Sliding Down With The Market In Florida
The Pensacola News Journal reports from Florida. “Greg Chapman put his East Hill home on the market in November 2005 at a time when residential prices were approaching post-Hurricane Ivan highs. But it also was a time when the inventory of unsold homes was starting to climb rapidly. Over the next three months Chapman got only three half-hearted inquiries about his three-bedroom brick home, listed originally at $193,600.”
“He pulled his home off the market, deciding to bide his time and wait for the market to strengthen. But this past spring Chapman had a change of heart after Realtor-associate Keith Harrod convinced (him) to price the house at what he considered a fair market rate for that section of East Hill. The result: the house sold the first day on the market at a price, $165,000, Chapman said made him ‘extremely happy.’”
“Chapman’s quick success offers a broader lesson for the overall Pensacola housing market: Price the property right and it will sell. ‘I’ve had a number of clients who have priced their homes too high and have been sliding down with the market,’ said Harrod. ‘And, in the end, they’ve probably lost money.’”
“But flying in the face of that simple strategy is the growing glut of overpriced, unsold homes, which hit a record high in May of more than 7,100. And that number doesn’t include homes for sale by owner, and the many hundreds of new spec homes offered by builders.”
“‘Right now I can’t even give away a condo on Perdido Key,’ said agent Glenda Jones. ‘There are 438 units on the market on Perdido Key, and I can’t get any buyers. Association fees and taxes are making a lot of buyers hold back.’”
“Jones says part of the problem with the condo market is ‘people want to make too much money’ selling their units. Realtor Bill Chavis’ take on the condo market is even more grim. ‘It’s brutal times in the condo market,’ he said.”
“Robert Hogan, of Innerarity Realty, says prices are coming down on the Key, and that’s a good sign. ‘Prices have come way down,’ said Hogan. ‘But we’re in a kind of Catch-22: People know we’re getting down to the bottom, but it’s hurricane season, and that, and taxes and insurance, are keeping buyers away.’”
“On Pensacola Beach, the condo picture is far from robust, but is holding its own, largely because prices have dropped by up to 25 percent, said veteran Realtor John Pinzino.”
“‘Seems to me the market has gone back to the way it was in 2004,’ he noted. ‘I’ve been in the real estate business for 40 years and from what I can tell I really think we’ve hit bottom.’”
“To the east, the housing/condo market in the Navarre area is more mixed, says Carol Brown with Prudential Holley Properties. There are some 950 homes and condos on the market, Brown said. And sales are slowing considerably from May 2006 levels when 112 single family homes sold, compared to 77 last month.”
“‘I think prices are coming down…and buyers do move to properly priced homes,’ Brown said. ‘But there is an abundance of property in market and buyers are not making a move until they see a property priced correctly, and unless it is absolutely showcased it won’t sell.’”
The Miami Herald. “Within an hour after the Florida Legislature passed its tax bill Thursday evening, Mark Zilbert went to work. The South Beach real estate broker sent an e-mail blast to 50,000 potential buyers with the tax changes, and condominiums for sale.”
“Like most in the housing industry, Zilbert had been eagerly waiting for something, anything, to inject new life into a frozen real estate market.”
“But even if voters say yes in January, it’s unclear how far the changes to the market will go. Peter Zalewski, a real estate advisor in Bal Harbour, said the super-sized exemption may bring a burst of activity, but not for long.”
“‘Ultimately, there are too many units and not enough buyers, and not even a tax break will change that,’ he said.”
“The broader market still faces a host of problems. There’s an affordability gap. Banks are tightening lending standards after giving out mortgages too freely. Insurance rates remain high for many homeowners.”
“And there is still a mountain of homes on the market looking for a buyer. In the past year, the number of homes listed for sale in Miami-Dade and Broward counties increased from 50,000 to more than 75,000.”
“Meanwhile, the vacation- and second-home sector, a big part of South Florida’s housing market, were largely left out of the tax breaks passed by the Legislature. Florida is the largest vacation home market in the country, according to the U.S. Census.”
“Some say the reform package, even if the January vote passes, doesn’t go far enough. ‘It’s not enough to impact our housing market,’ said Silvio Cardoso, president of the Builders Association of South Florida, who favored a rollback in property taxes to 2001 levels. ‘I think the market will continue to be very dead for a while.’”
The Bradenton Herald. “Maris Bluestein, who lives in an ocean-front Pompano Beach apartment with her husband, said she’ll likely vote for the amendment to cut their $8,800 homestead tax bill. But Bluestein said she’s disappointed with the plan. It doesn’t do enough, she said.”
“The super-exemptions don’t apply to non-homesteaded properties, so the Bluesteins will get no relief from the $8,000 they pay in taxes for another condo they own.”
The Sun Sentinel. “A day after Florida lawmakers hailed their landmark property-tax cut, analysts and real estate agents sounded off, insisting the savings won’t be enough to stimulate the hamstrung housing market.”
“Legislators say the average homeowner’s tax bill is expected to drop by $174 this year. While that’s something, it’s not the panacea people were hoping for.”
“‘I think we’re going to be addressing this tax issue again down the road,’ said Richard Barkett, CEO of the Realtor Association of Greater Fort Lauderdale. ‘The idea was to loosen up the buyers,’ added Jeff Levine of Illustrated Properties in Wellington. ‘But I’m not sure this does that. We need a longer-term solution.’”
“‘Most of the buyers I’m working with were hoping for some type of portability,’ said Debbie Anderson, an agent in northwest Broward County. “This is definitely a huge disappointment for Realtors and buyers who were waiting to make their move.’”
“The housing downturn is hurting other businesses such as home furnishings, which depend on robust home sales. ‘We’ve never seen a downturn like this since our history in Florida,’ said Ira Baer, chief financial officer for Baer’s Furniture, a Pompano Beach-based chain with 16 stores statewide.”
“Tax cuts alone won’t give the South Florida housing market a major boost, Baer said. ‘You still have to tackle some of the other issues,’ he said, noting that homeowners need more relief from rising insurance rates.”
The Orlando Sentinel. “People whose incomes depend on the housing market are trying to keep up with the changes to the property-insurance market, and hoping for improvements.”
“‘It’s already slowed things down,’ said Steve Schneider, past president of the Florida Association of Mortgage Brokers. ‘I’m aware of people that are moving out of the state because they say they don’t see’ enough relief on the horizon.”
“‘I’ve had several instances in the last year where the deal fell though because the buyer couldn’t get insurance on the home, or the insurance was too expensive,’ said Rob Owen of Rob Owen Insurance in Winter Park.”
From NBC 2. “With a slow housing market, more property owners have to rent out homes rather than sell them and that’s leading to an increasing number of squatters which is costing property owners hundreds of dollars and dozens of headaches.”
“Empty boxes of food, dishes, toys and trash was left all over the front yard for the homeowner, Erich Brady to clean up. ‘This was, this was just a nightmare,’ said Brady.”
“Other Cape Coral residents say they’re also seeing more and more of this, all because of the housing market. Homeowners are starting to rent their places to just about anyone and sometimes, they turn out to be squatters.”
“Other homeowners are also being affected by the trashy messes left by squatters. People that live near some of the messy homes say that trying to sell their home has become even harder.”
The News Press. “SunTrust Banks Inc., the seventh-biggest U.S. bank, plans to sell about 473 buildings and eliminate 300 jobs as part of a plan announced in January to lower costs. The company will put 48 office buildings and about 425 retail branches on the market and then lease the space and continuing using it, Atlanta-based SunTrust said in a statement.”
“SunTrust is the third largest bank in Lee County, according to the 2006 market share report by the Federal Deposit Insurance Corp.”
“‘While maybe not earthmoving, these are sensible things that can save the company money,’ said analyst Kevin Fitzsimmons. ‘It leaves you with the impression that Jim Wells is looking under every rock.’”
“Selling in a buyer’s market isn’t for sissies. And if all you are doing is trying to sell, then, unless you are into pain, you should wait for a friendlier market.”
“The difference between a committed seller and one who is just trying to sell is in how they answer one simple question: ‘Are you willing to do what it takes to sell?’ If your answer is no, then do everyone a favor and wait.”
“Pricing is the single most important issue a seller must face. Are you willing to sell at today’s market value, regardless of what that is? Forget about what you paid, what you need, or what the ugly home across the street is on the market for. It may not matter what your recent appraisal or Zillow.com says. It’s a safe bet that today’s market value is well below what you think it is.”
“If you want to keep your sanity throughout the listing and selling process, then set proper expectations. The Field of Dreams method of selling, which is ‘list it and they will come,’ does not apply in this market.”
“If your property is not clearly one of the best values on the market today, it will not be shown. If you expect otherwise, you will be disappointed. Six times more homes were listed last week than were sold, so the odds of your property selling are not in your favor.”
‘Allen Robert Engel had a platinum card and a sterling credit record. What he lacked was a steady job, though that apparently didn’t bother lenders when Engel started buying houses in St. Petersburg last year. Nor did the fact that his clean credit history was due to a minimum of consumer spending, he had just been released after serving eight years in the Florida prison system.’
‘As he watched Bay News 9 one day last December, Tom Barber was startled to see the photo of a ‘homeless’ man who had been arrested on various charges. It was Allen Robert Engel. ‘I was flabbergasted,’ Barber says. ‘Homeless? How could a guy who owns all these houses be homeless? I sent Jeremy an e-mail and said, ‘So this is your investor.’
Its a funny story but other then criminal records how are these guys any different that the hundred or thousands of other people who get cash back at closing and then end up in foreclosure?
If your property is not clearly one of the best values on the market today, it will not be shown.
What about those mad skills real estate professionals bring to the table?
Well…no matter how many skills they, you can’t make buyers appear in a market that doesn’t have any…
Recently like about 8 months ago my girlfriend sold her condo in South Miami. She went thru the agent she bought from, he seems smart , hard working etc. He gave a big spiel on how he had been in real estate all these years, good contacts etc.
Once she hired him, he did next to nothing other then list it on the mls, after awhile he didn’t show up for showings, in fact he didn’t make it to the closing either. When the condo didn’t sell in the first couple months my girlfriend, started pressing him for any information that might help, at the point he said “price is 90% of the marketing”. Well if price is 90% of the marketing what the hell do we need to pay him for?
“…what the hell do we need to pay him for?
Nothing, now that realtors no longer have a monopoly on MLS access. Pay an online broker a couple of hundred bucks for a six month MLS listing and handle the rest yourself. If you’re queasy about handling the paperwork pay a real estate attorney $1000 for 3-4 hours of their time and you’ll still come out way ahead.
“…you can’t make buyers appear…”
But it is so easy! JUST LOWER THE PRICE!!
No one in OC wants to do that, I suspect it will just make the problem that much worse instead of magically disappearing and going up again. However, Disneyland is just down the street so maybe they feel the whole of OC is magical….I think so.
Mark Zilbert went to work. The South Beach real estate broker sent an e-mail blast to 50,000 potential buyers with the tax changes, and condominiums for sale.”
“Like most in the housing industry, Zilbert had been eagerly waiting for something, anything, to inject new life into a frozen real estate market.”
Please…you got a injection alright..a Kavorkian one!…Can someone just finish the burial for the the Florida housing market..now it can truly be put out of its misery…
‘Prices have come way down,’ said Hogan. ‘But we’re in a kind of Catch-22: People know we’re getting down to the bottom, but it’s hurricane season, and that, and taxes and insurance, are keeping buyers away.’”
Growing up in Minnesota we used to joke that we had 2 seasons, winter and road construction. It seems like Florida also has only 2 seasons, hurricane season and waiting-for-hurricane season. Every ill is blamed on those blasted storms. They didn’t seem to cause any fear when prices were soaring.
“people know we’re getting down to the bottom”
How the heck do “people” know that?
I think people know you are NOT getting down to the bottom, and that is the main reason why those who could buy (that’s us) are not buying.
“people know we’re getting down to the bottom”
But out of the other side of their mouth the REIC says timing the market is a fool’s game. So which is it? Does one agent in a hundred understand the lessons from the previous real estate cycle which lasted 17 years?
“Every ill is blamed on those blasted storms. They didn’t seem to cause any fear when prices were soaring.”
Um, actually that’s the reason we left. At the time (spring 2005) I was completely oblivious to the bubble. I just thought prices were finally catching up to what we were used to in the greater D.C. area.
“Legislators say the average homeowner’s tax bill is expected to drop by $174 this year. While that’s something, it’s not the panacea people were hoping for.”
What? Are you kidding me? How can you possibly believe that the extra $14.50 per month won’t re-stimulate the housing mania? That’s just silly.
Here’s how Floridians can really make the most of that tax break (if it actually happens). Take that $14.50 and convert it to pennies. Melt the pennies down and sell them for their copper. That will turn that money into about $29.00. That should cure everything.
NYCB, I have the impression they have to be pre-1982 pennies to have a sufficient copper content. (?) - just yesterday I spent a few minutes separating my pennies and saving the pre-1982’s. The new growth industry, like bottle redemption.
And Floridians get screwed once again. Way to shatter the dreams of all those FBs, az_lender. If there are any suicides, they are on your head.
LOL
you’ll get a better return on nickels….
“Homeowners are starting to rent their places to just about anyone and sometimes, they turn out to be squatters.”
Really, everything predicted on this blog is coming to pass. Can section 8 condos be far behind?
Today’s up-and-coming neighborhood can easily be tomorrow’s ghetto. People in the last 10 years have completely forgotten how many risks there are in buying a house. At least a renter can easily flee if/when they see a neighborhood turn.
That is exactly correct. It reminds me of the post yesterday that linked to the photos of Gary, Indiana, where my grandfather graduated from high school. Every now and then, when I visit him (he still lives in Indiana), he gives me the “Gary tour” of places he remembers from the old days. These include his old house, now derelict, the grocery where he had a summer job, now razed and replaced by an empty lot, and the movie theater near downtown, now vacant, where on a weekend night people would crowd shoulder-to-shoulder outside.
“Can section 8 condos be far behind?”
Uh, section 8 condos are already here. At least, section 8 townhouses are. Failed flippers in this area (East Tampa Bay) are advertising “Section 8 Welcome”. We’ve had a population shift in this area of Section 8 residents from Tampa and St. Pete. One of the new developments here had a bunch of the unsold units go Section 8. I think the big draw has been the low paying health care (lots of retirees) jobs. So, a person can make it here with Section 8 housing and a low paying health care job. This is combined with the farmworkers (legal and illegal) who get subsidized farmworker housing. Difference is, the farmworker housing was built from the ground up specifically for that purpose, the Section 8 housing is by default.
As a general rule, Section 8 tenants try to keep their noses clean.
Can you imagine paying top dollar for a condo and then seeing a “Section 8 Welcome” sign go up? You can say hello to a 50% drop overnight. They might try to keep their noses clean but their mere presence constitutes a devastating situation for speculators. Excellent!
Pardon, the ignorance. What is section 8?
The short explanation is that Section 8 is government subsidized rental housing for low income residents. If you google it, you’ll get more of the details.
Too Late, the Condo Unit below me is rented Section 8
Just how expensive is property tax in Florida? It can’t be more expensive than the city I live in in DFW suburbs. . .tax rate is 2.9% of value (which is very close the actual value). So, on a $500,000 home taxes are just under $12K. . .I haven’t seen any Florida tax examples worse than this.. .what am I missing?
There’s a semantic ambiguity in your post that makes it very funny. You say “tax rate is 2.9% of value (which is very close [to] the actual value).” Clearly what you mean is that the assessed value on which the 2.9% is based, is very close to the market value. But syntactically it could also mean that 2.9% of the assessed value is very close to the market value. In other words, that a 97.1% reduction in prices is coming. Look out below !!!
Taxes are about 2.3% of fair market value. Insurance runs between 1-4% (usually 1.5%) of fair market value, depending on exact location (close to coast, flood zone, etc) and features of the house (type of roof, windows, hurricane shutters, etc). So on average you’re out of 3.5 - 4% of the value of the house just for taxes and insuance.
Insurance is based on fair market value? Not here. Our agent’s computer program wanted to know square footage, type of construction, exterior material, roof material, and distance to a fire station. It did not ask what we paid and did not ask the assessed (for tax purposes) value. In other words, in coming up with the premium amount it just needed to assess the relative risk and what would it cost to rebuild.
With the costs of building materials coming down, shouldn’t we then see reductions in insurance costs?
I’ll be sure to ask my agent come next renewal. Actually Nationwide IS advertising here about rates being reduced.
probably because you have replacement coverage.
Taxes and, believe it or not, insurance are both cheaper here in JAX than in the DFW area as long as you are not living within one mile of the beach. The tax rate is 1.818% and insurance is about 0.4% in JAX. When we lived in Dallas proper, our taxes were 3% and our insurance was 0.6%. The flip side is that home prices are about double in JAX compared to DFW.
yes, what I was trying to say was that in some states where I have lived the “tax value” has little to do with the actual value. For instance, in Michigan the tax value is apporx 50% of the market value. In DFW where I live the tax value is within 5% of real market value (based on sales). . .so, back to my question, what do Florida tax rates look like compared with this?
It varies widely from county to county. We live in a lower tax county, and pay about $1200/year for a home we bought for $129K in 2001, and has a current market value probably in the $250K-$275K range. (Coulda sold it for close to $300K in early 2005) This is with it being covered under Save Our Homes, which limits increases in our assessed value to 3% a year from the time of purchase. Generally, the starting point for property taxes in my county is about 1%-1.25% of purchase price less the $25K exemption you get for SOH.
If you’re talking Miami-Dade, it’s probably 3% a year from that starting point. Orlando or Brevard County is, IIRC, about 2% a yeart from that starting point.
I suspect that a lot of the people who are screaming now about how their tax bills on their primary residence tripled are the people who were too lazy or ignorant to spend 30 minutes at their tax assessor’s office filing their Save Our Homes paperwork.
Because for all the fuss about massive tax increases in 2006, my property taxes actually went down by $12 in 2006 compared to the previous year.
Jill, I am glad you have spoken up about living in a lower tax county in Florida. I’ve considered moving to Putnam County (Palatka). There was an article about it in the Tampa Tribune almost a year ago. Not only are the taxes lower there, but so is the insurance, because Putnam is considered to be out of the higher hurricane damage loop. So you’ve brought up an important point, which is that there ARE areas of Florida that did not get the tax and insurance run-up like other parts of the state.
We’re five miles from the coast, so we have taken an insurance hit- first year in the house, it was about $500, and we’re paying $2,000 this year. No flood coverage- we’re in a well-draining neighborhood 45 feet above sea level.
But at least we’ve got coverage from a stable national insurer, and not through Akbar and Jeff’s Insurance Hut, like some people I know.
To answer your question, the property tax system in Florida is exactly like the property tax system in Texas. The “taxable value” is about 5% less than the price you paid for the home. If you homestead your home, the taxes can then only rise 3% per year.
“Selling in a buyer’s market isn’t for sissies. And if all you are doing is trying to sell, then, unless you are into pain, you should wait for a friendlier market.”
Into Pain ?..Friendlier Market ? Are they totally insane ?
The real pain hasn’t EVEN begun to happen in this alligator PIT that they call a housing market.
munch…munch
Story from Chandler, AZ. Two of my neighbors had their house for sale since at least March (when I moved in). They both moved out this week, and also took down their for-sale signs. So make that at least 3 vacant homes that I know of on my street of about 30 homes.
Shaun, we hope you’re renting!
Moved out + took down for sale signs = foreclosure?
“‘Seems to me the market has gone back to the way it was in 2004,’ he noted. ‘I’ve been in the real estate business for 40 years and from what I can tell I really think we’ve hit bottom.’”
Seems to me you told me in 2004 it was the perfect time to buy real estate. ive been listening to bull@#$#% for 40 years and from what i can tell you’ve really hit bottom.
Where do they find these people who so convincingly believe their own marketing. It is painstakingly obvious to the average elevator operator that these types of self serving predictions are, well, just that.
The most honest realtor (not that it takes much honesty mind you) ive ever met told me “if i were to sell a house, dont use me, use for sale by owner. Save the commission. It isnt worth it. If you buy a house, ill try to help the contract has already been signed and someone is taking the 6%; might as well be me and i promise to work for it. And he did. Great guy. Checked all the outlets, kept on the inspectors, on the loan officers etc etc. Unfortunately i dont think realtor Ron will be quoted by the NAR anytime soon.
J
can you be a little more coherent, please.
What you have to remember about today’s market, is that anyone who buys a house is going to be STUCK IN IT for a long time. Sure, there is a glut of condos and everyone will be kissing your butt and you might get a lower price than the past two years if buy one, but once you own it, YOU ARE STUCK WITH IT. Prices will slide down below “your deal” and you’ll be just another shmuck who can’t sell for love or money. Condos are for RENTING, not OWNING. Tattoo this on your forehead and say it again. NEVERY BUY A CONDO, ALWAYS RENT. This advice will be handed down from father to son throughout the 21st century.
With taxes at 4,5,or 6 hundred a month, throw in insurance costs of 2,3 or 4 hundred a month. And rents at 7,8 or 9 hundred a month, the rent covers (well, not really) taxes and insurance with no money left over for P&I. So, therefore, FL condos are worth Zero
In my last post, I forgot to add in condo fees, so I guess FL condos are worth LESS THAN ZERO!
Well, but if they are reallly worth zero or less, then who needs insurance? I guess you might want liability insurance, but the HOA dues probably include liability ins for common areas.
Everyone on this blog was kicking my behind when I said I didn’t insure my last house, which was 100 years old and within 600 feet of the ocean (causing the ins rates to be absurdly high). There was absolutely no chance that the ocean would really cause any damage, because the house was 60 or 80 feet above sea level. I had the cash to rebuild the house if I had been dumb or unlucky enough to cause a fire. Of course I’m glad I didn’t. I know some FL people with a big house going “naked” on ins, too.
depends on if you own free and clear or have a mortgage. lenders usually require insurance. But if FL isurance rates are high and the ins is in the condo fee, then the condo fee will be high to include the ins. So I see it as 100 in taxes, 100 in insurance, 100 in condo fees or 100 in taxes and 200 in condo fees. The out of pocket is the same, it just may be split up differently.
“Prices will slide down below “your deal” and you’ll be just another shmuck who can’t sell”
That’s exactly what I am worried about. Plus I haven’t really seen any deals in Miami. While asking/fantasy prices have come down a bit, people are still pretty much asking what stuff sold for in early ‘06 on the hight of the bubble. I wouldn’t go as far to call those prices a bargain.
Right now prices in Miami are facing different pressures:
1. More people leaving Miami than moving into Miami. I don’t believe me? Check the one-way U-haul rates from Miami to Raleigh and vice versa.
2. Speculators are trying to unload, new ones are not in sight.
3. Taxes and insurance keep on going up every year, almost totaling as much as the mortgage by now.
4. No more 100% financing deals for the fiscally irresponsible.
5. The foreclosure boom, the only thing that’s booming here right now.
Despite of all that the vast majority of sellers still hangs onto their bubble fantasy prices. Almost nothing gets sold in the lower end of the market. It’ll take while for this mess to unwind.
“Chapman’s quick success offers a broader lesson for the overall Pensacola housing market: Price the property right and it will sell. ‘I’ve had a number of clients who have priced their homes too high and have been sliding down with the market,’ said Harrod. ‘And, in the end, they’ve probably lost money.’”
This story perfectly illustrates a point I have frequently made here: Housing is very nearly as liquid as any other asset (including stocks, Treasury bonds and $US) provided you price it at fair market value. Any home that is priced properly can be sold within the span of one week.
I can click a button and my trade is conducted on Ameritrade. With a house being “sold” doesn’t mean the end of the transaction. You still have to wait for that closing and hope any number of things doesn’t happen in the meantime. Your buyer can bolt 30 days after the house is “sold”. This is one time I’m going to have to disagree with you GS. Even a properly priced house is still illiquid unless you get a cash sale, on the spot.
I think we can easily resolve this disagreement. My insertion of “very nearly as” before “liquid” in the above post was intended to account for the reasons that there are untidy details that make it take quite a bit longer to pay for and finalize a home sale than to sell a paper asset. But my main point is that it takes no more than one weekend to attract buyers for a properly priced home. If it is taking you over a year to sell, then you might want to consider pricing more realistically.
Now we have complete agreement. Having a house on the market is an awful thing. Pricing it a little below what you could ultimately get is preferrable to having it on sale forever.
“Miami: Vultures circling
With $10,000 in monthly costs, the seller - an investor who failed to flip - has already cut his price from $1.2 million to $849,000. Besides the hefty discount, the unit has one of Zalewski’s favorite features: an unfinished concrete floor. “It tells you the seller is desperate,”
http://money.cnn.com/galleries/2007/real_estate/0706/gallery.condo_bargain_hunting.fortune/index.html
“Empty boxes of food, dishes, toys and trash was left all over the front yard for the homeowner, Erich Brady to clean up. ‘This was, this was just a nightmare,’ said Brady.”
“Other Cape Coral residents say they’re also seeing more and more of this, all because of the housing market. Homeowners are starting to rent their places to just about anyone and sometimes, they turn out to be squatters.”
“Other homeowners are also being affected by the trashy messes left by squatters. People that live near some of the messy homes say that trying to sell their home has become even harder.”
I don’t know if I should laugh or cry for the “We’ll just rent it until the market returns crowd.” Prices keep falling and they keep losing money. I bet the wish they would have sold.
If you sell a house in less than 2 weeks, it is priced too low. If it takes longer than 2 months to sell, it is priced to high. A fair market price will sell a house in 3 - 8 weeks, no problem. How do you know, that’s the norm. Even in a “bad” market, if youprice it right, it will sell in this time frame. So you look at houses that are selling in 3 - 8 weeks, and Voila! there is your market price. So if houses sit for months on end, then the prices are too high. That’s what every home seller needs to know (and most Real t whores don’t)
Houses sitting for months on end are certainly priced too high. What are you suggesting to a person who gets an offer within the first two weeks? Be surly and refuse concessions? In this market, I think one might regret passing up a reasonable offer.
that is in normal environment..not when buyers expect (rightly) substantial pricing pressures ahead.
No, I’m not saying refuse an offer. What I’m saying is that “historically” less than two weeks you priced it too low. In these times, your best bet my be to say “Oh, well” and take the money. It goes along with the tried and true sales axiom that 20% of your sales force will generate 80% of your business. Houses priced right sell in 3 - 8 weeks. If you have an I/O ARM reset coming, bite the bullet and sell. In these times in may be worth it to leave money on the table and get out, rather than ride it down.
Too many I/O ARM FBs are under water and the bank won’t even accept a short sale for the low offers they might get. Until every FB is foreclosed upon, and until all those properties are unloaded by their respective mortgage holders, the market cannot recover.
FL Legislator: You could completely cut all taxes on housing, and it still wouldn’t “save” it. That is, if saving it means you keep the high price party going. The only way to ’save’ it is to let the market force naturally take its course. Yes, a lot of FB and GFs are going to get creamed. Oh well, that is the way it is. Only when prices are back in line with realty will this thing to saved (real demand, not flipper demand).
Attn all 49 other state legislators: SAME THING.
Only problem is that all these tax and spend politicians need to “save” home values so the tax revenue doesn’t dry up. Amazing what would happen if they had to fund essential services only and not their pork projects.
You can bet if a house is priced too high, 9 out of 10 times it was priced by the seller not the realtor. If a house is too high 6% of 0 (no sale) is still 0.
Getting down to the bottom is what the Japanese said for over a decade. And then, after so many bottoms really weren’t bottoms, they became reluctant to call it. And then they became the pessimists. Anything positive was somehow interpreted negatively.
And that actually signaled the true bottom. Like 20 years later.
I know people who would hold out for $3000-5000 more. Mortgage interest payments @ 6% on a $300,000 house would run $1500 a month. Taxes and insurance at least another $1000+ a month. So in 2 months you’ve eaten up the $5000, still don’t have your house sold, will get even less because people think since it’s sat so long there’s something wrong with it. Many months later you get $20,000 less and have paid $15,000 more in taxes,insurance and interest. So now you’re out $35,000. Greed bites you in the butt every time.
100% of nothing is nothing!
Most of the houses around me are priced 90 - 110K above what the seller paid in 05/06. and guess what? NO SALES. a couple of switched to rentals. All the sellers “WANT” a 100K profit, or they won’t sell. And that’s exactly what they are getting, no sale.
The theme song music for Florida’s LOSS of BUYERS should be that old Eddie Fisher Classic, “The Big Hurt”
E F
Now it begins, now that you’ve gone;
E F Dm
Needles and pins, twilight till dawn.
E C#7 A Am7(V)
Watching that clock till you return,
G#m C#7 F#m C#m7-5 B7
Lighting that torch and watching it burn.
E Esus4 E F C#7 F
Now it begins, day after day;
E Esus4 E F C#7 F Dm6
This is my night, ticking away.
E C#7 A Am7(V)
Waiting to hear footsteps that say,
G#m C#7 F#m C#m7-5 B7
“Love will appear and this time to stay.”
Bridge:
E7 D9 E7 Bm7-5 A6 D9 AM7/6
Oh, each time you go, I try to pretend
Am7 Am7(V) Am7 B7 Fdim B7
It’s over at last, this time the big hurt will end.
E Esus4 E F C#7 F
Now it begins, now that you’ve gone;
E Esus4 E F C#7 F Dm6
Needles and pins, twilight till dawn.
E C#7 A Am7(V)
But if you go, come back again.
G#m C#7 F#m C#m7-5 B7
I wonder when, oh when will it end?
Coda:
A9 Cdim E E Dm6 E E Dm6 E D9 Dm6 E
The big hurt, the big hurt, the big hurt.
Play it again Sam munch …munch
It’s not enough to impact our housing market,’ said Silvio Cardoso, president of the Builders Association of South Florida, who favored a rollback in property taxes to 2001 levels. ‘I think the market will continue to be very dead for a while.’”
Simple Solution: put measure on the ballot that the state will lower property taxes back to 2001 IF builders and homeowners will reduce sales prices to 2001 levels for the next 10 years. Cool!
As I have posted here before the condos that have recently been completed here in Sarasota are all but ghost buildings and yet they are planning on building some BILLION dollar mixed use project where the old quay is being torn down along 41 downtown. What is it about Sarasota Fl? Is this area preceived as being imune from the condo bust?
Mike, the same thing is happening here in southern Hillsborough County. I’ve heard it said that builders have to keep on building. But what happens when there are no buyers? I am trying to envision Florida a couple of years in the future with ghost developments, etc. Do the builders just go BK and walk away?
As a former resident, I can assure you that it’s different there!
Bill, you are right, many people in Sarasota think it is different there. However, I have a couple of friends there who are long time residents and they are horrified by what is happening.
Without the housing bubble, Sarasota was a lovely area with something for everyone. The residents there cut across all age and income spectrums, but one thing I noticed is that as a general rule, they tended to be very proud of their community and very concerned with quality of life issues. The arts were heavily encouraged and even in some of the lower income areas you had regular citizens working hard to ensure their neighborhoods were at least somewhat attractive. Sarasota also has or had a very people friendly downtown area.
Sarasota, in the recent past, was an enclave of mostly miswesteners. MI,IL, OH,IN,MN ect. About 6 or 7 years ago the mix started to change. New Yorkers and New Jersians stated to show up in droves. I let my membership to Golds Gym expire because it was like going to the Bronx. After ruining the the Gold coast they have desended on our West coast and brought their baggage with them. I hope the housing bust is so extreme as to drive the back to that yankee $hithole.
“Realtor-associate Keith Harrod”
hang in there, Keith, you’ll make full “Realtor” before long
‘I’ve been in the real estate business for 40 years and from what I can tell I really think we’ve hit bottom.’”
translation: “I REALLY need to make a sale”
Not just Florida either. Our realtor friend in NoVA (many years in the business, frequently over $100K annual gross commissions) has now gone 18 months without a commission check.
Buiders keep building so they can roll their loans over (as they “improve” the property) and not have to pay. Until the end comes and they have no buyers and yes go BK! That’s why the big boys (Toll, NVR, etc) are walking away from option money and land deals and taking the hit, so as not to have t keep servicing debt that they will never be able to repay. The little guy has to keep building, he can’t walk away until the end when either he gets paid or goes BK.
‘I’ve been in the real estate business for 40 years and from what I can tell I really think we’ve hit bottom.’”
translation: “I REALLY need to make a sale”
Because like every one in RE, they spend every penny during the boom years and have nothing set aside for a rainy day.
Is that a cat or dog falling from the sky?
Funny to read these articles about people leaving FLA.
Does everyone remember back about 1 and 1/2 years ago, when it was clear the FLA. market was in the initial stages of collapse and the Realtors down there came on hot and heavy with the catch phrase “10,000 people a day are moving to FLA.” ?
That stupid line was repeated as “proof” by every FLA. RE bull that FLA. could absorb it’s inventory…and then some.
I wonder how long it’ll take for the general public to realize that realtors are total BS’ers, and, on top of that, stupid to boot.
It just kills me that apparently smart people were believing the Realtor claptrap last year about “interest rates going down” - as if they, of all the financial brains in the world, had a clue about such things.
“Chapman’s quick success offers a broader lesson for the overall Pensacola housing market: Price the property right and it will sell.
“But flying in the face of that simple strategy is the growing glut of overpriced, unsold homes, which hit a record high in May of more than 7,100. And that number doesn’t include homes for sale by owner, and the many hundreds of new spec homes offered by builders.”
This is part of the huge problem in Florida. Even if all the properties were priced right, there are just too many of them. Add on taxes, insurance, and HOA fees and it’s even harder to see why buying one of these properties would be worth your while. As JayinMD mentioned up thread, some of these properties are “worthless”. Oh, and maintenance in Hurricane zones.
OT, GS I like that article about New Orleans. Some of the work that we do focuses on reducing nitrogen into the Mississippi River because it’s causing yet another environmental problem for that region: hypoxia (basically a dead zone for aquatic life).
http://serc.carleton.edu/microbelife/topics/deadzone/index.html
Az_lender, I’d happily give you the title of my thesis if Google had any respect for privacy. Now, I’m off to Minneapolis; who knows, I may get to see some of their condomania: whee.
all potential buyers should also demand an immediate ~10% cut in asking price as higher mortgage rates means revaluation of assets (econ 101)..
I disagree, and I think you’ll agree with me too. When looking at the price of a house, one should leave interest rate out of the equation. I guess the mantra is, you can always renegociate rates but never the price…econ 101
I’m so glad that the property tax reform didn’t include the tax portability plan. That could have caused the sale activity to pick up, but the current plan won’t help the real estate marketat all. It doesn’t help any investors or vacation house owners, or people who were on SOH for a long time. If I had SOH there’s no way I’d give it up for the super sized homestead deduction.
Correct, this plan is giving peanuts to monkeys, it is good only for the guy that sold in 05 and rents..he will buy in a few years when Time headlines ‘paradise lost’ again…and get the super sized SOH..:)
I’m shocked that the Erich Brady story made the news. Tenants leaving a mess behind is hardly earth-shattering and can be cleaned with a few hours work or a couple hundred dollars to hire someone with a truck. Its the cost of doing business in that kind of market. He’s lucky they didn’t do real damage. What a whiny beeotch.
The folks leaving could have left the 3 little pigs inside (AKA - Oregon story). Could have also left dogs, cats, rabbits, mice, or any other type of animal to trash the place for foreclosure.
Federal Mortgage Reform Unlikely in 2007
No Major Reform This Year As Lawmakers and Regulators Point to Self-Correcting Mortgage Market
http://biz.yahoo.com/ap/070607/risky_mortgages_reforms.html?.v=5