Moving Back To Reality In Florida
The St Petersburg Times reports from Florida. “In what could be a sign of things to come in the sluggish housing market, a prominent Tampa condominium project faces 34 lawsuits from buyers trying to back out of their deals. But unlike some pie-in-the-sky deals like Trump Tower Tampa, the Place at Channelside is weeks from completion.”
“The problem: Some buyers who paid top dollar in 2004 and 2005 are afraid to take possession of what they fear is a depreciating asset in the housing slump. ‘They locked in at the height of the condo boom and the units are not worth what they paid,’ said Tampa lawyer Harry Coe, who represents seven buyers.”
“Developer Fida Sirdar blamed the suits on a small group of buyers acting in bad faith. ‘They will either have to buy or forfeit their deposits. It’s as simple as that,’ he said.”
The News Press. “Hovnanian Enterprises Inc., parent company of Lee County’s largest residential builder, reported Friday that it is writing off $8 million worth of sales and land values in Lee County for the second quarter.”
“Hovnanian CEO Ara Hovnanian said the $8 million includes two ‘bulk sales’ of scattered lots in Cape Coral and Lehigh Acres. He didn’t give a dollar figure for either deal but said that one of them involved the sale of lots the company now values in the low $20,000s per lot — down from $80,000 at the height of the market. ‘The contract price came in slightly below that level.’”
“With the lots priced at today’s prices, he said, ‘All of a sudden we’re back in the environment where we can have affordable housing. I think that’s a good indication of what vacant lots in Cape Coral are worth today.’”
“In other comments, Hovnanian said home contract cancellations spiked in March and April after a good month in February.”
“A key element to the Naples Bay Resort, a revitalization project in downtown Naples, has been postponed because of the slumping market, developer Jack Antaramian said Friday.”
“‘There’s just no market,’ said Antaramian, noting that all early buyers have had their money returned.”
“A class action lawsuit brought by people who bought houses from First Home Builders alleges that they were defrauded by the developer and real estate brokerage D’Alessandro & Woodyard in a program to sell homes as an investment.”
“A Fort Lauderdale couple…and others bought ‘at least 100 investment properties’ and got them financed by preferred lenders through D’Alessandro & Woodyard in a program that called for First Home, now owned by Hovnanian Enterprises, to build the houses and provide a tenant who would defray the investor’s mortgage cost with rent. The tenant would eventually buy the house, giving the investor a profit.”
“But beyond that, the investors differ with the builder and broker on who was at fault when the deal fell apart in many cases as First Home stopped providing tenants and the homes, when completed, were worth less than the buyer’s cost.”
“The lawsuit charges that the arrangement amounted to unlicensed securities sales besides being fraudulent and violating the federal Interstate Land Sales Full Disclosure Act.”
“Kevin Jursinski, a Fort Myers-based real estate attorney not affiliated with the class action, said the land sales act is increasingly being used. ‘So far, so good,’ he said. ‘We’ve gotten some deposits back.’”
“Lehigh Acres residents could feel their fire services suffer after preliminary numbers show a nearly 10 percent drop in taxable property value, mirroring a trend of a slowing real estate market throughout Lee County and across the nation.”
“‘This just proves what people have been saying — the bubble has burst,’ Lee County Property Appraiser Ken Wilkinson said.”
The Palm Beach Post. “The developer of Downtown at the Gardens, the shopping-and-dining destination that opened more than a year ago in northern Palm Beach County, has killed its plans for a similar project west of Port St. Lucie.”
“When Menin Development Corp. first announced plans for the open-air Main Street Village last August, the company’s chief operating officer, Rob Jacoby, cited St. Lucie County’s hot housing market as a driving factor.”
“Since then, St. Lucie County’s housing scene has chilled as investor-owned units have languished on the market.”
The Sun Sentinel. “The era of high-flying property values is over. The total value of homes and commercial properties in Palm Beach County grew just 5.2 percent from 2006 to 2007, marking a halt to the five-year bonanza that pushed local government spending to unprecedented levels.”
“‘The market went down, in real simple terms,’ Property Appraiser Gary Nikolits said. ‘Those areas that seemed to have a superheated market were the ones who took the biggest hits, because they were overvalued.’”
“Real estate analyst Brad Hunter, of Metrostudy in West Palm Beach, said Friday’s figures are the first signs uncovered by government appraisers of the downturn in the real estate market.”
“‘It kind of reflects moving back to reality,’ Hunter said. ‘Prices were moving up, residential real estate in particular, at unsustainable rates. Obviously you have to come back down.’”
“‘We’ve not hit rock bottom yet,’ Nikolits said. ‘We’re still in a declining market. I would say next year’s numbers are going to be worse.’”
The Herald Tribune. “In what seemed part of a campaign to arm real estate agents against naysayers and fence-sitting buyers, the National Association of Realtors’ top economist was in the region offering strong words of encouragement.”
“The softness that has bedeviled Southwest Florida’s residential real estate market for almost a year has just about run its course and will not last beyond another six to 12 months, said Lawrence Yun. ‘For those with a house on the market, there’s good news, the worst is over.’”
“The Sarasota market has enjoyed a 150 percent run-up in value in recent years. In the current downward cycle, it has given back about 10 percent to 20 percent of that. ‘That’s not a crash,’ said Yun, especially when compared with what happened to the Nasdaq earlier this decade. ‘Now that’s a correction.’”
“Yun noted that with median home values in the $300,000 range, the region was not really overpriced compared with other coastal markets such as San Francisco at $700,000 and Washington, D.C., at $400,000.”
“The region’s housing fundamentals compare very favorably with those of San Diego and Miami, he said. ‘One can safely say that there is more accumulation of wealth in Sarasota than there is in the rest of the country,’ Yun said.”
“Looking long-term, Yun predicted that Florida real estate remains one of the safest bets in the nation. During the next 40 years, Southwest Florida homeowners will enjoy values about 20 times higher than now.”
“That would mean a $500,000 home bought today will be worth about $10 million in 2045, or double the national appreciation average, Yun said.”
Those people who bought in Channelside should be happy to only lose their deposits. $40,000 is a small price to pay for their silliness. I’d even think it was OK if they were forced to complete the sale - I love how these ’speculators’ are willing to ride the boom up but want to bail when it started going down. They would have forced buyers to sell at 2004 prices in 2005 if stated in the contract.
“The softness that has bedeviled Southwest Florida’s residential real estate market for almost a year has just about run its course and will not last beyond another six to 12 months, said Lawrence Yun. ‘For those with a house on the market, there’s good news, the worst is over.’”
There is a new pimp in town. His name is YUN. Move over David.
If there was a charity auction that was auctioning off giving Yun and Lierah one good solid kick to the groin, that would feed the starving masses. I for one would bid it high.
“There is a new pimp in town. His name is YUN.”
- LOL
It sounds like he is talking Hong Kong smack.
Yun to GFs: “Of course trees grow to the sky.”
It sounds like he is talking Hong Kong smack
With a King Kong mentality.
Time once again to blow a 200 AMP fuse over the NAR.
Lending rules finally tightened (after billions & billions of $ flushed down the Chinese rat hole already).
EXCUSE ME, Your spinning has forgotten a few fundamental FACTS
1) What about the area’s P/E ? Since the majority of buyers are from the LOCAL area if the home price to income is insane now. Oh prices in the future will rises ??? SURE
2) You forget to mention that the subprime implosion. 77 DEAD lenders & counting
3) Inventory at historic levels in ‘06 & higher still in ‘07
4) Existing & new home prices falling in Florida
5) Major builders taking losses / land write offs esp. in FL
6) Canceled multi-story projects due to a glutted condo market
7) Comments from “respected” ratings agency like Moody’s downgrading the HBs and expecting earnings, sales & cash flow to further deteriorate.
9) Investors fleeing, when they discovered that “Real estate ALWAYS goes UP” was 100% Bu!! S#!t (ya forgot about the CA MELTDOWN in the early ’80’s) This took 5 years + to reach a bottom, and the RE got kited higher this time NATIONALLY!
10) The “retirement” of David “the lier” Lierah in part to his cheerleading antics. Don’t ya EVER learn ya FOOL?
If people can sue and win when the values of their properties go down, the court is setting off a hail storm of problems in real estate. Pretty soon no one will be comfortable selling if they worry about being sued when the market downturns. I’m not talking about just developers. Individuals will be sued also if the court sets a precedent that other attorneys can use. Ambulance chasers are slowly turning into property chasers and that’s just the beginning.l Sleezy attorneys will always find a new niche that they can chase after the dollars.
The good thing is that both sides will have to pay the lawyers. It’s very possible that the developers and flippers are more sleazy than those lawyers. Even if they win, they lawyers will take a big chunk out of the plaintiffs’ pockets.
Lawyers going to court wearing their new lizard shoes paid for in full by their “I got taken” clients are the real winners here.
Channelside is so filthy (the air-quality is about the worst in all of Florida), who is right mind would move there? And Channelside developers are asking 800k and up for fake “lofts” and condos? There’s nothing there, no view of anything; the surrounding area is an industrial wasteland, and you cannot walk around because of the traffic. The shopping center is ghastly, especially from the inside where one can look out from the second floor and see that’s it part of a vast junk yard to the east, complete with waste treatment plant. I was so shocked when I went there, I had to pinch myself.
Developers are now hyping this toxic, hazardous-to-your-health slum region as Tampa’s “Arts District.” What arts? Where are they? There is nothing there having anything to do with the arts, except for one crummy old building where local wannabes put on their own plays. Obviously truth in advertising means nothing. I bet almost all of the sales there were to speculators. I also think that they should be held to their contracts, since they made the whole fiasco possible. Then, all if it needs to be knocked back down.
I think the most successful business enterprise at Channelside, and the only one with a long-term future, is the Hooters franchise. Amusingly, there’s also a Hooters in the Jacksonville version of Channelside (I think it’s called “the Landings”). When are people going to learn that culture doesn’t sell here?
The only benefit of living in that part of town will be the ability to walk to the hockey arena. I like hockey but recognize that perk isn’t worth paying $300,000 for a one-bedroom.
The funny part is, up until a couple of years ago, there were actually artists in Channelside, because it was cheap warehouse space. They all got driven out as developers bought up all the land for all those ridiculous “lofts” and condos.
link to all sales by city from Homestead to Vero Beach http://statspak.firstamericanmls.com/RAMDCStat/
Has DOM Expired listings. Good stuff
Well, at least we finally got some rain here in Florida. Nice, good, soaking rain, too. Just what the doctor ordered. My car needed that, it was growing a beard from all the love bugs.
I had no idea that there was a rumor out there that the love bugs came about as a result of some biological experiment gone wrong at U of F until some news anchor started debunking it.
really? i did not know that?
I didn’t either. I would never have thought of it, unless some local news anchor called attention to it. Do we have any Floridian posters here who lived in Florida prior to the 1970s? Dimedropped, how about you? Have there been love bugs in Florida for as long as you can recall? Or did they just sort of show up in the 1960s, early 1970s?
FLorida has had many ‘introduced’ pests over the years.
And not all of them are human.
I always heard and believed the love bug story-have never seen anyone try to debunk it.
What did they say?
It was on the local CBS affiliate (I think) in the Tampa Bay area. One of those “perky” local interest “It’s Love Bug Season” stories, how they swarm for two months in April and May (coincide with the dry weather, I guess), how you have to clean the car and the windshield, blah, blah. And then the anchor says “And no, folks, they’re not some biologicial experiment gone wrong at the University of Florida like some people say. They are naturally occurring”.
Now, of course, all I have to do is hear the media trying to “debunk” something and it makes me go “Hmmm…”
I never noticed them until 1970, but that was when we finally had an interstate to drive in NW Florida. The lovebugs love those big grassy medians created by the interstate highways.
the iguanas are not native either, but I kind of like them…
Are you talking about iguanas, or American chameleons (green anoles)?
http://animal-world.com/encyclo/reptiles/lizards_iguanid/GreenAnole.php
I grew up in South Florida and never saw them until the early 70’s in Central Florida. Never saw them in South Florida - left in late 70’s. Makes the UF story kinda believable….
For all of us who don’t live in Florida, what the hell is a ‘love bug’? What’s this about your car growing a beard of them???
bugs that engage in “intimate activity” during flight. lots of them.. and they leave a lovely crust on your car when you drive through them
Growing up in Texas, we always called them f_ck bugs.
http://en.wikipedia.org/wiki/Love_bug
Well then I guess that cuts right to the chase.
They are small red and black insects that mate tail-to-tail in the air, aimlessly drifting around until splatted on a car, after which time their bodies turn acidic.
The appear in the spring and fall, and don’t sting or bite. I’ve seen them in south Louisiana too, so it’s not quite a Florida phenomenon.
Love bugs have been in Florida since the last half of the 1960s. I used to drive back and forth from college in Georgia then and it seems they first became a major windshield problem around 1966 or 1967. Back then, tires generally had 10,000 mile warranties — people just didn’t drive nearly as far as they do today, so the bugs received much less publicity. They migrated north from central America. I suspect that if DDT hadn’t been maligned so unfairly, it might well have helped to cut way down on the population of these stinky pests.
“Looking long-term, Yun predicted that Florida real estate remains one of the safest bets in the nation. During the next 40 years, Southwest Florida homeowners will enjoy values about 20 times higher than now.”
“That would mean a $500,000 home bought today will be worth about $10 million in 2045, or double the national appreciation average, Yun said.”
Buy now or be priced out forever!!!! Oh man, looks like this could be up for ‘Quote of the Year’. I’m sure salaries will go up 20x in the next 40 years as well….LOL
I find it shocking that someone would make such a comment. That’s just bizarre.
I find it shocking that it is legal for somebody in his position to make such a comment.
If he was selling stock instead of real estate it would be.
Yun seems less adept so far at telling plausible-sounding lies than DL was.
I find it shocking that you find it shocking that he made a comment like that.
Anyway the NAR /real estate sales people can get the concept of the bottom has been reached and now it the urgency of buying now before it goes up again is the name of the game for these shills .I wonder how much free press this mouthpiece for the real estate industry will get .Your right ,it’s just bizarre .
How is it possible that the NAR has avoided facing a class-action lawsuit or anti-trust prosecution? This is what I find most amazing about their existence. Any legal eagles out there that can answer this one?
Got campaign contributions?
you must have missed this…
JUSTICE DEPARTMENT SUES NATIONAL ASSOCIATION OF REALTORS FOR
LIMITING COMPETITION AMONG REAL ESTATE BROKERS
NAR Policy Obstructs Internet-based Real Estate Brokers from Offering Better Services
and Lower Costs to Consumers
Justice Dept., FTC Take On NAR
New Report Spells Out Anticompetitive Nature of Residential Real Estate Brokerage Industry
“After two years of hearings and studies, the U.S. Federal Trade Commission and U.S. Department of Justice issued their joint report analyzing competition in the residential real estate brokerage industry last week and have concluded that homebuyers aren’t well served by existing practices.”
I’d hoped that maybe, just maybe (remote possibility), that the NAR would realize how ridiculous they’ve looked and try to clean up their act with their new shill. Looks like business as usual.
Meet the new shill, same as the old shilll…
Hah!!
I did a new version of the whole song for palmetto’s benefit (not to mention my own amusement :)) a week or so back.
After I posted it someone mentioned there was actually a Florida connection these days (theme music for some TV show I don’t watch, I think).
The Big Shill
Starring Lawrence Yun
The Herald/Trib reporter, who wrote the “Yun” article, explains on the HT forum why he thinks Yun is NOT a shill.
There’s been some heated discussions there lately with a writer called Crunch.
Here on Page 2:
http://forums.heraldtribune.com/eve/forums/a/tpc/f/3941081465/m/2861022826/p/1
Key Lime Toast,
Thanks for the link !!! I might go on later and stir some cr&p up. I am waiting for my corp to release quarterly earnings next week. My company has always lead the greater economy by 6-9 months. I have heard rumors that as of the second week in May our business dropped off the proverbial “cliff”. It may take until the end of the next quarter to actually show a loss in business…
Chris
A sample of the rebutle:
SRQHousingBust Posted 01 June 2007 09:50 AM Hide Post
Wait..hold on….NAR has called the bottom…again!!! Good to see Mr. Yun has picked up where David LIEreah left off. Good to see the NAR has been calling bottoms every month now for a year. Get out and buy up all those vacant houses now since everyone will be priced out by 2045!! 10 million dollar houses for everyone!!!
Wow, Mr. Frater is really pouring it on these past 2 weeks. It’s really laughable at this point. The same article with a different headline and a new NAR-ism. Again, one sentence about high inventory but nothing else to counter NAR’s bottom call!! In the face of rising interest rates, tsunami of foreclosures, ARM resets, historical inventory levels, credit tightening and an economy about to tip into a recession I’m really glad we got confirmation of a bottom from the NAR!! That’s it….Time2Buy!!!!!!!! LOL
Can someone in FL calculate how much it would cost to insure this $10MM home in 2045 (taking the recent rate increase forward)?
A 200k home is costing about 10k to insure. So a 10MM which is 50 times the cost would take 500k a year to insure.
I wonder what that $500K house will be worth in 3010 or 4117? Hmm, maybe it wouldn’t be such a bad deal when you start thinking long term…
With the energy and climate change challenges that face us, any economist even attempting to extrapolate home values more than a few years into the future has no business receiving a paycheck. Yun’s quote should appear on every southwest Florida thread from here on out.
How can the sleepy west coast (sarasota/bradenton, fla), filled with walking cadavers, or people in god’s waiting room, be compared with California’s coastal cities? The most dynamic place in the world with jobs, and now unemployed migrant journeyman, illegals?
His last name is YUN, I suspect he used to be a short order chef at a chinese restaurant. His real estate theory came to being between mu-shoo pork and chop suey. He got the vision in the noodles. Those fortune cookies really predict the future correctly! 2045, average McMansion, $ 10,000,000.
I can see the sign now for future cookie cutter community: 3 bedroom homes, with pond view, prices starting at the low $ 10 million. Come see our finance department for the 1000 year mortgage.
At the heart of it.
Sarasota Phil
The sad thing, even a 10,000 year morgage won’t help. The negative am morgage stretched affordability futher then anything else ever will. Perhaps an intergenerational morgage (no payments for the first 30 years type thing) where you can pass the entire balance on to some other poor sap.
There is simply no way to stretch the lending any futher. Any further stretching would be nuts, and would be akin to a sleezy car sales pitch (no payments for 12 months on this lovely Chevy with a big oil stain on the pavement under it!).
“He didn’t give a dollar figure for either deal but said that one of them involved the sale of lots the company now values in the low $20,000s per lot — down from $80,000 at the height of the market. ‘The contract price came in slightly below that level.’”
How many individual speculators were buying raw land in Florida? Can you imagine the loss on such a purchase? You know they weren’t buying just one lot, if they could get the financing.
5 lots x $80,000 = $400,000
5 lots x $20,000 = $100,000
That’s a quick $300,000 loss for a land speculator. It also shows that builders will greatly be lowering the prices of new homes in the years to come. Their costs are going to be a lot lower when land is sitting at 10 - 20 percent of the mania price.
NYCityBoy,
I am just a short drive north of the area listed in that article in Port Charlotte. Same type area with lots of unbuilt lots. I can honestly say the only thing that ever shows a sale pending on the RE sites i follow are the lots under 9-10k. We had the same run up here…Lots are still listed for insane numbers but they ain’t sellin.
I am going to guess the lots are still to high. How bad was the runup…My parents bought three 40×120 lots in Cape Coral in 1996 for 9k,3k per lot. You need 2 lots to build in the Cape. Go look on the major RE sites…The amount of lots in the 20k plus range is effing insane. Christ,i just looked on remax for the Cape…61 PAGES of rentals. Thank god the rentals my parents and i own are paid for…and its raining so i can skip a weekend of mowing/landscaping them…….
Chris
“The total value of homes and commercial properties in Palm Beach County grew just 5.2 percent from 2006 to 2007″
That doesn’t mean the average price, or median price, went up 5.2 percent. That means the value of all properties added together. I would imagine they have been building commercial properties like there is no tomorrow. There is devestation ahead for this market.
Thanks for bringing that up because the numbers made me wonder considering the overall market. On the other hand, it seems the people in Weston still thinks “it’s different here.” Most houses are listed as if the boom is still happening.
“The developer of Downtown at the Gardens, the shopping-and-dining destination that opened more than a year ago in northern Palm Beach County, has killed its plans for a similar project west of Port St. Lucie.”
LOL. Downtown at the Gardens is the development that has the most insane high rise I have ever seen in my life. You guys have heard me talk about it, the high rise (20+ stories) with 1M dollar price tags in the PARKING lot of the Gardens Mall. Those HBBs in the area can vouch for the insanity of location for this building.
Also, Downtown at the Gardens is already hurting from what I hear through the grapevine. One of the ancors is already gone (high end furniture store) and other’s are barely holding on. The foot traffic there is great; it’s just (again) that the stores in no way reflect the market. I am sure that my HH income is in the upper 90-95% of the people walking through this development, and guess what, I still don’t buy 25K couches. Yes, some people do, and there is a market for them, but with Worth Ave/CityPlace/Town Centre/SoBe all within 50 miles? The market is just not there, and likely never will be.
Shocks me that all these “urban renewal” projects think that they can target the high end (or ultra high end) market at the same time and everyone is going to do just fine. Folks, there just are not that many people out there with that kind of money. Wake up!
And, especially in Palm Beach. If there really was that kind of market, to think that Worth Ave would not have already catered to these “ultra rich idiots” is nuts. Worth Ave is the shopping district for the rich; CityPlace and Downtown is where the middle class goes to look at the stuff rich people have. Unfortunately there is not much money to be made in the “looking at” market.
“The Sarasota market has enjoyed a 150 percent run-up in value in recent years. In the current downward cycle, it has given back about 10 percent to 20 percent of that. ‘That’s not a crash,’ said Yun, especially when compared with what happened to the Nasdaq earlier this decade. ‘Now that’s a correction.’”
Give it another five years, and it will look like a crash through the rear view mirror.
It is obvious that Yun is counting on the complete lack of simple math skills by FBs to work in his favor. The average FB probably thinks if the price of their house goes up 50% that it would take a 50% decrease to wipe out the gain. I know a lot of people that are mathematically incompetent enough to think this way. But that’s not how it works.
For every 1/n gain it only takes a loss of 1 / n + 1 to wipe out that gain. That means a rise of 1/2 of the value is wiped out by a decline of 1/3.
$100,000 + 50% gain = $150,000
$150,000 - 33% drop = $100,000
If prices eventually go down by 50% (like they will in many areas) it will wipe out a previous gain of 100%.
Yun is pinning his hopes on the fact that FBers are dumber than 5th graders. That’s probably not a bad plan.
The plan will only work if the subprime sector is somehow revitalized, either by Wall Street kingpins or hedge funds ramping up subprime lending activity, or perhaps by successful Congressional bailout measures to turn FHA into a govt-insured subprime lender. That is the only way I can imagine people who are dumber than fifth-graders again qualifying en masse to buy homes they cannot afford.
Exactly.
“Looking long-term, Yun predicted that Florida real estate remains one of the safest bets in the nation. During the next 40 years, Southwest Florida homeowners will enjoy values about 20 times higher than now.
That would mean a $500,000 home bought today will be worth about $10 million in 2045, or double the national appreciation average, Yun said.”
Yun must believe that Helicopter Ben is about to make lots of cargo drops into the Florida real estate landscape.
What was the figure from the 1926 boom? People who bought at peak didn’t break even on price until 1970something? You’d be underwater longer than Spanish dubloons from a treasure ship.
You’d be underwater longer than the titanic.
You’d be underwater longer than Spanish dubloons from a treasure ship.
You’d be underwater longer than the titanic.
The second one sounded like Austin Powers…”One Million Dollars”
I predict much more bedevilment, like 6 years to 12 years…
L.Y.’er: I know how much month and year sound alike, it’s a mistake I make all the time.
“The softness that has bedeviled Southwest Florida’s residential real estate market for almost a year has just about run its course and will not last beyond another six to 12 months, said Lawrence Yun. ‘For those with a house on the market, there’s good news, the worst is over.’”
I agree, in 6 - 12 months, things will be just a bit further along than they are today - no where near the bottom. We are still at the almost flat part of the bell curve on this monster, with just a small amount of decline so far. The roller coaster ride does not begin for another year or two, and may not bottom out for a decade. The scale of the current bubble is incredible, and it did not get where it is overnight and won’t go away over night. That said, most of the really crazy gains happened in the last 4 years, and these gains will most likely be erased in the next two.
Based upon the Credit Suise chart, I’d predict that the time when we’ll have the steepest decline in prices will be Fall of ‘08.
“During the next 40 years, Southwest Florida homeowners will enjoy values about 20 times higher than now.”
Wow! So Yun knows that he can’t sell homes based on the current direction of the market so he has to make unreasonable claims far into the future.
Several points here:
1. What’s he smoking?
2. If Yun was selling securities, he would go to prison for making such a claim.
3. So let’s take a $500k house. This house would be worth $10 million in forty years? Let’s take a 3% inflation rate. That means costs of good will increase by 3.26 fold in 40 years. So that $10 million house will be $3 million in TODAY’s dollars. Who the hell would be able to afford that?
Even with 5% inflations that’s a factor of 7, so the $10 million house would be $1.4 million on TODAY’s dollars.
The only way Yun’s prediction could possibly come true is if we had huge inflation over the next 40 years. Not only would we need that type of inflation but wage increases would have to follow inflation as well - something that is not happening now.
4. In 40 years, the baby boomers will be either dead or dying. Isn’t it the baby boomers who are supposed to prop up Florida’s real estate?
“Looking long-term, Yun predicted that Florida real estate remains one of the safest bets in the nation. During the next 40 years, Southwest Florida homeowners will enjoy values about 20 times higher than now.”
According to my math, that’s (20^.025)-1 = 7.8% annual appreciation for the next forty years. Hmmmm. Either he knows something about inflationary expectations that the rest of us don’t - or he is just about as stupid as a doorknob.
Votes?
Nah, he’s just a damn lying shill. None of these people are stupid or know anything that we don’t know. They just lie and hope that enough people believe them.
So the USA greenback will be one to one against the Japanese Yen??
I believe his number would imply a 9 - 10 percent average increase in prices for the next 40 years. That would imply destruction of the US$ and Aladinsane would probably be the richest man in the county with his personal Fort Knox he is building.
Yun will be dead in 40 years so he won’t have to take any flak over his lies. As long as it isn’t 2045 yet, his predictions have a “possibility” of of coming true in case of Weimar Republic style inflation.
I like his math…. My home will be worth about 30 million dollars by then so don’t diss the yumyum Oracle!
The scary thing is, this guy is probably right. Currently annual inflation is 8-10% and rising. In the past 40 years the dollar has lost close to 75% of its value. It would not be unimaginable that it would lose another 95% in the next 40 years. It could get even worse. I expect hyperinflation to occur sometime within the next 5-10 years. Yes a home could cost 10 million, but a gallon of gas will cost 100 bucks as will a cup of coffee at Starbucks.
L.Y.’er knows his audience…
Most of us have been trained to never think more than a few weeks in advance, or “Just In Time Thinking”
And the shill throws a 40 year plan at us.
“Looking long-term, Yun predicted that Florida real estate remains one of the safest bets in the nation. During the next 40 years, Southwest Florida homeowners will enjoy values about 20 times higher than now.”
everybody blame wang yun? sorry very bad but yes he would be sued in any other industry for this kind of garbage
“With the lots priced at today’s prices, he said, ‘All of a sudden we’re back in the environment where we can have affordable housing. I think that’s a good indication of what vacant lots in Cape Coral are worth today.’
Nonesense, we are no where near affordable housing today. (20% down - 30 year fixed -
Those are some very incredible statements, however they are not meant for us. He is saying that to those simple folk who trust RA and think interest only is the way to go to enter the housing market. I was reading the forum also, nothing makes me laugh harder than reading forums with RAs on there, talk about Kool Aid drinkers!
Lest we forget how stupid people are and brain washed….let’s go way back to two years a go.
http://www.pbs.org/now/thisweek/index_082605.html
Watch: “Housing Boom or Bubble?” (btw kudos to PBS for being objective in the mania)
Here is the follow up to that report a couple months back.
http://www.pbs.org/now/shows/317/index.html
“Past due and payday”
10 million….HA! Spokesperson…..HAHA!!!! Economist….BWAAHAHAH!!!
If you intend to buy in Florida, plan to bring your Flippers(no pun), Mask and Snorkle, as your going to be underwater for a long time.
From realtor.org :
“Making Market Sense
by Lawrence Yun, Senior Forecast Economist
Despite the headline information about weak housing market conditions, many local markets are performing quite well. In the first quarter of 2007, more markets (82) experienced a price increase than had a price decrease (62). Going forward, we will see a steadily increasing number of markets moving over to the positive side of home price appreciation. In fact, some local markets will not only move up, but will be moving way-way up…”
“way-way up” - You’ve got to be kidding me. This guy is a Ph.D?
Ph.D (Piled higher and Deeper)
Intellictual - An individual educated beyond their intelligence.
Common sense - Cannot be taught in school.
Experience - Cannot be taught - You have to “Experience” it for yourself.
Lesson here - a bunch of letters after someone’s name does not mean they are intelligent, experienced or have any common sense, only that they went to school for a VERY long time.
but but but…that’s what I thought schooling did 4u, make you smarter…
never forget my dad telling me that a BA, MA or PhD was really just a calling card.
“Looking long-term, Yun predicted that Florida real estate remains one of the safest bets in the nation. During the next 40 years, Southwest Florida homeowners will enjoy values about 20 times higher than now.”
HOLD ON GUYS…..THINK A MINUTE….WITH GLOBAL WARMING, SEALEVEL RISE AND THE FACT THAT THE STATE OF FLORIDA IS ON THE AVERAGE TWO FEET ABOVE SEALEVEL. SOUTH FLORIDA WILL BE WITH NEW ORLEANS…COVERED BY OCEAN
Yuns’ 20x claim is ridiculous on its face, but it would be nice to see him putting forth his rationale for this wild prognostication. It would take a constant YoY appreciation rate of 7.8% every year for the next 40 years to get to 20x. Here’s my more reasonable estimate: 3.5% YoY appreciation on average. This is in line with historical norms going back to the early 20th C. This results in about 3x, or about 1.2x after adjusting for inflation. If you first factor in a price correction of -30% and begin your 40 year adventure from there, you arrive at 2.1x, or 0.84x (a 16% loss) in inflation-adjusted terms.
I’d never make the grade as an NAR leader. I can look at historical data and do math. It still amazes me the kind of people they put in this position. One thing that I’ve ignored by making my own comparative prognostication is that you should never forecast this far into the future. It’s like predicting the weather in Portland on April 27, 2016. It should be amazing that anyone in Yun’s position would even take a wild stab at a forecast like this, should be more amazing that he would assert such confidence in his forecast, more amzing still the bad assumptions that must be going into his guesstimate. How does this guy not get publically called out by reporters on this nonsense? Oh yeah. Reporters are stupid.
Reporters are dumber than dirt when it comes to math. He could have said $10 billion and no reporter would have questioned him
“A Fort Lauderdale couple…and others bought ‘at least 100 investment properties’ and got them financed by preferred lenders through D’Alessandro & Woodyard in a program that called for First Home, now owned by Hovnanian Enterprises, to build the houses and provide a tenant who would defray the investor’s mortgage cost with rent. The tenant would eventually buy the house, giving the investor a profit.”
“Schadenfreude” doesn’t do justice to the sheer glee I feel as I watch the villains of the housing bubble turn on each other. Greedy “investors” were among the main culprits in running up home prices, and it fills me with malicious delight to see them losing their sizable deposits or better yet, being forced to honor the contracts they signed for a depreciating asset. My sincere hope is that tens of thousands of them will be so badly burned that they end up losing everything at the Mother of All Firesales, and serve as cautionary tales to an entire generation.
I’m thinking of moving back to the Jacksonville area in 2 to 3 years. What’s the word on the street these days? Any bloggers from Jax around?
The RE market in JAX has been sinking over the last year. But, homes are still very overpriced. Listings are at an all time high and prices have only dropped about 10% since last year at this time. So, I believe prices will really start to drop near the end of the summer. Just my 2 cents.
Jesus, that means a $250K house will be worth $5,000,000…
Whoever said we can’t all live in million dollar houses was wrong. We can all live in 5 million dollar houses…
Where do they get these idiot economists??
Two things:
“Looking long-term, Yun predicted that Florida real estate remains one of the safest bets in the nation. During the next 40 years, Southwest Florida homeowners will enjoy values about 20 times higher than now.”
Hasn’t this idiot ever heard of sea level rise? In 40 years, he’ll be lucky to be able to sell a chickee on a shell mound.
Second: I’ve lived in Florida for 62 years, the first 18 in Highlands County. There have always been love bugs. We used to call them “blind mosquitos” and there were many jokes made about their habits among the elementary school kids in the ’50’s. There are more of them now–most likely because we no longer use the aggressive chemicals–such as malathion–for mosquito control that we used back then.
Always look for the credentials of people who start rumors like that. Not a biologist in the bunch, you can bet. But people love conspiracies. They’re so much more interesting than facts.
Can anyone provide some good insight on the RE market in Vero Beach as of 6/08? What are inventories like; pace of sales; depreciation stats; apprecation forecasts, etc. Especially, insight on barrier island properties in Vero Beach.
Thanks!