There Are Price Reductions Practically Every Day
The Bradenton Herald reports from Florida. “April marked the second month in a row that saw existing-home sales in the Bradenton-Sarasota market increase. It was the only market in the state that showed a positive change, according to numbers released by the Florida Association of Realtors.”
“‘We’re not as bad as everybody else in the state, maybe even in the country,’ said Ron Cornette, Wagner Realty’s marketing and training coordinator.”
“Prices aren’t holding quite as strongly. ‘There are equal levels of price reductions and new listings practically every day,’ Cornette said.”
“On Wednesday, there were 97 new listings in Manatee and 94 price reductions, according to MLS.”
From USA Today. “Each bit of news about the softening housing market makes these real estate investors, hoping for a turnaround, even more nervous, says Rob Alpert, a financial adviser based in Long Island with several clients who bought investment property in Florida.”
“‘They’re waiting and seeing. They’re miserable,’ says Alpert, who has advised clients with shakier finances to take the loss. ‘Don’t make this worse,’ he tells clients.”
The St Petersburg Times. “No one denies the Tampa Bay area housing market is flatter since the frothy sales and prices of 2004 and 2005. Prices have plunged from their peaks as too few buyers chase too many homes.”
“The Times talked to two nationally known economists whose opinions mostly clash on this issue.”
“Jan Hatzius, Senior economist, Goldman, Sachs & Co, believes Florida’s record home price appreciation since 2000 now makes the state ‘the epicenter of the U.S. housing bust.’ His take: Homes prices will decline deeply for a couple of years.”
“Hatzius: ‘Forty percent is the current level of overvalue in Florida. I would guess the area will have 10 percent or 15 percent price declines for a couple of years. Beyond that, my crystal ball doesn’t go.’”
The Sun Sentinel. “A delegation from Broward County’s real estate industry implored state Rep. Ellyn Bogdanoff on Thursday to push for the deepest possible property tax cuts during next week’s special legislative session.”
“Several of the 15 real estate agents and others who work in related areas told Bogdanoff that the escalation in property taxes during recent years has helped choke their business.”
“‘It has to be made affordable again. That is the issue,’ said Diane Hedges, an agent in Fort Lauderdale.”
“The real estate industry did well during the booming market in the first half of the decade. Now, its representatives say, they’re suffering. ‘It went from busy to slow to downright nothing,’ said Joe Roberto, of Roberto & Associates title and closing services. ‘It’s scary.’”
From Winknews. “You’re not going to believe what some brand new townhomes went for on the auction block Thursday night in Fort Myers, considering where prices have been. A three bedroom townhome previously priced at $310,000 sold for about $180,000!”
“Greg Toher was outraged when he heard the prices some of the homes were going for. Walking out of the auction room, he told us, ‘$145,000! Unbelievable! We paid $300,000! They just got rid of at least four for $145,000!’”
“He says he closed on his three bedroom San Simeon townhome in December, ‘You’ve got to be kidding me, that’s not fair.’”
“Tara Gionpalo said, ‘I feel really mad, really sad, hurt.’ Victoria Toher said the developer went back on their word, ‘They promised us they were not going to go below market value.’”
“Levitt and Sons representative told WINK News that the homes did go for fair market value…as determined by the hundreds of bidders at the auction.”
The Star Banner. “Local manufactured housing producer Nobility Homes blames a slowdown in the housing market for a sharp drop in second-quarter financial results.”
“The company reported sales declined 38.1 percent in the second quarter of 2007 compared to the second quarter of 2006. Income from operations dropped by 54.6 percent compared with the same quarter last year.”
“Nobility President Terry Trexler said in the statement that sales and operations for the quarter were ‘adversely impacted by the reduced manufactured housing shipments in Florida plus the overall decline in Florida and the nation’s housing market.’”
The News Press. “Cape Coral contractor R. Fry Builders has started partially dismantling houses where the customers are balking at closing the deal, removing doors, windows, air conditioners and other items.”
“Fry officials said they’re responding to an increasingly common phenomenon caused by plunging real-estate values that have left buyers unwilling or unable to close the deal because the mortgage would be more than the house is worth.”
“‘It’s industry-wide and every builder has gone through it,’ R. Fry operations manager Charlie O’Key said. ‘We’re building them and they’re leaving us holding the bag. We’ve laid out our money, but we’re not being paid.’”
“Michael Reitmann, executive vice president of the Lee Building Industry Association, said he has only recently heard of local builders taking similar action. ‘Within the last three weeks I’ve heard of three different instances.’”
“Before that, he said, ‘It may have happened but never in the 20 years I’ve been here.’”
“Andrea Rols tried unsuccessfully to file a theft report with the Cape Coral Police Department for damage to a house being built as an investment for her mother. Rols also is having a house built by R. Fry but said nothing has been taken from it.”
“She’s angry at what happened to her mother’s house and blames R. Fry for being late in finishing the houses, which are almost finished after the permits were pulled in late 2005.”
“Rols acknowledged she and her mother are behind on payments but blamed that on R. Fry’s slow pace of construction. Now they’re having to pay the interest on the construction loans because construction has gone on so long, she said.”
“Whoever is right, government intervention appears unlikely. Joe Friedman, deputy press secretary with the state Department of Business and Professional Regulation, said from his agency’s point of view, ‘This is actually a civil issue. It would be a breach-of-contract issue’ between the builder and the customer.”
“At the height of the market in December 2005 the median resale price for a single-family home in Lee County was $322,300; it dropped to $283,200 in April, according to the Florida Association of Realtors.”
“Meanwhile, the number of foreclosure notices filed in Lee County court has spiked this year: 783 in April, six times the number from a year earlier.”
“Greg Toher was outraged when he heard the prices some of the homes were going for. Walking out of the auction room, he told us, ‘$145,000! Unbelievable! We paid $300,000! They just got rid of at least four for $145,000!’”
“He says he closed on his three bedroom San Simeon townhome in December, ‘You’ve got to be kidding me, that’s not fair.’”
—
What a whiny little bitch. Life ain’t fair, bagholder.
I am outraged that the price of silver just fell by 10%. Outraged I tell you! Mortimer - Turn the machines back on. Turn the machines back on.
I, too share your outrage. I want 50K for my ‘03 vette. Afterall, thar’s what I paid1
hahaha, good one. I want $2000 for my 21″ CRT monitor!
oh, if you haven’t seen the video of Greg Toher…it’s definitely worth it. It’s on the article link.
What a freaking dumbass, the entitled are screaming they are not getting what they want. They do no research, they don’t talk to people, they trust RE and the MSM for truth and they are shocked he is out 180k.
I think we are going to see many people who are angry, you people outside of So Cal have no idea the heights of retarded numbers went. I mean we are talking skyrocketing numbers, the median in OC is still over 600k…yes 600k!!! If you had any idea how big this county is you would be shocked and amazed. We have seen nothing yet, all I see is a very bad storm on the horizon…biblical in proportions dropping anvils instead of rain.
Best part, talk to the avg Joe here…it can’t happen here, housing will lose 10% max blah blah blah…let the blood letting begin - couldn’t happen to a better bunch of materialistic douche bags.
Those who acted based solely in their belief of the authoritative whine of the MSM and their RE shills will learn a very “shocking” truth that they have been had, à la Milgram. The learning curve will vary; for some the linkage to an all knowing authority is so strong they may not come out of their stupor for a good ten years.
Got 10% down?
Oh my God! That WINK video of the outraged bagholders was freaking hilarious! Truly, that made my Friday beautiful. The builder was hitting the nail on the head when they stated that market value is set by the buyers. Too bad for the bagholders that they were willing to be the greatest fools. Not! They can all suck on it in their overpriced stucco boxes.
From the same link, another outraged buyer claims the developer, Levitt and Son, has no “loyalty” to previous buyers. Do these people have any idea of the meaning of the word, “business”? You bought, they sold, end of deal. Somebody ought to alert these folks they’re living in a market-based economy.
They’re living in the wishful thinking based economy. Unfortunately, reality made an unwelcome appearance in March…
He’s right! It’s not fair! It’s not fair some people are so stupid!
No kidding. Bought in December and already at auction? HE”S got to be kidding ME. It’s not fair that these jackasses ran up housing prices when they had nu business buying. And so late in the game, there aren’t many fools that are “greater” than him.
“no” not “nu”.
I think you misunderstood what he was saying. His house was not on the block, he was pissed because similar homes went for half of what he paid six months ago. This probably puts him underwater.
I guarantee you it puts him under water unless his DP was 50%.
Oh, yes, I see the distinction. Still, crybaby. If he bought so recently, I wonder how long it will take him to make the decision to jingle mail.
Chad…
It took my friends neighbor 2 weeks when this happened in socal in 95.
chris
well, if he thinks they are giving them away, he should buy another house. Cost average for both homes would a lot less.
He would be a realestate genius and money god!
ah, nah. “You know honey, they are giving the homes away, but if they are down this much this month, we would be able to get a better deal next month and so on and so on”
The people who bought at 145K will be screaming soon about how they got screwed too, but “at least we did not get as screwed as the previous buyers “300K, haha, you believe that”"
and there bagholders, lies the paradox. You think you got screwed, but you basically screwed yourself for buying in Florida in 2005, 2006 and 2007…2008….. You idiots!
What’s **REALLY** funny is that Greggy-pooh even lied about his purchase price. He actually paid $329,100 for his house:
http://www.leepa.org/Scripts/PropertyQuery.asp?FolioID=10513678
OUCH!
That’s a nice garage he bought. Looks like there might even be a house behind it.
Wow, nice find! Man, I just can’t imagine being in his shoes right now. How could he NOT walk away? There’s no way I could pay that mortage bill every month knowing my neighbor was laughing his ass off at my stupidity.
Speaking of walking away, if you’re going to take a foreclosure anyway why not buy an auction unit at 145k first, and then let them foreclose on the 330k unit? Most FBs end up renting, he could actually arrange to still own if that’s important to him. What a mess…
What was the square footage of that little nightmare?
The square footage of the auction models (3 “styles”): 1395, 1614, 1779 sqft living space.
Nice find Gatorfan!
AT the very bottom there is a link for the 2006 TRIM (proposed tax).
I counted 22 taxing authorities. What a taxing mess!
Got 10% down?
This guy is just sour because he is not the sage investor he thought he was. Looks like it worked okay the first time - bought one for 150k in ‘04 and sold it for 254k in ‘06.
http://tinyurl.com/2qchxp
Doesn’t look like he’s going to make the easy 100k he thought he was going to on the second one. He also has a deed restriction that says he cannot sell for 18 months and a second home rider that seems to specify to no renting.
This guy is a total dolt
“Greg Toher was outraged when he heard the prices some of the homes were going for. Walking out of the auction room, he told us, ‘$145,000! Unbelievable! We paid $300,000! They just got rid of at least four for $145,000!’”
“He says he closed on his three bedroom San Simeon townhome in December, ‘You’ve got to be kidding me, that’s not fair.’”
“Several of the 15 real estate agents and others who work in related areas told Bogdanoff that the escalation in property taxes during recent years has helped choke their business.”
See it is fair. It wasn’t high property taxes that helped choke off business it was high housing costs and liar loans. So Mr. Toher, when you sell at the lower price, the RE’s business will pick up and there will be no need to lower property taxes. Life in the RE arena is getting better by the hours.
The awesome quote from the vidieo is: : “They promissed us they (Levitt) weren’t going to sell below the market value…”
Well, they didn’t. They sold exactly at the market value!!! Get a clue people!
“Greg Toher was outraged when he heard the prices some of the homes were going for. Walking out of the auction room, he told us, ‘$145,000! Unbelievable! We paid $300,000! They just got rid of at least four for $145,000!’”
“He says he closed on his three bedroom San Simeon townhome in December, ‘You’ve got to be kidding me, that’s not fair.’”
“Tara Gionpalo said, ‘I feel really mad, really sad, hurt.’ Victoria Toher said the developer went back on their word, ‘They promised us they were not going to go below market value.’”
Sorry, that’s the new market value, this week. They lived up to this promise at least!
Wonder how well the rental income supports the “not fair” $145K price. Is the price too high still? That would not be “fair”
…
From 300k to 145k seems to be about right - for now! It probably needs to another 30 to 40k and we will be just about right in pricing.
Anyone else feeling a bit…
Vindicated?
Schadenfreude?
At least this area has take most of its medicine. (If 155k of 195k drop is was prognosticated by Sobay and we don’t severely undershoot.)
Got popcorn?
Neil
Yes Neil, my schadenfreude is standing at full attention this morning, thanks for asking!
I agree, $329 to $145…sounds like this area popped its bubble pretty quickly. Now for the long slow painful burn as these boxes languish in the $110 to $140 range for the next 5 years. Enjoy the HOA!
Neil, my schadenfreude knew no bounds when I saw that retard crying about how it isn’t fair! As far as I’m concerned, all those FBs who propelled prices to such ridiculous heights because they thought it was some kind of new housing paradigm, can eat sh*t! Some people still think that recent pricing is justifiable, but anyone with common sense can see that incomes don’t even come close to sustaining this market today. I wonder what it must feel like, living in complete delusion? I laugh unashamedly at the FBs. Buying a house does not entitle you to riches, you f-tards.
‘Sorry, that’s the new market value, this week. They lived up to this promise at least!’
no kidding. Hey look Tara Gionpalo, someone wanted to buy at 145k and someone wanted to sell at 145k. That is precisely ‘market value.’ If you think it’s worth more, you should bought some of those places for 145k and sold it for what you think it’s worth.
Bingo SC!
If they liked the place at $300K, they must love another one at $145K.
I smell lawsuits.
The LA Times admits the obvious: “Flood of foreclosures could drive home prices lower”: http://www.latimes.com/business/la-fi-homes8jun08,0,807089.story?coll=la-home-business
I love this article, esp when comparing it to the Fort Meyers article. Looks like we are about 12 months behind them.
Last year there were 10 homes being sold by banks. This year there are 3000. hmmmm, I’m no math expert but that sounds like a pretty significant increase.
Dear Greg and Tara,
The answer is obvious. Each of you should have bought two more townhomes.
Sincerely,
David Lereah
Cost Averaging Condos
Cost Averaging Condos for Appreciation= CACA
Dollar cost averaging, buy one condo-closet every 6 months.
Got 10% down?
Condo Cost Averaging
I looked at these townhomes when searching for a new place to rent. $145,000 is about right, I would say. Those places are renting for about $1,200 a month, but I wouldn’t go above $1,000 to live there.
here in sarasota every neighborhood street seems to be littered with for rent signs
OK, people, which one of you posted this gem yesterday on the sarasota craigslist site? It’s a great rant against FBs who are now landlords against their will.
http://sarasota.craigslist.org/apa/346790121.html
already removed…
Figured it would be. Here’s the text of the post.
To All Landlords
To all the Landlords in the Sarasota/Bradenton area. So sad your quick flip did not turn into a quick flip. So sad your ARM has gone up and up and up. It’s not my fault you were stupid enough or greedy enough to go for the ridiculous concept of an ARM.
So sad you’re stuck with an overpriced 3/2 block house that originally cost $17,000 to build. However, as much as I would like a home that’s better suited to my needs I will not be assuming your monetary foolishness. I hope nobody rents your houses at the ridiculously high prices you are charging. Many of my friends have moved from this area so they could live in a place they could afford - and still have a decent quality of life. None of them have regretted their moves. I’m right behind them.
Do you know what this is going to mean for this area? It will mean that you have no cooks or waitstaff in your restaurants. No teachers for your children. Nobody to come to your home and do your odd jobs. No inexpensive lawn service. Etcetera.
You may have to bite the bullet and eat some of your mortgage payment yourself instead of expecting your renters to assume your debt.
Personally, I hope you sit on your property until it is put up for auction on the courthouse steps.
Location: Sarasota/Bradenton
it’s NOT ok to contact this poster with services or other commercial interests
PostingID: 346790121
Mike,
Whats even better is the absolute delusion/denial of the employees i work with here in Sarasota about price reductions…
Chris
Trouble in Down Town Sarasota luxury condo market:
http://www.heraldtribune.com/article/20070608/REALESTATE/706080358
How ironic that the SHT published an article on how great things were going there just a week ago.
A $4,000 per month alligator. And that’s WITH tenants!
“People who you sold these condos to — let’s be honest — they got into them because they thought they’d make a lot of money, and they didn’t.”
Guido gave examples of new two-bedroom and two-bath condos fetching $1,600 to $2,000 per month on annual leases.
“Investors have dried up. Some investors have multiple properties, mortgage rates have risen and the absorption rate will get worse,” said Guido, who also observed that prices have fallen to the “pre-construction prices of 2004.”
“When you consider that a mortgage on that kind of property carries a monthly payment of $3,000 to $5,000 a month plus property taxes and condo fees, there is still some serious hemorrhaging occurring,” Horrigan said.
“Even rented, some owners could be looking at losses of $4,000 a month or more. Some of those owners are multiple property owners and, while some may be able to withstand the negative cash flow, given the mortgage, taxes and condo fees, serious appreciation would have to begin soon, to offset the cash drain and make them whole any time in the reasonable future,” Horrigan said.
The deposit “is out of your wallet and has been for a couple of years. While it would be painful to walk away, because the money is already gone, it won’t change your lifestyle. Close on it and start running negative at $3,000 to $5,000 a month, and it becomes lifestyle-altering.”
Nice choices. I hope they go for option #2. (That is the choice where you say bye-bye to $3,000/month per unit forever.)
Too many people living high off the hog, time to downsize some of these lifestyles.
Got 10% down?
“Jan Hatzius, Senior economist, Goldman, Sachs & Co, believes Florida’s record home price appreciation since 2000 now makes the state ‘the epicenter of the U.S. housing bust.’ His take: Homes prices will decline deeply for a couple of years.”
Good thing that epicenter is way down in Florida. Since all real estate is local, I am guessing coastal California will not be impacted.
Nothing to see here in California - Move along folks!
Were is the real epicenter? Florida? California? Do we have two epicenters? One for each coasts? What about Massachusetts, didn’t the bust start there durning the fall of 2005? Multiple epicenters?
The epicenter of this housing bust being in Florida is the same as our Earth being the epicenter of the universe…
Please do not forget Detroit.
“Jan Hatzius, Senior economist, Goldman, Sachs & Co, believes Florida’s record home price appreciation since 2000 now makes the state ‘the epicenter of the U.S. housing bust.’ His take: Homes prices will decline deeply for a couple of years.”
Early on in my “career” on this blog (LOL), I predicted that pronouncements from the FED would be greeted with a yawn and that the real predictions and US financial policy would be dictated by Goldman Sachs. Saw it coming when Cueball Hank became Treas Sec. Lissen up, folks. Daddy’s got something to say.
The Florida Blame Game
Full Court Press
Goldman took over when Rubin was appointed by Clinton in ‘93. way before W even thought about running for Pres.
“way before W even thought about running for Pres.”
W thinks?? You sure?
not sure either, but still Goldman was in charge via Clinton. So this financial disaster started long before W gave up drinking and tried to use his pickled brain cells.
‘They promised us they were not going to go below market value.’
Best-meaningless-promise-ever!
Apparently they missed the asterisk -
“Prices will not go below market value*”
* Market value subject to change. The change is not guaranteed to be upward.
Packman
ROTFL
amazing how many people don’t understand what the following terms really means:
1. Market price
2. Value (vs. price)
You see… the value of these properties did go up, just not as much as their prices…
We’re in for a long ride.
Got popcorn?
Neil
They delivered precisely on this promise as it is written.
That’s right… and she heard what she wanted to hear, not what was said.
Many years ago when I was just young lad, Mad magazine did a funny piece on advertisements. I still remember the faux tire ad claiming that, “the treads were guaranteed to last the life of the tire.”
i think i’m beginning to see the tide turning in l.a. in a meaningful way. scouring craigslist listings i can now find 3br condos in the cheaper parts of the san fernando valley (e.g. reseda) in the $300k’s that actually look somewhat decent. this was not true a few months ago. burbank, too, looks like there are occasional price drops when there are desperate sellers.
this is just my impression, not the result of a scientific search. the housing trackers i visit show a tiny downtick in prices for l.a. (REALLY tiny) but i think i’m now starting to see real drops.
I posted this in bits-o-bucket but it fits here as well…
The new comps have aslo been set for North Port by on of the guys i work with. When i get more info next week i post up some details…
Ya’ll want the really good news…
One of the guys i work with has 17 SFH in North Port. He has been buying since ‘84. He just told me this a.m. he bought 3 more SFH this week. The price…300k,for all 3. The previous owner built these with equity from a home sale and has not been able to unload ‘em for 2 years. I didn’t get a chance to talk much today but from my understanding it was a out of state investor who just wanted the he!! out of the market.
So the guy is cleaning up the outsides(insides never lived in) and the neighbors ask…”Oh,new owner,what did ya pay ?”. Guy tells em 100k. He mentioned the neighbors looked ready to kill…
HOLYYYYYYYYYYYYYYYYYYCRA……………………
Its a gonna crash hard here in Florida….
Chris
P.S.-At the high point these would have been 180k plus homes.
Wow, the home you purchased for $300K is now worth just $180K. What’s the proper financial decision? Stop paying the mortgage now and be prepared to move when you’re foreclosed? Or keep making payments that are higher than the cost of renting? Is Florida a non-recourse state?
Bill in Carolina,
I personally saw a upside down buyer (130k) in Cali during the last pullback just turn in the keys and move out. He had put a substantial down,20% i think,on a 300k house. A good friend bought the place next door to him for 108k in 95. He stayed 2 weeks after my friend moved in…Nice guy but like he said,”Why stay in a place you are so upside down on ?”
Chris
This will happen in droves in 2009-10.
I just realized something: what if you’re in a down market, and you re-fi and then jingle mail? Get it?
Let’s say you bought in 2000 for $100k, and at peak you could have gotten $250k… you list and get lowballed for $150… you check and a bank will give you aa appraisal/HELOC for $200k, so you get $100k to, umm, renovate. And by renovate, I mean call UHaul and move to TN.
Is this possible? Is there another round or appraisal fraud headed to Florida?
I think the changing standards of appraisals and LTV are going to prevent the refi’s from occurring.
If I remember correctly, refi’s are pretty much always recourse, so they’ll come after you. It’s only first purchase that are non-recourse, and then not all the time/everywhere.
The ticket to riches was the overinflation of first purchase by appraiser collusion in non-recourse areas.
Yep - this only works if you’re willing to assume a new identity and/or live off the grid afterwards. And even then, they’ll be looking for you.
Perhaps…though I can envision a scenario where the govt grants credit and no IRS for primary residents. Govt/banks will be desparate for qualified buyers to help restart the economy by 2010 or so.
This happened informally in Austin, Texas in 1990-92 (at the bottom, 5 to 7 years from peak in 1985) as banks were desparate for business and would loan to people with great credit and only a primary residence foreclosure with 20% down of course.
Austin’s bust was not oil related, but speculation like this one - well not as bad as this one, though I recall some ARMs and 0% down schemes and such. Another difference…interest rates were falling over the late 1980s and we still saw 25%-50% crash in Austin depending on neighborhood. Land down 70-90%.
Can I get a beach or quality canal front lot in a great neighborhood in Fla for 90% off peak yet?
desparate = desperate
and loan to people with ONLY ONE primary residence foreclosure and sterling credit otherwise.
What’s the proper financial decision?
LOL
“Snaith: I think South Florida in general has to deal with the condo issue to a greater extent. But there will be pockets of pain throughout coastal areas of the state. Anywhere there was a rush to buy these condos it’s going to take some time. But remember, the baby boomers aren’t retiring to North Dakota. They’re coming to Florida, Arizona and Nevada.”
Las Vegas and Phoenix are doing so well, but Florida’s different. Sure it is. If you say it enough times, it must be true. Or, alternately, it’s the fault of the baby boomers. If they would just hurry up and retire to all of the overpriced, overbuilt condo markets (further maxing out their already maxed out credit), then we could get past this “soft landing”, “soft patch”, “flattening”, etc.
Uh, a lot of retirees are pulling up stakes and moving to the Carolinas if they can.
Yep, Florida is really stinking out the joint. I just wish the homebuilders would get it and STOP BUILDING!!!!!!!! Who is even going to live in the substandard POS’s they are building? Families leaving, even retirees leaving. That leaves us creaky tweeners. We’re hanging on, waiting to see what happens. But it is not looking good.
By the way, I read something in the Tampa Tribune over the weekend about the property tax situation. Seems a little sleight of hand has been done. Taxes were already raised. “Relief” is just going to cut them back MAYBE to where they were. And somebody showed a clip on one of the TV stations of the Florida CONgress celebrating Stinko de Mayo just before they shut down. Some fat dick lawmaker in a huge sombrero was ringing a bell and yelling “YaRRRRRIIIIIIBBBAAAAAA”! Never saw that clip before, but I had heard about it. It was even worse than I had imagined. I wonder if he knows that by doing that, he just reinforced the corrupt Mexican stereotype some of us grew up with watching “Zorro”. Santa Ana, anyone?
I hope someone posts or has posted that on YouTube. And I hope anytime anyone googles “Florida Turd World Government Corruption”, that clip comes up.
Hey Palmetto,
Immigration bill implodes and 10 yr. Treasury inching up to 5.25%.
It’s all good.
spike, it’s not over yet with the immigration bill, but I was really glad to see what happened. A real squeaker. Harry Reid (see his name next to the definition of “smacked ass” in the dictionary) is waiting for Boosh to come back and “raise hell” with the Republicans in the Senate. ROFLMAO!
Ron Paul is da man!
Knowing contractors, they won’t stop building untill they get their financing cut off. That is up to the banks. The building will stop when you start reading about non-performing loans, and banks in trouble.
these are the no worries cities on foreclosures
low potential for mortgage delinquencies.
The top 10 judged with the lowest risk include Phoenix at number one, West Palm Beach, Florida, Ft. Lauderdale and Salt Lake City
You have got to be joking.
Which analytical genius came up with those cities?
I’m going to start laughing now again.
on yahoo finance page
Wow! You weren’t kidding! Here’s the link:
http://biz.yahoo.com/cnnm/070607/060707_high_risk_foreclosure_areas.html?.v=1&.pf=personal-finance
Here’s the problem:
“To asses its risk profiles, the company looks at home-price trends, economic health, historic foreclosure numbers and the amount of fraud it finds in an area, according to Schroeder.”
So, according to their logic, boom areas like Phoenix or Ft. Lauderdale, where prices have historically gone up (at least for the last 10 years) and the resulting foreclosure rate has been low, means that it will continue to have low foreclosure rates.
Moronic logic on their part.
“Tara Gionpalo said, ‘I feel really mad, really sad, hurt.’ Victoria Toher said the developer went back on their word, ‘They promised us they were not going to go below market value.’” - They didn’t.
“Levitt and Sons representative told WINK News that the homes did go for fair market value…as determined by the hundreds of bidders at the auction.” - Exactly!
They didn’t say they wouldn’t sell them for less than a previous buyer paid, simply they wouldn’t sell below the market value. What people will pay is the market value. That sucks for an early buyer in a declining market, but that’s the way it is. “Who knew this house came with a knife set. They didn’t tell us about that.”
“Tara Gionpalo said, ‘I feel really mad, really sad, hurt.’
Aww, Tara, not to worry. Certainly The Oprah has an answer. The Oprah can restore everyone’s self-esteem and make all the bad yukkies go away. 4pm every day, just tune in.
WWOD?
I think all she needs is a makeover and all we be fixed…just like everything on talk shows.
Tara! Tara! Tara!
“Greg Toher was outraged when he heard the prices some of the homes were going for. Walking out of the auction room, he told us, ‘$145,000! Unbelievable! We paid $300,000! They just got rid of at least four for $145,000!’”
“He says he closed on his three bedroom San Simeon townhome in December, ‘You’ve got to be kidding me, that’s not fair.’”
“Tara Gionpalo said, ‘I feel really mad, really sad, hurt.’ Victoria Toher said the developer went back on their word, ‘They promised us they were not going to go below market value.’”
For those that seem to wonder what FB means…see Tara and Greg above
somebody call them the Wanh - mbulance
“‘We’re not as bad as everybody else in the state, maybe even in the country,’ said Ron Cornette, Wagner Realty’s marketing and training coordinator.”
“Prices aren’t holding quite as strongly. ‘There are equal levels of price reductions and new listings practically every day,’ Cornette said.”
Hehehehe… translation: “FB’s are getting reamed, but our realtwh*res are getting a few more commission checks than last year.”
“They promised us they were not going to go below market value.”
“you keep using that word. i am not sure it means what you think it means.” - inigo montoya “the princess bride”
The guy who made that promise must’ve been laughing hysterically up his sleeve.
Seriously, though, from the sound of it, these buyers had a clue of some sort and were seeking re-assurance from the builder. In other words “We have a feeling you’re going to screw us. Just tell us you won’t and we’ll go ahead with the deal”.
Some people just BEG to get taken and what’s a salesman to do? If he doesn’t, someone else will.
The average American cannot tell the difference between fact and a sales pitch. I keep wondering how many people now believe Lawrence Yun’s prediction last week that an average house in Sarasota-Bradenton will be worth $10 million in 2045.
an average house in Sarasota-Bradenton will be worth $10 million in 2045.
oh no, did he really say that?
Cue Doctor Evil voice: In 2045, the average Sarasota house will be worth ONE MILLION dollars…
Actually he didn’t say the “average” house, so I misquoted him on that point. He said a $500,000 house. Otherwise, here is the link quoting the new Dr. Evil of the NAR:
http://tinyurl.com/2fzz8l
During the next 40 years, Southwest Florida homeowners will enjoy values about 20 times higher than now.
Some of the quotes from that article do sound surreal. Austin Powers seems credible in comparison.
Inconceivable!
I need a double popcorn neil, things are getting good down here. I may go to some open houses over the weekend and torment some realtors.
Great idea! Gonna add that to our list of things to do when we make our annual visit to Sarasota this winter.
Oh boy, they will be VERY entertaining, I am jealous of the west florida coast, they are crashing faster than we are….
ROTFL
You should walk in with a big bag of popcorn… just munch away. No need to be rude… just be very… non-committal.
I blogged fear has reached SoCal. We’re trailing Florida, but with the coming credit crunch, this avalanche will get speed.
Got popcorn?
Neil
oooooh, I have a good idea, lets have some HBB’er popcorn bags made!!!
Has Neil been posting yet since his honeymoon?
Hello! I’m back.
Got popcorn?
Neil
ps
LOVED HAWAII
we missed you! hope it was everything you hoped!
Funny. My wife and I have started going to open houses here here in Broward, mostly out West, Davie, Cooper City, Plantation, and Sunrise.
It’s amazing to see the absolutely huge disparity in prices at the open houses where some sellers/Realtors® still think its May 2005, while other prices seem quite reasonable (don’t worry; we’re still not buying). We have seen very similar houses priced with $150,000 price differences.
Last Sunday we went armed with lots of stats off of http://www.ziprealty.com and http://www.bcpa.net/. I had great fun asking questions and then challenging their lies.
Typical conversation:
Me: How long has this property been on the market? What are the comps? How long has the owner lived here?
Realtor®: Lies, lies, lies.
Me: That’s weird; according to these print-out you don’t quite have your facts correct.
Realtor®: –Speechless–
The Internet; busting lying Realtors® since Al Gore invented it.
“Snaith: I think 40 percent is probably excessive. The worst of the situation will be over by the middle of 2008. A 10- to 15-percent price decline is the worst- case scenario. We’ve got a lot of long-term drivers in place that will support housing: Baby boomers retiring, 40-year-low mortgage rates, strong personal income, low unemployment.”
“You’re not going to believe what some brand new townhomes went for on the auction block Thursday night in Fort Myers, considering where prices have been. A three bedroom townhome previously priced at $310,000 sold for about $180,000!”
“Greg Toher was outraged when he heard the prices some of the homes were going for. Walking out of the auction room, he told us, ‘$145,000! Unbelievable! We paid $300,000! They just got rid of at least four for $145,000!’”
Question - If a possible 10-15 percent decline is a “worst-case scenario”, what are actual declines greater than 15 percent?
Answer- Of course, a great time to buy! (and feed all the commission whores)
Question - If a possible 10-15 percent decline is a “worst-case scenario”, what are actual declines greater than 15 percent?
Kind of like “maximum fines doubled in work zone”?
It was a riches to rags story….
What’s the old British saying (please correct, I couldn’t find it on Google):
“Short sleeves to suit cuffs and back within three generations.”
We’re just on internet time now.
Got popcorn?
Neil
With a little changing that could be a new NAR slogan.
“Short sleeves to suit cuffs and back within one generation”
Turning dollars into (non) cents.
The St Petersburg Times. “No one denies the Tampa Bay area housing market is flatter since the frothy sales and prices of 2004 and 2005. Prices have plunged from their peaks as too few buyers chase too many homes.”
Shouldn’t this be worded in reverse - too many homes chase too few buyers?
“Beyond that, my crystal ball doesn’t go.’”
Finally, an honest economist reveals how they do it.
Or… “at this point my dartboard is filled, and I will have to move to a new dartboard for further analysis”
I’ve got one of those cheap Chinese made crystal balls, as well…
Keep in mind this is the same economist who was looking for 3 twenty-five basis points by the Fed by the end of ‘07. He just put out a piece entitled “Yumm… crow” (as in eating crow) on his prediction in which he reversed his call.
My point - this guy (and Goldman Sachs) doesn’t have any more insight into the future than anybody else.
Anyone want to guess what 30 year fixed mortgages are at by the end of summer? 7.25% is my guess….
Just what the FB needs; a good hard shove in the back from higher rates. This train is picking up speed.
They were 6.58 last week and there has been another 15-20 b.p. market move since then so we are already at at least within 1/2% of your prediction. (BTW, Rick Santelli has correctly called almost every meaningful move in bonds for the past six months. Even Pimco’s Gross is following him!)
I don’t even know how much it even matters any more, at least in Cali, LV, and Florida…a lot of the stuff that people use here in Cali (and the stuff that is resetting as we type) is tied to short term rates. Very few new buyers (and those wanting to refi out of a reset) can afford a fully amortizing 30 year fixed as it is…the stuff they use is usually tied to LIBOR or other short term rate. What the long rate going up means to me is that investors expect inflation to pick up…which would make it harder for the central banks to lower rates to re-ignite the ARMs race.
It’s all academic at this point anyways, with the resets going on right now, there’s not much to do but sit back and wait.
(This was in response to Shaun’s “Anyone want to guess what 30 year fixed mortgages are at by the end of summer?” comment)
Ben, you’ve done it again! Every week you pull at least 1 story that makes me laugh, cry, scratch my head, and get pissed off all in one. This is that story.
You guys are making me crack up with the comments. The toher’s just saw almost 200K of papaer equity vanish. However, the debt on that vanishing equity willnever disappear. Remember kiddies, you can always refi an interest rate, but you can never refi a purchase price.
Of all the factors that went into this housing/credit bubble, the one that still amazes me is that no one looked at value anymore. I know Neil allued to it above, but I want to take it a little further. I realize greed, fear of being priced out forever, and RE always goes up had something to do with it. However, didn’t anyone take the time to realize that the house that was built (land inc.) for 100K, sold for 125K 8 yrs. ago, is not all of a sudden worth 500K? I really think that for the most part people have their sense of value and pricing things. I don’t mean you have to be cheap. I like to buy when I feel I am getting a deal or getting value for something. However, to pay 5 times what something is worth is just lousy buying smarts.
Put it this way, every time I go to my local Saturn dealer I look at the newer cars and (dream, I can still do that). What gets me are not the low-end cars. It is the new high end ones. First off, since when is Saturn in the business of making 300K+ cars and where is the value in that? If I want to spend 30K, I will buy a Lexus or move up another 10K and get a cheap MB.
I just don’t get how we have come to the point in this economy where no one understands value anymore. I guess if the gubmint doesn’t respect its money, you can’t expect the masses to either!
people have LOST their sense…
“no one looked at value anymore”
Exactly. The average joe does not understand that price and value are two completely different things and that price may, and quite often does, differ from value. Price is what you pay, value is what you get.
The value for houses is determined by cash flows (rents avoided for owner-occupiers and rental income for landlords), not by what it is “currently” selling for in the market.
In the DC area, residential real estate had a 10+% rental yield on average for decades prior to the 2000’s. In other words, the price to rent ratio was about 12 times annual rent. These days, the price to rent ratio is double that and earnings yields on investment properties (based on today’s prices) are far below the yields available on no-risk government bonds. It’s insane.
And yet people still insist there is no way housing prices can drop.
Unbelievable!
Add me to the chorus. Yes… as an urban center gets wealthier, property closer to the wealth generating regions (or easy commute to those regions) should go up…
But the market has been insane for years.
The hangover will be dire…
Got popcorn?
Neil
Unbelievable? Human greed knows no bounds. That is what the realtors, lenders, and Wall Street prey on. They basically sell the sizzle and get the steak from the gullible and those with get rich quick dreams. However let’s face it, if we are all rational and sensible this blog wouldn’t exist. Vive la difference!
Neil, “value” is a word I often use. Like you, I believe that the meaning is lost on 99% of the masses. Value is very grey, but forcing all citizens to take economics in h.s. would help. Your Saturn v. Lexus analogy was perfect. Just because a similar item costs a few dollars less, does not mean it is a value. Just because the builder “throws in” some granite counter tops does not mean you are getting a great deal. This country has lost its freaking mind.
“Remember kiddies, you can always refi an interest rate,”
I wonder, can everybody refi? I thought that’s why there are so many FBs out there — they can’t refi because they’re underwater on their loan.
Think of trillions of dollars in deficiency judgements and plummeting values forever and you get the long haul picture. NO creditworthy buyers for many years. Something wicked this way comes!
This blog has been warning about “catching a falling knife”.
“Greg Toher was outraged when he heard the prices some of the homes were going for. Walking out of the auction room, he told us, ‘$145,000! Unbelievable! We paid $300,000! They just got rid of at least four for $145,000!’”
“Tara Gionpalo said, ‘I feel really mad, really sad, hurt.’ Victoria Toher said the developer went back on their word, ‘They promised us they were not going to go below market value.’
Just imagine what they would be saying now if the bubble had continued to expand and these townhomes were selling now for $450,000 six months later. You better believe that these FB’s would be saying that $450,000 was the fair market value. They certainly would not be saying that the recent buyers had overpaid by $150,000 and that paying that much was not fair…. If prices go up, I am a genius…. If prices go down, it is not fair, it is always someone else’s fault. I assume that if prices went to $1,000,000 in 2008 and they sold out, would they feel sorry for the poor schmuck who bought??
Sellers: buyers, not you, determine market value. No buyers no $$$. How stupid are people? I’ve been watching to buy in Florida for the last 5 years and next year would have been the year. But not now.
2002 - could afford the area I wanted to buy in
2003 - a little more, but still reasonable
2004 - prices starting to rise - last year of normal appreciation.
2005 - can’t afford to buy there - prices almost double - frenzied buying
2006 - prices astronomical - most places already more than double 2004 prices
No how can someone be so blind over the last 4-5 years, as to not see the ridiculous triple digit appreciation in the prices of houses. What were these people doing? Living in a cave without TV, newspapers, or human contact. I had a friend that bought in Ft Myers. They paid $168,000 in 2004. By the peak in ‘05 it was worth $350,000. Now anyone seeing prices jump from ‘04 to ‘05 that much would have to be brain dead to not see a problem coming. I don’t feel sorry for them. Well, they got their $329,000 condo, and I may have to wait a few more years to buy, but mine will probably be worth closer to what I paid for it.
“Levitt and Sons representative told WINK News that the homes did go for fair market value…as determined by the hundreds of bidders at the auction.”
LOL. Oh, the humanity!
think back to how all this started. The housing bubble was created to save us from the tech wreck after the stock market bubble. That bubble was created because inflation in the Clinton yrs was in stocks, for W it was Real estate. Rubin switched the Gov’t long term borrowing to short term. He got rid of the 30 yr and switched to 5 and 10 yr notes. Financing long term obligations with short term money Medicare at 5 yr rates? Same as buying a house with a I/O, 5/1 ARM. Clinton spent the peace dividend and then some but most peole didn’t notice cause the economy was”booming” and inflation was in stocks, now to reinflate the balloon the fed lowered rates so people would overspend in something that they thought they knew about: Real estate. There is another bubble coming. probably ethanol (costs more to make than it delivers).