Just The Beginning Of The Declines In Florida
The Dow Jones Newswires report on Florida. “One Bal Harbour may look like just another sign of excess in Miami’s oversaturated condo market, but to developer WCI Communities the luxury tower represents crucial cash. WCI launched the project during the housing boom, when developers rushed to fill what seemed to be an insatiable demand for housing, particularly condominiums.”
“In the time it took to earn approvals for and build the condos, the housing bubble popped. That has left Florida awash in a record number of condos. South Florida alone has about 65,000 listed for sale.”
“There’s been an 80% drop in new condo sales in the last year and tens of thousands of more units should flood the market in the next 24 months, leaving ‘many years’ worth of inventory,’ according to broker Mike Morgan. ‘From here on out, it’s just all downhill,’ he said.”
“Warned Alex Barron, an analyst with Agency Trading Group: ‘It’s going to be a bloodbath.’”
“Industry watchers wonder if the building, which has already been delayed, will actually open on time. After touring One Bal Harbour Saturday, Morgan said a lot of work remains. ‘I did not see enough activity to demonstrate they are even trying to hit a September closing,’ he wrote in an email to clients. ‘With the overall market imploding, this is not a good sign for WCI.’”
The Naples News. “In a conference call, Jerry Starkey, WCI’s president and CEO, called it a ‘tough quarter,’ saying the company continues to focus on generating cash flow, reducing costs and moving inventory. ‘It continues to be a tough environment for homebuilders throughout the country and for WCI particularly in Florida — and more specifically in the tower business,’ he said.”
“In the quarter, WCI recorded impairments and write-offs of $36 million before taxes. New orders declined more than 50 percent. Over the past 16 months, WCI has reduced its work force by more than 33 percent, shedding 1,300 employees. More cuts are coming, Starkey said.”
“(An) upturn may not come for another four or five quarters, he said. The company has also ‘put the skids’ on land spending, Starkey said.”
“In the tower division, revenues declined 99 percent to $2.1 million from $214.4 million a year ago, in large part due to defaults. There were 68 defaults, far outnumbering the 11 new orders.”
The Orlando Sentinel. “A prominent South Florida developer with more than a dozen big condo projects under way in the Miami and Fort Lauderdale areas is pressing ahead with plans for a condo-hotel in Celebration near Walt Disney World, despite a slowdown in condo sales and projects statewide.”
“The Related Group will open a sales office this fall for the Icon Celebration, a 441-unit condo-hotel with hotel services, Chairman Jorge Perez said this week. The Related Group has more than 11,000 condo units under construction or in the final stages of preparation for development in South Florida, mainly from West Palm Beach south to Miami.”
“‘We have slowed down, but we are continuing to move forward,’ Perez said.”
“He said he will begin construction on the first of two buildings for Icon Celebration as soon as he has firm commitments for about 130 units, about 50 percent of the first phase. He said he could not predict how long it would take to sell that many units in today’s market, plagued by slumping demand and falling prices.”
“‘That’s the million-dollar question,’ Perez said.”
“One downtown project, the Lexington at CityPlace, recently filed for bankruptcy protection, while others have been put on hold as they compete for investors and buyers of conventional condos. ‘There’s just a lot of them out there,’ Anne Rogers, broker in Orlando, said of the condos now for sale.”
“Florida’s soaring home-foreclosure rate was still 78 percent higher last month than it was a year ago.”
“‘I don’t think the worst is here yet,’ said Dan Dowling, president of a mortgage brokerage in Altamonte Springs. ‘For many of them, there’s just no escape, no remedy,’ he said, other than to let the home revert to the lender through foreclosure.”
“Dowling said the level of frustration among those trying to sell their homes month after month in the face of record gluts of properties for sale is rising even in Central Florida.”
“The ‘credit crunch’ scare of recent weeks has made people even more fearful, he said, and some are beginning to sell their homes for 50 percent to 60 percent below the appraised value, in desperation, if they find a buyer willing and able to close quickly.”
“‘These are people with equity, and options, but they just need the money. There’s just a general sense of depression among a lot of sellers out there,’ Dowling said.”
From TC Palm. “Frank Lodico’s business has more than doubled in just a year. ‘We’re seeing more than five times the amount of foreclosures here,’ said Lodico, VP of (a firm) which serves foreclosure papers on Treasure Coast homes. ‘I just had (served) six this morning…and I’ve never seen it like this before in my whole 12 years here.’”
“‘On July 30, I surpassed what I processed during the entire year of 2006,’ said Nancy Bennett, supervisor of the civil division for the St. Lucie County Clerk of the Courts. ‘Now we’re having to come in on Saturdays to process them — last Friday alone 60 (foreclosure) cases went up before a judge.’”
“‘The biggest resets of (adjusted rate mortgages) will work its way through October and March,’ said Brad Hunter, director of the housing research firm Metrostudy in West Palm Beach.”
The Miami Herald. “If you’re in the market for a mortgage these days, you’d better have good credit and be willing to come up with a substantial down payment on your dream home.”
“‘Lenders are definitely demanding better credit scores, and they’re stricter with appraisers’ to avoid inflated home values, said Ines Hegedus-Garcia, a Realtor in Miami Shores.”
“Lenders have pulled back from these large loans if they exceed the threshold for purchases set by the government-sponsored entities Fannie Mae and Freddie Mac. ‘We are seeing a rolling credit crunch,’ said Kenneth Thomas, a Miami-based economist and banking analyst. ‘Money is still out there, but [banks are] going to be requiring a lot more’ to get loans done.”
“Carlos Fernandez-Guzman, senior executive VP of Neighborhood Banking for BankUnited, said the bank has reacted to the changing lending environment by requiring 20 percent down payments as well as escrow accounts.”
“‘We have tweaked the credit lines further,’ said Fernandez-Guzman, who noted the bank isn’t in the subprime business. ‘That’s not to say that there isn’t room always for tightening a little bit more.’”
The Associated Press. “The National Association of Realtors expects membership rolls to decline this year for the first time in a decade. The Florida Association of Realtors currently has about 154,000 members compared with more than 161,000 last year at this time, but expects flat membership by year-end.”
“Nancy Riley, president of the Florida Association of Realtors, said membership more than doubled since 2001 and stood at 169,434 last year.”
“‘Most people getting out got in just to make a quick buck,’ Riley said, blaming tax issues, insurance costs and the media for the perception that Florida’s real estate market continues to falter. ‘It’s not doom and gloom,’ Riley says, insisting the state is gearing up for another population boom.”
The Palm Beach Post. “Palm Beach County’s property appraiser on Tuesday mailed more than 620,000 property tax notices, and the preliminary bills show two things homeowners haven’t seen in years: Falling values and falling tax bills.”
“Of the 620,647 residential and commercial properties in Palm Beach County, fully 364,835, or 59 percent, are worth less this year than last, said John Thomas, assistant director of residential appraisal services at the property appraiser’s office.”
“Palm Beach County home prices have been in a slump since late 2005, as a speculative frenzy ended and the number of homes for sale continues to grow.”
“Thomas couldn’t say how much the average decline was, but some homeowners saw drops of 10 percent or more. Because the property appraiser’s values are based on the price on Jan. 1, Thomas predicted another drop in values on next year’s tax bills.”
“‘At least in my opinion, that’s just the beginning of the declines,’ Thomas said. ‘Unless things change radically, you’ll probably see it go down again next year.’”
Florida condos for everyone!!!
Here is a condo for everyone!
Condo in Sarasota for sale. He’s desperate
http://condosaleinflorida.com/
Some emergency — this seller wants to unload his albatross for an entire 9.5% discount off the WISHING price of a comparable unit that is for sale. Yo, anxious seller! 30% off would get my attention as an “emergency.” But in this market, it might not be enough.
There is precedence for getting rid of bulky overpriced goods, Americano…
You get a condo
And you get a condo
And you get a condo
And you get a condo
There is new precedence that is trying to be set as well…and that is politicians wanting taxpayers to bailout homeowners.
Got a new post up…
SoCalMtgGuy
http://www.housingbubblecasualty.com
NO CONDO FOR YOU!
…lousy condo n@zi…
SoCal — good to see you back.
Oh look … it’s in that one development — Villa D’Banquerupt at Foreclosurio.
Jim — too bad it’s so late in the day — you’ve got the seed for a good amount of humor, in “Name that bankrupt development.”
“El Condo Pasa”
I’d rather be a hammer than a nail…
Got 10% down?
‘Q: As a new member in a condominium association, a question has come up regarding the Florida ‘bed tax.’ A number of our members are absentee owners who rent their units on a seasonal or monthly basis. Are such rentals subject to the bed tax?’
‘A: You are correct that there is a ‘bed tax’ in many counties in Florida, including both Lee and Collier counties. It is not unusual to hear of some condo unit owners not reporting and paying the bed tax, either out of ignorance or intentionally. I am also aware of some owners who believe entering into a six-month lease, even though neither party intends for the occupancy to last for six months, is a way to legally avoid the bed tax. However, they should know that in addition to penalties and interest, enforcement of the bed tax is also supported by criminal law, and a knowing refusal to pay the tax or fraudulent conduct to avoid the tax can be met with criminal sanctions.’
Ben,
I make damn sure when i set leases for our units they are for a minimun of 1 yr. Also some cities like to tack on extra “fees” if the lease is less than 6 months. Now if the tennant wishes to bail at 4 months and forfiet the security desposit i have zero problem with that…
Chris
’some are beginning to sell their homes for 50 percent to 60 percent below the appraised value, in desperation, if they find a buyer willing and able to close quickly.’
Interesting how these little quotes are just buried here and there in the MSM.
“‘It’s not doom and gloom,’ Riley says, insisting the state is gearing up for another population boom.”
There’s a quote that deserves airing.
I just did a quick Google News search to find stories on Florida school enrollment now that the new school year is under way. Couldn’t find much, but the stories I found show a mixed bag. Slightly up, flat, slightly down. Volusia County dropped 3,000 over last year, down to 58,582. Those are the only hard numbers I found. Maybe others here have additional data (not hearsay).
In Palm Beach, school just started yesterday, and I think Dade and Broward started Monday, so they wouldn’t have anything yet.
Brevard started on Monday.
http://www.orlandosentinel.com/orl-schoolgrowth2007aug20,0,1586589.story
this story ran in the Orlando Sentinel on Monday and the next story is about enrollment down in religious schools that ran on Tuesday.
http://www.orlandosentinel.com/orl-mreligiousschoo07aug21,0,7581553.story
Don’t draw any conclusions from the first day of school enrollment numbers right now–wait till the 20th day of school numbers are released. School started much earlier last year and many parents waited till the 2nd of 3rd week to put their kids in school. It is likely the first day of school numbers of sckewed because of different starting date.
As for school enrollment there is an anomaly that might skew the numbers for a particular school or two, but probably not a district. A HS math teacher friend says that if the FCAT (statewide exam that, by all reports, distracts teachers from getting through their regular material) score of a government school is low enough (I think that means “D’ or “F”), the parents have the option of transferring the student to a school with a better score. So instead of Donny Dumbass’s parents realizing that maybe Donny isn’t cut out for Algebra II, they transfer him and he fails at the new school, while also helping to drag down its score. Isn’t socialism wonderful? In my day, we had “Vo Tech” schools available — excellent schools that taught trades, under the assumption that not every single Dick or Jane was destined for college. We took aptitude tests — “feelings” were not a part — and that helped determine where the educational counseling would lead. Now, everyone has to feel good about themselves, so we dumb down the bright kids to assuage the feelings of the less-gifted, and import properly-educated foreign workers to fill employment needs.
OT, what % of graduating HS kids these days go to college? Given that they start, how many graduate?
A HS math teacher friend says that if the FCAT (statewide exam that, by all reports, distracts teachers from getting through their regular material) score of a government school is low enough (I think that means “D’ or “F”), the parents have the option of transferring the student to a school with a better score. So instead of Donny Dumbass’s parents realizing that maybe Donny isn’t cut out for Algebra II, they transfer him and he fails at the new school, while also helping to drag down its score.
Your friend is right and it’s not just Florida. It’s part of the No Child Left Behind Act. I”m a school board president and I was at the teacher inservice this morning at our school district. The Superintendent gave a talk on just this topic. Any school that does not meet certain things on the testing report card has to send a letter home to every parent in the district and tell them that they will pay transportation for their child to go to another school. Problem is the low income and mentally disadvantaged get first shot of transferring, thus bringing down the scores of the school they transfer to. In our county only two schools met the AYP (Average Yearly Progress) although almost all were effective on the report card, which is a bunch of stupid criteria that makes no sense. Four of the other schools in the county called to see if they could use our schools’s name in the letter home to parents of their district as a school to attend. Our superintendent told them he would prefer they send out the letter without any other school names (which is allowable). This NCLB created by Bush just shows how low his mentality really is. It’s poorly designed and very restricting. It’ll transfer poorly performing students from school to school and bring down the testing report cards everywhere they go.
Good question, which I’m too lazy to look up.
I can tell you when I graduated from an affluent high school (for VT at any rate) in 92 that the number of kids who went onto college was an important metric. It was “magic” number even though the high school was associated with an excellent on site vo-tech school.
I’m guessing not much has changed and the problem has gotten worse. (And who cares how many actually finish?? - the high school got their good looking number and the college got a warm body and tuituion for at least a semester or two.. ;))
“This NCLB created by Bush just shows how low his mentality really is. It’s poorly designed and very restricting.”
That’s what I hear from one of my brothers who is a grade school principal. He also has harrowing stories of how the “tutoring” programs are being milked as cash cows by certain teacher groups, esp. “special education” by signing in, then blowing out a half-hour later and collecting for several hours work. All you need is a supervisor in on the scam. He says it’s freaking everywhere.
One big hurricane hit will finish any possibility of getting any kind of insurance in FL.
Yes, but it would probably stimulate the economy and provide jobs in the construction industry.
Maybe homeowners can plant a statue of the Big Bad Wolf in their front yards.
Just where does she think the “boom” is going to come from. There’s a lot of baby boomers who are in it up to their eyeballs and will never be able to retire. Secondly, Florida has priced out probably 3/4 or more of the boomers that thought about retiring there. I don’t see new young families moving in, they’re priced out too. Wealthy people only need so many houses and the supply way, way outnumbers the demand. Wake up lady.
But you forgot about ‘MIRAGE’: Moneyed Immigrants, Rich Ancestors, Generous Expatriates.
another population boom in mosquitos from the pools in foreclosure homes maybe possible
“In the tower division, revenues declined 99 percent to $2.1 million from $214.4 million a year ago, in large part due to defaults. There were 68 defaults, far outnumbering the 11 new orders.”
Yeah, I remember a couple quarters ago WCI management said they were pinning their hopes on their condo towers. At the time it was a pretty assinine statement that smacked of a drowning man grasping at straws. How’s that workin’ for ya?
I once worked for a company whose stock price fell 95% in twelve months. That was a wake-up call, considering I held stock options in said company. It was a hard lesson, but a good one.
I remember that statement. Their stocks jumped immediately.
Lemmings.
“The National Association of Realtors expects membership rolls to decline this year for the first time in a decade. The Florida Association of Realtors currently has about 154,000 members compared with more than 161,000 last year at this time, but expects flat membership by year-end.”
Hey, they’re right… how low can you go? Only to zero, my friends
Do these people count in the unemployment numbers? I doubt it.
Do these people count in the unemployment numbers? I doubt it.
No, most are self employed or 1099 and are not counted.
No they do not count in unemployment numbers. They’re independent contractors. Nor do many mortgage originators, and many subcontractors. That unemployment number is way under-reported.
The don’t count in the unemployment numbers but they will count in the employment numbers when they get jobs working the grill for peanut wages
This will be a statistic that will help distort the overall health of the economy.
Yes they count in the unemployment numbers.
There are two surveys. The Current Employment Survey is a survey of employers on wage and salary employment levels. They aren’t counted there.
The unemployment rate comes from the household survey. People are asked if they are working or looking for work. It doesn’t matter if they are/were employees or self employed.
If being a realtor was just a side job that will not be replaced, then the ex-realtor will not be counted as unemployed because they are not looking for worse. They will be counted as not in the labor force.
But surveys take into account such a small number of people. What are the chances that most realtors will get a household survey. I’ve never received one, have any of you?
“But surveys take into account such a small number of people.”
The CPS (Current Population Survey) is huge. They interview 60,000 households each month.
http://www.bls.gov/cps/cps_over.htm#overview
And even then, they get screwed. The latest on Tucson’s very own First Magnus…
The gift checks (for Southern AZ ex-employees only) are in the mail
:
http://www.azstarnet.com/sn/related/197731.php
The StarNet readers are already tearing this story apart:
http://regulus2.azstarnet.com/comments/index.php?id=197731
I bet the checks had to be classified other than paychecks to circumvent the bankruptcy proceedings.
be a real pisser to :
1) Have the court or investors or regulators breathing down the owners/execs necks if they incorrectly issued the last paychecks instead of paying mr & mrs megabuck their investor dividends first. (OMG !! Think of the horrors, the righteous indignation, the hue & cry from screeching pensioner trust fund widows if the “little people” employees get their justly earned paychecks ahead of anyone else)!!
2) On the other side the same owners/execs dont really want to see an angry mob outside their residence. or kids school, or country club, demamding compensation, and this is a way to at least get em SOMEHTHING right away, if not in full.
Hell, I’d do the same thing. If I had employees I’d damn sure MAKE sure they were paid off even if I had to sell my Gulfstream.
And on the flip side, if I was stiffed wages you bet I’d use every resource available to pursue & embarrass the owners/execs.
First Magnus employees aint strawberry field workers, they know how to use the powerful internet to help themselves & spread the word.
(Thats what sends shudders thru the wives of the execs, that some unwashed mob will embarrass little tiffany or
tiffanni or tiffannee or brianna at private schoo) l!!
I think what you end up with is many partially employed people or under employed, rather than unemployed. In this way unemployment is not really accurate. I am a software engineer, but say next year software goes to the birds and I and up trying to get side jobs and working at taco bell, I am considered employed, even though to all intents and purposes I am out of work.
“…some are beginning to sell their homes for 50 percent to 60 percent below the appraised value, in desperation, if they find a buyer willing and able to close quickly.”
I find this hard to believe. Oh it’ll happen eventually, but right now I doubt many people could take that kind of a hit. Easier to just walk away. The 50-60% drops will either occur through multiple transactions (with each “oner” taking a 20% hit), or one big write-off by the mortgage paper holder (which I also doubt could happen on a large scale without the paper holders going under). What I can believe is that people are now trying to sell their homes for 50% less than their ridiculously high made-up asking price. Maybe they got an appraisor to value their home at their asking price?
“oner”=”owner”
It’s always interesting what people can believe or not believe, even though it is happening right in front of them. I assume some of these folks are facing default but have equity in the property. What choice do they have? And with tens of thousands of units for sale, with more coming, what’s so hard to believe?
That’s true - these could be long time Florida residents who purchased in the early 90s for $80k, saw their home appreciate to $350k and are now trying to get out at $175k. But how many of those people had the self restraint during the mania to not take out a HELOC?
We don’t even need to go back that far. This could be early 2003 just trying to get out sans loss.
A 5%/year turnover is a normal turnover market. So any older neighborhood should have 75% of the homes able to discount 40% and get out loss free.
Bwaa haa ha.
So I can believe this.
As I noted before, I know tons of people who own multiple properties who will *never* be forced to sell; but they will at some point want liquid funds for other purposes.
These 40% to 60% discounts could be those very people. People who realize that a major price drop is required to stop feeding the insurance and tax alligator.
Everyone else? They probably should just walk away.
Got popcorn?
Neil
I sold my house in April for $365,000. I paid $180,000 in 2000. The peak prices were $500,000. My home was the last sale in my development. There is ample supply in the development. I am currently renting my home back for a year (pure luck). The purchaser lives in Chicago and is very unhappy with his mortgage. He’s not moving down anytime soon. My rent is $2100 a month and I didn’t have to move. It’s a 4 bedroom two-story track house. I’ve been watching a 3000sq.ft. 5 bedroom home. The owner paid $337,000 in 2003. Her price originally in September of last year was $800,000. It’s now down to $689K. Still way too much. The house sits vacant while the owner now lives in a home she purchased for $1.7 million. We made an offer for $500,000 back in April. She said not a dime under $700k. My next offer, if I make one, will be between 400K or 450K. She has a small mortgage and no heloc’s. However, she has a $1million mortgage and $300K heloc on the new home. I don’t know how long she can hand onto the house. Very little in her neighborhood has sold. There is plenty of her model available with bigger lots. One in particular is now listed at $618K. We may just continue to rent. With the way things are going, there’s no telling how far prices will drop.
You better hold out for 2003 price. $500k is way too much now.
I think you may be right. If jumbo mortgages are not available, I don’t see how anything will sell above $400K. The last two sales in that development were in the $600K range. They were 100% to 95% financed with jumbo mortgages. It looks like the gig is up.
not true - they might sell up to $417
But are they worth $417?
And the $150K+ that was realized on the sale should conservatively be throwing off $500 or $600 a month in interest income.
Good deal!
Looks like my last reply got eaten by the ‘net gremlins. My point isn’t to argue that prices won’t drop 50%; I think they will and more besides. I’m just saying the market declines aren’t going to happen this way.
Yes some people still have equity. Yes most purchased some time ago at a much lower price. But many purchased recently at inflated prices and are already under water. And many of those who purchased at a low price drank the Kool Aid of the mania and have HELOCed themselves to death. These people don’t have cash reserves and don’t have the option to sell for a major loss.
Are some people selling at 50% below appraisal? Sure, a few. But I’m sure they’re the exception, not because many people don’t want out, but because most people’s finances don’t leave them any room to maneuver.
“Are some people selling at 50% below appraisal? Sure, a few.”
All you need is one to skewer the comps.
50 to 60 percent off? If the seller owns the property outright (no mortgage), it’s possible. Not everyone is “under water.” Isn’t the national average about 40% of homes owned free and clear?
I’ve heard such numbers as 30’s to 40%, and these will be some of the people leading the way in setting prices. The other 60+% will be forced to follow (kicking and screaming) as prices are set at the margins in the market.
Yesterday on the news they said 1/3 owned free and clear.
Devildog,
Its happening in a few places here,just not eveywhere YET. My parents have a standing offer with the listing agent for two GMAC foreclosures on their street. One is for .40 on the dollar,another .45. They have been contacted a bunch of times to buy for .80-.90 but dad laughs at em. He kindly reminds the agent he will write a check the same day they accept. One of the places will have been fc for over 31 months sep1. The loan amounts…108 and 130k. Nobody has even looked at either house at all…
Ah yes,foreclosure fun in Port Charlotte,Fl.
Chris
P.S.- You wouldn’t be one of Uncle Sams Misguided Children would ya ???
I got out some time back, but once a Marine always a Marine…
Ah…yes…
I seem to remember something along the lines of…”Parris Island,Where everyday is a holiday and every meals a feast”.
Semper Fi,
Chris
It’s already happened. Remember those 3 bedroom condos in Ft. Myers that were auctioned last month? The people who paid $300k for them in December were po’d at the builder for auctioning them for $145k. I’m waiting til they’re down to $50k, then I’ll pay cash.
The problem is that many of the people that bought condos in Florida have good jobs, decent assets and prime credit (like many of us I suppose, except for the condo purchase). A bankruptcy is out of the question as there are other assets that can be tapped. Walking away is also not an option as that would ruin their future credit. It is better in some cases to pay the piper and lick your wounds.
What is frustrating is that the ants are punished while the grasshoppers can easily walk away.
Greed is getting punished as it should be.
Yes, some have been greedy in Florida and many of them are being punished financially. But what about the middle-class, worked-hard-their-whole lives buyers who retired to Florida three years ago and bought at the peak…and now, for whatever reasons, have to sell? Greed has nothing to do with their equation.
“Greed has nothing to do with their equation”
But stupidity does - and that deserves to be punished too. It used to be you NEVER bought a house you intended to live in for less than five years - for it was common knowledge that you would take a loss.
If they moved there to retire, why would they need to sell in 3 years?
So many homeowners are trapped in Florida. The only way to escape from Florida is to do drama pricing. Most homeowners have received their trim notices (tax assessments for next year) and the assessments are only lower be a few percent. Recent buyers a fuming, because they know that the true values are down 30 to 60 percent. Cape Coral and Fort Myers are having a half price sale right now.
My neighbor, who works for the county assessors office is about to have a nervous breakdown, because he is being bombarded by the angry home-debtors. A big reason for the drama pricing is the high tax assessments. People have had enough,
“‘The biggest resets of (adjusted rate mortgages) will work its way through October and March,’ said Brad Hunter, director of the housing research firm Metrostudy in West Palm Beach.”
- The peak of the resets will be in the summer of 2008. We are still only working our way up to the peak and then speculation of the bottom can begin.
-Todays LA Times Business section has a nice article on the states future job wages. The jobs are divided into two ranges, either you will earn 83k or 21k….that will be the new gap. Next, our state will need to create special housing programs for 21k earners (probably 370k to 580k) homes. Not!
“But Sung Won Sohn, an economist and chief executive of Hanmi Bank in Los Angeles, cautioned against drawing “alarming conclusions.” Although there may be an expanding wage gulf, he said, “net worth has gone up significantly even for people at the low end of the income spectrum,” because homeowners have seen the value of their houses increase.”
How many at the low end own homes and of those, how many have any significant equity?
More likely they’re incredibly burdened with debt if they own as credit was only loose enough to buy near the peak of the bubble.
‘It’s not doom and gloom,’ Riley says, insisting the state is gearing up for another population boom.”
Here we go again, more of the same spin to fool the public. Riley has no data backing up her claims whereas on the other side, the data from movingcompanies, etc. clearly support a declining population in Florida. I have completly lost confidence in any of the information put out by these realtor associations.
There is going to be a population boom. All Florida needs is 60,000 new residents wishing to buy (without putting another place in Florida up for sale) immediately.
U-haul rates out of Florida are booming.
One-way rates for a 26′ truck
From Durham,NC to Miami, FL $192.-
From Miami,FL to Durham, NC $1816.-
…and no this is not a typo! See for yourself.
http://reservations.uhaul.com/ReservationsWeb/Default.aspx
1000 people a day move to Florida and 2000 a day are moving away, quite a boom we’re grearing up for.
The perfect part-time job for an under-active Florida realtor — offer to drive these back to Miami for $300 plus gas. Your only expense is the cost of the bus ticket to Durham.
A looooong days work, to be sure. But, easy money compared to fixing roofs or sign-twirling.
Bet you could rent a flatbed with a tow hitch and take two at once - that’d be $600 per trip.
Wow — we’ve seen U-Haul stats here for a long time now, but I don’t remember then ever being so lopsided as this example. It reminds me of the days long ago when rental car companies would pay you to drive a car back up north.
Hmmm, we have a cruise coming up later this fall, out of Miami. I think I’ll see if we can get a gig “deadheading” an empty truck from this area down to Miami.
I’ll bet there’s an excellent chance you could pull that off.
How’re you gonna’ get home?
I like this one:
“He said he will begin construction on the first of two buildings for Icon Celebration as soon as he has firm commitments for about 130 units, about 50 percent of the first phase. He said he could not predict how long it would take to sell that many units in today’s market, plagued by slumping demand and falling prices.”
My prediction is that it will take about as long as it would take to find 130 wealthy people that want to jump out of an airplane without a parachute, or cover themselves with bloody fish parts and go SCUBA diving on the great barrier reef.
I’ve watched Celebration for years. We were going to buy there eventually, but the houses and condos jumped from $139sf to $300-450sf. Right now there are a couple hundred condos and a couple hundred houses for sale. Since I’ve watched the area so closely I can tell you that a big percentage of them have been on the market for 1-3 years. Relisted and relisted. I’m finally starting to see houses in the $187sf range. Even one short sale from the bank. When it hits about $125 for houses I might consider it. If he thinks he’s going to sell 130 units that are basically a hotel room, he’s crazy. Probably for half the price you could get a 2 or 3 BR condo. Here’s a guy who just hasn’t gotten it yet, but he will when he’s standing in the soup line.
I hope someone can explain how foreclusures hurt the owner….Here is an example:
http://sheriff.cuyahogacounty.us/foreclosure_city.asp
Now I have seen this house FSBO for 2 years on and off. I did a little research last night and found that it was in foreclosure but has been withdrawn because of bankruptcy (what does that really mean…it appears he gets to keep the house)
Sale Date
Sale #
Parcel #
Location
6/25/2007
197
60127006
Brecksville
Status: Withdrawn - Bankruptcy
Case #
CV06609152
Plaintiff
TCIF REO BAR CORP C/O GMAC MORTGAGE CORPORATION
Defendant
ANDREW SOCHA, ET AL.
Address
8650 WEISE ROAD
Description
A SINGLE BRICK AND STONE DWELLING WITH ATTACHED TWO CAR GARAGE
Withdrawn
Withdrawn - Bankruptcy
Attorney
CURRY/MATTHEW/P.
I did a case search and the owner has several cases listed. It appears to me he is an appraiser that may be working out of his house. Anyway it appears he is still living in the house (how??)
See Cuyahoga County Court site:
http://cpdocket.cp.cuyahogacounty.us/p_PickSearch.aspx
Case Number: CV-06-609152
Case Title: TCIF REO BAR, CORP. vs. ANDREW SOCHA ETAL
Case Designation: FORECLOSURE MARSH. OF LIEN
Filing Date: 12/06/2006
Judge: EILEEN T GALLAGHER
Magistrate: STEPHEN M BUCHA
Room: N/A
Next Action: N/A
File Location: DF-ROOM 45
Last Status: INACTIVE
Last Status Date: 04/23/2007
Last Disposition: DEFAULT
Last Disposition Date: 04/18/2007
Prayer Amount: $.00
06/27/2007 N/A CS ORDER OF SALE Parcel Number: 601-27-006 ORDER OF SALE RETURNED 06/26/2007. CHAPTER 13 BANKRUPTCY ACT. NO SALE FORECLOSURE CLERK FEE - $2.50 CUYAHOGA COUNTY SHERIFF DEPT SERVICE FEE $45.00 ORDER OF SALE - NO SALE - LEGAL NEWS COST: $527.85 LEGAL NEWS ABSTRACT $ 5.00.
Could someone please explain this…..signed frustrated saver
I had a neighbor that had a house go into foreclosure after almost 6 months of not making payments. They then filed bankruptcy and lived another 12 months free(18 months altogether) in the house until the bankruptcy was settled and the foreclosure could proceed. Government at work.
i really stupid for saving for down payment and having no debt….seems the best way to live large is put zero down and make min payments….whats the downside…..bad credit? is my perfect credit getting me anywhere?
“Of the 620,647 residential and commercial properties in Palm Beach County, fully 364,835, or 59 percent, are worth less this year than last, said John Thomas, assistant director of residential appraisal services at the property appraiser’s office.”
Mine is 5% less than last year…and last year is when I purchased. The funny thing I see is my friend in Olympia saw his go up by over 10%. The builder is selling RIGHT NOW and has been for the last 9 months for 2003 prices. I guess they figure people paying $500K plus for a home don’t really care.
“I guess they figure people paying $500K plus for a home don’t really care.”
Might turn out that they didn’t care until about a week ago. August 2007 should become a pretty memorable month.
“It was pretty much a free for all in the office, people taking paper, stuff HomeBanc wouldn’t need,” he said. “I don’t feel like HomeBanc did anything. It was a perfect storm of a bad housing market.”
Two of Clark’s friends have already landed jobs with Countrywide. Another found work with an affiliate of First Magnus, and was almost immediately laid off again. Roach plans to open his own lending business, focusing on commercial business loans and originating home loans himself.
“The Related Group will open a sales office this fall for the Icon Celebration, a 441-unit condo-hotel with hotel services, Chairman Jorge Perez said this week.”
WooHoo. Condo-Hotels for everyone. It’s the perfect investment combing the worse aspects of both time-share developments and condos.
WooHoo. Condo-Hotels for everyone. It’s the perfect investment combing the worse aspects of both time-share developments and condos.
Really worked in Miami. LOL
Question- when one buys a unit in a condo-hotel, do they have to do a commercial loan (for instance, really high downpayments, say 70% LTV)? Does not sound like you could slip through as an owner- occupied…
A friend of mine asked today what could end up happening with all the condo projects underway now in South Florida. Well, having lived down there in the 1980’s, after their previous bust, I could tell him:
There were several failed condo projects in our neighborhood, and they were just hulking shells of buildings, surrounded by weeds and chain link fences topped with barbed wire. Lovely, eh? Get ready for more of these.
As for the ones already built, who knows. Section 8 housing in the end, if it comes to fire-sale pricings on some of them? (Slum-lord, anyone?) Or conversion to (money-losing) rental complexes? It’s hard to imagine they will all be filled up with the kind of urban professionals, second-homers, and wealthy retirees that the developers perhaps first imagined.
It’s hard to imagine they will all be filled up with the kind of urban professionals, second-homers, and wealthy retirees that the developers perhaps first imagined.
Imagine the buildings that were sold out and they get to live right next to Section 8 housing. Certainly will help with the value of their properties.
That’s one thing that would frighten me to death about buying one of those condos, even at a discount. God only knows who your neighbours would be. Or even if you HAVE any neighbours to help you shoulder the common-maintenance burden of the complex.
The same applies to some extent in a single-family-home development, and when we were looking for a house to buy years ago, there was no way we would have gone for one in an under-construction neighbourhood where you have no idea who will be next to you, especially in the days of no-money-down, anything goes.
I like to know beforehand who the neighbours are; in fact, even as a renter, I would introduce myself to potential neighbours BEFORE filling out the rental application. Weird, eh? The rental agents sure thought so. But from my point of view, I’d have to live there for six months to a year, at least, so I want to know.
Want to see the most overpriced, most marketed house for sale, and the most delusional seller?
A few houses down from me, a man has been trying to sell his house for over a year and a half. He has gone through several realtors, and is now selling it FSBO. He runs an open house all day every Saturday and Sunday. He has even created a website to try to sell his home.
http://www.308greenwood.com
I checked on the property appraisers website and the lot was purchased for around 100k back in late 2002. He built the home in 2004. The PBC property appraiser puts the market value at 400k. The seller just reduced the asking price from 925k to 850k. He is 4 blocks from the intracoastal and the area is nice, but almost a million dollars is insaine.
No expense spared, unfortunately for the seller nobody wants the expense.
I see the same thing in Norfolk Virginia where they built a lot of $700,000 in an area called Ocean View except these houses don’t have a view of the ocean or what would actually be a bay view. And Norfolk and surround cities are not exactly high income areas, its not bad income but its not high income.
If you took his keys house and put it in the keys he couldn’t get that price! I used to live in Wellington where is this house? I never heard of “Historic” Southland Park and I grew up in Palm Beach County.
It’s right off of Dixie between Southern and Belvedere.
Stuff like this makes me think we are still YEARS away from reality. From my memory of the area, I am thinking he is overpriced by about $600,000.
You’re probably about right. I’ve seen comparable home in the area listed less than 300k
Of course it’s historic — it was part of Spain in the 1600’s, and has been a part of America since whenever Florida became a state. In fact — the land there is as old as the earth itself!
interesting - is he actually living in that house (not a lot of furniture), or is it a flip with some staging furniture.
A few years from now, it would be fun to watch a few of the Flip tv shows …
New series… The truth behind the flips…
Go back to all these flip houses and do some investigation of when/if they sold, how much, what happened to the buyer, current market value, what the flipper is doing for a living now, etc.
Excellent!
We could call it “flipped out”. Or “flipped off”.
Seriously - that is something the American public would love to watch. Much like rubbernecking for auto wrecks.
Or flipped flopped.
So - this looks to me like this was a cheap little one story ranch-type house (or whatever the Florida version of this is) that he as gutted and expanded, and built a faux-second floor onto? I don’t see any way to access second floor in the floor plans — of course, you couldn’t have anything on the second floor under that metal roof in Florida anyways — that’s gotta get hot as hell, even with vent fans — probably to hot to even store stuff.
Looks kind of pretty from the front, but that thing looks like what my parents always called a “white elephant” (their term for anything that looked like an overpriced waste of money and effort).
Nope, no way to access the second floor, at least not as living space. He doesn’t advertise it as such — the advert says single floor, or something to that effect. And the catheedral ceiling probably uses a good part of what would be the attic.
Still, thoughI can perhaps forgive him that, I can’t forgive him those cheesy dormers. Maybe it’s just the photo, but the look fake! Is it the colors? Is it the lack of windowsills? Hmmm… Seems cheap and cheesy.
Personally, I’d have insulated the roof area and at least used the top floor for storage, maybe even an office. Sure, it can be hot in the summer under that metal roof, but a well-made (and shiny, heat-reflective) metal roof insulated properly isn’t so bad.
Now the price… that’s a whole ‘nother matter.
The sad thing is that’s a LOT better than an $850K house in much of coastal California. Much, much, better.
“…designed by renowned architect…”??? Gimme a break. It looks to me like a 4-corner roof with extension — the cheapest style, if I remember correctly. I could build an accurate reproduction of Billy Smith’s 1940 backyard playhouse, but it still would be a crappy little nothing. How renowned do you have to be to design this place? Am I renowned, and just don’t know it?
“renowned architect”
He might be right. This house looks like it’s straight out of the Donald A. Gardner floor plan books you get at Safeway. The overdone gables and the fake upstairs show up in almost every one of those floor plans, no matter what the style. Country, European, Provincial, “55 or better,” Traditional, Italiante, it’s all the same house!
Of course, “renowned” is subjective. Garndner (and his stable of copycats) is not exactly Greene and Greene, if you ask me.
I rec’d this from my friendly ZIPREALTY agent yesterday. Have other Fl readers rec’d same?
“State Legislators passed a two-prong plan which will immediately cut property taxes on Florida real estate and also create a super exemption for homesteads effective in 2008.
What does this mean to the real estate market in Florida? It means that more buyers will be getting off the proverbial fence and be BUYING NOW… likely causing an end to the historic buyers market we are currently in.
We have already seen increased sales in our ZipRealty office by over 50% in the last few months in anticipation of this property tax cut. The amount of buyers requesting to see homes has doubled in the last 2 weeks.
These are clear signs that the market is really heating up. The media hasn’t reported it yet but as agents we see the first signs of a turn-around. The lenders are the second to see it as they process loan applications. The press generally knows when the “sold” figures come in which won’t be for many months.
If you have been “waiting and seeing” this is your wake up call…NOW is the time to buy…before this historic buyers market shifts back to the seller side. Interest rates are still low, but creeping up, inventories are high but beginning to drop, and sellers are willing to negotiate , b ut this will change when the market gets flooded with more buyers.
If you are ready to take advantage of this last great opportunity to buy real estate at rock bottom prices in South Florida…please give me a call or send me an email.”
Boy, if that doesn’t look like a last ditch effort to generate some commissions. Real estate agents have now burst through the bottom and rate below used-car dealers and pond scum (with apologies to any pond scum that might be offended.)
inventories are high but beginning to drop,
Could you get back in touch with friendly ZIPREALTY agent and ask for data to support this claim?
That is a hideous attempt at market manipulation in a last ditch effort to generate commissions. Realtors have now burst through the bottom and rate somewhere below pond scum (with apologies to any pond scum I might offend.)
Sorry for the multiple post - I thought the web had devoured the previous post when it didn’t show up for a few minutes.
r u serious ??? inventories are dropping ?? ROTFLMAO!!!!!!! This is the best laugh of the day !!!! flooded with buyers ?? LOLOLOLOLOL oh …my stomach hurts ..hold on …LOLOLOLOLOLOLOLOL
What “rock bottom” prices??
I think we should flame this guy like the chick in Oregon. Is there a link??
ZipRealty Miami, I did not even bother to respond. Its also interesting to see thier “market updates;” it actually shows more “sold” for each Q so far. Seems a deliberate flip of data to me.
That is a bunch of nonsense..I have realtor friends from multiple locations in Florida and they have told me the complete opposite..Inventory keeps climbing and buyers keep waiting. They are “waiting” to see “if” the super exemption passes and most people are saying it won’t pass. Why? Because currently Floridians are capped at what the paid for their home and property taxes can only increase by up to 3% each year. With the super exemption the cap is removed and the property tax office can value your property without a limit. If you go onto http://www.bcpa.net you will see that based on the property cost your savings will be the greatest in the first year.. and by the 3rd year you can be paying MORE in taxes had the super exemption not passed. So whoever is telling this story at zip is crazy..tell them to check out the local real estate rags at the grocery store… what use to be novel size thick is now as thin as the coupon insert in the Sunday newspaper…realtors aren’t spending the money to advertise because “no none is looking…”
sorry..typo..no one..
If this message indeed came from a real estate brokerage, it may be borderline illegal. I’d check it out wit me lawyer if I was you.
I got almost an identical e-mail about 8 weeks ago. That market here is REALLY heating up. Must be that $0.70 raise in minimum wage. Those extra $28/week will propell the market to new heights. Better BUY NOW or be priced out forever.
Angelo Kenneth Lay - er - Skilling - er - Kowalski - er - Angelo Mozilo, is talking to Wall Street shill Maria Bimbolini on the CNBC Comedy and telling us his company is in great shape. Time to buy CFC (NOT!)
I wonder if some of the excess in housing will be bought by non-US residents? For instance, the US taxpayer has been pouring billions into Iraq and a LOT (and I do mean a LOT) of that money has been skimmed by the Iraqi politicians and Iraq contractors, etc. As a side issue, that’s why the Iraqi government doesn’t want the US to leave. The US is a trillion dollar cash cow they can continue milking. They don’t want the country to “stand on it’s on feet” which means the cash cow leave. Billions of $$ is being shipped to other countries like the UK and Switzerland to name just 2 from various sources around the world and these countries are turning a blind eye. A trick they learned from the US in days gone bye. As we all know the price of property in the UK is through the roof FAR more than in the US BUT it’s hard for the US to trace money which was skimmed if it’s in a foreign country. However, I suspect that if there was some way this skimmed money could enter the US without fear of being traced and the assets confiscated if the perps were identified, the foreign element would be buying with both hands.
I am betting that a part of that skimmed Iraqi money is going into Dubai, somebody is buying all those fancy homes and condos.
That makes sense.
It makes a lot of sense. And since the Bush admin has made such a big deal of their wiretapping skills, especially on big money moves, do you think they are uninformed on the issue? Would they “entertain” questions on this subject, or are they not accountable?
Funny you should mention Dubai. Check out this article from this morning’s WaPo:
http://tinyurl.com/yrgyoh
Might Dubai be the next Japan - buying up all kinds of U.S. real estate and companies - paid for with our gas money?
Dubai World Buys Big Stake in MGM Mirage
I saw that on the news last night. That’s probably why Disney is changing the name MGM Studios part to Disney’s Hollywood Studio’s instead of the dumb a** reason they gave for the name change. We saw the Disney park name change last week and wondered why.
But if we ever leave Iraq, people who hate us - Sunni Muslim fanatics - would be slaughtering other people who hate us - Shia Muslim fanatics. And vice versa. We can’t have that!
“There’s been an 80% drop in new condo sales in the last year and tens of thousands of more units should flood the market in the next 24 months, leaving ‘many years’ worth of inventory,’ according to broker Mike Morgan. ‘From here on out, it’s just all downhill,’ he said.”
But…but…I thought the builders learned from the last bust not to overbuild? No? This is what they told use in 2005. What a frickin’ joke these builder execs are. I”m sure most of these crooks dressed in ties have already cashed out millions and millions in stock options. The rich get richer…ahh you know the rest. Just more fleecing of the middle class.
But…but…I thought the builders learned from the last bust not to overbuild?
Apparently they haven’t learned from this bust either, they’re still building.
http://www.cnbc.com/id/15840232?video=481763309&play=1
Tan Man video
Holy cow! He *really* needs to lay off the tanning bed. He’s scary looking.
Heard from a friend yesterday and couple of other sources that the few left mortgage lenders/brokers out there are running to FHA..Does anyone know what the limit is on those loans..I remember FHA from like 100 years ago..they were always difficult to deal with..tons and tons of paperwork and that the limit on the loan was real low and they took forever to close..Can you even buy a home on a FHA loan? What’s the deal?
I think it’s around $425,000 but I don’t think they will accept no downpayment OR non-verifiable stated income.
I should add that the FHA is the usual incompetent government concern BUT it isn’t government. They have some kind of “charter” with government but the government is under no obligation to bail them out. Of course, if you believe the government will NOT bail them out, I have a bridge in New York for sale if you’re interested. As this mess unwinds, you can be sure that Barney Frank, Christopher Dodd or any other politician (on either side) will put pressure on the FHA to raise the ceiling to, say, $600,000 and get a “wink” from government that they will make sure the FHA doesn’t fail. The FHA is rife with corruption. The last bunch to run it ripped off so much money I think they retired to the South Of France.
“…BUT it isn’t government. They have some kind of “charter” with government but the government is under no obligation to bail them out.”
You are thinking about Freddie Mac and Fannie Mae, the two chartered (but private) lenders/mortgage securitizers. FHA (Federal Housing Administration) is a branch of HUD- it IS a part of the government. The FHA does not lend- it insures loans by other lenders (if the borrower meets certain criteria). They have about 5 million homes insured now. I am not sure how picky FHA is, though they will only insure loans of maximum size $200K - $360K, depending on area.
Actually, I’ll bet you are thinking of FNM, not FHA…
Limit may be same as Freddit and Fannie. I think you still need 3-5% down and the closing costs are not cheap.
ISTR that unlike F&F, FHA bonds ARE explicitly guaranteed by the “full faith and credit” of the government.
Best I recall, one of the reasons people shied away from FHA applications was that FHA actually did “due diligence” by having the home inspected and brought up to snuff before money changed hands. That got tiresome in the late 90s, when easy money became available. The tables have now turned, and in a hurry.
No kidding, their inspections were brutal for some older homes, sometimes requiring a lot of work to get things up to code. I think Kerriella (does she still visit these blogs?) in Oklahoma was dealing with that, and it added an unwelcome bit of uncertainty into the process.
I know if I were to sell my house, and I had to choose between offers from FHA- and non-FHA-finance buyers, I’d certainly take the non-FHA person if the offers were at all close.
Well, that’s before the most recent tight money. Now the aggravation of FHA inspections (and mandated fixes) might be ameliorated by the relative certainty that the loan won’t fall through the day before closing due to lack of funding.
Ok did some checking and found out the amount varies per each state..In Florida it lends between 200K-362K..and depends on county to county as well. So in most of the counties with the $362K limit it doesn’t get you a single family home..that isn’t a handyman special..also the downpayment is low, however, EVERYTHING must be full docs and they offer also offer it to people with not great credit. Which surprised me due to all the changes in the market right now with credit..
I suspect that the reason they offer their loans to people with weak credit is they have assured themselves that the property is salable at a reasonable percentage of risk, should there be a default. However, this gets back to the “old” model, which presumed that there would be no longish downward trend in prices — which means they are likely to be screwed in a lot of deals they make in the next couple of years, IMO.
Thank god the GF sold her Miami condo a year ago
This is almost comical…
“Housing Sales Have Gov. Crist Feeling Optimistic”
http://www.wesh.com/money/13959605/detail.html
Here’s the really funny part of the Gov’s speech.
“Florida is going to have a sonic boom when that (passage of the amendment) happens,” Crist said. “I hope you’re getting some rest now, because your phones are going to be ringing off the hook and you’re going to be busier than ever. Go out and tell your friends, your neighbors and your customers - please encourage them to vote ‘yes’ on Jan. 29, 2008.”
“So the future is bright,” said Gov. Crist. “It is. I’ve been to places where the future is not as bright as it is here. Florida is a special place. One thousand people every single day are making that choice [to come here]. They’re flooding the state. Get ready - make sure your license is up-to-date. Because Florida is on the move. She’s on the rise, and it’s all because of the people.”