The Home-Buying Season Is Over In Florida
The Miami Herald reports from Florida. “The proposed marriage between home builder Levitt and BFC Financial may be on the rocks. The reason: the ongoing housing slump. Levitt lost $58.1 million in its second quarter, the company said. Levitt’s second quarter revenue declined 4 percent to $127.8 million. Buyers canceled 39 percent of new home orders in the quarter, up from 21.5 percent a year ago, while the average selling price dropped 9.5 percent to $256,000. Levitt didn’t acquire new land in the second quarter.”
“CEO Alan Levan said market conditions will be challenging for the ‘foreseeable future.’ He said rising inventory of homes along with reduced credit availability is pressuring prices in all its markets.”
The Palm Beach Post. “‘Traffic at the information center at Tradition, Florida, has dramatically slowed in connection with the challenging homebuilding market in Florida,’ Levitt said.”
“The company attributed its $58.1 million net loss to ‘the continued deterioration of the homebuilding markets where we operate, particularly in Florida.’”
From NBC-2.com. “Some local home builders are going to great lengths to drum up summer business in a slumping real estate market. According to the Florida Association of Realtors, home sales have dipped 37 percent in the Cape Coral/Fort Myers between June ‘06 and June ‘07.”
“Signs in front of the line of model homes along Chiquita Boulevard in Cape Coral offer all kinds of deals. Here is a list of some of the signs: ‘Help with Down Payment.’ ‘Free Pool with Home Purchase.’”
“Cape resident Dave Lewis…expressed some skepticism. ‘If you have to pay taxes on the pool, it’s not totally free,’ said Lewis.”
From Florida Today. “The number of home mortgage foreclosure filings has continued to rise in Brevard County . There were 423 foreclosure filings in Brevard in July — the highest monthly total in at least 5½ years, according to the Brevard County Clerk of Courts.”
“July’s total surpassed the previous high of 385 foreclosure filings in June. From January through July, there were 2,398 foreclosure filings in Brevard, surpassing the total of 1,868 for all of last year, records show.”
“‘My belief is this rise in foreclosures is not a spike, but a long-term trend upwards, as we wring out the massive speculations, poor mortgages and oversupply’ of housing, said Brevard Clerk of Courts Scott Ellis.”
The Orlando Sentinel. “The Orlando area’s sluggish housing market is showing no signs of a turnaround, with the latest numbers going from bad to worse during what should be the hottest sales stretch of the year.”
“Existing-home sales in the Orlando area fell again in July, a 42.6 percent plunge from the same month a year ago, and for the second time this year the median sales price posted a rare decline, the Orlando Regional Realtor Association reported Monday.”
“‘I think we’ve got six months of serious bloodshed ahead,’ said William Weaver, an associate professor of finance at the University of Central Florida.”
“For industry watchers waiting for a turnaround, the record 26,018 homes and condos on the market provided no hint that the local downturn has hit bottom. It would take a record 19.2 months to sell all those homes and condos at the recent slower sales pace.”
“ReNae Bailey…recently put her three Oviedo rental homes on the market because the taxes have gotten too high, she said. The rental income covers the cost of the mortgage and insurance, but not the property taxes.”
“‘That’s what’s going to kill the market — higher taxes,’ she said.”
“Bailey said she bought her rental homes about two years ago, at the peak of the market, and now figures she will be fortunate to break even. ‘I’ve made money on everything I’ve ever sold up until now,’ Bailey said of her sales during the past 20 years in Central Florida. ‘It’s tough right now for people.’”
“Weaver said it was particularly troubling for the Orlando home-resale market to slip for the second straight month, an even worse sign than the year-over-year decline. The 1,354 units sold in July was down 10.8 percent from June and off 22.4 percent from May.”
“‘The home-buying season is over,’ Weaver said, so the chances of an improvement are slim for the rest of the year.”
“Weaver said loan originators who pushed subprime mortgages — loans with higher rates and terms targeting buyers with weak credit histories, helped bring on the slump by making loans that now are going bad.”
“But many buyers share the blame, he said, because they took on too much debt, didn’t understand what they were getting into or got caught up in the excitement of becoming a home buyer. ‘Both sides made some dumb decisions,’ Weaver said.”
From USA Today. “Who wants to be a millionaire? Never mind.” “That’s the come-on, and ultimate torment, recently served up to Briny Breezes, a 43-acre mobile home community on Florida’s Gold Coast.”
“In January, Ocean Land Investments of Boca Raton agreed to pay Briny trailer owners $510 million for their oceanfront propertys. But two weeks ago, Ocean Land, facing an Aug. 10 deadline to pay the rest of a $5 million non-refundable deposit (it had put down $500,000) asked for a 45-day extension to talk to nearby towns opposed to the project. Briny’s board of directors refused, and the deal is off.”
“There goes the money. The new sailboats. The lavish gifts for grandchildren. Most troubling: A few dozen residents have already bought new homes in anticipation of the big payday.”
“‘Some of these people have purchased elsewhere,’ says Roger Bennett, mayor of Briny Breezes. ‘Some can afford it, but it’s the many who couldn’t that I feel sorry for.’”
“Ileane Aztiazarain says she and her husband, Jose, recently spent $52,000 on a 29-foot boat and $40,000 on a truck to tow it. The couple bought their double-wide trailer two years ago for $325,000 and were eager to pocket $1 million.”
“‘We did a few things we shouldn’t have done,’ she said. ‘It was a once-in-a lifetime opportunity. We’re working people.’”
“Jose planned to use part of the cash to start his own business. Suppressing the worry in her eyes with a half-smile, Ileane added, ‘We just have to figure out what we’re going to do now.’ If the sale doesn’t happen, she says, they’ll sell the new toys and the trailer.”
“Board member Robert Purcell, echoing the view of several residents, says the community will accept only an ‘equivalent’ price. The developer, he suggests, planned all along to reel in residents with an irresistible offer, then push the price down. Ocean Land ‘didn’t want the deal,’ he says.”
“When Bennett told Nancy Boczon, the town clerk, the deal had fizzled, she screamed. ‘I have grandchildren going to college, and I like to travel. I was willing to take the money.’”
“Joseph Good of ComNet Realty, says the developer likely fell victim to South Florida’s burst real estate bubble. High-rise condos, he says, simply aren’t selling.”
“Not worried is Joe Masterson, who looked forward to buying a new sailboat with his $840,000 and plying the Caribbean full time. ‘Being out at sea 24/7 would grow old after a while,’ he muses. ‘One beautiful sunset after another. … Now, I can stay here and ride around in my little golf cart.’”
home buying season over?
well…the home selling season sure ain’t.
is there any possible way that any one that bought so far this year in 2007 made a good decision or got a good deal???
Very few..as a matter of fact in Florida there has been an increase in the “money at closing” deals. Alot of the MLS closings show much higher selling price than list price. I have seen as high as $100K..Heard that now the FBI has put a task force together to start going after these “special deals.”
Heard that now the FBI has put a task force together to start going after these “special deals.”
True, If you as a buyer, mortgage broker or realtor was involved in “special deals” that crossed the lines, you will be caught!
Much as I would love that to be the case — I can’t imagine the Feds would allocate the needed resources to investigate (much less prosecute) a lot of these deals.
The local paper “The Palm Beach Post” reported on the task force about 2 weeks ago. I guess Florida is tired of keeping the crown as “The Number 1 Mortgage Fraud State in the Country..”
“423 foreclosures filings in just one month is huge…”
A bounty would help a lot.
So which lenders are funding these deals?
Home buying season can’t be over if it never started.
Hurricane a coming
Reading all those Briny Breezes stories of exploded dreams - it’s really not so bad - reminds me of: “To travel hopefully is better than to arrive.”
“If the sale doesn’t happen, she says, they’ll sell the new toys and the trailer.”
ah….expect ten cents on the dollar old fool…LMAF at the total greed and entitlement of these bunch of idiots…poster story for the bubble.
“In January, Ocean Land Investments of Boca Raton agreed to pay Briny trailer owners $510 million for their oceanfront propertys. But two weeks ago, Ocean Land, facing an Aug. 10 deadline to pay the rest of a $5 million non-refundable deposit (it had put down $500,000) asked for a 45-day extension to talk to nearby towns opposed to the project. Briny’s board of directors refused, and the deal is off.”
A Million in the Hand is worth 2 in the Bust !
More than a few people predicted that this deal wasn’t going to fly.
Yes indeed, not only predicted, but laid out a road map to collect the money no matter what, at what I consider a small (25-30%) discount for the option buyer assuming the risk of what has actually happened.
I’d have been on the market to sell my option the day after the deal was announced. Anyone who went out and spent money they weren’t even scheduled to get for two years is an idiot and so is the lender who lent against the contract (for other houses, etc.). Greed in Florida knows no bounds.
Anyone who went out and spent money they weren’t even scheduled to get for two years is an idiot
Ha! The same thing amazes me about boomers and their dying parents. Hey, it’s a slam dunk– 2 years tops. Check’s in the mail, let’s just buy the boat now.
Am I kidding?
I’m in that vaunted Boomer cohort. And I won’t see a cent from my parents until both of them die.
Longevity runs in the family, so I’m not counting on any sort of inheritance.
LOL
Well said. All these morons and their feelings of entitlement are learning a lesson they won’t soon forget.
Ahhhh, I love the smell of fu–ed up homedebtors in the morning!
Greed ANYWHERE seems to have known no bounds.
Those Briny Breeze residences are the example of greed. How many are going to go under? With all do respect, its a trailer park! How many people living in a trailer park can really afford expensive boats (w/matching truck, I’m sure)? What, two?!?
This will be an interesting spectator sport.
Got popcorn?
Neil
If you can’t afford a place to dock you boat that’s not in your front yard, then you can’t afford a boat. I wish people in Suburbia would learn that.
lol
Alas, I know a prime counter example. Docks his boat in Marina Del Rey a good 15 miles from the house. On the way home from work every Tuesday and Thursday its sailed (usually races). Dinner on the spinnaker leg.
To each their own… if you can afford it!
Got popcorn?
Neil
Amazing how many nice trucks are in trailer parks. That idiot was probably in the GMC dealer saying “get me the biggest, baddest crew cab 4×4 dually you have”, and the GMC dealer was seeing $$.
Neil,
I know one couple that spends there winters in Briney Breezes. They actually own 2 lots. But the money would not have impacted them at all. My parents are actually getting together with another couple from there shortly. From what I understand, that place is a strange mix of monied snowbirds and working class full-time residents. Some of them will be hurt badly while others won’t have a problem. I do wonder what this will do to the small community; especially those who would have settled for less versus those who wouldn’t budge.
Have you read the Options Bible book by Guy Cohen? Good stuff IMO.
Does anyone have any information about the state of the market in lake placid-sebring area?
Dead. Folks from SFL took Helocs on homes to buy second homes and “investment” property.
There is no GOOD place anywhere in the state of Florida to buy..unless you like risk…
I’m Tom, you can’t steal my ID. Add a letter or something.
“Does anyone have any information about the state of the market in lake placid-sebring area?”
To the “other Tom” — Sebring is a lot of fun if you like to race cars once in a while and there is some decent golf in the area. But IMO it is the total boonies for living. About as far as you can get from anywhere nice, in sub-panhandle Florida, and still be relatively dry.
I swear to god we could meter this whole thing by looking at boat sales.
How about rowboats and bicycles instead of yachts and hummers? Or can we no longer afford bicycles, which come from China?
How about rowboats and bicycles instead of yachts and hummers? Or can we no longer afford bicycles, which come from China?
Mainland China has yet to infiltrate the “real” bike market (they make some junk and toys) although Taiwan has long been a major frame supplier and innovator.
Preach it, Paul! I worked in a bike shop during the 1990s. Lemme tell ya, the stuff that came out of China was, umm, I can’t use that word on this blog.
I will concur about the poor quality of the Chinese bike. The stuff they sell in their home market is actually worse than what you get here. When I was in China I knew that I would be in Beijing for a while and would need a bike to get around. Bought a brand spanking new bike for less than 20 bucks. By the time I left a couple of months later the thing was literally falling apart. This is why there are so many road side bike repair guys around. BTW these guys can break down a tire, patch a hole and get you back on the road in amazing speed. All for about a quarter!
I’m pretty sure that there’s no place in America that makes bicycles anymore. Or bike tires.
While Taiwan still appears to be the market leader, you might be surprised at how many “real” bikes are now made in China.
I went bike shopping this spring to add a stablemate to my 10-year old hand-made-in-the-USA mountain bike, which is still in fantastic shape but not so appropriate anymore now that I ride exclusively on roads. There are definitely fewer manufacturers that still build them here - if your budget is less than $5,000. I splurged a bit and took home a very high-quality handmade-in-the-USA-with-tubing-made-in-the-USA road bike. It’s a fantastic bike, and I hope that in 10 or 15 years I still have the option to buy American if I need another bike.
What kind is the new one? I’m also in the market for a new road bike.
This is what I ride. In the last 3 years I have put around 4k miles on it. I have no complaints. You’ll have to throw away the silly cycle cross tires.
http://www.bianchiusa.com/05_axis.html
What kind is the new one? I’m also in the market for a new road bike.
Lemond Sarthe. Steel is pretty high-tech these days. The nicer frames use these new alloys specifically designed for air-hardening after the weld is made. High strength, competitive weight, and the bike keeps the traditional ride characteristics of steel.
Test ride one of these new steel bikes back-to-back with full carbon and aluminum frames. The difference (to me) is incredible. Aluminum is stiff and harsh, carbon feels like a lifeless hunk of machinery… But that is just my personal preference
Have fun bike shopping!
“‘I think we’ve got six months of serious bloodshed ahead,’ said William Weaver, an associate professor of finance at the University of Central Florida.”
Is this guy serious?
Global stock markets on edge; the Fed and other central banks pumping in billions to avert a complete meltdown; and a trillion mortgage re-sets in the coming eight weeks?
Only 6 months of “bloodshed”, and voila…all is well?
Sorry Mr. Weaver…I’m callin’ for a decade’s worth of drama, or even a total changing of the US financial paradigm forever.
The Pig-Men have emptied the trough.
But, can somebody tell me how I get one of these high-paying know-nothing, do nothing ivory tower pontificator jobs?
These people just blow me away.
Too much nippin’ off the gin bottle in the desk drawer I guess.
They are so far removed from reality I don’t trust them anymore. I don’t trust the talking heads or the media. I only trust blogs and the collective wisdom of the blogging community, where BS is called BS as soon as it’s posted. The only guy I right was MSN’s Bill Fleckenstein. He was only voice of sanity during this entire debacle.
Visionaries / Truthtellers are usually despised. People hate to hear bad news in any form: before it happens, while it happens, and especially after is happens. Even if the person is gracious enough not to rub it in their face with I told you so, it doesnt matter because self concious loathing within makes them a pariah.
Doesnt even matter if the helpful person was really just trying to be just that: helpful, with no ulterior motives. Still hated & scorned.
I cite Jesus Christ as the perfect example.
“Doesnt even matter if the helpful person was really just trying to be just that: helpful, with no ulterior motives. Still hated & scorned.”
All the more reason to rub their noses in it.
Bill Fleckenstein has a daily market recap and Q&A that he posts on his website for $10/month. Todays mkt recap is chock full of links and opinions of future events. I have profited from the ideas and thought process he shares…
“‘I think we’ve got six months of serious bloodshed ahead,’ said William Weaver, an associate professor of finance at the University of Central Florida.”
“For industry watchers waiting for a turnaround, the record 26,018 homes and condos on the market provided no hint that the local downturn has hit bottom. It would take a record 19.2 months to sell all those homes and condos at the recent slower sales pace.”
And in the very next paragraph it said it would take 19.2 months to sell all those homes. This guy needs to go back to first grade for some math refresher.
Maybe he meant there will be six months of bleeding before the patient is declared dead.
They dropped the 1 that was next to the 6…
“They dropped the 1 that was next to the 6…”
Does the one go on the right or left side?
“Can somebody tell me how I get one these high-paying, know-nothing, do nothing ivory tower pontificator jobs?”
I’m pretty sure all you have to do is join an organization called “Skull and Crossbones.”
“Ileane Aztiazarain says she and her husband, Jose, recently spent $52,000 on a 29-foot boat and $40,000 on a truck to tow it. The couple bought their double-wide trailer two years ago for $325,000 and were eager to pocket $1 million.”
These stories on Briny Breezes are hilarious. It’s really hard to make stupid up. The above is another example of why a redistribution of wealth would quickly result in wealth being transferred back into the hands of the wealthy. Jose and wife just don’t understand the value of money.
2 comments:
1. Never spend money you don’t yet have from a windfall. AKA don’t count your chickens….
2.These people vastly overestimate the value of the money they would have received after taxes and would most likely ended up wasting most of it on toys and “business” oppertunities they have no clue about. This sale falling through was a blessing for these poor saps.
“This sale falling through was a blessing for these poor saps.”
Quite true, generally speaking. Not to mention for the local dermatologists and sellers of golf carts.
This is an illustration of the “paper money” concept. If you have an asset that is worth “so-and-so”, you don’t have the “so-and-so” until you successfully sell the asset.
If you took all the wealth in this country and divided it up equally what would happen?
In short order “inequality” would be restored. Some would gamble and lose, some would gamble and win. Over a longer period of time those without a sense of value would become relatively poorer and those with a sense of value would become relatively more wealthy.
The notion of economic “equality” is a dream of people who have no understanding of human nature and value(s).
Well said… Jag, I’ll remember this.
Nicely put Jag.
Very nicely put.
Starting from a point of complete equality, today’s level of inequality would be restored in about 20 years.
It wouldn’t even take that long…
My guess would be 10 years maximum and everything would be back to “normal”.
Haha. George Bush and his cronies are rich because of their values. And the wall street billionaires who rig the system to make sure they always land on their feet posses a superior nature.
That is why you hear these stories of people who have won millions and within 3 years they are broke..
One of the hayseed “winners” from Ky. blew $25 million and then died, all within two years.
Wasn’t this the premise of an all cashless society? Remove all forms of the black market. I think is was to be called “the mark of the beast?”
Economic Equaility = Communism.
See North Korea and Cuba.
But don’t be confused - many of the currently well-off would be among the poor, and quite a few poor, frugal people would be well-off. The ratio might remain, but the population would be different.
Jim D,
Precisely. Would that one could short Brittany and Paris and go long a Tiger Woods…..
Just do a little research on wealth and you’ll find plenty of examples of rich imploding and poor prospering. Granted, one can go either way financially regardless of one’s values . Its not that good values insure good results but they do tend to coincide and tend to endure with them. More importantly, bad values rarely have anything BUT bad results regardless of the height of one’s financial success.
See “Hunt Brothers: Silver debacle”………
And my Parents thought I was reckless with Money.
A Guy named Jose, a “Delivery Driver” actually Bought a $325,000 TRAILER?
Then spends almost 100K on a Boat and Truck because ” He thought he was gonna make a 600k profit ,before he got the Money?
This Proves my Theory. The Stupid are far out-breeding the Smart People.
Soon We will be extinct.
This Proves my Theory. The Stupid are far out-breeding the Smart People.
The smart use birth control, the stupid don’t.
“The smart use birth control, the stupid don’t.”
That’s always amazed me, since it apparently is free.
Normally I wouldn’t mention it, but. . .”Smart” people capitalize informal nouns and some adjectives and verbs, don’t close quotes, and invert the spacing around their commas?
Maybe that’s what they taught her in journalism school.
Trying to sell expensive toys at the same time as everyone else. Good luck.
Besides, a lot of those HELOC toys are garbage the likes of which most prudent folks steer clear of anyway. Sorry, but we can rent a jet ski.
I’m going to admit to watching e-bay for certain stuff.
For example, I’ve owned three pairs of skis in my life: two used demos, one set bought new on super sale. If I can buy a set of nice used ski boots… they’re mine! (For the right price.)
Ps, only got rid of the 2nd set of skis as the bindings were too old to support (ski shops wouldn’t touch them anymore due to the liability, first set were trashed on a rock. Cest la vie.). Not to mention a high school kid commented on the 2nd set that it was cool that I was participating in the mountain’s “retro day” in full gear.
So there is a plus side to this! Toy’s galore, cheap!
The only thing I will not buy used is scuba gear.
Got e-bay?
Neil
Trying to sell expensive toys at the same time as everyone else. Good luck.
The automobile resale market is testament to that.
Trying to sell expensive toys at the same time as everyone else. Good luck.
Both are declining liabilities. Probally worth 40-50 cents on the dollar if less than one year old and in good condition.
Somehow our whole middle class has bought into the notion that a ‘luxury’ can be financed. There should be no such thing as a pleasure boat loan. It defies logic. If you can’t afford to pay cash than you can’t affort the ‘luxury’.
So now we are swimming in Lexus leases and repoed sailboats.
You are absolutely right. This is why so many lottery winners end up broke a few years down the road. They should take 20 year payments, at least it would take 20 years to be broke again.
What ever happened to “if you cannot afford two, you cannot afford it” approach to luxury?
Or am I showing my age touting such advice?
As to lottery winners… there is a reason 90% of them go broke.
Got popcorn?
Neil
What is your source for that number?
This entire thread smells of sour grapes. Yes, a lot of people who come into money don’t manage it well, but a lot of people DO. The housing bear case is often exaggerated because many people who got low interest loans over the last few years took advantage of stupid banks. Remember that refis were a big thing a couple years ago, with many long-term owners switching to 15 year plans from 30 year plans.
Some people use windfalls smartly, but since they probably kept a budget before having extra money (even if “poor”) you wouldn’t notice them.
John
No, your comment of this thread is a sour grape rant is wrong.
You seem, its only sour grapes when you degrade that which you cant obtain.
Most people on this thread, a high percentage actually, are very financially comfortable, secure, have enough wealth or able to obtain wealth, to aquire toys.
The mere fact that financially prudent indiviuals can openly discuss & agree that people get stupid over large sums, doesnt make them a bunch of sour grapes. If you cant handle a wide range of thoughts on a subject, yer on the wrong blog.
Look up the Realtors, Brokers, & Meth Users blog for more sunshine feedback, John. Maybe thats more to yer taste.
ok so last post was horrendous on spelling/grammar due to large doberman wanting attention.
Apologies rendered but the main points are still readable & valid.
I stand by them.
I thoiught it was if you have to ask the price you can’t afford it.
It absolutely astonishes me that so many take the lump sum. What they afraid they are going to die and someone else might get their “just-deserved” riches? Lottery! “pfuuff” just another tax on the man.
The lump sum is a better deal, even if you only get half. With inflation, lost opportunity cost and possibly raised taxes you will probably end up with 2-3x more in the end than taking installments.
Personally, I think I could invest it better than the fairly conservative bonds they buy with the lump sum and do better over the long haul… what is it, 26 years? There are a couple of other things I’d like to do with such a jackpot that would be better served by having the lump sum, but that brings up another point: even those who choose the annuity payments option go broke fast, because there is no shortage of firms willing to lend against such an annuity.
Of course, I rarely if ever play the lottery. I once ran the numbers on the expected return for Powerball, and it is *always* negative after taxes no matter how high the jackpot, because of the likelihood of multiple winners.
You’d have to know the discounted rate of return if you let the “state” pay you over 20 years. I’ve never had a need to do so, but I’d guess that it is somewhere between 1% and 2.5% per annum. I suspect that you can take a lump sum, walk across the street to Met Life and get a better deal that on a 20-year annuity. Heck, you might be able to get the same exact payment amount for life, with a guaranteed number of years greater than 20 (with remainder to heirs).
Speaking of such wealth transfers, didn’t we see that played out after Hurricane Andrew? Po’ folks took their compensation money and bought Lexuses. Which they parked in front of their ruined homes. But for some reason, they just couldn’t come up with the money to fix those homes?
What is it about the Car thing? It’s a freaking car, we all have speed limits, one car’s air condition is no colder than the next, we will get where our cars take us no matter if one cost $3000 or $30,000. I live in the central valley of California and you have no idea how many turds out here drive new BIG 4×4 pickups with BIG stupid tires. To all 4×4 drivers here “IT’S FLAT, WE HAVE NO MOUNTAINS” They must drive Big trucks to compensate for something Small?
I don’t know either. Cars are just so common, so ordinary. Packed expressways are hardly awe inspiring sights - not at all like watching a 747 during rotation, or a Shinkansen at full cry, or an immense cargo ship churning the waters. Yeah, yeah there are classic cars worthy of preservation but what’s on the lots for consumers is disposable junk.
Traffic can be amusing to watch. I used to watch the traffic over the 35W bridge in Minneapolis (half of it was UPS and FedEx trucks) from my office window but now…I read this blog more.
“Ileane Aztiazarain says she and her husband, Jose, recently spent $52,000 on a 29-foot boat and $40,000 on a truck to tow it. The couple bought their double-wide trailer two years ago for $325,000 and were eager to pocket $1 million.”
Greed clouds judgment, NEVER COUNT YOUR CHICKENS BEFORE THEY HATCH!
Here’s another Florida story:
http://www.reuters.com/article/inDepthNews/idUSN1230248820070814?feedType=RSS&feedName=inDepthNews&rpc=22&sp=true
my friend just had a place listed in his complex at a price lower than he owes. So he is officially underwater now. To put that in perspective, he was “up” (by comparable sales) almost 80% IN ONE YEAR (bought ‘04 to ‘05) and ignored my repeated begging to take the money and run. He could come in now and buy his place back. He’s an idiot and we are no longer speaking (he can’t bear to face me).
Is he planning on moving? Did he buy just to get rich quick? If the answer to both is “no”, then what’s the big deal?
1) yes, 2) no
The big deal is, you rarely get a windfall like that and certainly not on a residential purchase unless you happen to buy something on land that the owner of a NFL team wants to build his new stadium. To me, it borders on insanity not to take it and run. The place he lives in is a craphole, a little United Nations if you will. It was not worth riding up and down.
Txchick,
I don’t think I’d want to get on your bad side.
How can people not realize 20%+ appreciation was just stupid? Ok, if the NFL wants the land, sell! One of my relatives owns a very nice NYC apartment overlooking a fool… a fool who has a tall building surrounding his brownstone on two sides (corner lot at 2nd ave and 72nd). Why? He was offered 2X market price and turned it down. Then offered 4X market price after seven other brownstones sold out. He demanded 10X. Nyet. There will never be anything on that lot but a brownstone (not enough foundation for anything taller). Due to his home being boxed in and un-expandable, it cut the value 20%. Cest la vie.
Got popcorn?
Neil
If he knew he was going to move, then I’m in complete agreement with you re: stupid move not to sell in `05.
Cape Coral, Fla,, R.I.P.
A friend of mine was donig mortgages there. bought a big house and all. Of course he was putting people into toxic loans. He lost his house and business as the market there tanked. He moved north and is now doing landscaping in another part of the state. I asked him how business was, and he said, “There is a lot of competition and it is slow and hot.”
Oh, oh, oh! What nectar to my ears! Merriment! Hahaha! Tell me the funny story again! Again!
Actually, you probably really could tell me this funny story again and again, with different people each time…again, and again, and again…
I can tell bedtime stories lol but you might have a nightmare?
I had a situation like that..bought a home to live in ‘03, finished built in ‘04, had a offer from somone to buy it, never lived in it..my friend said, “Aren’t you attached to the house?”..I said,” No, I am attached to the $$!” Sold it, made the $$$ and put it away for retirement..it would have taken me 5 years to added to that acccount what I did in 10 months..
My friend of 20 years (we did undergrad and grad school together) bought a town house in Sacramento in 04 … I had been quietly telling him not to buy. When he actually did I gave him a bright smile and said, if it makes you happy I am happy for you.
He is now trying to sell, job move. He is going to loose about 75K. Fortunately it is going to hurt but it is not going to affect his life style and we are still very good friends. My point being I had learnt my lesson “people do not like you very much if you are right all the time”
“…people do not like you very much if you are right all the time”
Ain’t that the truth. It is a part of human nature I cannot grasp. When my father gave me advice, I listened and usually followed it. If I thought it was wrong and did otherwise, I didn’t silently mock him — I appreciated his interest in my well being. Didn’t realize how rare is such a relationship — I’ve been right since pre-dot-com bust days and my relatives either snicker or resent my having been right — after they lose the money. Maybe it’s because I’ve never been a gambler and never went for that Big Brass Ring, like they did.
“Ileane Aztiazarain says she and her husband, Jose, recently spent $52,000 on a 29-foot boat and $40,000 on a truck to tow it. The couple bought their double-wide trailer two years ago for $325,000 and were eager to pocket $1 million.”
“‘We did a few things we shouldn’t have done,’ she said. ‘It was a once-in-a lifetime opportunity. We’re working people.’”
“Jose planned to use part of the cash to start his own business. Suppressing the worry in her eyes with a half-smile, Ileane added, ‘We just have to figure out what we’re going to do now.’ If the sale doesn’t happen, she says, they’ll sell the new toys and the trailer.”
Good luck with that. I have a 20′ 1975 Wellcraft that I paid $1,200 for and another $1,800 for an engine and trailer. I also have a 1991 Suburban I use for towing it that I paid $1,200 for, for a total of $4,200, yes four thousand two hundred, NOT 42,000. All are in really good working shape. I decided I wanted to sell it a few years ago just for the hell of it. No one even looked at the whole turnkey package for $5,000 ($800 for my labor in getting it all running). I couldn’t imagine trying to sell a boat and a truck for $92,000. No way in hell they’ll get that kind of money for it. They’re toast.
Actually, I put that package together 10 years ago, so a used boat should be even more, at least that’s what I’ve seen in the paper. Someone else on here commented that the ‘affordable automobiles’ listing in the paper now starts at $3,000 where as a few years ago it was $1,500 or Less. Same with boats. I’ve noticed an increase in boat prices. My point is, even a relatively affordable boat like my drew no interest, which I really don’t care because I don’t have much in it and it could sit in the driveway for eternity for all I care, but trying to unload a $52,000 boat and $40,000 gas guzzler, that shite ain’t happening. I always have to laugh when I see these 25 foot monstrosities sitting summer after summer out front of a carwash or something with a for sale sign on it, even in good times. There’s just not that much of a market for new boats and especially used boats with all the accessories. I can’t believe anyone would drop that kind of cash on a boat. Even my boat new would go for $30,000, that’s just insane. These boat dealers must make a Catholic Mass tighth donation everytime they sell a boat. That’s gotta be a slow ass business even in good times.
Of the six cars I’ve owned, 4 of them were purchased for $2000 or less, and I got a cumulative 250,000 miles out of them. There is no reason one can’t buy a decent car for $2000…..if you look hard enough, you can find a clean one too. My last truck looked brand new inside and cost me $500 to own over three years.
You think Jose’s truck is a gas guzzler, consider that 29 foot boat. It probably gets no more than 2 (that’s two) miles per gallon. More likely even less.
Refilling the tank after a day on the water is painful to the wallet.
Years and years ago visited some friends in Sacramento. They had about a 40 footer they used on the river. Filling the gas tank - $500.
Anon, I had a buddy who had to sell his 26 Chriscraft last fall. Burned 17 gallons of gasoline per hour, up on plane.
Marina gas is about 3.50 - times 17 = 60 bucks an HOUR to run up and down the Potomac. Good grief!
Call me old fashioned by I like my boats to come with oars. They’re especially handy if you’re up the proverbial creek!
Wait a few months and they will be giving boats away.
Had a friend who paid $250K for a 36′ Sea Ray, which became his home for as long as he could stand it — a year or two. Fun guy, but he was not a millionaire from what I knew, nor do I think he had a clue as to what a used honker like that would actually bring. I think I would do that only if I had cirrhosis and no kids who would be helped by an inheritance.
Marion County Florida here. Does anyone else see this Happening in their Local Government?
House prices are Dropping Slowly ( for the last Year) but Tax appraisals still shooting up? 25% Plus this Year.
Also they said they are doubling the Impact Fees. $8,800 to $16,000 on all residences .
I know this is just an attempt to prop up assessments and Prices on existing Homes.
This is getting really annoying. Just when I think I might be able to find a reasonable priced lot and ” Build My own Home” so I can actually ” Afford it” the County adds another 10k in Taxes .
These Gov A-Holes are really getting Me PO’d . Outlaw all Impact Fees!
These
gov workers are perpetual- their pensions even more so
gov workers are perpetual- their pensions even more so ??
The new upper middle class….
Have to find a way to make up that $174 tax savings they gave everyone off their property tax bill..remember they do Florida math… 5% off your tax bill = 30% increase in everything else you pay…
I know what you mean. My lot in Sedona went up in value 70% in one year. I just sold it and it will close escrow on Sept. 5th..
I’m totally liquid now and will be for some time.
The LEV news is good. I had pegged LEV TOA and WCI as for sure bankruptcies in that order. Unfortunately for me TOA went first and then I got squeezed hard when the LEV deal made the news. I had hoped for them to tank quick so I could pour those earnings into WCI. Oh well. I’ve been doing good on LEV the last few weeks though.
The part about the sailboat and the truck was interesting because next week I’m going to buy a Rolls Royce (covertible of course) and I might take a trip to the South of France and buy a 65 ft luxury boat which one of the arab oil tycoons is selling. Where am I going to get the money? I’m going to win the California lottery of course. I figure it should come in at about $35 million.
As a side issue - can anyone tell me why people like this are allowed to vote?
These folks are great for our leadership which profits off their stupidity. Just look at the financial disclosures of our Senators and Congressmen. Many are business owners, have huge trusts etc. They are turning the middle class into a bunch of life-tenants willing to toil for shiny pieces of &^*%$$.
When voting season comes around you can have your choice of 1) a vote or 2) a pony.
Who do you think was responsible for all those hanging chads?
I have a friend who’s in RE who told me that she doesn’t have the mortgage payment for next month. Her last deal fell out of escrow because, suddenly, her people couldn’t get a loan. Then she shared that she’s been living off credit cards for the past 6 months, and now they are maxed out (also same friend who got mad at me a month ago because I didn’t want to $pend a long weekend with her at a luxurious spa — it was $700 a night). I nodded my head and tsk tsked her “bad luck.” She was horror struck when I mentioned that — just maybe — she should consider a BK, and (I swear this is true) she said “no way… I’m going to win the lottery and everything will be OK.”
Well, there’s a lot to be said for positive thinking…
I have a friend who’s in RE who told me that she doesn’t have the mortgage payment for next month. Her last deal fell out of escrow because, suddenly, her people couldn’t get a loan. Then she shared that she’s been living off credit cards for the past 6 months, and now they are maxed out (also same friend who got mad at me a month ago because I didn’t want to $pend a long weekend with her at a luxurious spa — it was $700 a night). I nodded my head and tsk tsked her “bad luck.” She was horror struck when I mentioned that — just maybe — she should consider a BK, and (I swear this is true) she said “no way… I’m going to win the lottery and everything will be OK.”
Well, there’s a lot to be said for positive thinking…
Sorry for the dupicate post. Dog wants out, knocked laptop off my knees, hit add comment accidently.
Money market fund halting redemptions:
http://www.thestreet.com/tsc/pdfs/LETTERTOCLIENT.pdf
Please give us your money, you can take it out whenever you want. “Fine print on page 700 says we reserve the right to halt redemptions”
Are these the same people that wrote mortgages with prepayment penalties?
I wonder if Cramer owns this for his charitable Trust! BOOO YAAA!
Hmm. sounds like that would lead to a personal credit crunch for many people when they can’t access their funds. Now the cascade effect gets interesting…….
I guess this is why the FED injects liquidity. Let us hold those MBS for you. Here is money. Investor still takes it out. FED says pay up, Hedge Fund says, sorry, we are broke. FED then will end up selling these things off to Fannie Mae and Freddie Mac with Hillary Clinton and Christopher Dodd’s help.
SNTXX is that the Sentinal Money Market symbol? All research is wiped off the Big Charts page. This could be #1 on the implode o meter for Money Market Funds. How many 401k’s have their “safe” money in Money Markets becuase Mutual Funds are too risky? The party is really, really over.
Sentinel Funds are HQed in Vermont. This Sentinel Management is in Northbrook, Illinois and sells its commodity futures advisory services.
Nope, I’m wrong. Sentinel Funds and Sentinel Management appear to be related.
From NASDAQ’s site:
“2007-08-14 11:00 ET Dow -147.38 Dow Close 13089.15 Nasdaq -24.26 Nasdaq Close 2517.98 S&P -18.55 S&P Close 1434.37 NYAdv 867 NYDec 2169 NQAdv 1099 NQDec 1645
[BRIEFING.COM] The market continues to deteriorate as speculation about a letter to clients from a money market fund halting redemptions is confirmed. Within the last 10 minutes, CNBC reported that Sentinel Management Group has asked permission from the CFTC to halt money market redemptions.
Sentinel’s inability to meet significant redemption requests has exacerbated the liquidity concerns that have led many to believe a real credit crunch is forthcoming. While the credit markets continue to experience liquidity problems, which are real and of serious concern to the financial markets, there is no evidence yet of a credit crunch that would impact the overall economy. Nonetheless, the Financial sector has edged even lower and is now down 1.9% as the bottom continues to fall out of the brokers and banks.”
“there is no evidence yet of a credit crunch that would impact the overall economy.”
Phew!! Thank God this issue is contained.
“there is no evidence yet of a credit crunch that would impact the overall economy.
Don’t joke. Some a** will buy tons of stock on that statement alone.
Sentinel Asset Management, Inc. (of Vermont) is in no way affiliated to the Sentinel Management Group (of Illinois) that is referred to in news stories today.
The Vermont Sentinel runs SNTXX, a US Treasury Money Market Fund. More at
http://www.sentinelfunds.com/
CFTC? What the heck is in that fund?
CFTC says it has not authority to grant this request.
Nice way to bite the hand that feeds you.
Stocks going way down today. hedge Fund squeeze coming on?
On a sidenote, VMWARE is way up. I don’t see why. Too much competition from IBM, Microsoft, XEN Source and others will eat away at margins.
I see another Tech Bubble coming on from what I see Cramer and everyone preaching.
SUNW
ORCL
MSFT
IBM
VMW
EMC
HPQ
DELL
AMD
INTC
and others you may want to look into just in case there is a bubble. You might be able to profit : ).
I have 100K+ shares of SUNW in the 4.50s bought last week. I like that stock here.
You bought 100K shares in ONE company in this kind of market! Well, I suppose that’s okay if you have 100K shares in 10 other companies. If not, you violated Rule #1 of investing. “Preservation of Capital.”
I have 400K shares in another one that traded an average aof 4,200 shares a day. Don’t lose a minute of sleep over it.
Warren Buffet preaches against diversification because it lacks focus.
god I got in and out of sunw so many times (i love sun because i am a java developer) I just cant do it anymore… they just cant seem to go anywhere.
Sun is committed to keeping every penny they make with management. Even when they were showing profits, their balance sheets were getting worse because they were spending it all buying back stock to give themselves.
They fought FASB 123 tooth and nail. If they’d put half the energy they spent pretending all the option awards weren’t draining the company into building computers, they might be worth owning.
You’re screwed. Dump it. Sun is pumping out crapwagon after crapwagon of hardware which nobody wants to buy anymore ever since reading that Google uses $800 commodity boxes in their datacenters. Sun’s latest PR blitz is that they’ve “open sourced” their CPU. Whoopdee freaking do. You can’t buy a Sparc CPU and drop it onto an Intel or AMD motherboard.
The only thing Sun has going for them is Java, and the licensing fees they collect for hardware implementations will be shortly circling the toilet bowl as cellphone providers realize that, oh, hey, we don’t need Java on our phones, because Apple doesn’t have Java on their phone.
“On a sidenote, VMWARE is way up. I don’t see why. Too much competition from IBM, Microsoft, XEN Source and others will eat away at margins.”
VMWare has been at their business a long time. Coming from a tech field, the big push lately is to VM(virtual machine) everything. I’m currently working on a project that is downsizing 8 servers into 4 with 2-3 VMs on each box. That is just one of many similar projects involving VMware at my company. Those projects are small compared to what some friends are doing: a friend of mine that works for a large insurance company that is spending like mad redoing everything on VMs. He was telling me their rolling out a pilot program where they’ll even replace desktops in the organization with VMs.
We consolidated many servers onto a 32 server (4 dual core CPU per server) farm on VMWARE. The problem is I see some very attractive offerings from Microsoft and IBM and Xensource that were not there before at a very attractive price. This is why I believe VMW is hype. This stock might be a good value now, but next year it might be $100. Would I buy it then? Depend. But if what I see right no is any indication, I would have to say no way.
Competition for VMWARE.
http://biz.yahoo.com/prnews/070814/aqtu058.html?.v=19
the competition doesn’t stand up to VMWare. Even though MS gives away virtual server for free.
does the competition support P2V? I don’t think MS has a V-Motion feature for your virtual cluster. microsoft’s free product is about as good as VMWare’s free product.
we are still early in the virtual game and 5 years from now we’ll have features we can’t think of yet. VMWare has so far been the leader in bringing new features to market.
personally i think it’s going to do what MS did when it went IPO. rise, then fall and be dead money for years until it comes up with the next killer app
You know tech is going to be a bubble. This stupid country just goes from one bubble to another and a lot of people never learn their lesson.
Thank you. that was going to be my next comment. “For industry watchers waiting for a turnaround…” Wait, do you mean to tell me that there are people on the edge of their seats waiting to effing do this AGAIN? Are they not paying attention? Sure, maybe if they start at the bottom of the next boom they’re OK. But that’s like saying you’ll just take one hit of heroin one time, and you’ll be fine. If you’re the type that considers it, the odds are already against you.
Especially if you are watching a bunch of heroin addicts in detox, crashing, sweating, hallucinating and crapping their pants.
But whatever. Get back on the train for another round.
Hey I’m not trying to sell VMWare stock here, but I have used their workstation software to run sandboxed Windows on my Linux machines, and it works really well. (VMWare is the only way I’ll run Windows on machines I own.
That said, I have no idea what a fair valuation of the company would be. But their meteoric rise in share price today suggests people may be actively trying to anticipate the next great tech company or the next great IPO. I suppose GOOG has set the standard - count on most of the future IPOs trying to compare themselves to GOOG.
I still have my IBM, but I unloaded my GE yesterday. SRS and SCC are shining for me.
Note: This is not a solicitation to buy or sell securities. If you buy securities good luck, you’re gonna need it!
Apparently Goldman Sachs believes in throwing more money at the problem.
Is there a “wake” being held at CNBC today…down 158 at 11:15, and the shiney faces look a little pale. How much spin is left for these hucksters. Their reputations go down with their stock market hype as the markets head lower, much, much lower
I’m sure Maria Bartibimbo will save the day!!! Or Crazy Cramer!!! Or Cocaine Kudlow!!!
Remember cuckoo Cramer ranting and screaming last week about Armaggedon??? That was just a setup for the sheeple to short. The market got a bounce (surprise!) so Cramer and his ilk sold their shares while the sheeple roasted.
Rinse and repeat, rinse and repeat… it’s all a game.
Same thing happens with real estate. Shills and paid realtwhores fool idiots like the trailer park trash in the story. Hey, your roach-infested dump is worth $1,000,000,000,000!!! Get a HELOC and spend it on toys, boats, and three more McMansions… a few months later, the NOD arrives, then foreclosure, then BK. But the realtwhores’ comission is not refundable, so they keep it and go on with their game.
Sad, really, but the pigs and the sheeple are just soooo easy to fool.
Good money after bad? I hope they fine-tune their “quant” models before the massive introduction of new capital!
““There goes the money. The new sailboats. The lavish gifts for grandchildren. Most troubling: A few dozen residents have already bought new homes in anticipation of the big payday.”
How did they buy new homes without a “stated income” loan if they didn’t get their anticipated windfall yet?
How did they buy new homes without a “stated income” loan if they didn’t get their anticipated windfall yet?
If they used the purchase contract for the sale of their place as evidence of ability to pay, I’d guess that someone would give them the loan and that it would not be considered fraud, even after the deal feel through. However, they are in a heapa’ trouble, relative to paying for that new mansion.
“The best time to buy is when the sellers fear tomorrow is worse than today,” said Grimes.
That’s absolutely the worst time to buy, or buyers will be the ones fearing tomorrow is worse than today.
Not just stupid people in Fla, but sounds a lot like San Diego. . .people took Helocs on their homes to buy boats, SUV’s, and other toys, now they owe more than the house is worth - “a city of dope smoking surfers and beauty school dropouts” as one local person put it, and those are the “quality” people, the rest are realtors and used car salesmen - if it wouldn’t be for the military, no one in SD would have an honest job.
Diego de Los Angeles sold it’s soul and became the neighbor up north it always despised…
There is a lot of well paid tech in SD…I know, I been here 10 years. Sold the house 3 years back, as txchick says, was a huge windfall and I knew it would be dumb not to take it. Now we live comfortably in a nice rental and could semi-retire, but I like to do engineering, its fun if you like to design and build gadgets, plus it pays good. Some of my colleagues need to be here…I don’t.
Agree - lots of tech people, but they tend to congregate in Carmel Valley and UTC. . .a lot of east county and south county is pretty down at the heels. . .and let’s not even talk about the crumbling infastructure. . .the nightly water main break on Fox6. . .
“a city of dope smoking surfers and beauty school dropouts” as one local person put it, and those are the “quality” people, the rest are realtors and used car salesmen
LOL
The FED injects no liquidity into the market and it tanks. A sign of things to come?
http://www.ny.frb.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE
sentinal mm = no cash back today Jack
keep it under the matress
Dow almost hit 13,000 but of course, it bounced.
http://finance.yahoo.com/q?s=%5EDJI
Did anybody notice the comparative numbers from the first story? “Levitt lost $58.1 million in its second quarter, the company said. Levitt’s second quarter revenue declined 4 percent to $127.8 million.”
That is a loss equivalent to 50% of your revenue - they would have to increase revenue by 50% just to break even. That isn’t a wound hemorrhaging, that is your freakin’ head being lopped off.
The whole situation reminds me of a scene from Monty Python’s Holy Grail.
Ben Jones: You just lost $50M
LEVITT: ‘Tis but a scratch.
BEN JONES: A scratch? Your arm’s off!
LEVITT: No, it isn’t.
BEN JONES: Well, what’s that, then?
LEVITT: I’ve had worse.
BEN JONES: You liar!
LEVITT: Come on, you pansy!
[BEN JONES chops LEVITT's right arm off]
BEN JONES: Victory is mine!
We thank Thee Lord, that in Thy mer–
LEVITT: Hah!
Come on, then.
BEN JONES: What?
LEVITT: Have at you!
BEN JONES: Eh. You are indeed brave, LEVITT, but the fight is mine.
LEVITT: Oh, had enough, eh?
BEN JONES: Look, you stupid bastard. You’ve got no arms left.
LEVITT: Yes, I have.
BEN JONES: Look!
LEVITT: Just a flesh wound.
BEN JONES: Look, stop that.
LEVITT: Chicken!
Chickennn!
BEN JONES: Look, I’ll have your leg.
Right!
[BEN JONES chops the LEVITT's right leg off]
LEVITT: Right. I’ll do you for that!
BEN JONES: You’ll what?
LEVITT: Come here!
BEN JONES: What are you going to do, bleed on me?
LEVITT: I’m invincible!
BEN JONES: You’re a looney.
LEVITT: The Levitt always triumphs! Have at you! Come on, then.
[BEN JONES chops the LEVITT's last leg off]
LEVITT: Oh? All right, we’ll call it a draw.
Come on man, you’re stealin’ my bit! I’ve been rockin’ the black knight for some time now. Just link to this:
http://www.toyvault.com/montypython/Black%20Knight%20-%20Large.jpg
Zillow question ?
do they penalize an old house in a hood of newer homes ?
Actually it is probably worth more than an old house in a neighborhood of old houses. You definitely don’t want to be the most expensive house in the neighborhood.
“do they penalize an old house in a hood of newer homes ?”
Not in my one-off experience. My old mother had a no-maintenance-in-20 years house in a nice neighborhood where everyone else hept their places up well. Her Zillow valuation was way too high, relative to the others.
“the Orlando Sentinel. “The Orlando area’s sluggish housing market is showing no signs of a turnaround, with the latest numbers going from bad to worse during what should be the hottest sales stretch of the year.”
It bugs me that Newspapers editorialize like this. Why is the end to crazy speculative inflation on home prices “bad”? If gas prices were falling would they call that “bad”? Why are houses different?
“‘That’s what’s going to kill the market — higher taxes,’ she said.”
1. Property taxes went up because the valuations of the homes went up. (Often because they were bid up with money the “buyer” shouldn’t have had because he lied on his loan.)
2. The Guv’ment went ahead and spent this windfall
3. They still expect to collect the taxes based on inflated valuations.
If you’re property taxes went up because “values” went up based on liar-loans, then you’re being screwed.
A report August 16 indictes that the number of discounted properties in Fort Lauderdale doubled in just one month. All eyes have been on Miami and Miami Beach recently, where steep discounts have been reported by the national media. This latest development is concerning (for sellers), and indicates the real estate crisis is spreading outside the speculators market.