No One’s Building, No One’s Buying In Florida
The Miami New Times reports from Florida. “Crossing the Lehman Causeway into Sunny Isles Beach, you might wonder if you’ve been sucked into an interstate wormhole in the space-time continuum and landed in downtown Miami. Construction cranes perch atop a skyline that, though dominated by high-rises, still strains upward. Lucy Collins purchased her apartment at the low-slung Kings Point Imperial, in late 2005 when the market was hot. ‘You can’t go wrong buying this property,’ she remembers being told.”
“Thanks to an adjustable rate mortgage, she now pays almost twice what she used to spend on rent for a similar apartment, more than $2000 a month, and the bill is rising.”
“‘I’ve already borrowed $12,000 on my credit cards just to keep going,’ Collins says. She is even considering cashing in her IRA, as well as looking for a job at Home Depot. ‘Instead of working less as I get older, I’m having to work more. I want out. I’m thinking I would just leave the state.’”
The Sun Sentinel. “Marge Dwyer was in ‘total shock’ when she heard she wouldn’t be getting the money to pay off her mortgages. The Maryland native, who lives here seven months out of the year, was to receive more than $1 million for her two mobile homes in the (Briny Breezes) seaside community.”
“‘It’s horrible,’ she said. ‘I still can’t believe it’s happening.’”
“The $510 million deal fell through Monday after the town refused to give Ocean Land an extension on an Aug. 10 deadline and the developer pulled out of the deal. Between her two units, Dwyer would have made about $1.6 million on the sale.”
“She planned to pay off about $1 million she owed on three properties in Delaware, three in Maryland and a condo in Delray Beach. ‘I’m mortgaged up to my eyeballs,’ Dwyer said. ‘I’m going to have to start selling [my properties] off just to survive.’”
The Palm Beach Post. “The $510 million Briny Breezes deal, which fell apart yesterday, always had more than its share of surreal touches. For starters, there was the incongruity of a trailer park nestled amid some of the priciest oceanfront land in the world. Then there was the idea of deep-pocketed developers securing a $510 million deal for an entire town with nothing more than a $500,000 deposit.”
“Silver-haired Briny residents visiting the Post’s editorial board recently and swearing up and down that they didn’t want to sell, but they voted to sell anyway. One even broke down in tears, in between trying to figure out how to make her BlackBerry stop ringing.”
“Looking to scoop up some prime Miami Beach real estate? This could be your year. Nine properties valued at a million dollars or more have gone into foreclosure on the Beach since the beginning of 2007.”
“According to research, these include a prime, vacant 10,500 square foot waterfront lot on Hibiscus Island ($3 million) as well as several condos that haven’t even been completed.”
The Herald Tribune. “Foreclosure filings during the first half of 2007 totaled 2,303 in Sarasota County, up 198 percent from the same period last year. Manatee and Charlotte counties also posted increases of more than 100 percent for the time frame, RealtyTrac reported.”
The News Journal. “In a sign that deterioration of the Volusia-Flagler area housing market may be accelerating, foreclosure activity on local homes soared in the first half of the year at rates far exceeding the troubling increases nationally and statewide.”
“The number of foreclosure-related filings shot up 156 percent in Volusia County from the first six months last year to 2,623 in the first half this year, according to Realtytrac. In much less populous Flagler County, the total number of filings was smaller, 600 in the first half this year, but represented a staggering 408 percent increase over the year-earlier pace, the company said.”
The News Press. “Housing permits in Cape Coral fell to their lowest level in more than a decade in July, according to a city report released Wednesday. Meanwhile, activity in unincorporated Lee County slowed drastically following a surge in June caused by a deadline to avoid the tripling of road impact fees.”
“In Cape Coral, only 45 permits were pulled for single-family homes last month, a far cry from the 858 recorded in March 2006 at the height of Southwest Florida’s real estate boom.”
From Florida Today. “The pain in the local housing market isn’t limited to Realtors and people trying to sell their homes. Construction workers also are getting their share. Brevard County has lost a big chunk of its construction jobs during the past year, as a result of the slumping housing sector.”
“‘We recently merged our Space Coast and Palm Bay divisions in response to reduced demand in the current housing market,’ said David Barin, president of Mercedes’ Space Coast Division. ‘Like other builders, we have had to lay off and transfer some employees as the industry searches for equilibrium.’”
“Martin Carrizales was laid off with other workers last week from his job as a roof designer after 11 years. ‘They just told us one day, and we were gone,’ said Carrizales. ‘They said, ‘It’s just the market. No one’s building, no one’s buying.’”
“The number of mortgage foreclosures in Brevard has continued to rise, with 385 foreclosure filings in June, the most for any month in at least 51/2 years, according to the Brevard County Clerk of Courts. During the first half of 2007, there were 1,975 mortgage foreclosures filed with the clerk’s office, compared with 1,144 for all of 2005 and 1,868 for all of 2006.”
“Alan Hunter, a housing market analyst with Metrostudy in West Palm Beach, expects housing prices in South Florida to continue to fall for another year, in some places as much as an additional 20 to 30 percent, stemming from artificially inflated prices and an excess of housing construction. ‘Prices just got way out of line with what people could afford,’ Hunter said.”
“The median single-family home resale price in Brevard fell from a peak of $248,700 in August 2005 to $198,000 in June, a 20 percent drop.”
The Times Union. “The St. Joe Co. reported an operating loss for the second quarter Tuesday, as the slumping housing market reduced demand for the company’s residential real estate projects. St. Joe reported a loss from continuing operations of $5.3 million, or 7 cents a share.”
“‘It was a difficult quarter, reflecting the current market,’ said CEO Peter Rummell. ‘It’s a tough time for the housing industry nationally, and it’s tough in Florida,’ he said.”
“While St. Joe officials expressed optimism about the future, Wachovia Securities analyst Christopher Haley expressed caution for the short term in a research note Tuesday. ‘We note that such optimism has been offered by management in the recent past, only to have the existing weak market conditions persist longer than expected,’ Haley said.”
From Florida Trend. “Some owners are paying the price for homes built in a hurry during the boom years. In addition to contractor abandonment cases, Florida is seeing a rash of construction defect and delay cases as the housing boom deflates, according to attorneys around the state.”
“‘Because so much was going up so quickly, you had subcontractors on the job who didn’t have experience building a 30- or 40-story high-rise on the ocean,’ says Stacy Bercun Bohm, a construction attorney in Fort Lauderdale. ‘You had subcontractors here from other parts of the country getting in on the boom, but they had no experience with environmental factors such as salt air and the humidity here.’”
“Some cases may represent desperate attempts by condo investors to get out of preconstruction contracts by claiming substandard work. But many involve contractors who cut corners as costs boomed and the housing market began to wane.”
“Orlando home inspector Richard Tan says the situation is the same inland. He tells story after story of substandard work by both custom luxury builders and cookie-cutter home building corporations. ‘My reports used to be 20 to 30 pages long, but lately they’ve been hitting 50 to 60 pages,’ he says. ‘And these are brand-spanking-new homes.’”
The Orlando Sentinel. “Central Florida’s only publicly held financial institution posted its first loss in more than a decade Tuesday, falling into a multimillion-dollar hole triggered by real-estate failures in Florida’s slumping housing market.”
“It was the latest hit Federal Trust has taken during the past year as fallout from the housing slump has taken its toll on the banking industry. The thrift’s profit fell more than 65 percent in the first quarter after a 23 percent decline in 2006. It was the 17th-largest bank in the region in 2006.”
“‘Federal Trust and a lot of other smaller banks are probably suffering more than bigger banks right now,’ said Rod Jones, an Orlando banking lawyer and a former state regulator. ‘But even the big players such as Bank of America and Wachovia are being hit hard. And we may not have seen the bottom of that yet either.’”
“Florida’s economy, and thus the state government’s finances, is in worse shape than predicted and will take a longer time to turn around, state economists revealed Wednesday. The state is not in a recession, economists said, but only because that’s a term they reserve for describing national fiscal woes.”
“Amy Baker, coordinator of the Florida Legislature’s Bureau of Economic and Demographic Research, said of the state’s economy: ‘By almost any way you calculate it, if you looked at the housing market and all its related pieces, the finance piece, the Realtor piece, the building piece and the sales piece, by pretty much any measure, that is akin to a recession. It’s just we don’t define it that way.’”
“The economists blamed Florida’s troubled real-estate market, saying sales of existing homes and housing starts are down, which keeps the overall economy stagnant.”
“Worse, they said, there is no sign of a recovery before 2009. ‘While Florida is not in a recession, it looks very much like a recession,’ state economist Frank Williams said. ‘We’re not expecting to see a big comeback like you would coming out of a recession.’”
“‘There won’t be a day, there won’t be a ‘Eureka’ moment but more of a period of time,’ said economist Amy Baker. ‘This will be a fairly long adjustment.’”
The Tallahassee Democrat. “Baker said Florida’s housing boom was bigger and longer-running than most states enjoyed. Therefore, she said, the correction has been a longer, steeper fall that looks likely to last a while.”
“‘It was a windfall or a boom, we were in a bubble,’ she said after the conference meeting, ’so you’re seeing the growth rates in a bubble that were not sustainable, ever. This was inevitable.’”
The St Petersburg Times. “Throughout the past couple of years, Tampa was tops at producing happy workers. How the mighty have fallen. The Hudson Employment Index, which tracks worker confidence in 11 major cities, ranked Tampa second to last in its July measurements.”
“What’s turned us into such pessimists? ‘It’s got to be something related to the whole real estate market,’ says Fritz Eichelberger, who runs (a) local techie networking group. ‘Companies here don’t want to pay any money,’ said David Rudd, a business development specialist at Manpower in Tampa, ‘and the government wants to charge more money to live here’ in property taxes.”
The Naples News. “There’s no arguing that this is a tough time to be in the real estate business. Inventory is up, sales are down and agents are finding themselves with way more free time than they’d like to have. But some say there is good news to be had if you look closely enough.”
“‘People have to understand that if they bought for $150,000 several years ago and had it listed for $450,000, and now in order to sell they have to sell for $350,000, they did not lose $100,000,’ said Realtor Joe Pavich Sr in Estero.”
“Of course, making a profit under that scenario assumes the seller didn’t use his home equity ‘like a debit card’ a few years ago when interest rates were at historic lows and property values were at historic highs, he added.”
“And Realtors say buyers are out there, they’re just hovering until they feel confident the market has reached bottom.”
“‘My impression is there’s a huge pent-up market of buyers out there, but they’re all waiting for the media to say something positive before they jump in,’ said Wes Brodersen, broker in Bonita Springs.”
“Brodersen believes much of the blame for the current market belongs on the shoulders of the media. ‘I’m beginning to believe the media actually has an agenda with this,’ he said. ‘The market we’re in now started two years ago, but I’ve been reading about it for three years. Can you say self-fulfilling prophecy?’”
“‘People have to understand that if they bought for $150,000 several years ago and had it listed for $450,000, and now in order to sell they have to sell for $350,000, they did not lose $100,000,’ said Realtor Joe Pavich Sr in Estero.”
This easy math seems very hard for many sellers to grasp.
But that’s the beauty of the free market - it will provide them with a free education.
Experience keeps a dear school, but fools will learn in no other.
–Benjamin Franklin–
I heard this a lot during the dot com bust. I would tell my friends they lost the actual amount they had invested.
When the end up selling it for even less than $350,000 next year I would have to agree they *did* lose money.
It’s a $100,000 loss if they refinanced the home at $350,000 and took out all the equity to burn on vacations, cars, and a new boat.
No, they did not sell the home for less than what they paid- no loss.
And, while taking out money and spending it frivolously may be a sign of stupidity, it does not amount to a loss- I mean, think of all those memories that they wouldn’t exchange for anything.
I was being sarcastic. It’s one of the services we offer.
Tom….you need to get SERIOUS!
Your right . People who have equity are not in a loss position . The fact remains that if they want to sell their house and move up ,they are also going to be paying a cheaper price for that move up house .
Just told someone today..if you want to sell your home in Florida right now..take your mortgage + 20% downpayment for your new home + a little extra for closing and new items(incidentals) in new home and then list it for that price..even if you are way below the “market” of the sellers around you.. it will sell..then move on with your life…If there was no boom that would be what you would be aiming for in reality..
You mean the 3 trips to nowhere, the rv, boat and 150″ plasma screen isn’t free?
test
In Naples, in a few years they will be lucky to get $200,000. The area was 90% over priced at the peak according to Money magazine.
oh, that is just silly talk!
Thx, Naples Realtors Association
“Of course, making a profit under that scenario assumes the seller didn’t use his home equity ‘like a debit card’ a few years ago when interest rates were at historic lows and property values were at historic highs, he added.”
Wall Street and the Fed seem to have a disconnect to the housing ATM. Without that boost from the last 5 years the economy would of been toast.
150 to 450…ha….to 350 HA!!! Reality…is such a bitch when they sell for 190 maybe…
Lost opportunity of $100,000 but not the actual loss itself.
unless they heloc’d the bejesus out of the $150,000 house, then maybe they are going to lose $100,000….
“And Realtors say buyers are out there, they’re just hovering until they feel confident the market has reached bottom.”
They are still not getting it.
No, we are not waiting for confidence that the market has reached bottom. We are waiting for the prices to be affordable.
If the bottom is still overpriced. We still won’t buy. Most of us can’t.
i am very late coming to the blog, but people need to stop blaming just the media. can we all say, GREED!
It’s amazing to me that some areas which have large increases in recent years continue to rise. All the core Silicon Valley towns, such as those around Stanford - Palo Alto, Menlo Park, Atherton, and those around the financial core in Manhattan, still have price increases.
Are there enough people with genuinely high incomes buying in these areas or are they just taking a longer time to reach their peaks?
Silicon Valley was awash with stock option millionaires a few years back. These days those of us remaining in the software industry pretty much do OK, but have to earn our money the old fashion way. I seriously looked at moving up there in 2000 with $100+ Hr contract offers being thrown my way, but after looking at the cost of living, balked and stayed in San Diego. Of course on my paltry salary, we cannot afford to buy anything yet in SD, but rents are still reasonable, so we just sit it out and watch with fascination while the hard math does it’s work.
This is in the early stages - housing cycles take years to play out. If markets such as Manhattan, Silicon Valley, Los Angeles coastal communities, etc. get through the next few years without experiencing rising inventories and falling prices I would be very surprised.
With inflation as high as it is, if it really takes years the drop may not happen. Probably just flat in these areas for the next 5 yrs.
Most people in these areas are just going to have to wait for the math to improve through increased wages unfortunately. I don’t see prices coming down much more in San Diego, for example, unless there is a huge spike in interest rates. If there was a huge spike in interest rates, that of course would mean high inflation, thus housing would still hold up.
Price will not only come down but interest rates will remain stagnant because the Federal Reserve has no choice to report low inflation to keep the COLA under control. You see the cause of this bubble was oversight (which we had none) and people bought what they could not afford and buildersw thought they could build forever. PRICES will adjust down to where normal wages and salaries can qualify for a loan. What goes up comes DOWN!
I have been asking myself the same question. I track some of the towns around SV, and inventory in the pricier areas continues to stay low, even as it has been climbing rapidly in nearby areas (the East Bay, for example).
My spidey sense tells me that PA, Menlo, etc. certainly will not be immune to price reductions, and that supply will outpace demand before too long, especially if the local and national economies continue to wobble. In the meantime, however, the waiting is the hard part. It was awfully disheartening to watch a townhouse around the corner from our (rental) condo come on the market recently at $1.8M and sell within a couple of weeks.
I suspect that very few people actually have the means to buy these houses without… ahem… questionable loans, but where is that flood of for-sale signs, now that the end of the buying season approaches? Will it arrive next year?
“……but where is that flood of for-sale signs, now that the end of the buying season approaches? Will it arrive next year?”
My prediction, no. My advice - if you really want to own in that area, buy now. If you think prices there are high now, you ain’t seen nothing yet. I can’t even fathom what the avg or median home price will be there in 20 yrs. The bay area will more than likely in our lifetimes always be ridiculously expensive.
Troll alert! Nice try though.
You must be smoking something. If that were to be true, where do you think your ancillary service workers are going to live? You’re tax basis would have to rise dramatically just to pay for safety members (fire and police) and city workers. Business will move elsewhere too. But no, you go ahead and buy now and tell me just what a financial genius you were a few years down the road.
Heck no, I’m not buying there. No friggin way, are you crazy? I said, if you really want to own there, may as well do it now - just my opinion based on facts that I’m seeing - I certainly may be wrong, but if I’m wrong I won’t be for long.
Fact: inflation is high right now
Fact: housing is an inflation hedge
I do not live in the Bay Area nor do I want to.
Housing is an inflation hedge only if you 1) make payments and 2) believe that inflation is going up big time.
I take the opposite side - we are on the verge of massive deflation. Everything (except oil) in this country is overproduced. There are 3-5 million gas guzzling cars about to hit the market along with 5-6 million extra homes already built. The next selling point is going to be dirt cheap McMansion comes with free nearly new F150.
“Brodersen believes much of the blame for the current market belongs on the shoulders of the media.”
What a bunch of bull.
The blame is on the media and not on the fence sitters realizing that rents are far cheaper than buying, and while income levels have increased single digit per year, the real estate prices doubled?
Give me a break! That guy is in the middle of the deep Nile river!
It’s funny how when things go up, its “FUNDAMENTALs” and when they drop, it’s the media?
It’s “FUNDAMENTALS” that are causing this crash to happen. This bubble/ponzi scheme is collapsing under it’s own weight.
The list of factors that drove the market up is exactly the same as the list of factors currently driving the market down. Only the sign has changed.
I’ve said this many times. If over the last several years housing has kept the economy afloat, it’s going to bring it down now. You can’t have it both ways.
Media to GFs, oh, I mean home buyers…..”Boo !”
The housing bubble was caused by a lot of factors ,but the media was sleeping on the job by not challenging the bubble, and often times the media was a cheerleader for the housing bubble. The biggest factor causing the run-up of real estate was the easy lending low down loans to unqualified borrowers and speculators that created a unstable fake short term unstable demand .The media failed to question the affordability issues and the grounds for the inflated property or the departure from prudent past lending standards . We have to look to who was footing the bill in advertising that might cause the media to look at issues in a positive or cheerleading light ,or fail to ask the right questions .
For that matter ,we have to look to why the appraisers failed in their duty ,or why the lenders agents and realtors failed in their duty to prevent fraud or put unqualified buyers into real estate . The answers have been given on this blog many times ,but suffice to say that it was a perfect storm of all normal check and balances going out the window based on greed and lack of oversite .
“‘My impression is there’s a huge pent-up market of buyers out there’ said Wes Brodersen, broker in Bonita Springs.”
No Wes. The speculators are gone for a decade, at least. The supply of home “owners” has been eviscerated by the reversal of the mortgage market. What buyers exist are the few, well qualified, people who either can afford to take an obvious risk or are just rich and really dumb. After that, you won’t find any buying demand until prices reflect rational affordibility….like a median around $180,000.
“Brodersen believes much of the blame for the current market belongs on the shoulders of the media. ‘I’m beginning to believe the media actually has an agenda with this,’
Wes. Take an economics course. Very simple; when supply grossly exceeds demand prices fall. That’s all you need to know.
I would agree with his assessment that there is a huge pent-up buyers market. At less than 1/2 the current prices for most of Florida and other bubble areas.
Are there a lot of people who would like to buy? Yes.
Can a lot of them buy? No
Are most of the rest holding up their noses at what they can buy? Yes.
Until price to rent gets back into whack… prices will drop quick.
Christmas 2007 is going to suck. 2008 is not going to be a jolly year. Not with the belt tightening coming.
Got popcorn?
Neil
Not with the belt tightening coming.
You’re already seein’ it in the tourism trade around New England.
People might be on the road, but they’re shackin’ up with friends or family, and stickin’ around the back-yard barbeque. Not good for the high end eatin’ biz or $200 per night B&B crowd.
Bahahahaha! That’s exactly was we did! The only thing we spent on was gas and that was insulting enough. $75.00 a tank.
Neil .. make it so!
My rent will be up for renewal June of next year. We will start looking again at the beginning of the year. If by this time next year the market is still unnafordable, we will be leaving Florida just like thousands of others are doing.
But I think things are going to get interesting. I’m looking to snap up a nice place on the Beach.
Geez I hate the “pent up demand” argument.
Wanting something you can’t afford doesn’t make it “pent-up demand”. Demand denotes a capability that doesn’t exist.
Cape Coral barely even existed 30 years ago. Check out this map for population growth in Fort Myers-Cape Coral:
http://www.censusscope.org/us/m2700/chart_popl.html
Unless you think this area, which is nothing but a series of bedroom communities, is going to continue to grow until it rivals Tampa and Miami metros, it is SO over here. This area has less charm and history than any other in Florida (and, I can hear it now, that’s saying something), and there’s not even easy access to the beaches.
A few years ago, I had a prospective client from Cape Coral. He was a real estate, and he took forever and ever to get started on our work together. (I suspected that his business wasn’t as robust as his bluster.) Finally, he decided against working with me. Reason: He admitted what I had suspected.
I have the feeling that he’s no longer in real estate.
Ft. Myers is a nice little place but definately not a place people flock to.
I did have the best pizza I ever had while vacationing there. And I have been in NYC.
Uhhh, Sorry Wes. I know you think 1,000 people a day are moving to Florida. There not. I would be willing to bet that 1,000 people a day are moving out of Florida based on school enrollment figures and Uhaul rates (both in and out of Florida).
Oh, indeed there might actually be 1000 people moving there per day.
There’s likely 2000 leaving, and the only one’s coming are fleeing a third-world country.
Chuck Ponzi
“What’s turned us into such pessimists? ‘It’s got to be something related to the whole real estate market,’ says Fritz Eichelberger, who runs (a) local techie networking group. ‘Companies here don’t want to pay any money,’ said David Rudd, a business development specialist at Manpower in Tampa, ‘and the government wants to charge more money to live here’ in property taxes.”
I know Fritz! his Techie Social Networking Group is HotSpaces.Net. I go to it often. He is right, companies don’t want to pay around here for what it costs to live. That is why you see people moving out of Florida and the Uhaul index so out of wack. To move to South Carolina from Tampa costs $1200, to move from South Carolina to Tampa costs $200. The people who made money, driving the Escalades, and living in the big houses were people who had jobs tied to the Real Estate industry in one way, shape, or form. Luckily, I have a good job and I can telecommute. Many others don’t have that luxury and are suffering. I feel for some of them, but not all them, because they did it to themselves by not saving for a rainey day and living within their means. It’s because of them that this happened in the first place. You reap what you sow.
You hit on a very important point in regard to Florida. Florida has always been cheap place to live ergo the huge growth in the past 50 years. Now it isn’t. See school enrollment numbers and the recent $1 billion dollar shortfall in tax receipts for state government. People who are not from Florida cannot imagine the how much Florida’s economy is based on rapid/rampant growth. It will be very interesting to see what is going to happen there in the next 5-10 years.
There is talk of raising sales taxes and eliminating all property taxes but I think that failed because of the tourist industry lobbying and people who don’t own. There is also talk of instituting a state income tax. If they do that the rush out of Florida will be on, as if it isn’t already.
They are stuck. The next major hurricane and this state is screwed. Property Insurance and Taxes will be more than the mortgage on the house. Why would you own?
In most of SFL tax and insurance is already more than the mortgage payment. I believe Florida is one major hurricane away from a tipping point. How many small and medium businesses can take so many hits from so many directions?
Saw an article here in Ohio for one of the insurance companies looking to add 600 agents around the state so they can compete with the other 18 or so big companies insuring here. They said Ohio is one of the cheapest states to insure and I believe them. We live in a $220k house and have full replacement coverage ($1000 deductible) and our yearly house insurance is $538. It’s obvious they are going to abandon the states that cost them and move to the states that don’t. Bottom line is the most important thing to these ins. companies and they’ll raise it by any way imaginable.
As well they should. The midwest has always been known for cheap insurance. Although I live in FL, I don’t feel sorry for those who can’t get insurance because companies will insure where it makes actuarial sense. Even the auto insurance is a ripoff here (changing in OCT lets hope!!). The real problem is the number of owners who should be renting, based on traditional financial equations.
“The median single-family home resale price in Brevard fell from a peak of $248,700 in August 2005 to $198,000 in June, a 20 percent drop.”
WOW! I can’t believe it
“The median single-family home resale price in Brevard fell from a peak of $248,700 in August 2005 to $198,000 in June, a 20 percent drop.”
According to what Jim Cramer says if a house value drops 20% it is better to walk away even if you are OK financialy. If more and more people take this advice and prices go down 30% and more…what is going to be - the lender’s bust?
http://www.youtube.com/watch?v=c7e9H4zTqk4
” . . . she recently refinanced all her holdings, leaving herself just enough money to live on until the Briny Breezes sale in 2009.”
Way to plan, Marge.
“She (had) planned to pay off about $1 million she owed on three properties in Delaware, three in Maryland and a condo in Delray Beach.” “I’m mortgaged up to my eyeballs,” Dwyer said.
Yikes.
Ouch… way to count the chickens before they hatch.
Real estate local when three states are going to see foreclosures based on one transaction falling through?
2008 will be interesting… Yikes is right…
Got popcorn?
Neil
Speaking of chicken-related metaphors, there’s also the old saw about putting all your eggs in one basket.
“She (had) planned to pay off about $1 million she owed on three properties in Delaware, three in Maryland and a condo in Delray Beach.”
Not true. This reckless dingbat (had) planned to use most of her $1.6 million proceeds to purchase even more property.
Got 10% down?
tcm_guy as usual, keepin it real
I think her eyeballs are way under water.
” ‘I’m mortgaged up to my eyeballs,’ Dwyer said.” Will somebody please help her!
I wonder how many Briny Breezes residents took the discounted “here’s your money right now” offer that was made to them last year, just after the deal was announced.
I asked that exact question a day or two ago.
Consensus response: very, very few.
He who is greedy is always in want.
Horace
What’s more, how many residents started spending before the deal was sealed? They are getting Stanlied in the Johnson’s.
A HBB’er looked into a few months ago… I think one person sold for mid-600’s within the last year.
To Lucy Collins who is using credit cards to pay her mortgages: “Wake up idiot! Walk away!” To Marge Dwyer who is in shock because she isn’t going to make an easy $1.6 million on 2 mobile homes: (Sorry. I would get banned off the blog for what I wanted to say - but it wasn’t nice.)
Geez, she has more homes than a monopoly board game!
Back off the gas lady, and sell some.
You want to take it all with you!
Lucy Collins purchased her apartment at the low-slung Kings Point Imperial, in late 2005 when the market was hot. ‘You can’t go wrong buying this property,’ she remembers being told.”
The writer has it wrong - that’s what Lucy was telling everyone in 2005.
[Lucy Collins] bought her unit in November 2005 — just after the market peaked — for $185,000. “Of course it was in its heyday,” Collins says, as her yellow-and-gray-flecked cockatiel Sunshine perches on her shoulder. She says she needs to sell for $270,000 to pay off the debt she has taken on. She held an open house this past Father’s Day. No one came.
She needs to sell it for 270K. But no buyers NEEDS to shell out that kind of money. And buyer is the king or queen, as the case may be.
She says she needs to sell for $270,000 to pay off the debt she has taken on. She held an open house this past Father’s Day. No one came.
Oh, Lucy, there’s your problem. All the buyers were at home with their families. Hold another open house when there isn’t a holiday, sporting event, weather, birthday, school event, and definitely not when the casinos are open. You’ll be fine.
Lucy just got her first lesson in MARKET based pricing vs. needs-based pricing. And an expensive one at that.
Experience is a dear teacher, but fools will learn at no other.
-Ben Franklin
[Lucy Collins] bought her unit in November 2005 — just after the market peaked — for $185,000. “Of course it was in its heyday,” Collins says, as her yellow-and-gray-flecked cockatiel Sunshine perches on her shoulder. She says she needs to sell for $270,000 to pay off the debt she has taken on. She held an open house this past Father’s Day. No one came.
She needs to sell it for 270K. But no buyer NEEDS to shell out that kind of money. And buyer is the king or queen, as the case may be.
“Marge Dwyer was in ‘total shock’ when she heard she wouldn’t be getting the money to pay off her mortgages. The Maryland native, who lives here seven months out of the year, was to receive more than $1 million for her two mobile homes in the (Briny Breezes) seaside community.”
“‘It’s horrible,’ she said. ‘I still can’t believe it’s happening.’”
A long, long time ago…
I can still remember
How that music used to make me smile.
And I knew if I had my chance
That I could make those people dance
And, maybe, they’d be happy for a while.
But february made me shiver
With every paper I’d deliver.
Bad news on the doorstep;
I couldn’t take one more step.
I can’t remember if I cried
When I read about his widowed bride,
But something touched me deep inside
The day the music died.
So bye-bye, Marge who swallowed the lie
Thought the deal would treat you real good
So you leveraged up high
You’re now in strife because the deal didn’t fly
Singin, Dwyer’s dream of wealth will now die
Dwyer’s dream of wealth will now die
That is outstanding!
D’oh! Marge!!!
“‘I’ve already borrowed $12,000 on my credit cards just to keep going,’ Collins says. She is even considering cashing in her IRA, as well as looking for a job at Home Depot….”
Walk away; protect the IRA.
No kidding. Another future real estate mogul gone astray. Too bad, so sad. WTF are these people thinking, leveraging themselves into purgatory? She might want to think about looking for a job not with Home Depot. Their business is already sliding and will only get worse. No need for workers if your stores are empty.
No, no, no! Do not take advice from the HBB!
Go ahead and cash out your IRA. When that is all gone, go ahead and borrow from a loanshark.
Get yourself good and flucked.
Only then will dingbats like your kind (possibly) learn anything from this!
Got 10% down?
“Marge Dwyer was in ‘total shock’ when she heard she wouldn’t be getting the money to pay off her mortgages. The Maryland native, who lives here seven months out of the year, was to receive more than $1 million for her two mobile homes in the (Briny Breezes) seaside community.”
“She planned to pay off about $1 million she owed on three properties in Delaware, three in Maryland and a condo in Delray Beach. ‘I’m mortgaged up to my eyeballs,’ Dwyer said. ‘I’m going to have to start selling [my properties] off just to survive.’”
Looks like marge was “Counting her chickens before they hatched”.
‘I’m going to have to start selling [my properties] off just to survive.’”
Sounds like the RE equivalent of a margin call.
All your homes are belong to us!
God forbid a greedy f@#king pig like Marge be forced to sell one of her NINE properties (6 houses + 1 condo + 2 mobile homes) just to “survive”. We should all consider ourselves fortunate not to be in such a terribly desperate position.
Why just the other day, I was contemplating selling my Ferrari in order to pay for my grandmother’s heart operation. Luckily, my HELOC saved the day. I cry into my caviar just thinking about how close I came to ruin, though.
Here is what blows my mind. New York City, heck the whole region, is full of small income properties such as apartment buildings, storefronts and shopping centers owned by local investors. They are usually handy with repairs, and spend lots of time on each of their properties.
But this person owns indivdual units in three states! When did that happen?
I wonder how much of this due to cheap airfares. Those fares are not sustainable — investors have lost money over the lifetime of the airline industry, labor has been beaten down to the point where it is as likely to be underpaid as overpaid, and fuel prices are up and not going down. I expect prices to rise substantially to the point where the industry if viable, and stay up.
It’s due to all the stupid get-rich-quick-on-RE seminars. They make their money upfront giving bad advise. I’m sure many of them further make money pumping up regions where they had previously purchased homes on the cheap to sell at inflated prices to their “investors”.
The one thing all these seminars had in common was they pushed out of state properties.
Our local real estate discussion page doesn’t get much action. Usually about 5 posts a week, if that. Instead of what we discuss here its mostly realtors recommending how the buying purchase works and landlord/rental discussions
Lately there have been quite a few out- of-state investors wondering how to buy apts and researching which groups they can hire to do maintenance and upkeep of the properties. (Apparently, according to this group, Syracuse has way too few of these apt maintenance companies and so are overwhelmed to the point of ineptitude) Back to my point, these posters appear to want to be a landlord w/o any of the messy work. Wonder how quickly those costs will eat them up.
“It’s due to all the stupid get-rich-quick-on-RE seminars. They make their money upfront giving bad advise. ”
And just when are we going to see our first law suits against them?
I hope we don’t. Those seminars don’t force people to attend, just like McDonalds doesn’t force you to eat quarter pounders.
Time for some personal accountability.
imo, it’s just dumb to buy stuff more than an hour or two away from “home”.. even if you make some money, the demands on your time are too much.. and the family often suffers too.
SeattleEric bought all over the country. I wonder how he is doing–he took his blog down.
housing bubble r’ us. ok a house up the street 890 sq ft is listing for $599,000 =$670 per sq ft.(expecting numerous offers) a year and a half ago we bought our house for $772,000 for 2100 sq ft.=$367 per sq ft. I’m not gloating as we will probably live here for another 8 years minimum, but this housing bubble or runup never ends here in Bay Area (I wish it would). Perhaps people just don’t mind being in debt for the rest of their lives or are not afraid of bankruptcy. Risky living in risky times.
Hey Melvin,
You are gloating.
Friends of mine bought a place in North Berkeley last December that was on the market for six months. Two prospective buyers couldn’t get their financing figured out and they got the place for more than $100K “off” the wishing price, right around where you got yours.
I have few doubts that 8 years is going to come sooner than you think, considering where your house will be priced at that time, relative to today’s price.
And that includes the benefit of “neglecting” inflation adjustments.
“Risky living in risky times.”
Plenty of ‘bareback lending’ in the Bay Area.
–
Florida is already in a recession (David Rosenberg of ML) and so are MI and few other states. Let us see if the contagion brings the US economy into recession this year.
Jas
FFR futures are implicitly pricing in a 100% probability of a drop in FFR to 5% (from current 5.25%) by Jan 08. Given BB’s insistence that the economy is humming along strongly, it seems some serious signs of weakening would need to appear between now and Jan 08 in order to justify a rate cut (like maybe more “volatility” in the headline U.S. stock market indexes, for instance).
“It’s just we don’t define it that way.’”
So that is what is going on….there are different definitions everyone is using????
“It’s just we don’t define it that way.’”
They didn’t define the housing bubble as a bubble either. Must use a different dictionary than the rest of us.
“She planned to pay off about $1 million she owed on three properties in Delaware, three in Maryland and a condo in Delray Beach. ‘I’m mortgaged up to my eyeballs,’ Dwyer said. ‘I’m going to have to start selling [my properties] off just to survive.’”
Poor dear. How will she cope with this tragedy?
As far as I am concerned, she can eat the grass to survive. With 9 properties she should have plenty.
Here’s a subject for the weekened: Has life improved for Joe Average in places like California and Florida over the past 20, 30 or 40 years (depending on how old you are)?
I know medical advances have improved life expectancy dramatically but what about life itself? I first came to the US as a merchant seaman in 1956. I loved it. I spent 3 months wages (the whole $36.00) on a leather jacket and levi jeans (James Dean was my hero in those days). EVERYONE wanted to come to America. Not just the third world nations which make up the bulk of todays immigrants, legal or illegal, but from the more advanced european countries. California (I never got to Florida) was paradise. Cheap to live, sun shine, laid back, wide open freeways, cheap housing, etc. Now it’s still has only one advantage left. Sun shine. California is expensive. No need to mention housing which is a joke. State taxes are high. Freeways congested, smog ridden, frenetric pace, people under pressure. I suspect that places like Nevada (the old Las Vegas was much better under the mafia than under the current greedy corporate America) and Arizona and, of course, Florida were much nicer than now where a American who had worked hard, saved, had a company pension plus retirement benefits if he worked from GM or Ford or IBM, etc, could live out his/her days comfortably and was able to afford even a small mobile home which didn’t cost $700,000.
I hope I’m not answering your question too early, Mike, but take my family as an object lesson in how California has changed. My parents arrived in LA from the frozen wasteland of Winnipeg in 1965. My dad was a resident at UCLA, making peanuts, and was able to purchase a house in Rustic Canyon (part of Pacific Palisades) for 40K. It has a creek in the backyard, and is within walking distance of both a fabulous park with free tennis courts and also the ocean. It’s paradise, it really is. Growing up, most of the neighbors were doctors, architects, teachers, lawyers, upper middle class, but not crazy wealthy (well, except for Jerry Buss, who lived across the street for a while). Flash forward to today (or 2 months ago when I left for Seattle), and there are four homes for sale on my old street, the cheapest listed at just under 4 million. The only people who move in now are extraordinarily wealthy. It’s still lovely and we’ve been lucky in that my mom has had some nice neighbors move in recently, but that type of change is ultimately crushing for a society I think. The city has always been stratified, but the housing bubble has only made it worse.
The other major issue I had with LA was the traffic. Growing up, I could zip to Westwood in fifteen minutes of so. Now the drive can be staggering. A buddy of mine left Santa Monica for Beverly Hills one afternoon recently; he called me two hours into his journey, having just reached Westwood. Besides the social and economic stratification mentioned above, there’s also a physical barrier to accessing the city. Before I left I couldn’t recall when the last time I attended a Dodger game. The time spent on the 10 and 110 made the journey untenable. Since being in Seattle (for all of two months), I’ve managed to get downtown a number of times and feel much, much more apart of the city (despite living near UW).
IMHO, overall, LA was a much more vibrant and interesting place to live years ago. I think a lot of it had to do with affordability, both for living and for opening businesses. When I met my wife 13 years ago she was a waitress and could still afford to rent a bungalow in Santa Monica. Not a bad life. Now you really do have to be wealthy to live on the westside. Before I left I stopped at the Brentwood mart with my little girl. She rode a pony a few times, entered the petting zoo, and I spent something like 18 bucks for the experience. Crazy.
Enough babbling. This is Ben’s blog, not mine.
Lionel…
I’d rather hear a tale like yours, than the standard real estate pablum we read all too often~
I was born and raised in the city of angles, and can relate to everything you’ve written…
It’s not too late to escape.
I’ve gone over the wire, and it’s better outside looking in, than vice versa…
“It’s paradise, it really is.”
‘Call someplace paradise, kiss it good-bye……’
The Eagles
“the frozen wasteland of Winnipeg”
Hey, it’s not frozen anymore!!
I grew up there and left in 1999. Winnipeg actually has beautiful summer weather and believe it or not has experienced it’s own housing bubble in the last number of years. My old property that I sold for 136,000 is now worth 275,000, shocking to say the least.
I loved your story especially the James Dean reference.
What popped into my head was that 1956 was an America with 1/3 less people and the bulk of those people were youthful not ready to retire. We were more homogenous than diverse, and were informed through the same 3 major networks and a few magnificent newspapers. We played pick up games in the street and knew all our neighbors on a first name basis, a lot of times those relationships remained for life.
I think we felt incredibly more unified in goals (sheeple if you’re a cynic) than we are today. Instead today we are competitive for what feels like declining resources….although I believe there’s plenty if we worked in unison. I don’t have less materially than the 70s (my youth) but outside of my family and friends of similar philosophy, the quality of life feels all wrong.
I echo this sentiment. The quality of life…we were once a nation unified by language, values, and even national goals. This babble of diversity, bilingualism, ethnic groups battling for privilege, and the general breakdown of reasonable levels of honesty in social, political and economic areas is beyond depressing.
America is being reduced from a nation of citizens to an economic platform for opportunists. The is the real death of the American dream.
I agree wholeheartedly, spike. I also think we have to band together with friends of like mind and work to do what we can to restore what we were, and even better. It IS possible. No one said it would be easy, but it IS possible. Just talking about it, as we are doing here, is a real start. I make a point, for example, of calling my local, state and national representatives from time to time. They are, after all, our employees and they should know, beyond a shadow of a doubt, what we do and don’t like. If I catch them doing something right, I call and acknowledge that, as well. It does happen, sometimes. Also, we can have an effect on our friends, neighbors and loved ones. This is perhaps the hardest part, but it is necessary. I always figure, if you end up losing a friend or two along the way because you pointed out something they were doing that was harmful to themselves and their neighbors, then they weren’t friends worth having. Yes, you have to be diplomatic about it, but anyone who thinks it is OK to let the US die out without at least objecting to the fact, is no friend of mine
I’m just saying, we DON’T have to let the American dream die. It might, but I’ll be darned if I at least won’t speak up. An acquaintance of mine once said they thought someone would kill me for being outspoken. Perhaps. I don’t relish the thought and don’t think the idea doesn’t scare me. It does. But I gotta say what I gotta say and I’ll go down with the ship here in the US if that’s what it comes to.
“…and the general breakdown of reasonable levels of honesty in social, political and economic areas is beyond depressing.”
So true. Everybody a playa.
So goes Rome
OOOH look at the flames!!! Is that a violin I hear?
There’s just WAY too many people…which is what causes this breakdown.
I think that the issues brought up in these posts really have nothing to with the passage of time,some degradation in moral character, or loss of values. In my eye, they are simply the net effects of overcrowding.
The bubble has made CA prices insane but there’s also a reality of millions of people looking that same little slice of paradise described in a previous post.
If people were content to live in large apartment buildings without cars in nice places, California might be a lot cheaper and more laid back than it is. But everyone has to have *their* SFH with *their* lawn, and it has be by the ocean, or brook, or mountain view or whatever with *their* 2 SUVs in the driveway. That type of living was never going to work beyond a certain population threshhold.
Most of the US, including CA, have not really dealt with the population explosion since WWII in a meaningful way. It’s not hard to see why CA and other congested, once nice places are the way they are now.
1950s…Zenith of America? From what I hear, the decade was near perfect in every way.
People talk like it’s impossible to live a 50’s life now, and I don’t think that’s true. I think people choose not to. Go to some small town, get a house and car (and toys?) comparable in size and features to things from the 50’s, work as an auto mechanic or something like that, don’t get any modern medical procedures done, and I bet you CAN live a 50’s style life with only one income for a family.
But people want modern houses and cars and toys and medicine. They want it BAD and they want it NOW. Yet at the same time they look back at how great it was back then? How many are willing to put a whole family into a no-AC house under 1000ft^2, drive a single featureless car, watch a cheap little CRT television with no cable, and die at home as soon as they get cancer or have a heart attack?
Except for the die at home bit, we’re living that life right now (actually it’s an apt.)
Everyone talks about the traffic. Remember not only has the population increased, but every house has 4 or 5 cars. Mom, Dad, 3 kids over 15 1/2. No wonder it takes so long to get anywhere. In the fifties most families had 1 car and no one drove to school.
My life (at age 48) is better than my life at 38, which was better than my life at 28! Health has been my most important item on my list since I was a teenager. Number 2 is career. All these other things - congestion, taxes, and so forth, are small problems that I have little control over. I refuse to worry about them.
Also I refused to become a financial slave by taking on obligations that I cannot easily pay back within a year. I am constantly amazed how people get themselves into bad credit situations.
Great posts above me regarding the changes in the cost of living and the quality of life in America in the past . Amost everyone I talk to from other cities tell me they have a traffic problem . Inflation has eaten away at the standard of living for people in general . If you are old enough ,you can remember a time in which a one person household income was enough .
Now people are way out of balance on the housing expense and it does reduce funds for other needs . The medical expenses are relly high . I remember a time when I only paid 15 dollars a month for a great medical policy (my employer paid the other 15 dollars ), and it was a great policy and I only had to pay 3 bucks a month for 80% coverage on dental .
It is becoming more ‘Dog eat Dog ” in America ,and the attitude of fleece America without having any loyalty to it ,seems to be the current trend verses the America of the past .
I feel very lucky to of lived in America during some pretty wonderful years . I would love to go back in time and change some of the long term mistakes that were made that caused the current problems that America has today ,but that is not possible .It would be nice if we could get to the point where we can even state what the real problems are in America ,instead of special interest being the ones that define the problems .
I echo your feelings. I believe that happy life is totally within your control. Health is the only thing you should pray for. The rest is up to you.
I certainly have more enjoyable life now at 47 than, say, two decades ago. Life was great up to highschool. Then it was two decades of struggle in college and early in the career. No real complaints now.
My wife and I live simpl. We aren’t fooled by any material things, but live comfortably. I rent a nice apartment about a mile from my work place. My wife walks to her work. We aren’t bothered by traffic, congestion, etc. We hate to shop unnecessarily.
Renting, minimal shopping etc, has made us so cash-rich that as soon as there is a reasonable price decline we’ll buy a house for cash. No debt for us. Our daughter is going to be surprised by the nest egg we’ll eventually leave for her. In the mean time, we slowly inculcate our values into her: work/study hard, eat good food, exercise, enjoy simple things, often visit public library and spend very little money! Our method has worked, she’s going to a top college with a full merit scholarship (more savings for us) and getting top grades…
The main point of my life-story is that each of us has within us to define and live a happy life. We can’t wait for the external factors to change according to what we want them to be. It is unrealistic. Let’s adapt. Let’s not keep fighting change.
Neil,
Simple living is how I do it too - living well below my means. It is a cinch to minimize stress when you have enough cash and conservative investments to live on several years without a job, if need be, especially with cheap rents like the rents these days!
Excellent comments Neil.
I imagine I’m younger than most on this blog but I have learned a lot of important lessons. It was great growing up in the heartland where neighbors knew each other and courtesy was standard. Once I graduated college things have been good but some lessons I learned stuck hard. One of the rules of satiation is that more=better and I believed that for many years. I kept buying, consuming, buying, hoarding, etc. Then I took a trip to a Latin American country and woke up. People there live very modestly, happily, and lean. Returning home I was surrounded again by the mindset that nothing is ever good enough, people always working to get the newest SUV, biggest house on the block, almost like a pissing contest. One of the areas I’m good in is that I drive a paid off car, but it took 53 months of payment hell to realize what a virtue it is. Anyways, I decided to change my life and sold almost everything I own, down to the basic necessities (for me): computer, TV, a couple books. I haven’t missed a dang thing and not only do I feel better, my wallet is fatter, and my space isn’t crowded by never ending junk.
So thanks to those of you who have provided encouragement to enjoy the nice things in life. Fish jumping in the lake, birds chirping in the evening. It’s much nicer than spending the hours scheming how to get the next best fad item. I wish my friends could see life through my eyes right now, and learn that sometimes less really is more.
This is an awesome set of comments and sentiments and a better response than my own. I had pointed out the obvious because it just seemed silly to acknowledge massive population growth and strip development and then go: gee - what’s up with all the cars, people, and smog now a days??
We just recently sold our house (much thanks to people on this blog for pushing me to run numbers and consider a new perspective on real estate) and downsized into an apartment. We are still sorting through the rubble, but each time I get rid of something else I feel a sense of relief that never paralleled it’s acquisition. My husband is on the same downsizing kick. We may or may not relocate next year but it’s nice to know we won’t be schelping a big household with us. The feeling of the cash cushion and no debt is even nicer.
America’s Financial Future, in a nutshell…
“‘I’ve already borrowed $12,000 on my credit cards just to keep going,’ Collins says. She is even considering cashing in her IRA, as well as looking for a job at Home Depot. ‘Instead of working less as I get older, I’m having to work more. I want out. I’m thinking I would just leave the state.’”
Did you notice Mastercards earnings went up 93%, but the stock sold down. Some inividuals may not be able to pay their credit card bills and the earnings evaporate.
Will the creditcard companies, for all their wizardry in things gouge related, to each American a dults $9k debt that never goes away?
Be able to pull off the same tricks of the trade, as said debt can easily blossom to $30k, as the mortgage payment gets tacked on, every month?
Combine with a tired economic model, where the average joe’s pay is going down…
It will create a “debt malaise”, when people just stop paying even the minimum monthly payment.
Serf’s Up!
Lead apes in Hell thou mewling fen-sucked scut.
All Americans pay Mastercard and mortgages to the failed economic model.
that person is a fool. Someone told her that a sucessful career in real estate speculation was attainable by anyone.. and she believed it. Fact is it requires a set of particular talents and a couple of uncommon personality traits.
Since the bubble made it easy for every Joe and Jane6pack to give it a try, the failure rate should be 99% or more.
i take that back.. seems she bought just the one place and ’speculator” may not apply to her… i get these FBs stories mixed up.
“While St. Joe officials expressed optimism about the future, Wachovia Securities analyst Christopher Haley expressed caution for the short term in a research note Tuesday. ‘We note that such optimism has been offered by management in the recent past, only to have the existing weak market conditions persist longer than expected,’ Haley said.”
Robert Toll is the same way. So was Liareah and all other indsutry shills. Good thing they aren’t weathermen because they would be pissing on our legs and telling us it’s raining.
“Amy Baker, coordinator of the Florida Legislature’s Bureau of Economic and Demographic Research, said of the state’s economy: ‘By almost any way you calculate it, if you looked at the housing market and all its related pieces, the finance piece, the Realtor piece, the building piece and the sales piece, by pretty much any measure, that is akin to a recession. It’s just we don’t define it that way.’”
Florida is in a recession, I just can’t say its in a recession. I wonder how long it will be before the Florida media calls it a recession?
I heard that the Plunge Protection Team has now been given authority to fly into hurricanes and release massive amounts of salt in order to cause them to disappear and keep the economy trucking along.
They are still building tons of spec homes in Gainesville, Fl and no
is buying. We have around 300 spec homes sitting empty many for more than 6 months and some of the builders should be aproaching the end of the run. We are about 8 months behind south Fl and our builders have just started incentives like $15,000 off,so we have a long way to go. I will buy one if they discount 20% or more. I do own a home purchased before the bubble and will wait.
I live in Cooper City FL (33026) and there are a LOT of new homes going up on Sterling Rd near University Rd.
Given the number of for sales signs I see, Lord only knows who will buy them.
The Maryland native, who lives here seven months out of the year, was to receive more than $1 million for her two mobile homes in the (Briny Breezes) seaside community.”
A mil for a couple of rat-bag trailers.
Like this development was ever gonna cash flow.
Developers would have raked off a few million each off the top of the $512 million project, half-complete it, and let the town and lenders holdin’ the bag when sales never materialized.
Boo-hoo, cry me a river.
rat bag trailers- that is really funny!
“While St. Joe officials expressed optimism about the future, Wachovia Securities analyst Christopher Haley expressed caution for the short term in a research note Tuesday. ‘We note that such optimism has been offered by management in the recent past, only to have the existing weak market conditions persist longer than expected,’ Haley said.”
Looks like Halley is trying to plant St. Joe upside down, financially…
“Enron, The Smartest Guys In The Room” has morphed into “The US Economy, The Smartest Guys On Wall Street”. We all know the end of the story already. The non-reality based economy is running headlong into reality and it’s not pretty. I highly recommed the Enron documentary to anyone who wants a look at the ill fated microcosm that has become a nationwide macrocosm.
“Thanks to an adjustable rate mortgage, she now pays almost twice what she used to spend on rent for a similar apartment, more than $2000 a month, and the bill is rising.”
“‘I’ve already borrowed $12,000 on my credit cards just to keep going,’ Collins says. She is even considering cashing in her IRA, as well as looking for a job at Home Depot. ‘Instead of working less as I get older, I’m having to work more. I want out. I’m thinking I would just leave the state.’”
Another person leaving the state. Geez. UHAUL INDEX 1 - Florida 0.
“‘People have to understand that if they bought for $150,000 several years ago and had it listed for $450,000, and now in order to sell they have to sell for $350,000, they did not lose $100,000,’ said Realtor Joe Pavich Sr in Estero.”
“Of course, making a profit under that scenario assumes the seller didn’t use his home equity ‘like a debit card’ a few years ago when interest rates were at historic lows and property values were at historic highs, he added.”
Referring to a “debit card” would make the reader believe the money was coming from a savings or checking account. He should be using the correct term which would be “credit card”. Meaning borrowed money which needs to be paid back with interest.
“Brodersen believes much of the blame for the current market belongs on the shoulders of the media. ‘I’m beginning to believe the media actually has an agenda with this,’ he said. ‘The market we’re in now started two years ago, but I’ve been reading about it for three years. Can you say self-fulfilling prophecy?’”
The media would be the last place I would be finger pointing at. Oh please give me a break. This finger pointing is coming from a broker. The trouble with finger pointing is while you have one finger pointed towards something, you then have three fingers pointing back at you.
Idiot.
Does anyone have that quote from the guy who said Florida was working off a totally new economic model where we have reached a high plateau?
It was posted just Monday in the other Florida forums…..but if search trading dot coms for real estate you will find it.
–well I did your homework for you
Premonitions of a bubble on the verge of popping do not ruffle those who are bullish on real estate. In Miami, Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors, predicted that a limited supply of land coupled with demand from baby boomers and foreigners would prolong the boom indefinitely.
“South Florida,” he said, “is working off of a totally new economic model than any of us have ever experienced in the past.”
“South Florida,’’ he said, ‘’is working off of a totally new economic model than any of us have ever experienced in the past” according to a realtor who predicted that a land shortage will support higher prices indefinitely.”
–New York Times, Trading Places: Real Estate Instead of Dot-Coms, 3/25/05
Interesting article by former Reagan Treasury secretary:
In Richistan: Fantastic Wealth for a Few; Steady Decline for Many
The Return of the Robber Barons
http://www.counterpunch.org/
–
“In American today the greatest rewards go to investment bankers, who collect fees for creating financing packages for debt.”
These debt-pushers are the genuine evildoers in the world today but it is very hard to convince a legalistic minded American that what these people are doing is evil. It is the consequences that follow that would prove that what these people did was evil. Until then they are “wealth creators”!
These people are not “Robber Barons” but Manipulators.
Jas
who’s deserves the blame.. a casino’s owners or the patrons?
matters if the game is clean or fixed.
well, all the casino games are fixed… not mechanically, but with the house-odds or with a ‘rake’. It’s a can’t-win situation in the long run. And gamblers are well aware of the situation, but still play.
The question of who’s at fault, if anyone, needs to be answered.
sorry for off topic post above-will put this in appropriate one next time
“What’s turned us into such pessimists? ‘It’s got to be something related to the whole real estate market,’ says Fritz Eichelberger, who runs (a) local techie networking group. ‘Companies here don’t want to pay any money,’ said David Rudd,
This is troubling - I know Fritz personally. If he says things are cold, then they are real cold. Fritz is one of the most connected people in the Tampa area, and is akin to the shoeshine boy, light in the steeple, or however you want to call a signal.
The canary in the coal mine?
Agreed. I know Fritz too. He gets it from the grapevine.
“Brodersen believes much of the blame for the current market belongs on the shoulders of the media. ‘I’m beginning to believe the media actually has an agenda with this,’ he said. ‘The market we’re in now started two years ago, but I’ve been reading about it for three years. Can you say self-fulfilling prophecy?’”
During the boom times, Brodersen was touting that propertiy values would always continue to rise and purchasing a condo was a no lose financial situation. His approach was not consumer focused at the time. Now that his business has had a significant drop he is playing the blame game. The fault lies with him and not the media. It is the consumer who is sending Brodersen the media message: “We will not buy at these overly inflated housing prices”.
“Amy Baker, coordinator of the Florida Legislature’s Bureau of Economic and Demographic Research, said of the state’s economy: ‘By almost any way you calculate it, if you looked at the housing market and all its related pieces, the finance piece, the Realtor piece, the building piece and the sales piece, by pretty much any measure, that is akin to a recession. It’s just we don’t define it that way.’”
Dare I call it a localized Depression, Ms. Baker?
“The pain in the local housing market isn’t limited to Realtors and people trying to sell their homes. Construction workers also are getting their share.
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No sympathy for the greedy or the RE industry in general, but I do hate seeing construction workers out of work. Young family near me just lost their home when the husband’s work dried up. Don’t know what he will do for a living now…or where the family will live. I’ve got a lot of family members that are in construction-related fields and I wonder how much longer they can hang on.
“Martin Carrizales was laid off with other workers last week from his job as a roof designer after 11 years. ‘They just told us one day, and we were gone,’ said Carrizales. ‘They said, ‘It’s just the market. No one’s building, no one’s buying.’”
Come on, you’re kidding me right?! A ‘roof designer’? Me thinks that is akin to calling a garbage collector a sanitation engineer.
Yes a roof designer. I worked at a plant that made roof trusses and they do have designers in the front office. For regular builders/customers it was routine items, they would just sign of for the plans but they also worked with one-off custom jobs, and helped design the roofs. I think they were structural engineers. Me, just a dumb hammer swinger.
Article on retirement on AOL.
The ‘Half-Back’ Retirement
Many northerners retire to Florida only to find it too hot, clogged with traffic, too expensive and a cultural wasteland. But they don’t want to go back to winters, so they go halfway back, retiring in the Carolinas, where both temperatures and property prices are milder.
And the Carolina will SUCK in about 10 yrs, just wait.
Just got a phone call from a realtor/investor friend of mine. He was asking if a friend of ours home is going into foreclosure. I asked him what are you talking about? He said that he noticed that a lien had be placed on the property for not paying their HOA and he knows the house is vacant. I told him that they just moved from Fl to GA and that I didn’t know anything about it.
Not surprised thought if it is true since they are in the mortgage business and things are tough right now. Scary stuff out there…
“‘I’ve already borrowed $12,000 on my credit cards just to keep going,’ Collins says. She is even considering cashing in her IRA, as well as looking for a job at Home Depot. ‘Instead of working less as I get older, I’m having to work more. I want out. I’m thinking I would just leave the state.’”
Does she expect me to feel sorry for her? She’s as STUPID as people can get. She made her own mess, and took other victims with her by causing price inflation, and taking credit she can’t handle.
Of course, responsible savers like you and me will have to cover her losses now, too, one way or another.
Blast from Past–check out http://www.andrewkovacic.com/PDF/Cape_Coral.pdf