Paying The Consequences In Florida
The Orlando Sentinel reports from Florida. “The champagne-popping days are over for Natalie and David Luongo, who banked enough money flipping a South Florida condo three years ago to stage a $100,000 wedding. Should they walk away from the $117,000 deposit they plunked down on another investment condo in the ritzy Miami-Dade enclave of Bal Harbour? Or should they close on the one-bedroom unit, which is similar to others now on the market for less than the $585,000 they agreed to pay?”
“‘It’s painful and scary,’ Natalie Luongo said. ‘We saw the frenzy, and we bought in. Now we’re paying the consequences.’”
“Just how many other speculators face the same dilemma in the nation’s most glutted condo market will become clear during the next two years. That is when 25,000 new condo units, most of them rising in or near Miami’s downtown, will flood an area already saturated with 23,000 condos listed for sale. An additional 40,000 units have been approved, but analysts doubt the majority will break ground.”
“(Consultants) warned that up to 70 percent of the condos rising in Miami were being snapped up by people who didn’t plan to hold on to them, much less live in them. That was evident from the hordes who camped overnight, fought over lottery numbers, even paid homeless men $20 and a pack of cigarettes to hold their places in long lines, all for the chance to put 20 percent deposits on condos that existed only in brochures.”
“The frenzy for some projects was so fevered that some developers raised their prices hourly.”
“‘It was a nightmare. Lines around the corner. People screaming into phones. I would look at them, and think, ‘You don’t know what you’re doing,’ said Mark Zilbert, president of Zilbert Realty Group.”
“Gregg and Mary Mullins, retirees living near Fort Myers, finally rented out the two-story $885,500 penthouse they closed on last year in Blue, a concave tower overlooking Biscayne Bay. But the $2,800-a-month rent they’re collecting is less than half their monthly mortgage payment, maintenance fees and property taxes.”
“The couple never planned to live in the condo, but jumped at buying it at pre-construction prices in 2004 after friends shared a familiar story. ‘They said they made lots of money, so they told us to try it and maybe we could make lots of money, too,’ Mary Mullins said. ‘But that didn’t happen. We don’t know what happened.’”
“A sheepish Tom Leon says he knows. The retired businessman from Illinois said he knew he had made a mistake about six months after he put down $200,000 on two $500,000 condos at the end of 2004.”
“‘Every 2 inches, I’d see another [construction] crane, and I knew: There is no market that can absorb these many units,’ said Leon. ‘It doesn’t take a rocket scientist to say, ‘Gee, who’s going to live in all these buildings?’”
“After a more than five-year frenzy, the condo-building boom in downtown Orlando has ground to a halt. A new Orlando Sentinel survey of the downtown core finds that more than two-thirds of the 40 new high- and mid-rise condo projects announced in recent years are in limbo.”
“Not a single project has broken ground since an identical Sentinel survey six months ago found only 15 of the 40 projects had begun construction or been completed. Scott Stahley, a senior VP at Lincoln Property Co., calls the current condo environment ’scary.’ ‘It cannot be done,’ said Stahley.”
“The projects that have yet to get out of the ground may be the lucky ones. Many developers say the condo market has fallen so precipitously that the true danger now lies with the handful of still-incomplete towers that have already passed the point of no return.”
“A number of developers are in a situation some say is the worst-case scenario: halfway built. Five downtown condo towers are in the midst of construction right now, including the 100-unit Star Tower and the 146-unit 101 Eola. The other three are giants.”
“Developers make no secret that they will be anxiously watching to see how the newest projects perform. ‘I think everybody is in the search mode: How many investors are there?’ said Michael Beale, of Raleigh, N.C.-based Highwoods Properties, which has a 125-unit downtown condo project on hold and another in early planning stages.”
“‘We were all hoping it was like 80 percent owner-occupied and 20 percent investors,’ he said. ‘But no one knows.’”
The Palm Beach Post. “After 14 months, Pam Crosby finally blinked. The former morning news anchor put her Lake Worth home on the market on June 9, 2006. ‘I had been told for the past two years I could get all this money for it, and then I went to have it appraised, and it appraised high - $260,000 to $280,000,’ she said. ‘Then the bottom fell out.’”
“Despite being listed with a widely respected Realtor, the two-bedroom, one-bath house was shown only five times in 14 months, she said. There were no offers.”
“The supply of single-family homes and condominium units for sale in Palm Beach County’s MLS reached 32 months’ worth in June in the $200,000-$299,999 price range, according to Illustrated Properties Real Estate.”
“In the $300,000-$499,999 range, which has included the county’s median price since the boom times, sales declined 73 percent from June 2006 to June of this year. And it would take 37 months to burn off the supply.”
“In Palm Beach County, 1,142 homeowners lost their bid for the American dream - or their investment flip - compared with 370 foreclosures in the same month a year ago, the Palm Beach County clerk’s office said. It was worse in St. Lucie County, where 429 homeowners got foreclosure notices last month - nearly five times as many as in July 2006, when 90 were filed, according to the clerk’s office.”
“After getting nary a nibble on her home for more than a year, Crosby lowered her asking price from the original $260,000 to $156,000. She decided to sell the 800-square-foot house herself, a challenging task for an out-of-town owner. If Crosby can’t sell the house, she said, she’ll rent it.”
“‘My sellers are sticking to their guns in pricing,’ said Douglas Rill, president of Century 21 America’s Choice. How are sales? ‘Slow,’ he said.”
“‘One client - a famous guy, but I can’t tell you who he is - thinks, ‘Well, it will sell now or it will sell next year,’ Rill said. ‘But he really can’t hold out because he has a $1 million mortgage. He moved to North Carolina, so he’s going to lose his homestead.’”
‘”When that sticker shock comes up and his taxes are $75,000 instead of $7,500, then I think in November or December when the tax bill comes, price is going to matter. When it’s costing him $15,000 a month, it’s going to matter,’ he said.”
The St Petersburg Times. “Bleak headlines say the home building industry has sunk into its worst trough in a decade. With sympathies to laid-off construction workers and model home sales staff, three cheers for the trough. It’s good news for Tampa Bay area homeowners.”
“In our region the big picture depicts a glut the size of Goliath. In July, of 41,000 homes for sale in Pinellas, Pasco and Hillsborough counties, about 2,400 sold. With so many homes competing for so few buyers, a house sells for about 10 to 20 percent less than it would have 18 months ago.”
“Aside from sellers yanking their home listings to await better days, the market needs builders to give it a rest.”
The Ledger. “Foreclosures filed for single-family homes in Polk in 2007 totaled 1,696 through July, nearly doubling 2006’s total of 998, according to data collected by Largo-based Foreclosures Daily. And there’s still another five months to tally.”
“Tracy Beebe, a manager in Polk County’s Circuit Court’s civil division, spoke with several real-estate lawyers who estimate thousands of foreclosures are waiting to be filed around the state.”
“Chris Osmon, who owns AAA Housebuyers LLC, hasn’t found any deals. ‘It’s a down market right now,’ said the Lakeland investor. ‘No one is bidding because the homes are at 100 percent of their value or greater and the banks don’t want to take a loss. It makes no sense as an investor to bid on those properties.’”
“At the auction last week, properties were sold within a matter of minutes, sometimes seconds. But only the lenders foreclosing on the property were bidding.”
“Polk’s median home sales price has increased 96 percent from $89,000 in 2002 to $175,300 in June. Across Florida, median property values increased 76 percent during that time from $137,800 to $243,200.”
“The rise in prices helped fuel a craze among buyers hoping to get into a new home, investors wanting to make quick cash and lenders looking to make money off new mortgages. ‘The less you understand and know, the more money they make,’ Jeff Lazerson, CEO of a mortgage broker in Laguna Niguel, Calif., said of mortgage lenders.”
“That is what has helped fuel the current foreclosure situation around the country. ‘Many of the lenders were loose or had no standards for underwriting,’ he said. ‘You could be dead and get a loan.’”
The Herald Tribune. “Sarasota Realtors coined a new slogan in January: Time2Buy. One of these days they may be right, experts say. Those willing and able to buy can take their pick, make low-ball offers without fear of derision and wait for a seller to take the bait.”
“But though it is easy to make a buy now, not all the experts agree that it is the right thing to do.”
“‘Prices definitely have declined, especially in areas like yours,’ said Susan Wachter,a professor of real estate at the Wharton School in Philadelphia. ‘You are in the epicenter of the subprime-induced bubble.’”
“In July 2005, a Sarasota buyer would have found just 1,626 active single-family listings, a mere 10 weeks’ worth of inventory. Realtors were closing on 156 deals per week. This summer, that would-be buyer has 8,135 homes to consider. At the current sales rate of 90 houses a week, that inventory will last 90 weeks.”
“‘We are in a holding pattern, because we haven’t seen the bottom yet,’ said George Huhn, founder of Gulf2Golf Properties in Venice. ‘There may be another 20 percent, 30 percent on the downside on this thing.’”
“‘Everybody wants to know when will we get out of trouble,’ said Sarasota banker Jody Hudgins. ‘In January of ‘06, people were saying, ‘Sometime in the spring and summer of 2007.’ Well, that has come and gone, and what are we saying now?’”
“As chief economist at Wachovia Bank, Mark Vitner of Charlotte, N.C., has a unique vantage point on the construction-related economy in the Southeast. He claims to know the executives of every major builder in the region.” “In Vitner’s view, the nation is roughly halfway through a two-year-long correction in existing home prices, which started in third quarter 2006.”
“‘We are in the early stages of a buyer’s market, because there are more sellers than buyers. But sellers really haven’t come off their prices enough to make it attractive to the buyers,’ he said.”
We appear to be having technical issues this AM. If you have problems, please check back.
Has anyone ever heard of primerica financial? I’m trying to gather some information on this company.
Primerica Financial Services, a wholly owned subsidiary of Citigroup, is headquartered in Duluth, Georgia. It is the largest financial services marketing organization in North America, with more than 100,000 licensed independent representatives, of which 26,000 are securities licensed.[1] The company provides financial products and services, including term life insurance, mutual funds, variable annuities, loans, long-term care insurance and pre-paid legal services, to over 6 million clients.[1] In August 2007 Primerica and Answer Financial introduced Primerica Secure, an auto and homeowner’s insurance referral program to help families get the best quotes from today’s competitive industry. Primerica conducts business principally in the US and Canada; the company also operates in Spain as CitiSoluciones.
Primerica states that its marketing plan pays representatives commission on personal business and override commissions on the income generated by the representative’s sales group. This marketing structure is similar to the General Agency concept in insurance where commissions are earned at several levels.
A few years ago I was involved with this company. The life insurance policies aren’t bad, and a lot of their ideas are solid and make good financial sense, especially buy term and invest the difference, and PFS got me started on my first mutual funds (which did end up losing money, BTW).
The problem is the kind of people attracted to Primerica. It’s akin to a pyramid scheme in that agents are chiefly interested in finding people under them to sell products and collect commissions. (No different than the broker/agent in real estate.) But most of the people I was involved with were of little educational ability and knowledge, and focused SOLELY on hiring more people to sell instead of be out there selling themselves. There are a few people who have made lots of money in the company but alas herd mentality reigns large, with every agent thinking they are going to be a superstar if they just can find enough people to work under their umbrella. After a number of broken promises I left the organization.
What exactly is your question with Primerica?
Thanks for the info everyone.I was mainly concerned w/ the reputation of the company I guess.
Yes, I wouldn’t trust them with a dime. I got approached twice with the same line they try to use to hook people into the business. Disclaimer: I haven’t checked them lately, however for me they sell products that by and large could be gotten elsewhere with better fee structures.
Checked them out a few years ago. There was kind of a skunky smell around them. So I decided against doing business with them.
I think Casy Serin was one their top draft picks. lmao
Remember ‘Seinfeld’? I think they’re a subdivision of Cosmo Kramer’s “Kramerica Industries”.
…. about as useful too.
Primerica SPAMS YOU LIKE CRAZY on all the job boards..i have gotten 46 of these “You can make a SIX Figure Salary wioth a Fortune 500 company”
Pre paid legal is the same Now we have Bankers America which spams me TWICE A DAY…
Then add in All the mortgage Brokers “Have you ever thought of real estate”
Just post a resume on Craigslist and see how FAST you get a reply. Commission Only crap….
If I am going to work for FREE, talking to tons of potential clients, it might as well be promoting MY Wedding Dj business at least I know i provide a useful service.
Give Adam Sandler a call for some 1980’s flavor to those weddings. Might want to watch out for a guy named Glen & his upturned collar pink polo shirt. Brrrrr those kinda wall street wanna be tough guys are just too scary. Especially if he drives a (gasp) Harley !
I have a BIL that works for them. He makes about one sale a year. You have to be a pretty good salesperson there.
and they said Orlando was different…
News for existing home sales just out…
Inventory is at 9.6 months… highest in 15 years!
Of course the headlines reads “Sales down, but still better than economist expected”.
Bwa hahahahahahahaha… What a bunch of shills and whores!
Anyway, enjoy the popcorn!
And that’s just MLS inventory. In my neck of the woods about half the houses with for sale signs in front are FSBO. We’re over 12 months inventory for sure.
Sinkin’ fast…
MSM here in this country rather report on the DUI busts of a bunch of spoiled brat movie stars, than any thing of substance which might scare the sheeple.
http://www.telegraph.co.uk/money/main.jhtml;jsessionid=4EFJ1B0K5B111QFIQMGSFFWAVCBQWIV0?xml=/money/2007/08/27/cnusecon127.xml
The Orlando Sentinel reports from Florida. “The champagne-popping days are over for Natalie and David Luongo, who banked enough money flipping a South Florida condo three years ago to stage a $100,000 wedding.
What a pair of fools! $100,000.00 for a damn wedding? They should go broke. My wife and I went to the Justice of the Peace Total cost $38.00 then off on a pre-paid honeymoon.
Hahah. We paid $35 to some wacky “minister” in the gaslight district of San Diego. Then blew another $100 on beer for all the guests at a pub down the street.
Here in Chicago the city holds civil wedding ceremonies every Saturday morning. Reserve your spot in advance, a judge marries you, and you get 20 minutes or half an hour afterwards for photos with family and friends before it’s the next couples turn.
Cost = $10.00
This is where it happens
That’s so funny, a friend just had his wedding there not two weeks ago. They paid $6k for the rotunda on a Sunday evening. Total wedding was $50k but I suspect it was higher because they are well aware of my opinionated nature reagrding such nonsense.
On one hand, the city is saying that the first half hour is $10, and it’s $1000 an hour after that.
On the other hand, $5000 (minimum fee) is a very competitive fee for the use of a building of this caliber in this city. I’ve been to a few non-wedding private events in the Cultural Center and they have all been magnificent.
Visitors to Chicago should definitely check this building out. It’s across the street from Millennium Park so it’s not like you’d have to go out of your way to get there. If you like books like I do, it’s a real treat to go see how absolutely exquisite the first public library building in Chicago is.
And now if they could only put a decent collection of books in said splendid library building.
Got 10% down?
And now if they could only put a decent collection of books in said splendid library building.
Their collection of books got too large and thus the city built a fancy new larger library building a few blocks away. People rent that one out for weddings too.
That’s so funny, a friend just had his wedding there not two weeks ago. They paid $6k for the rotunda on a Sunday evening. Total wedding was $50k but I suspect it was higher because they are well aware of my opinionated nature regarding such nonsense.
Crap. I thought we had you all beat. $320 in 1995 total including the gas to get there. You guys ar really hardcore. Makes me feel better though that we are not alone since most of our “friends” make fun of us.
We got married 30 years ago by a judge (friend of my father’s) in my parents back yard with about 20 of immediate family there. My parents spent about $150 on food and cake. My wedding gown was from the mall, and cost $48 on sale. The setting was beautiful and we’re still married. My sister, on the other hand, had a big church wedding with reception at a country club and it cost my parents $6500 almost 28 years ago. It definitely is not worth the expense of a big wedding for 4 or 5 hours. Problem is, too many spoiled rotten kids who live just for show.
So instead of using that money to start their life together they decided to blow it on a 5 hour event. At $20K a hour lets see if they are even still married a year from now? Future credit card crisis management recruits..
Is there anyone left in S. Fla who isn’t a “transplanted New Yorker?” That alone would keep me out of the place.
Remember that we need to have the taxpayers bail these folks out…
As a taxpayer, if I pay to bail them out, I get first dibs on the bride! Kinda like ‘prima nocta’ from Braveheart!
East side (West Palm south) that is true. West side (Naples, etc.) it tends to be more midwesterners.
Bradenton’s been inundated with sleazy NY/NJ types. their kids are unruly and curse, of course they learned it from their parents who yell shut the *!#$#% up! The only good news is they were heavily banking on the real estate industry. I’m hoping they all lose their 3000 sq ft homes and move back to their Scranton duplexes!
well they were expecting their bal harbour condo to appreciate 100k a year over the next 10 yr.,, and 200k/year after that
Have you seen “My Sweet 16″ show on MTV that shows over-the-top 16th birthday parties for rich princesses?
It is truly depressing.
Omigod, is that awful. And I only hear bits and pieces on the radio. The kids AND the parents should be slapped.
I seem to recall having cake after dinner. And this was at home with my parents.
I assume that your newly-minted wife was there, too..
Or maybe honeymoon’s are just better with the folks.
Sorry Slim, I don’t get it.
I believe she was referring to her 16th birthday - not her wedding.
Also I can’t believe the advertising for back to school clothes, electronics, etc. It is really disgusting this year. The worst ever. Comparing what these kids will wear, the Ipods, the laptops, the cell phones, etc. with what everyone else will be sporting. The worst is, people who can’t even afford their mortgage payments will be buying this crap for their kids so they can keep up with their peers. Those are the ones I do not feel sorry for, and the generation of kids they are raising will be even worse.
The Spanish language MSM likes to promote this BS with their followers. A south of the border “tradition” that “parents brought up with them when they crossed the river”, and now that they are in the land of milk and honey they are either refinancing their houses or taking out CC cash advances for thousands of dollars (or so it is being reported) for this nonsense.
One of the very worst things Hispanics in America can do is read Hispanic publications. Guaranteed to keep you uninformed, ignorant, chained, and enslaved.
Got 10% down?
These dopes would have just flushed the 100k on another condo deposit if they hadnt had the big wedding. Wedding industry is slightly less sleazy than condo tower builders so I support that.
Keep in mind they would never ever save the funds no matter what.
“It’s painful and scary…”
What’s painful and scary to me is the thought of being asked to bail these folks out. I didn’t use other people’s money to speculate in real estate. Didn’t get the plasma TV or the Hummer out of home equity. Didn’t throw a $100K wedding. So don’t send me the bill.
Why is there such a great willingness to portray the speculators as victims?
Preach it, Suff, preach it!
Sob/victim stories sell more newspapers than good, common-sense news.
Let ‘em rot.
Because this sizeable chunk of the populace lacks integrity and common sense - just like the politicians that court their votes and the journalists who fiend for their stories of faux suffering. They are all made for each other and deserve the same fate.
Agreed.
“‘We are in the early stages of a buyer’s market, because there are more sellers than buyers. But sellers really haven’t come off their prices enough to make it attractive to the buyers,’ he said.”
Blasphemy I declare!!!!
It is getting ugly down here. but believe it or not, there are still people trying to “flip” a house in the area I am watching was sold 2 months ago, some one slapped granite/stainless and has it listed for a 25% increase of what they paid… DENIAL…
How’s that Las Olas area holding up? I thought it was very nice but the prices were scandalous.
a lot of the foo foo boutiques have closed, my spousal unit got a great deal on office space there… and the condos are dropping prices finally. and very few people say it is “different” Funny story, right before we relcoated here in 2005 we were having lunch at the riverfront hotel and had brochures for houses… our waiter handed us his real estate card. Told hubby then prices would crash soon, he argued but not any more;-)
Back around 2004, one of the first articles I read that made me think that something was very wrong involved a claim that a Miami waiter had made $70,000 flipping a condominium. It just sounded too much like the Joe Kennedy “shoeshine boy” moment from 1929.
“…our waiter handed us his real estate card.”
That’s funny.
I looked at homes in my Scottsdale, AZ neighborhood this past weekend. One of the homes had a baby-sitting agent (not the listing broker) and she looked like she literally did used to be a pole dancer and she had a male friend with her. She was trying to pimp a $600,000 home (masquerading as a $1.5mil home) and she had an overwhelming scent of cigarette stench. They let anyone sell homes and put people into mortgages. LMAO. Very unimpressive. As far as the home goes, I think I was the only looker that day. Things are definitely slowing. Very few people have enough income to qualify for anything over $500,000 under normal underwriting guidelines of 28%/36% with a fully-amortized fixed rate.
I think I was the only looker that day…
Apparently that included the agent. Good story - should be titled ‘The Limits of Cheap Bling’.
Trust me, in another month you will run across RE agents passing out cards for their baby sitting services.
Got 10% down?
“granite/stainless”
My girlfriend likes to watch the house buying shows on TV. I watch some of them with her.
Reading this blog has made me really sensitive to “granite” and it has been driving me crazy how often that shit is mentioned in every one of these shows.
“we should put in granite here”, “i like the granite in the shower”, “can we change these to granite”, “ooo, love the granite”, “yeah, the granite was one of the best features”
All in ONE 15 minute segment! Now I want chop someone’s head off every time I hear the word.
Granite makes for some good long-lasting tombstones.
actaully, isnt there something else that is hot right now. Looks like granite to me but has another fancy name.
too bad for the ‘investment’
My sister has granite and it is a pain in the ass to dry after you’ve wiped it down with a sponge. It’s like water is repelled off of the surface. It’s weird and I’m not sure if I like it.
Mark my words. Granite/Stainless are the shag carpet/avocado appliances of the future.
stainless steel is already out. Someone I know in retail told me they WON’T be stocking SS in 2008 models at their store (special order only).
Granite is often radioactive, as well, something not told to the suckers cramming it into their houses. I doubt they have Geiger counters at Home Depot to be on the safe side.
No only do I detest granite, I cannot stand stainless steel appliances. Who wants to gape at a stove or refrigerator across a room? These were originally intended to create a high-end professional chef’s kitchen look, mostly for people who didn’t cook, but now the cheapest appliances come in stainless steel, and granite veneers can be purchased to put over existing counters. They even put this crap in ultra low-rent apartments now.
What’s next? Stainless steel air conditioners, exposed plated plumbing, golden toilets in the living room? I predict granite counter tops and stainless steel appliances will be laughingstocks ten years from now, just like the butcher block counter tops and avocado-green appliances of the 1970s.
I didn’t realize someone else was posting the same idea about the same time. Sorry.
I agree with both of you. Too bad because I really like stainless steel - always have, and I will have it in my house regardless of popularity or not.
Don’t worry that craze will be over soon, as every house in America even the shacks will have granite..the problem is that they haven’t learned that granite does not mean a house sells..it goes back to P-R-I-C-E.
I wonder if the typical Section 8 renter is well versed in the proper care of granite & stainless steel surfaces?
So, if new construction wanes and a large number of homes have already been remodeled with granite/stainless where does that leave that industry?
I’ve been in maybe 40 or 50 homes over the last 2 months and I’d say about 60-70 have been remodeled with the aforementioned.
oops 60-70 percent
Maybe the granite fixture people are behind the movement. Sort of like when movie stars exclaim they are wearing XXXYYY designer at the Oscars. They get paid under the table to wear those clothes and yell out the name. Maybe the granite people are doing the same.
…granite couches, granite flat-screen TVs, granite mattresses….
Flintstones, meet the flintstones, lalalalala
Already done by the Flintstones. What was Prehistoric is new again.
You should make a drinking game out of it. Every time someone on the show says “granite” you take a drink of your PBR. You’ll be hammered by the first commercial break.
white formica counters are becoming popular in southern cal again
Lower prices may not do the trick. Even fire sale prices may not. There is a real glut of property in the Fla and Ca markets (and, anecdotally, over most of the country) such that a simple lowering of price will not help. There will need to be a stimulation of actual demand as well as lower prices. There may be no real demand out there at any price.
What I mean is this: if they thought they could sell those half-finished condos at any price they would build them. Remember, condos finally fell to less than $25K during the last housing crash in the late 90s and they ended as cheap rentals. Many went bankrupt.
Roidy
Does anyone think some of these megastructures will be torn down? The developers have snatched and junked-up every square inch of available land in Tampa, creating crowding that is incredibly oppressive, and blocking out views in all directions. I’m sure there must be psychological studies on the effect of this kind of sudden, unplanned, and cancerous overgrowth, but evidently nobody cared. Just driving in South Tampa gives me claustrophobia these days: something unimaginable five short years ago. We have about 30,000 too many condos and townhouses, and probably 20,000 too many houses . . . And they’re STILL building.
I wonder, there are some construction projects that have had no progress for months, and at some point it will be a safety concern.
Travelling through latin america, I saw many 1/2 completed high-rises that looked as if they were that way for many, many years- right in the middle of downtown. It could happen here too if banks get smart and start pulling the plug on const loans they already approved.
Let ‘em rot.
If you let dead, thieving rodents rot around your house you still have to smell them….
Perhaps we should burn them down instead…
I rememer an acquantance in Houston, in the early 80’s, who went to a Condo auction, and actually paid for his winning bid for a Condo ($16K+) with a Credit Card! We may see that in FL in about 2 years!
I have already seen an ad - Solomons Island, MD, I think, that offered a FREE CONDO with the purchase of a boat slip.
I hope. I wouldn’t even hesitate at 16-25k.
I flew PHX to Austin last week.
1) OMG it is insane how much land has been cleared on the south edge of PHX, roads in, street lights on, scattered houses under construction here and there. If it all gets built, add tens of thousnads of new homes to a totally oversaturated market.
2) Didn’t see the same level of mass sub-division development in Austin, but there it is townhouses/condos. Lots and lots of townhouses.
3) Flipped through the inflight magazine. Ads for $600K condos in Vegas, $600K condos in Miami, $600K condos in Scottsdale, $600K condos in Los Angeles (Hollywood). Hello? How many people make $200K a year and want to live in a condo?
Even if there was no housing problem, the condo market would be more than enough to bring down a charade we call the U.S. economy.
“How many people make $200K a year and want to live in a condo?”
We’re about to find out, but my guess is not many. As you probably know, those inflight magazines have been chock full of those adds for years. They all pitch a lifestyle - and lifestyles are very susceptible to the whims of fickle consumers. Once conditions start to deteriorate in the cities their cosmopolitan urban lifestyle (based it seems off of a fusion of an early 60s playboy/jet set/martinis image) won’t be so appealing.
Flying back n forth to FL from CA last year I saw my XM Radio INNO on the front page of some inflight mag & felt like I was some Robb Report cutting edge zillionaire for awhile !
I actually shelled out $500 when it was new (justfied as fathers day gift) just to get away from the horrible public radio commercials that have ruined the airwaves now. Seems there are 20 commercials to maybe 2 songs .. if yer lucky. I LOVE my XM radio, especially on the couple of drives accross country - Texas is one longazz state to drive thru & oopmah tex mex songs & radio fade is now a thing of the past.
Anyway, not schilling for XM , just tying in to the inflight mag.
Give you a little tip on the XM. Everytime your contract is almost up, call them and tell them you may want to cancel because it’s not worth
x dollars a month and usually they’ll give you a deal for over half off the monthly price. I’ve done it 4 times now and I rarely pay over $5-6 month for it.
Hey thanks Ghost
I think my 2 yr contract is about up & I will definately give a call with your advice. Never hurts the consumer to ask for a loyalty discount. (by whatever method . .) !!
The $12 per month paid now is worth it for the content but heck, $5-6 monthly savings is easily $60 per year savings = justifiable to call an sweet-talk/cajole/coerce for a discount.
And don’t expect rich Latin Americans to be snapping those up either. Last month I counted sixteen ads for condominiums in the Avianca in-flight magazine. Only one was for a tower in south Florida; the rest promoted beach and waterfront buildings in Cartagena and Santa Marta in the “enhance your lifestyle” manner with which we are all familiar.
When I arrived in Bogota and asked who in Colombia was falling for this ridiculous act, it was explained to me that, just like in Panama, the majority of the purchasers were from “el extranjero.”
Agreed.
“How many people make $200K a year and want to live in a condo?”
Well lets put it this way, there is no zip code in Scottsdale in which the median household income is anywhere near $200K, the highest, I believe, is about $140K, so if you multiply that by 3 you get about $420K (which is about half of the median in that neighborhood). So there is lots of gnashing of teeth coming to Scottsdale. I wouldn’t even think about spending over $200,000 for a condo. LOL
I saw the other day where somewhere, can’t remember where, condos were selling for 25 cents on the dollar.
is FL back to 2003 pricing ?
guess they are the hands down winner in the race to the bottom
In Miami, the sfh prices only started to budge in 2007 - that’s not only my impression, but the Case-Schiller index data.
So, we are still 50% above mid-2004 prices. Till July, aggressively priced listings (though which were 5-10% below peak levels of late 2005- mid 2006) were still selling, but now it seems the sales have slowed down to a crawl.
I would be very pleased in the prices drop 25-30% in the next couple of years, and go back to 2004 level. But I think fed will do everything possible to prevent bubble markets from going back to less insane price levels.
I have seen a few individual listings priced at 04 type prices, very few, most sellers seem to be happy to do the slow bleed and mark down 5-7% every 60 days or so. I think it may pick up in the fall when more of the foreclosures are on the market
The FED can do all they want, but if lending tightens up and incomes are still way below the area’s housing prices, it’ll still have to correct. What are they going to do, force people to buy overpriced houses more than 3x their incomes.
“if lending tightens” - and this is still a big if.
I think by the end of the year some measures will be undertaken to stimulate lending. At the very least, Fannie & Freddie may be given permission to purchase jumbo loans, and perhaps other non-conforming crqp as well.
By mid-2008, prime rate will stand at 4.5 or even 4.25%, giving lenders more margin. Just watch the fed - they have many bullets, and they are going to fight for this bubble till the very last one.
fed funds rate of course, not prime
Some places, however most of South Florida is still delusional.
I see many sellers coming around in SW Florida. Canal (on the water) 3/2/2 built in 2002, going for 210k. Many more home made signs popping up on street corners advertising 139K for 3/2/2 off water property in Fort myers and Cape Coral. The 1/2 price and buy one get one free sales are well underway.
Ha ha hah. Countrywide
https://image.minyanville.com/assets/FCK_Aug2007/File/Chart%20Links%202/sg2007082756508.gif
Heading right for the convertible price. Oh, how this reminds me of the telecom things. Once it breaks that, $18 will be resistance forever. But of course BOA can’t short the stock for 18 months. Right. But others can!
I love it when you talk dirty.
In Northern Calif the realtors are pushing fixed rate interest only Jumbos for 5/7/10 year periods with 20% down. Their sales pitch is that home prices will be much higher at the end of these periods and the buyer can refi to a fixed rate jumbo much lost then the 8 1/2 current 30 year fixed. These I/O fixed are running about 6.625%.
Their sales pitch is that home prices will be much higher at the end of these periods
You know what else will be higher? Interest rates.
should say” buyer can refi to a fixed rate jumbo much LOWER then the 8 1/2%
And the cattle are led to slaughter.
Speaking of Florida, that’s where I live and something strange happened this morning. I was nosing around the Well’s Fargo site (they hold our mortgage) and clicked to see the going rate for a signature loan. When I chose Florida from the scroll bar, I was informed that the loan was not available. They don’t want to loan to people who live here.
KayLaw: too late!
test
I can still post, it’s just taking longer to go through.
Thanks for letting me know..
“‘We were all hoping it was like 80 percent owner-occupied and 20 percent investors,’ he said. ‘But no one knows.’”
Don’t get me started with this one. Your damn sales people knew exactly who they were selling to just by the terms of the loans the investors were taking and what features they put in the sales contracts like cheap rugs or no window treatments. You guys just looked the other way while taking the money and hoping to get the project built before things went bad. Pleading ignorance whne you are managing a multi-million dollar development isn’t going to cut it.
“‘We were all hoping it was like 80 percent owner-occupied and 20 percent investors,’ he said. ‘But no one knows.’”
Big joke. Nothing is FL is 80 percent owner-occupied and 20 percent investors anymore. He’s delusional.
“””””Your damn sales people knew exactly who they were selling to just by the terms of the loans the investors were taking and what features they put in the sales contracts like cheap rugs or no window treatments. “”””’
The builders knew it but they can’t admit it because they told their bankers that it was owner/occupied
And the bankers knew it but can’t admit it because they told the bond rating agencies that it was owner/occupied
And the rating agencies knew it but can’t admit it because they told the bond mangers that it was owner/occupied.
And the bond managers knew it but they can’t admit it because they told the bond investors that it was owner/occupied.
Exactly.
Optimism is endless. This guy’s theory that he would sell more $7000 plus home theater setups might make sense if it wasn’t a housing driven recession.
http://tinyurl.com/39k5kt
“Honey, since we can’t make our mortgage payment, why don’t we just take out a no-doc HELOC and upgrade our bonus room to a home theater?”
Moron Patrol…In Color!
I had a new boss hired in from external who has been doing job ~18 months. He built a custom 4000ft McMansion with huge media room. (He’d tell me about it all the time). He has 4 kids so go required pool etc, wife doesn’t work.
Well, he recently got involuntary moved sideways and will likely last 3 months in that new role. (He makes FEMA Mike Brown look competent.). I am wondering how well he could financially survive if what I think will happen to him.
It’s called feathering the nest,” said Oglum, referring to a trend he’s seeing of homeowners upgrading the places where they currently live rather than aspiring for a McMansion.”This is going to happen as housing prices slump.”
The Newark, Del.-based company has already seen fast growth. In 2004, its first year in business, TheaterXtreme sold 200 home theater packages. Unit sales topped the 2,000 unit mark in less than four years. The company’s total sales now are between $12 million and $14 million, Oglum said.
I’m sure the banks and mortgage companies will appreciate the extras when they foreclose on the house.
I live in Cambridgeshire, England.
I came across this site a couple of weeks ago via DollarCollapse.com
I am amazed from reading the message on this site that there are so many intelligent people who can understand the popping of the housing bubble in the US.
We in the UK this side of the pond are yet to see our housing bubble pop.
Watching the collapse of the housing bubble in the US is like watching a train wreck in slow motion.
The train wreck in the movie The Fugitive starring Harrison Ford springs to mind.
If any people on this site have any advice for housing bubble watchers on my of the pond or any questions, please let me know!
Yes sell now and rent. Or keep renting and buy when prices revert to mean.
I live in Germany and can tell you that blokes from the UK are in every town and village buying property. It is insane. My advisce is enjoy some cheap rentals in exotic locations and wait for prices to regain sanity.
If you get gutsy, get ready to short homebuilders and lenders. If you were a shorter in the US this year you made a bundle. I only caught the tail end of the real fun.
Also have cash.
I used to go to housepricecrashUK to try and see whats going to happen here ,but UK dipped in 04 and kept going up
Yes, I’m a Brit in the USA and I know the UK property market and, obviously, the US property market. The fortunes of the UK and linked closely to the US and it’s reasonably safe to say that the UK is the 51st state of the United States. In the US we are looking at the mother of all real estate meltdowns which could take until 2015 to clean up. At least the next 3 years will cause heavy duty problems. Some parts of the US will escape and only get slightly burned but other places like California where I live and Florida are toast. Florida being the poster boy. I would rather own a black rat with plague fleas than property in Florida. Owning the rat would be safer.
Now for the UK. A lot of “skimmed” money from Iraq courtesy of the US taxpayer has flowed into the UK plus a lot of Russian criminal money. It’s easier to launder dirty money in the UK than the US. Oil rich arabs (like the Saudi’s) like putting their cash in the UK. Also, the UK is without any doubt THE world’s money center at the moment even though many deny it (it’s not New York) but as the credit squeeze tightens, that could change. In fact, europe could be looking at a bigger eventual bust than the California or Florida markets and Spain is really on the edge. As the free credit punch bowl gets withdrawn, consumers in the US and Europe will suddenly wake up and realize their with their debts, especially those who used property like an ATM, they are up sh*t creek without a paddle. The UK property market (especially London) is nothing more than a Ponzi scheme. Bottom line is this. The UK is looking into the jaws of a financial train wreck and the US is heading into a serious recession.
Who to blame? Greenspan. They showered praise on Mr. Magoo and those clothes the fast talking tailors made him looked really good. At first. Now the seams are coming apart and he don’t look too nice naked.
what are stocks worth looking at as potential shorts for a UK/EU real estate meltdown scenario?
I have to agree about the UK. I live in CA but I am originally from Northern Ireland and have kept an eye on the insanity there. The price runup rivals anything on this side of the pond.
I talked my brother out of ‘investing’ in some real estate about 18 months ago just showing by showing the differential between rents and mortgages - often 60%+ for essentially the same houses on the same street. Normal semi-detached (1/2 duplex) 70’s 3 (small) bed s**tboxes are going for 1/4 million pounds AND SELLING (roughly comes out to about 1,500+ mortgage payment). Houses exactly the same on the same street rent for 550…..
I have come to the conclusion that after all this is over - houses won’t be seen as an investment for a generation.
UK: This thing is global. Other countries where RE is out of whack are Spain,Ireland, Holland, Dubai, Australia.
Maybe difference is US is sub-prime /no documentation thing but there are many in UK speculating on proprety. Ratio of salary to house prices is even worse in UK.
One thing which may cushion UK is that if you are unemployed, you’ll get help in paying interest on your mortgage. (Well you used to).
Common factor to them all was cheap money. All looking for a high return than basic govt bonds.
Bloomberg TV had a running caption a couple of weeks ago stating the London real estate market was slowing down. Did any one else see this?
That was evident from the hordes who camped overnight, fought over lottery numbers, even paid homeless men $20 and a pack of cigarettes to hold their places in long lines, all for the chance to put 20 percent deposits on condos that existed only in brochures.”
Good thing they’re used to camping out. That’s what they’ll be doing once they get foreclosed and don’t find a place to rent because of their poor credit and lack of cash.
Hope they all saved their refrigerator boxes from the new stainless steel models.
““The champagne-popping days are over for Natalie and David Luongo, who banked enough money flipping a South Florida condo three years ago to stage a $100,000 wedding.”
- If there was ever a case AGAINST a bailout.
“The champagne-popping days are over for Natalie and David Luongo, who banked enough money flipping a South Florida condo three years ago to stage a $100,000 wedding.”
-If there ever was a case AGAINST a bailout, this is one!!
http://www.telegraph.co.uk/money/main.jhtml;jsessionid=4EFJ1B0K5B111QFIQMGSFFWAVCBQWIV0?xml=/money/2007/08/27/cnusecon127.xml
“In Germany, it emerged that the state-bank SachsenLB may have accumulated $80bn of exposure to risky assets through a set of Irish funds kept off balance sheet.”
German banks, Irish conduit funds, “off-balance sheet”……how does one find out exactly how far the losses spread?? It just seems like they’re everywhere, but who ultimately will take the hit??
CNN new home sales for July: sales down, inventory up
http://money.cnn.com/2007/08/27/news/economy/homesales/index.htm?postversion=2007082711
Funny to see such a negative article sponsored by the very people who caused the bubble:
Mortgage Rates at 4.65%. $250,000 loan for $650/month. See New Payment - No SSN Rqd. Save Now! Refinance.LeadSteps.com
“Aside from sellers yanking their home listings to await better days, the market needs builders to give it a rest.”
The real issue in the Tampa Bay region is not so much as an oversupply of new construction, but an over priced selection of houses listed. The true issue in the Tampa Bay region is the listing prices MUST come back in line with the local wages and fixed incomes. Most of the lisings still show home prices that have only declined 10-20% which is not enough to come back in line with the regions incomes. As for the 41,000 listings, the article forgot to add in the number of for sale by owner and forclosed properties that would probally take this number up to about 82,000. Add in the number of pre-forclosure and homes that are being rented while waiting the market out and the number swells way beyond the 82,000 number. It’s only going to get much worse before it gets any better!
No, they did not “forget” about the FSBO or foreclosure properties in the pipeline. They chose to omit this information.
Got 10% down?
I still think it’s cute how many people in the press profess that their area is ground zero or an epicenter for either the housing bubble as a whole or some major facet of it (eg, subprime). Some sort of perverse bragging rights.
“Well, when I was young, I had to walk 10 miles in the snow to get to school.”
“10 miles and snow? Try 15 miles and 110 degree summers and a rusty nail in your eye. When I was young…”
“Gregg and Mary Mullins, retirees living near Fort Myers, finally rented out the two-story $885,500 penthouse they closed on last year in Blue, a concave tower overlooking Biscayne Bay. But the $2,800-a-month rent they’re collecting is less than half their monthly mortgage payment, maintenance fees and property taxes.”
Yeah, but soon to be 1/3 to 1/4 of their carrying costs after rents go down and insurance goes up and another reset or two.
They will jingle.
Got 10% down?
“Retirees” buying an almost 900K condo/penthouse/whatever. AND with over 5K/month payment. Unfreakin’ believeable.
Blano here is the kicker:
“As chief economist at Wachovia Bank, Mark Vitner of Charlotte, N.C., has a unique vantage point on the construction-related economy in the Southeast. He claims to know the executives of every major builder in the region.” “In Vitner’s view, the nation is roughly halfway through a two-year-long correction in existing home prices, which started in third quarter 2006.”
These talking heads are giving these two senior FBs hope that all they need to do is hang on for just 24 more months and everything will be fine. So now they will spend the next two years raiding their retirement savings to feed their hungry alligators.
I am looking forward to that point in time when people will talk about RE as a totally corrupt business, that you only buy a house to live in it, and you do not do 30 year mortgages for Condos that are built to last only about 10 - 15 years.
Got 10% down?
I’d be surprised if they are able to ride it out. Seems to me they’d eventually see the light and quit throwing good money after bad. Guess I shouldn’t assume that though since they actually went and bought it. Their kids better be adding on to their homes so they can take mom and dad in.
Vitner has no clue. his forecasts have always been way off the mark on the high side. read his past quotes about how wonderful re in fl is and that there is no bubble. i wonder how he still has a job in the economics field; but i guess he is highly qualified to the be the NAR chief economist. perhaps there is some value in always being wrong as one merely does the opposite.
Is there anyone left in S. Fla who isn’t a “transplanted New Yorker?
Yes, Most are from Cuba and South America. You still can find bargins on used rafts in the area!
“Aside from sellers yanking their home listings to await better days, the market needs builders to give it a rest.”
The real issue in the Tampa Bay region is not so much as an oversupply of new construction, but an over priced selection of houses listed. The true issue in the Tampa Bay region is the listing prices MUST come back in line with the local wages and fixed incomes. Most of the lisings still show home prices that have only declined 10-20% which is not enough to come back in line with the regions incomes. As for the 41,000 listings, the article forgot to add in the number of for sale by owner and forclosed properties that would probally take this number up to about 82,000.
If this 82,000 number is correct sellers awaiting better days, had better plan on awaitng better years. This has a long way to play out, and I think many will be desperate long before the fat lady sings.
“We’ll have some fallout, there’s no question about it,” Patterson said, though he noted that Paramount required 15 percent deposits on condos that range in price from $220,000 to $2 million. “People are going to walk away from a lot of money if they walk away.”
They’re going to walk away from a lot less money than if they purchase those condos that have probably already lost 30-50% of their value.
Big drops in Lee County, Florida. As usual.
The median price of a home sold with the help of a Realtor fell 7 percent to $246,100 from $264,600 a year earlier while the number of sales fell 39 percent from 694 to 426.
For condominiums, the median price — half higher and half lower — fell 33 percent from $346,300 to $230,400 while the number of sales fell 28 percent from 179 to 129.
Reality is like a cold shower in the morning!
I live in the Bay Area for 16 years and saw the extreme building of hi tech campus like Cisco, Lucent, Suns…Many building are still left empty since year 2000. That’s 7 years ago and counting.
I think that will be the fates of these luxury condos coming up in FL, CA and Vegas
People saying the unemployed Illegals will go back to Mexico better take a second look around. I’ve noticed a lot of illegal day laborers trolling for work in places not normally seen . . . like the Food Maxx store in in Citrus Heights.
And at Tiempo park off Fair Oaks this morning, when I drove my classic step-side dodge beater truck over to run my dog, a latin fellow practically ran out of the picnic table area, hoping I was looking for a crew, then eased up when I unloaded my doberman. His very pregnant companion was waiting back at the picninc tables.
Quite a . . . striking situation, indeed !