers me to no end.
I took out some debt for my graduate school, but paid it off before I took on any more debt for consumption. When I asked my parents what I could do to repay them, they said “do the same for your kids.”
I imagine our folks would get along.
The inflationary policies of the FED are responsible for our debtor society. If you save money, you lose 3% of your return to inflation every year. If you borrow, you get the money now and pay it back in depreciated dollars. The saving generation had the deflationary memory of the Great Depression.
I worked while in college so I had no debt. I saw everyone playing all day and night while I went to work. Seemed to me that there was plenty of time to work and play and study. I was a veteran at the time so I was beyond the college bush league stuff anyway. The GI bill was a wonder to me. $200 a month to learn. WOW!
“Where there’s a will, there’s a debt-free way”
spoken like someone whose parents paid for his education…
Indeed they did. And see my previous post for details on how they did it.
yeah, thats great mommy and daddy saved up for you
In my family (and my wife’s family) there is a multi-generation tradition of giving your child a suitcase for their birthday (in senior high), another suitcase for Christmas and that’s it. College in Alaska is a good deal, as the summers off are the busiest time of the year for construction, mining, fishing, etc. work, so that was how I paid for school. Of course tuition was much lower then, too - the State paid a much larger share of Univ. budgets than it does now.
As someone who just finished paying for a Michigan degree for a daughter, you are appropriately grateful… And but for my state supported education in Texas, she wouldn’t have gotten out of school debt free either!! One half of one semester’s tuition far exceeds all of my tuition for all years..
One comment from the second NYT link that I think folks here might appreciate: “In my opinion, there are two types of ‘good debt’. Student Loans and a Mortgage. However both are still investments and you shouldn’t buy more school than you can afford any more that you should buy more house than you can afford. No matter how easy the banks make it for you. Student Loans are like an interest only, Cash out, ARM, only they’ll loan you $100,000 on a $30,000 career.”
Here’s one on grad school
http://www.smartmoney.com/debt/advice/index.cfm?story=gradschool
“Florida’s stagnant real estate market sunk Bonita Springs-based WCI Communities Inc. to a first-quarter loss of nearly $16 million, the company said Tuesday. ‘The first quarter was a tough quarter with no broad signs of improvement, particularly in Florida,’ CEO Jerry Starkey said.”
TOA is next. Their takeover of Transeastern was a total bust and now the stock will dive below $3 a share after earnings come out tomorrow. IMO, they’ll be the first large homebuilder headed to receivership. Good job Greek guys!
So, since the primary economic activity in Florida is housing, and since housing is taking a reaming, this means that Florida is SOL. Makes you really wonder, with all of the houses sitting around and not getting sold for maybe ten years or more, if the whole state ends up looking like Michigan does now? I can’t see how in the world anyone down in Florida can afford these houses outside of a huge exodus of Northeasterners moving to the state. I’m not an expert on Florida but even I can tell you that Florida is in deep trouble, maybe as bad as the Southwest. Also, I don’t think the condo towers will hold up well in a hurricane.
X-state
Islamic Republic of South Dakotastan
You’d be surprised how well some of those towers hold up in storms. Uh, the structure, anyway. Can’t say much for the windows, nor for the contents as they are swept out once the windows are gone. Maybe on the bright side we could say that since the structure would be OK, you can call it “periodic renovation”, and so after each Cat4 you just get a whole new interior installed!
xstate…what part of SD? Im in the firing zone now (Central Florida) but grew up in the Black Hills. It’s a…NICE ~Borat
“Makes you really wonder, with all of the houses sitting around and not getting sold for maybe ten years or more, if the whole state ends up looking like Michigan does now?”
Can the current, or soon-to-be current owners really sit on them for that long just because they don’t want to sell them at market price? I have a hard time believing that anyone but the government can take that much loss for that long…
“I don’t think the condo towers will hold up well in a hurricane.”
AS long as there is not strong enough scour to completely wash out the foundations, which is unlikely, the towers should hold up fairly well. Those built after Andrew have a lot of improvements, but the most recent Miami codes are very good, for something created by government. The new windows, for example, are super-strong — at least the ones required if you do not have external shutters. The unimpressive ones, to me, are the shutters made of PVC rather than extruded aluminum — they seem too flimsy for both super-high sustained wind and for penetration-resistance.
All said, in a very bad storm, and allowing for the serious inconvenience of days of elevator outages due to power failures, I’d rather be in a *new* high-rise condo here during a storm than in an SFR.
Look at all the Beach erosion already today from the Non storm off SC:
http://www.local6.com/weather/13284467/detail.html
Well lets say for sake of argument that i happen to work for a large multinational corp. Here in Sarasota business usually drops 5-10% when the snowbirds bail back up north. Last few years it hasn’t dropped at all.
Now,what if i said our business usually leads the economy at large by about 6-9 months ?? I have seen previous examples of this.
How bad do you think it will get when you get told business is down 25-27% since the middle of april ??? Oh yes, very interesting times…
Chris
I work for an engineering/planning firm that’s been in SW Florida a long time. Most of our work is for the private sector and work has fallen off a cliff. We are also having a rough time collecting money from clients.
My brother-in-law is an engineer. Over the last 28 years I’ve noticed engineering is the first to plummet and the rest of the economy follows within a year.
Hypothetically, I’d say being correct on calling the housing bubble is going to be a Pyhrric victory at best.
At least we’ll have some savings to fall back on and our credit scores intact…
Rental Watch — cheer up. It will be a much greater victory than that, IMO, if you’ve hoarded your cash. And a reasonable victory if all you have is good credit and no debt.
“Gosh, how far we’ve come from sticking a sign in the yard then waiting for a dozen speculators to bid up the price another 20 percent.”
Maybe I’m mean, but I don’t feel sorry for realtors. I even have friends in the business who aren’t earning anything and I still don’t feel bad. I am just sick of housing being the subject of bidding wars. Housing is a necessity.
This article has some comments that are very amusing. The anger and hostility of the bubble-denying crowd is funny.
(Go to the comments at the bottom)
“David DeLoach, broker-owner of DeLoach Real Estate Inc. in St. Cloud said he expects sales and housing prices to hold up better in Florida, particularly Central Florida, than in many other parts of the country, at least over the long term. ‘There are ups and downs in the market, but the things that make Florida attractive are not going to change,’ he said.”
Right — things like hurricanes, high property taxes, and soaring insurance premiums, just to name a few.
well, we have our first tropical storm, very early in the year. I hear can practically hear the values dropping.
who’s afraid of a tropical storm when the dow is going to 20k? Gotta get your priorities straight…
“Keith Chandler Powell’s story is a familiar one in Southwest Florida: His construction business took off in 2004. Thinking the boom would last forever, he spent too freely and ended up in bankruptcy.”
He can look on bright side, he may get busy in a couple of months fixing hurricane damage. Although with a shortage of insurance companies willing to participate in Florida, getting paid may be a challenge…..
““It’s take a real estate agent out to lunch week. This is from a post that I decided to share with the entire class…”
WTF? Let me know when its “take a real estate agent out back to the wood shed week.”
LMAO!!
ot-need advice from the blog
selling a studio in queens ny for 125K most otherws in the are selling for 110-140k. just go t an offer from a qualified person for $110k should i take it? i think i should just want an opinion from others please
if they’re qualified by all means yes…
you won’t get a higher offr anytime soon.
well how much is your mortgage and common charges? Can you rent it out for more?
do you really need more room? Or want to move closer to the job or GF/BF? or Manhattan, and lessen the commute like LIC or sunnyside? ….if not then keep using it as a crash pad. Unless you can scarf of a rent stabilzed 1 bm for the same monthly price.
I would be glad to give a broker $2500-3000 fee for a RS very large 1 or sm 2 br for under $1200 with parking
it is paid off and i am married so we need a bigger space which i have already rented .
i am selling this thing asap
thanks for your input
Yes no sense becomming a landlord. You could use it as Storage or a office and write off the expenses of a home business.
You know how much those NYC storage places charge per month…LOL Just the maint. fees per month on a studio can’t be that much.
“others in the are selling for 110-140k”
If others are selling for a low of 110 what makes you think that you’ll get 10-15% more? How many qualified buyers have come by since you’ve been on the market? Do you imagine the number of qualified buyers is going to increase (hint; think about the subprime fiasco)? Will the news about housing in general get better, in the short run, or possibly get worse? What economic factors would have to improve (in NYC and nationally) in order for any wait by you to pay off?
Supply will likely a) decrease b) increase in your area in the near future.
Demand will likely a) increase b) decrease in your area in the near future.
Unless you can (reasonably confidently) select “a” for both questions you are gambling by not taking the offer (absent knowledge of any other factors that might make your condo 15% more special than those selling for 110 currently).
Gambling is ok, if you can afford it. But remember; the game is now musical chairs with plenty of “chairs/properties” for players/buyers to pick but ever fewer and fewer players/buyers in the game at all. 10 or 15% may seem like a lot to leave on the table but the alternative may be that you may not get to the table at all………
“Now, those adjustable-rate mortgages (ARMs) that took off at the turn of the century are set to adjust, and if owners aren’t careful, their dream will end with the housing boom’s demise.”
And sellers in Florida are scratching their heads wondering where market demand went.
Every morning on my way to work around 4:30am I hear the same tort Lawyer commerical. The lawyer asks if there is any one who feels that they are being ripe off by their subprime loan that they should contact him and he could save them thousands of dollars if not all of their money that they have spent on the mortgage. I find it so funny who all this is being played out.
I think someone said on this blog (or someone else):
“Now is the time where everybody sues everyone over everything.”
“Heidi Williams just started renting her 1,030-square-foot Brickell Key condo from an individual owner for $2,100 a month. That’s after her agent negotiated $200 off her rent each month.”
Hey Heidi, I got a 600 sq ft yuppi shitb*x for rent for $4000 but I will give you $1000 off. What a deal. I just want the place rented.
Here is the listing: Hedi has a great view
http://idx.myagenthost.com/detail.query?id=Brickell&nListingsID=12473229&ud=15
Any central Fl people out there. I know what I’m seeing on the internet for number of listings, price reductions, motivated sellers, etc., but I keep reading all this hype about prices stabilizing. From what I’ve been seeing everything is going straight to h”ll, but people down there seem to have their heads in the sand. Maybe they’re just wishing upon a star that things are turning around.
Just got off the phone with a buddy of mine who lives in Palm Coast. He said the prices are all stable down there: “the guy next door just sold for $10K less than he bought it for last year.”
“Why did he sell?”
“It was an investment property and he got tired of dealing with it.”
Yeah, prices are stable, except they’re not.
Polk County here:
Not about housing, however.
But in other observations:
1) The guys at the marina where I keep my “new” boat (older used-but I love it- and I OWN it) told me that alot of people, more than ever, were pulling their boats out of dry storage to save money. ( ~$120-$150 per month bill ) Also, they have more boats on consignment for sale than they have ever had….keep in mind that 2005 was the banner year for boat sales here in FL and broke all previous records. Slowly but surely these toys are showing up on front lawns and Craigslist……the marina guys told me boat/waverunner sales dropped precipitously in February. Heck, I made the mistake of coming through the front-end of the business the other day ( marina has seperate entrance ) and had to run a gauntlet of no less than three (3) hungry boat salesmen trying to sell me a Pathfinder or a SeaPro.
2) Bike Nights. Popular here in climate-friendly Florida; my biker drinkin’ buddies tell me that Bike Nights at the local pubs and taverns are “losing their luster” and attendance is way down from last year…seems like the noveau-riche Realtors(tm), Mortgage Brokers, Car Salesmen, and other people of “bling” have lost their desire to “dress down”, drink beer, show off their Chrome Hogs and rub elbows with the “common man”. THE CENTRAL FLORIDA AREA IS SWAMPED WITH BIKES FOR SALE.
$ 3.00/gal gas is here and just bought the biggest house in the middle of town. Looks like his brother, $4.00/gal, packed the moving van and is headed this way as well….
I don’t see how this game of credit cards, HELOC’s, robbing Peter to pay Paul, and cash-out refi can last much longer.
I smell a distinct change in the air. I have lived here over half my life ( 21 years ) and sense something is definitely fixin’ to happen..Alot of the people that I know are trying to sell their houses and get out before another bad Hurricane Season…those that rent have resume’s out in the Carolinas, etc and will bail on the next opportunity that comes along.
As for me, I am staying. I still like it here. But I don’t have kids to put through the shitty school system, don’t own a house, make above median salary (barely), live within my means, am single, and love the water. For people like me Florida is still an attractive place.
All smoke……roughly 1400 sales in MLS last month for Orange and Seminole Counties. The worst April since 2003. Yep folks it is 2003 and heading for 1980. Just like a choochoo headed down hill it takes a while to get going but it is so fun in the end. Hold your little paws up and scream.
I looked on the MLS for Orange, Osceola, Seminole and Polk counties. There are 38,009 MLS listings and that does not include For Sale by Owners or Foreclosures that the banks haven’t listed with a company yet.
20,884 houses listed in MLS for Orange and Seminole. That’s about 6.7% in sales. I’d bet that for every one that sold 2 more were listed. That’s a serious backlog for an area that everyone is just dying to move to.
“I don’t see how this game of credit cards, HELOC’s, robbing Peter to pay Paul, and cash-out refi can last much longer.”
I can’t see how this will last much longer than 2007. From what I’m seeing here in the SD/MN/IA area this place is taking off in prices but will take a HUGE crash. It started up about two years ago in the Sioux Falls - Sioux City region, and with it came all of the traffic, the obnoxious people that seem to follow the Real Estate Xpress, the screwy houses that they build on the south side of town, the closing of good local businesses and replacing them with fly-by-night companies or strip malls and ‘finance’ companies. We had a Suncoast DVD store in our mall for the longest time, and it closed about a year ago. You could go in and buy rare DVDs (mostly hard to find stuff like Red Green episodes and anime) but now, it’s gone. A lot of other good businesses have gone, and they won’t come back, I’m afraid.
To give you an idea of what the rural outposts in America are facing in this bubble, there was a house a block away from me that was recently sold to what I think was a flipper. Me and some relatives toured the place when it was open house a month ago and the place was a wreck. The fence was knocked down, the house looked like it wasn’t cleaned in a decade, the appliances were old and moldy, the basement was a mess, and they ripped the heating vents and parts of the ventilation out. Ten years ago GOOD houses in this neighborhood (plain neighborhood, nothing special) would sell for around 60K - 80K for around 1500 sq ft. Now, this heap of a house was sold for 145K and I think it’s maybe worth 40K tops with the repairs that need to be done, and that’s on a good day. The jobs in this part of the country don’t pay much more than $6 - 9/ hour for the most part, and from what I’ve seen on this site and others, I wouldn’t be surprised if housing goes back to 1990 - 1995 prices. I think this is going to be a much bigger mess than the S&L crisis or the Stock market meltdown in 2000. I think 1999 - 2000 prices are ‘in the bag’.
The Xstate