A Snowball Effect In Florida
The Herald Tribune reports from Florida. “Foreclosures are putting a damper on an already sluggish housing market in Southwest Florida. The number of foreclosures in the region spiked during May, and Manatee County was fifth among all Florida counties in terms of per-capita foreclosures. ‘We all knew it was coming,’ said Steve Jonsson, president of Bradenton’s Flagship National Bank. ‘I’m not sure the housing market can get much worse, quite frankly.’”
“‘They aren’t doing 95 percent loans like a couple years back,’ he said. Several other lenders, including some of the area’s largest like SunTrust and Washington Mutual, declined to be interviewed about foreclosures, saying it has negative connotations.”
“In Southwest Florida, the foreclosure hot spots remain in North Port and north of the Manatee River, two areas with large swaths of homes and condominiums that attracted investors during the recent housing boom. Another substantial concentration was in Port Charlotte.”
“The number of foreclosure actions filed in Manatee County during May rose 164 percent from April. In Sarasota County, foreclosures rose 104 percent, putting it 10th in the the state. Charlotte County foreclosures rose 74 percent, placing it 16th.”
“Three other west coast counties, Lee, Hillsborough and Pinellas, were in the top 20 statewide last month.”
“‘It’s not that people are being kicked to the curb and losing their homes,’ said Mark Vitner, senior economist with Wachovia Corp. ‘It’s more similar to the folks who were day trading in dot-com stocks and were losing their money.’”
“Charlotte, Manatee and Sarasota counties saw a sharp spike in the number of landowners failing to pay their property taxes this year, another sign of a sagging real estate market and struggling economy.”
“The number of parcels with delinquent taxes soared more than 70 percent in Sarasota County, while Charlotte County saw a 50 percent increase and Manatee County nearly 45 percent. Combined, the three counties had more than $55 million worth of unpaid taxes this year, a record total.”
“‘All of this is anecdotal symptoms of the sick real estate market we have,’ said analyst Jack McCabe.”
“The luster is off the large inventory of vacant lots in Charlotte and Sarasota counties, where investors just two or three years ago could not get enough. Those lots appreciated rapidly in value, in some cases jumping 10 or even 20 times in less than five years.”
“For example, one lot on Reading Street in Port Charlotte, valued at $2,550 in 2003, changed hands yearly though 2006, when it hit $33,101 in assessed value. It more than doubled in value from 2005 to 2006 alone.”
“Its market value has since dropped. Whether speculators bought one lot or many, the prospect of paying this year’s taxes, which are based on the higher 2006 values, is not appealing.”
“McCabe noted that people are losing far larger sums by abandoning deposits on condos and homes, knowing that they could incur much greater losses if they close on property that has decreased in value.”
“‘People are walking away from 20 percent deposits on very expensive units, hundreds of thousands of dollars,, McCabe said. ‘Speculators in particular are walking away from property and walking away from taxes as well.’”
“George Huhn, a Venice homeowner and real estate broker, is one of the property owners who opted to pay other expenses over his taxes. ‘I simply didn’t have the cash flow to pay my taxes,’ Huhn said. ‘My business, quite honestly, is the worst it’s ever been in 15 years. It becomes a matter of priorities.’”
“‘I think it’s definitely a trend,’ McCabe said. ‘We’re headed for some hard times over the next three years because of the extremes of the last three years.’”
From TC Palm. “The numbers don’t lie. An independent survey of residential construction issued across the Treasure Coast from January through April showed a staggering drop in building permits, a trend analysts say is reflective of a troubled housing market and slumping buyer demand.”
“From January through April, Indian River County residential permits issued dropped 71 percent from the prior year while in Port St. Lucie the number of permits issued dropped 72 percent.”
“Residential permits dropped 70 percent in Martin County and 86 percent drop in Fort Pierce.”
“This year, payrolls have been trimmed at employers such as Indian River Medical Center, the Indian River County Property Appraiser, Harbor Federal Savings Bank (now National City Bank) and the St. Lucie Building and Zoning Department. DiVosta Building Corp. and KB Homes shut their Treasure Coast divisions.”
“Consultant Jack McCabe said condominium builders in Miami have resorted to giving away a two-year luxury vehicle lease to rid themselves of excess inventory. ‘Frankly, we are going to see a recession in 2008,’ McCabe said. ‘The housing boom drove us all into this paper wealth, artificial wealth that drove consumer spending.’”
“McCabe said many homeowners refinanced their homes based on inflated values and the effects of that are about to hit Florida and the rest of the nation.”
“‘Things are really bad in the Midwest and Northeast,’ he said. ‘All those Baby Boomers we thought would move to Florida, well it maybe very troublesome for them to leave.’”
“Fran Love, owner of the Clubhouse Bar & Grill in Vero Beach said because business has dropped 25 percent since last year, she’s had to make some drastic decisions. ‘We don’t open for lunch anymore, we open a 3 p.m.’ Love said. ‘It’s like a snowball effect, everyone feels like there’s a noose tied around your neck.’”
“John and Regina Barczykowski, owners of Allen’s Diner in Fort Pierce, says business has been unpredictable since the housing market started to slide. ‘We’re all feeling the affects of the housing market,’ John Barczykowski said. ‘Everyone is tightening their belts.’”
“Rich Barker, a broker of SUVs, motor homes, trucks and imports in Fort Pierce is one who describes current sales as terrible, in part because of the softening housing market and because of higher gas prices.”
“‘It’s not just me feeling this, everyone down the street is feeling it,’ Barker said. ‘It’s a new reality that no one wants to talk about because everyone wants the public to feel secure and happy so they’ll spend more.’”
“Bill Wallace, owner of Wallace Automotive Group, said the company is down 20 percent for the first four months versus 2006.”
“‘I would attribute about 90 percent of that to the housing crisis,’ Wallace said. ‘Anybody that depends on the residential real estate market for a living isn’t doing as well as they were a few years ago.’”
The Bradenton Herald. “Although he moved to Parrish almost two years ago, real estate investor Mark Snider won’t be buying properties in Manatee County any time soon. Like many other investors, Snider hoped that the property-tax reform would help in the recovery of the local real estate market.”
“‘It’s a miserable failure. They haven’t done it,’ Snider said about the reforms.”
“Snider was one of about 40 people who turned out Friday to hear Sen. Mike Bennett speak to the Bradenton Real Estate Club, making it the best-attended meeting in the club’s history. ‘Local government has shut down the No. 1 industry in the state of Florida, and the No. 1 industry isn’t tourism, it’s growth,’ Bennett said.”
“‘It’s been a big disappointment to me,’ said attorney John Wickman. ‘It’s put a chilling effect on people. Couple that with a 22-month straight-down real estate market.’”
“Potential buyers had been in a holding pattern, waiting to hear what legislators would propose in their regular and special sessions, which just ended. But now real estate professionals like broker Marie Avery feel like the plan may have done more harm than good. ‘People are just going to leave the state,’ Avery said.”
“Bennett says they already are. ‘For the first time since 1953, people left the state of Florida with more frequency than they came last year,’ Bennett said.”
The Atlanta Journal Constitution. “When Warren Lambert’s insurance company canceled his homeowner’s policy, it was the last straw.”
“Even though he had never filed a claim despite a punishing year of hurricanes in 2004 and had absorbed a 40 percent rise in his insurance premium, Lambert was among thousands of Florida homeowners left in the lurch by retreating insurers.”
“Lambert is among a wave of transplants migrating to metro Atlanta from coastal communities, driven by soaring insurance premiums, devastating weather and a volatile real estate market that has priced much coastal housing beyond the reach of average workers.”
“Leslie Johnson, vice president for business development at Coldwell Banker The Condo Store, said recent research about the Midtown market shows that 33 percent of all the buyers there over age 55 are moving from Florida.”
“‘I think there will be more when those people in Florida can sell their houses,’ Johnson said.”
“For a growing enclave of Florida transplants in Henry County, those costs combined with a growing market of attractive salaries made moving to metro Atlanta a no-brainer. Miami teacher Nannette Bradley said the annual $3,000 insurance cost for her three-bedroom, two-bath townhouse was straining her public-servant salary to the breaking point. ‘The bills were piling on,’ Bradley said. ‘You couldn’t see the end to anything.’”
“In January, she visited friends already living in the Hampton area and found a lot to love about the area, including higher teacher salaries. With a job secured, she will close on a new home this month. The new five-bedroom, four-bath house in a Hampton subdivision was the same price as her Miami townhome.”
“‘In Miami, that house would have been at least $600,000,’ Bradley said.”
“Consultant Jack McCabe said condominium builders in Miami have resorted to giving away a two-year luxury vehicle lease to rid themselves of excess inventory. ‘Frankly, we are going to see a recession in 2008,’ McCabe said. ‘The housing boom drove us all into this paper wealth, artificial wealth that drove consumer spending.’”
Hmm..so much for the wealth effect. Artificial wealth? You have got to love that one. People insisted on converting equity into debt to buy depreciating assets. Yep, nothing like securing that Jetski loan with your house. But the interest is deductible…
I really think people thought that they were high flying financiers by taking an equity loan. $50,000 for $300/month, sure..where do I sign?
Keep in mind an equity loan, it is not really incurring debt. Most think of it as a withdrawl from their piggy bank saving account. I have several friends who took out huge amounts. They clearly saw this as the reward for their success, rather than taking on a debt.
“I have several friends who took out huge amounts. They clearly saw this as the reward for their success, rather than taking on a debt.”
I have seen this with friends also. Somehow, a HELOC balance is “different” than a MasterCard balance. Yes, the interest is deductible, but it’s still debt.
It’s been another noose around FBs’ necks. “Liberate your equity”. Yeah, and push the stool out from underneath your feet as well.
The only way to liberate your equity is to SELL.
nothing like sitting on the deck of my nice rental having coffee with two new listings on my street. Is it too early for popcorn?
damn, it’s too sticky to go outside here in G’ville. lucky dog.
Bluto: Over? Did you say “over”? Nothing is over until we decide it is! Was it over when the Germans bombed Pearl Harbor? Hell no!
‘We all knew it was coming,’ said Steve Jonsson, president of Bradenton’s Flagship National Bank. ‘I’m not sure the housing market can get much worse, quite frankly.’”
‘I’m not sure the housing market can get much worse, quite frankly.’
Won’t he be surprised?
Two lies in one sentence.
After the market is done violating this guy, he will have a pretty good idea.
Steve will get to meet some Federal regulators pretty soon. Way to go on the record about how you knew it was comming.
Duh.
The housing market will have at a minimum another leg down. There is underlying factors regarding all of the homeowners that bought at 100% that don’t need to re-adjust this year. With a declining market and a great amount of the new home owner population being at 95-100% in adjustables they will have no choice but to loose their homes or deal with an adjusting note. Unless new products come out they will not be able to re-structure!
Do some research on your new neighbors. The information is public. 90% of the new home sales towards the end of 06 were at 95-100%, these factors have not hit the market.
“‘It’s not that people are being kicked to the curb and losing their homes,’ said Mark Vitner, senior economist with Wachovia Corp. ‘It’s more similar to the folks who were day trading in dot-com stocks and were losing their money.’”
Boy is that comment on target! It makes it kind of difficult for politicians to push blanket policies to “Save our homes” when so much of the recent purchase activity amounted to idiots gambling in second, third or fourth homes.
exactly, with normal appreciation the tax rate would not be out of line with other areas of the country.
“gambling in second, third or fourth homes”
thats the part like 1929. big margins on lots of buildings.
the ticker tape is going to fly!
‘We all knew it was coming,’ said Steve Jonsson, president of Bradenton’s Flagship National Bank.
If y’all knew it, why did y’all keep it a secret?
‘I’m not sure the housing market can get much worse, quite frankly.’
I am sure the worst is yet to come, as the full scope of the situation at hand has yet to filter through to the collective consciousness. Wait until denial gives way to fear, anger and panic before you talk about the worst possible scenario.
I wonder if there is a point where banks and mortgage companies holding foreclosed properties panic and realize the sooner they dump these properites the less they will lose. I think right now, with the market only falling by 5 to 10% a year, many holders of these properties feel they can “protect” the market by not flooding it all at once and allowing prices to fall. Can this go on indefinitely? Will there be a trigger point?
I see these distressed properties as the only real key to lower prices.
Its like that famous psychological experiment - should a group of people act together for the greater good, or should they maximize their selfishness at the expense of the others. I vote for the latter, and “he who dumps first gets the most” is going to be the winning strategy.
Who is gonna buy these houses? Even when they are priced at 60 to 70 cents on the dollar who will qualify for a mortgage? Certainly not the people who were foreclosed on - their credit is shot!
A lot of the investors and flippers have gone under too, so they won’t qualify for round two investing.
Looks like some FS’s are about to experience a slide down the supply/demand curve, courtesy of the HB’s.
HOW TO BE A PUNDIT/ECONOMIST/WEATHER FORECASTER/POLITICAL SCIENTIST IN ONE EASY LESSON! Special today only!
Just repeat this formula ad infinitum for any situation:
“(Mention major event that just happened HERE). We knew it was coming! But the worse is over! (put a completely off-the-top-of-your-head theory as to why it happened HERE. No proof or logic required.)”
“Bennett says they already are. ‘For the first time since 1953, people left the state of Florida with more frequency than they came last year,’ Bennett said.”
Wow! 1953 is when my dad moved to the state. That was a while back.
Yeah, this Bennett is a state legislator who thinks “growth” is an industry. Anyone here ever worked in the “growth” industry? Maybe if you’re an illegal, you’re in the “growth” industry. Or an oncologist.
Yeah, this Bennett is a state legislator who thinks “growth” is an industry. Anyone here ever worked in the “growth” industry?
And you wonder why FL is in trouble. Legislators like Bennett. With brains like that Florida is sunk.
It depends on “who” is leaving or entering the state. You have to remember that the bottom 50% of Florida’s population could not muster the resources to move anywhere. Also, in economic terms, they don’t matter. The problem is the population flow direction of the top 5% of the population who do matter. Florida is like a kidney - it filters the population, leaving the poor stuck there while the wealthy can move elsewhere for a better deal. If you thought NOLA was bad, wait until a hurricane hits Miami and half the population is sitting in the front yard without so much as a bottle of water. The entire trailer industry of the US will have to work overtime for a decade just to house them all.
The bottom 50% aren’t going to be paying much if anything in taxes. But I’m sure they’ll be using all state programs paid for by the people who are paying taxes. The bottom 50% won’t be going anywhere because they can barely buy gas to drive across town. It’s expensive to relocate even if you don’t have any property to sell.
I don’t agree about the bottom half being stuck..I think it is the middle and upper middle class that are more stuck right now.it is alot easier for someone to buy your house when its $250K or when you rent you can leave…versuses the $400K-$800K market where NO ONE is looking at them…most of the 5% are leaving for states like TN,GA or NC where BUYING makes more sense than owning. In those states taxes, insurance and affordable housing make even the cashier at the local grocery store have a chance at their own backyard without being over in debt…The problem with Florida started back in the 90’s when all the major corporate employers found better tax breaks in other states..the migration started then but affordable housing still existed for the local mom and pop businesses and their employees…now with the cost of living in Florida it makes little sense to stay…
Many of the bottom 50% are stuck, at least mentally, because there is nowhere for them to go. All of there life is here in Florida. They don’t know much about the world (except what they get from TV, filtered through their ignorance) and they find even places a few hours away intimidating.
Don’t worry so much about them leaching off taxpayers … this was a Jim Crow state, and, as such, the poor only receive what the good ol’ boys think they “need” … generally that does not include decent housing, police, sanitation, food that isn’t rotting, or … heaven forbid … effective public education.
Many of the bottom 50% in Florida still live in the same crooked bald cypress shacks that their great-grandparents lived in. I am not making this up. Self-built wooden shacks, not square inside, with rooms around a stove, retro electricity, possibly retro plumbling.
It’s that, or they live in sh!t construction apartments. Not sure which is worse in a hurricane.
“If you thought NOLA was bad, wait until a hurricane hits Miami and half the population is sitting in the front yard without so much as a bottle of water.”
Yeah, well, I hate to tell you this, but we’ve already been there with Hurricane Andrew. Cat 4. It’s actually a testimony to Florida that you don’t remember this, because the state really pulled together and rebuilt. The difference is, however, that FEMA actually functioned at the time, and so did the state.
“the state really pulled together and rebuilt”
Forgive me for correcting you, but it was not “Florida” that pulled together. *America* pulled together and rebuilt your state *for you*. Those FEMA dollars are paid for by people who live in cold places like Chicago, all so Floridians can live in a fool’s paradise. Florida is right smack *in hurricane alley*. When hurricane’s hit Florida it should not be considered an “emergency” of any kind — instead it should be considered “a “standard occurence” which is bound to happen every few years. Any meteorologist can tell you that the Florida coastline is quite simply a foolish place to build, and the expectation that American tax payers should regularly bail Floridians out because they chose to live in a hurricane zone is an absurdity. (The same holds true for much of the Mississippi flood plain — which one might add, is why it’s called a “flood plain”.) Quite frankly, I hope FEMA doesn’t “work” for Florida anymore. There are too many real potential disasters that FEMA needs to stay prepared for instead of bailing out sun worshippers who think they can defy mother nature. 100 years ago people used to build more intelligently — on high ground, in secure areas. Today Americans think they have some god given right to live wherever they please. And if the chips don’t fall where they’re expected to, its some sort of national emergency.
You’re walking some dangerous ground, my friend. California is an earthquake zone (as is the entire West Coast); try having a U.S. economy without the west coast. New York is also in the sights of hurricanes, as well as many other calamaties that are certain to occur (e.g., the collapse of some volcanic island on the other side of the Atlantic is predicted and when it happens will spark a tsunami the likes of which humans have never seen–New York will be destroyed). The snows of the mid-west are a certainty, as are the fires of the far west. And on and on. If you want to stop bailing out Florida, fine. But then, you have to stop bailing out everyone else, everywhere else, too. I mean, even 9/11–didn’t some video game have planes crashing into the building years before?
All these calamaties are predictable. They have to be. That’s the only way insurance can work. You can’t insure the impossible to predict, because you wouldn’t even know of it as a possibility. However, you could ask (demand) that those living in precarious positions pay more . . . oops! That’s everyone. Guess taxes have to go up!
IAT
Thanks, IAT, I had a whole post written that I just doinked, figuring Ben wouldn’t let it go through, anyway. A Floridian buddy of mine rushed up to NY after 9/11, leaving behind his business and income, to help in the rescue efforts. He died about 4 months after he came back, of a heart attack. I never made the connection, until recently with all these reports of how the dangerous air quality at Ground Zero was suppressed.
A lot of very decent rescue workers from all over the country rushed to NY to help and to see a New Yorker post something like that makes my blood boil. This guy and other rescue workers are/were worth far more as contributing human beings than any arrogant NY Wall Street hedgie.
And, don’t forget Tornado Alley in the heartland, that’s vulnerable, too.
Palmetto,
Yes, they are the salt of the earth. It is a sin how the first responders are taken-for-granted and treated.
I am very sorry about your friend.
IAT
Hurricanes in Florida are much more common than earthquakes in California. There is a hurricane season. There is no earthquake season. Tornados are small and even the largest only affect a few blocks or a small city at most. Hurricanes affect entire states and sometimes several states. Nobody said that people shouldn’t live in Florida or Mississippi. Just use common sense and don’t build a house 50 feet from the coastline and expect taxpayers to bail you out when the yearly hurricane hits.
You may not mean people should leave Mississippi and Florida, but the original post targeted the states, not the coast.
Also, if by pointing out there is a hurricane season you mean the existence of a season should suggest people shouldn’t live there (or on the coasts), then what about fire season in California, Nevada, Utah, Colorado, and other western states? Do you mean to imply we should evacuate all those states because we know fires are going to rage, destroy property, and kill people, and we know that will happen at certain times of the year? They tried fire suppression–which only led to record-breaking fires when they inevitably do occur.
My point–we can get on the FBs for paying too much and so forth, but when life-threatening tragedy strikes, we should really pull together, as a nation, as human beings. Suggesting victims of one kind of disaster are deserving and victims of another kind are not is not a game I think it wise to play. For, in the inimitable words of William Muny, “deserving’s got nothing to do with it.”
IAT
Paying to bail out millionaires on FL’s coast is like bailing out millionaires on Cape Cod - - it shouldn’t happen. Of course, we all pay when the reinsurance goes up.
Risk premiums should reflect the risk. If that means it’s prohibitively expensive to build/own a house on an eroding coastline (a coastline which should be public property anyway), so be it!
Most of the country was disgusted when FEMA bailed out those homoaners in Ft. Dodderdale. I think many were disgusted by the bailout of the rich in Miss. after Katrina, too.
Also, why should the entire US pay for the fact that Florida has COMPLETELY inadequate building codes? Even post Andrew the codes are far stricter in Massachusetts than in Florida.
Mass. and other northern states have hurricanes too. They also have blizzards, nor’easters, floods, etc. (And even earthquakes.) You see many more old houses, including of wooden construction, in NY and NE, because these buildings were built to withstand certain wind loads, and they have withstood these loads.
Meanwhile, Orlando has a minor hurricane, and all the roofs blow off. THIS SHOULD NOT BE A TYPICAL OCCURANCE.
Why is insurance in FL so high? Because the building codes are a JOKE and the construction is shack-worthy. If Massachusetts had codes like Florida, then all the new houses would be destroyed every time a ten-year blizzard rolled through. Gee, I wonder why that doesn’t happen.
When I was a small child in Massachusetts during Hurricane Gloria, I saw houses destroyed. Without exception, they were destroyed by falling trees. I did not see ONE house in my area which suffered wind damage such as a roof which blew off, or a collapsed deck or screened area.
Of course, some coastal homes WERE destroyed. As always. If the rich want to privatize the coastline, let them pay out of their own pockets for their whims.
Even tree damage could be mostly prevented if cities and property owners would hire a licensed arborist every 5-10 years to see if their trees are healthy or in danger of falling. About $200 could save you $200,000.
You are correct sir.
The truth is, non of this is possible without the Fed, Housing bubbles or bailouts. So for someone to be on TheHousingBubbleBlog.com and commenting on how housing is out of control, and then simultaneously defending bailouts makes no sense. Without the Fed to print money, no housing bubble would have occurred, no faux millionaires building $800k homes on the water, nothing to bailout.
Not to mention Hurricane Wilma, just 20 months ago, which was the 4th or 5th costliest in U.S. history, did incredible damage, and barely made the radar screen because S. Fla. picked itself up. New Orleans is off the charts by itself as the basket case of the U.S.
Yeah? What if that giant reservoir in the middle of the state breaches?
Ruh-roh.
NO was killed by a flood, not by a hurricane.
I don’t agree. The fact is that where Andrew hit was a area that was not REALLY densely populated at the time…say like Miami Beach, Adventura, Tampa or Ft. Lauderdale..the damage was severe but nothing compared to a Katrina…that is Florida’s worst nightmare that a MAJOR city in Florida gets hit..it really has not happened yet..if it does within the next 2-3 years..God help those that are still left there because it will PLUNGE the state into a economic nightmare worse than anyone could anticipate..
The talking heads are going to have to start using the “S” word soon, to describe the current situation. A Shrinking population and a Shrinking economy. Why is it so difficult to use correct descriptive adjectives? The opposite of Growth is Shrinkage. Start using the “S” word.
I think that anyone who expected genuine across-the-board decreases in property taxes was bound to be disappointed, because it would have meant reducing spending to 2001-or-so levels and the politicians will not do that.
Tax decreases…you made a funny!
That’s sounds about right, the taxes are “theirs” now and they will not give it back. Anyone foolish enough to think the politicians would ever consider tax relief is going to have an epiphany pretty soon. Everyone can go get a second job for all these folks care, the citizenry are now tax slaves. They are going to stay at current spending levels and the lifestyle they have become accustomed too.
If people can’t afford to pay their taxes, or their properties are foreclosed on, or they leave the state where does the gov. think the money is going to come from. “All those people who just can’t wait to move into this mess.” No use moving to the sunshine state if you have to work 3 jobs and stay inside all the time just to make ends meet. All the outside construction jobs in the sun are gone.
Florida has too many people anyway. There are a lot of people who would like to see taxes and expenses remain high so that riff-raff can’t live there. Other posters here are right - taxes are not going down. You have to remember that the sum of state and local employees, contractors and businesses that serve them make up a pretty large constuency. A couple of loud mouth tax protestors are going to be heard at public meetings, but they have little political clout.
I think they know prices are coming down so tax cuts would eventually be applied to 2000 prices which they can’t have. If taxes went down that would mean people were paying attention to government, and I don’t see that happening.
I can’t wait to see the crime rates in Jax and Miami after they cut police and fire services.
You who complain of FL taxes either have never lived in the Northeast or have short memories. You are also paying the price for no income tax (which you can deduct on your federal taxes, duh!!!).
Up north, we got services for those tax dollars, which saved us inconveniences like nasty trips to the emergency room from food poisoning or because the grandkids choked on that new toy, or having to fight a serial fraudster in small claims court because the AG doesn’t have the time or resources to pursue it, or fighting with the insurance company because the company can’t afford reinsurance on the tacky-shacky we live in built under weak codes and weaker code enforcement.
Yeah, I lived in a nanny state. It was f’ing awesome.
Where else could you walk into Walmart, notice that they weren’t posting unit prices on an item, call the department of weights and measures that day, reach a real person immediately, rat their stinking corporate ass out, be assured that an inspector would be right on it, and see the change next week? Dude!
That kind of thing makes a person proud to pony up their sales tax.
I LIKE living under rule of law. I like a lower murder rate. I like having banking regulations and insurance regulations and the like. IMO, NY goes too far because their tort laws are ridiculous (ie, you can go after parties shown in court not to have been negligent), but, hey, that’s why they call it the Big Crabapple. If there were more jobs and opportunities for a young person up there, I’d be there now.
Who knows, I may go back. Especially if RE crashes and the cost of living up there goes down.
In the meantime, I live in fear under the Rule of Bubba.
Dude, you’re that challenged you can’t do you’re own unit weighting. Yeah, it’s CONVENIENT, but that’s about it. I wouldn’t chose higher taxes just for someone to do some math for me though.
What’s next, a government worker wiping your ass and dabbing your face after you eat. Holy hell!
Back in 2002 they had firemen in Marco working double shifts and even voted to DECREASE their pay. Then the 1% Fed rates kicked in and all was well.
Taxes will go down. Can’t get blood from a stone. But first they’ll go up for a bit.
Long-time Florida homeowners pay lower taxes and new buyers pay higher taxes. Do long-time Florida homeowners take out home equity loans that reflect the higher price of their house, a price created by the recent buyers? If so, then shouldn’t such Florida homeowners also be expected to pay taxes commensurate with those house values? I assume that if someone does not take cash out, then perhaps they should be exempted. I don’t live in Florida, so maybe that’s how it works. Is that how it works? Just asking.
IAT
I don’t know what to think anymore. My mom lives near the Orange Bowl. It was a pretty depressed area until recently. Many homes got an update so it looked to me like a lot of people took loans on their homes to fix them up. One neighbor is months from losing their home. It is known that they have planned to develop the entire area by the Miami River. With taxes going up (this is a poor area) many people stand to lose their property. The value is location. 5 minutes from the airport, the beach, downtown. The few homes for sale there (one of the few areas I have seen few for sales - where would poor people go?) are ridiculously priced and in many cases would have to be torn down and a new home built.
I had my own meltdown this weekend. I’m sick of this. Sick of the situation and the greed, the taxes and the incompetent government. I could live so much better somewhere else. I am here because of my elderly mother who is half blind and widowed. Also because my husband is making a six figure salary. That salary does’t afford us a home here as we do not live on credit and will not purchase above our heads. Husband convinced me to rent here another year. I’m sick about it. This is not the way it is supposed to go. We earned degrees, good jobs, live debt free and the reward is we can’t afford to buy a home or send our kids to college. I’m depressed.
Thank the Fed. If you’re tired of it vote for Ron Paul and he’ll stop this silliness of paper dollars and make what’s suppose to be money, money; silver and gold. Can’t create silver and gold out of nothing and then use it to pay for overpriced homes or have it redistributed to welfare recipients and then negatively affect the purchasing power of the money you’re holding. Tell all you friends, Ron Paul is the guy to vote for. Register Republican and vote for him in the primaries, then vote for him for president.
You are only depressed because you have expectations. Blessed is she who expects nothing for she shall not be disappointed. You have come to expect the american dream.
Our @sshat Palm Beach property appriaser wants to have it both ways, as related by the Palm Beach Post:
http://www.palmbeachpost.com/business/content/business/epaper/2007/06/24/a1f_cloughcol_0624.html
Appraiser doubts tax plan will spur sales
Will the tax reform plan help end the pain in the real estate market?
Not likely, said Palm Beach County Property Appraiser Gary Nikolits.
Last week, Nikolits addressed the first meeting of the Master Brokers Forum in Palm Beach County, held at The Resort on Singer Island. The Master Brokers Forum, already active in Miami-Dade and Broward counties, consists of Realtors producing $5 million a year in sales during the past five years. In other words, people with a dog in this real estate tax fight.
The standing-room-only crowd of nearly 100 listened carefully to a panel discussion of real estate, taxes and insurance. But when Nikolits told the group that the Florida Legislature’s tax reform measure fell short, Nikolits was greeted with applause, or as he put it, “hoots and hollers.”
Why? Because Nikolits stated what is becoming increasingly obvious: The proposed tax reform won’t help all taxpayers and therefore won’t do much to lift the sagging real estate market.
The reform fails to address the need for “portability,” meaning people cannot bring their Save our Homes exemption with them to another property. Nikolits said the reform plan also still keeps the biggest tax burden on those without Save Our Homes, such as snowbirds who have second houses in Florida.
“The same basic problem is that not everybody is still being treated the same,” Nikolits said Wednesday, the day after the meeting. “I don’t see where you’ve done anything for tax reform.”
Here’s a novel idea, lower all taxes back to 2000 levels and then readjust gov spending accordingly. The government functioned back then on what they got, no reason they can’t now.
Anyone who has been to Bradenton, Florida, knows that it’s like Biloxi, Mississippi, without all the class and charm.
Bradenton is a terrible, terrible place. The idea that real estate in that town could ever be a good investment, is foolish beyond belief.
Bradenton Real Estate Club?
That’s about as impressive as the Penny Stock Investment Club.
Biloxi doesn’t have much charm… trust me. And the beaches in Bradenton are way nicer. No comparison.
“‘It’s not just me feeling this, everyone down the street is feeling it,’ Barker said. ‘It’s a new reality that no one wants to talk about because everyone wants the public to feel secure and happy so they’ll spend more.’”
Bingo! If consumer spending takes a dive the air entirely leaves the bubble. When 55% of homeowners still think that they could sell there home for the price that they want, you know the end is still a ways away.
Unless they increase the rates, taxes will fall as prices plummet.
That’s not necessarily true for a couple of reasons: First, most homeowners will NOT opt for the “super homestead exception” (unless they bought after 2003). Most homeowners will stay under the old SOH rules. Therefore, even as prices drop, these long-time homeowners will continue to see 3% annual INCREASES (the SOH cap) even while their property values are dropping like a rock.
The effect of a significant portion of taxpayers choosing the super-exemption, if passed in referendum, would be to decrease the tax base (total taxable assessed value) to such an extent that a significant number of counties and municipalities would be forced to pass a tax rate increase. Any tax rate (millage) increase wouldn’t apply to just those homesteaders choosing the super-exemption but rather to all taxpayers, including those choosing to remain under SOH. I’m afraid that in the end, even if local spending is brought under control, this second tax “cut” will turn out to be more of a tax shift, increasing taxes on those long-time homesteaders (pre-12/31/2004) while temporarily decreasing taxes on new homesteaders. I’ve been looking for information to the contrary but as best I can tell, this is the most probable logical consequence. It probably won’t be easy for local governments to raise the millage rates, but the potential decrease in the tax base is possibly too large to be made up through cutting spending along. If the intent of the Floridian legislature were to decrease local spending in the 20-40% range then they would have done that instead of the average 8% spending decrease they mandated as part of the tax cut package passed.
Re: that last part, I still don’t understand how a public school-teacher living single can afford a $450K or $500K home. Especially in a metro area that requires a car. Anyone?
“With a job secured in the Henry County schools, she will close on a new home this month for herself and her 8-year-old son. The new five-bedroom, four-bath house in a Hampton subdivision was the same price as her Miami townhome.”
I guess I’m old fashioned, or maybe just old, but this house seems a bit excessive for 1.5 people living on a teacher’s salary.
We lived in the Atlanta area and the cost of living alone is so much lower. I bet she paid under 300K for that large home. Still, I have never understood buying a five bedroom house for two people. Even if I had Oprah’s money, why would I want a 22 room home?
A childless cousin just purchase a five bedroom home in N.C. She paid 330K for it. They can’t have children and they have no family near by. I think its just a status symbol. I also think that our society, as a result of this crash, may well change and that ostentaciousness will be a fad of the past.
Cripes, there are gated subdivisions around here that have gated subdivisions within it! It’s not like we are living in Baghdad for crying out loud! And they pay twice - one HOA for the entire neighborhood and another for your own subdivision HOA.
I was thinking the same thing. I would think as a single parent she would have taken the additional money from the increased salary and decreased cost of housing and put it away for her child; but I’m sure she’s already got plenty of living expenses socked away in case anything should happen to her.
Hint: She’s a shallow ho’.
You can get a brand new, never lived in 5/3 in the Tampa suburbs for a lot less that the price of that house in Atlanta. For those of you who think everywhere in Florida is overpriced, check out Tampa. It’s not bad, really.
“SunTrust and Washington Mutual, declined to be interviewed about foreclosures, saying it has negative connotations.”
ROTFLMAO! Ya think?
Their poor PR people failed to notice that declining-to-be-interviewed because it has negative connotations has MUCH bigger negative connotations.
JP, I was watching a symposium of political journalists (Woodward, Bernstein, et al) pondering the widespread symptoms of lying and obfuscation in government and Washington and wondering what this meant for America. Wish I’d been there, to tell them how lying and obfuscation played a big hand in the bubble and that we’re seeing what this means for America, right in our communities.
Woodward, Bernstein, and Seymour Hersh are my three favorite journalists. Probably Ben + Rich Toscano are the equivalent for housing.
I’m just trying to figure out who qualifies as Deep Throat in this little drama.
‘I’m just trying to figure out who qualifies as Deep Throat in this little drama’
David Liarhea
‘It’s a new reality that no one wants to talk about because everyone wants the public to feel secure and happy so they’ll spend more.’”
And this goes a long way towards explaining why lying and obfuscation have become endemic in the government and media.
As our economy has gone from one based on production to one based on consumption, the psychology of the consumer has become an overriding concern for the PTB. Look at how much time the Fed spends behind closed doors talking about investor/consumer sentiment. Look at the total change in media coverage of the Iraqi war compared to the Vietnam war. Keeping the masses fat, happy and, above all, CONSUMING is the only glue holding things together….
I’ll comment for him: “So how about those Phillies?”
Why do they assume the general public is incapable of facing reality?
In the summer of 2005 my girlfriend and I *almost* bought a house in Montecito, a new development in Palm Beach Gardens (north Palm Beach County) for $568,000. It was a 4-bedroom home on the lake (read: canal). In today’s Palm Beach Post, in the Residences section, a 5-bedroom lakfront house in the same community, was listed at $409,000! Thank God my girlfrend had qualms in 2005 and we decided not to buy then.
We also looked at townhomes in Abacoa (Jupiter) in 2005. A 4 bedroom, two-story townhome built by DiVosta was selling for $480,000. Fast forward to today, and there is a listing for an identical townhome for $319,000.
It feels good to be a renter…
“on the lake (read: canal).”
Read: drainage ditch, retention pond, stormwater runoff
by the way, no diss meant, droog. Well done on not falling into the trap. I see a full cash, low price property in your future, should you decide to stay in FLA.
or mosquito farm;-) I just love the very loose definition of waterfront that the RE uses.
Yeah, if you have a puddle in your backyard, they call it “waterfront” in Florida.
It does amaze me at what they call a house on the water. I would think some of these “holes” would do nothing but attract mosquitos.
I would think it insane to buy any property with any “friend” unless it was strictly for business purposes.
Yes, that is a good point. Who knows, maybe we would have broken up and then I would have been in the unenviable position of having to unload a property I’d bought at the peak! That scenario probably describes a good number of FBs…
No idea how much you make, but could imagine owing $168,000 at closing. How friggin’ long would that take to pay off. When it’s all said and done, I’ll have paid about $175,000 for my house over 21 years (principal and interest). That’s 21 friggin’ years, at least I get a home in exchange for my troubles. These FBs get nothing. This will be a huge depression for years to come.
“The number of foreclosure actions filed in Manatee County during May rose 164 percent from April. In Sarasota County, foreclosures rose 104 percent, putting it 10th in the the state. Charlotte County foreclosures rose 74 percent, placing it 16th.”
If these counties could keep it up, they’d be looking at 1,000 to 2,000% increases in foreclosures on a year to year basis.
Floridians: Here’s your future, it called Detroit.
http://detnews.com/specialreports/2001/elmhurst/
It actually looks better without the houses. Why not plant some corn or something on those open lots.
“the No. 1 industry isn’t tourism, it’s growth,’ Bennett said.”
Bennett is a state legislator, so his idiot statement above demonstrates with exquisite perfection why Florida is in deep poo.
Yeah, we’re in the growth business, like cancerous tumors.
“‘It’s a miserable failure. They haven’t done it,’ Snider said about the reforms.”
“Snider was one of about 40 people who turned out Friday to hear Sen. Mike Bennett speak to the Bradenton Real Estate Club, making it the best-attended meeting in the club’s history. ‘Local government has shut down the No. 1 industry in the state of Florida, and the No. 1 industry isn’t tourism, it’s growth,’ Bennett said.”
The government didn’t shut it down. They didn’t pass any laws raising taxes. You are wanting them to drop taxes so that it can bail you out from your bad investment. Who will bail Florida out? What happens to RE values in FL when there is no tax revenue to pay for police officers and then you wake up one day to find that the local gang militia has taken over your hood, spray painted your house, and kicked you out and raped your daughter? Yeah, that is a good thing to do. They need to just let this play out and let the correction happen to teach idiots like you a lesson. That is the only thing to fix it. By eliminating taxes, they will just let this bubble inflate bigger and make the pop that much worse when they have to reenact taxes to create SOME revenue.
Tom, this Bennett is an incredible shill for the developers. Notice that he is dissing local government. This is how Tallahassee is positioning itself, with the people, against the local governments. It is a sickening display. Tallahassee is in the pockets of developers and insurance. The “stupor-exemption” is designed to benefit the mass developers and move their inventory, if you look at the structure of the exemption, and to phase out SOH. There could be a LOT of stumping for the “stupor-exemption”, driven by money contributed by the developers and builders. However, if the fall mortgage re-set tsunami and other factors hit Florida hard, like I’m thinking, developers won’t have the $$ to pay for a media blitz to affect the voters in January.
That would be awesome, because the developers and land speculators are systematically destroying one of this state’s few assets: its beautiful, but fragile, ecological treasures.
I went to Hart Springs in Gilchrist County last weekend. It had just rained a lot, although we are in a two year drought. Bearing that in mind, it was still clear that the Suwanee water levels were down a lot from when the recreational area was first created. Data points on historic floods also pointed towards a downward trend in water levels, especially since 1980.
Some folks want to bottle water from the Santa Fe River. If the Suwanee is any indication, these local rivers do not have that kind of water to spare.
Gilchrist is still agricultural–less impact on many environmental factors than houses, and less cost to local government. In fact, farms are typically a net pay-in. Alachua county is turning into one giant sprawl (despite the high density within the old part of Gainesville).
I thought that people went into sprawl areas to avoid paying G’ville taxes. After all, they bitch about taxes often enough west of I-75. However, I just found out that the difference is only 10%. Considering what you get for being closer in in terms of shorter commute (or free commute if you walk, for example from 2nd Ave SW to campus or from Duck Pond to the courthouse), cultural activities, utilities savings, curbside service, mosquito service, bus service, proximity to shopping and restaurants, shady walks in old growth neighborhoods with long-term neighbors who aren’t FBs … well, seriously, where’s the benefit?
In fact, if we rerun to utilities alone, GRU has a surcharge on all county residents outside G’ville, so on a 3bd house you probably pay the same when you count GRU plus property tax because of that backend GRU tax. IT WAS ALL A WASH AND YOU GAINED NOTHING FOR IT.
Morons.
If government would increase their budget by 3% a year (like everybody else has to make due with) we wouldn’t have the problem where all the budget increases are pushed onto recent home buyers, landlords/renters, vacation home owners, etc.
There’s only so much pain in taxes and insurance people are willing to put up with. Sooner or later they will draw the consequnces and leave. Once the population declines, real estate will go even further into the crapper. Then where do you think the state will get their money from? Increase in millage/tax rates for all those left behind. Did you actually think they will decrease spending once real estate value fall?
I hope they keep taxes high. It will make total destruction of the state, that much more complete.
No worries, Palmetto. It’s ludicrous how realtors “upsell” these fetid swamps as “lakes”.
We’re in a one-year lease now, and hope the rents come down to match the falling home values. Abacoa, which is a much-touted master planned community in Jupiter, is saturated with homes for sale or rent so our fingers are crossed that this community will lead the rental prices down.
When your lease is up, notify the landlord that you will be paying $100/mo. less on the next lease.
“‘It’s a new reality that no one wants to talk about because everyone wants the public to feel secure and happy so they’ll spend more.’””
Ding Ding Ding. Too bad the papers rely on advertisers’ spending too.
I have to say I’m a little confused, as I live in the miami area and do have a rental property, granted it wouldn’t be my dream that realestate drops 20-30-50%, but how do renters expect rent value not to go through the roof if long term investers decide to stay in the market?
Those that are forclosing will just get bought low by a few people with VERY deep pockets and those who choose to hang on will raise rents to makeup on their “paper equity”
It just seems to me that everytime people panic (IE: stockmarket) those that hold on are much better then those who sell in the panic?
Feedback would be great this is my first time going through any type of bubble…
“…but how do renters expect rent value not to go through the roof if long term investers decide to stay in the market?”
Supply and demand. Long term investors can only survive in the market if their product is competitively priced. Supply of vacant properties, whether speculator, REO or new construction is increasing faster than it can possibly be consumed. Responsible parties must now compete for a limited amount of rentors. They will compete by lowering rents, which is the easiest thing to do.
“Those that are forclosing will just get bought low by a few people with VERY deep pockets and those who choose to hang on will raise rents to makeup on their “paper equity”.
They can raise the rents to whatever level they like, but those properties will remain vacant as rentors occupy properties that are more reasonably priced. Consumers vote with their dollars. Fundamentally, its no different than the current housing situation with regard to supply and demand. Look around you- Is supply increasing or decreasing? Are home prices increasing or decreasing?
Plus most long term investors are smart enough to know when to cut losses and get out..all indications in Florida show that the market there has been in a “stalled” position and will continue to do so as seller refuse or can’t lower prices and those who do sell do not recycle in to the market but instead leave…long term investors buy low and sell high…that scenerio has been long gone and investors have already pulled out..
“how do renters expect rent value not to go through the roof if long term investers decide to stay in the market?”
If an investor decides to “stay in the market” by keeping their houses vacant and thereby taking a huge monthly loss in mortgage payments, mainanance, taxes, etc., then I can see rents staying the same or going up.
If, however, “investors” decide that the monthly cash bleed is way too much, they will either have to sell, or rent out (to help defray costs). Either option should help keep rents stable or allow them to come down.
Right now I have a rental in an area that was grossly overbuilt, partially because of a swarm of investors bought for the purpose of renting out or flipping. Rents are down from when we rented the house out, and so we treat our current renter like gold.
“Those that are forclosing will just get bought low by a few people with VERY deep pockets”
No, that’s like waiting for rich baby boomers or rich oversea buyers, or rich move stars to save your area…every area thinks that will happen, but where are all of those “rich deep pockets” right now? Most of the real estate based “deep pockets” I know sold two years ago.
“It just seems to me that everytime people panic (IE: stockmarket) those that hold on are much better then those who sell in the panic?”
True, but if you have rental property, panic may be your only option. If you are cash flow negative and can’t manage (or no longer want to manage) the $$$ bleed every month, or if you are facing an ARM reset and can’t manage the payments afterwards (and can’t refinance), or if you just don’t want to handle managing an out-of-state rental when every little thing goes wrong, well, then it might make sense to “fire sale”.
Stocks don’t have these little annoyances.
Arroyogrande-
I’ve seen you stirring the pot over at Mike Thomas’ blog at the Orlando Sentinel- good job! Are you around O-town? I’m seeing a couple SFH rentals (3/2) in Windermere for about $1600/month. Nice.
‘If an investor decides to “stay in the market” by keeping their houses vacant and thereby taking a huge monthly loss in mortgage payments, mainanance, taxes, etc., then I can see rents staying the same or going up.’
I don’t understand the argument. I realize that these guys have bills to pay, but with so many other newfangled landlords in the same pickle, they will not have any pricing power. Anyone who tries to raise rents to cover their expenses will price themselves out of the rental market, as renters have many choices at the moment.
Most of the real estate based “deep pockets” I know sold two years ago.
Exactly.
Try rasing rent and see what happens. There’re many choices out there for renters, especially with all those condos on the market and more in the pipeline. They’ll pack up and leave. You’re stuck paying taxes and insurance regardless if the place is rented or not. To add insult to injury for landlords, everytime the state needs more money they are going after vacation homes, recent buyers and rental/investment property since all else are locked in by SOH. I rent, my $1400 just covers taxes and insurance on the property. My landlord covers the mortgage payments all by himself…how nice of him. If you can sell for a profit or at least break even, get out now. It’s going to get a lot worse. Especially with the tax law the way it is, I don’t see any relief for landlords on the horizon. There are more profitable ventures you and your money could engage in.
I rent, my $1400 just covers taxes and insurance on the property
Breathtaking. It means the true value of the property is - zero.
Too true. Almost stupifying to think about.
Thinking of moving from Clearwater Beach to Naples, so I placed an ad in Craig’s List under “Housing Wanted” in the Ft. Myers listings. In less than two days, I have had 23 responses! Most have been new or nearly new town/coach homes in golf communities with double-car garages, a lanai (some with their own pool) 3 bedrooms, 2 1/2 baths and of course the forever present GRANITE!!!! Basic cable, trash and lawn maintenance were included in all. I stated $1300 as my maximum and got several replies at $1000-1200, with offers to negotiate. Going next weekend to check it out to see just how desperate they are. Hope someone makes me an offer I can’t refuse.
I hope that they don’t enter foreclosure while collecting your rent.
I stated that in my ad too. I think i’ll ask them for a credit report. lol
A credit report shows past events - foreclosure would be a future event. No way of knowing that unless the owner has missed more than 3 months of payments.
so Stevie, when did you quit writing 0 down morts ?
We all knew it was coming,’ said Steve Jonsson, president of Bradenton’s Flagship National Bank. ‘I’m not sure the housing market can get much worse, quite frankly.’”
Take heart, Floridians! Our legislators are “betting” on another source of income:
http://www.tbo.com/news/metro/MGBHAUCXA3F.html
I predicted last year that gambling would become the advertised “savior” of the Florida economy..the problem with that is just like with the lottery… it will produce little real effect for the small guys.. but for the big boys…construction contracts, supplier contracts, etc..all kinds of funny money will be exchanges…the rich will get richer..Florida should have had that years ago..but I still don’t think it will do enough since there are today so many more interesting places to go gambling around the USA..
Just think of all the wives and children that will get a good beating because the man lost everything at the casino! Ohio “conservatives” all are ape-sh*t over gambling too.
In May, the State of Florida collected $70,000,000.00 LESS in sales tax revenue than it had projected! When was that projection made? Just one month previous! Even seeing sales tax revenues drop in the previous months didn’t prepare them for the worsening situation.
JC Penney’s and other retailers had capitulation prices at the mall last weekend. I was shocked. Haven’t seen prices that good in years.
Sales are probably up for this month, but trust me, margins are down.
That’s about $4/month for every person in Florida. That’s not much really, yet. Wait til the recession really kicks in. That drop in revenue really only $50/month less in shopping per person. For a family of 4 that’s $200/month. That’s just about the same amount more that the average family has to pay on their minimum payment on their credit cards now that the minimum went from 2% to 4%. Hhhhmmmm
‘Most of the real estate based “deep pockets” I know sold two years ago.’
Many have. Others put themselves in a deeper hole at the top and have been averaging in even more on the way back down and surviving cash flow wise by not paying the taxes. Few I know just got out cold turkey in 2005 and retired from the nonsense. I doubt there is enough firepower on the sidelines blidnly throwing money out there now to keep another leg down from occurring If anything it’s going to be discounting and squeezing motivated sellers for years to come as inventory gradually gets absorbed again by end users..
‘JC Penney’s and other retailers had capitulation prices at the mall last weekend. I was shocked. Haven’t seen prices that good in years.
Sales are probably up for this month, but trust me, margins are down. ‘
Yet we have a global boom going on in other areas.. Buy some Chinese solar stocks or semiconductor companies. Intel and GE recently broke out.. Stock market remains strong and the dollar weak but this all makes it even more difficult for the fed to bail out housing..