The Fallout From Florida’s Hot Housing Market
The Tallahassee Democrat reports from Florida. “Home sellers should heed the advice of their real-estate agents, especially in this current competitive environment, according to longtime Realtor Jan Soto. ‘Sellers need to do everything they can to make their homes, properties look good,’ Soto said. ‘It has to be priced right.’”
“‘Our number of closed sales improved slightly (over March), but we’re dramatically putting more listings on the market,’ said Don Pickett, a Realtor and chairman of the market trends and research committee at the Tallahassee Board of Realtors. ‘It’s like we’re taking one step ahead, one step behind.’”
“‘I’m not really sure why we’re getting more and more on the market. We can’t say it’s all investors,’ he said. ‘Some people really hesitated putting things on the market a year or two years ago. Now they’ve waited, and they’re doing it.’”
“Pickett recently asked members of the local real-estate industry why there is currently so much residential inventory. They cited several reasons, including the following: ‘Sellers that were on the fence about selling and waiting until the market ‘peaked’ came in too late last summer/fall.’”
“‘Qualifying for a loan has become more difficult for some first time home buyers.’ ‘Overbuilding.’ ‘Housing prices have surpassed incomes in many metro areas.’”
The Herald Tribune. “Hank Fishkind, Florida’s premier economist, believes that the downturn in the residential real estate market is over. ‘I argue that housing has stopped going down,’ Fishkind said. ‘It is weak. It is painful, but it is not going to get any worse.’”
“For the several hundred builders, developers, Realtors, mortgage brokers and other members of Southwest Florida’s real estate industry, Fishkind’s comments came as a welcome relief after two of the the toughest years in more than a decade.”
“When it comes to the region’s condo market and sales of raw land, however, Fishkind was not nearly as ebullient. ‘Ugly, ugly,’ was how the economist referred to the condo market, in which sales have plunged to about 120 per month from about 600 per month during the boom.”
“‘People who are closing on condos now and thinking of reselling them are going to find that there is no liquidity,’ said Fishkind.”
“Prospects for land sellers are even worse. ‘Land prices were bid up in the expectation of rising home prices,’ Fishkind said. ‘We all know that didn’t happen. Prices have not returned to equilibrium. It is a dangerous place to be.’”
The Tampa Tribune. “Florida now leads the nation in the number of cases of suspected mortgage fraud. Experts say the fallout from Florida’s hot housing market is leading lenders to pick up on bad loans originated last year.”
“‘One of the things that fueled growth in fraud is the rapid growth in prices in the housing market,’ said John Mechem, spokesman for the bankers association. ‘When people see all that money, it becomes a target for mortgage fraud schemes.’”
“The state’s overall housing economy could suffer as mortgage fraud pushes up foreclosure rates, which causes more homes to flood the already crowded real estate market. As homeowners compete with each other and lenders, home prices could go down.”
“‘When banks have to take these homes back, they have to get rid of them fast,’ said real estate analyst Mike Larson. ‘They are willing to drop prices and undercut everybody just to get the homes off their books.’”
“The fraud report comes on the heels of another dim housing report released Tuesday by the Florida Association Realtors. Amid such slow sales, mortgage origination volume is the lowest since 2001. Lenders, however, report 30 percent more suspicious mortgage loans were made in 2006 than a year earlier, according to a research firm.”
“Doug Pollock, president of Sanford-based Information Data Services, which investigates mortgage fraud for lenders, said he’s not surprised at Florida’s rise to No. 1. ‘2006 looks bad, and I think 2007 will be worse,’ he said. ‘The only thing keeping us afloat right now is that the Fed is keeping the prime loan rate low, but at some point we have to pay for our sins.’”
“‘I don’t think we’ve seen the fallout of the subprime lending industry,’ Pollock said. ‘It may be another couple of years before it gets better.’”
The Bradenton Herald. “The number of mortgage-fraud cases reported by Florida lenders jumped by 43 percent from 2005 to 2006, according to a national study.”
“‘It’s really embarrassing,’ said Greg Hallam, president of the Mortgage Bankers Association of Florida. He and others in the industry said an unprecedented boom and subsequent slowdown in Florida’s housing market is behind the surge in fraud.”
“As home values skyrocketed in 2004-05, more people sought to cash in through inflated appraisals, exaggerated incomes and other fraudulent means. Lenders also relaxed their lending standards and practices, making them more vulnerable to fraud.”
“‘There’s always been a lot of fraud and misrepresentation in the Florida market, but a lot of it was masked by appreciation’ in property values, said Merle Sharick, one of the report’s authors.”
“But when values began dropping and mortgage defaults started rising in 2006, lenders began taking a harder look at their loan portfolios, and uncovering more fraud.”
“That likely will continue through this year, a local mortgage lender predicted. ‘Unfortunately, I think we’re going to be seeing more of it,’ said Pete Minarich, a senior lending officer for CTX Mortgage Co. in Bradenton. ‘I think it’s going to get worse before it gets better.’”
“A record number of delinquent taxpayers have two weeks to settle up or face an investor who buys the debt, adds 10 percent and tries to collect. The bills not paid by June 1 will be sold in the last up-close-and-personal auction to be held by Manatee County.”
“In all, about 96 percent of 165,000 tax bills, which were mailed in November, were settled. That left 5,930 property owners unpaid, a record, the tax collector’s office said.”
“Manatee’s delinquent population is higher than ever, due mostly to a greater frequency in foreclosures. ‘People are stuck with second homes because they thought they could sell the first,’ said Susan Profant, a paralegal at the tax collector’s office.”
‘A real estate source who keeps up with sales in the Orange-Seminole market says we are on track for a very bad month in May.’
‘The Okaloosa County School Board scrapped about $8.6 million in construction projects at its meeting Monday night as a result of the district’s declining enrollment.’
‘From October to February, the district has lost about 600 more students, assistant superintendent Rodney Nobles said. The schools ‘are decreasing daily,’ Superintendent Alexis Tibbetts said.’
‘Kranz said rising insurance and housing prices have exacerbated the problem. ‘If you build classrooms, there all of a sudden becomes nothing but a large storage room,’ he said, adding at many of the schools, there is no indication of an ‘uptick’ in enrollment.’
‘The Okaloosa County School Board scrapped about $8.6 million in construction projects at its meeting Monday night as a result of the district’s declining enrollment.’
A wise move, but how about those of us in Palm Beach County who were promised new schools and projects for our .5% sales tax increase? They are scrapping projects here as well without rolling back the .5% that idiots voted for.
“…as well without rolling back the .5% that idiots voted for”
Sorry, wishful thinking. Do you really think they’d roll that back?
they have to hire legions of mammy baby sitters
look at the school budgets from 1980 on-it’s all surrogate parenting
. “Hank Fishkind, Florida’s premier economist, believes that the downturn in the residential real estate market is over. ‘I argue that housing has stopped going down,’ Fishkind said. ‘It is weak. It is painful, but it is not going to get any worse.’”
- Good ole Hank, he’s the premier on Planet Denial.
He kind of looks like Borat. Go figure.
Check out the Powerpoint presentation from the talk that was the basis of his talk:
http://www.fishkind.com/download/fishkind_econ95.pdf
He provides trend data on employment, housing starts, sales, permits, etc., but completely ignores the trends in the swelling inventory (he just provides current snapshot of that data).
He mentions employment but fails to discuss affordability. Most importantly, he completely ignored the subprime/Alt-A mess and it’s associated growing glut of foreclosures and the tightening credit markets. Of course, vacancy rates also aren’t mentioned. It those items that will affect the RE market more than anything.
What a moron.
“He provides trend data on employment, housing starts, sales, permits, etc., but completely ignores the trends in the swelling inventory (he just provides current snapshot of that data).”
So? Since.. when.. does.. supply.. affect.. price?
(sorry - it’s hard to talk with my tongue so far into my cheek)
Hey Hank - has it really bottomed? Suddenly flocks of people who can carry a $250,000 mortgage are going to materialize out of the employment market of Florida? We haven’t even BEGUN the downward trend yet, Hank. Are you listening HANK??!
Hank is an idiot or was paid off.
…‘I argue that housing has stopped going down,’ Fishkind said. ‘It is weak. It is painful, but it is not going to get any worse.’”
More famous last words to quote.
“South Florida,” he said, “is working off of a totally new economic model than any of us have ever experienced in the past.”
Can’t help but wonder what the idiot who said that is doing today. Fishkind might want to get in touch with him.
Yes he sure is… his only commented data point was that new construction is now below current new home closings. WHOOPIE!!!
He at least gives himself an out with the comment that new home prices my not rise for the next 3 years. So if I wait this out for the next 3 years, I can buy a new build for todays price. OK I’ll wait.
I know. This is truly a rare day. I only have basic college courses in macro and microeconomics to my credit, but today I conclusively can say that I am a superior economic thinker to my state’s alleged premier economist Hank Fishkind.
Why is Fishkind speaking at a gathering of developers, realtors and mortgage brokers? Off-topic, but anyone with a mustache like that should be in adult films. I think the appropriate word is porn-tacular.
Be glad you only have a little ‘official’ school in the subject. University economics are designed to create a class of economists that are good at fooling themselves, which make for pathological lier I economics, the most effective kind. Read up at financialsense.com, itulip.com, here, etc… if you want a real education in economics.
“University economics are designed to create a class of economists that are good at fooling themselves”
That’s why I’m 99% anti-higher education. In getting an MBA and working on a DBA I’ve realized that it’s only a contest to see how much sh*t you’re really willing to tolerate.
We may have a lot in common. (I’m specifically talking degrees here.) Do you have an email address you’re willing to share? I’d like to chat offline.
About the only reason to attend college is to get the ‘receipt’. I call it a college receipt, not a degree. It’s a shame you’re generally not taken seriously without the receipt.
When I got out of college in 1992 there was a bad recession and I had to take a job for about half of what I was expecting. In the meantime everyone else who couldn’t find work or viable work went back to school. 3 years later a master’s degree was the thing to have if you went on an invervene. Gee, I wonder how that happened. I took a few graduate level courses and found they were nothing more than regurgitated undergrad courses. I suspect the same dynamic made having an 8th grade education obsolete in favor of a high school diploma, and then a high school diploma was made obsolete by a bachelor’s degree. At some point people will be starting families and getting on with their lives about the time they start collecting social security (which will be the equivalent of about $80/month at that point). It’s amazing how many 30+ people there are around that are essentially living lives that a 21 year old in 1950 would laugh at.
Too true. This is the deflation of living standards - I’ve watched it happen.
Unfortunately I think it can still get a *lot* worse.
Excellent post AndyinJersey. I am in complete agreement.
“We may have a lot in common. (I’m specifically talking degrees here.) Do you have an email address you’re willing to share? I’d like to chat offline.”
Sure, I’d be happy to chat offline. andrew_norm@yahoo.com
I’ve posted before and haven’t had the SPAM folder bulk up as a result.
“About the only reason to attend college is to get the ‘receipt’.”
And that’s the problem. In the business world, I would rather someone go into a 12 month program that is strictly business education. Beyond that, I can mold anyone into a success. 4 years of theory and rehash of courses from high school is crap.
AInJersey -> “I suspect the same dynamic made having an 8th grade education obsolete in favor of a high school diploma, and then a high school diploma was made obsolete by a bachelor’s degree. At some point people will be starting families and getting on with their lives about the time they start collecting social security (which will be the equivalent of about $80/month at that point).”
I know in India this is exactly same. You will find many public transport bus drivers and conductors having a Bachelor in Science degree with first class honours.
“I know in India this is exactly same.”
In the US it runs in cycles that mirror the economy. The better the economy, the less education that is required to get into the entry level. As unemployment grows, employers become more particular. Smart employers seek experience over education.
“In the US it runs in cycles that mirror the economy. The better the economy, the less education that is required to get into the entry level. As unemployment grows, employers become more particular. Smart employers seek experience over education.”
Yes - a lot of college educated idiots out there. Look at the poeple preaching housing assets, etc. most of my college buddies are just dolts who follow the masses. I thought college was supposed to teach independent thinking?
Masters classes are only rehashed undergrad classes. Two classes I’ve taken are actually taught at both undergrad and grad level TOGETHER - of course undergrad is about 1/3 of the cost for the same education.
In 10 years a Masters will be the current bachelors’.
Engineering/Science/Medicine are differnet for degrees. You actually learn new stuff.
Art and Buisness guys always spend some time on the green throwing frisbees and hitting the campus part trail.
Hate to see people waisting tax dollars on those guys.
“Engineering/Science/Medicine are differnet for degrees. You actually learn new stuff.”
And if you threw away the crap in those programs we’d be calling you Dr. in 4 years.
As a wise man once said “Beware of formal education. It could cost you your common sense.” I remember Warren Buffett once saying that Wall Street economists are like monks who spend 10 years at the monastery studying the scriptures only to realise afterwards that all they needed to know are the ten commandments.
“Beware of formal education. It could cost you your common sense.”
I had an econ professor once tell me about exceptions to supply and demand…even going to the point of taking credit away on an essay. This housing bubble is prime example of NO EXCEPTIONS to that rule. No matter what it seems like in the crazy days, there will be an oversupply driving prices down.
“About the only reason to attend college is to get the ‘receipt’.”
IMHO, I think it depends on the degree. If you get something practical like accounting, software engineering, law, nursing, MD, etc… then it is worth it. I did my undergrad in Business Finance and have used it extensively as an IT consultant on HR and financial systems. I am now working on a Masters in Softare Engineering. The work I do at school allows me to keep my skills up to date as I have been in the business a long time and the technology is constantly changing at a rapid pace.
When I look to hire somebody, if they have a degree from a half-way decent University then I know that they can stick to a program and that they can probably communicate effectively. However, it is somewhat of a crapshot and a degree is no guarantee that the person is smart or emotionally stable. Intelligence and education are two different things altogether…
“IMHO, I think it depends on the degree…”
So tell me how that biology course has applied to your consulting practice. How about your humanities course? And American Lit?
No matter what the degree is in, at least 66% of it at the undergraduate level is useless. That’s what I’d like to see changed.
“So tell me how that biology course has applied to your consulting practice. How about your humanities course? And American Lit?”
These types of courses generally teach you how to think critically and organize your thoughts in a coherent manner. IMO, rhetoric is a valuable skill that will take you further than somebody who does not have it. It also opens your mind to thinking about why the world is the way it is and gives you more information to form your opinions about life in general. Personally, I value my education and think it has made my life richer on many different levels.
It is only useless if you see an education as primarily vocational training - of course you won’t be able to use your memorized TCA cycle or Greek Pantheon to help you wire a house or trade stocks. That’s not what it is for. The point is to produce an educated stratum of society who can do a lot of important things which aren’t of instant economic value - can you imagine anything more useless than studying the electrical properties of silicon contaminated with atoms of heavier elements? Yet out of that came the entire semiconductor industry.
How worthless is it to study the mechanisms by which bacteria fend off virus infections? Hello, genetic engineering!
The main problem as I see it is that university education has become a prerequisite for a host of careers for which it is not really necessary. The result has been a slew of people resentfully spending time in an academic environment for which they have no inclination and little tolerance.
“How worthless is it to study the mechanisms by which bacteria fend off virus infections? Hello, genetic engineering!”
For a doctor or researcher it’s not worthless. For an advertising executive it certainly is.
We have a primary education system to teach basic knowledge over the entire spectrum. It should then be left to the individual to continue that education in their chosen vocation.
“These types of courses generally teach you how to think critically and organize your thoughts in a coherent manner.”
Well, you’ve been sold a pile of crap. How much real estate do you own? Any business course on management will teach you how to “think critically and organize thoughts.” So will any law class. It’s people like you who continue this constant mess of college “receipts.”
Colleges (especially those that are state run) are profit houses. They depend on the status quo to keep their doors open. What a shame that they are able to continue to do things today as they did in the 1800’s.
“The main problem as I see it is that university education has become a prerequisite for a host of careers for which it is not really necessary. The result has been a slew of people resentfully spending time in an academic environment for which they have no inclination and little tolerance.”
I may borrow that quote sometime Ed Bear.
“Well, you’ve been sold a pile of crap. How much real estate do you own?”
I don’t quite understand what RE has to do with having an education. But since you asked, I own my primary residence free and clear and that is all the RE I own. There are better investments out there and have been since the fundamentals went haywire back in 2002-2003. As far as being sold a pile of crap is concerned, I guess everyone is entitled to their own opinion. If that’s what you think then, hey, more power to you. It doesn’t change my opinion on the matter.
I tend to agree with you on your comment about State Universities and the status quo. They have not adapted technology enough make education less expensive. Acadamia is not exactly known for innovation when it threatens the established order. I think that the private schools will probably take the lead.
“I guess everyone is entitled to their own opinion.”
Yes, and it’s apparent that mine is a strong one. I’ve been in the business world for a long time. I’ve been in higher education for a long time as well. It’s time for reform.
Here are the issues. The regional agencies accredit universities based on the 1800’s logic. The private universities as well as state universities have to play by these dated rules.
With diploma mills out there, the status quo agencies are the only way to weed out “bad” schools if you will. What I’d like to see is more focus on hands on co-op things for credit instead of classroom theory. Unfortunately co-ops and life experience can make up very little of your final degree.
snake charmer - np, cheers!
…anyone with a mustache like that should be in adult films. I think the appropriate word is porn-tacular.
lol
Economic prognosticating = day job?
I get all my financial advice from the firm of Jeremy & North.
Nice.
Bravo. Anyone who gets this joke is a perv.
anyone who doesnt get it is, well probaly fairly normal.
myself, Im perverted to the nth degree
REIC is a branch of the porn industry, they just keep their clothes on.
I seem to remember a realtwhore ad that offered less clothing a while back…
Seriously. Amazing they find anyone willing to give them a paycheck. Imagine this guy trying to eek out a living in a world where you actually had to contribute something to survive.
BTW, where abouts in Philly are you?
Lived in Queen Village and South Philly when I was in town. Now I’m a suburbanite, just north of PA/DE state line.
Hank means that the single family MEDIAN PRICE has stopped going down. There are two reasons that this could indeed be happening.
1. No low-end sales due to the tightening of credit for sub-prime and Alt-A borrowers. We could see the median actually rise.
2. Using the median hides the fact that this year’s buyer may be paying the same amount as last year’s buyer, but this year’s buyer is getting much more house for the money.
Bill,
Prices are going down. It is too much inventory and not enough buyers. People cant keep paying out this money forever. The median price is not dropping so much, because people are not buying. In South Florida: schools, crime and community makes a difference. No one is moving back to low or middle income areas. There is alot of inventory in the low and middle income areas. Many poor people who brought sub-prime loans will have to sale at any cost or the bank will take the house and sale at profit. This should happen in 2008 or 2009.
Of course you are getting more for your buck, because people are desperate to move out of south florida. my cousin moved out in 2005 and made a killing. if gas goes up to 4.00+, it is a whole new ball game and it is not going to be good!
Yes, house prices are going down. My point is that using median price statistics tends to mask the severity of the decline.
To respond to one of your other points: If the bank takes back a house that was purchased in 2005 or later, there is no way they’re going to make a profit by selling it at foreclosure. Say they lent $400K to the buyer, but they only get $300K at auction. That’s a loss anyway you look at it.
“Say they lent $400K to the buyer, but they only get $300K at auction. That’s a loss anyway you look at it.”
Bill, you assume they didn’t take the $2600 interest only payment for the last 3 years along with the initial closing costs. They collected $93,600 just in interest!
Bill,
As a fyi for here in Port Charlotte…the lady at the end of my street was foreclosed on 15/16 MONTHS ago. The house is 2 years old and in brand new shape. The lady still lives in it and keeps it up. I called the local bank about the note. The note is for 130k. Not a single bid for the place. I told the loan officer i would write em a check for 60k the next day. The guy kinda snickered at the offer but he did take my return number …
Chris
bill
i understand and i meant to say (not for profit)!
my bag!
Cobradriver, is that lady living in the house for free, just paying utilities?
Not a single bid for the place. I told the loan officer i would write em a check for 60k the next day. The guy kinda snickered at the offer but he did take my return number …
Go up to 90K, I bet you can get it. Let us know how it works out, I’m expecting a 3/2/2 to once again be 120k in the Tampa area, not 200k.
Bill, you assume they didn’t take the $2600 interest only payment for the last 3 years along with the initial closing costs. They collected $93,600 just in interest!
Um, Andy, just where do you think the bank got the money to loan to the homeowner? They had to borrow it from somebody (called a depositor) and pay interest. Sure it’s less than the interest the homeowner paid but there is no way this spread is going to compensate for a 25% capital loss on the balance. The bank is going to take a big loss.
They need a statistics that shows dollar volume of sales. That’s gotta be way down.
Right, nevermind that he’s been wrong about most everything for 2 years.
Fishkind is a shill for developers….DL in drag.
is he buying , or lying?
“Florida now leads the nation in the number of cases of suspected mortgage fraud.”
WE’RE NUMBER ONE! HIP-HIP HOORAY! WE’RE NUMBER ONE!
Sweet! I never really doubted our ability to climb to the top of the faud pyramid. I am so proud of everyone who put in all the effort to help make FL number 1! My fellow FB is doing his part to make certain that FL is a true leader in the nation.
Actually, it is a bit suprising. CA is so much bigger then FL, I am surpised that we could surpass them in MTG faud. Don’t count the little guy out yet!! It’s like a Rocky story!
arroyogrande pointed this thread out back in january. Mortgage brokers talking about fraud in FL. It’s started by a broker who had an account exec from a lender as a client… but lost him to a guy that would forge 12 mo bank statements! A LENDER doing this!
And only gets better.
http://forum.brokeroutpost.com/loans/forum/2/87749.htm
I think we’ve got more crooks than the next 10 states combined. Remember, Florida is the state where people bought swampland sight unseen in the 80’s only to find out they couldn’t build their retirement home (or anything else) on the land they bought.
Hey - the land my grandfather bought back then in Florida was extremely valuable. Florida has nothing but honest business people.
(I wish I were kidding about my grandfather…)
Castro emptied his jails in the early 80’s of the most ruthless,and coniving criminals. They havn’t been idle the past 25 years I assure you…machetes,and machine guns have now been replaced with pin striped suits..
Eastofwest…You must be referring to the local politicians in South Florida. Amazing rip-off scams with public funds revealed in the Miami Herald everyother week by local Cuban “American” politicians and high level businessmen. However, most middle and working class Cuban Americans I have met are great, conservative, hard working people and are proud to be Americans.
You’re correct SanDiego, I have several Cuban friends ,and are very intelligent hard working people. I refer to Castro emptying his jails of the most hardened criminals. Hardened criminals, but highly intelligent. Scarface was based on one such achetype…but as with any intelligence at all the criminals saw that they could go’ligit’,and make more by gaming the system….hence no more street gunfights etc. Get a broker licence, buy a bank, go into politics etc.
Also watch the’ godfather’ series again. It was Vito Corleones’ greatest wish to get his son into congress, and make some real money. Business is business….nothing personal.
“people bought swampland sight unseen in the 80’s”
I think that was in what is now known as Northport. They keep trying to revive Northport and now pretty much the same thing has happened again there. Florida keeps giving people a good financial pasting and yet they keep coming here with dollar signs in their eyes and nothing but a song and sunshine to live on. Sigh. When will people learn? You’ve got to be a wily coot to get around the many pitfalls of Florida. It is just not a state for families and middle class folks. Never was.
“It is just not a state for families and middle class folks. Never was. ”
Thank you! Thank you! Thank you! That’s exactly the point I was trying to make the other day when we got to talking about the economy of FL. Florida will survive, but it will continue to be what it always has been!
Of course I agree with you, Andy. Having lived here since 1979, I’ve learned, sometimes the hard way, what it takes to survive here. If you know what you are doing and how to work around the disadvantages, life in Florida can be sweet. If you don’t know what you are doing in Florida and what the pitfalls are, Florida is just an alligator with its jaws open, waiting for a meal. The beast has been pretty savage these past six years, it has gorged, its belly is full and it is now regurgitating. Hang on for a wild ride, it is gonna get interesting here and we’ve only just begun.
palmetto,
Ya mean all dem lots that sold/changed hands at 50-100k (thats right LOTS),are not worth that. Boy i am devastated !!!! I can show people area that were subdivided in the late 50’s/early 60’s that have not a single home,streets overgrown with grass and yet there is no more land….
Chris
Chris, back when I was kicking around South Florida, I worked for a fellow who used to sell those lots. He went into another business, couldn’t stomach it. But he had some great stories to tell. This is all par for the course in Florida, it is just on steroids because of the bubble. It will go away and then happen again, sometime down the road, unless of course the lower half of the state sinks like Atlantis, which is not outside the realm of possibility.
“Florida now leads the nation in the number of cases of suspected mortgage fraud.”
No surprising.
FL was always home to legions of boiler room penny stock hucksters and scam artists.
Obviously the money to be made in mortgage fraud was easier, so they all made the employment shift.
What’s a “premier economist”? I wouldn’t buy a used car from Hank! Although I’ve got to hand it to him, calling the market bottom at this stage in Florida takes some real guts.
Doesn’t take guts. See:
FL prices are not going to go down anymore. The economic fundamentals support home prices at these levels; we will have a period of flat appreciation, and then back to 30% YOY.
See, that was really easy. Even a die hard HBBer can do it.
What takes guts is BUYING a condo anywhere in FL. Or a home built in the last 10 years (which is likely grossly overpriced by now). Or buying a retirement home in FL (that takes blind stupidity, given our taxing environment). Those are the heros! They charge forth into a hail of bullets and shrapnel (that is now the FL housing market). Those people have bravery like nothing I have ever seen before.
House next door just sold for 325K (2 months ago) down from 411 (last sale, 05). An identical model 2 doors down is for sale at 299K. Ever lose 25K in 2 months? It takes a kind of bravery that I just don’t have!
Actually, Mike, you had me going there for a minute.
I was buying into the concept until I thought about it.
100% financing, no money down, stated-income, blah, blah, blah. I have no fear at all. It’s not my money. It’s DEAL OR NO DEAL in real time.
You give me money for nothing, and I see if I can get more money for doing nothing.
The Florida Real Estate game circa 2000-2005.
All courtesty of ALAN (1% is a great rate) Greenspan.
It’s a good thing worthless, lazy, ’something for nothing’ Americans were so willing to play.
I’m confused.
Who paid? Oh!, you mean the lenders that made all the easy money available to the “buyers”? But, I thought they sold all those crappy loans to the market place as AAA rated bonds. Didn’t they? So, who is paying?
‘As home values skyrocketed in 2004-05, more people sought to cash in through inflated appraisals, exaggerated incomes and other fraudulent means. Lenders also relaxed their lending standards and practices, making them more vulnerable to fraud.’
‘But when values began dropping and mortgage defaults started rising in 2006, lenders began taking a harder look at their loan portfolios, and uncovering more fraud.’
How can the reporter step over this obvious connection?
“How can the reporter step over this obvious connection?”
Man’s just doing his job…
“How can the reporter step over this obvious connection?”
Try this out: Enter the names of local real-estate reporters into the appraiser’s website. Be prepared for the worst.
That said, I should also say that some local real-estate reporters have done a good job, despite their personal financial stakes in not reporting the truth. That takes at least some courage. By and large, after all, they aren’t cheerleading. But whether they begin to make the connections, well, we’ll see.
“…exaggerated incomes and other fraudulent means.”
Imagine how many thousands of people out there will be sick with fear once they realize that “fraud” applies to them because they went along with falsified income on their mortgage application. I hope the flippers and speculators get what’s due them, but there also must be many people who otherwise were honest, hard-working folks and who got caught up in the “buy now or be priced out” mentality the greedsters created.
Tax cuts not for everyone
A House plan wouldn’t help many at the lower end.
http://www.sptimes.com/2007/05/18/State/Tax_cuts_not_for_ever.shtml
A leading legislative proposal to trim Florida’s property-tax bills would save the average homeowner about $1,500, or more than 50 percent. But the savings would not be distributed evenly.
A St. Petersburg Times analysis of county property appraiser data has found that about 55,000 homeowners in Pinellas and Hillsborough counties, or one in 10, would not gain a penny under a plan recently floated by House Speaker Marco Rubio, R-Miami.
Many of those who would be left behind live in lower-cost housing, including mobile homes or over-55 condominium communities. Forty-one percent of those owning property worth less than $100,000 would not benefit from the cuts. About 98 percent of those who own homes valued between $200,000 and $1-million would.
Some would save more than others. For example, owners of Hillsborough County homes worth $1-million or more would enjoy an average tax cut of $8,000.
Rubio, whose proposal will be debated Monday by a joint House-Senate committee on property-tax reform, is not worried.
“My pet issue is the poor seniors. But those aren’t the people that are generally complaining,” Rubio added. “Would they take a tax cut? Sure … but you want to focus on the people who are paying more.”
Rubio said he believes his plan will boost the Florida economy by eliminating Save Our Homes, which he called an artificial drag on home sales, and put more cash in residents’ pockets.
But county property appraisers who assisted the Times with its analysis - and who admit having a vested interest in robust local governments - were critical of the direction of the property tax debate in Tallahassee.
“I had a feeling that the people at the low end of the housing spectrum would get nailed, and they do,” said Pinellas County Property Appraiser Jim Smith.
This looks like a phony argument to me. If a property is worth less than $100K, and you subtract the $235K homestead exemption that already exists, what is left to tax? $75K maximum? That would generate property tax of about $100 a month. The reason these folks aren’t getting much relief is that they aren’t paying much tax to begin with. There is also an argument to be made that if police and fire services are to be paid via property taxes, then every homeowner who wants such protection should pay at least something for it.
Typo - 25K homestead exemption
The Herald Tribune. “Hank Fishkind, Florida’s premier economist, believes that the downturn in the residential real estate market is over. ‘I argue that housing has stopped going down,’ Fishkind said. ‘It is weak. It is painful, but it is not going to get any worse.’”
Florida’s premier economist? How about Village Idiot, that seems more accurate.
Anyone heard about COAST financial? It’s TOAST!
The funny thing is…
My manager where i work lives next door to the ceo of coast. The boss told me he had bought there at the high point a couple of years ago. My boss bought in at 80k,20 plus years ago,the ceo 650k.
hahahahhhahahhahahahahahahahahahah
Chris
Banks have not yet started dumping REO properties. They are refusing to list or sell below “market” because this would realize hard losses. Their inventories are piling up. Stay tuned…
They are also waiting to see what kind of bailout package Congress can push through. For instance, a taxpayer-backed FHA guarantee on 100% LTV loans could make it much easier to unload REO, as the risk is transferred from the new buyer’s lender to the U.S. taxpayer.
I didn’t think of that in my note earlier (but below).
The possibility of such a bailout could justify banks holding on to REO.
Could they be thinking that if they own the property but can’t sell it for what is owed, they might qualify for bailout money one day, just so long as they can hold out till such a law would be passed?
Whereas if they take their lumps and sell it at a loss now, it would be unlikely that bailout money would cover that “earlier loss” before the law’s enactment; that would indeed seem like even more of a direct handouts to the bank and might raise more taxpayer ire.
“…they might qualify for bailout money one day,…”
It’s about lining up a new buyer (and lender) at the price the bank would like to get for the REO. If Uncle Sam stands ready to guarantee the new buyer’s mortgage loan, it will be much easier to find a lender willing to make said loan.
I keep wondering about this. When I look at it from a “What would I do?” perspective, I don’t think there is any type of financing that could convince me to spend more than about a 2000-2001 level price for a house. The rent ratio will continue to apply and there seems to be so much vacant inventory that in most places rents will not be bad versus buying for a long, long time to come. Once the REOs become very large in number, I suspect the lenders will have to fold their cards and take their lumps, as there may well be too few suckers left out there to bite on the new financing schemes.
“Pushing on a string”.
Doesn’t matter if the funding’s available or not… very shortly nobody’s going to want to commit to losing tens (if not hundreds) of thousands of dollars and being stuck in the same place for most of the rest of their lives.
I reckon you’re right. It’s the banks following the same path that FB’s or dot-com (or Enron) investors have done to justify holging on even as losses mount.
For individual investors, there’s something psychologically final about selling a loser and “booking the loss”, since then you have thus acknowledged that you made a bad decicion and will never have a chance of a rebound. For corporations, it’s more formalised. There’s the “book value” that maintains that this dog of a repo house is still “worth” $250k, hence no loss yet on your books, when in your heart you know you’d probably only get $190k. The former case is one of fooling yourself; the latter is fooling your shareholders (or your boss). Yet you the banker still hope housing prices recover so that you can get rid of these things at a better price. Which methinks might not happen.
Which is why traditionally, bank regulators have wanted banks to get REO off of their books expeditiously. In exchange FDIC insurance (which is valuable to banks because customers then don’t have to worry as much about losing their deposits) banks put up with greater scrutiny than other corporations.
Yes, and it is interesting to see that most of the HUD repos in Tampa Bay area counties are mostly mobile homes or crumbling crack shacks. Or higher end. The good meat in the middle is being held back, IMHO.
“Doug Pollock, president of Sanford-based Information Data Services, which investigates mortgage fraud for lenders, said he’s not surprised at Florida’s rise to No. 1. ‘2006 looks bad, and I think 2007 will be worse,’ he said. ‘The only thing keeping us afloat right now is that the Fed is keeping the prime loan rate low, but at some point we have to pay for our sins.’”
Can anyone who is good at reading the tea leaves known as the bond market yield curve please explain the implication for the prime rate when the right end of the yield curve rapidly climbs to the highest level across the duration spectrum?
http://www.bloomberg.com/markets/rates/index.html
That’s normal. More time money will be tied up means the lenders (bond buyers) want higher rates to account for tying their money up for so long.
What is not normal is for the short term rates to be higher, the “inverted yield curve” effect. That is sometimes an early warning for economic problems ahead.
“Manatee’s delinquent population is higher than ever, due mostly to a greater frequency in foreclosures. ‘People are stuck with second homes because they thought they could sell the first,’ said Susan Profant, a paralegal at the tax collector’s office.”
As I type, one of my sisters and, more recently, also a sister-in-law find themselves in the awkward position of owning two homes (with the new one 33% bigger than the last) in the near-term aftermath of the subprime collapse. I will watch with trepidation while they try to find buyers for the homes they are leaving at anywhere near the prices they anticipated when they signed their move-up purchase contracts.
Why do people buy a new house BEFORE they have sold their old one? Is the second home an impulse purchase? Are they stupid? Is it because they want what they want and can’t wait a month or two? Are they ENTITLED?
Is the second home an impulse purchase? YES
Are they stupid? YES
Is it because they want what they want and can’t wait a month or two? YES
Are they ENTITLED? NO
“Why do people buy a new house BEFORE they have sold their old one?”
I don’t know, I’ve certainly never been able to pull that one off. But I can tell you, it is nerve-wracking going to the closing table, selling the first and then buying the other. The moving truck is waiting and you hope and pray both transactions come off without a hitch. Last time I did that, we left the new owners in possession of our old home for three days prior to closing, because there was a glitch in the mortgage paperwork. I know we stone realtors a lot on this blog, but in this case, the realtor saved our behinds.
I don’t care too much when the rest of the world makes this mistake, but it makes me crazy to see close relatives make it. I went to great lengths to talk my sister out of buying a home last December (when the subprime tsunami was already in view of the shoreline for anyone who was looking), and she actually backed out of the contract. Then a couple of weeks later, I heard through the family grapevine that she and her husband had been lured back in by a couple-thousand-dollars off the asking price on the same (still-overpriced) deal.
So she is sneaking back to the beach to collect all of the pretty shells that the receding waters have temporarily uncovered? She’s not alone, a lot of people are still picking baubles out of the sand as the pre-tsunami tides recede.
Had the same thing happen to me. My elderly parents left Indiana & moved to Olympia, WA to be closer to my sister. I suggested to them that they rent a little while till the market settled out a bit. My sister was insistent that they buy a condo NOW because ‘everyone wants to live here, it is a great investment blah blah blah. So they ended up buying a condo from someone in foreclosure. They would not listen to me no matter what. The Koolaid out there must be real good - hope it works out.
IMHO, except for New York, NorthWest koolaid is the most powerful.
view of the shoreline for anyone who was looking), and she actually backed out of the contract. Then a couple of weeks later, I heard through the family grapevine that she and her husband had been lured back in
Hey Stucco, at least you tried, and you came real close to svaing them. They certainly can’t blame you for problems ahead, since even after taking your advice, they turned ’round and changed their minds. Arrghhhhh!! Feel no guilt, dude.
Because it’s a pain to move twice. I’m still going around this one with my wife. She clearly understands the downside to holding two houses, but the double move and living in an apartment with 2 kids and a dog and all your stuff in storage isn’t appealing either.
If you look at the typical loss from holding two properties in a normal market it’s only around 10k. That is mostly offset by reduced moving fees. Keep in mind these folks aren’t experts and most don’t realize the magnitude of this bubble.
As to my situation, after explaining the options to my wife we’re staying put another year. She would rather ride the equity down than sell and rent. This may seem stupid, however, we bought 7 years ago and put well over 20% down and have had a 15 year loan for several years. We can afford to lose 5% a year indefinately, and it would take around 7% per year for several years to make renting break even. Not everywhere got as outrageous as the coastal markets.
What ever happened to purchase contingent on sale of your current house? Then close on both, move once. or am I remembering these “old school” types of real estate deals wrong?
This may seem stupid, however, we bought 7 years ago and put well over 20% down and have had a 15 year loan for several years. We can afford to lose 5% a year indefinately, and it would take around 7% per year for several years to make renting break even. Not everywhere got as outrageous as the coastal markets.
Utlimately if you are in good position financially and would rather own than rent, then that’s a personal, emotionally good and not a stupid decision. However, I have to admit that a willingness to lose 5% of your equity per year for lack of willing to disrupt your life for a few months to rent seems very odd. Given my in-laws reaction to renting, would part of the issue be more like that your wife doesn’t want to go “backwards” and rent for a while?
I don’t know where you live, but I have never paid $10K to move. Given a generous budget of $2.5k to move twice, it’s still a $5K loss. It does not make any sense whatsoever to carry two properties at once other than convenience and I wouldn’t consider the loss minimal.
The other thing to realize in the equation is that there is the opportunity costs of losing interest paid to you on the equity turned into cold hard cash. We calculate that the bank will be paying us $200 or $300 per month insured on the profit on this house, in addition to being 100% debt free. We realize there are inflation risks but given our beliefs about the bubble (obviously) it makes sense to us to cash out.
We have 2 kids and a cat and our situation (bought 7 years ago, with 20% and 15 year note, non coastal area) is close to the same as yours. We wanted to move, and after running the numbers decided to take the plunge by downsizing and renting until the market becomes sane which may take a number of years.
Anyway, what I’m saying is that if you want to move and the real issue is that little work and a prejudice about how you acquire your next abode at the heart of the problem, it may be well for you to reconsider it as it presents serious hazards to your overall wealth.
“it would take around 7% per year for several years to make renting break even. Not everywhere got as outrageous as the coastal markets.”
I bought my home 20 yrs before I sold it due to a job relocation in 2004. I refused to rent it out and ended up selling it to the relocation company for $4000 less then I wanted to sell it for. Then relocation company cut me a check in 24 hrs and paid off all costs. When we moved we decided that prices were too high and chose to rent a SFH; interest on the money from the sale of the house now pays the bulk of the rent cost. It feels great to know that when we want to leave or buy a house we can. We went from 2260 sq.ft. into 1300 sq.ft and found we got rid of a lot of things we didn’t need; something that as a home owner we should have done about every three years. As for owning a house in the future, who knows, maybe yes, maybe no as our whole mental outlook on home ownership has changed over the last couple of years.
I parted company with a couple of neighbors who did this very thing. Despite their agent’s assurances that they’d have no problem selling their first house, it was on the market for eight months. It just sold, but I don’t know whether they actually got their wishing price.
According to other neighbors who still talk to them, they took quite a financial beating from carrying two mortgages.
For the same reason a woman during Germany’s 1923 hyperinflation will buy 10 bedpans with her entire paycheck, to exchange the money for something else before the purcahsing power of her money is eroded and someone outbids her. That and greed.
“Hank Fishkind, Florida’s premier economist, believes that the downturn in the residential real estate market is over. ‘I argue that housing has stopped going down,’ Fishkind said. ‘It is weak. It is painful, but it is not going to get any worse.’”
CAN THEY STOP LYING TO PEOPLE!
This is just the beginning of the end of the housing bubble. I am sick of the fuzzy math. It is a blood bath in South Florida. The govt down here are so scared, the cuts they are planning are unreal. Actually talking about laying off people. I thought 1000 people move to Florida every year.
Govt overspent and now has to pay a price.
For once, can people go after the insurance companies and not the property taxes they are not willing to pay for their 500,000 home. Spoiled rotten! Life isnt fair so PAY RICH, SO YOU CAN PLAY RICH.
When you have money, you learn to diversify your funds so you don’t pay alot on taxes. We dont even have income tax.
It is going to be real ugly in 2008!
Actually the figure tossed around is 1,000 people move to Florida a DAY.
All the reporters have to do is ask this one simple question .
Based on the true affordability index in your state , and absent fraud in lending, how can you justify that prices won’t come down . Further, if it required mass fraudulent lending to qualify buyers, as well as no down stated income liar loans ,if that lending sector is drying up ,how are the buyers going to afford the inflated real estate on their own merits of really qualifying ? In other words wouldn’t the affordability factors dictate where the bottom is ?
I live in Tampa and everyone and their brother owns their own mortgage company. Driving Escalades, owning 5 investment homes at overinflated values. Losing their shirts. It’s no wonder most of them are turning to fraud in order to keep their lifestyle going.
The Tampa Tribune. “Florida now leads the nation in the number of cases of suspected mortgage fraud. Experts say the fallout from Florida’s hot housing market is leading lenders to pick up on bad loans originated last year.”
“‘One of the things that fueled growth in fraud is the rapid growth in prices in the housing market,’ said John Mechem, spokesman for the bankers association. ‘When people see all that money, it becomes a target for mortgage fraud schemes.’”
“The state’s overall housing economy could suffer as mortgage fraud pushes up foreclosure rates, which causes more homes to flood the already crowded real estate market. As homeowners compete with each other and lenders, home prices could go down.”
I knew something was up when it seemed like every other strip mall had a mortgage, appraisal or title operation. Now people finally are starting to realize that there is no industry here other than call centers, tourism, theme parks and remnant agriculture on the few farms and ranches that haven’t been converted to subdivisions named “Tuscan Oaks.”
“Tuscan Oaks.”
Tuscan Dopes. Lago de Lunesta. The Meth Labs at Villagio. Casas de Crack House.
Wait they got this all wrong ,fraud in lending inflated the real estate prices ,not rapid growth in real estate prices created fraud .I have said it before that the only reason the market didn’t crash sooner was because it was shored up by the cash-back and incentives games of 2006 .They gave buyers money to buy a house while inflating house prices more to cover the cash back .
People wonder why it’s been slow for sellers to vcome down in price . It’s simple that sellers saw the fraud deals in their neighborhoods at inflated prices and they feel that they should get those prices also ,(they don’t know they are fraud deals ).it’s very easy to see how fraud deals can establish values in a area .The question becomes why did the lender allow a high loan amount on a high sale ? Because the slime appraiser and loan rep. and real estate agent got away with it ,while all their fellow realtors didn’t report them or the real estate broker didn’t question it . Part of crime prevention is having the industry police itself ,which just wasn’t happening .
A friend works as a mortgage broker in Tampa. We’ve been discussing this the past two years and she said I was wrong that the market was a bubble. Thankfully I put enough doubt in her head not to buy a condo that she would have lost $50k on by now. However, I wasn’t successful in persuading her to hold off on the new car, and now she just lost her job. I feel bad, but some people just can’t see the forest for the trees.
What I’d like to know is this:
Where in the USofA do the hottest, best-endowed female FBs live? I mean, if everyone’s going to be “losing their shirts”…
“Hank Fishkind, Florida’s premier economist, believes that the downturn in the residential real estate market is over. ‘I argue that housing has stopped going down,’ Fishkind said. ‘It is weak. It is painful, but it is not going to get any worse.’”
It was a tale of two Florida Hank-ies…
Fishkind & Paulson, both utterly clueless tools, all too willing to be used.
Hankie’s name is being bandied about to replace Wolfie. Coupla old frauds.
who else would this admin nominate to run the World Bank? An honest man?
“‘When banks have to take these homes back, they have to get rid of them fast,’ said real estate analyst Mike Larson. ‘They are willing to drop prices and undercut everybody just to get the homes off their books.’”
Banks are going to be forced by the regulators to get the foreclosed property off their books. The lost is recognized when the foreclosure takes place. Banks don’t want additional losses from non-earning or actually negative earning assets. Remember if the banks holds the property they have to pay taxes, insurance, HOA fees, utilities, grounds up keep, etc. They want the property gone and will significantly discount it because they know the bank who owns the foreclosed property next door is going to try and dump their property first. As each bank lowers their price that becomes the new comp. Hello 1995 prices. Just watch.
No drinking water for humans?
If you are a fishwrap, this is how you apply lipstick, to the fishes…
http://www.news-press.com/apps/pbcs.dll/article?AID=/20070517/ENT13/70516096/1054/ENT
It’s interesting that Mr Fishkind (fish child) thinks that land prices can drive house prices up, but that falling land prices won’t help bring them down. I know for sure that if I can buy a lot for a decent price I’ll have my own house built to my own specs (like passive and active solar)instead of buying some overpriced mass produced energy sink.
It’s a shame you can sink 1/2 million into a house and it has no technology to speak of except for $100 of CAT5 cable in the walls. What a waste. For the price of stainless appliances and granite countertops you could have PV panels and high efficiency appliances and be nearly energy independent.
That’s a really good point, climber.
Do you have any good links to using active and passive solar on home construction, or rehab?
About 10 years ago I bought a good book with examples of passive solar remodeling. Any good architect should be able to make suggestions as well.
http://www.consumerenergycenter.org/home/construction/solardesign/
What are you Florida folks paying for electricity these days? Take your total bill, move the decimal two places to the right, and divide that number by the kilowatt-hour (KWH) usage that’s shown. That will give you cents per kilowatt-hour. Our winter rate here is just under 7 cents per kwh.
8.5 cents KW/H.
$140 a month, on average, for 2,500+ sq.ft. and no skimping on heat or cooling. Orlando-are condo, excellent energy-efficient construction. Can’t imagine how low it would be in a TVA area.
13.6 cents. Probably because consumption is so low (about 1,000 KwH), since the rates decline for higher usage.
TY
For Florida specific ideas for solar and energy eficiency, since most focus on solar heating that is not too benefitial in S. Fla, try the Florida Solar Energy Center @ UCF. They have grat advice for energy efficiency in Florida’s unique climate.
http://www.fsec.ucf.edu/en/consumer/index.htm
I like that Gossamer Wind fan, assuming it doesn’t cost a lot more than a typical Hunter.
You’ve got it all wrong, Climber. People would rather pay for pizaaz and spashly granite and ss appliances that already scream 2005 and will be ripped out in 2010 when Home Depot/Lowes/magazines convince people that WHITE is the new GRANITE again. No one wants to invest in substantial improvements, and why should the builders when the owners are oblivious to the true state of the markets. The y (owners) would rather spend the money on a depreciating SUV than invest a litlte into long term payoffs.
It’s interesting that Mr Fishkind (fish child) thinks that land prices can drive house prices up, but that falling land prices won’t help bring them down
Actually both are incorrect. It’s the market price of houses that drives land prices (both ways), not the other way around. Land isn’t worth anything except as an input to building houses or other RE, or agriculture if suitable. And it doesn’t cost anything to produce land because it’s already there.
shocking, but look at Fishkind’s client list
http://www.fishkind.com/client.html
Plenty of taxers and builders.
How ecologically ugly is the state of the state of F el lay?
http://comm.emeraldcoast.com/times/news/article.showarticle.db.php?a=2954
Article from June’s Money Magazine about this couple who retired to Florida and started flipping. Now they are screwed. I could not get the link to the article maybe some else can.
Retirement interrupted
The Daimlers banked their retirement on flipping Florida real estate. Now they need a Plan B. By Donna Rosato
I don’t have a link at hand but did read it in print. They’re not that hosed. Well, OK, they are losing a bundle on real estate, but they started with a lot of money when they moved down there from Virginia — perhaps after selling their place here at a bubbleicious price.
You’ll love this, though: One of the financial recommendations was that they sell their very expensive vacation house on the coast (Carolinas?). She says she can’t, got too much of an emotional attachment to it!! That tells me right off that they aren’t in deep doo doo. And the various numbers in the article bear it out. Just a couple of flippers looking to haul in fast profits but getting burned.
They are seriously dipping into their savings. Like $123,000 this year.
more like deep denial.
AMF Florida…
http://droughtreporter.unl.edu/map.jsp?&src=&daterange=month&c_ot=on&c_wa=on&year2=2007&year1=2007&c_ag=on&day2=18&scn=nv&day1=18&c_fi=on&c_en=on&month2=5&month1=4&c_so=on&Cmd=sv&st=Florida
Sadly,
The Pollack Joke of an institution that we know to be the Fed, will have far too many punchline endings, most of which…
Will leave heavy brusing~
“Doug Pollock, president of Sanford-based Information Data Services, which investigates mortgage fraud for lenders, said he’s not surprised at Florida’s rise to No. 1. ‘2006 looks bad, and I think 2007 will be worse,’ he said. ‘The only thing keeping us afloat right now is that the Fed is keeping the prime loan rate low, but at some point we have to pay for our sins.’”
Knock Knock
Who’s there?
Polish Burgler.
Back in the old days of lending ,if a neighborhood got a high sale ,the lender would make that buyer put more down because one sale does not make a market . During the 2002-2006 boom , it was “hit the sales price appraising” on any sale . So, the sellers just kept adding 10% to the sales price to the point of some areas going up 40 to 50% in one year . When you have nothing to justify those type of price increases (other than speculation ), than you should let the speculators take the risk of the higher price being stable , not the bank ,(meaning requiring more down until you see that all end-user buyers would pay that price .). Also end-user buyers establish market price ,not short term speculators and unqualified low down buyers . The lenders did a great disservice to the public by allowing these sort of buyers to establish market value . Now the whole market place is looking for end-user qualified buyers with down payment money and they are nowhere to be found at these prices .The whole industry was sold on the idea that a mass-marketed investment scheme of short term turn-over real estate investing was stable and would continue . We really can’t say that “unable buyers” should of determined market values and it should of been stopped ,it wasn’t even questioned .
Just another shameful chapter in the American experience.
LOL…what a ridiculous time that was. I had friends and strangers trying to sell me on what a great investment real-estate is. Fortunately, I studied the subject, did my homework, looked at the prices, and decided that I was not a herd animal.
I guess a service economy really doesn’t work. We were all lead to believe that one person does fiancial services for 3, another person does legal service for 3, another person does software service for 3, and a fourth person sells real estate to all of them, and at the end of the cycle free food and energy appear. LOL
You are on fire today!
“I never drink water because of the disgusting things that fish do in it.”
“There comes a time in the affairs of man when he must take the bull by the tail and face the situation.”
W.C. Fields
” Fishkind’s comments came as a welcome relief after two of the the toughest years in more than a decade.”
“After two of the toughest years” and that folks puts us back into 2005 when he and the MSM where telling us that there was no bubble and that everything was just “copacetic”. In a court of law, one lie and your whole creditability is thrown out the window!
“It is going to be real ugly in 2008″
——–
How ’bout 1972, 1990, 2008…. 18 year cycle
It’s the merchants, set up the banks
“You must be referring to the local politicians in South Florida. Amazing rip-off scams with public funds revealed in the Miami Herald everyother week by local Cuban “American” politicians and high level businessmen. However, most middle and working class Cuban Americans I have met are great, conservative, hard working people and are proud to be Americans”
” I have several Cuban friends ,and are very intelligent hard working people. I refer to Castro emptying his jails of the most hardened criminals. Hardened criminals”
Fine, maybe you a communist too.
Personally, I don’t care much for loud mouths in public (all of them)
yackin away on their cell phones while standing in line for someting.
The labor market is supply and demand so I wonder how it is fair to the workers when you bring in and even financially subsidize more workers.
I don’t remember many cubans around here 30 years ago and now they’re all over the place and they ALL of them,,, borrowed and defaulted their way up the ladder
Me thinks a mental health degree is verry usful.
Well, you should apply for one then
Yep, the prime rate averaged about ~13% for 12 years while they deprived us of credit, which is the only place that money comes from!… 1978 - 1990..
I heard alot on the tv about how Americans just don’tt want to work abiout the same time that they started bringing in hundreds of thousands of foreigners and now I get to hear foreigners tell me how “we are allll immigrants”
You sound like a bleeding heart mr levie and thats fine but do it on your dime, blood sweat and tears, not mine
My name’s Harold Bennett.
I guess I just don’t understand what kind of man welcomes foreigners in to displace his children..
Even more,, what kind of man leaves his country instead of working to make it better.
I guess that’s how the merchants get 2 dollars labor for 1 dollar… i.e keep us between the rocak and hard place of DEBT and immigration.
You know that Northern Ireland was “England’s” first colony and that they took the land by force displacing it’s rightful owners and replacing them with Scottish, English and French to raise sheep for wool,,, for the merchants.
About half of the people who consider themselves Irish are really Scots whose ancestors lived in Ireland for 100 years and on top of that, they came over to America in the early 1700’s before the Revolutionary war…
Andrew Jackson was “Scotch Irish”
Andrew Jackson get Florida for USA ,, not spanish or commies heheh