Values Are Dropping In Florida
The Gulf Breeze News reports from Florida. “Foreclosures are spiking in Santa Rosa County. ‘It’s the worst I’ve ever seen it,’ said Deputy Clerk Joyce Watkins, who’s been processing foreclosures for over eight years. By the 13th day of June, Watkins and her department already had 31 foreclosures to process. She compared the 71 foreclosures in May to the 48 foreclosures in May of 2003, a 147 percent increase.”
“‘I think it’s as high as it is right now because people, when they plan for a home, have a certain amount they can afford. Everything is going up except salaries,’ Watkins said. Variable interest rates also contribute to the foreclosures.”
“Local real estate broker Sherlyn Waghalter said a lot of homeowners got overextended on equity lines of credit after values spiked after Hurricane Ivan.”
“‘People were taking tons of money out of their equity, buying boats or cars or whatever. Now they want to move or relocate and the value of their homes is 15 to 20 percent less. They can’t afford to close and have to bring money to the closing table,’ Waghalter said.”
“Waghalter said homeowners can avoid foreclosure by putting their homes on the market. However, competition is stiff, with over 1,929 single family homes available on multiple listing service in Santa Rosa County priced over $100,000.”
“‘The home has to be priced right,’ Waghalter said. ‘Our values are dropping, and the home has to show well. Buyers can be picky now.’”
The Palm Beach Post. “In the clearest sign yet that the region’s real estate boom has ended, Miami-based Ocean Bank confirmed Wednesday that it has filed a $50 million foreclosure action against the developers of a Boca Raton condo conversion.”
“The foreclosure may be the largest filed in Palm Beach County since the red-hot residential real estate market began cooling early last year. And analysts say it’s a precursor of things to come as the lenders who fueled the frenzy with easy-to-get loans continue to tighten the purse strings.”
“‘It’s probably just the tip of the iceberg, the first of many more to come over the next couple of years,’ said Jack McCabe of McCabe Research and Consulting in Deerfield Beach.”
“Ocean Bank is Florida’s largest independent commercial bank with $5.9 billion in assets, and lent millions of dollars on condo projects in South Florida, which now has a glut of condo units hitting the market.”
“In March, the Federal Deposit Insurance Corp. issued a cease-and-desist order in which Ocean Bank agreed to reduce and monitor loans to condo conversions and land development. The enforcement action came too late for the NRW loan, however.”
“The Ocean Bank lawsuit says NRW and six other borrowers stopped paying on the loan in December, only seven months after NRW borrowed the $60 million to pay $57 million for the property.”
“NRW had planned to create Villa Mare out of…the last major rental complex on the Boca Raton waterfront. Units were to be priced between $311,000 and $1.2 million. But even that sweet location wasn’t enough to guarantee success, especially when NRW plunked down so much to buy the two-building complex.”
“It’s tough to make the numbers work when you’re paying $356,250 per unit, McCabe said. Even when the sale took place last year, ‘we questioned that deal,’ he added. ‘The price may have been too high.’”
“Now Ocean Bank has a giant hole in its $4.5 billion loan portfolio, bad news for a bank with past-due loans creeping past the $208 million mark.”
The St Petersburg Times. “Sales of condos and free-standing homes, which mushroomed between 2003 and 2005, have plunged since then to pre-bubble levels.”
“The condo market has become glutted with apartments converted into condos. The new home market became glutted when investors quit buying. If there’s a townhouse glut, it’s smaller.”
“But there are signs. Mobley Homes recently advertised a ‘total appliance package’ plus $8, 000 in closing costs at Stone Creek. liane Balleza, a real estate agent based in New Tampa, said some townhouse developers have slashed prices in response to buyer offers.”
“‘They’re taking $25,000 or $20,000 off the base price,’ she said.”
The Orlando Sentinel. “Florida is in a serious funk. The big question is whether this now turns into a serious recession.”
“In a May report, Goldman Sachs economist Jan Hatzius called Florida the ‘Epicenter of the U.S. Housing Bust.’ Home prices are overvalued by 40 percent, with Florida also having the biggest glut of homes on the market in America.”
“‘I think a lot of people used home equity to fuel spending, and that is not there now,’ says the University of Florida’s survey director Chris McCarty. ‘I don’t think steady employment growth is enough to make up for that.’”
“Hatzius’ report backs this, citing numbers that show Florida residents fueled spending more with equity loans than did homeowners in the nation as a whole. Sales-tax figures from the state show spending is falling fast.”
“Tax collections in April came in $43 million less than what was predicted. And the prediction was made in March. In May, collections came in a whopping $70.3 million below the prediction.”
“Home builders are cutting back because of the housing glut. Construction here accounts for 7 percent of the state’s economy, compared with 4 percent nationally. And that doesn’t include the army of real-estate agents and mortgage brokers that depends on home sales.”
“Florida’s economy is addicted to growth. And there even is a hiccup in that, with a puzzling statewide decline in school enrollment this year.”
“‘Is there a sea change going on in our state?’ says Dominic Calabro, president of Florida TaxWatch. ‘Back in January we heard concerns, and they’ve only been more validated. We’re seeing a yellow light. It’s a great warning sign. We just can’t sit on our laurels and assume we’ll always have population growth and job growth as far as we can see.’”
“For further proof, as if anyone needs it, of the slump in the real estate market, we offer the 17,145-square-foot Belleair estate of pro wrestling legend/reality TV star Hulk Hogan that is back on the market at the reduced price of $17.9-million.”
“Hogan had listed the property at $25-million before taking it off the market last year. The two-story French Country home overlooks the Intracoastal Waterway and has a guest house, boathouse, pool and waterfall, maid’s quarters and four-car garage.”
“The Hogans bought the Belleair property in 1992 for $2-million.”
The Daily News “More than 300 people with a keen interest in the Emerald Coast’s real estate market gathered Wednesday at Destiny Worship Center to ask for God’s blessing. The Real Estate Prayer Luncheon was organized in hopes of breathing life and positive thinking into the area’s slumping housing market.”
“It was the first of what the organizers, co-owner of Crye Leike Coastal Realty Wanda Duke, former Destin City Councilman Mel Ponder and Destiny Worship Center Pastor Steve Vaggalis, hope will become a regular, uplifting event.”
“‘The heartbeat of today’s economic community is on the backs of the real estate community,’ Ponder told the crowd.” “Those gathered had one goal, ‘changing the climate in the area.’”
“‘We need to think positively and get everyone on the same page,’ Duke said. ‘Positive things that come out of your mouth will end with positive results. If we lose hope, we lose everything.’”
“Real estates sales are down all along the Emerald Coast. According to figures from Metro Market Trends, total sales in Okaloosa County in May were down 44 percent compared to May 2006, and year-to-date sales in 2007 are down 36 percent compared to last year.”
“During the luncheon, several speakers, including Buddy Runnels of Cornerstone Development Group, reassured the crowd by reminding them that the market has gone down before, but it always comes back up.’ ‘Work hard. Things are positive; they’re just in the future,’ Runnels said.”
‘The ‘largest tax cut in Florida history’ may not save some taxpayers a dime, compared to what they paid last year, at least. Tax bills for some non-homestead properties, such as businesses and second homes, could increase because rising property values will eat up the savings, according to an analysis by The Daytona Beach News-Journal.’
‘The possibility of an increase didn’t surprise Susan Callahan, a Lake Helen real estate broker. ‘I don’t think bread is going down. I don’t think milk is going down. So I don’t expect taxes to go down, either,’ Callahan said.’
‘I don’t think bread is going down. I don’t think milk is going down. So I don’t expect taxes to go down, either,’ Callahan said.’
Hey! Focus on the core rate, you doomer. Don’t you know the price of big-screen TVs is plummeting?
taxes are going, along with your fake values on your homes.
and rubio had to back track on raising sales taxes because people are not buying things for their lovely homes or “trump” lifestyles.
south florida is beyond underwater. and this is only the beginning.
south florida is beyond underwater. and this is only the beginning.
Sadly its the whole state… I doubt people in summer 2008 could sell a boat there for more than 10 or 12 cents on the dollar.
The downturn that has been predicted is picking up speed. By fall things will get very exciting.
Got popcorn?
Neil
I’m buying a new mattress today. Been looking on craigslist, and I’m amazed at the amount of people liquidating things to move out of state. Trying to bail before foreclosure?
I want a bedroom set, but that can wait until fall. By then, foreclosures will be in full swing.
It’s amazing how much Rooms to Go (i.e. junk) furniture is for sale. Looks like the ’schmoes used the equity to buy crappy furniture, and are trying to unload it 50-75% off to afford the gas to get to the GA state line.
Perhaps they should rename it “New Atlantis”.
“Floreclosureda”.
“‘They’re taking $25,000 or $20,000 off the base price,’ she said.”
Everyone repeat after me, “Real Estate only goes UP!”
“Florida is in a serious funk. The big question is whether this now turns into a serious recession.”
PROBABLY
Florida is already in a recession. And it will get worse.
“Florida is already in a recession. And it will get worse.”
Only a housing recession as it stands now. Economy right now is strong due to consumer spending. Hate to see what happens when the consumer has no money.
Check some data. Retail sales tax collections have been down yoy for several months. Public school enrollment is down yoy. Signs of housing slump spreading are getting difficult to hide.
“Check some data.”
I have checked data. No one is going to deny your school enrollment or retail spending numbers. You’re comparing it to last years numbers. Population is lower this year than last. That must also be factored in.
Some people dispute population is down this year vs. last year. I happen to be in the same camp as you are on this one.
Now, whether the fact that retail is down is due only to population loss is where we differ. My guess is not. Retail is down without adjusting for inflation, and this is a year with robust tourism. Factoring in inflation and tourism, the local economy in FL is clearly in the early phase of recession.
Population loss contributes to recession, not a mitigating factor.
Population loss will drive Florida’s recession.
The question is, how deep of a recession will it get there? Could it go to 25% unemployment (depression?). I think there is a chance. MEW is falling off a cliff and that will kill Florida boat, car, and other sales.
Let’s put it this way, the cheapest way for me, in California, to buy a used BMW is to have one shipped over from Florida! Although for some reason corvettes out of Houston are cheaper… (huh?)
So why I don’t live there (now), its pretty obvious the state is already in recession. As the Germans freak out and sell their properties… that will cut into tourism. (They will, if for no other reason than due to losses in their Spanish properties.)
Got popcorn?
Neil
“Let’s put it this way, the cheapest way for me, in California, to buy a used BMW is to have one shipped over from Florida!”
LOL! Many of my “stuff” customers from Cali used to buy large pieces of mid century furniture from me over the net and even with shipping costs, it was in some cases as much as 50% cheaper than buying the same thing on Montana Ave. in Santa Monica.
However, here’s an interesting anecdote: my Cali customers have dropped off markedly and are being replaced by people buying out of North and South Carolina and Tennessee. I’m tellin’ ya, the Carolinas are the new Cali. Even the illegals know that, they too are leaving FLA for the Carolinas.
It’s only anecdotal, but I’m a firm believer in what happens on the ground. Anyway, if “stuff” sales are any indication, the disposable income is in the Carolinas, Tennessee, Maryland, Virginia and Georgia, even Alabama. And, they’re making out like bandits, too, because they’re getting great stuff at bottom dollar. YEEEEHAWWW! The South shall rise again!
One more thing: we get a lot of people from the Carolinas and Tenessee who make buying trips to Florida for “stuff” they can sell back home.
Some folks have been buying in Florida and selling elsewhere for a long time. Remember, when people move to the other side of the grass they no longer need their “stuff.” Florida has had an excess of such “stuff” even before the bubble popped.
We will be looking for a jet ski or small runabout to bring back to our lake here when we go down to Florida this winter.
I went down to florida last month to pick up furniture, my friend had 3 foreclosures and she didn’t want to leave the stuff. I got out of florida at peak, in 2005, sold all of my florida RE and bought on smith lake in Alabama. My lakefront home has went up somewhere in the 200k range in that time, it will come down some, but i have made out great. The people here are awesome, taxes on a 500k property, 460 dollars a year, this state and the lake are awesome. Another great thing, No Snow like some of the other states.
Maybe you didn’t understand the article that said “SALES TAX COLLECTION FIGURES ARE DOWN..” Just a hint..but sales tax is attached to consumer spending(that is the economy for Florida)…so guess what ..recession here we come…
“For further proof, as if anyone needs it, of the slump in the real estate market, we offer the 17,145-square-foot Belleair estate of pro wrestling legend/reality TV star Hulk Hogan that is back on the market at the reduced price of $17.9-million.”
“Hogan had listed the property at $25-million before taking it off the market last year. The two-story French Country home overlooks the Intracoastal Waterway and has a guest house, boathouse, pool and waterfall, maid’s quarters and four-car garage.”
“The Hogans bought the Belleair property in 1992 for $2-million.”
Nobody is going to buy that thing. Not with insurance and taxes the way it is. Who wants to pay taxes on a 17 million overpriced POS.
It might be worth 5 million at the most.
It might sell for 5 million, but it is worth 25 - that is how it works, right?
If a celebrity appraiser says it, who are we to judge?
‘Nobody is going to buy that thing. Not with insurance and taxes the way it is. Who wants to pay taxes on a 17 million overpriced POS’
Whoa up there. Let’s not drag the honorable profession of wrestling into the mud with the housing disaster.
that’s a good one. kudos…
The funny thing is that the reduction from 25 mil to 17 mil is evidence of the RE slump. No, this is evidence of delusional/greedy sellers at all levels. The stupidity of the American public - who believe that there is always a correlation between a property’s price and its actual value - is astounding. So much of the pricing during the boom was done on a “throw-it-up- and-see-if-it’ll-stick” basis. I recall friends of mine snickering as they placed their houses on the market for twice what THEY thought it was worth at the time, and selling for more than that.
And the newbie wannabe RE moguls who believe that there is always a correlation between a property’s mortgage payment and it’s rental value. When the RE going gets tough, the RE tough raise their rents, NOT!
Got 10% down?
Today it’s easy:
monthly mortgage payment + associated housing costs - tax advantage = 2 x monthly rent
Forrest Gump wrote the book on this stuff.
Forrest Gump once said, “I may not be a smart man, but I know a housing bubble when I see one.”
The situation can only get worse. With tax revenues falling the state and it’s towns and cities will have to layoff people. Creating more problems with home ownership. For the Florida market to recover prices need to fall 25-40% as soon as possible. Otherwise they will fall 25-40% in the next few years. The pain will then go on and on. Better to fall on one’s sword quickly that’s what a Roman Senator would do!
I predict Ocean Bank will go under in 2 years.
Figuratively or literally, as in rising sea level, glug glug?
“‘People were taking tons of money out of their equity, buying boats or cars or whatever. Now they want to move or relocate and the value of their homes is 15 to 20 percent less. They can’t afford to close and have to bring money to the closing table,’ Waghalter said.”
In other words, they now have to cover all of their funny munny purchases with some REAL dough. These successive joy-toy purchases is gonna give these morons a belated lesson in the law of diminishing marginal utility.
Got 10% down?
oops, is=are
You know having to move a boat and all those cars can be a real pain when you have to relocate : )…
Get ready for deals on used toys folks…….
I don’t want the toys at any price. Some things are best rented if you use them at all. I prefer non motorized sports. Hiking boots don’t take up much space and you don’t need a HELOC to buy good ones. My 13 year old car just had a tune up and I expect to get another 5 years out of it. The economy geared up for totally unnecessary production.
Good suggestion climber…
Walking is so good for the soul
If it flies or floats, rent it. There’s another item that often gets added to that list, but I’ll keep the board PG rated.
You’re not spending 100% of your income on crap you don’t need in order to line the pockets of corporate execs?
That’s SO un-American. Why do you hate freedom?
In April I paid $572.15 for new timing belts, new accessory belts, new engine coolant, new water pump, new spark plugs and a valve adjustment for my 6 year old car. Now I am good to go for ‘nuther 6 years
.
My favorite recreation activity is my running. I am now doing “burn outs” up the short but steep hills where I run as fast and hard as I can. I keep fussing about the cost of running shoes, but in reality this is money well spent and it doesn’t cost me an adjustable ARM or a fixed leg.
Got 10% down?
“…having to move a boat and all those cars can be a real pain…”
That reminds me of the surprised emergency management people in Texas in 2005, watching the roads clog with second cars and boats that apparently no one thought evacuees would be trying to bring along.
I saw at least 3 SUVs for sale on CL today in the first two pages. “Must sell, second car have no use for”, etc. One guy said he needed $1800, but it will sell on Sunday for the higgest bid MUST BE GONE MONDAY. I will call at 8 PM Sunday and offer $200.
Alan Greenscam had lowered the interest rates so low that houses became giant ATM machines full of equity cash. It was pure magic!
Alan Greenspan played the role of the ultimate subprime lender when was the Fed Chairman. He introduced the teaser rates after September 11 and he then reset the rates higher and higher. You will remember that he also waxed lyrical about wonders of unconventional mortgages. Let’s face it, he led the way for American mortgage lenders and they simply followed him like the children of Hamelin followed the Pied Piper. Greenspan though has little excuse - He was paid while the Pied Piper wasn’t.
The Daily News “More than 300 people with a keen interest in the Emerald Coast’s real estate market gathered Wednesday at Destiny Worship Center to ask for God’s blessing. The Real Estate Prayer Luncheon was organized in hopes of breathing life and positive thinking into the area’s slumping housing market.”
Essentially they are praying for money. Perhaps they need to spend a bit more time researching what their religion has to say on this topic?
Bingo.
ROTFL
Yea… that bit on home size and number of outfits… I’m thinking they didn’t read in detail.
Got popcorn?
Neil
To bad they didn’t read the part that says..”You shall not worship FAL$E Gods..”
“Local real estate broker Sherlyn Waghalter said a lot of homeowners got overextended on equity lines of credit after values spiked after Hurricane Ivan.”
Well at least they are conceding that stuff was overpriced, they are just not quite ready to admit that it was due to loan fraud, loose lending, NAR hype, MSM hype, etc… For now, they are going with the “act of God” theory.
Got 10% down?
“Home prices are overvalued by 40 percent (in Florida) ”
Don’t worry Florida, Cali has you beat in the “overvalued” department.
Don’t say that too loud by South Coast plaza where people are spending their equity, they will scoff and laugh at you.
You mean the people shopping at Needless Markup? Those were all of the mortgage brokers that worked in the sub-prime industry.
Needless? Wait are you trying to tell me that a shirt isn’t really worth $200? My monocle almost popped out of my eye when I saw needless and South Coast Plaza in the same sentence!
Two years ago Time was refering to “Overpriced” as “Appreciated by (overpriced x 2)”. Funny how all you have to do is adjust the verbage a little and the whole meaning changes. Tomato, tomahto. Except we can’t call the whole thing off now. LOL.
In a way, what has happened in Florida has been a good thing. South Beach for instance needed to be refurbished entirely. If you ever stayed in one of those old musty hotels on the beach, you know what I mean. Even the Fountainbleu is getting a multimillion dollar make over. The apartments weren’t much better.
Now they have redone most buildings and made it much better … maybe with everyone losing their shirt in Florida it may lose that “it” factor and the mobs will finally leave MY BEACH.
I wonder if they will all head to the Carolinas like everyone else around here.
I’m not going anywhere. I figure once the hords leave South Florida, it is going to be very nice here again.
“‘It’s probably just the tip of the iceberg, the first of many more to come over the next couple of years,’ said Jack McCabe of McCabe Research and Consulting in Deerfield Beach.”
There’s that damn Iceburg again, sooner or later were bound to hit it. Or perhaps it will melt with all this Global warming going on.
“There’s that damn Iceburg again,”
LOL, I was thinking the same thing. We’ll be hearing “tip of the iceberg”, over and over, ad nauseum.
Also this:
“It’s tough to make the numbers work when you’re paying $356,250 per unit, McCabe said. Even when the sale took place last year, ‘we questioned that deal,’ he added. ‘The price may have been too high.’”
Ya think? No disrespect to Jack, he reads this board and has been known to post here on occasion. Overall, he’s been pretty conservative with his comments on the bubble. I hope his clients have listened to him.
“Overall, he’s been pretty conservative with his comments on the bubble.”
As conservative as he’s been, Jack was still telling people to jump on the bandwagon in 2005…as long as we were talking about single family homes. If you’re going based on my neighborhood alone that was HORRIBLE advice.
2005: $349,900
2006: $329,900 (that’s the bottom folks nothing to see here move along)
2007: $249,900 less if you’re willing to put in elbow grease.
That person taking Jack’s advice would be enjoying a $100,000 loss today.
Jack’s main clientele, as I understand it from his website, are institutional investors, large multifamily condo and apartment developers, like that. And I think he’s done well for his clients in those areas. He has to, or he wouldn’t have clients. Since that is his clientele, if I were a single family homeowner, I’m not so sure he’s where I’d go for advice, anyway.
“…if I were a single family homeowner, I’m not so sure he’s where I’d go for advice, anyway.”
But the Post quotes him like he’s everything to everyone. I’m not faulting the man. Ride the gravy train as long as you can. There’s no way that you could have called a sudden stop like we had. After the stop it’s easy to throw out numbers as to how steep the delcine will be. The problem I had with his 2005 advice was that he told people in the face of all of the condo inventory that single family homes would still be a good investment. Everyone knows the condos were just a sign of things to come.
“But the Post quotes him like he’s everything to everyone.”
Agreed. I keep forgetting, people take these things at face value, rather than looking at who is making the pronouncements and what their interests might be. He’s a consultant for a niche market and single family homeowners were not part of that niche market.
I guess we can close the door now on all the RA jack holes and just get down to brass tacks and ask the real question….not if prices are going to drop but rather how far are these going to drop and what a are the ramification on the economy and are we facing a recession or a depression and is this local or global? We can guess and speculate and we are probably more accurate than the brain dead RA, but we don’t know and only way we will know is after the dust settles and all the resets are finally done - and 10-20% down returns in 15-30 year mortgages.
“…and 10-20% down returns in 15-30 year mortgages.”
That’s not going to be the case for someone who has full documentation to provide. In the late 90’s you could buy with 5% down without the help of FHA or VA. You did have to tell the bank how much money you made and you did have to make enough to afford the home…but you didn’t need 20%. I think the low/no documentation loans will still be available but not at attractive rates and not without a substantial down payment.
FHA and VA programs aren’t going to change the 3% standard. Those will always be options. You get a slightly higher rate, you must pay PMI, and you must document your income.
“We need to think positively and get everyone on the same page,’ Duke said. ‘Positive things that come out of your mouth will end with positive results” This reminds me of that commercial with the postive thinker in the sky tram, next they will bring in a witch doctor…
It sounds like “The Stepford wives” with realtors……
” Real Estate Prayer Luncheon ”
Am I the only one who finds this insanely funny? What do they do, bury St. Joseph statues under the egg salad?
“‘The heartbeat of today’s economic community is on the backs of the real estate community,’ Ponder told the crowd.”
I find it funny,sad,pathetic,desperate etc… Nothing more than an Amyway convention. These are some true low lifes!
So Copernicus had it all wrong, the planets revolve around Realtors (TM) . People with this RE-centric model of the solar system need to go back to VENUS.
Got 10% down?
I find it very sad and disgusting. Praying for money, yeah, what religion is that? Also, they’re praying against people who have waited, lived a more self-sacrifing lifestyle waiting for prices to come down. Morons.
Denial
Anger
Bargaining
Depression
Acceptance
Moving right along I would say. When we start reading about FB suicides, you will know we are getting close.
After reading that line, I fell off my chair and ROTFLMAO!!
Am I the only one who finds this insanely funny? What do they do, bury St. Joseph statues under the egg salad?
Not likely, as Protestant Fundamentalists don’t go for the St. Joe thing (they don’t believe in the intercession of Saints).
They do when they’re trying to sell houses.
Trust me, a Fundy would eat brillo pads before praying to St. Joseph.
“Tax collections in April came in $43 million less than what was predicted. And the prediction was made in March. In May, collections came in a whopping $70.3 million below the prediction.”
I’m assuming that these are SALES tax figures.
I think this was the biggest news in Ben’s Florida compilation. If FLA is a leading indicator (and I’d bet it is), the question of whether the housing collapse will be contained or not has just been answered. Granted, most of us here already knew the answer, anyway, but now we can see it confirmed.
Consumer spending in FLA is falling off the cliff…
That means that total sales declined 1.17 Billion in May. A little less than $70 per person, assuming a current population of 17 million.
basically that is money going to gas and insurance!
“basically that is money going to gas and insurance!”
I wish it was that simple. Gas and insurance is taking a bite out of the entire state of FL. Gas alone is taking a bite out of the nation as a whole. The problem now is when the GF homeowner goes to HELOC again the banker tells them their house is worth $100,000 less than what they owe and there is no equity left for a line of credit.
Yes, they are Sales Tax figures (read the previous line). I agree that this is the most significant part of the entire post. It hit me right away.
I’m not surprised though, I own a small retail business in South Fla and I could have told them in advance. I learned long ago that my little business is the proverbial canary in a coal mine, I see it first.
Readers are starting to get *really tired* of the whining they perceive going on by the writers of NY Times’ “Dream Home Diaries” ‘blog’ (who are supposedly building their dream home in coastal Florida):
http://dreamhome.blogs.nytimes.com/2007/06/20/plans-glorious-plans/#comments
“Are you kidding us? Wondering about the budget at this point?
You must have a lot of free cash lying around to go ahead with the design without even thinking about the budget first and foremost.
There is a fine line between having a good story/angle and faking it…
NYT should be checking on how ‘fictive’ is this blog…Worst dislay of true journalism ever! — Posted by arch”
“Seriously? You still amaze your readers with new naive musings… simply wondering aloud ‘gee, how much could this cost?’ and ‘do you think there might be some problems?’ at this stage is so staggeringly daft I can’t imagine this is really happening. Yes, building a new house can be complicated and nerve wracking, but wake up and do YOUR job. I’m being harsh, but this is has been an utterly ridiculous process. — Posted by j”
“‘I think a lot of people used home equity to fuel spending, and that is not there now,’ says the University of Florida’s survey director Chris McCarty. ‘I don’t think steady employment growth is enough to make up for that.’”
Academics calling the obvious. Sorry you only get credit for identifying this BEFOREHAND, not after the fact. No smarty pants points for you, even if you are a college professor or whatever. Ben 1, academic retard 0.
“More than 300 people with a keen interest in the Emerald Coast’s real estate market gathered Wednesday at Destiny Worship Center to ask for God’s blessing.”
Dear God, please help us keep prices up so that we can keep our tremendous, sudden, and new found equity, even though newcomers (such as our children, teachers, and firefighters) will have to mortgage their entire existence by paying 60% of their salaries and take out risky, exotic mortgages in order to live next door to us. Amen.”
They need to read the book of Job, then Proverbs. I think they’re looking very foolish and greedy.
Perfect.
Ah, the followers of the “Prosperity Gospel”. I suppose that “God will make you rich” is an easier sell than “take up your cross and follow me”.
That’s great! Or, the alternative, “God, thy father, maker of heaven and earth, we pray that you assist us in selling our overpriced POS home so that we can pay off our debts/make a boatload of money by screwing our fellow man.
“Dear God, please help us keep prices up so that we can keep our tremendous, sudden, and new found equity, even though newcomers (such as our children, teachers, and firefighters) will have to mortgage their entire existence by paying 60% of their salaries and take out risky, exotic mortgages in order to live next door to us. Amen.”
I like the way you think!!
The real reason (other than I hate to lose money) that I don’t buy now is that the thought of who I’d have as neighbors keeps me up at night. The kind of neighborhood I could afford–right now–would place me in welfare, SSI neighborhoods. Why should I be the one with the burden of bringing up the neighborhood?
“Dear God, please send me an idiot that I can charge too much for the house that I want to sell.” So the theory is that God only loves the righteous sellers and not the sinful buyers.
Talk about AmeriDUH!
http://money.cnn.com/2007/06/21/real_estate/housing_perception_gap/index.htm?postversion=2007062114
Is this ignorance or wishful thinking?
“Is this ignorance or wishful thinking?”
Wishful thinking most likely. People don’t like to be convinced that they made a bad decision. The wife made a $45 purchase the other day and took great steps to defend it when I showed her the same item for $20.
My wife has done the same.
I’d imagine that the great majority of the blissfully ignorant, referred to in the article, are those who can comfortably handle their mortgage payments, or who don’t have a mortgage and in both cases who are not planning to sell soon.
This will all be different in 2009. 60-70% will say RE is a terrible investment.
“….the market has gone down before, but it always comes back up.’ ‘Work hard. Things are positive; they’re just in the future,’ Runnels said.”
Right - waaaaaaaaaaaaaaaaaaaaaaaaaaaayyyyyy in the future
How would you like to own land in Afghanistan, Serbia, Georgia, one of the - stans, the West Bank, Palestine etc? Things are always positive eh?
Remember — all real estate is local!
Isn’t one supposed to buy when there’s blood in the streets?
Bring it on!
The Daily News “More than 300 people with a keen interest in the Emerald Coast’s real estate market gathered Wednesday at Destiny Worship Center to ask for God’s blessing. The Real Estate Prayer Luncheon was organized in hopes of breathing life and positive thinking into the area’s slumping housing market.”
I cannot help but wonder what they were really praying for? Maybe they were praying for a large Cat 5 to come into the Miami area and then move west to the Gulf of Mexico and then turn northeast and move inland just north of Ft. Myers and then turn north and travel up the penisula going back into the Atlantic just south of Jacksonville.
They are praying for a GF to come along and a lender who can make the appraisal and loan numbers work in a declining tighter money market .
The problem with hopes/wishes is that sometimes it will cause one to make the wrong decisions . Look at how many sellers held out selling for a lower price hoping for the big rebound market promised for 2007 and now they are even more up-side-down .
Decisions should be made on facts but the sheep have been given nothing but positive BS spin about this market . Some of these FB’s could of saved themselves earlier had they not been stroked by the RE industry and the MSM.. Isn’t it funny how now the whole answer to selling your house is spending 20 thousand at Lowes so you can sell it . It’s a hard lesson to learn that the so called ” Experts” have a agenda .
Today’s LA Times
55% of current homeowners believe that they can sell there home today for more than it was one year ago!
-This sense of security allows them to continue to spend freely! Until consumer spending gets bitten - let the good times roll.
“Never mind that large white object ahead. Full steam ahead!”
Only in Florida…
http://www.miamiherald.com/460/story/147572.html
“In August 1988, a Norwegian couple vacationing in South Florida were struck while standing on a Fort Lauderdale beach. Witnesses said the sky was cloudless.”
It’s God having his laughs.
Notes from Florida’s morgue. It is totally dead on Clearwater Beach. The same properties are still sitting and the for sale signs are turning a deeper yellow. The Hulk’s house is beautiful. I’ve been in it. He and his “bitch” wife Linda did put a lot of money into the property. They redid the whole thing and its on the prettiest waterfront street in Belleair. Is it worth $25m? Is it worth $17M?
LOL - Straight from the tax records:
Assessed value $5,901,600
Tax Value $5,876,690
Market Value $7,450,600
REAL ESTATE TAXES - $154,848.33 (that’s what it says - but I don’t think it’s right)
Have a great day!!!!!!!!!!!!!!!!!
The taxes would be over $100K, si the figure may well be accurate. That’s why I’d be a lousy owner of a mansion like that — I’d divide those taxes by the $2 million I paid for the place and figure I was being screwed.
I boated by the Hulkster’s house on the water this weekend. It is a very, very nice spread. Whatever it is worth to someone with enough money to pay for it and maintain it is a mystery, but it is an incredible home. For the life of me I don’t understand why on earth they would have long term plans for living in Miami…
Here’s an update from the beaches of St. Petersburg/Tampa Florida. There are hundreds and hundreds of condos on the market between 150K and 250K.
I watched the price on one at the Treasure Island Tennis and Yacht Club drop from $225K to $180K over the course of a year with no takers at realtor.com. This is 885 square feet. Another unit in this complex purchased for $180K and gutted/refinished with the finest granite, etc. over 2 years ago has been dropping the price from $262K to $188K and still has not takers.
What is very telling about these 2 example properties is all the 580sf and 670sf condos for sale for $180K to $220K. I honestly don’t understand how people expect to sell these condos. By the way, purchasing is at a STANDSTILL. It has gone down a LOT more than the 20% I keep hearing about in the media. Proof is at pcpao.org.
Also, someone posted the link to Countrywide’s foreclosure division, and I found a humdinger, waterfront property for sale in Redington Beach for $480K which was purchased for I think $630K. It was a two story house with some good square footage and good water out back. There are a lot of people trying to sell tiny beach shacks on the water here for $550 - $800K with no takers. It amazes me that new NAR econojackass says $10 million by 2045 is what a $500K house today will be worth. They are actually renting these “$600K” houses for $1300 - $1600 a month. That’s mindboggling to me. It’s $750 a month in taxes, $3,000 a month in lost income on the $600K (assuming cash was paid and 6% could be had as a return). You don’t have to have insurance, but you do have to have flood insurance… In any case it’s costing these people $4,000 a month to keep these properties (more if they are paying off a mortgage) and they are losing $2500 a month if they don’t have any vacancy or repairs. It truly boggles my mind. They all think prices will be back up in a couple of years.
It truly boggles my mind… I can understand owning some real estate to hedge your bet against inflation if you can afford it, but I know not everyone playing this game of “chicken” can afford it…
I can understand owning some real estate to hedge your bet against inflation if you can afford it,
Man, I sure can’t. Short-term CDs, inflation-indexed securities, gold, 1950s-60s art and collectibles . . . anything but real estate.
One property I am tracking in Pembroke Pines, Broward County;
Bought in 1994 @$99,00 (one owner)
Appraised value @263,00
Beginning Sales price in 2007: $310,000
Reduced price on 6/20/07 after 92 DOM: $289,000
OK. Any update on the price of the signed Elvis poster on Ebay that you are tracking would be appreciated, too.
JB — that was tacky. Let’s encourage sepcific anecdotes/price examples, not make fun of them.
Thanks, Chip. I did not respond to that post directly because I respect Ben’s effort too much to allow silly, juvenile comments to detract from the purpose…and as you correctly stated the purpose was illustrative.
Values are dropping?
replace with Plunging.
Found this on Reuters. The mass delusion in this country runs deep, deep, DEEP! It is truly amazing to witness the breadth and depth of it.
No one wants to admit they are losing money in the most expensive asset they own; much better to repeat Dorothy-stye to themselves, “prices only go up…prices only go up!…”
That popcorn is tasting better and better every day.
Americans still confident in home values: survey
Thu Jun 21, 2007 5:43PM EDT
WASHINGTON (Reuters) - Although existing homes are selling at their slowest pace in four years, most Americans are confident their homes are worth more now than they were a year ago, according to a survey released on Thursday.
A poll conducted by the Boston Consulting Group found that 55 percent of Americans believe their house would sell for more money now than last year, compared with 59 percent who felt the same way last summer. Eighty-five percent expect their home to be worth even more in five years than it is now….
tinyurl.com/2z4vtm
The real question, is how does a wise investor make some change on this. Outside of selling your house (which I did). Does shorting the individual homebuilders make sense?…or shorting a RE index as a whole?
Posters on Ben’s blog are 100% confident, that houses are worth less than a year ago, and are still losing value. Beat that.
When I was in Palm Beach Gardens in February I saw this nice house for sale. Nothing huge but a nice 4 bedroom/4 bath/ 2 car gargae house on the golf course in Ibis, that was purchased to flip and has been sitting vacant for over 20 months. It was purchased for $399,950 in September 2005. The asking price in Feb. was $399,000, it was later reduced to $379,000, it is now under contract. The agent would only say that the price was between $300,000 and $350,000. Assuming it was at $350K which I am sure it was not this idiot/flipper loss a small fortune. Almost two year of mortgage payments on $320,000 first and $150,000 HELOC taken out on his primary residence. Taxes of $650 per month, Insurance of at least $350 - $400 per month, plus HOA and utilities.
There are hundreds if not thousands of empty dwellings for sale and sooner or later either the investor really lowers the prices or gives the keys to the bank and just walks away.
If I was a buyer right now I wouldn’t touch real estate in Florida unless it was free. The bottom isn’t there yet and I wouldn’t want to buy a piece of property until I saw prices starting to go Up again…who wants to buy something today at $350K to find out 1 year from now its worth $300K..not the time to buy in Florida unless you HAVE TO..
The Hulksters house still shows it is homestead exempted on pcpao.org -I thought they moved to Miami…
Anyone from the West Palm Beach area? I have a friend who lives there, How is the market there?
Several posters are — Michael Fink, Bad Andy, “Mike in FL” and others. They may be from Palm Beach rather than West Palm, but should have a good feel for what’s going on in the larger area.
“Anyone from the West Palm Beach area? I have a friend who lives there, How is the market there? ”
See any of my previous posts. I live in West Palm Beach. I was pretty sure I’d bought at a level that was below bottom. Not so sure now. In my neighborhood homes in 2005 sold for $350K. Same house today sells for $250K. I bought for $225K when the seller was about to go into foreclosure.
Houses in Olympia (moderately high end) are now selling for $317K brand new. They took it up a a bit to $340,000, but it’s been a yo-yo for the last 90 days. What they fail to mention is in 2005 the starting price of their homes was in the low $500’s.
Now look at our local newspaper BLOGS and ask them how the market is. They’ll talk about median prices not moving much. Fact is the person who can afford to spend $350K will still spend $350K…he’s just not looking in my neighborhood any more. That’s why you can’t trust those figures. Look at listing prices and sale prices. Look at price reductions. That gives a better overall view.
West Palm is still a great place to live as long as you’ve got the money to support the lifestyle. Car insurance, home insurace (or even renter’s for that matter) and even health insurance is insanely expensive. Property taxes aren’t as bad as others make them out to be…if you spend $500K on a home, you shouldn’t complain when that property tax bill comes in at $9K.
Houses in Olympia (moderately high end) are now selling for $317K brand new. They took it up a a bit to $340,000, but it’s been a yo-yo for the last 90 days. What they fail to mention is in 2005 the starting price of their homes was in the low $500’s.
I remember when that community was the “hottest place to live..” hard to believe the price drops and I bet that isn’t even the lowest yet…See no matter what they do with tax relief until prices go up most who want to move can’t because the “new comps” won’t allow them to relocate with it being a short sale..the state has a whole lot of recovery years ahead..
And that doesn’t include the army of real-estate agents and mortgage brokers that depends on home sales.”
Well I guess they will have to trade in the McMansions and BMW’s…I hear Outback Steakhouse is hiring…
About sales tax collections in Florida. They are down year over year in January, February and March. Leading the decline are expenditures on home improvement…down about 30 percent in Orlando area, which supposedly is the strongest market in the state.
Business investment spending also down, as are cars and durable goods.
Classic consumer retreat.
Guys, I’ve been a reader for a long time. I’m a big housing bear. First comment.
Moved to Fl from Northeast 1 year ago. Started a dental practice in the tampa area.
I don’t see the economic problems you guys have been laying out. My income is 3X greater than in the NE and it continues to grow. Also, the cost of living is so much cheaper.
I was looking to buy a boat, but if you guys say that market is going to decrease, then I’ll just wait.
The Best Paying professions in Florida have always been Medical and Dental. Other than that everything else pays 50 or 60% of what it pays up North. Lots of old People need lots of Medical care.
Wait a Minute , I forgot Lawyers.
How long before they have the 1st Annual Sunshine Skyway High Dive Competition. I know a lot of realtors, brokers, bankers, title agents, construction suppliers, contractors and homeowners who may be ready compete.
I hear banks like Pilot Bank in Tampa have stopped funding construction loans for developers. As a result, developers are now having to turn condos into rentals. I know of two developers suing Pilot Bank because of their malfeasance.