Reasons For The Readjustment Are Obvious In Florida
The Star Banner reports from Florida. “Local Realtors are in survival mode. ‘I’ve seen the highs and the lows and the unreal in 2004-2005 and the complete crash right now,’ said 17-year Realtor Vic Rotz. ‘It’s really taking a turn for the worst the past three months.’”
“The Ocala metropolitan area is down 50 percent in home sales compared to May 2006. Just behind Ocala was the Tampa Bay region and Miami, with 42 percent and 44 percent declines respectively. In the greater Orlando area, sales are down 40 percent.”
“‘I’m all about ‘we live in Florida.’ Everyone wants to live here,’ said Rotz, ‘But facts are facts. We’re over-inventoried and overpriced and until we fix that this is going to get worse.’”
“Reasons for the readjustment in the housing market are obvious: homes in many areas of the country became too pricey, affordability suffered and the home buying public lost confidence.”
“‘Households and investors moved to the sidelines with many waiting to get back into the real estate market when property prices retreat to more suitable levels,’ wrote Paul C. Bishop, Ph.D. and Harika Bickicioglu, both housing analysts.”
The Palm Beach Post. “Mortgage foreclosures in Palm Beach County tripled in June compared with the same month a year ago, and they quadrupled in St. Lucie County, painful signs that the housing market slump continues to spread throughout the region.”
“In St. Lucie County, where speculators madly gobbled up properties during the five-year boom, lenders foreclosed on 355 homeowners in June, compared with 79 in June 2006, according to the St. Lucie County clerk’s office.”
“‘Many people can tell you they can’t refinance now because their property is worth less than their mortgage is, especially those who bought at the pinnacle of artificial appreciation in 2005,’ said analyst Jack McCabe. ‘Others do not meet the more stringent requirements needed to get a loan now.’”
The News Press. “Lee County foreclosures kept rising last month, with Cape Coral leading the way. June’s foreclosures totaled 968, up from May’s 867, according to the Lee County Clerk of Court.”
“It was a continuation of a long runup in foreclosures as the real estate market has cooled, the rate in April 2006, before the numbers took off, was only 131.”
“Many of the properties going into foreclosures were single-family homes owned by investors, Fort Myers-based mortgage broker Jeff Tumbarello said. ‘Everywhere there was heavy speculator ownership.’”
“Daren Blomquist, for RealtyTrac, said the county ‘has one of the higher foreclosure rates in the state,’ ranked at No. 6 in May, the last month available. The No. 1 county is Osceola; No. 2, Flagler; No. 3, Dade; No. 4, Pasco and No. 5, Manatee.’”
“Jeff Lazerson of Mortgage Grader said he’s hearing from a lot of Florida clients who are trying to get out of bad loans but aren’t always able to.”
“‘They were misled about the original loan, and they get the shock of their life’ when interest rates rise or a balloon payment comes due, he said. ‘Part of the problem is that subprime loans are almost non-existent because of the subprime meltdown’ with some big lenders in that category falling apart.”
From CNN Money. “A tidal wave of foreclosures may be heading toward Florida, if you judge by the number of homeowners looking to get rid of their homes as fast as they can.”
“‘Orlando has blown up. There’s been a 700 percent increase in traffic of people filling out our forms,’ said Duane LeGate, president of House Buyer Network.”
“Jonas Lee, whose company, Redbrick Partners, buys properties in distressed markets all around the country, sees similarities with Orlando. ‘There are tax issues that are depressing the market,’ said Lee, Property taxes jump when houses change hands. ‘And insurance rates spiked after the hurricane season of a couple of years ago,’ he said.”
“When LeGate sees big jumps in client contacts from a single county, he concludes that the area has hit a rough patch that may not come out in price stats for months.”
“‘We called Phoenix, two counties in California and West Palm Beach, Florida in June of 2005,’ he said, at a time when those areas were still perceived to be white-hot.”
“Now, according to figures from RealtyTrac, the Phoenix metro area has 10 of the top 11 zip codes for foreclosure filings in Arizona, and all 10 are among the 500 worst hit zip codes in the nation. The other areas are also suffering a deep slump.”
The Naples Daily News. “One of the nation’s largest homebuilders is abandoning plans to develop new communities in Southwest Florida, saying it expects the Naples/Fort Myers housing market to remain ’severely depressed in the foreseeable future.’”
“Meritage Homes Corp. said year-to-date home sales in the Naples-Fort Myers area have dropped 70 percent since the same time last year.”
“A Meritage official told the Daily News on Friday that the homebuilder has abandoned options to purchase an estimated 2,500 lots in the Naples/Fort Myers market over the past 18 months. The company had invested approximately $25 million in the abandoned lots, Meritage Investor Relations Director Brent Anderson said Friday.”
“The homebuilder, the nation’s 12th largest, announced it will write off $28 million in losses related to its investment in its Naples-Fort Myers operations as part of its second quarter 2007 financial results.”
“Ross McIntosh, an area land broker and industry analyst, said Meritage isn’t the first major builder to leave the market and it likely won’t be the last. WCI abandoned an estimated $10 million investment in its Sabal Bay project in Naples, but smaller developers also are walking away from millions in deposits, McIntosh said.”
“‘The scope, impact and pervasiveness of this downturn continues to manifest itself in ugly ways,’ McIntosh said.”
“Anderson said Meritage officials have lost hope that the Southwest Florida market will turn around any time soon. ‘The market is bloated with inventory and there’s no demand,’ Anderson said.”
The Miami Herald. “When Lily Azel and her husband forked over nearly $750,000 for a condo at Blue, a swanky new tower on 36th Street just east of Biscayne Boulevard, they weren’t just sold a luxury home with turquoise-tinted windows and a gleaming stainless steel kitchen.”
“They were sold a vision of a fabulous new midtown Miami. But that doesn’t quite gel with what they see when they leave their home.”
“‘We knew there was some of that element,’ Azel said, referring to the squads of vagrants and panhandlers who populate the area near the condo. She moved to Blue last year from Weston. ‘But we were led to believe the whole area would be revamped into this great midtown.’”
“Peter Megler, a Realtor and vice president of the Blue’s board of directors, said the condo’s developers extolled the transformation expected for Edgewater when pitching to buyers.”
“‘I moved here from New York because I could feel the energy in this town,’ said Megler, whose condo cost $396,489. ‘But many of us don’t feel like we’re getting our money’s worth.’”
“‘I’m all about ‘we live in Florida.’ Everyone wants to live here,’ said Rotz, ‘But facts are facts. We’re over-inventoried and overpriced and until we fix that this is going to get worse.’”
“Reasons for the readjustment in the housing market are obvious: homes in many areas of the country became too pricey, affordability suffered and the home buying public lost confidence.”
But… its different here… or there or everywhere!
J6P is still waking up to the situation. He’s scared, but not ready to admit this debacle is the fault of over-lending and over-speculation.
Sigh… we don’t learn. Oh well. Florida alone is breaking many of the banks. Support the implode-o-meter!
Got popcorn?
Neil
And when CA gets rolling in 3-6 months… game over.
O.C., can you see…by the dawn’s early light…your house ain’t worth $870,000 no more…
From the O.C. to the Oh, F***
ROTFL
You hit a funny bone… That one is getting used!
Got popcorn?
Neil
If I could only get a fraction of the nitwits in San Jose to move to Florida I’d be a happy man. Come on Florida, time to step up to the plate and start advertising what a great place you are.
Florida SUCKS!
Yea thats why I plan to leave FL, its overpriced and has many problems. East Tennessee looks good
Just a couple of weeks ago, someone here — Neil? — was predicting that the Implode-O-Meter would hit 100 by August 1. It’s already at 96 today! I feel like I’m relaxing in the lobby of a ski lodge (never been in one, though), watching an avalanche start on the hill in the distance. Very eery, as I reach for another cup of coffee.
Alas, I cannot claim that prediction. Nor can I tell you who.
But 96 is *almost* there!
I like the avalanche analogy. But to add to it, you’re watching as you relax and wonder how many of the skiers who taunted you to go down that slope will get buried in said avalanche.
Oh… and I love skiing. But its been 18 years since I’ve ignored those “do not ski here” signs… Once was enough to learn my lesson.
Got popcorn?
Neil
There’s 19 new failures just since June 1st. Looks like we’re into a second wave, or (as some put it) another leg down.
Another item in today’s Palm Beach Post about the half billion buyout of the Briney Breezes trailer park now being questionable due to the imploding sub-prime mortgage-backed securities market… The paper millionaire trailer people aren’t going to see dime one anytime soon.
http://www.palmbeachpost.com/localnews/content/south/epaper/2007/07/07/s1a_BRINY_BREEZES_0707.html
Briny backer finds himself in middle of mortgage mess
By Jeff Ostrowski
Palm Beach Post Staff Writer
Saturday, July 07, 2007
BRINY BREEZES — John Devaney, the deep-pocketed, high-flying trader who’s lead financier for the $510 million purchase of Briny Breezes, is facing a financial squeeze after a series of bad bets on the subprime mortgage market.
Angry neighbors and skeptical regulators had been the biggest obstacle to a development team’s plans for an ambitious redevelopment at the oceanfront mobile home park. Now, though, some wonder whether Briny Breezes’ buyers will have to look elsewhere for financing.
Devaney’s company, Key Biscayne-based United Capital Markets Holdings, acknowledged this week that it has suffered “significant losses” on its risky subprime mortgage trades. The company has taken the unusual step of not allowing investors to cash out of four of its hedge funds.
United Capital spokesman Michael Gregory on Friday said there was no cause for concern. He said United Real Estate Ventures, the company investing in Briny Breezes, is separate from United Capital Markets, although both are owned by Devaney.
“It’s a totally different company,” Gregory said. “Briny Breezes and the asset manager have nothing to do with each other.”
While the company now is trying to distance the hedge fund from the Briny proposal, in the past the names have been used interchangeably.
Others, meanwhile, aren’t so optimistic about United Capital.
“There’s gonna be a concern, especially because it implies liquidity problems,” said Ken Thomas, a Miami banking analyst.
Devaney and United Capital are part of the group that hopes to buy Briny Breezes and replace its downscale mobile homes with upscale condos. The others are Ocean Land Investments of Boca Raton, Related Group of Coral Gables and Catalfumo Construction & Development of Palm Beach Gardens. None could be reached for comment Friday.
Devaney, 37, has drawn national attention as a swashbuckling trader. He boasts a Gulfstream jet, a collection of yachts and a Rolls-Royce.
Last year, he and his wife bought a $16.25 million home in Aspen, Colo., and he owns works by Renoir, Picasso and Chagall.
In January, two days after Briny Breezes residents voted to sell, Devaney put out a news release calling United Capital Markets underwriter of the project. The company “will set up working capital facilities and ultimately structure and distribute commercial mortgage-backed securities or set up a bank facility to finance the project’s construction costs,” the announcement said.
Briny Breezes Mayor Roger Bennett said he knows nothing about United Capital’s recent woes.
“I haven’t heard a peep,” he said Friday.
But United Capital’s problems have made noise in the financial media. The Wall Street Journal, Financial Times, Bloomberg News, Reuters and The New York Times all chronicled its losses this week.
“Over the past 10 days we have received an unusually high number of redemption requests, including a request from our largest investor that accounts for nearly one-quarter of our assets under management,” United Capital said this week in a statement.
United Capital went on to call the subprime markets “highly volatile.” As home sales plunge and interest rates rise, the subprime mortgage market has been roiled by rising delinquencies and foreclosures. The risky mortgages, made to borrowers with poor credit, are packaged into securities and sliced and diced into a variety of complex investments, which have plunged in price recently.
United Capital’s losses follow the near-collapse of two Bear Stearns hedge funds that also trade arcane mortgage securities.
“Bear Stearns and others have deep-pocketed parents,” Thomas said. “Who’s going to bail out United Capital?”
Briny Breezes isn’t United Real Estate Ventures’ only deal in Palm Beach County. Earlier this year, it was part of a group that paid $44.4 million for 150 acres along Atlantic Avenue west of Delray Beach.
Tom Evans, a former Delaware congressman and opponent of the Briny Breezes plan, said the redevelopment project faces a more immediate obstacle than financing - that of convincing state regulators to go along with the plans.
“I would think that regulatory approval would be difficult, especially in view of the overwhelming opposition to their proposal,” Evans said.
Who’s going to bail out United Capital? NOBODY! HA HA!
The breezes will remain briny for years to come, and it looks like there will be a massive fire sale in Aspen soon.
Bwaaa haa haa.
Oops, that came out loud, didn’t it.
I think the “fine art” market is about to see a deluge of paintings available. And cars… and homes… and…
Got popcorn?
Neil
Those trailor people at briny breezes have no brains. Actually they didn’t want to sell, the vote to finally sell for $510m won by a *slim* majority. They have no concept of money. I would be happy to sell for $250k at this point. That kind of money will buy me a huge house in east TN with plenty of money left over to invest in funds.
I wouldnt be supprised if that developer promising $510m backs out. This land arent worth more than $150m
Who are these suckers investing in the hedge funds? If they make money, management keeps a ridiculous 20% of the gains. If the fund losses money, you can’t even pull your investment out. It’s like investing with the Mafia. They’ll screw you going both directions
If anyone remembers, I (as well as others) predicted this over a year ago. The people in Biney should have (and maybe did) option out of those places immediately upon the paperwork being signed. 1M for a trailer? I will take 750K today, right now to buy me out of my trailer that is worth 1M dollars.
This was another “height of the boom” indicator. 1/2 a billion dollars for a trailer park? WTF? And yes, I do realize it’s on the water. Still totally unjustified.
“This was another “height of the boom” indicator. 1/2 a billion dollars for a trailer park? WTF? And yes, I do realize it’s on the water. Still totally unjustified.”
You got it Mike- right on the water and right in the middle of Hurricane Alley.
Michael — I remember well your prediction and you were spot on. It’s part of why Ben’s blog always seems to me like the real estate version of the old “Early Edition” TV series. My only “loss” has been the weight I’ve gained by sitting on my butt in front of this computer for so many more hours than I would have without the blog to follow.
“Over the past 10 days we have received an unusually high number of redemption requests, including a request from our largest investor that accounts for nearly one-quarter of our assets under management,” United Capital said this week in a statement.
That’s it. Game over. Cancel your round-the-world cruises and return to your trailer-park-by-the-sea lifestyle.
it’s hard to believe he’d say this, it looks like probably 30% of his capital was trying to pull out, at least that.
“In January, two days after Briny Breezes residents voted to sell, Devaney put out a news release calling United Capital Markets underwriter of the project. The company “will set up working capital facilities and ultimately structure and distribute commercial mortgage-backed securities or set up a bank facility to finance the project’s construction costs,” the announcement said”
good luck with that!
Wonder how many of those yachts are registered in safe-haven countries?
“They were misled about the original loan, and they get the shock of their lives when interest rates rise”
puh-leeeez. If they don’t read the contract, I guess they also do not read newspapers, that’s why they are still getting the “shock of their lives” - MSM has covered these situations a whole lot by now.
I have posted a comment like this before, but I feel I need to say it again. When you close on a home there is a ton of paper work to sign and I do not read everything I sign, however there are two documents that I read every word of: the Deed of Trust and the Note. If these folks had taken the 5 or ten minutes to just read the Note there would be no surprise down the road. However I think that with many of these people they did not care what the papers said because they knew that they could turn this house around a sell it. They probably saw one to many episode of Flip This House.
Just hire a lawyer. . .for $300-500 you can have an attorney read all the docs, explain them to you , make sure you aren’t getting shafted, etc.. .I have never bought a house without an attorney and don’t understand why people (especially the ones that apparently can’t read) don’t hire one.
If “How much will this cost me down the road and can I afford it?” is of no concern, and the question is not asked, I don’t see how a lawyer will help… unless he’s the altruistic type.
The FBs are complaining that the docs were wrong, they were lied to, or the docs were falsified, or it was supposed to be fixed 30 year when it was 2/28 IO Option ARM. An attorney would have prevented all of these types of issues.
Perhaps the real point is that they all knew exactly what they were doing but anticipated rising prices so didn’t care. . .now that the market has imploded they are looking for a way out that doesn’t make them look as stupid as the obviously are. . ..
and maybe some of them didn’t want to hear the truth from an attorney.. it’d spoil all the fun.. like having a probability expert at your elbow while placing all the hardways in Vegas.
The FB probably ‘listened’ to the mortgage broker when the loan terms were discussed, the same way that dogs ‘listen’ to you when you talk to them:
‘Blah blah blah, blah blah blah FIDO. Blah, blah blah, blah blah DINNER. Blah, blah blah…’
Ben,
In yesterday’s San Francisco Chronicle (paper edition), there was an article about a new financial product. The bank would take (say 10%) equity in a home’s value in excess of a threshold (say $1 million) in return for giving the home owner an amount (say $100,000) now. (This is in the Bay Area - values must be adjusted for other locales.)
The article worked out how such transactions would be used in a variety of situations (four, IIRC). Essentially, home owners are to sell “futures” on their homes. The bank counts on the fact that eventually the value of the home over the course of time far exceeds the threshold. The borrower is very enticed because they are typically unable to make their payments without such bridge financing. The spokesperson for the company went to great pains to call it an investment, not a loan.
Anyway, I thought all the HBB crowd would be interested since this product opens to possibility for the bubble to drag on for many more years than we may have otherwise expected.
I found an online link:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/07/06/BUGHQQRLUC1.DTL
Don’t have time to read the article, but are you saying that the bank is willing to buy an equity interest in the house without receiving any yield? That’s absolutely idiotic.
The bank is borrowing the money from someone, and has to pay interest on it. Is there are catch somewhere? If the owner justs sells the house below the threshold that bank gets nothing.
Or is the bank just going to get Wall Street to package it and sell it off to another group of fools? Such fools may be getting scarce very soon.
I think this little nugget is the key:
“Chrisman said he could picture a scenario where Rex would turn its equity-sharing agreements into securities and sell them to other investors, just as mortgages are now routinely packaged and sold to Wall Street.”
One of two things exists here: 1) either the players at REX are completely aware and plan on exiting their bets by selling them as securities (and making money on the transactions, like all the other investment banks) or 2) they are clueless …either way, whoever ends up holding the bag on this one is going to be screwed.
Read this late last night. The meat of the premise is in the final paragraphs of the article (the opener being an unrealistic teaser):
“Here are potential ways a Rex deal might turn out, all based on the same premise: A homeowner with a $750,000 house gets a $100,000 cash advance from Rex in exchange for 50 percent of the future change in her home’s value. In all cases, the homeowner would also pay third parties for real estate services such as appraisal, escrow fee and title insurance, although some of those would be rebated by Rex.
“Scenario 1: After five (or more) years, the homeowner sells the house for $900,000, a $150,000 increase in value. The homeowner pays Rex $75,000 (half of the appreciation) plus the original $100,000.
“Scenario 2: After five years, the house sells for $675,000; it has lost $75,000 in equity. Rex “owns” half of that, or a negative $37,500. The homeowner pays Rex $63,500 — the original amount minus Rex’s loss.
“Scenario 3: After five years, the home sells for $750,000. The homeowner pays Rex $100,000, its original investment; Rex has neither made nor lost money on the deal.
“Scenario 4: The homeowner decides to sell after just 11 months. The house sells for $770,000. Rex is paid the original $100,000 plus $10,000 (half of the $20,000 appreciation) plus an early exit fee of $25,000 (25 percent of Rex’s initial investment) for a total of $135,000. ”
This should be an interesting math exercise for those needing a soduku break.
That is a great deal because house prices are going down. Borrow $100k and only have to pay back part of it. I can see alot of people going for it and laughting all the way to the bank as those investors all lose their shirts.
3-6 months in California you say ?
More lenders taking homes
FORECLOSURE AUCTIONS MAY DRAW NO BIDDERS
http://www.mercurynews.com/business/ci_6320572?nclick_check=1
The Silver Creek Development isn’t that far from me, gated, golf course & exclusive for the bankrupt to be.
“‘I moved here from New York because I could feel the energy in this town,’ said Megler, whose condo cost $396,489. ‘But many of us don’t feel like we’re getting our money’s worth.’”
Your not!!…You should have gotten two condos for that price…Bah ha ha ha.
The energy from the explosion in the chamber of a pistol, causing a metal slug to travel at high speeds until Newton’s Laws work their magic? That energy?
Or was it the high-class hookers?
hmm.. bet 400 large on a feeling.. this guy’s got stones.
The public “lost confidence.”
No, the public lost access to crazy credit or they lost their bet that they could sell their overpriced house in NJ or IL before all their neighbors.
It’s the market, stupid!
Jeff Lazerson of Mortgage Grader said he’s hearing from a lot of Florida clients who are trying to get out of bad loans but aren’t always able to.”
“‘They were misled about the original loan, and they get the shock of their life’ when interest rates rise or a balloon payment comes due, he said. ‘Part of the problem is that subprime loans are almost non-existent because of the subprime meltdown’ with some big lenders in that category falling apart.”
In the South for a century it was the stated public policy to not educated poor whites and especially poor blacks. Education would give the people power and upset the position of the landowning class.
Even after desegregation, schooling in the South is still segregated, with the wealthy sending their children to boarding schools, often out of state or abroad, while the poor send their children to public school (truancy being often overlooked unless the child becomes a nuisance) or “christian” schools or camps (big on beatings, weak on any sort of learning).
The South was already ‘Brazilified’ at the end of the Civil War and continued to be so. It was more important for the landowners to keep their power vis a vis the masses of the poor than for the whole region to improve economically. Thus, no education, no distribution of land, no vote, no prospects.
Every day I meet hard-working people who have no understanding of finances. Every time they get a little money together they get taken to the cleaners by somebody. Time and again you will find that in Southern counties one or two families or individuals own 90% of the land.
I should add: the Yankee stereotype of the Southern white male as a lying cheat is more or less accurate. What the Yankee doesn’t realize is that he got so slick scamming his neighbors and friends first. Old Yankee didn’t stand a chance.
(Revolting) Old Yankee needs to go home. Please.
Gosh, are all those dumb hicks in the old South? Then how do you explain what’s happening in California, Arizona and Colorado?
Who said anything about “all” “dumb” or “hicks”?
There are fools everywhere.
“I should add: the Yankee stereotype of the Southern white male as a lying cheat is more or less accurate.”
and you know this for a fact because… ?
I think he needs to see a psychiatrist. He has some mental issues. I hope he doesn’t go around saying these things in person.
imagine the conversation around that dinner table.. so on and on we go for yet another generation..
I resent this idiotic stereotype. The South is not made up of illiterate, crooked hicks; it was fine till New Yorkers, and slobs from New Jersey, Pennsylvania, and Ohio decided to take it over. I’ve never met a real Southerner who was 1/10th as appalling as a standard Yankee. Having been born in Atlanta, a city which fifty years ago had more colleges and universities than almost any city in the North (with the possible exception of New York), and having my entire maternal line in New Orleans, I know something about the South. Bigoted, brainwashed Yankees who make these repulsive, arrogant statements are dealing with OTHER YANKEES who have moved to the South, or people isolated in the sticks, and believe me, rednecks are much worse up North than here (I’ve lived up there, too). Go to Miami, Naples, St. Petersburg, and Tampa, and you do not encounter Southerners for the most part; rather, you encounter trashy Northerners who have plopped here in order to be big fat fish in little ponds.
This theme has come up time and again on Ben’s blog, and it’s becoming obnoxious in the extreme.
The SF Bay area has the highest rates of pay option ARMs. The most ridiculously high prices in the country are in California. Most of the Florida flippers are from New York and California. They were the ones who drove the prices up and they are the suckers who are holding the bag. Most of the Florida natives knew what the RE was worth because they had lived there for decades.
No distribution of land, no vote? Did someone just transport you from the 1930’s and drop you here? Most of the land in the South is owned by families who have lived there for generations. Most of these families are poor or middle class but they own the land outright. As far as voting, I’m not white, yet I’ve never once had any trouble voting. Reading your post, a person would think that swarms of KKK ride around on horses at night lynching minorities. If you want to see segregated schools, go to any city in the north or west. Do you think all those white kids in LA go to public schools? Do you think those rich white kids in SF or NYC go to public schools? Get with the times. Your stereotypes are plain silly
n-a-g — don’t know if you’re into the gator juice this afternoon, but c’mon. Opinions are just fine, but misrepresentations purported to be facts are not. I’ve been a Floridian over 60 years and know many rich ones. While they tend to send their children to expensive colleges, by and large many send their children to public schools through high school — precisely because they are true Southerners and sports, especially football, and community activities are a vital part of their social lives. I don’t recall any at all sending their children to boarding school, except one who had a severe learning disability and had to go to a special school for that. If you were able to get your hands on Groton’s or P-Exeter’s enrollment statistics, for example, I venture you will find a far higher percentage of Yankees than Southerners enrolled there.
At any rate, I’m sure many of us would appreciate knowing the source material for what you presented here as facts.
not a gator
are you f***ing kidding?
my husband, middle class from ole south families +200years in the US, went to public school in rural Mississippi. He got a Phd in Physics from a very good university paid by scholarships, otherwise they couldn’t have afford that university. No need to go to a boarding school or abroad, just to have parents who value education. He also went to christian camps…in Jamaica helping to build public facilities in the mountains. Gimme a break…you might only know Florida (btw Florida has not been part of the “South” for quite some time)
“‘I’m all about ‘we live in Florida.’ Everyone wants to live here,’ said Rotz, ‘But facts are facts. We’re over-inventoried and overpriced and until we fix that this is going to get worse.’”
A realtor with a brief moment of clarity. How original.
Having left SFL recently I can tell you that the state is up for a recession in the near future..as I have said before there was a reason Florida was “cheap” for many years with real estate..simply it has never been a “high” wage state. So up until the boom, homes were in line with salaries where Tourism and Real Estate related industries kept the economy going..now.. with both industries suffering terribly, a middle class exodus, and a lack of affordable housing…it is hard to ignore the spiral downward that the state is taking..it is a shame that those in political power are choosing to ignore the soon to be “earthquake” of recession that will knocking on the door of residents and business owners alike…
“A realtor with a brief moment of clarity. How original.”
how much research do you think it took for the realtor to come up with thought? is over-inventoried even a word? sounds nice and cute- like downsizing.
Everyone does NOT want to live in FL. I am tired of hurricanes, crime, heat, traffic, overpriced houses, taxes, etc.
“‘Households and investors moved to the sidelines with many waiting to get back into the real estate market when property prices retreat to more suitable levels,’ wrote Paul C. Bishop, Ph.D. and Harika Bickicioglu, both housing analysts.”
I’m going to go ahead and bet that the number of future homebuyers, including investors, pales in comparison to what we saw over the course of the last 7 years. Most infestors are taking a bath. Same with spec home builders.
Many who were in the last market won’t be in the next one. If sub prime loans disappear and buyers have bad credit (investors included) then where are all the buyers going to come from to buy up this horrendous amount of housing inventory. I can see lots and lots of deteriorating vacant houses for years and years to come.
I bet those sellers will either rent the houses or just walk away(foreclosure) rather than holding the bag and lose more money on taxes, insurance, interest.
“‘I’m all about ‘we live in Florida.’ Everyone wants to live here,’ said Rotz, ‘But facts are facts. We’re over-inventoried and overpriced and until we fix that this is going to get worse.’”
If facts are facts, then if everyone wants to live here with our high prices, high taxes, and low paying jobs, then why is everyone moving out of FL? I’d also like to add that realtors and mortgage brokers are now having trouble paying their bills, including their mortgages and investment properties.
You are right about that. Too many people right now in that industry who had not only advised people to mortgage themselves up to the top, but did it themselves, are feeling the pressure…those that did not live by the great equity home machine will make it through the storm, the others well…we are starting to see where they are headed…
I am new to blogging. You all use abbreviations that I do not understand.
Can I get some help on this? I would like to contribute, however I am not qualified at this stage to adequately comment. This, I will continue to read your and other info on Housing and credit/lending bubble blogs.
Lostcontrol (former safety consultant for employed by major line comm ercial insurance companies and now an independent commercial insurance broker in So. CA.
Lost,
list the abbreviations that confuse you, and I’m sure folks will help you out.
for general internet abbreviations this page should cover most.
http://en.wikipedia.org/wiki/Internet_talk_abbreviations
For housing bubble specific abbreviations, at one time i was going to suggest that Ben (this blog’s owner) create an abbreviations page for reference purposes.. FB and GF.. CDO and MBS.. some of them are financial.. none are intuitive and new ones pop up often.. and it takes a while to stumble across and connect words to the letters.
Newer readers are at a distinct disadvantage.
how about it Ben ..
for all their smarts, it seems like the winner and losers will be determined by who thought it would get worse and who thought it’d get better and bought the dips. amazing isn’t it? success or failure on essentially answering one question, it’ll get worse or better? this is straight out of “fooled by randomness.” the buy the dips guys do great until it’s not a dip anymore but a bust.
“Some of the investors who bought CDOs certainly took on more risk than they thought,” says John Weicher, a former assistant secretary of housing now at the Hudson Institute. But Devaney, who told a crowd of investors that the riskiest mortgage bonds looked “awful” before the crash, says he thinks he’ll be buying. “I don’t believe the carnage and fallout will be as bad as people think,” he says.
We’re Number 1, Hey! We’re Number 1 !
Now You all know where I came up with my Handle ‘ marionsucks’ . i feel so Vindicated . Moved back here over 2 years ago and I the first 2 days I was here I called this RE mess here and told everyone this was going to be the Worst RE Disaster this County has ever seen.
All the Geniuses said I. The Media has been Holding back the Real Truth, and still are , but Finally they can’t Deny it’s Not Good.
Just Posted Today. I fell Giddy!
Here is some more of the Article Ben Posted from ‘The Ocala Star Banner’
Ocala/Marion County was ranked worst by the Florida Association of Realtors in home sales for the month of May.
According to their monthly report, the Ocala metropolitan area is down 50 percent in home sales compared to May 2006.
People were flipping property. Prices rocketed. Homes that sold for $85,000 in 2003 were selling for $130,000 in 2004. Quarter-acre lots in Marion Oaks and Silver Springs Shores were no longer $6,000 but $50,000.
The hectic market was a dream for Realtors and sellers - until the investors left town and locals were left picking up the pieces.
“I’ve seen the highs and the lows and the unreal in 2004-2005 and the complete crash right now,” said 17-year Realtor Vic Rotz of Remax Premier Realty. “It’s really taking a turn for the worst the past three months.”
” Out of State Flippers Ruined my Town. At least it fells Good to Be Right”
We’re Number 1 !
Sorry for the Mis-spellings in the Previous Post. I had to run out the door real quick and I was in a hurry. I’m not the Fastest typist.
It’s a real sham, too, IMO. 20-30 years ago, Marion was a beautiful, peaceful county. I always loved the drive to Tallahassee on 27, cutting off 441 or later I-75 at Ocala. That reminded me, farther out, of Chiefland (and Perry) re not-a-gator’s post today.
I don’t know what exactly ruined the area, but in my personal opinion, The Villages was a pretty good start (or finish).
sham = shame. Spell-checker didn’t catch that sucker.
Have you been up 484 lately, Chip? I take the back roads way into the National forest sometimes, and there are constant subdivisions out in the middle of nowhere. There are at least 4 new stoplights along a 10 mile stretch between Lake Weir and Belleview.
On a different note, I flew my airplane over central FL today and was stunned at the constant subdivisions up in the Inverness/Brooksville/Dunnellon area. I thought to myself in another 10 years FL is going to be one big subdivision.
Chiefland is a nice town, and I will address N-A-Gs comments later after getting a milkshake.
Moman — no, haven’t been there lately. Wives tend to work like stuck anchors. I love the forest and the hunting and the quiet and the freedom and the apparent absence of Yankees. I’ll be gone before it is.
Moman — are you a hunter?
Yes sir, actually it’s more like acting to be a hunter, haven’t seen a shootable deer in the woods in the past 5 years. You?
Haven’t seen much mention of Tallahassee. What’s the general consensous of the real estate market up there?
My ex bought a 1/3 acre lot for $2500 in Ocala in 2004. I looked to buy an acre nearby after the split in 2006 only to find the price had accelerated to around $30,000. Complete udder mania.
Let me clarify these lots are near the National forest and are intended to house a camper unit for deer hunting/country relaxation.
Thanks, spike66. What does J6p? mean?. ABS, CLO and CDO I figured out by following your references to your original sources. I have got to say you all are histerical in your comments. Have you ever thought of taking this show off broadway? I love this blog, however, after reading it over to extensive of a time, it can be bitting and very depressing. By the way what do you all think about “Dark Ages America” by Morris Berman. It sounds like you have either not read it or read it and in both cases agree with his argument. Please, I am not trying to start an argument. Just making a comment.
Lostcontrol
joe six pack - the stereotypical . . . whatever
Glad that you are here, lostcontrol.
A majority of people on here are not negative or wishing for something bad to happen to the economy. I don’t care to read about doom-and-gloom scenarios. All I want is for two things:
1. Common acknowledgement from J6P that housing is a bubble, and the end of spouting all the NAR headlines.
2. As an economist, I want to see high value inputs go to high value outputs. Housing is a low value output, and billions (maybe trillions?) of dollars have been put into products for which there was no real demand, and a bunch of brainwashed buyers who thought that exponential rising of housing prices was good for everyone (see #1 above).
I rent - only because I choose not to spend 50% of my take home pay on a house.
My intent is not to cause an argument, but as I see it, and from my own personal experience, in spite of the fact that I constantly listened to MSM, I was fooled. Look it, I am not a total idiot, though my EX may disagree, however I did attend UCLA and graduate from UC Berkeley.
The problem is, in-spite of the fact that I try to be informed (please, I am not part of elite based on inclose or family background) the MSM has done an exellent job in keeping the public lulled in the belief that everything is “great”. This fog has to be penerated or else reality will smack them in the face with a Tuna1
That is just my opinion! I will not attempt as a “newbe” to provide this blog with evidence of the collapse of the housing bubble. In my humble opinion, its obvious. But what the H#@l do I know. I am one of the “new kids on the block”.
I must say, I love your scathing humor. I thought that I was the only one that was crazy.
God Speed, wherever that may be,
“Beam me up, Scotty”
lostcontrol
The media can’t fool people. It’s just that people do not think enough for themselves. J6P and I have the same information available to us - I choose to look at more than one slant to this housing bubble. Add a little common sense, and the true picture comes in clear.
joe6pack = equals typical American. Just goes to their job, goes up, pops open a can of beer, and vegs in front of the TV in the evening. Doesn’t know nuttin’ about high finance and believe the bull$hit the realtors and other ‘news’ agencies feed them that they should run out and buy an overpriced Mc$hitbox with some sort of suicide financing.
See my replies above, I have some good points. I am shaking my head at the insanity in land prices. Seems like land rose much faster than house prices. Did land prices rise in other states like Tennessee? I hope prices drop alot so I can get 10 acres on the cheap along with a house on it.