Turning This Bust Back Into A Boom In Florida
The Miami Herald reports from Florida. “South Florida’s housing market continues its slump. Home sales fell sharply in August, the Florida Association of Realtors reported. In Miami-Dade County, existing single-family home sales in August dropped 45 percent from the same month a year ago and 24 percent from July. Broward single-family home sales in August were off 23 percent from August 2006.”
“It was a similar story for condominiums. Miami-Dade condo sales fell 44 percent in August over last year and 16 percent from July. Broward condo sales were off 22 percent from last year and 2 percent compared to July.”
“The number of homes waiting for buyers continued growing, from 60,900 in Miami-Dade and Broward in August 2006 to more than 80,000 this year. At the current rate, it would take 25 months to sell all of the single-family homes on the market in Miami-Dade, and 36 months for condos. It would take 21 months to sell all the homes in Broward, and 29 months for condos.”
“Broward condos are the one area where sellers reduced prices in a meaningful way. The median price dropped 12 percent over last August to $178,800. This scenario, observers say, will be the key to market recovery: Cut prices to spur buying, which will reduce the number of homes for sale.”
“‘When prices start to relax and fall, it is part of the healing process to bring us back to a balanced market,’ said Richard Barkett, CEO of the Realtor Association of Greater Fort Lauderdale.”
“‘There are times when the market speaks loudly and clearly and gives an indication that it’s time to pull back and retrench and to wait for another day, and these are those times,’ Miami (based) home builder Lennar CEO Stuart Miller said.”
The Herald Tribune. “The median sales price for a home in the Sarasota-Bradenton market slid 11 percent from last August to its low point for the year at $273,500, a Tuesday report from the Florida Association of Realtors showed.”
“That continued a pricing decline that started in July after six straight months in which the market had seemed to bottom out in the $292,000 range.”
“Statistics in Manatee and Sarasota counties tell the same tale over the last two years: threefold to fourfold increases in inventory and a sell-through rate that is 50 percent to 60 percent of its former self.”
“In that two years, Manatee’s listings went up by 380 percent to 5,372 homes. Meanwhile, the number of sold homes per month slid to 174, a 45 percent decline from two years earlier. In Sarasota County, the inventory rose by an almost identical 372 percent to 4,756 homes. The number of closings fell by exactly 50 percent to an average of 36 homes per week.”
“But Jim Willig, a Sarasota real estate investor, says that so far, his offers are not being taken seriously by the banks that are left holding homes when a seller goes into default.”
“‘Honestly, I feel like Rodney Dangerfield,’ said Willig. ‘What is amazing is how little respect I get. I am a cash buyer in this marketplace, yet no one cares.’”
“‘The prices have really dropped 25 percent from the peak,’ said broker Bill Norberg. Waterfront bargains abound: Norberg recently sold his own home in Burnt Store Isles, on sailboat water and appraised at $650,000 in January 2005, for $450,000.”
“‘The only way I could sell it was to be the cheapest house in the neighborhood,’ he said.”
The Ledger. “Marred by inflated prices, a glut of new home inventory and indecisive buyers, Polk County’s housing market continued its decline last month. Existing home sales dropped nearly 32 percent from 499 in August 2006 to 340 last month. It was the 15th consecutive month sales totals had declined from the year before.”
“‘People just have to get realistic,’ said Scott Coulombe, executive director of the Polk County Builders Association. ‘People selling a home can’t ask for those outrageous prices anymore.’”
From TC Palm. “Jennifer Atkisson-Lovett, president of the Realtors Association of Martin County, said) that…sellers realized the changing market and lowered their prices. The median home price in August was $247,750, down 16 percent from a year earlier.”
“The condominium market in Martin saw a 58 percent decrease in the number of units sold, with 37 changing hands in August. The median condo price dropped by a third to $160,000.”
“The Realtors Association of Indian River County reported 159 existing single-family homes were sold in August — 16.9 percent more than from the same period a year earlier. Meanwhile, the median home price dipped 6.4 percent to $207,000 for the same period.”
“‘It’s a little glimpse of glory,’ said Karen Hall, association president. ‘I am encouraged by these figures. … I think we are headed in the right direction.’”
“Hall said the increase was likely driven by sellers lowering their prices. ‘Sellers are becoming more realistic about their prices,’ Hall said. ‘They are realizing that they may not be seeing the big bucks that some people were making in the past.’”
“According to William Pittenger, chief real estate economist for Seacoast National Bank, prices will need to continue to roll back to 2003-2004 levels ‘before we start to see any major action in the market.’”
“The increase, however, didn’t spill over to the rest of the Treasure Coast. The Fort Pierce-Port St. Lucie area, which includes Stuart, had 287 single-family homes sold in August, reflecting a 26 percent decrease from a year ago, according to the Florida Association of Realtors.”
“The median home price for the same period also fell 15 percent to $214,200.”
The News Press. “In Lee County, the median price of a single-family home sold with the assistance of a Realtor dropped 5 percent to $250,800 from $264,100 in August 2006. Sales were down 25 percent to 520 from 691 in August 2006, according to the Florida Association of Realtors.”
“Statewide, the median price fell 6 percent, from $246,800 to $231,900 and the number of sales fell 26 percent from 15,252 to 11,279.”
“‘Another month of falling sales and rising inventories tells us the housing market is still a basket case,’ said economist Joel Naroff. ‘It is going to take a long time to work off that imbalance and undoubtedly prices will have to fall a whole lot further.’”
From Tampa Bay 10. “Take a trip down any street in Tampa, the for-sale signs are tough to ignore. ‘It’s huge, there’s a lot of properties on the market,’ said realtor Bradd Monroe. He’s been in the local industry for more than 20-years.”
“‘We have a few months of inventory, about 17-months of inventory, which I believe is a record for us,’ he stated.”
“The building boom two years ago seems to have backfired. Monroe says too many people wanted to flip for a quick buck. It didn’t happen. And many homeowners, he said, got in over their heads with loans they couldn’t afford and didn’t understand.”
“‘616 on the ‘Lis Pendens’ of foreclosure filed this month in Hillsborough County,’ Monroe said.”
“The developer of the new Platinum condominium in Miami’s Edgewater neighborhood auctioned 20 units Thursday in hopes of speeding up sales in the sluggish housing market. But Maysville now says bids were so low that it is rejecting all offers except those it promised to honor regardless of price. It plans to rent the units and wait until the market improves.”
”The bids were significantly lower then even our preconstruction prices,’ said Alex Redondo, Maysville president. ‘I had hopes that units would at least sell north of that.’”
“Maysville initially promised to sell eight of the units absolute, meaning the units would go to the highest bidder no matter how low the price. Ultimately the developer sold nine without minimums.”
“At the auction, Redondo said, the most expensive unit sold for $269 per square foot, and one even went for as low as $195 per square foot. ‘I am not going to just give away my work,’ Redondo said. ‘I was very surprised.’”
“‘It’s symptomatic of part of the problem, buyers and sellers are still too far apart,’ said Tom Dixon, a commercial real estate broker who assesses property values for tax appeals. ‘Someone has to say, ouch, I give up.’”
“Said Kevin Tomlinson, a Miami Beach condo broker, ‘this is the market speaking.’”
“Redondo said he didn’t undercut his previous buyers but the market did, albeit vividly illustrated through an auction. ‘The market is what it is,’ Redondo said. ‘This is a sign that the market has already come down more than people are thinking.’”
“Do you recall that guilt trip that the media and others attempted to apply to us Southwest Florida residents at the height of the building boom?”
“It went something like this: ‘Property values are so high that the community’s critical workers — the police, firefighters, teachers and nurses — can’t afford to buy homes and live in Southwest Florida. Therefore, the taxpayers ought to subsidize such things as apartment projects and housing projects.’ Remember that?”
“Even though I am retired, I don’t speculate in real estate, bought my first home almost on ‘green stamps,’ exist on limited income and pay my medical bills myself, I felt like I was doing something wrong — because I was living in my own home.”
“The News-Press and other media said that I was being unfair to the police, firefighters, teachers and nurses because I could afford a home, and they couldn’t.”
“That’s why I was so happy when the building boom went bust.”
“I figured that now that housing prices are in the toilet, and that home bargains are galore, that all those police, firefighters, teachers and nurses would be snapping up homes like it was a fire sale. I’m so happy that they now can afford what they couldn’t afford before, and now I don’t have to feel guilty.”
“I think it would be a great story if The News-Press did one of its investigative reports on how many of those police, firefighters, teachers and nurses are taking advantage of this building bust to achieve their home ownership dreams.”
“Heck, given the degree of the problem before, their home buying should turn this bust back into a boom.”
retrench warfare
“‘There are times when the market speaks loudly and clearly and gives an indication that it’s time to pull back and retrench and to wait for another day, and these are those times,’ Miami (based) home builder Lennar CEO Stuart Miller said.”
Race to the bottom, real estate style…
“‘The only way I could sell it was to be the cheapest house in the neighborhood,’ he said.”
You mean that price is an actual consideration again when buying a house? I thought this was America.
I see the drop already in my old stomping ground in SFL. The same guy who bought my house for $800K now has a house worth around $650K….he has only own the house for about 6 months…amazing….
Oh by the way…he bought the house on the premises that property taxes in Florida were going to be removed and he was afraid the prices of homes were going to go up once this happened!…hehe…
You made a smart move. If he bought 6 months ago, he deserves to take a big loss. The bust was called on this blog more than 6 months ago.
Friend in Maryland “doubled down” by buying his retirement place Daytona Beach area in May of last year, while still living in the MD home until he retired (this month). He sold his MD home fairly quickly, but by his admission the equity declined about $125K from the ‘06 peak. His FL house has declined at least that much since he’s owned it.
I wonder how that $250K paper loss will affect his planned retirement lifestyle?
Race to the bottom, real estate style…
“‘The only way I could sell it was to be the cheapest house in the neighborhood,’ he said.”
I posted this link earlier over on Bits Bucket, but it is so relevant to the state of the Florida market, that a re-post is appropriate. It is a report by analyst Mike Morgan. Very good read which blows the ‘real estate is about to recover’ theme out of the water :
http://www.treasure-coast.us/weeklyupdate09-23-07
keys guy, I am so glad you re-posted this. It is awesome. Really tells it like it is. Morgan is fantastic. Doesn’t mince words, that’s for sure.
This article is so full of great quotes, I don’t know where to start. But here’s Morgan’s take on the builders:
“These greedy pikers built more homes than the country needed . . . and they knew it. They were selling to anyone and everyone, even when they knew the buyers were not qualified and the buyers were lying on signed documents. The pikers sucked up bonuses in the hundreds of millions of dollars, all the while telling everyone that everything was fine. Now we have enough inventory for the builders to totally stop building for 12-18 months. That’s what it would take to absorb the current inventory. We all know that’s not going to happen.”
And Palmetto says, TES-TI-FY, Brothah Mike!
Quote:
#####
“These greedy pikers built more homes than the country needed . . . and they knew it. They were selling to anyone and everyone, even when they knew the buyers were not qualified and the buyers were lying on signed documents. The pikers sucked up bonuses in the hundreds of millions of dollars, all the while telling everyone that everything was fine. Now we have enough inventory for the builders to totally stop building for 12-18 months. That’s what it would take to absorb the current inventory. We all know that’s not going to happen.”
#####
That is if any one out there that does not own a house does have the cash to put up for the required down payment and the qualification to make the monthly mortgage payment for the next 30 years. A house in Florida over $300 is ridiculous, much less if it is on the plus side of $500K, then the right description for that type of pricing is NUTS. Remember people, it is a house, not a freaking villa or a resort hotel…
what is toxic?! you say potato…..
http://biz.yahoo.com/bizwk/070924/sep2007db20070921855992.html?.v=1&.pf=loans
This was one of those rare articles that really nailed it. Besides, any article which leads off with this quote :
” . . .we’re in deep doodoo.”
Robert Toll, CEO of Toll Brothers
will always get my attention !
Boy, I wish he’d come to Texas. He’d find all of what he said in this article and much much more. I’m going to contact him and see if he wants to take a crack at bursting the denial bubble here.
That is one of the best post I have seen in a very long time….Thanks Keys….
check check
Good post, I missed it the first time around. One item of interest - he slams Ivy Zelman. He’s spot on with all his other comments. Reactions?
I thought that was weird, too. Whether his comments have any merit or not, they make him look petty. Even petulant.
It’s good to finally have you on the board Ivy.
LOL!!!
It’s nice to get confirmation from the guy in the field. I especially liked what he said about home builder margins:
That means the sales we saw a year ago or even a few months ago with healthy margins, will actually be closed at low or no margins. From here on out, the majority of sales for all builders will be no and negative margins. Maybe I should color that a bit. Builders are telling you they are still at decent margins . . . exclusive of impairments. Think about that, but not too hard if you’re in the mango category.
Love this quote:
“Who and What to Buy – No one, yet. …. My advice is simple. Wait. Look, touch, smell, don’t taste, squeeze, poke . . . giggle and wait. “
I thought he was starting to quote Al Pacino in The Devil’s Advocate…
And don’t forget, Floridians, the Super Exemption has been struck down by a judge because of deceptive language. One of the debates is now whether the tax shills should just change the language (simple) or waste the taxpayers’ money and mount a court challenge to keep the language as it is. I don’t get it. Why not just change the language? Why waste money trying to prove the lipstick on the pig should stay there?
Why not just increase the exemption under Save Our Homes and be done with it? No muss no fuss.
“I think it would be a great story if The News-Press did one of its investigative reports on how many of those police, firefighters, teachers and nurses are taking advantage of this building bust to achieve their home ownership dreams.”
Hey, that’s who was buying in NYC in 1994. Steady job, provable if not sky-high income, and perhaps even some savings. Two firefighters bought on my block within a year. A bust is good for many people, and the boom was bad for many people.
I think it would be a great story if The News-Press did one of its investigative reports on how many of those police, firefighters, teachers and nurses are taking advantage of this building bust to achieve their home ownership dreams.”
TESTIFY. We bought our apt. in 1994 when I was a civil servant making 30K. That job still pays 30K. Try to get yourself a cardboard box in my neighborhood on that salary.
Miami-Dade sales down 45%. Wow. Sellers just have no option. Its’ either short-sale or foreclosure. The foreclosures here are going to be mindboggling.
Pyrrhic Victory…
http://en.wikipedia.org/wiki/Pyrrhic_victory
“The Realtors Association of Indian River County reported 159 existing single-family homes were sold in August — 16.9 percent more than from the same period a year earlier. Meanwhile, the median home price dipped 6.4 percent to $207,000 for the same period.”
“‘It’s a little glimpse of glory,’ said Karen Hall, association president. ‘I am encouraged by these figures. … I think we are headed in the right direction.’”
I think we are headed in the right direction.
Straight to the bottom?
test
test again
Checking new 60 second limit.
hmm.. i think slowly..
but it explains why one of my posts is still sitting here.
any other new stuff?
what does this mean - only one post every 60 seconds - or does it mean it you don’t see it in 60 seconds, it was trashed?
Mike Morgan also has this to say:
“Prices on Prime’s townhomes were in the $250,000 range . . . but Lennar’s townhomes were 2,200sf while Prime’s were in the 1,600sf range. So Lennar was willing to sell at $87 per square foot, while Prime is asking $156 per square foot. When I told the Prime sales agent that Lennar was selling at under $200,000, she winced and had a very interesting explanation to share with us. But the bottom line was clear. Builders are cutting each other’s throats at this point of the cycle . . . and they have no choice. Darwin would tell you this is how the world works. We are going to see extinction with a lot of blood and guts.”
There’s more to this builder battle, but this is something I hadn’t thought of, although it should have been obvious to me. Much of Mike Morgan’s article deals with the battle of the builders, trying to cut each other’s throats and destroy the competition.
Ahhhh…carnage and mayhem visited upon builders…Excuse me whilst I experience an orgasm.
LOL
Can we watch???
I have an urge to light a cigarette. Odd, because I don’t smoke.
$87/sq ft for townhouses. In most parts of the country that kind of price would probably trigger purchases by investors looking for positive cash flow rentals. But in FL with its high taxes and insurance, the prices gotta come down even more.
The grossly outrageous thing is that anyone would ever pay more than $80/sqft for a townhouse to begin with…
So, wait, lowering prices will increase the chances of selling a house? This is revolutionary! It is as if there is some sort of relationship between the supply of houses and the demand for houses and that this relationship has an effect on market prices. I should write a scholarly paper about this!
You may even be able to get a grant for it. Be prepared to spend 2 years verifying data that should only take 5 minutes for the average HB blogger. LOL
Read MBA’s link above to see what econ profs get paid for. (If we could just educate people, they’d stop behaving irrationally and more like our models!!!)
LOL! I’m a meteorologist, and we often make jokes about new forecasters just going with what the model predicts because the latest satellite images aren’t verifying!
A little off topic, but this seems to get brought up every time we get articles on Florida. The real problem with property tax assessments is that so often they are a make believe made up value. Don’t get me wrong, it is definitely possible to get a pretty accurate number, but you have to trust the tax hungry government who want your money to do the right thing. And recently you had to trust that mortgage brokers were honest and upright. Both losing bets IMO.
The solution is simple. You get taxed on your purchase price. Period. No appreciation for tax purposes. This rewards long term residents and doesn’t pull the rug out from under old people. You don’t have to trust anyone appraising your home or worry about ulterior motives. And no need for assinine convoluted legislation to fix the problem (resulting in worse problems). You hold your home for 20 years you’re in good shape and unaffected by bubbles (unless you bought in one). You sell your home for a huge proffit and then that’s when the county/city gets a big jump in taxes for that property.
Basically Prop 13 with its 1% kicker. I know, I know - Prop 13 has its enemies. But this is just the facys, madam.
that is essentially what Save Our Homes Does.
You pay 100% of purchase and 3% MAX per year, to account for govt. inflation.
It is fair. People who paid $500k should be taxed on 500k. period.
I agree.
-d
“This rewards long term residents and doesn’t pull the rug out from under old people. ”
…and it punishes new buyers, people who have to move, etc.
Young working class families will be living in small apartments paying more property tax than retired professionals do on their spacious houses.
It’s rent control for home owners, and has all the same negative effects as rent control for renters. You get ludicrously different returns based on when you bought, rebuilt, or remodeled and all the downstream discouragement of increased density.
It is also a direct transfer of taxes from people who manage to live in the same place for a long time to those who don’t. Tax rates for newer home owners must increase to make up for the fact that people who are able to own homes for very long periods of time are taxed less.
It is a market distortion encouraging people to maintain ownership as long as possible. You will see people driving further if they change jobs because their property tax would double if they moved thus encouraging traffic congestion. Eventually you will see absentee landlords owning homes in the property tax controlled area and renting them wherever they really live.
It would actually be more fair to simply randomly select part of the population and give them 50% off their property taxes every decade. At least everyone would have a chance of benefiting then.
Even I am surprised at how inventory keeps growing, and wonder what percentage of people “have to sell” we have two more foreclosures in our neighborhood just this month yet three more people have listed thier homes? Even one of the realtors who sends out monthly newsletters used this months to beg “optional” sellers to take thier homes off of the market.
“Even I am surprised at how inventory keeps growing,”
Thank your state, county and local representatives for this. Especially in Florida, they couldn’t drop their pants fast enough for developers. And they’re STILL approving massive development, I read about one 700 acre development they’re approving in Polk County. Another one in Pasco County. I don’t know what these people are thinking, they’re completely out of their minds. Caution just thrown to the winds, anyone who wants to build, why, just go right ahead, over sinkholes, aquifers, you name it.
Yep, and just who in the world wants to live near alligator alley??? I love south florida, but that area is as ugly as it gets and there are miles and miles of little boxlike townhouses etc.
“‘Another month of falling sales and rising inventories tells us the housing market is still a basket case,’ said economist Joel Naroff. ‘It is going to take a long time to work off that imbalance and undoubtedly prices will have to fall a whole lot further.’”
“Basket Case” was a saying thought up by the English in WW1
It refers to a soldier that has lost all 4 limbs
On the other hand, the Trump Tower site is now identified by a faded banner and weeds as high as my head. The stories about further planned development upset me also, but un-needed houses, condo towers and strip malls can only be built for so long, even if state and local governments help.
I’m curious to see if The Donald ends up bankrupt (again) when this is all through. Not from his failed Tampa venture of course, but from things like his Chicago tower. It wouldn’t surprise me. If he does - the scum needs to rot in debtor’s prison this time. No more free pass and start over by declaring bankruptcy.
“The developer of the new Platinum condominium in Miami’s Edgewater neighborhood”
What?
When are these clowns going to stop with the ridiculous names? They sound like Puff Daddy calling figure-skating moves…
The developer of the new triple-double Lutz-into-a-Backflip multi-Platinum condominium.
Here’s an amazing story, near my house, that shows how out of touch Florida politics is. The state of Florida gives a developer $5 million to “offset the cost” of building 30 “affordable” townhomes, which will sell for “only” $250-275K. So they give the developer $167,000!! toward each one, so added to the $250 that’s $417K. There are similar townhouses built without public money down the street for about $350K, and nobody is buying those. The rest of the townhouses would not be “affordable” and will (in the developers dreams) sell for more than the $417K. It makes me ill that they are giving my tax money to this developer to build “affordable” townhouses at way over the going rate of “non-affordable”. Not to mention that someone should make $90K/year to buy something at $250K.
http://www.sun-sentinel.com/news/local/palmbeach/sfl-flpmidtown0918pnsep18,0,1104123.story
But you forget that the developer has to give back a lot of that money in the form of campaign contributions.
You know, I read these “florida meltdown” threads and articles — and I think about our trade deficits with other countries and the weakness of the dollar — and I just get concerned that this is going to really make American real estate assets in places like Florida incredibly attractive to foreign investment. I’m certainly pro free-trade, but increased foreign ownership of American real estate, businesses, infrastructure worries me in the long term.
I’ll bet future immigration debates include provisions that the pathway to citizenship or some other kind of permanent legal residency is made easier by property ownership. And a lot of money is going to be made by people who figure out how to shield tax collection on assets/income of foreign nationals living permanently here, but with assets/income generated elsewhere.
And, just to piss everyone off a little more — it will even make Florida real estate “snap back” more than people expect 5 or 10 years down the road. It’s a lose, lose, lose proposition as far as I’m concerned.
Hard to say. If Cuba was ever opened for investement, Florida would be toast. There’s an island twice the size of Florida, that’s even prettier with practically no development on it.
Also, foreigners for years had the opportunity to buy in places like the phillipines, costa rica, mexico, all over the caribbean and there’s still plenty available. Why would they all of a sudden rush to Florida? You may see some purchases, but I doubt it would be an onslaught.
American rule of law, property rights and access to services and infrastructure — I think these are all competitive advantages for U.S./Florida. (not that I’m saying these are all perfect in the U.S. - but I think they may be better than those other places, except perhaps future property tax climate in Florida).
The eventual opening of Cuba, however, would pose some interesting issues for Florida. It might cause some repatriation from cubans in exile — but it might also link Florida and Cuba together in some postive ways. In any event, that is going to be some wild wild stuff when it finally happens.
Yeah, this is the same mentality that made everyone believe that RE would never fall in Florida to begin with. This foreign investment lie is just the latest scam to get people to think that Florida RE will go to the moon again. “Yeah, foreigners will buy up all the property in Florida, so you better buy now cause its going to be worth a fortune in the future! Florida is special” Um…no it won’t and no it isn’t. Florida is not so special. Its not the next California. Its not a paradise. There are plenty of other places that people, foreigners and others will invest in in the future. Just because you live in FLA doesn’t mean you have to believe the hype. I used to live in FLA and believe me I know, its hard to tell the forest for the trees. The FLA hype machine is very strong and compelling when you are living in ground zero. Keep saying to yourself: “Florida is not so special. Florida is not so special.”
Puerto Rico has fabulous deals and it’s essentially a part of the U.S.
“‘Honestly, I feel like Rodney Dangerfield,’ said Willig. ‘What is amazing is how little respect I get. I am a cash buyer in this marketplace, yet no one cares.’”
And why should they? The talk of bailouts is in the air, Bernanke is cutting rates and printing like mad, and credit is still flowing into the market. Sellers don’t give a rip where the money comes from as long as the check doesn’t bounce. It just shows that inflation is still the crowd’s expectation.
Once again the media misses the blatently obvious, excessive credit crushes the value of cash and encourages reckless behavior at the expense of what used to be considered prudent. We’re still so deeply wrapped up in the boom mentality people still don’t want to admit what went wrong.
“‘The prices have really dropped 25 percent from the peak,’ said broker Bill Norberg. Waterfront bargains abound: Norberg recently sold his own home in Burnt Store Isles, on sailboat water and appraised at $650,000 in January 2005, for $450,000.”
Without even looking at the place, I’d say that is too high. He should try 10-15% below a current and reliable appraisal if he wants to unload right away. The prices will drop from one week to the next. It is going to be a relentless race to the bottom…
“‘We have a few months of inventory, about 17-months of inventory, which I believe is a record for us,’ he stated.”
The 17 monthsof inventory is incorrect. It does not include all of the forclosed properties, for sale by owner or the little tricks realtors do to hide the actual days on the market for a listing. The number swells even larger when you add in the properties being rented because they could not sell.
Funny you should mention properties being rented because they could not sell. Happening right behind me. The young real estate genius who owned the place realized that it just wasn’t going to sell at his wishing price. So far, the tenant(s) have been quiet and well behaved.
That will change. About 5 years ago I had the black helicopter crowd descend on a rental home that I had looking for drugs. They didn’t find any but it was a little unnerving.
So, wait. Are renters good or bad? I can’t remember.
I’ve dabbled as a landlord. Over the course of 3 years, with roughly a dozen units, I had 4 shootings. During those 3 years, the police smashed their way into my units at least twice to arrest people. Oddly, the police didn’t call me on any of this. My empty units were broken into at least 4 times - thiefs looking to steal tools and/or building supplies. Tenants once broke into electrical boxes, stealing power by using auto jumper cables to bridge power to their units. I had units abandoned 4 or 5 times, once with quite literally knee deep trash- and the resulting roach infestation- left behind in the unit. I probably evicted around 8 tenants for non-payment of rent.
Some of these newbie landlords are going to be in for a very rude awakening. (not to imply that there aren’t perfectly nice, responsible tenants; I had some of those too).
I’d say that the people on this blog that rent because it makes good sense for a responsible person are not the typical renters. I’ve rented in my life too. But the problem that you may have is that these FB will rent to anyone that can fog a mirror (kind of like the banks that loaned to them).
“The developer of the new Platinum condominium in Miami’s Edgewater neighborhood auctioned 20 units Thursday in hopes of speeding up sales in the sluggish housing market. But Maysville now says bids were so low that it is rejecting all offers except those it promised to honor regardless of price. It plans to rent the units and wait until the market improves”
Good luck @$$&^%$!
You will begging on your knees next year.
“The developer of the new Platinum condominium in Miami’s Edgewater neighborhood auctioned 20 units Thursday in hopes of speeding up sales in the sluggish housing market. But Maysville now says bids were so low that it is rejecting all offers except those it promised to honor regardless of price. It plans to rent the units and wait until the market improves”
Good luck @$$&^%$!
You will begging on your knees next year.
“The developer of the new Platinum condominium in Miami’s Edgewater neighborhood auctioned 20 units Thursday in hopes of speeding up sales in the sluggish housing market. But Maysville now says bids were so low that it is rejecting all offers except those it promised to honor regardless of price. It plans to rent the units and wait until the market improves”
Good luck @$$&^%$!
You will begging on your knees next year.
“The developer of the new Platinum condominium in Miami’s Edgewater neighborhood auctioned 20 units Thursday in hopes of speeding up sales in the sluggish housing market. But Maysville now says bids were so low that it is rejecting all offers except those it promised to honor regardless of price. It plans to rent the units and wait until the market improves”
Good luck @$$&^%$!
You will begging on your knees next year.
This is a Florida story that really irritates me, near my house. It shows how out of touch people are. The state of Florida is paying a developer $167,000 per townhouse, to build “affordable” townhouses which they will sell for $250-275,000. That’s at least $417,000. This is near where I live, and there are plenty of townhouses already for sale at WAY less than $417,000, so the state is wasting my money, basically giving money to the developer. I can see the “non-affordable” townhouses here selling for less than the “affordable” ones.
http://www.sun-sentinel.com/news/local/palmbeach/sfl-flpmidtown0918pnsep18,0,1104123.story
Sorry for the double post. I gave the first one 20 minutes.
We are tinkering with the servers and software this morning, so stuff like this will happen.
Ben,
The blog ate my post about a fix for property tax valuations. Any chance on resurrecting it, or do I need to repost?
gov rewards failure- get less gov w ron paul of lp.org
otherwise ben dover
Hey nonone is making anymore land.
Stinko realtors.
hahahahaha!
Here’s a couple of thoughts that a twisting my knickers.
Inventory levels. OK. We’ve got a whole lot a inventory. Every schmuck is saying 12-18-24 months (fill in the blank with your very own prediction!) BASED on WHAT? Easy money? To move any type of inventory, there must be a demand. Just because I invented a gizmo, doesn’t mean the market will purchase said gizmo. Ditto for housing. How many of us would even tour the POSs? grrr.
Subprime lending. I am seeing more and more *analysis* of the subprime. Many times the kooks are actually referring to ARMs. There is a clear and definable distinction, but these baffoons will have us believe it’s all subprime. grrr.
Thanks for letting me get my knickers untwisted…LOL.
Leigh
Just look at Japan. They had a bad real estate bust decades ago. Predictions were made at 1 year, 2 years, etc. Some “sky is falling types” predicted 5 years. Decades later we’re STILL not past the peaks of their last bust.
Once deflation sets in… it’s a long, long, long road back to recovery.
The smartest thing real estate owners (even non FB’s) can do right now, is sell. This is going to get *significantly* worse.
Ya know, I’m reading these stories here every day and I can’t, for the life of me, figure out why the stock market is still going up! I know it’s mostly psychological, but still. How long before it crashes?
Don’t get me wrong, I love making $$$ there lately, but I know the gravy boat’s gonna be over soon….
The Fed is trying blow the next bubble in stock market. That is why.
Expect more rate cuts.
I’m not sure the Fed has much control over where the money actually goes. Considering protecting the banking system is one of their jobs, letting the housing bubble form seems to have been a remarkably bad idea.
It seems more like a case of “stupid money” - people chasing return. The weather in the Northeast has been remarkably warm and summerlike. I wonder if we’ll start to get some hiccups as the weather turns colder..
“‘It’s a little glimpse of glory,’ said Karen Hall, association president. ‘I am encouraged by these figures. … I think we are headed in the right direction.’”
“Glory”? Well, hallalujah! Really, there are so many inane quotes above, it’s hard to pick the dopiest. Do these reporters hang out at the local NAR watering hole and catch these quips after the brokers/realtors have had 3 martinis and a roofie?
In Philly yesterday while getting pizza at Pizza Rustica at 36th and Walnut I heard a woman on her cell phone bitching about the real estate market. She said something to the effect “The house behind us just sold for $160,000. 3 months ago they were selling for $210,000 in our neighborhood.” It’s real.
I just love to listen in on cell phone calls. Nothing like hearing people broadcast their stupidity far and wide.
Speaking of which, here’s a classic. A few years ago, I was seated in a study carrel in one of the branches of Tucson’s public library. A few seats away was a guy cell-phoning to confirm some sort of order. This included a slow and careful reading of his Visa card number.
Hospice Reality Realty
“‘When prices start to relax and fall, it is part of the healing process to bring us back to a balanced market,’ said Richard Barkett, CEO of the Realtor Association of Greater Fort Lauderdale.”
“The state of Florida gives a developer $5 million to ‘offset the cost’ of building 30 ‘affordable’ townhomes.”
Remember that affordability crisis we had two years ago? Government moves SLOWLY. So in addition to all the other problems, they’ll be a wave of subsidized units adding to the inventory.
Same thing in California, where a large affordable housing bond issue passed last year. Out of work construction workers will go to work building subsidized units for more than existing homes sell for. If people have any sense, they’ll just buy the REOs at a big discount and resell them…instant affordable housing!
In my small development in South Broward there are 15 homes for sale of 179 - only 3 are listed as foreclosures, but there are lockboxes on 3 homes with no signs - what gives?
There are a number of folks who bought many years ago and want to move - they could afford to sell for much less than they are asking, but they don’t know how much they will have to pay when they go elsewhere. They aren’t greedy, just risk averse. The property tax problem is still a big item here - lots of folks don’t realize that SOH (limited to 3% or less rise per year) can still go up if the “market value” as set by the property appraiser is above the SOH “locked in” tax valuation. So if you get a PA valuation way above what you could really sell for, even your SOH will continue to rise. It’s difficult to fight these valuations unless you can get comparables and with little selling, that’s difficult too.
any ideas on office condos in Davie and Cooper City Florida. Still hovering around the 300psf range..not budging.
I was in court this morning and noticed a tbt (free fluff publication from the St. Pete Times) sitting at the counsel table. It had a big ‘ole red arrow (pointing down, of course) with headlines to the effect of “sales way down, prices way down.” I giggled. The tbt definitely targets a, shall we say, less educated demographic. Maybe all of these moronic sellers will wake up and smell the coffee with the news right in front of them. But I’m not holding my breath. I posted a comment on the sptimes website for the article. It’s in their “most emailed” section. Most people I’ve talked to are now coming to realize that prices will go down further and that it’s not a good time to buy. None of them are sellers of houses though.
Sometimes when I see a particularly overpriced listing, or one that has been on the market for months, I just want to go to the house and smack the seller upside the head. They have no clue. They don’t seem to realize that a 1200 sq.ft. house is a “first-time homebuyer” sized house, and that if they paid $110K for it 6 years ago, and had to scrimp and save to come up with 10-20% down, and that was all they could afford, then they have no first time buyers to sell their “first home” to when they list it now at $350K. There is no way they would have been able to afford the house if they’d had to pay $350K, so how the hell do they think someone else is going to?
With a 1% “quicken” loan. I still hear them advertised on the radio here. You can even do a Neg-Am loan to get in on the property ladder.
What’s the big deal?
You think anyone intends to actually PAY the Mortgage?
This is incredibly interesting, the average single family home in the city of Calgary, Alberta, Canada costs roughly $510,000 USD only a few months ago. A lot of Canadians are going to move to the United States considering there is so much profit to be made simply by moving. The crash of housing may be a good thing for the American economy. If the Canadian housing market does not crash as well, we will strugge with a stagnant economy for considerably longer than the United States giving the U.S. a considerable business competitive advantage.
“Meanwhile, in East Boston, a long-anticipated remake of the neighborhood’s waterfront is still pending, despite years of planning and discussion. One big project, East Pier, will move into construction next month, but as apartments, not condos, a spokeswoman said.”
so here we are
apartdos or condoments
“At the auction, Redondo said, the most expensive unit sold for $269 per square foot, and one even went for as low as $195 per square foot. ‘I am not going to just give away my work,’ Redondo said. ‘I was very surprised.’”
Translation: We are still making a profit at $195/sq ft. Its barely a profit but it’s profit nonetheless. Shows the excesses that these guy have made up to this point. Its only going to get worse for them and better for the people who have been priced out for the past several years.
Laguna Hills examples,
Home # 1, Vista Firenze - purchased 01/2006 for $820,000, on market now $749,000 (asking)
Home #2, Kim Circle - purchased $789,000 in 2005, on market 763,000 (asking)
Home #3, Encanto, listed in July $975,000, price reduced $789000, about 20%, again asking
Home #4, Zumaya, had an offer of $949,000 in 01/2007, it fell through as it appraised at 900,000. Back on the market at $865,000 (asking), still not moving - open houses every Sunday.
All the above homes are single detached, 4 bedroom homes.
The party has just begun….
Got 20% down?