The Spring Home-Selling Season Came To A Dismal End
The Florida realtors have the May numbers out. “Statewide sales of existing single-family homes in Florida totaled 12,607 in May and were more in line with activity in May 2002, prior to the housing boom years, than the May 2006 figures of 19,072 homes sold for a 34 percent decrease in the year-to-year comparison, according to the Florida Association of Realtors.”
“Florida’s median sales price for existing single-family homes last month was $237,000; a year ago, it was $250,100 for a 5 percent decrease. Sales of existing condominiums in Florida also decreased last month, with a total of 4,090 condos sold statewide compared to 5,671 in May 2006 for a 28 percent decline, according to FAR.”
The Sun Sentinel. “The spring home-selling season came to a dismal end in South Florida last month.”
“Sales of existing homes plummeted 33 percent in Broward County from a year ago, while Palm Beach County saw sales slide 25 percent, the Florida Association of Realtors said Monday.”
“The market for existing condominiums in Broward also was down in May. Sales fell 29 percent from a year ago and the median price declined 5 percent to $202,600.”
The Naples News. “May housing sales figures released Monday paint an unsettling picture of the market both locally and around the state. The local statistics were punctuated by a 42 percent drop in the number of single-family home sales in May in Lee County as compared to May 2006, and a 29 percent decrease in the median price of a condominum in Lee County during the same timeframe.”
“The median price of a single-family home in Lee County was down 2 percent from May 2006, dropping from $286,500 to $281,500. The number of condo sales in Lee County was also way down from a year earlier, dipping 22 percent from the 250 that were sold in May 2006.”
The Naples News. “In Charlotte County, prices were down 12 percent from $213,400 to $186,900 and sales were off 39 percent from 387 to 235.”
“Complete information for Collier County was not available because the Naples Area Board of Realtors no longer reports its statistics to the state association.”
The Palm Beach Post. “Existing single-family homes sales for May fell 25 percent in Palm Beach County, to 741 from 982 in May 2006, the Florida Association of Realtors said today. The median price fell 1 percent, to $387,800 from $391,000 in May 2006, FAR said.”
“In The Treasure Coast, existing single-family home sales fell 39 percent, to 315 from 519 in May 2006, FAR said. The median price fell 9 percent, to $228,500 from $252,300 in May 2006, FAR said.”
“‘The wave of speculative investors seeking a quick profit appears to be gone, and now we have a more normal market, with buyers interested in investing in a personal dream and finding a home,’ said Norma Mirsky, president of the Palm Beach Board of Realtors.”"
A sonic boom waiting to happen, Gov. Charlie Crist calls it. A racehorse that’s been reined in. An engine that cannot run on all of its cylinders. His subject: Florida’s economy. The culprit: high property taxes.”
“So with a new, two-piece package through the legislature, Crist abandoned all restraint with his metaphorical flourishes last week.”
“‘I think it will fire up our economy. Florida is like a thoroughbred and…she’s been held back,’ he said moments after signing two new laws on the matter. ‘We’ll have an opportunity to get this engine going again, fire this baby up and make sure that this economy will not just boom, but have a sonic boom.’”
“Economists and real estate agents generally agree that the new constitutional amendment would, if adopted, spur considerable home-buying activity.”
“‘It’ll be an absolute boon to first-time home buyers,’ said Patricia Fitzgerald, a Jupiter real estate agent and secretary of the Florida Association of Realtors.’”
“A Palm Beach Post analysis of the proposal shows that buyers of a $150,000 home would save about $141, or 13 percent, off their total monthly mortgage and escrow payment under the new plan. The buyers of a $250,000 home would save $219 per month, with the amounts and percentages dwindling as the purchase price increases.”
“The rapid increases in prices have made the typical house unaffordable for the typical family in Florida, according to the report by the Shimberg Center for Affordable Housing at the University of Florida. The median household in Palm Beach County earned only 51 percent of the income needed to buy a median home there, according to the study.”
“So the main problem for many would-be home buyers, particularly in South Florida, where prices escalated the most, is a $350,000 or $400,000 house, not the taxes and insurance on that house, FSU’s Holcombe said.”
“‘Demographically, Florida is likely to become more like San Francisco,’ said Randall Holcombe, a Florida State University economics professor, describing how that city is closing schools because families with children cannot afford to live there. ‘Eventually, no one would be able to afford anything.’”
The Miami Herald. “Allan Bense, chairman of the Taxation and Budget Reform Commission, which is empowered once every 20 years to place tax and budget amendments on the November ballot, said that when the group meets again on Tuesday he will suggest they discuss Plan B: What to do if voters reject the amendment lawmakers have put on the Jan. 29 ballot.”
“The Florida Constitution requires the Taxation and Budget Reform Commission to convene in 2007 for the second time in Florida history, only 17 years after the first one met in 1990. But the coincidence of the panel meeting in a year when tax issues dominate the agenda is not lost on its members.”
“‘You cannot blame communists or the Trilateral Commission,’ said Carlos Lacasa, a commission member and former Miami state legislator. ‘The fact that the real estate bubble coincided with the timing of the commission was pure coincidence.’”
“Lacasa also believes that because the Legislature’s two-part property tax plan won’t solve the problem, the issue will ‘overshadow everything until it’s resolved.’”
The Herald Tribune. “The thousands of new homes in the works for the land east of Interstate 75 in Southwest Florida are providing ample opportunities for home builders. Even with the precipitous drop in new home construction around the region, a growing list of construction firms are moving into the region.”
“‘They follow the rooftops,’ said Jay Brady, executive director of the Gulf Coast Builders Exchange, a Sarasota-Manatee group of commercial builders, architects and engineers with 350 members.”
“‘We see enough opportunity to be a profitable organization, without a doubt,’ said Gregory F. Galmin, the Tower Group’s executive VP. ‘We are not here to put anyone out of business, but we will be aggressive and we will be knocking on our competitors’ doors.’”
When you borrow ’sonic boom’ quotes from the L.Y.’er, you’ve stooped low…
“We’ll have an opportunity to get this engine going again, fire this baby up and make sure that this economy will not just boom, but have a sonic boom.”
More like a sonic thud.
Seems like some people think that a healthy economy is based on creating more debt for people.That is a short sided way to go.All this funny money has created an unsustainable economy.People are maxed out on debt.We have robbed from future growth to create this stiuation.The bush administration created a bunch of service jobs and jobs related to real estate.Why didn’t they focus on energy independance instead of screwing around with iraq’s oil.Are we headed in the right direction? Well I think about 75% of the population thinks not.
lad; Why are you posting first and quoting last? It’s bucking the system. Is this proper netiquete? Just wondering
Rules, who needs em’
Crazy work hours. Just need to get my 2 cents in. Is that OK?
oops, That wasn’t for me.
Pessimists: It’s so bad and we’re so much in s*** it can’t possibly get any worst!!! We are truly at the bottom of the barrel!!!
Optimists: Yes it can! yes it can!
Ok,
Those 2 are off the list.
Whom else can’t we blame?
“‘You cannot blame communists or the Trilateral Commission,’ said Carlos Lacasa, a commission member and former Miami state legislator. ‘The fact that the real estate bubble coincided with the timing of the commission was pure coincidence.’”
Lacasa. Means “the house”. Carlos The House. Sounds like a gangster.
Lowering taxes will make no difference whatsoever.
Affordable housing will.
And affordable housing will be built down here. As long as the builders can show a profit margin they will continue to do business.
The bagholders will get bypassed and left holding their greedy “investments”.
Land prices are going, literally, “out to pasture” and are plummeting. Materials prices have plummetted as well. What’s stopping new construction ? Answer: Nothing.
Builders will sell off their spec inventory at break-even or loss prices; wiggle free of the “boom”, and go back to building decent, affordable housing. At prices that normal, working class Floridians can afford.
You will see empty McMansions held by the banks and flippers weathering in the sun….and you will also probably see a bunch on newer, modestly built stuff in the 2000 sqft range back into the $90,000 - $ 150,000 area come online in the nest 2-3 years.
and on another note, will we see the H2’s go the way of the Edsel as well?
I know what will stop housebuilders: cash flow. They need to service existing loans and sell their existing liabilities.
The willingness (and ability) of banks to lend will also decline.
Come on, you couldn’t find a 2000 sq ft home in Florida 10 years ago for $90K.
Funny how the “lower property taxes” REIC crowd (who have never seen a government subsidy they didn’t like), always fail to mention that the very REASON property taxes are much higher today is that house PRICES are much, much higher. It’s not like the millage rate suddenly shot up over the past 6 years.
Of course ignoring such obvious causality won’t cost them any love from Joe Howmuchamonth. He can’t do the math (and wouldn’t like the results even if he could). He just wants to hear about how his house-ATM is appreciating xx% a year and how he’s getting another well deserved ‘tax cut’, so he can go out and borrow even more money to buy some more ‘free’ Chinese $hit.
Careful … you might wake some monthly payment consumers from their stupor.
The thing with Florida is that you don’t just have the greedy people. You know, the ones who don’t mind consuming government services, but don’t want to pay the taxes necessary to maintain them. Here we have the DUMM people. The ones when you point out that those social security bennies they’re relying on to save them when they can’t work any more come from the same Federal tax they’re bitching about have this to say: Duh-ummm.
Even as a child in the early 1980’s, I couldn’t understand how the Republicans gained such traction running up budget deficits and then calling the Democrats “tax and spend”. Isn’t that what you’re SUPPOSED to do? I mean, even I could add and subtract. And a smaller something minus a bigger something is a debt. Isn’t that bad?
Even the idea of government bonds bothered me. I was supposed to be happy that grandma bought me a savings bond, but I couldn’t figure out why our federal government needed to borrow money from little people like us.
Apologies for the thread hijack, but breaking news:
SEC probing Bear hedge fund losses
Hmm . . . the “contained” situation is looking rather less contained at the moment . . .
The Enhanced Leverage fund said in May that it was down 6.5 percent in April, but on June 7 said its April loss was actually 18.97 percent, BusinessWeek said. It did not provide a reason for the discrepancy.
ouch
Albanian school of exconomics?
Who knows, once this probe gets going we might actually find out how much those CDOs and derivatives are really worth . . .
Also this:
Bear Stearns Cos. Inc. (BSC.N: Quote ,Profile ,Research ) may have to bail out a second troubled hedge fund that it manages, Merrill Lynch analyst Guy Moszkowski wrote on Monday.
That fund could have a loan exposure of as much as $7 billion, Moszkowski wrote.
http://yahoo.reuters.com/news/articlebusiness.aspx?type=bankingFinancial&storyID=nN25313424&pageNumber=0&imageid=&cap=&sz=13&WTModLoc=BizArt-C1-ArticlePage2
And, the Paulson Gang sees trouble:
Goldman Sachs Group Inc. (GS.N: Quote , Profile ,Research ) subprime mortgage bonds issued last year are being downgraded by rating companies at the fastest rate of any issuer, according to Citigroup Inc. research dated June 22.
Portions of Goldman’s GSAMP-issued bonds, which include subprime loans from a variety of lenders, have been downgraded a combined 69 times by Standard & Poor’s and Moody’s Investors Service in the year through June 15, analysts at Citigroup Global Markets said in a weekly note. Sixty of the downgrades refer to classes from 2006 bonds.
http://yahoo.reuters.com/news/articleinvesting.aspx?type=companyNews&storyid=205755+25-Jun-2007+RTRS&WTmodLoc=BizArt-L1-CompanyNews-3
‘The wave of speculative investors seeking a quick profit appears to be gone, and now we have a more normal market, with buyers interested in investing in a personal dream and finding a home,’ said Norma Mirsky, president of the Palm Beach Board of Realtors.””
This is still a problem though. Why should I buy until all the remnants of the investor-caused run up (higher prices) are flushed from the system?
The fact that anybody is amazes me. The investors may be gone, but the effect they had remains…
You are right.You have to wait till the prices are in line with histoical appreciation rates.This madness in the past few years was gambleing.Prices will get back to normal levels. The smart investors made a lot of money on this boom.Unforunately all of morons(serin types) got suckered in at the top as usual.We know how the cycle goes, rich get richer off the average joe.
yea it’s as if chernoble happened and the prices stayed the same and people moved there anyway…instead of financial suicide, it’s regular
Some housing developments will be like the real Chernoble. They built the development, it imploded, nobody new came to live there, and those few folks who wouldn’t or couldn’t leave still live there.
‘The wave of speculative investors seeking a quick profit appears to be gone, and now we have a more normal market, with buyers interested in investing in a personal dream and finding a home,’ said Norma Mirsky, president of the Palm Beach Board of Realtors.””
Not yet Norma Mirsky, prices need to drop before most people can afford to purchase. Until then, keep working your day job in the fast food industry!
Classic.
“A Palm Beach Post analysis of the proposal shows that buyers of a $150,000 home would save about $141, or 13 percent, off their total monthly mortgage and escrow payment under the new plan. The buyers of a $250,000 home would save $219 per month, with the amounts and percentages dwindling as the purchase price increases.”
So let me get this straight… prices increased by 100%, but we’re going to get that crazy boom going again by reducing overall costs by 13% or less? Who are these idiots?
“”So let me get this straight… prices increased by 100%, but we’re going to get that crazy boom going again by reducing overall costs by 13% or less? “”
Especially since if they don’t cut government spending by 13% the people who own homes will simply be paying out that 13% to different taxes.
“Lowering taxes will make no difference whatsoever.Affordable housing will.”
I don’t know how that’s going to work. We have “affordable housing” housing here in Monterey Co. (Salinas) and it sucks. Houses are going from $550k to $800k and workers are allowed to buy with a stated income of $30 to $40K and live right next door to you who are paying the full load on the $550K to $800K mortgage. Some even rent out rooms on the side to make money under the counter. The front of the house look like a parking lot and the lawns grow nice weeds. I don’t know about you but I would never buy into an area with section 8 or ‘affordable housing’. Just one more reason to rent until things shake out and we know the big picture.
I’m of the belief that there is plenty of “affordable housing” already built all over FL. It’s just ridiculously overpriced. Taxes will come down with prices. When the $400K 3/1 with carport comes back down to the mid-$100’s, there won’t be an affordable housing or property tax problem. Beware where you rent though. I am currently renting from an “investor”, and troublesome “foreclosure relief” offers and a notice of default from Citizens have recently appeared in my mailbox. I check the county clerk’s website every couple of days for lis pendens and foreclosure notices. There are just too many FB’s trying to rent out to stop the bleeding, and taxes and insurance have killed the real landlords here over the last few years, so reasonably priced rentals in good condition with solvent owners are in remarkably short supply.
Only problem is that this will take years for housing prices to normalize with median incomes.
Meanwhile, in the next few months property and building materials costs are about half what they were during the boom….and you have thousands of builders and construction workers standing around down here with nothing to do.
There is plenty of land here in FL and plenty of cheap building materials now that the boom is finished. I look for builders to build under, over and next to the FB McMansion developments and further the demise of The Bagholders.
They will keep on building. They have to eat. And many people down here, like me, can’t afford to pay some asshats wishing price for a 3/2 when I can have one custom built for half the price. Show me a decent, well built 2000 sqft 3/2 at pre-2002 prices and we have a deal.
.
“Show me a decent, well built 2000 sqft 3/2 at pre-2002 prices and we have a deal.”
Amen to that. But in my neck-o-the-woods, that amounts to about a 50% haircut on current asking prices.
Well-built? In Florida? Ha!
If it hasn’t been standing for at least 80 years, chances are it’s junk.
I have an associate who used to do construction in Massachusetts. He built a backyard shed to Mass. standards. Maybe I’ll hire him as a gen. con. on a custom and see if I can pull all NE-native labor.
I love the nice local rednecks to death, but I wouldn’t live in one of their “jobs” … ever.
maybe you should pay rent into an escrow account
tell me about it–I will definitely request an escrow account for my deposit on the next place–I’m already looking around for new digs.
I might just ask for a provision in the lease (a simple amendment/addendum if they use a form) providing that notwithstanding anything else to the contrary in the lease, the landlord covenants, represents and warrants that they are, and will remain throughout the term, current on all mortgages on the property, and that no rent is due during any period in which an uncured notice of default or other foreclosure-precursor events are outstanding on the property. That way, you can just pay the rent and occasionally check for notices, and if one appears, it’s free rent until the default is cured! If they’re really getting foreclosed, this could mean free rent for months.
Ok..lets be realistic and understand that the days of the $100K houses in Florida are long gone and will not be returning anytime soon. For those waiting for that well, you will be waiting for a train that will not arrive…Florida’s medium price alone tells story..it has dropped by tens of thousands compared to the heydays but it HAS NOT DROPPED BY HUNDREDS of THOUSANDS..that lets you know that yes prices of homes will re-adjust but the good old days are long gone for low prices, quick sales and for mortgages brokers and realtors getting those large and easy commissions…
I disagree. Those 3/1 with carport currently offered in the 200s (400K must be within a couple blocks of ocean in nice area) will get a 50% haircut, in real $. As one poster above noted, new stuff can be slapped up awfully cheaply, which is actually going to increase the net oversupply of these very modest and very overpriced “old Florida” houses.
Are you by chance a realtor?
I agree, Paul … the fact is, So. Fl. RE ran up really high more than once in the last 30 years, and crashed hard, too. My girlfriend’s mother got her condo for much less than $100K, in a good community, by waiting for the right point in the business cycle (during the last downturn).
The high prices on crud construction in outlier areas is a joke. They were propped up by out-of-state equity locusts. Well, they have stopped making out-of-state equity locusts.
Check back in a year. I bet the good old days will be back.
Something changed suddenly (over 10-20 years) in the psychology of buyers where they were willing to raise their percentage of income alloted to housing… a lot.
Why can’t that change snap back? For example, if this change was due to “real estate always goes up”, once the common wisdom becomes “real estate is a sucker bet” why can’t the psychology change as quickly? (e.g.: the long slides over a decade seen in various parts of the globe in recent memory.)
Pretty much all the standard realtor reasons for the “permanently high plateau” have been debunked. That leaves structural changes in the market like weird interest rates and crazy loan products, … and psychology. The market is being corrected, whether it wants to or not. When will we see a corresponding psychology correction?
Ok..lets be realistic and understand that the days of the $100K houses in Florida are long gone and will not be returning anytime soon.
In the latest release of the PMI market risk index, it mentioned that the Tampa Bay area is 23.2 percent overvalued. The price drop is not going to happen overnight or in one or two years. The price drops will continue until home prices are back in line with local wages. The main issue in the current RE market is home prices have increased in double digit numbers versus wage increases which were in the low single digit numbers. The $100K home will return simply because wages have not kept pace with the rapid inflation in the housing market. Wages will not even catch up in the next 10 years to the increases we saw in housing costs in just 2004 alone. It all boils down to one word and that is affordability and how much a person is willing to pay for the property.
I don’t agree that “affordable housing” automatically means “section 8″. I think they are two very different things. Section 8 is gov’t assistance and is primarily the lower class or those teetering on the edge of poverty. Affordable housing is (or should be) for middle class. Just honest, hard working folk who should have the chance to buy a house if they want to.
“Just honest, hard working folk who should have the chance to buy a house if they want to.”
Longer term “affordable housing” becomes anything but. Instead of government sponsored programs, why not encourage people to SAVE for the house they want?
Well by “should have a chance”, I assume those honest, hard workers have a downpayment (silly me, I know).
But rather than having to save up $50,000 for 10% on a $500K home, they maybe only need to save up $10,000 for 10% on a $100K home. The best of both worlds - saving has happened and now that savings can go to good use in a house that’s “affordable”.
hey hey now!… that 10K saved means it didn’t go to fancy toys like the plasma or the Hummer.. you’r talking about stalling this consumer driven economy here… be carefull what you advocate ;).
got cash?
Ok when you say $10k to the hummer I assume you mean at the pump?
“Affordable housing” is government-speak for Section 8 or projects.
I’d love to know why anyone would spend their money to live in a neighborhood surrounded by deadbeats.
I live in Manhattan, and anywhere there are projects or Section 8 housing, there is a totally different atmosphere and higher crime. They built expensive high-rises on Amsterdam Ave., near the projects in the 80s, even though the project towers are “scattered”-(not clustered together) they can’t get the rents or even the tenants that they could get even one block over.
Truth is, people want to be in the best neighborhood they can afford, with other folks who have also put their own money in their homes.
““Affordable housing” is government-speak for Section 8 or projects.
I’d love to know why anyone would spend their money to live in a neighborhood surrounded by deadbeats.”
You can’t avoid it even if you tried. Buddy, ANY house can become a section 8 house if the owner/LL decides to join the program. The whole point of section 8 housing vouchers is to spread the folks using the program through the community, *instead* of creating housing projects.
Look at this way. If your point is that there tends to be a criminal element within the lower-income folks, concentrating all the criminal types in one small area makes it much easier for them to hang out together and much more likely to have a significant uptick in local crime. So instead, you spread the lower-income folks across the community, so you’ve got the occasional poor criminal rubbing shoulders with the gun nut wifebeater suburbanites, the middle-class wives embezzling from their small-business employers, the pedophile pastors, and the spoiled kids practicing their B&E skills on their friends’ parents’ houses.
If you’re lucky, the poor criminal lowlifes will acquire white-collar crime skills from their neighbors, so they’ll rob and steal without any of that messy bodily harm associated with lower-class crime.
That is absurd. Even one Section 8 home in a neighborhood is the death of that neighborhood.
“You can’t avoid it even if you tried.”
Well, back in the real world, section 8s are in run-down buildings near the projects. No landlord with a decent building that could command market rents is going to bother with section 8s–just the owners of buildings that are using them as cash cows without doing upgrades or more than minimal maintenance. And with a project on the same block, you’d never get any money back from upgrades anyway.
“Well, back in the real world, section 8s are in run-down buildings near the projects.”
Well, back in the real world, all kinds of inexperienced RE ‘investors’ who haven’t been able to sell their houses are joining the section 8 housing program. They figure it’s dependable rent, since the gov’t is paying it. Coming soon to a neighborhood near you!
Not in Manhattan they’re not. Coops have strict rules on renting…most will only allow it once for a max of two years, then only if the renter’s financial package passes board muster.
If some multimillionaire is in trouble with a townhouse, they will not be renting it to section 8. Even this government will not pony up 20-30k a month in rent. And “group homes” must be licensed and approved by the city and the local council which would never allow such a thing in a well-to-do neighborhood. Same reason the cops “move along” homeless folks, winos and others deemed undesirable who clearly don’t live in the nabe. This is how things play out in wealthy and politically connected neighborhoods
It’s quite possible that it might happen in the Bronx or Queens, but that ain’t my neighborhood.
Funny thing is, 5 years ago they pushed for affordable housing by loosening lending standards and this is where we are now, even less afforable housing. Maybe, just maybe, natural forces dictate that only 62% of Americans can actually afford to own rather than 71%, like it was before.
There seems to be a lot of rigid thinking about affordable housing. The idea is to solve a complex problem. The approach of throwing around money obviously has some drawbacks based on how markets work, but there are other issues.
Affordable unit requirements mean that developments which had previously been dominated by customers at the high end get broken up to include a range of inhabitants. This doesn’t always work out and might not be ideal, but overall it has helped to stabilize the urban fabric by avoiding clusters of the most disadvantaged while still providing workforce housing.
One thing that happened in California that seems to be working even better are the revised secondary unit rules. These compel local planners to allow secondary units on lots where they previously would have been forbidden. This enables increased density in areas of existing development. While many do complain about crowding, overall development remains very similar in character as legal back yard and basement apartments fill up available spaces.
This probably isn’t what you were talking about, but that is kind of the point. If one takes ideas of affordable housing and workforce housing seriously then there are often basic changes in zoning and building requirements that can lower prices, most often by increasing density.
“Lowering taxes will make no difference whatsoever. Affordable housing will.”
Affordable housing and a good paying job that won’t be outsourced to a low wage country!
So…did Florida and its politicians ever “solve” or “try to solve” the insurance crisis?
No, rj, in fact, it looks like they made it worse. Not only did rates NOT go down (due to the window of time that the Florida legislators so kindly provided the insurance companies to jack up rates into the stratosphere) but Floridians are now on the hook for reinsurance for the insurance companies, in the event of hurricane losses. Slick deal.
You are correct.
Insurance reform was a total fraud and failure… just like this tax proposal. This tax thing is a joke, they made it complicated and convoluted so to hide how miserably they screwed it up. It will NOT help the housing market one bit.
Key Lime, the main purpose of the tax proposal is to covertly eliminate SOH. They’ll really be trying to do a hard sell on this “stupor exemption”. Tallahassee couldn’t care less about the “housing market”, one way or the other, except for whether or not it puts money in their pockets and keeps the pols re-elected. As long as it does, the “housing market” matters.
The only thing that gives me hope is the fall mortgage re-set tsunami and the gathering Wall Street debacle. This might stave off the dangerous road Crist is taking us down. All I need to know about Crist is how did the state education system do when he was Commissioner of Education under the first Jeb term? Not so good. How was crime in the state while he was Attorney General? Even worse. Mortgage fraud blossomed and violent crime went up. How will he do as Governor of the entire state? Draw your own conclusions. He’s a career politician and this is the pinochle of his career.
“He’s a career politician and this is the pinochle of his career.”
I guess that means his election win is in the cards.
So — this going to save the average Florida homeowner less than $200 bucks a year — as I believe a much quoted article said last week AND it’s also going to save buyers of a $150,000 home $141 a month, and $250k buyers about $219 per month?
So, this has the effect of lowering taxes as the lower end of the equation — which is fine and helpful, I suppose. But, is it still a kick in the teeth for people with a $500,000 home (that they bought 10 years ago for, say, $175,000)?
A really good look at the Florida real estate tax history and prospects would be a good weekend topic. Or, better yet — it might be a neat topic for Ben to actually try and solicit a couple guest “columns” from folks in Florida who actually know what’s going on and have a stake in this.
Save our homes needs to be kicked to the curb, but it will be nearly impossible to do that since it’s in the state constitution. (What is with FL putting everything under the sun in it’s damn constitution?) Certainly, it shielded long-term residents from punishing tax hikes brought about by speculative morons, but the collateral effect on business owners and rental property owners is really damaging. And the long-term property owner still gets screwed if he wants to up- or down-size his home. I vote for scrapping the whole system and starting over. And honestly, where I live in South Tampa, SFRs of livable quality and of a square footage suitable for a family of 4 start at nearly $500K, so this proposal is of little benefit to my neighbors.
Keep in mind that these savings are only for homesteaded homes. There are NO savings for investors or for second homes. Snowbirds — and there are millions down here — will continue to pay the same old high property tax rates.
I would be very surprised if homestead cheating isn’t like illegal alienage: If they actually looked for it, they’d find so much they would either get fired or torch the economy fully prosecuting it.
As long as Florida refuses to add a sales or Income tax, their real estate tax will be ridiculously high. When they were a bunch of snowbirds, and growing fast, they could get away with it. With 15 million people, lots of kinds in schools, & growth slowing down - there’s just no revenue stream.
This one will go on a loooong time. Crist will come out of the closet before they fix it.
I find it interesting to hear experts blaming the current crash of the housing bubble on psychological effects and why this market condition is so much more positive than ‘81 and ’91 when there were real market conditions to blame; thus, they say logically we should be seeing a turnaround soon.
I do believe there is a psychological effect playing out in the housing market, but; it doesn’t matter. It doesn’t make it any better that people can afford to buy a product, but don’t, because they think it’s too high.
As a matter of fact, a market loss based on psychological effect may actually be worse than a market failing because of high interest rates or loss of jobs. How do you fix this type of market? You can’t add jobs (unemployment all time low), you can’t lower interest rates (at historical lows) and you can’t loosen up lending practices (note subprime failure).
How do you jump start a market like this? You don’t…it’s a slow process. First, the market needs to find bottom. As this occurs, we will begin experiencing the so-called ‘real reasons’ for a market downturn as mortgage rate rise due to lack of investors and economy slows as you remove home equity money from the retail sectors. If these things don’t happen simultaneously, we will see many false bottoms drawing out the recovery process even further.
There is no doubt psychology has a huge part in this crash, but it doesn’t make it any easier or faster to recover.
With 55% of the population thinking there is no problem in the last poll I don’t see how this can be blamed on the perception of the public. And if 77% think that they will get their asking price in 6 months of listing, I really want to see how the psychological effect are hammering these people. The simple fact is a majority of people have no clue, this is the very first trickle down effects of a market gone retarded…so we should be a tad scared about when this gets into full gear.
That’s why the “you haven’t seen more than a few percentage points drop in national house prices so don’t worry about any larger revert-to-the-mean drops in the future” talk is so infuriating. I’ve only been around this blog for around a year and even I remember when ANY national price drop was considered impossible. I’m actually kind of surprised that after 10 months of declines (MoM or is it monthly YoY?) that the NAR seems to be warning to the idea that maybe prices can drop. I figured they’d have to have at least 12 months of proof first
“A sonic boom waiting to happen, Gov. Charlie Crist calls it. A racehorse that’s been reined in. An engine that cannot run on all of its cylinders. His subject: Florida’s economy. The culprit: high property taxes.”
(wipes copious amounts of regurgitation off computer keyboard and screen): Just saw old Charlie the Tuna on the local TeeVee news (Bay News 9, for anyone who is interested) Charlie got back from a little Middle East globe trotting just prior to signing the legislation. Apparently, he was visiting Israel and Dubai looking to drum up “investment” in Florida (dry heave). Wonder how much of Florida he’s looking to sell off? Note to Dubai and Israel: Can’t touch this, Florida will burn your naked patootie.
palmetto,
Dubai…Rightttttt. If i remember correctly the magazine i was reading on Dubai stated near zero or close to zero taxes in the country. And they would care to come here to Florida and invest for what reason ?? Just let housing values retreat and taxes and insurance will come down again.
Chris
I swear to God, Chris, I saw Crist talking about it this PM. He said Florida needed investment (it does, but not that kind) to provide jobs for the residents and to make up for the tax shortfalls. Trust me, this smells like a 10 day old fish. Why would they invest here? For the luxury and gaming crowd, that’s why. I can feel it.
Psst, Chris, I was right. If you see this post, try to tune in Fox News at 6:00pm. Crist is really serious about this Dubai thing and like Dubai itself, the plans for something called “Media City” are off the scale. How far it will go, who knows. Apparently, though, Dubai does have some serious designs on the state. If this goes forward, then Florida real estate WILL re-inflate, despite any bubble, taxes, etc.
OK, just saw the story on Fox News Tampa. Apparently, Dubai is serious about this and is looking to purchase 200 to 800 acres somewhere in Florida, either Miami, Orlando, Palm Beach or Tampa and it is being reported that Tampa is at the top of the list. They intend to break ground within the year. This is moving fast. Weird. Forget Spanish. Learn Arabic, folks.
DING DING DING and the winner is: MIAMI!! No, that’s not for sure, just my instinct. I read the excellent article “Dubai’s the Limit” by Nick Tosches in Vanity Fair and there’s two things Dubai needs and wants, wherever it goes: a large port and beaches. Only Miami really fulfills those requirements. Tampa’s got the port, but the beaches? Feh. The Gulf Beaches in Fla leave a LOT to be desired. Might as well forget Orlando, it’s landlocked. Palm Beach would be perfect, except no port to speak of. My money’s on Miami.
I always figured that Dubai was too small to have enough of the correct colored sand to replace the eroded parts of Miami beach? Maybe since dollars are so low density, they intend to use sand as ballast when they ship them over…
Yeah they said the same thing about Trump and Tampa..and he BAILED out of Florida..
It’ll be Miami, for sure, if it happens. Watch for Florida to sell off public land to Dubai..
You want to sell public land…start with Congress. That land on the Mall ought to be worth something. Does DC have a port?
If not, why not throw in Baltimore and make it a package deal?
Let us blame everything except the prices, because they have nothing to do with the problem. Unfortunately, people woke up from their frenzy and shook off their buzz and realized that these prices in a hot market or whatever market are terrible and stupid.
Gov. Charlie Crist calls it. A racehorse that’s been reined in. An engine that cannot run on all of its cylinders. His subject: Florida’s economy. The culprit: high property taxes.”
Ya know Chuck, I have to agree property taxes do suck, however it isn’t the bigger problem. The damage was in lending and fraud and the mania leading up to this, not the taxes. Also, if you guys can’t function with the other bazillion taxes you have, then maybe we should just figure the Gov is too expensive and have you be reassessed as obsolete in current form.
Hmm… I wonder if the problem is that traditionally, the Southern states did not spend any money on public schools. Then Northerners moved in and demanded it for their children. The cost of government went up. And the Southerners whined about their higher taxes.
Sadly, it’s going to take generations for improved public education (which still isn’t close to Northern standards–hence Florida students compete in their own “special” academic competitions instead of the national ones, to avoid that self-esteem blow of being creamed by kids from Oak Ridge, IL and *gasp* Houston) to put a dent in the profound ignorance of the people.
When it does, though, look out. The next step after education is radical politics, and down here the oppressed have a much longer list of grievances, methinks.
You know, those people in politics who continue to cheer lead housing are going to pay a real price soon.
Those in glass houses should not get loans…
Wow, sales counts down AND prices down in tandem.
This is not, not, not good. We’d expect the first stage of the decline would be when sales counts stalled due to inflexible prices. The next stage is lower prices in the hope of getting sales moving. Are we beyond even that?
The tough thing for all those FB’s is this: Even if you do lower your prices, you STILL might not sell that house. Ouch.
Kinda like a guy who is holding on to a branch, if he uses his strength he has left he can push off and clear the cliff, and end up in the water. The same person who holds on to the branch eventually tires and falls down the cliff hitting every rock, scorpion, root, branch on to entering the water. They both ended up in the same water, one choose to take the easy road the other tried to hold on.
That is my analogy of home owners currently, if you let loose now and take a small loss you are helping the realigning of the market and not taking as big a loss. If you are holding on as if the market will go back up, it wont and you will take a bigger loss and end up in the same place just losing more money.
I am amazed. The news for No.VA. just said “There could be 10,000 houses in foreclosure here by years end.” Fairfax county dosen’t have that many house for sale now. That would be very bad.
Opps, in a year not by years end.
In a year… Well, still good enough for a disaster, so if not this year, then next. I really worry a bit for some of my friends who’ve bought in the last year or two. Fortunately, they have no intention of moving for years; hopefully, their employers feel the same way.
Just in time for the spring selling season (after this “year of the bottom”)
Say hello and goodbye to 2002 sales on the way down. If the birth/death models are close to accurate then we are in for a few years of undershoot before equilibrium is restored.
when you grab a tiger by the tail, you can’t let go.
All these FBers bought no money down, they will have to bring cash to the table to sell. And all their cash is parked in the driveway or tuned to HBO. Their only choice is to hang on. They know they will hit the wall and end up in the water. But because they have no cash, their only option is to hang on and hope to hit the lottery.
It never happens, they know it never happens, but, heh, there’s always the lottery, and you got to play to win!
Florida is like a thoroughbred? (says the governor)
Florida is a lot of things, some good and some bad, but it’s more like a wily coyote than a thoroughbred.
One of the bad things that’s always gotten on my nerves: the incessant nickeling-and-diming, baiting-and-switching of hotels, auto repair shops and the like, with all their little miscellaneous surcharges. Somebody started doing it (a way to gouge the tourists?) and now it’s just common practice in the state, and I don’t think Floridians even realize that an extra $5 for shop grease and a couple dollars for a washer on top of $80/hour labor is not the way business is done in most of the rest of the country.
I agree with that..I love it here in GA where the nickel and dime dealings seem to be low compared to the nonsense in Fl..
Hmmm… so if the builders keep building and nobody can afford the McMansions, would they build logical, practical, affordable houses? It would be funny if the next real estate boom in the country at some point in the future was tearing down falling-apart McMansions and putting in smaller, better-built, and more efficient homes!
What’s the groups forecast for Charlotte, N.C. and Seattle, WA?? I saw an article claiming they had already bottomed out and were headed up (article called it the V graph as opposed to say the U graph they predicted for Sacramento). Anyway no more bad times for Seattle and Charlotte? gw
My guess is they’re watching zillow. I’m seeing a few of those Vs on zillow in Florida, in nice, older neighborhoods in Jax and Miami that control prime real estate. But I also see it going the other way hard in nice sections of some NE cities. No idea what their algorithm is.