There Is A Silver Lining In Florida
The Orlando Sentinel reports from Florida. “(For) the company known for its ‘We Buy Ugly Houses’ signs, Florida has been one of Home-Vestors’ best markets. And there’s no shortage of houses for sale, a virtual smorgasbord. But these days, many of the homes for sale in markets such as Central Florida can’t be bought, rehabilitated and sold for a profit.”
“‘I don’t know how some [owners] are able to pay the taxes and insurance,’ said CEO John Hayes.”
“Ron Smith, an independent housing-rehab specialist in Apopka, said he gave up his sideline business a few months ago after 20 years of working the Orlando area. ‘It just got a lot tougher. I went to work full time with a roofing company,’ said Smith, who used to buy and fix up homes to sell, or to rent until he could find a buyer, as many as four or five times a year.”
“Smith said his best years were the late 1990s through 2004, when ‘it just went crazy.’ So many buyers were bidding up prices, it got harder to compete, he said. Then, earlier this year, sales went flat as thousands of homes flooded the market at inflated prices.”
“‘I didn’t believe the market here would go 180 degrees, but it did,’ Smith said.”
The Herald Tribune. “Do not blame developers for bringing hundreds of thousands of square feet of office space to market at the worst possible moment. Three years ago, every indicator was persuading them that Sarasota County’s southernmost city was in desperate need.”
“But it was the collapse of North Port’s home building industry that brought the office market to a standstill. Suddenly, developers found it impossible to fill their new buildings, and lease rates plummeted.”
“Figures presented by the the Economic Development Corp. of Sarasota County point to an office vacancy rate in North Port of about 50 percent, amounting to about 180,000 square feet of space. Based on the city’s historic annual absorption rate of roughly 22,400 square feet, that space will take eight years to fill.”
“‘It’s not a pretty picture, especially given current market conditions,’ said George Hugh, a Venice real estate agent and foreclosure specialist. ‘Eight years is a long time for developers to keep feeding money to their banks.’”
“Huhn added that the situation in North Port proves that home builders were not the only speculators during the boom.”
“‘You’ve got to wonder whether developers and bankers, in their rush to develop in 2004 and 2005, were doing proper due diligence,’ Huhn said.”
“Benderson Development Group’s office park on Toledo Blade is a case in point: The company’s six office buildings, totaling 40,000 square feet of space, stand empty. ‘I’m sure they saw rooftops being built and they didn’t count on them being sold to speculators,’ Huhn said. ‘You’ve basically got a situation down there in which half the homes are empty.’”
The Miami Herald. “Tom Murphy Jr. is CEO of Coastal Construction, a general contracting firm in Miami building many of the high-rises going up across South Florida.”
“Q: So you have reduced the number of condos you are doing as it relates to your overall business. Why?”
“A: For condos, five years ago the market was on fire, and we made the decision to try and reduce the amount of condo work we’re doing as a percentage of our business. I think a lot of people built their business on condos because it was easy to get the business.”
“You try to read the future, but you know one thing for sure when a market is so heated up, it won’t last forever.”
“Now, the number of condo developers looking for general contractors has shrunk. It has significantly shrunk. Fallen off a cliff when compared to the last five years.”
“Q: For general contractors that are largely focused on condos is that downturn creating changes in the market?”
“A: We are seeing a lot of movement because guys that only build condos are starting to feel the slowdown that is coming. A lot of these people see what is happening, and they know the company has never built a school or an office building. It’s kind of like rats jumping off a sinking ship for some of them.”
The News Press. “As difficult as it may be to see, there is a silver lining (something positive) to Lee County’s current real estate market.”
“First, the facts: Residential inventory is still near its all time high. Residential sales are roughly equal to the sales rate of 1999. Prices are down, down and down from the high of 2005.”
“Foreclosure filings are up, up and up – by some counts, at six times that of 2006. The property insurance and property tax crises remain unresolved at the time of this writing. The residential downturn is having the expected effect on commercial real estate. The number of people moving into Lee County is down by as much as 30 percent.”
“So where’s the silver lining? With residential inventory still too high relative to the number of buyers, prices will continue to decline.”
“Our residential market set a record last month. According to the MLS, there were fewer homes sold last month then there were in any May so far this decade. In fact, comparatively speaking, more homes were sold in May of 1999 than in May 2007!”
“Another interesting fact is that most of the homes that sold last month had one thing in common. They were priced right! The good news is that it’s going to get better. The bad news is, many market segments will get worse before they get better.”
“The builder’s unsold inventory that is hitting the market at heavy discounts will continue for another year. Foreclosures and short sales will continue beyond that.”
“A Realtor told me his clients were waiting it out. Their investment properties that were purchased pre-construction in 2005 were listed, but at prices that would allow them to break even. However, their prices are above what the developer is offering, and what the market is willing to pay.”
“What his clients fail to realize is that they have already made a bad investment and waiting to sell just makes it that much worse.”
The St Petersburg Times. “If you need a construction-related permit for work in unincorporated Hillsborough County, you may not want to wait until a Friday to request it.”
“The county will be closing its Building Services Division offices every other Friday starting June 15. The closings are a cost-saving measure in response to the sharp downturn in housing construction.”
The Naples News. “In Collier County, commissioners have given the green light to nearly 5,500 affordable housing units since the end of 1999. Fewer than 1,500 of those units have been built, according to county records.”
“‘The houses are just not being built that we approved,’ Collier County Commissioner Fred Coyle said.”
“Coyle wonders whether the delays are market-driven. ‘People are just reluctant to begin building at a time when prices are down and demand is down,’ he said.”
“Several affordable projects that have yet to be built also include market-rate housing, a much tougher sell these days. That may give developers a reason to drag their feet. ‘It is more complicated when the affordable housing is merely a component of a larger housing development because the demand for other types of housing is not as great,’ Coyle said.”
“Phil McCabe, a longtime Naples businessman and developer, believes some of the approved projects won’t get built for ‘many, many years to come’ because of a slower real estate market. ‘I think they’re just frozen in their tracks,’ he said.”
“Even with falling home prices and a higher inventory of homes on the market, the average sales price is still in the high $300,000s in Collier County, putting home ownership out of reach for many workers, from police officers and firefighters to teachers and nurses, said Marcy Krumbine, the county’s director of Housing and Human Services Administration.”
“‘This is actually the first time since I’ve been working in housing that it’s a buyers’ market,’ she said. ‘It’s a better time to buy right now. There is more flexibility in pricing and more things on the market.’”
“There’s more than enough demand to support the more than 4,000 affordable housing units that have yet to be built and sold, Krumbine said.”
“McCabe isn’t so sure. He said there are many other affordable housing options available today, with rents and home prices coming down. ‘My view of this whole thing is that this affordable housing issue is gone,’ he said. ‘It’s gone.’”
“McCabe built an affordable housing project called Botanical Place in East Naples. He had trouble finding people to purchase the 64 units in his project, even after knocking on the doors of local employers to try to reach out to workers.”
“‘I still have one left, by the way,’ he said.”
guess commecial RE’s 18 months is up
“Do not blame developers for bringing hundreds of thousands of square feet of office space to market at the worst possible moment
I’m not surprised to see such comments. I knew even the South Florida commercial RE market was becoming ‘oversaturated’ with oversupply of office space. The real question is, how does that translate into $$$ for a prospective office renter in terms of price/sq. foot reduction?
Last time I checked, via the Daily Business Review, a legal publication serving South Florida, office rents per sq. ft. hovered anywhere between $25-$50. That is simply too expensive. I was hoping for rents like $5~ per sq. ft. in Downtown Miami/Brickell.
Is it even realistic that prices will actually go that low, despite the recent burst of commercial RE activty and the inevitable oversupply of office space? Is Downtown Miami/Brickell really that much different than the rest of Miami-Dade County?
convert a couple empty condos to office space?
I doubt you will see rents anything less than $15/sq ft. The going rate around here (Tampa) for Class-A is $18/sq ft. $5/sq ft is major depression prices, and I sure don’t want to see that.
Posted this in BB, probably really belongs here:
FL will vote to revise the prop tax system (no concrete plan yet on how to revise, that should be determined before this vote) in Jan of next year:
http://www.sun-sentinel.com/news/florida/sfl-fproptax05jun05,0,3915152.story?coll=sfla-home-headlines
By that time prices will hopefully be down enough that the SOH disparity starts to evaporate.
And, BTW, where are the people suing for reassesments? I just don’t see enough of these stories, and I don’t understand why. Every single day I expect to see the papers start to report on it (or hear about people doing it) and it never happens.
Especially for commercial property; I would think that they would want a reassesement every other day while values are trending downward. Perhaps some other FL posters can shed some light on this?
“And, BTW, where are the people suing for reassesments?”
Mike…you KNOW that the tax chimps are at least a year behind in these assessments. This year if there is no change or just a small hike in values, most people have no room to complain. It’s next year when the chimps make a small increase instead of a large decrease that people will have the ammo to take on city hall.
Most people have no room to complain, that is most certainly true. But if I am the guy who paid 1.1M dollars for a home in my development, and then a year later the same model 2 doors down sells for 600K, I think I am going to complain!
We certainly have not had enough loss of value to get most of the people into a situation where they are paying on a crazy value. But I wouldn’t think that would keep the guy who paid 1.1M from complaining and trying to get his value lowered?
God help them if they try to make an increase next year. As you know from living here, there is just barely controlled rage about the taxing situation right now. If they actually try to up the assesement for people who bought in 03, 04, 05 I think that that rage is going to boil over..
That is already happening, people in my neighborhood were selling at 1 mil or above, for houses that sold for 550k 5 years before. It is resetting, and the owners digging in their heels and pulling and screaming as the price slips through their hands will change nothing.
Unless the Fed really do come in to “save the day” which who knows would be the last breath of the dollar?
I just checked my old ZIP code in Sarasota and wishing prices are remarkably, stubbornly sticky. There’s very little reduction from 2005 numbers. I’m guessing that most owners still think the value shown on the tax assessment is correct, or close enough that it’s not worth the bother to protest.
they are just praying for buyers. give it time! even in prime locations, there are so many houses for sell. these sellers are basically taking on many cuts. keep paying the note, they will have to eat it or the banks will undercut them sooner or later!
Michael Fink,
Here in Port Charlotte prices have not dropped all that much…YET. There are a lot of places on the market that are overpriced that have not sold. I also had a appraiser tell me only a handful of REO have hit the market. The only thing moving are lots under 10k. This reflects 00-01 pricing on lots….
Chris
Cobradriver,
BTW thanks for your offer a few days ago to check on the SW Fla lot where I am owed $40K. It turns out there are only two vacant lots listed for sale in that same mobile park, and the wishing prices are $65K and something higher. So, even though the situation could deteriorate at any time, I am not surprised my creditor is making payments promptly.
I tried to email you as best I could interpret your netscape address, but it didn’t work.
I screwed up…the adress should have ended in dotnet vs dotcom that i typed in…Dohhhhh..slaps forehead….
Same offer is still good for a drive by look if needed…
Chris
Michael/Andy — I wonder if part of the reason many people haven’t protested their valuations is their need to deny to themselves that the property has actually dropped that much — and that, by extension, they made a bad decision to hang on to it rather than cut the place loose at the top of the market.
The ones who bought to stay in the palce forever wouldn’t be protesting as quickly because most of them either were locked in at lower SOH valuations or, as noted, haven’t bee valued upward yet.
“A Realtor told me his clients were waiting it out”.
I know someone in South Fla. that is “waiting” it out. He tells me that by the first of the year things will pick back up. As to why? It’s South Fla. of course it’s different there…. Right!
Waiting it out is a crap shoot; in the initial stages of the downturn, it can pay off, because there are still plenty of buyers out there who also believe that a turnaround is just around the corner. Inevitably, as buyers start to bid prices down, the mass mentality will change from “pay whatever it takes to get in” to “pay as little as possible to avoid a loss.” As that mentality takes root, the sellers will be increasingly f-ed. Look out below!
“Waiting it out is a crap shoot…”
Very true. Now’s not the time to buy anything. We’re talking about a 5 year purchase decision right now at minimum. If you are THAT jumpy to buy, you’d better plan to stay a while.
As for the rest of your statement, you have to remember that once a “low” is finally defined greed will overtake the masses again. GF flippers that haven’t learned their lesson in addition to a whole new crop will drive prices up quickly once again as soon as demand outpaces supply. I’m afraid S. FL is in the wash, rinse, repeat mode. It happened in the 80’s…cooled in the 90’s…now we’re in the cooling period again.
Five years is about right. I used to appraise homes in Wellington area during the 90s downturn and it was no where near as bad as this one, it took at 8-10 years for real estate to be a good word again.
Will they be able to do it if 20% down is the only way they can finance the deals?
Will they be able to buy If 20% down AND the supply of housing AND incomes don’t increase……
I don’t think you’ll see the frenzy come back for a looonng time. Too many people scorched, too much supply, too little credit, too few qualifying under “new” mortgage (investor) guidelines. This is different than the 90s correction, this time just about everything was perfect for a market bubble and too many recently favorable factors just won’t be back for the forseeable future.
there are five fundamental differences in south florida now.
many people are actually leaving.
cost of living is faster than incomes.
insurance, insurance and insurance
too much inventory in the best and worst areas (no middle class neighborhoods.
a cat 5.
a cat 5 ends all housing issues. cat 5 destroy infrastructure. look at south miami dade. most people in south florida now dont remember andrew. that 500,000 home will be toast and the insurance company wont give you the money you paid for it. they many only give you the actual appraised cost (this dont include flood.) and yes, most places in south florida can flood.
that is why everyone that has brought from 01 to 05 and not sold is really upside down. wilma was just a wake up call and that was a cat 1 - 2.
so many people are upside down, (check out the property appraiser) it will take years to make money now.
p.s. the investors on the side line think they are going to make money in a few years are really fools. the longer prices stay up, the worst it gets. the banks have ended the exotic loan business and that just ends the market for a long time.
I find it interesting the level of denial by the holders of property. Many that I speak with think they have some level of control. If you own a home here in Naples and you rent it out, you have a negative cash flow of 5-7% of the zillow value of the house. It is worse if you can not find a renter. If it takes ten years for your property to move back to 2005 levels, you will have paid out or had lost opportunity costs of 50-70%.
If the market tanks it would be a nightmare.
It is all about ego. The idiots don’t want to face taking a loss until they get foreclosed on or panic. Then the cycle will bottom.
I wonder how many people understand the concept of lost opportunity costs and think in terms of non-inflation-adjusted dollars. That is, they don’t know that they are taking a loss.
That’s the Paper Money / Greenspan miracle. Another opiate for the masses.
“It is all about ego. The idiots don’t want to face taking a loss until they get foreclosed on or panic.”
You betcha. I believe that nationwide, this is by far the greatest cause of sticky prices. But eventually, ego will give way to the decision-making force of an empty wallet.
“McCabe isn’t so sure. He said there are many other affordable housing options available today, with rents and home prices coming down. ‘My view of this whole thing is that this affordable housing issue is gone,’ he said. ‘It’s gone.’”
Yes Jack, and this time you’re right with no reservations! Even in expensive Palm Beach County the affordable housing issue is dead.
With all of the GF flippers now stuck trying to rent just to stay above water, the price to rent has been reduced substantially. Single bedroom units are renting as low as $550 and 2 bedroom units as low as $850. Those are prices we haven’t seen in at least 3 years. Even the apartment developments are having a hard time drawing in enough renters.
On the buying side, you can get into a 2 bedroom condo with all of the toys for $150K. You can get into 3BR 2BA homes for $199K. Now we’re talking about the cost of rent and the cost to own getting in line. I still wouldn’t want to be on the buyers side of things right now…with the glut of inventory prices will fall even lower in my opinion. When the cost to own is significantly less than that to rent, that’s when to put the buying hat on. We’re not there yet.
Annecdotally, we have been renting a suburban home in Broward County (So Fla) for almost two years. 4 bedroom, 2.5 bath 2700 sq. ft. pool, lakefront, rent $2500/month. We are vacating in three weeks and moving out of state (yipee!). The owners let us know that rent is barely covering expenses. We looked up the tax bill and it was $10k. They also complained that their adjustable rate martgage went up 6.5 to 8.5%. They wanted to sell this summer after we leave but their real estate agent said don’t bother, she’s already got 30 listings and nothing’s moving. So now they’re trying to rent it out again and we were sure after all their bitching that they’d raise the rent but again, their agent said no, market won’t support it and it staying the same-$2500/month.
For $2,500 a month you can rent almost anything you want nowadays, no?
In Arizona, $2,500/mo would get a huge place or a nice, furnished monthly rental in any of the expensive towns/cities.
Actually, no. There are a lot of dumpy nasty places for less and I hear to get a really nice place it’s closer to $3k/month. Our place it a bit of deal because the owners don’t pay for landscape care or pool servive. Every other rental we looked at included pool & lawn. We took it anyway because it met our needs best (size, fenced yard for the dog, pool AND lake). It was the least bad of all that we saw and we were in a bit of a time crunch to get a place to live. The pool is no biggie and you can hire somebody for $90-100 a month. Mow & blow is about $100/month also. We have a very large lot, about a half acre and it is a lot of work. (We’re too cheap to hire anybody and do it ourselves.)
“…their agent said no, market won’t support it and it staying the same-$2500/month.”
If you follow that place after you’ve gone, I’d be interested to know later if they in fact got their $2,500. Seems to me the odds are well against it.
Well, I think it’s all set. I actually met the incoming couple and spoke to them at length. The rental comes with a wacko landlady/owner. So I told them everything that was wrong with the place so they can be sure and request repairs are made prior to move in. I’m pretty sure that the contract has been signed and the new folks are already giving her headaches with demands above and beyond. The new renter guy is a hard case Marine who speaks fluent Spanish and told me he looks forward to tangling with her. Tee hee hee…
Oh and on top of that the A/C went out today. Needs a new compressor. LL isn’t going to be happy about that at all. We’re soooo glad we’re renters right now.
I’m really surprised that a house that size (assume the lake is a large retention pond) will still rent for that much in an area with so much empty housing. Sounds like the incoming Marine plans to get his money’s worth, though.
We have been renting in So. Florida for three years now and are very happy we waited and continue to wait this crazyness out. We recently checked out the market for other rentals and found two pages of homes in the 700k plus range renting for 2200 and up. Some were ridiculously priced — 6k a month rent? This is a nice area but anyone with that much money to rent will buy. Where will they find these renters for these high end units? We are going to stick it out another year as the prices are still way out of control.
I love Zillow. I don’t pay attention to the zestimate, but I do like to see what the property was last appraised at and what it sold for last. We are seeing 100K plus reduction on homes overpriced by 500K. Long way to go still. This week there was one with 150K price cut. Still overpriced.
“Some were ridiculously priced — 6k a month rent?”
I call those vacant homes.
Is this the owners pre-reset carrying cost, or post reset? You see these spreads all over the ads, two identical places for rent, one’s $1,500 the other is $4,500.
no one better pay rent at 6 k in south florida. that is just plain stupid!
Wish I paid that little in rent.
I pay over $5,000 per month for less than 2,000 sq. ft.
But then again, I live in Hong Kong, not south Florida….
what exactly does the term affordable housing mean in Florida? I know in SoCal for a first time buyers program you could never afford a house based on the salary requirements to get into the program.
“what exactly does the term affordable housing mean in Florida?”
The numbers vary quarterly and are WAY out of whack right now. I believe they have condos deemed affordable at $150K, townhomes at $225K, and single family homes at $290K. Quite frankly, the market has cooled so much that I would consider that AVERAGE housing vs. affordable.
affordable” means pols will get taxpayers to chip in
“affordable” means pols will get taxpayers to chip in”
NOPE…means the municipality will give tax incentives to developers. Just means less from that developer…not more from everyone else.
How bad is it in Lee County/Cape Coral…
I am heading to the Cape after work today. I have to hang past due notices on 3 apartments today. Why is this significant ? In 13 years my dad has had to forcibly evict one(1) tennant. Our places have the lowest rents for 3br/1ba units in Cape Coral. When i was down sat. to mow/clean up i noticed on the street we are on there are 36 other units for rent. Someone is also constructing a 8 plex just down the street. This is gonna get real ugly before it gets any better…The only thing that will save landlords is the ability to cut rents,which i have(done and will do ).
“Benderson Development Group’s office park on Toledo Blade is a case in point: The company’s six office buildings, totaling 40,000 square feet of space, stand empty. ‘I’m sure they saw rooftops being built and they didn’t count on them being sold to speculators,’ Huhn said. ‘You’ve basically got a situation down there in which half the homes are empty.’”
Directly behind this unoccupied commercial development someone just broke ground on anther commercial set of buildings…
Oh also on the opposite side of Toledo Blade is a HUGE development that just started cranking by Centex.
You really need to be in the area to fully understand how overbuilt everything is. But hey i work in Sarasota and after the article in the Hearld i actually had people tell me the worst is over today…BWAAHAAAAHHAAAAHHAA
I guess i need to get back to work…
Chris
Several years ago I had a complete car breakdown at night on I-75 one mile away from the Toledo Blade Road exit. This being Florida, I was sure there would be a convenience store, gas station, hotel, or fast food outlet with a phone at the exit, so I started walking. There was nothing. I walked down the exit ramp and headed west for about a mile, and still nothing. It was utterly empty except for what looked like a lot full of storage units. After a few unpleasant thoughts about what a “computer aged photo” of me might look like if I disappeared, I finally walked back to my car and hit one of the roadside assistance call buttons, and ended up getting towed back to Tampa.
Now there are houses and office buildings there? LMFAO. Good luck with those.
I live over in southeast orlando and I still don’t see homebuyers cutting their prices. In 32827 and 32828, initial listings are going out on a daily basis at $500 and $600k. (and ofr 32827….I am not talking about the Lake Nona Cuntry club listings)
Granted they sit on the market and sit and sit…..sometimes I wonder if these people live on another planet.
During the tail end of the 90’s (?) boom, I recall my parents being convinced that their house was worth $300K+ as houses smaller than theirs had sold for similar amounts in recent years. After the initial listing and several price drops, they tracked down one of the early lowballers (there were no other interested parties) and sold to him for $160K. Probably accounts for my bearish attitude….
It really blows me away that a market like Orlando, low wages and not on the coast, could have prices that high. What’s special about the place? Disney and Universal Studios?
Orlando is just wonderful. Great culture, great food, great schools, low crime rate…..oh….maybe not….
Not great crime rate. CNN.com said yesterday that Cities with big increases in the number of murders included Orlando and Miami in Florida, Oakland and San Diego in Ca, Phoenix Ar, Corpus Christie, Grand Rapids Mi, Reno, Nv, and Little Rock Arkansas
I suspect that the increase in crime has alot to do with all of the NYers that have moved down there recently….believe me when I say this cuz I know alot of them personally and I’m glad they moved down there. NY dumped alot of it’s trash in FL. Sorry about that.
“I still don’t see homebuyers [sellers] cutting their prices”
I suspect that it’s mostly because they can’t without being underwater. Most of that area is new within the past few years and you can bet the buyers of most places took out ARMs on them. Many are assuming that the expansion of UCF and the new bio-med outfit will help them, but I think that for most of these FBs there’s far too little time for that. For someone who can hold on in there for 5-10 years, they may well make out like a bandit. That’s a mighty long time.
Oh yeah…homesellers….doh!
I agree that most of these people are in way over their head. Where I live (i rent a house) in 32827, people talk as if it is the most desirable place in America. Yet now there are for sale signs everywhere.
Remember most of the people CAN’T lower their prices.
The bought at a certain price and only have so much equity. Another solid group of followers (actual owners) don’t have to sell and will only tend to follow the market.
So, there are those who can’t, followers going along. Still funny money and few GFs out there still buying though.
So, pressure will keep building till the losses are too hard to bear or the forclosures dominate prices.
In 2005, prices for 1900-2000 sq ft homes in the 32828 zip code had asking prices of $300k. Some likely sold for more due to the crazy bidding wars. Now I’m seeing more and more like sized homes with asking prices of $270-280k. I’ve even seen a few over the past year listed at $250k. So prices are dropping, just not very rapidly.
“said he gave up his sideline business a few months ago after 20 years of working the Orlando area…I didn’t believe the market here would go 180 degrees, but it did,’ Smith said.”
How can someone steeped in “the industry” for so long NOT see what was coming down the pipe? Did he keep telling himself “everyone wants to live here?”
Heck, if you’ve been in the S. Florida market for *** 20 YEARS *** and you’re not a freakin’ millionaire after the last five years of run-up — you’re a moron.
No doubt Mr. Smith has all the “toys” that prove he WAS a success: a Hummer, a Harley, the biggest plasma TV you’ve ever seen and an even bigger boat.
Its just so hard to show off a fat account balance when you drive a sensible car.
Driving to the store this morning, I saw a fellow putting a “for sale” sign on the jet ski in his front yard. Lots more of that coming.
If he were a tycoon he would not be roofing houses now.
This seems like such a basic concept, and this guy nails it on the head.
“What his clients fail to realize is that they have already made a bad investment and waiting to sell just makes it that much worse.”
However, people who bought at the wrong time, made a bad investment are going to continue to hold onto that investment as it drills deeper and deeper into decline in price. All the while they hold the bag on mortgage payments and taxes and all the other costs of having a house sit. A fool and his money….as the saying goes.
True, I’ve seen people hold out for 5months for $2000-3000 more. In the meantime they’ve paid interest on their mortgage of $1000 or so a month plus 5 months of taxes & insurance. Go figure. Stupid…Stupid…Stupid
“…didn’t believe the market here would go 180 degrees…
It’s not a pretty picture…
Fallen off a cliff…
Prices are down, down and down…..
rats jumping off a sinking ship…”
Do I detect a trend here?
Market is way down this morning….guess something is spooking it and the 10 year bond is almost to 5%….
Could it be some of the bubble guys are bailing?
Wonder if it is because of the Fed’s surprise at the length of the housing downturn. Ben Bernanke should have consulted Ben Jones. Long ago.
“McCabe built an affordable housing project called Botanical Place in East Naples. He had trouble finding people to purchase the 64 units in his project, even after knocking on the doors of local employers to try to reach out to workers.”
“‘I still have one left, by the way,’ he said.”
The old, I still have one left trick…
I’d put the over/under # of houses unsold @ 23.
Place your bets~
http://www.floridahomeloan.com/2006/08/developers-question-affordable-housing.html
We have a housing development that has had “only 2 lots left” for over a year-and-a-half now. And there were only four to begin with.
Yeah I haven’t heard of any affordable housing being built in LA, except as a required percentage of units in an otherwise upscale development. Someone correct me, but there’s some law that you have to devote 10% of your units that you’re building to affordable housing. Needless to say the devlopers *hate* this, and try to get around it anyway they can, preferably just donating money to get this waived. This is just stuff I’ve heard, I’m sure somebody knows specifics better than I.
All I know is there sure as hell ain’t any affordable housing that I can see. Anywhere. Even in Compton.
I’m waiting on the sidelines and piling cash. I’ll wait for the second wave of lowballers, cuz I think the first wave is going to catch that falling knife we’ve all heard about.
but what do I know, I’m a bitterLArenter
They play this game in NY too. Set asides for “affordable” apts. in luxury housing. The best part…they are not a widely known fact.
My friend Nicky lucked into a apt. with all the bells and whistles in the Trump Riverside development. She showed up in person to get an application (required) and dressed in her best business suit and borrowed expensive shoes. She had a small enough documented income…but the trick is builders want these apts. to go to people who look like the folks paying full freight. They don’t want any akwardness in the elevators. I’m guessing a lot of the non-American buyers weren’t even aware these apts. were available.
Have any of you guys been following the “Dream House” blog on the New York Times web site? It’s about this clueless couple who are desperate to pour hundreds of thousands of dollars into building their own custom dream home on the Florida coast. They are doing it RIGHT NOW and are blogging about it. The comments are merciless. We’ve been talking about buying at the top of the market but how much more stupid do you have to be to custom BUILD at the top of the market? It will be decades before they can recover their investment if forced to sell. Anyway, here’s the link. It’s really priceless comedy:
http://dreamhome.blogs.nytimes.com/
And be sure to read their recent posts about their design and floor plan. My 3rd grader could come up with a better plan than their architect.
“Each of us had wanted an office, and we had wanted them separated from the main area of the house. ”
Point one: What is this couple’s income? Do they want a home theater room and an indoor basket ball court? I realize that this is their “dream home”, but are they at a point in their lives where they can realistically afford a ‘dream home’? There was a series on cable called “dream house”, and the last installment of it followed a couple building their “dream house”. The couple was just starting out in life, and had their first child on the way, and they wanted to live in a super-cool house with lots of space. Turns out that after a year or so of planning, sweat equity, and frustrations, they had to sell their “dream house” because they couldn’t afford the mortgage (due to tight monthly budgets and house cost overruns).
Point two: They include a map of Anna Maria Island. Without knowing more about it, it looks like “storm surge central”.
“For Paul, having a roof deck was non-negotiable”
I *WILL* have my roof deck! It’s a dream house, dammit!
“We really aren’t dwelling on the possibility that our home could be blown away…We are well aware that Anna Maria Island is a sitting duck for hurricanes…But we don’t lie awake at night thinking about what might happen if we were hit. We will take practical measures, like investing in impact-resistant windows for our house when it’s built”
Try concrete block? Anyways, don’t worry too much…have you budgeted in hurricane insurance into your monthly budget?
“Many readers of this blog are convinced that Paul and I are blithering dolts. While that may be true, the reason for our calm about hurricanes is not stupidity, but a realization that in life and in real estate, when your number is up, it’s up.”
Uhhhhhhhh…OK. Maybe you don’t need hurricane insurance then?
Let me guess, they bought extended warranties for all of their appliances.
I can’t help but to read this blog…going back in time:
http://dreamhome.blogs.nytimes.com/2007/02/02/
““Well, you are in luck. There are only three buildable lots available anywhere in town. At 70’ x 102,’ this is a good-sized one. When they do come on the market many of them are only 50’ x 100 — and between you and me, I think they priced it low.”
“And that would be?”
“$259,900.”
I didn’t choke on my iced tea. But I could have.”
“I would have gone screaming into the street, except for one thing. My darling bride was not shocked.
One of the many things I love about Alison is she has a terrific hold on reality. In addition to being smart and funny, she knows, for example, what things cost…And Alison was sitting there calming sipping her iced tea as if $259,900 for 7,200 square feet of dirt was not insane.”
And Alison was sitting there calming sipping her iced tea as if $259,900 for 7,200 square feet of dirt was not insane.
I hope that she came with a large dowry.
That blog is a laugh riot. One of my favorite savage comments (aside from the one that asks whether the couple’s architect “graduated from the former East German school of design”) is below:
Dream Home indeed. This whole thing reminded me of a conversation in the 1986 movie classic “Back to School”:
Dr. Phillip Barbay (Paxton Whitehead): “Now, notwithstanding Mr. Melon’s input the next question for us is where to build our factory.”
Thornton Melon (Rodney Dangerfield): “How about Fantasyland?”
Breathtaking stuff isn’t it?
Like watching a trainwreck in slow motion.
I honestly don’t know who is more stupid, these folks or Casey Seren
Hi everybody! Reporting from Clearwater Beach, Fl 33767. Don’t believe a word about a silver lining. Things are bad and getting worse. NOTHING on the beaches is selling. The For Sale signs are getting yellow. The Auction signs are getting more numerous. They are now inserting 28-page real estate supplements in the local Beach Bee weekly paper. It is June and the beach is dead quiet. The torn down hotels are now empty lots. I’m thinking of contacting my landlord to reduce my rent. Why not? I’ve got hundreds of rentals to choose from between North Redington and Clearwater Beaches. The buildings Board of Directors just posted that there has been another huge increase in the buildings insurance - $83K a year for 30 units - and to expect a big increase in the monthly fees. Three units have been for sale in this building for the last eight months. Several open houses - but I don’t see anyone coming by to look. Don’t believe a word these real estate shills are spouting. There will be no turn-around until 2010 at the earliest.
Thanks for the on-the-ground report. As we’ve talked about recently, what a shame it is that so much of the old Clearwater landmarks were torn down — for this.
“McCabe built an affordable housing project called Botanical Place in East Naples. He had trouble finding people to purchase the 64 units in his project, even after knocking on the doors of local employers to try to reach out to workers.”
“‘I still have one left, by the way,’ he said.”
Hmmm. He must be refering to his remaining testicle.
“‘The pendulum has swung in the opposite direction, he says now. ‘The clients that sold stocks to buy spec houses in Arizona are telling me they’re under water, can’t rent them and they wish they left all the money in the stock market.’”
Pendulum swung in the opposite direction, but man it still swinging and has a long way to go.
These dolts will not want to ever hear the the word investment and real estate for at least a decade. Then new fools will be born again.