An Unexpected Ingredient In Florida
The Star Advocate reports from Florida. “Brevard County homeowners with a mortgage had a median housing cost of $1,297 a month in 2006, according to a U.S. Census Bureau report released today. That’s up 15 percent from the $1,128 figure in 2005. Titusville resident Mary Franz said she is looking forward to moving to South Carolina. That is, if her Windover Farms home sells.”
“She and her husband have had to drop their asking price from $337,000 to $299,900. Housing costs are part of the reason behind the move, Franz said. She can buy a home that costs ’six figures’ here for about $50,000 in South Carolina.”
The Orlando Sentinel. “Homeownership is taking a bigger bite out of the income of Central Floridians, especially in Seminole, Brevard, Polk and Volusia counties, according to new data released today by the Census Bureau.”
“Mortgage-holders spending 35 percent or more of their monthly net income on housing jumped by 26 percent in Seminole County from July 2005 to July 2006, while the increases in Brevard, Polk and Volusia counties were 19 percent, 19 percent and 16 percent, respectively, for the same period.”
“‘Jon Shehan, an Orlando Realtor who also owns a mortgage company, said he expected the situation was even worse now, because mortgage-interest rates have increased since July 2006. ‘A year ago was just the beginning of the problem.’”
“University of Central Florida economist Sean Snaith was not surprised by the increases in residents’ income going toward housing, given the huge increase in housing prices that peaked about a year ago.”
“Households have been paying a larger share of their income toward housing nationwide, and Florida has been no exception, he said. The same mortgage instruments ‘that are now being maligned had a positive side in allowing more people access to housing,’ said UCF’s Snaith, adding that record-low mortgage rates also spurred more ownership.”
“Much has changed since July 2006, Snaith said. ‘We’re in for a little dip here’ in the housing market, he said.”
The Palm Beach Post. “The housing meltdown is turning even economists…into comedians. University of Central Florida economist Sean Snaith writes, ‘The housing market needs the subprime meltdown like the NFL needs another dog-fighting scandal.’”
“While most everyone now agrees that 2005 was a bubble, Snaith still sticks to his ‘housing soufflé’ analogy.”
“‘The credit crunch in mortgage markets is a new twist and an unexpected ingredient in the housing soufflé,’ he writes. ‘It will weight the soufflé down and likely cause more of a decline in prices than otherwise would have been the case.’”
The St Petersburg Times. “In May, Donald Trump sued his Tampa business partners, accusing them of flubbing construction of Trump Tower Tampa, the luxury condominium high-rise that was supposed to make them all millions of dollars.”
“On Wednesday, two of those former partners returned fire and sued Trump, accusing the New York tycoon of failing to uphold his end of the bargain.”
“The project, to consist of 190 condos costing between $700,000 and $6-million, was supposed to be the deal that transformed downtown Tampa into a center of luxury living. But SimDag has struggled to find financing in the sluggish housing market.”
“Less combative than the corporate tyrant he likes to play on TV, Trump added some parting words: ‘It’s too bad how things turned out.’”
From TC Palm. “Stalled school enrollment seems one more sign of a Treasure Coast housing market failing to recover from its boom and bust.”
“But optimistic analysts say the Treasure Coast should rebound more quickly than South Florida from the havoc wreaked by speculators who drove up prices and flooded the area with new homes now sitting empty.”
“‘It doesn’t mean there’s any change in growth prospects for the Treasure Coast,’ said Brad Hunter, director of Metrostudy in West Palm Beach. ‘It just means we got a little ahead of ourselves.’”
“In Palm Beach County, the school district was one of the first agencies to notice growth going awry. The district began losing students two years ago, signaling a period of stagnant population increases caused by rising housing costs and speculators — not families — building and buying homes.”
“‘No one really knew what was going on,’ said Nat Harrington, spokesman for Palm Beach County schools, which has been forced to cancel building projects because of the unexpected enrollment decreases.”
“Some builders have worried this year’s slowdown in Treasure Coast school enrollment might be the start of a similar trend. Indian River County Schools had about five fewer new students than expected. Martin County Schools actually lost about 100 students, and even St. Lucie County Schools, which added about 1,200 children, saw its growth cut in half from the previous year.”
“‘Next year, it would not surprise me to see the schools have even less growth,’ said Don Santos, spokesman for the Treasure Coast Builders Association.”
The News Press. “Hiring prospects appear bleak across Lee and Collier counties for the rest of the year, according to a labor market survey to be released today.”
“One-third of employers surveyed by Manpower Inc. expect to trim employees by the end of the year and just 17 percent expect to add workers.”
“Those prospects made the local market one of the weakest in the nation, according to Manpower data. Only Cleveland, Bakersfield, Calif., and Gaston, near Charlotte, N.C., had a greater disparity between employers who expected to trim jobs and those who expected to add.”
“A year ago, 32 percent of the employers surveyed in Lee and Collier counties expected to add employees.”
“‘It’s definitely slowing for us everywhere from Charlotte (County) to Naples,’ said Darla Betzer, regional manager for Manpower Inc. in Southwest Florida. ‘Few people are looking to hire and they are treading very lightly.’”
“Betzer said the caution appears to be radiating from the stalled housing construction sector. The sector that includes construction accounted for about 36,900 jobs in Lee for July, down about 300 from a year ago, according to state data.”
“However, that includes only direct construction jobs and not various industries closely tied to construction. The job sector that includes finance, insurance and real estate is among those where reductions are most expected, Betzer said.”
“Lee County thinks more than 2,000 residents have filed petitions arguing their property isn’t worth what the county estimates.”
“They have an ally in Lt. Gov. Jeff Kottkamp. Kottkamp filed a petition indicating his home in North Fort Myers is overvalued by 38 percent. The appraiser’s office estimated the home value at $1,382,920.”
“The notices tell the value of a person’s taxable property and what they can expect to pay in property taxes. The market rate is based on comparable home sales in 2006. Many property owners have seen heavy market declines since then, but in order to have the value changed a person must present evidence the appraiser’s value is inaccurate based on comparable 2006 sales.”
“The burden is on property owners to prove the appraiser incorrect. Some residents presented independent appraisals or did their own research.”
“Rebecca Werner is retired and living with her husband in a condominium near the gulf in Fort Myers Beach. She filed a petition showing her condo, appraised at $574,000, to be overvalued by $175,000.”
“‘If you look at the equivalent comparisons in that building, there is very little rhyme or reason to it,’ Werner said.”
“Bruce Johnson bought his Cape Coral home two years ago. ‘They got my property going up $60,000,’ Johnson said. ‘I got it going down $100,000.’”
“Cleve Frederick of Lehigh Acres submitted a petition arguing his home, valued at $293,800, should be valued about $53,000 less. His market value spiked $44,000 from last year.”
“‘I said, ‘What the hell — this house isn’t worth that kind of money,’ Frederick said.”
On the ground report from Sarasota, where we passed through last week on our way to/from Miami for a cruise.
Significantly fewer For Sale signs in the old neighborhood and adjoining ones. The still-building neighborhood we drove through last January had roughly 16% of the houses with For Sale signs. Now only about half as many, but some said “Foreclosure” or “Pre-Forclosure” and there were other houses obviously vacant and untended, but with no sign. From the info sheets we grabbed, some owners still think it’s 2005.
Bonefish Grill was almost full on Sunday night, and our favorite pizza place was full on the following Friday night.
How is it Bill that these restaurants are still full? Wouldn’t you think they would be slowing significantly? I am seeing the same thing, the restaurants are busy, I just don’t get it but am glad for staff at these places that they are making money.
It would be interesting to know how the more expensive restaurants are doing. I think people will still go out, but will hit the mid-priced and pizza places instead of the Chez-whatever. For example the new Boca Ale House is doing a great business, selling domestic beers for $2 and $8 Mahi-mahi sandwiches. I’d also expect the South Florida Honda/Toyota/Chevy places to take share from Lexus and BMW when people’s leases run out.
In Orlando I have two friends who each own multiple location Pizza franchises and one who owns a Mom and Pop Itallian Place. They are all saying business is noticably down.
I can’t say if it’s because of increased competition or a downturn. I agree that people will go from the upscale places to the lower priced restaurants in a slowdown.
Most places upscale or otherwise around the attractions do not seem to slowing noticably.
It seems that there is a noticable move from Lexus/BMW to Honda/Toyota and VW. American car dealers are taking a hit. Chrysler seems to be doing better than Ford or Chevy.
I think the restaurants will always be busy on the weekend…how about a Tuesday or Wednesday night?? People will still do eat out..just once a week instead of several times a week…
I’m in the Sarasota/Bradenton area and the reduction in For Sale signs is due to many houses being rented out or sellers giving up. About 40% of my community is now renters with several vacant houses with no For Sale signs. My subdivision had a significantly lower number of sales in August than prior months so I think the mortgage crunch is now taking hold. The restaurants I frequent have been full on the weekend nights I’ve been there, but the waits have been only a few minutes compared to 1+ hour that was pretty consistant at these places. Commercial is the next thing to blow here. Unbelievable amount of ‘For Lease’ signs everywhere. Reminds me of early 2006 when everyone kept saying residential real estate was still hot but ‘For Sale’ signs were blooming everywhere.
I forgot to add to my above post but we went to a restaurant on Saturday at 7:30 in Bradenton which is usually fairly busy and it was only half full. I have also been in the local Circuit City’s and Best Buy’s over the past 2 weeks and they have been nearly empty. I am definitely seeing and feeling a difference here locally compared to a year ago.
I’m in Lakewood Ranch. I’ve noticed a lot less Hummers on the road. Most people moving in are opting to rent. Prices are well under $200 a square foot. Two years ago realtors told us to expect to pay around $250 a square foot. We’re waiting for the $100-$150 range.
“…She can buy a home that costs ’six figures’ here for about $50,000 in South Carolina.”
I guess she’s going to go from a 900 sq ft s#itbox in Florida to a single-wide in SC. Oh well, her property taxes will be lower.
Back in 2005, I looked up property in various areas of SC, mostly outside of Columbia. Now, I’m not on the ground to see what the neighborhoods are like, but there were a few properties in the $50,000 to $65,000 range that didn’t seem to be too bad for someone who wants to live modestly but nicely. One property I saw was a 3/1 on an acre with an in-ground swimming pool for $65,000.
Agreed palmetto, there are some pockets in S.C. that went a little crazy, but there is still affordability there in other parts of S.C.
I don’t know how it is now, but from what I saw back in 2005, $50,000 could get you something quite decent, certainly better than a singlewide. I was impressed. And that’s how it used to be in part of FLA.
Well I guess I haven’t looked at the so-called Midlands part of the state. Where we are, you can find some remarkably nice places in the $90K to the low $100K range. But not $50k.
Not in a gated community, you’re right. I’m talking about some of the older, semi-rural homes.
The woman might be making a mistake with the “…costs ’six figures’” part. If she’s comparing to $50K in SC, I think it would be more accurate to say “…used to cost ’six figures’” or to note that the six-figure number is the asking price, not the getting price. Titusville is not Orlando or Sarasota, by a long shot.
Also, if Titusville’s Windover Farms is like the one in Melbourne, the lots are all 1 acre+ and the subdivision is within 3 miles of big-box shopping. Bet you don’t get that in SC for $50K. What is most likely is that she assumes she’ll walk with $50K in cash and so that’s what she wants to spend, to be retired and mortgage-free. But I think she’s going to be downsizing in footage or land or both, or living waaaay outside of town.
Six figure VS 50K aside, I think the most significant thing is that they are getting out of Florida because they’re priced out.
Look at the rest of the articles:
“Stalled school enrollment seems one more sign of a Treasure Coast housing market failing to recover from its boom and bust.”
“‘It doesn’t mean there’s any change in growth prospects for the Treasure Coast,’ said Brad Hunter, director of Metrostudy in West Palm Beach. ‘It just means we got a little ahead of ourselves.’”
No, it means the population of families with school age children is not growing. Call me crazy but I would say that significantly changes the growth prospects.
“In Palm Beach County, the school district was one of the first agencies to notice growth going awry. The district began losing students two years ago, signaling a period of stagnant population increases caused by rising housing costs and speculators — not families — building and buying homes.”
“‘No one really knew what was going on,’ said Nat Harrington, spokesman for Palm Beach County schools, which has been forced to cancel building projects because of the unexpected enrollment decreases.”
“Some builders have worried this year’s slowdown in Treasure Coast school enrollment might be the start of a similar trend. Indian River County Schools had about five fewer new students than expected. Martin County Schools actually lost about 100 students, and even St. Lucie County Schools, which added about 1,200 children, saw its growth cut in half from the previous year.”
“‘Next year, it would not surprise me to see the schools have even less growth,’ said Don Santos, spokesman for the Treasure Coast Builders Association
OOPs, there it is!! Florida’s population is stagnating and could actually reverse. If we lose the core working families, i.e. those with school age children, all we’ll have left is Realtors and retirees.
There are numerous indications that people are leaving this state. I think if the US as a whole is lucky enough to suffer a ONLY a Mild recession as a result of the housing market, in Florida it will be far worse. Our biggest industry, tourism is based on something only people with disposable income can afford. If the couple from Ohio with 2 kid’s stops coming to Disney or the beach every 3 years, we’re screwed.
California will get wacked but at least they have some industry. We ain’t got s**t.
Disney hotels are booked constantly still and many are charging rates over $250/night
Chicho;
They are offering specials to Fla residents all the time. Up until two years ago I always had an annual pass and I could get rooms for $99 in the mid priced resorts, i.e. Coronado, Port Orleans etc.
I’m still getting offers in the mail and via email.
I know most people think Zillow is silly but I watch different houses all over Florida. I think the reason some of the houses have gone up in value has to do with tax appraisals going up because there are so few recent comps.
Does zillow care about tax appraisals? My home hasn’t been appraised since before I moved there in 1991. Its tax value has no relevance.
“Households have been paying a larger share of their income toward housing nationwide, and Florida has been no exception, he said. The same mortgage instruments ‘that are now being maligned had a positive side in allowing more people access to housing,’ said UCF’s Snaith, adding that record-low mortgage rates also spurred more ownership.”
FYI, this Snaith idiot can be emailed at:
ssnaith@bus.ucf.edu
The same mortgage instruments ‘that are now being maligned had a positive side in allowing more people access to housing,’
This quote only makes sense if one discounts rentals as a legitimate housing option. Everybody has access to housing…if you don’t have money you move in with your folks or go Section 8.
My preferred mortgage instrument is not to have one.
“The housing meltdown is turning even economists…into comedians. University of Central Florida economist Sean Snaith writes, ‘The housing market needs the subprime meltdown like the NFL needs another dog-fighting scandal.’”
This Snaith guy is a real laugh-a-minute.
“‘The credit crunch in mortgage markets is a new twist and an unexpected ingredient in the housing soufflé,’ he writes. ‘It will weight the soufflé down and likely cause more of a decline in prices than otherwise would have been the case.’”
Tell it to Rachel Ray.
Comedian all right. Maybe a Bizarro comedian.
The subprime meltdown was exactly what the housing market needed, and the credit crunch was expected by everyone who understood that loaning money against grossly overvalued assets is a great way to make it disappear.
Sounds like ‘ol Sean might have an investment alligator or two out there in the bushes.
This is what I just sent to him:
“Households have been paying a larger share of their income toward housing nationwide, and Florida has been no exception, he said. The same mortgage instruments ‘that are now being maligned had a positive side in allowing more people access to housing,’ said UCF’s Snaith, adding that record-low mortgage rates also spurred more ownership.”
Getting into a house is much different from actually being able to afford it! I just have to shake my head at your comment and many similar ones I see constantly in the mainstream media. That is precisely why those mortgage instruments are causing a whole lot of problems now. They qualified unqualified persons to get into ridiculously priced homes, thus inflating prices even more, until one day, things were just down right unaffordable and unsustainable. The gravy train stopped and that idea of being able to refinance out of your financial ruin or being able to sell for a ridiculous profit is just a vague dream only seen on “Flip that or this House” or whatever. One more thing: these so-called “homeowners” are “homedebtors” if they really can’t afford the home (so big whoopdedoo on that high homeownership #, although the increase is probably due to speculators/flippers who really aren’t living in the “home”). The bank or crazy mortgage company (or some guy in China for that matter) owns your house until you pay it off and if you can’t pay it off, you are worse than a renter because you have to pay all the carrying costs that come with having a house and mortgage.
I wouldnt even bother writing a letter or comment to anyone with an ounce of decision making ability. All youll get is smug announcements meant to show what a great job they do, to protect & enhance their turfs, or sullen resentment from any attempt to discuss their errors.
It’s just rare for an individual to be able to take a well-balanced, 3-dimensional, objective look at themselves, be able to accept the flaws, & strive for improvement without throwing off a hellacious bitter attitude. (realtors come to mind)
My wife is a perfect example: she will blindly accept anyone’s opinion, who holds a degree, as the gospel truth. Drug reps that cycle thru her office are wizards about everything from pool cleaning to childcare. Every other day she comes home quoting some schmuck’s sage advice. (Amusing how what the spouse says just goes in one ear & out the other … until Dr. so-and-so says it, then its true .. hehe)!!
hilarious, actually
Aquis - what was that you just typed. I wasn’t listening.
hey there Houston
I said ” half price off SALE going on now at the MALL. It’s a GREAT time to BUY ” !!
can you hear me now? I got 3 bars on my end …….. !!!
“Titusville resident Mary Franz said she is looking forward to moving to South Carolina. That is, if her Windover Farms home sells.”
It will come to be known as “Bendover Farms”.
Thank you sir may I have another……….
LOL — good one, Palmetto.
She must consecrate the bonds of obedience and assume the position
I am sooo glad I don’t own a house here right now. IMHO, Florida govmint, both state and locals, has lost their minds and gone rabid in terms of trying to squeeze money from the people.
A buddy of mine had his car break down on 1-75 this AM and getting help was a joke. Hillsborough Sheriff came by and said he’d called for FHP and they should be there in 5 minutes. Time went by and FHP wasn’t showing up. I made a phone call for him and no one picked up on FHP’s emergency line even after two phone calls. Finally, FHP shows up, an hour and a half later, just before the AAA tow truck. The patrolman said FHP had never received a call from the sheriff.
My point is, I’m wondering if this is the beginning of a trend where law enforcement and gov emergency services start penalizing the taxpayers for budget shortfalls in Florida. Seems a tad vindictive to me.
The cops are too busy writing tickets instead.
More good quick wit. Nice day, starting off here…
I agree palmetto that Florida is trying to squeeze everything they can out of residents, very unfair and ultimately counter-productive and destructive by collapsing economy further and therefore lowering tax revenues even further longer-term.
“therefore lowering tax revenues even further longer-term.”
My thoughts exactly, Florida Watcher. It’s like Crist and the legislature has a gun and is shooting their feet, toe by toe. The only thing worse than the bubble in FLA are the desperate measures the politicos are taking to protect revenues. I’ve given up trying to protest. In fact, each time they come up with a rotten idea, I’m going to encourage them, in the hopes that Florida bottoms out even faster, we can throw the bums out and move on to make a phoenix rise from the ashes.
Crist lied to get into office as far as I am concerned. He has done nothing he said he was going to do.
“Crist also led his opponents in fundraising throughout the campaign, but his activities were occasionally controversial. One of Crist’s backers was real estate mogul Donald Trump, whose guests at a Crist fundraiser included a former Ukrainian official in the country illegally, as well as the owner of a company under investigation by Crist’s office. Crist later returned the donations from the companies under investigation, while the Ukrainian official’s fee was paid by another guest. Further controversy set in, however, when ethics complaints were filed against Crist and his chief of staff for failing to investigate a major donor, personnel firm Convergys, that has been plagued by lawsuits and prison sentences for its role in the inadequate protection of state employees’ social security numbers.”
“Crist’s platform as a gubernatorial candidate included affordable homeowner reinsurance, report cards for insurance companies, abolition of citizens insurance, lawsuit reform through elimination of joint and several liability, and property tax flexibility.”
“In 2007, Governor Crist has been embroiled in public disputes with property insurers over homeowners’ insurance rates. Governor Crist had expected insurers to lower their rates with new reinsurance coverage available from the Florida Hurricane Catastrophe Fund. However, insurers have found that although the FHCF will offer them complete coverage, there are significant doubts in the marketplace as to whether the FHCF will be able to make good on those claims. Ratings agencies (such as Moody’s, Standard & Poor’s, and A.M. Best) have warned insurers that if they accept too much reinsurance from FHCF, they risk being downgraded. With such a warning in hand, insurers have instead gone to the private reinsurance market for much of their reinsurance, and have found significantly higher rates.”
http://www.floridainsurancecrisis.com/tag/charlie_crist/
Governor Crist to Insurers - “I want you to lower your rates, or else!”
Insurers - “Or else what?”
Crist - “ummmmm, I’ll hold my breath till I turn blue?”
Insurers - “we choose NO”
Crist - “ok, sorry to bother you”
What Tom said.
Crist will be the downfall of Florida, IMHO.
SFC
AHAHAHHAHAHAHAHHAHAHAHAHAHHAAAAAHAHHAHA !!!
damn funny & true !!!!!
It is true for sure, aqius. While Crist was AG, I believe violent crime in FLA has a serious uptick. Sort of gave me an idea of how he’d handle the job as governor. Sigh. Crist would have made a great PR guy in the private sector, gladhanding people and such. But I just don’t think he has what it takes to pilot the ship through rough waters.
Government incompetence is not limited to Florida. It also has nothing to do with housing prices. If government does it, it does it poorly. End of story.
“If government does it, it does it poorly.”
Yeah, I notice private corps are doing a heckuva job these days. I’m no fan of government overall, but I don’t think government always does a poor job. I lived in So Fla during Andrew. I couldn’t have asked government to do a better job than what they did after that storm.
But if the private sector does it poorly they USUALLY get shut down. Government never gets shut down, Palmetto.
“Government never gets shut down, Palmetto.”
I dunno. I haven’t seen Rome, Weimar or USSR around lately.
OK, NYCityBoy, despite my comment, you are right, government never really gets shut down, because even if they go defunct, they either morph into something else or get taken over. Whereas businesses do disappear.
Having said that, it rather appears to me that the more we “privatize”, the worse it seems to get. I think there should be a separation of gov and corp, just like church and state.
If that indicates there are fewer state troopers around, I’ll take that as a good thing.
Here in Colorado Springs, the cops’ sole purpose in life seems to be revenue generation through speed traps. My neighbor had a drunk, beligerent low-life kick down his back fence at three in the morning, trying to get into his yard (and probably his house, where he’d seen his daughter peering out the window) and the cops were “too busy” to send a car out to do anything about it. The stock answer for anyone who gets anything stolen and is delusional enough to expect the Colorado Springs PD or Sheriff to do anything about it is, “talk to your insurance company.” They won’t bust meth houses unless they think the owner will pay for the remediation. Etc., etc.,…basic services will be the first to take the hit once tax revenues start drying up.
“The project, to consist of 190 condos costing between $700,000 and $6-million, was supposed to be the deal that transformed downtown Tampa into a center of luxury living. But SimDag has struggled to find financing in the sluggish housing market.”
Jeez, this should have been a slam dunk. After all, it’s obvious that the international jet set are just dying to move to Tampa.
The numbers might be bigger in California (and the boobs, too), but for sheer bubbly ridiculousness, I think Florida’s got everyone beat.
“The numbers might be bigger in California (and the boobs, too), but for sheer bubbly ridiculousness, I think Florida’s got everyone beat.”
That’s because Florida is always trying to outdo Cali, with disastrous results.
Don’t Underestimate the Golden State, the bigger they are…
The dollar amounts you guys bandy about on the coasts continue to just boggle my mind. That even includes values after the coming haircuts.
It dawned on me a few years ago when we in Buffalo, and the avg house was like $50k, but there were a few $10k beaters around…
Economically, much of the country is locked in.
The idea of a Buffalonian selling their paid for house for $50k and moving to California and buying a starter house for $600k is just not in this house of cards…
Play it again, all over the forgotten middle, of our country.
Hearing some interesting stuff from a friend of mine. If you guys have noticed a trend is starting to occur with the banks pulling or cutting warehouse lines for the brokers. Turns out she said that stats have showed that of the 40% of loans done by brokers show that 99% of the fraud came from them. She said the trend going forward is for all the banks to go retail and cut out the brokers. I think what she is saying is true as in the last couple of weeks I have noticed big boys from Citi to WaMu cutting off the lines. It will be interesting to see where things are 1 year from now or even six months after a mass amount of ARMS are reseting. I think the banks are setting up to take as much as the business in for themselves as they can without the middleman. This way they can sell them on Wall Street without having the issues of “high” fraud.
“I think the banks are setting up to take as much as the business in for themselves as they can without the middleman. This way they can sell them on Wall Street without having the issues of “high” fraud.”
I guess “outsourcing” hasn’t worked well for the banks, LMAO!
Never does and never will..watch out toy shopping this holiday season!
Yes, I heard on the news last night that stores are labelling toys with the country of origin. LMAO! “Made in China” synonomous with “Hazardous”.
I saw that too. About the China/hazardous warning.
You may be laughing about toys, but what about food? Much of the additives, dyes, preservatives are made in China, under conditions that are less than appetizing. There is a law on the books, COOL, country of origin label, but once again, a law that is not enforced. Take a good look at cookies, breakfast cereals, breads, twinkies, what have you. The manufacturers, Gen Mills, Kellogg, Kraft, et al refuse to identify what came from where, even if you call or write them.
Turns out she said that stats have showed that of the 40% of loans done by brokers show that 99% of the fraud came from them.
If they(brokers) have no skin in the game, just like 100% buyers, why wouldn’t they pull out all the stops and commit fraud, all the while raking in enormous commissions. And all without any gov. safeguards in place to stop them. Like they said it’s a perfect storm.
My friend, the mortgage broker in Florida who owns a bunch of homes and isn’t making the 200k she is used to just admitted to me that she is so screwed. She kept saying, they are going to lower rates, they are going to lower rates. Well, it looks like she is at the acceptance phase.
Tom — at this point, even if the Fed lowered rates, how can she hope to maintain that kind of income? I think there won’t be enough additional buyers to make a big difference in the current rate of sales. She seems to assume that rates were the only factor on the boom/bubble — she may be forgetting that the expectation of rising values, and there fore wealth, was at least as great a force. Further, even with lower rates, appraisals are tighter and no-docs are toast, so the pool of buyers is greatly shrunk, or they will have to look at significantly lower-priced housing until prices naturally revert to the long-term mean. Either way, I’d be impressed if her $200K+ income returned. As noted by Annette, banks have been unhappy with, but tolerated, mortgage brokers until now. August 2007 is the date on the tombstone of the mortgage broker business.
She is cash flow negative to the tune of $3000 a month. This is at 100% occupancy and before her rates reset. Her homes are mostly worth less than she owes on them.
R.I.P.
Here lies a mortgage broker
Killed by his own greed
I don’t know what this means, but it feels icky.
http://tinyurl.com/2qg8gq
Private placement market gets boost as three more big banks join new platform
In a move that should further bolster the appeal of the private placement market for companies looking to duck the burdens of being public, Bank of America, Credit Suisse and UBS are joining the private placement trading platform being launched by Citigroup, Lehman Brothers, Merrill Lynch, Morgan Stanley and Bank of New York Mellon.
The system, called Open Platform for Unregistered Securities, or OPUS-5, is a rival forum to the one launched in May by Goldman Sachs and another launched by Nasdaq last month. OPUS-5 is set to launch later this month, according to Ron Sommer, a spokesman for Bank of New York, which is developing the platform and will act as its administrator.
The platforms manage trading of privately offered equity securities transacted under Rule 144A of the Securities Act of 1933, which allows companies to avoid the regulatory burdens and scrutiny of being public.
The addition of the banks “will further promote liquidity and efficiency for qualified institutional buyers who trade 144A equity securities and enhance issuers’ capital raising efforts,” the group said in a statement.
Though private placement is becoming a more popular alternative, liquidity is much more limited than in the public markets. Trading in the 144A market is restricted to large institutional investors with at least $100 million in assets. Additionally, a company can only have up to 499 investors or else it must register as a public company.
Still, private placement offerings raised $162 billion in the 144A market last year, more than the $154 billion raised by Nasdaq, New York Stock Exchange and Amex IPOs combined.
By Matthew Quinn
September 12, 2007
Leigh
Damn interesting find on that opus-5 story. Confirms just how slimy the so-called respected banks really are.
Here in Sacramento, CA, in the old part of historic ” Old Town Sac ” there was (maybe still is ) a motto written in the Wells Fargo museum that went somewhat like this :
” I/WE HATE THIEVES. ALWAYS HAVE, ALWAYS WILL ” .
That simple statement always came to mind over the years & was a factor in my seeking out Wells for business/personal transactions.
However, in the last 7 years or so I have watched in horror & disgust at the way Wells has done business, and am convinced that that motto is just an empty slogan. I wonder what the bank founders would think of the present day company? Shocked? Impressed!?
I DO know Sam Walton is spinning in his grave over his heirs selling out to China. Sam was pro-american and seemed to be able to make a profit keeping most of his business sourced in america. Yeah, I know times change but now the company now takes extreme delight in squeezing the little guy, customer & vendor. You CAN be effecient in business WIHTOUT being cruel. (Look at IKEA.)
I think sam walton’s son has a monkey on his back in his trying to step out of his old mans shoes, by turning his dads perceived upstart kmart wannabe hick company into an international juggernaut. Too bad he lost his humanity on the way.
ok, covered a few topics. its all relevent. carry on.
But what is the significance of the story??? That’s what I’m waiting for someone to answer.
Me too…I don’t know why but it appears significant.
The Walton who followed in his father’s foot steps died several years ago, and from that day forward the company did a 180 degree turn. My nephew is a district manager over 24 Wal Mart Stores and he said when the one son who was really good at running the business died you could just see the downward slide.
‘I said, ‘What the hell — this house isn’t worth that kind of money,’ Frederick said.”
While we Georgists tend to exclude (at-or-below-median) homesteads from aggressive property taxes, one of my favorite elements of the Georgist tax regime is allowing people to pick their own property tax (actually site value tax, since taxing fixed improvements is verboten in Georgist philosophy).
The catch is, of course, that whoever is willing to pay the most site-value tax gets the property.
Some advice for those who are stressed out and bordering on a mental break down because they cannot afford the mortgage, HOA fees, property tax and constant repair problems. WALK AWAY.
It’s only a pile of wood and bricks probably set on an overvalued handkerchief size piece of land. The good old days of responsibility have gone. The Fed are no longer responsible entities. The government is no longer a responsible entity. The banks are no longer responsible entities…..so why should you be responsible. Give them back their pile of bricks, wood and plaster.
There are many who will throw up their hands in horror at the suggestion that people should “walk away”. 30 years ago (when I was 40 years old) I would never have suggested it but if I was in the position that many now find themselves in, many of them young people, because of fraud, deception and outright government and Fed incompetence by allowing this to happen, I would tell them where they could stick the keys to that overpriced, badly built piece of junk.
As for your ruined credit rating? Don’t worry about it. You’re going to have a LOT of company in the next few years and there’s a bright side. For several years you will not be able to spend what you haven’t got and you might even save some money. Wow! Wouldn’t hat would be an earth shattering event. Even if you were one of the many greedy buyers who thought they were jumping on a gravy train but discovered it was a train to misery, it makes no difference. You were suckered in. Walk away, learn from it and let those that suckered you in pay the price….instead of you.
..
Everybody on here refers to BK as a bad thing….
I got news for ya.
From what I’ve seen, it ain’t all that bad.
My best friend filed BK back in 2005 before the October deadline. He had an ugly divorce and about 20K in CC debt.
Anyhow, fast forward to 2007. Capital One gave him a Platinum Card with $ 3500K limit and a truck loan for 22K @ 9.5% APR. He’s fine. With the same employer. His FICO is now a 675 and his credit profile was helped by the BK.
Sure, he has a BK on his record, but he has gotten his act together somewhat nowadays and is actually saving money.
The only reason he filed for BK in the first place is that about 12 months prior to his difficulties with credit and marriage, he was late on one (1) payment and ALL the credit card companies colluded to instantly raise his rates to like 24%. He tried to pay his way out but the banks wouldn’t be reasonable with him. Tried Credit Counseling and that was a waste of time. Now his NEW CC has a rate of 12% and his auto loan is 9.5%.
Screw the banks. I agree with the post above. They have gotten greedy in some cases and will squeeze anybody dry at the least “provocation”.
I agree with Mike’s post as well. Wholeheartedly. Faith has been broken by the FED, banks, govmint, builders, brokers, you name it. Contracts by definition are a “meeting of the minds”. Today’s contracts are one-sided and so are not contracts. Business and government entities have gone completely rabid. Take care of your and yours, do what you have to do to survive.
And ultimately, this is how the “big guys” learn their lesson, being treated themselves as they have treated others. Their business models depend on people keeping faith with them, while they do what they please. Their business models fail miserably when the other side does not dance to their tune.
Yes their model was predicated on the blind faith of the masses doing what was expected. They even threw in some “moral obligation” crap just to set the hook. Alas as the masses were doing their moral obligation to borrow and pay the system became increasingly stacked against them, taking advantage at every opportunity that presented it’s self. And now it’s out there for every one to see (if they care to look) how “moral” they were and guess what? the people are getting pissed, and rightfully so. Now it’s gonna be every man for themself. After all that’s the way it’s really played isn’t it?
A contract is nothing more than a document around which to base the lawsuits.
I have to agree the notion of a default rate is not only wrong but also counterproductive. What should happen if credit card companies get worried is they should turn the card off and tell the card user to come back after paying down the debt, but this triggering everything to 30% essentially must throw most who have it happen into BK
$3500K is $3.5 million. Les, no wonder he’s your best friend!
From the onset… “FB” really = F—ed Banks
“Platinum Card with $ 3500K limit”
Can you please verify that number? I didn’t know there are million $ credit cards.
A lot of people find themselves pushed into the BK corner due to the combo of doubling and tripling of interest rates combined with the higher minimum payments (by %). Add to this the housing value declines (one less place to turn) and any resets, and…
Still amazed seeing the economy ( 2/3rds consumer spending) doing as well as it is. Are people that conditioned to “good times” and don’t see it possibly being any other way?
Well said, Mike. BRAVO! I totally agree.
Yep, I’m going to go out on a limb here and say that this is perhaps the BEST post I have seen on this blog. I believe Mike has just writting the eulogy for the bubble, maybe for the last couple of decades of financial history in the US. A truly awesome post. Says it all. Mike, my humble thanks.
And to quote hd74man, as far as these entities go, “Fook-em!”.
Probably harsh medicine but if you’re suffering payment shock a bad case of subprime hives, walk.
http://www.youtube.com/watch?v=UsazuAL1J70
Yes, EXCELLENT posts this AM from Palmetto, Mike, and others about the state of our so-called union.
You wont get real advice from our president, just more blather to keep the masses from bleating into a revolution . . .. IF they can divert themselves away from the Playstation & Britney Spears long enough to pay attn . .. my bet is 50-50.
As for your ruined credit rating? Don’t worry about it.
Exactly. Too many people lose track of what exactly they’re building a credit rating FOR: to buy a house. Well, if instead of buying a house you’re trying to GET RID of the one you have, what’s the worry?
LMAO! Pay no attention to the man behind the curtain.
After this fiasco, lenders might start relying almost completely on LTV and income, and not on the FICO. The Alt-A implosion will teach them that lesson.
WALK AWAY.
OMG. Mike is Cramer, Cramer is Mike!
Mike — nicely written. Sad, but “stickin’ it to the man” will fit in well with the mindset now taking shape in our country.
Loans were once made on a calculation of both data (documents relating to financial capacities) AND character.
As we’ve “evolved”, technologically, loans have increasingly been made simply on data…statistics. The recent debacle in lending is just the culmination of that adoration of numbers over the harder to define things like what makes up a person who will (or won’t) pay someone back.
There was a time when I would have said, morally, a borrower should do everything they can to pay a loan back. However, as the lenders have grown to virtually totally ignore the issue of character and have come to base their decisions essentially on what is an “acceptible” level of defaults, they’ve redefined the rules of the game.
Lenders (or really the ultimate investors) have chosen to bet on raw, historic, data and have shown little or no concern about the fundamental factors that might make a borrower unreasonably default (much less perform).
That’s the bed they’ve made. If they choose to continue to do business solely on the laws of “large numbers”, fine. Let them take the risk and continue to embrace statistics above all else. If you are on the other side of this equation, a borrower who (for whatever reason) cannot pay the existing rate or simply CHOOSES not to pay back a loan on a depreciating asset, so be it.
The resulting defaults will be digested. Either the game will go on with an accomadation of this new, unhappy, data or it will change. Maybe a group will emerge that WILL look at people’s character and more thoughtfully consider WHAT a borrower is doing from a broader perspective and lend to those more reliable borrowers of character (who acquire assets thoughtfully) accordingly….at more favorable rates and terms.
Point is; the lenders/investors recklessly chose to accept OBVIOUS risks. They deserve to pay that price. If their price is made higher because you choose to accept foreclosure instead of starving to simply pay a mortgage off, that choice is just as moral as the one the lenders made in giving you the loan in the first place. Their decision was simply numbers based…why shouldn’t yours?
Excellent caveat, jag. Even though I may not always agree with you, I think you have an excellent understanding of banking as it should be and as things go forward, I hope you are one of the people that a financial institution will appeal to in trying to find out wherein they have gone wrong. And I hope you charge them big bux for your time and analysis and a program to put them back on the right track.
I was just chatting with a friend about this same topic. There was a major financial collapse in Alaska during the mid 80s (oil prices dropped). We noted that the banks that survived were the ones who were local and who kept (did not sell) their mortgages. They had a good feel for their borrower’s ability to pay AND they had the incentive to be cautious. These same banks struggled in the ‘boom times’ because they didn’t have the right corporate culture to go whole hog into crazed lending mode.
Jag — good points. For better or worse, they auger toward banks and S&Ls reassuming virtually all mortgage lending and the death knell for mortgage brokers and, for the most part, MBS as significant investment vehicles. Personally, I think that in the end, it will be the difference between the wolf and the coyote, with government deciding the hunting hours.
“The same mortgage instruments ‘that are now being maligned had a positive side in allowing more people access to housing …. Much has changed since July 2006, Snaith said. ‘We’re in for a little dip here’ in the housing market, he said.”
This guy is a troll. He is taunting reality.
I’ll bet he is overinvested.
‘We’re in for a little dip here’ in the housing market, he said.”
An when everyone is totally underwater next year he will say he really didn’t mean that.
Titusville resident Mary Franz said she is looking forward to moving to South Carolina. That is, if her Windover Farms home sells.”
Oh Crap! Not another one, we don’t want you to sell your house in Fla.and move here to S.C. Stay down there! Stay damnit! Or move to Tenn. it’s much nicer there.
LOL!!! But us modest Michigan types are still welcome, right?? RIGHT????
Welcome? Absolutely? But you better buy now or be priced out forever!
I can buy now, or pay less later, right??? : )
An old friend in Asheville is willing to roll out the welcome mat anytime I want to show up. If I didn’t have kids here, I’d have already taken him up on it.
Make that, “Welcome? Absolutely!”
Blano,
Don’t laugh but I would love to retire on Mackinac. Rent a car for when we need it off island. Get a ton of books to read in the winter. Only thing is I think the horse poop would get to my husband sooner or later (used to own horses so it doesn’t bother me). Love the tranquility of the quiet parts of the island though and the loop makes a 8 mile run.
I can understand why you’d like Mackinac, just from what I’ve heard….never been there myself though. I would definitely want to have a spouse though for those long winter days and nights.
I’ve occasionally toyed with the idea of buying some property in East Jesus nowhere U.P. but for me it comes down to weather. I was in Naples, Florida New Years Day…wearing shorts and flip flops. Doubt that I’d ever move there, but I was hooked on the shorts and flip flops concept for January attire. As far as summer though, there isn’t a place I’d rather be in the world than western Michigan.
Coming back to Detroit was a major downer when I looked around at what I came back to.
What a pleasure to hear some nice comments about upper Michigan.
I grew up in the Detroit area and moved to the central UP in 1989. The winters are colder but there is much more sunshine. Feeling that radiant heat on a brisk UP morning…ahh refreshing.
Occasionally I make my way back to Detroit and after about 3 days I can’t wait to get back home. Breaks my heart though to see so many shuttered manufacturing businesses. I hope the upcoming UAW contract is a watershed moment of cooperation between labor and management. Maybe it could turn the area around.
MWAHAHAHAHA! SC is safe from halfbacks who are weighed down by their homes. But those who have mobility will be headed your way. I think the Carolinas are being looked at as the promised land by illegals who can’t find work here in FLA.
“Or move to Tenn. it’s much nicer there.”
ROFL.
“‘The credit crunch in mortgage markets is a new twist and an unexpected ingredient in the housing soufflé,’ he writes. ‘It will weight the soufflé down and likely cause more of a decline in prices than otherwise would have been the case.’”
The housing souffle was in the oven too long. As a result, it burned to a crisp. Since you can’t turn back the clock, housing is now toast. Enjoy!
test
I wonder when these morons will start doing the right thing…List the House for $249-269K (easy $100K equity!!!!) and have an absolute 7 day auction….no contingencies, fast closing…. unless of course they heloc’d the heck out of the house they will probably get multiple bids.
——————————————-
“She and her husband have had to drop their asking price from $337,000 to $299,900.
I was in Orlando this past weekend. Didn’t look at homes or count signs. But I did notice restaurants/bars downtown were less busy than they used to be 2 years ago when I lived in Orlando.
I don’t doubt your observations, but the weekend after labor day is one of the slower leisure-travel weekends of the year.
Downtown is not really touristy. Not to be confused with Downtown Disney which is.
The people losing money in housing can make it back by investing in the market. It seems the worse the financial news the better the market performance:
Stocks Soar on Unemployment Report
http://finance.yahoo.com/
Oil Hits New Record on Refinery Outages
Dollar Sinks to New Low Against Euro
http://biz.yahoo.com/top.html
With that kind of good news, I guess the market can only go up. (sacasm off)
‘The housing market needs the subprime meltdown like the NFL needs another dog-fighting scandal.’”
This guy is a complete idiot!! The market did need the subprime meltdown to weed out the fraud caused by banks, mortgage brokers, realestate brokers and sales agent and the toxic bonds created by Wallstreet. The consumer needs to stand up and say we control the market and we the consumers are tired of the high housing costs, etc. Bottom line, the consumer should cut back sharply on their spending to send a message that enough is enough!!
But Fuzzy that is so, so, so, UnAmeriKan! How dare you tell the consumer to cut back Sharply on spending, esp. for over-priced junk called homes. You really want to kill this country, don’t you?
Sarcasm off.
We will now go back to regularly-scheduled programming.
Buy at Wal-Mart. Buy at Wal-Mart. Buy at Wal-Mart.
But Fuzzy that is so, so, so, UnAmeriKan!
OCDan: I can’t stop laughing. In this world economy, I have become UnAmeriKan! I like saving money and it works!
“Stalled school enrollment seems one more sign of a Treasure Coast housing market failing to recover from its boom and bust.”
It seems that all of the nation’s FB’s are ending up here or in North Carolina. Houston’s freeways are swarmed with cars with California and Arizona tags. Our schools are overflowing. North Carolina is swarming with Floridians, most of whom fled the northeast over the past decade.
I still don’t get why these people refuse to stay where they are and just rent until prices become affordable again.
“I still don’t get why these people refuse to stay where they are and just rent until prices become affordable again.”
*******
Perhaps the overall quality of life is better in NC or in Houston than wherever they came from… on the other hand, in my situation when the fallout has finally run its course (post 2012), I have to decide whether I want to live among the most smug people on the planet.
I feel less like doing that every day. Though a slumping housing market does help to bring people to face reality.
Excellent post SF. Couldn’t agree more. Me and the wifey live in South OC and we have been looking hard at Spartanburg, SC for more than a year. Even have a couple off job apps in. I know many in SC don’t want us, but look at it this way. There is a reason you guys don’t want to move to So. Calif. Well, there is a reason I like the lifestyle and the costs of living in So. Carolina.
And wait for housing to come down. Sure, and still have smog, overcrowding, too many illegals to count, a bankrupt state (for all intents and purposes), slow erosion of public services, ridiculously piss-poor school system, and massive amounts of traffic. Sure, you changed my mind. I guess I’ll live in the “OC” for the next 100 hundred years, things are only going to get better. RIGHT!
It’s dead here in Western N.C. 600 spec homes on the market.
Real Estate sales are non existant.
No construction whatsoever.
jinwnc,
I was thinking the same thing until I looked at the data. Asheville had double the volume than last August. You are right though there are tons of overpriced spec homes that will NEVER sell for the wishing price.
Asheville IS different. LOL
I’m 90 miles west, in the sticks.
We have a huge influx of Floridians, I’m actually one of them.
It’s eerily quiet…..flashbacks to ten years ago before the boom.
I don’t begrudge the fleeing masses. It just seems ridiculous to me that if you like the local lifestyle you would move elsewhere just for the “privilege of owning.”
its the privilege of surviving with or without money. + hurricanes.
Last time I checked we were all Americans (illegals excluded) and this was our country and we could live anywhere in it we darn well pleased. Since when have we gotten to the point that everyone must stay in the state they were born in and were not welcome anywhere else. This is America and every state is not a separate entity.
Who said anything about “must stay”? I am simply pointing out something that I think is obvious: If you like where you live but can’t afford to own, stay and rent.
“Perhaps the overall quality of life is better in NC or in Houston than wherever they came from…”
I suppose that might depend on whether the quality of life in their former home was in spite of them, or because of them.
A lot of people want to bring their culture with them, instead of adapting to the new one. They’re the noisy ones, with the out-of-town accents, at the planning and commission meetings.
You described Las Vegas.
Californians moving in to escape high taxes, insane home prices, traffic, smog and illegals.
And what did they turn Las Vegas into? A city full of illegals, with unbareable traffic and smog and as an added bonus rising taxes and insane home values.
I left Las Vegas to escape the Californians. Now I live in the South where we are being over run by Floridians. I’m running out of places to hide in this country.
“I suppose that might depend on whether the quality of life in their former home was in spite of them, or because of them.”
As I once told a acquaintance who fought with all his neighbors: ‘If you think one of your neighbors is an a$$hole, then they ARE probably an a$$hole. If you think ALL of your neighbors are a$$holes, then YOU are probably the a$$hole.’
Lou,
If you lived in Florida you would know why.
We are getting swarmed in SC with the nation’s poor. (A fresh start?) We are also immersed in a HUGE crime wave right now. Stickups, robberies, muggings in parking lots, and 3 armed home invasions in the news just this week!
Three?? That’s news??
the home invasions are definitely the Floridians…. we get that a lot down here.
Problem with Fl is that renting there is very expensive. An example I have a friend who owns several apartment complexes…she had them in the range of $800-$900 for rent. When Wilma came through in 05 her insurance company went out of business and so she had to get another policy which was very hard and it had become a revolving insurance..each month they would tell her what she would pay for the following month..she of course had to pass that on to her renters…so now her rentals are $1000-$1200 and they are not the best of rentals…
Another reason not to think about buying for a few years…when the Carolinas and Tenn are the first places “everybody” thinks of as an escape…then you’ll be stuck there with everybody you were trying to escape.
?? what is a housin counselor ??
Lance Hill, a housing counselor with Visionary Homebuilders, a Stockton non-profit whose goal is to extend homeownership to low-income families.
Somebody ought to be investigating these “non-profits”…smells like scammer spirit.
“I still don’t get why these people refuse to stay where they are and just rent until prices become affordable again. ”
Probably because most Americans think on the basis of cheaper is better. Since they equate cheaper housing as better (in some cases it is), they will invade areas that have sclerotic housing prices. That’s likely why areas like the Rust Belt have all kinds of flipper condos and flipper neighborhoods going up even with the stagnant local economy. I don’t always equate cheap with better; there are houses out even in the north that are below 100K but they aren’t in very good areas. Personally, I don’t want to buy a house until your top quality areas fall into that range since I don’t think buying a flipper house in some abandoned suburb for 5K or 10K is a good idea.