When The Music Stopped In Florida
The Sun Herald reports from Florida. “When the music stopped in the residential-real-estate market, speculators who got caught with unsold houses and condos began putting them on the market as rentals. ‘I see a lot of houses that people can’t sell that are going onto the market as rentals, but they are having trouble renting them,’ said Dan Collins, of Collins Management and Realty.”
“Collins says he has eight homes for rent and’ while that may not sound like many’ he normally has no rental units available.”
“Lorraine Matthews, property manager for Coldwell Banker/Sunstar Reality, said she is seeing ‘brand new homes available as (sales) prices have gone down from a year ago.’”
“Matthews said the agency has about 400 rentals from Charlotte County and Englewood to North Port. In 2003 and 2004, at the height of North Port’s building boom, when 8,000 new homes went up, finding a rental was nearly impossible. As construction has slowed, however, that has changed.”
“Richard Campo, CEO of Camden Property Trust, said Camden is recruiting failed homeowners to rent its apartments. ‘They’re pretty good renters,’ he says of foreclosed-upon homeowners. ‘But they didn’t realize what the total cost of ownership really meant. We are marketing to those people as long as they have reasonable credit minus the foreclosure,’ he says.”
From WESH Orlando. “The mortgage crisis that’s gripped the nation has hit especially hard here in Central Florida. One of every five homes in Flagler County is for sale. Celebration is feeling the same pain because 50 percent of the homes there are for sale.”
“In Moss Park, east of Orlando International, nearly 9 percent of the homes are in foreclosure, 8 percent in the ZIP code west of Palm Bay and 7 percent in Poinciana.”
“In fact, the most homes in foreclosure are in ZIP codes that didn’t exist five years ago.”
“So how did so many people end up in this fix? ‘They didn’t really look at the quality of the people who could afford to pay the loans,’ Randy Martin of the Orlando Association of Realtors said.”
“Mortgage brokers signed people up for the biggest, fanciest house possible, offering low rates to buyers didn’t truly understand. ‘I’ve had clients come in and I’ve told them that they had an adjustable rate mortgage because I read their mortgage to them. They had no idea,’ lawyer Rosalyn Dunlap said.”
“‘A perfect storm is probably a pretty good analogy,’ Randy Martin said.”
“New home inventories have stacked up. Desperate sellers have dropped prices to move them, flooding the market with homes. If no new houses were added to the Central Florida market, it would take 22 months to sell all of them. There is currently one buyer for every 16 houses.”
“Last year at this time, the region was averaging seven to eight foreclosures a day. Martin said Central Florida is now up to 50 a day.”
From CBS 4. “Foreclosures are up, and home sales are down. Almost everyone knows this in South Florida, but industry experts in the area say this is the worst they have ever seen.”
“‘In 2006 we had about 6,600. In 2007 so far this year we’ve had about 13-thousand,’ said Broward County Clerk of Courts operations manager Barbara Brown.”
“‘There are lenders out there with programs to assist you,’ said John Byrne, with Coldwell Banker. ‘You may not keep your home, but it may not be taken away in a manner that is abrupt to your life.’”
“And once these homes go on the auction block, they’re not selling there either. 90 homes for sale today and all of them went back to the lender.”
The Palm Beach Post. “In Palm Beach County, lenders foreclosed on 1,196 homes last month, up from 509 in September 2006, according to the county clerk’s office.”
“In Martin County, 65 homeowners got foreclosure notices in September, up from just 29 a year ago, according to the county clerk’s office. In land-rich St. Lucie County, home to the one-time fastest-growing city in America, Port St. Lucie, and a hotbed of investor activity during the five-year real estate boom, foreclosures more than tripled, the clerk’s office said.”
“‘When home values were growing faster than kudzu, said Jim Sahnger of Palm Beach Financial Network, said he knew of local homeowners who refinanced their house every 12 months. The house, originally valued at $300,000, soared to $900,000 at the peak of appreciation - and then came crashing back down, Sahnger said.”
“‘People who were surviving off serial refinancing are stuck now,’ he said. ‘They had the opportunity to dip back into the pool and it gave them liquidity, but now there’s no liquidity left.’”
“Sahnger said the home is for sale with an asking price near its value during the peak of the market. ‘When Realtors tell them they need to lower their prices, they say, ‘You’re being negative.’”
The St Petersburg Times. “For the better part of two years, Trump Tower Tampa developers have promised that a financing deal was just around the corner. Now, at the 11th hour,developer SimDag LLC is telling potential buyers it may have found a willing lender.”
“‘Those boys, they always say there’s hope around the corner. I give them credit for being optimistic,’ said Tom Long, a Tampa attorney representing two Trump buyers trying to recover their 20 percent deposit on a $1.5-million condo.”
“Long expressed hope that SimDag would get its loan, if only so his clients can get their deposit back. But he’s skeptical he’ll ever see a Trump Tower at 111 S Ashley Drive. ‘A lender is going to want a pound of flesh in this environment,’ Long said.”
The Herald Tribune. “After putting off buying a new car for a year, Jean and Don Fowler decided to use a cash “windfall” from Don’s job to buy the vehicle they wanted.”
“Jean Fowler was struck by the fact that ‘the dealership was like a ghost town.’ They were the only customers on a Thursday afternoon in September: ‘I have never been in a place where the salesmen outnumber the customers,’ she said.”
“Customers in showrooms have been on the decline across Southwest Florida, mimicking the declining fortunes of the region’s housing market. That is no coincidence. Homeowners who have watched the value of their homes plummet are feeling much less inclined to make a big purchase like a car. People who had hoped to tap the shrinking equity in their houses are unable to.”
“New car sales fell 7 percent last year in Manatee, Sarasota and Charlotte counties, and, as of July, were on track to fall 12.5 percent in 2007.”
“‘Housing is a big issue here in Florida and in California and it’s affecting our sales,’ said Marc Cannon, a vice president with Fort Lauderdale-based AutoNation Inc. ‘Industry retail sales this year are off about 8 percent.’”
“The shaken consumer confidence that so intimately governs car purchases is not likely to rebound any time soon, said Jesse Toprak, director of industry analysis at the car-buying Web site Edmunds.com. ‘The only thing automakers can do in the short term is to make the deals better,’ Toprak said. ‘They can’t generate an artificial feeling of confidence.’”
“‘It’s not really because people can’t afford to buy,’ Toprak said. ‘If your house just lost 10 percent in its value, you’re not in the mood to go out and buy a new car. The housing market went up so fast, it was easier to justify the purchase and now you have the reverse situation.’”
“The Fowlers shopped around for a good deal and got one. The financing from GM was not a zero-percent-interest deal like those offered a few years ago, but the couple said they did not need it anyway. ‘We thought we got a really good deal,’ Jean Fowler said.”
The News Press. “Mortgage foreclosures in Lee County remained at a near record level, even as some people started to reap the benefits as banks put foreclosed houses back on the market.”
“A total of 1,220 foreclosures were filed, compared to 1,232 in August. The number of single-family homes on the list increased from 791 to 915.”
“A lot of the properties being taken back by the banks are houses that are new or nearly so, built as investments in the heat of the housing boom of 2005 and 2006 but abandoned by their owners when prices plunged.”
“Some of those are now finding their way to families who are finally able to afford a home of their own.”
“Riverside president John Moran said the bank is selling the homes directly instead of turning them over to a real estate agent as it had previously.”
“‘My wife and I started looking when the market started cooling off,’ said Ron Temple. Recently he heard about a program by Riverside Bank of the Islands to sell homes taken back in foreclosure, and now they’re under contract to buy their first home in Lehigh Acres for $198,000 — $10,000 under appraised value and more space than they’d dreamed of having. ‘I keep pinching myself,’ said Temple.”
“The four-bedroom, three-bath house they’re buying in Cape Coral is ideal for them and their two children living at home but would have been out of their range at more than $300,000 two years ago.”
“‘We’re actually going to be paying less monthly than we were paying in rent,’ Ferguson said.”
“About six of the houses are under contract now, Moran said. ‘It’s a painful answer for a lot of the banks but it’s still getting people into homes they never thought it was possible to get into.’”
“Moran said he’s trying to adjust to the unfamiliar business of selling houses for less than they were worth a year or two ago. ‘For nine years we never took a loss on a residential piece of property, never,’ he said. ‘We’re not in the business to sell real estate.’”
‘In fact, the most homes in foreclosure are in ZIP codes that didn’t exist five years ago.’..’A lot of the properties being taken back by the banks are houses that are new or nearly so, built as investments in the heat of the housing boom of 2005 and 2006 but abandoned by their owners when prices plunged.’
This shows that this ‘crisis’ doesn’t involve a bunch of families being put out on the street. The crisis is in the lenders’ boardroom.
Ben….What time do you post the “local Market Observations” post on Fridays ??
That’s on Saturday morning, usually around 8:30 PST.
Thanks Ben….
“under my administration, more people are homeowners than at any time in the history of our great nation” _ george w. bush (state of the union).
Paraphrased, but what an idiot this guy is.
I couldn’t believe him taking credit for this mania and credit bubble and how great it was we had so many new “homeowners”.
Now the truth comes out.
Little did he know that he gift-wrapped yet another campaign issue for the Dems to use in ‘08.
diogenes, ANYTHING that happens during the gwb damninistration is bound to be one big screwup. It’s the nature of the beast. Just the way it is. I give this nation huge props for surviving this far under this regime. (Disclaimer: I voted for shrub the first time around, to my everlasting regret, because I couldn’t stomach the alternative. Second time around, voted my conscience third party. Will do it again if I have to)
Badnarik
Bush and a lot of other people don’t know that the only time you are a homeowner is if you actually own the home. If you have a mortgage then you are a debtor who if you have some equity in the home own that equity. If you owe more then the house is worth then you are a debtor who owns nothing and is underwater. If you can’t pay your mortgage then you are just someone in a house waiting for the sheriff to show up with an eviction notice.
I don’t think I agree with this. You are a homeowner, but someone has a lien on your home. That doesn’t mean that the person (or bank) with the lien actually owns your home. For example, if I own a house outright, then get a 10k HELOC on it, does that mean I suddenly no longer own the home? Of course not. It just means if I choose not to honor my debts I can forfeit my collateral, in this case my home.
‘In fact, the most homes in foreclosure are in ZIP codes that didn’t exist five years ago.’..’A lot of the properties being taken back by the banks are houses that are new or nearly so, built as investments in the heat of the housing boom of 2005 and 2006 but abandoned by their owners when prices plunged.’
I advise my customers who still want to build new, to buy new. The market is flooded with new homes that were built in the last two years and forced into foreclosure. Unless you just absolutely have to live next door someone or in a specific community, it doesn’t make sense on paper to build a new house when you can buy a house that is a couple years old for as low as 150K or less. With many older 3/2’s (1970-1995) in Cape Coral to choose from priced between 90-120K more families who are renting are finding it’s time to live the dream of owning their own home and taking the plunge into home ownership.
“With many older 3/2’s (1970-1995) in Cape Coral to choose from priced between 90-120K more families who are renting are finding it’s time to live the dream of owning their own home and taking the plunge into home ownership. ”
With many homes still overpriced by 20%, many renters are finding it’s time to stand clear of the falling knife.
“With many homes still overpriced by 20%, many renters are finding it’s time to stand clear of the falling knife.”
That is true for some areas in Florida. I can’t speak for Palm Beach County but in Lee County, Cape Coral was one of the first cities to feel the hammer or falling knife as you put it; while other cities within the county like Sanibel and Captiva held their own and are only now starting to drop in asking price. For many areas there may indeed still be a gap from where they are and where they will eventually be. Although I doubt there is much if any room to drop on a 3/2 single family home listed for 90K, to anyone that feels there is still 20% to go and wants to buy I say go ahead and make your offer at 20% less. You just might get it.
No matter what market you are in there will always be two things. 1. Sellers with unrealistic expectations or asking price. 2. Desperate sellers who are willing to take bottom dollar. This is where you need to either do your homework really well or seek out a Realtor and ask for a Comparative Market Analysis (CMA) that shows all the recent sales in that area (within a 1-mile radius) within the last 3 months. A property is only worth what someone is willing to pay for it. Again, if you want to buy but think there is still 20% or more to go depending on your area, make that your asking price.
” Again, if you want to buy but think there is still 20% or more to go depending on your area, make that your asking price.”
Been there, done that, guessed wrong. Why not wait until supply starts to drop instead of rising? Maybe that would be the time to step into home ownership.
Bad Andy you are making me do my homework! It sounds like you bought at the wrong end of the cycle and I’m sorry . Anyone who has ever profited in any business, bought low and sold high. You aren’t alone, lots of people did the exact same thing. Rest assured that it won’t last forever.
According to The Greater Fort Myers and The Beach MLS, In Cape Coral Florida there were 876 Active listings of Single Family Homes in the month of August, that’s 8/1-8/31. In the month of September from 9/1-9/30 using the same criteria there were 821 Active listings. It doesn’t seem like much but the supply has decreased from one month to the next.
“…there were 876 Active listings of Single Family Homes in the month of August, that’s 8/1-8/31. In the month of September from 9/1-9/30 using the same criteria there were 821 Active listings.”
One more bit of homework. How were the listings 9/2006 compared to 9/2007?
If you have been watching the real estate market you don’t have to be a Realtor to know that the number of homes on the market now compared to last year is significantly higher. That’s what happens when a bubble bursts. The facts that differ between now and last year that one should consider before making a decision is the asking price. In Cape Coral for the month of September 2006 the lowest priced 3 bedroom Single Family Home was listed for $130K. The lowest priced 3 bedroom Single Family Home on the market in September of 2007 was listed for $88,900.
When Appraisers are calculating worth they don’t look at listings, they look at closed sales. In this type of market they arean’t looking at closed sales a year ago, they are looking at the most recent closed sales within three months or less.
“…you don’t have to be a Realtor…”
I know…and I’m not! Don’t think I’d want to be thank you.
30% off peak might be enough where you’re located but I’m willing to bet not. Let’s not even use Palm Beach County as an example, let’s look at Redford Michigan. Blue collar kind of place filled with good, hard working people. 2004 you could buy 3/2 for $120,000. 2005 and 2006 weren’t boom years with the economy the way it is and prices stayed about the same. Same house today will run you $60,000. That’s 50%. Are they going to drop further? Maybe…
I’m sure in 2006 people were being advised that homes didn’t have far to fall from the $130K mark in Cape Coral too. Those that believed caught the knife.
Again, I can’t speak for other areas but the peak in cape coral wasn’t in 2006, it was in 2005 with the lowest priced property at $175,999
FRC -
“Bad Andy you are making me do my homework! It sounds like you bought at the wrong end of the cycle and I’m sorry . Anyone who has ever profited in any business, bought low and sold high. You aren’t alone, lots of people did the exact same thing. Rest assured that it won’t last forever.”
From the above paragraph, it seems to me you’re implying that this is the ‘low’ time and that now is a great time to buy. What makes you think this downward trend is about to turn or has?
“From the above paragraph, it seems to me you’re implying that this is the ‘low’ time and that now is a great time to buy. What makes you think this downward trend is about to turn or has?”
Sales at my office nearly doubled from August to September and almost tripled from July’s sales. We won’t discuss June’s sales which were almost non existent. I’m just stating the numbers, there are too many nay sayers shouting the sky is still falling and that may be true in some areas. It may happen this season and it may not but activity is picking up here and could bring an upswing. We are already at a 50% reduction from our peak in 2005. If you have a Realtor who does their homework you will know exactly what the recent sales were in that neighborhood and will be able to make a calculated decision based on facts. My advice is still if you want to buy and think it’s going to drop another 20% or more, make that your offer.
I apologize if this is a double post, I didn’t see the first one.
Sales in my office have picked up considerably. If it’s happening at my office I would imagine other offices are seeing the same. We are already at a 50% reduction from our peak in 2005. My advice is still, if you think it’s going to drop another 20% or more, make that your offer.
Florida. You’re brave to venture here, especially if you are trying to say now is a good time to buy. It might be a good time to buy compared to Spring 2006, but it isn’t as good as it will be in Spring 2009. And, Cape Coral is certainly not my first choice for a place to live.
“Florida. You’re brave to venture here,”
Thanks, someone needs to be.
“Sales at my office nearly doubled from August to September and almost tripled from July’s sales. We won’t discuss June’s sales which were almost non existent. I’m just stating the numbers, … ”
Two things:
1) I don’t see any numbers at all. Care to share them?
2) Sales were probably pretty good in 2005 too. Does that make 2005 a good time to buy as well?
As a potential (educated) buyer, I’m not intrested in maintaining your momentum. I’m also not interesting in buying because everyone else is (or isn’t.)
Prices have dropped 50% and we’re just in the beginning stages of this mess. What leads you to believe that the area will not continue to drop and attract a bad crowd?
I’m really looking for the reason I should buy NOW…? You haven’t really given me a reason not to hold out..
Sorry ETV, maybe you didn’t follow the thread in previous posts and the numbers mentioned there.
You don’t need to maintain “MY” momentum and I’m not asking you too. Just keep your eyes open and look at the facts instead of speculation.
Florida,
I think you’re looking at a dead cat bounce. Two months does not a market make. Looking at the longer term data, you may find that 2009/10 is a likely better time to buy. So why is now a good time to buy?
Reminds me of SUV sales in 2005. Really strong in June/July with the 0% financing and employee deals, only to find gas at $3+/gallon in September 2005 and dealers refusing to take them as trade-ins, loping off 20% of the value in one swoop. Housing is the same way. We ain’t seen nothing yet.
How much do these older 3-2s rent for? $700? Vacancy rate probably high… Let’s see….crunch, crunch, carry the 1,….
$51,500?
“How much do these older 3-2s rent for? $700? Vacancy rate probably high… Let’s see….crunch, crunch, carry the 1,….
$51,500? ”
Try it. Why not?
How low does anyone think prices will go in any market? 60, 70, 80% ?
90-120K might look pretty good to someone who lives in Buffalo, New York in February of 2008 when they have 6′ of snow in their yard.
Prices will bottom out at 20% below rental income cash flow value at worst. May not get quite that low.
Figure Rent. Competitive rent. Subtract vacancy. $700-$105=$595. (let’s take 15% off for vacancy…high inventory, right)?
How much mortgage can I get for $595 / month on 30 yrs fixed, 20% down, and the $595 includes taxes, insurance and HOA and anyother fees.
“Prices will bottom out at 20% below rental income cash flow value at worst. May not get quite that low.”
Thank you for that opinion, I hope it is incorrect.
“How much mortgage can I get for $595 / month on 30 yrs fixed, 20% down, and the $595 includes taxes, insurance and HOA and any other fees.”
You’re kidding right?
OK gang, it’s been fun…. I’m on the road showing property tomorrow so I’ll catch up with you next week if not sooner.
Florida Realtor Chick-out
“90-120K might look pretty good to someone who lives in Buffalo, New York in February of 2008 when they have 6′ of snow in their yard. ”
The reason people leave Buffalo is the economy. The climate is a plus in most people’s minds. BTW - There is never 6′ of snow in Buffalo in Feb. Lake Erie usually is mostly frozen over long before that. This shuts down the lake effect snow machine, as it’s known locally.
Well, you asked how low could it go…it CAN go below rental income cash flow value for a little while. At that point, investors will come back into the market and buy to rent at a positive cash flow, putting a floor on the market.
If those houses rent for $700, I bet I’m not far off at the low $50Ks as a potential floor. In Austin in the late 1980s, a 3-2 1400 sf home that would rent for $550 sold for between $38K-$45K at the bottom which lasted about 2-3 years at the higher end of that range and about 1 year at the lower end. Austin in the late 80s had far better fundamentals than a lot of Fla today (hi growth, hi tech, 3% unemployment, etc…).
Now tell those good people buying my future investment to take care of it…and don’t forget to tell them of my offer of $51K or so, contingent upon a raft of contingencies of course
… I figure I can get those houses at auction in 2010 for that…. 2nd round of foreclosures on the sames houses. Saw that too in Austin.
“The crisis is in the lenders’ boardroom.”
******
7 words of truth.
That statement says it all.
This shows that this ‘crisis’ doesn’t involve a bunch of families being put out on the street. The crisis is in the lenders’ boardroom.
However, the NAR, builders, Lenders, Ford CEO, etc. have been telling the political leaders that the problem has impacted a bunch of families and they needed to lower interest rates. In reality as you pointed out, it was the investor or greedy home buyer/flipper that ended up losing the house to foreclosure. In the Tampa Bay area, there were a large number of houses purchased that were not occupied by the owner during the boom.
There were numerous advertisments in papers outside of Florida and on the web to invest in Florida realestate by realtors advertising that Florida was the next California.
Now as you mentioned, the real crisis is in the lenders boardroom and also the boardrooms of the builders, realtors and suppliers.
The Palm Beach Post. “In Palm Beach County, lenders foreclosed on 1,196 homes last month, up from 509 in September 2006, according to the county clerk’s office.”
There are probably 1,196 nice homes in nice neighborhoods in Palm Beach County that you can purchase under $360,000. LOL!!
There are 128,871 properties, per Zip realty, for sale. I take “homes” to include condos, so I didn’t cut the number.
So as a fraction of total inventory, that number is insignificant. And complexes with 100 or more units have occupancy barely over 90% (94% to 95% is normal as noted in this link):
http://www.floridahomeloan.com/2007/07/palm-beach-county-now-a-renters-market.html
So the market is incredibly weak. What are the monthly sales in Palm Beach? We must be getting near the point where foreclosures equal sales (to end users).
Got popcorn?
Neil
There are usually about 500-800 sales per month in PBC. Right now the foreclosures are about 2x sales.
“There are usually about 500-800 sales per month in PBC. Right now the foreclosures are about 2x sales.”
And it’s further proof that we’ve got a long drop ahead of us.
By the holy Joshua tree!
Foreclosures 1.5X to 2X sales? Gulp!
OT:
If you haven’t seen BMIT’s latest report of Phoenix, you should see that too. PBC and Phoenix are in uncharted territory; territory I cannot even get my analytical mind around. The implications are staggering; in other words the sub-prime mess has just entered the 2nd inning.
Warning, thar be dragons ahead.
Got popcorn?
Neil
Yea, I noticed the parallel between SFL and areas of AZ for awhile now. From what I see PBC beats out everybody as the true ground zero however some areas in AZ are very close behind.
Neil, are we in the second inning now do you think?
“People who were surviving off serial refinancing are stuck now,” he said. “They had the opportunity to dip back into the pool and it gave them liquidity, but now there’s no liquidity left.”
That’s from the same article. This is the part of the bubble that burned me. I didn’t see the writing on the wall regarding the mortgage meltdown. I was waiting for 2003 prices and when I found them I jumped. Should have waited for 1999-2001!
‘I see a lot of houses that people can’t sell that are going onto the market as rentals, but they are having trouble renting them,’ said Dan Collins, of Collins Management and Realty.”
Tenants usually beat the crap out of what they rent.
Also given the fact tenant base quality has been drastically reduced because of Adolph Greenpsam’s purchase bubble, these newbie landlords are liable to be get the absolute dregs for occupants, like
multi families of illegals displaced by the contraction of the construction boom, who will pool money for a deposit and them begin to welch on the monthly rent once settled in.
When it comes times to evict, the judge, noting one tenant is pregnant, will give the deadbeats the term of the pregnancy to vacate with the landlord pickin’ up the tab. (Seen it done)
Great to be a renter.
I always leave a place better than I found it.
“I always leave a place better than I found it. ”
As do I. I had trouble paying the rent in college. I was always late. When it came time to rent when I got out, the landlord said, “He really tries to pay his rent on time. I think with a full time job he won’t have in issue. He left the apartment cleaner than my cleaning service would have. I would rent to him again without a doubt.”
LOL, me too. The ex and I once rented a house in South Florida and the LL had heard a nasty rumor from one of the neighbors ( a druggie) that we had trashed the place. He came over to do a final inspection under the influence and loaded for bear, ready to start a fight. Came charging in, staggered throughout the house and out into the yard, staggered back to the living room and stood in the center of the room with a huge, sheepish drunken grin on his face and extended his hand, then started crying, asking us to forgive him for his mistake, that we’d actually improved the place when someone told him we’d trashed it. He must’ve apologized for about 10 minutes, slurring his words. We figured he’d gotten drunk to get a little courage to confront the situation and when he found out there was no situation, the wind was sort of taken out of his sails.
Ah, South Florida. Some real characters, there.
The LL was a pretty decent guy to actually ask your forgiveness. So many people today would never admit to being wrong. Instead they try to bluster their way out of making an apology.
True, Bill, he actually wasn’t a bad guy. But it just goes to show you what meddling neighbors can do to stir up trouble between people. Fortunately, he realized it wasn’t his mistake, even in a drunken stupor he realized he got the information from the druggie neighbor, so he didn’t have to admit to being wrong, the other guy was the one who was wrong, and that enabled us to shake hands all around.
And some landlords are jerks..Hubby and I rented a cabin once in Boone, NC..left the place in perfect condition after one week..I guess the landlord was use to people leaving the place messy and getting some of the deposit…So he said since I was late, by one day, sending him the deposit he kept $100! Well, I had friends who wanted to do the same thing..sent them to the guy down the road. No deposit issue and he has them coming back every year to rent….lost several $1000 dollars of business for a lousy $100 bucks…even in NC greed exist!
“…even in NC greed exist! ”
LOL, Come to Wilmington, it is the nexus of avarice and ostentatiousness. These are universal qualities that are unffortunately ruining our great country. At least the one of my memory, maybe I was wrong or sheltered.
RE: I always leave a place better than I found it.
LOL-Ben, you’d be every landlord’s dream!
However, you’re radically the exception from the norm.
“RE: I always leave a place better than I found it.
LOL-Ben, you’d be every landlord’s dream!”
actually ben has probably turned a few flippers into landlords.
Does that make them “fliplords”?
Been my experience too. On the other hand, my instincts tell me those here aren’t the typical tenant. Sort of self selection…
Same here as much as i berate dumb landlords, i still never sued any for my deposit back.
Me too and people have chided me for it - blah blah wasting your money to improves someone elses property. When I live in it, it’s my home and I want it nice. I’ve planted gardens, painted, repaired even had a jacuzzi fixed.
“I always leave a place better than I found it.”
Ditto — our place will be as close to perfect as possible, when the day comes to turn it back. Same way with rental and lease cars, for that matter. What a person does with another’s property shows everything I need to know about their character.
Right after I moved to the Arizona Slim Ranch, my former landlady sent a letter complimenting me on how well I took care of her rental.
Same here. Of course, that didn’t stop the management company from charging us for a new paint job inside and an extra three days rent because they we’re late with getting what was left of the deposit back to us. In small claims court now.
Same here. Even pay rent on time! Landlords love me.
Legacy of being raised by an Eagle Scout.
Between taxes and insurance and competition no matter what you get in rent money it will never be enough to cover the expenses…also the seller is still holding onto a assest that is probably depreciating by the month…basically a no win situation…pouring good money down the drain…
RE:Tenants usually beat the crap out of what they rent.
To all those who leave their apartments in better condition than they found them, all I can say…go into the appraisal biz and do a few prior tenanted foreclosures.
You’ll get a pretty big reality check about how the other 98% lives.
Ben’s posters, by and large, are cut from better cloth.
In every property I have rented, including while in college, I have always left it better than when I moved in and received back 100% of my deposit. On the other hand, almost every property that I rented out to others, they caused damage, paid late,etc.. I guess that is because I was raised with morals. Most people, especially in S. Fla, don’t take care of their own homes, much less a rental.
There was a townhouse around the corner from where I live whose tenants were evicted this summer. I got a chance to look inside before and during the remodeling. I’d never seen anything like it before, it’s hard to believe people could actually have lived there. They had to remove the walls, the floors, the toilets, it was a total wreck.
it’s hard to believe people could actually have lived there. They had to remove the walls, the floors, the toilets, it was a total wreck.
Thank you Cami for your validation of my point.
It’s one of those situation’s one can’t believe until they actually see a direct circumstance.
The other problem, none of those mortgages were originated with the assumption that these places would be rentals, same for the insurance. Normally wouldn’t there be more restrictions and costs involved with property that’s being rented? I ttried looking up some legalese on this but couldn’t find any, but I know lenders generally wnat more of a downpayment and a higher rate of interest if the place is a rental. Same for the insurance companies. That’s going to get ugly.
I think this is great, actually selling homes at prices that people can actually afford
“‘My wife and I started looking when the market started cooling off,’ said Ron Temple. Recently he heard about a program by Riverside Bank of the Islands to sell homes taken back in foreclosure, and now they’re under contract to buy their first home in Lehigh Acres for $198,000 — $10,000 under appraised value and more space than they’d dreamed of having. ‘I keep pinching myself,’ said Temple.”
“The four-bedroom, three-bath house they’re buying in Cape Coral is ideal for them and their two children living at home but would have been out of their range at more than $300,000 two years ago.”
“‘We’re actually going to be paying less monthly than we were paying in rent,’ Ferguson said.”
“‘We’re actually going to be paying less monthly than we were paying in rent,’ Ferguson said.”
no argument here.
I stare in shock…
Homes selling at affordable prices. $198k requires a $60k income. That’s it. My wife could buy that home on her income.
We’re holding out for our area. But… I’m considering the benefits of moving more and more.
Now, Florida isn’t done going down in price. But I’m not going to beat up someone for buying a home they’ll be excited with through the “down years.”
Got popcorn?
Neil
Not only that Neil, but this is a family of 4 and sometimes as you know when people rent, later on for whatever reason a landlord decides to sell and this guy would have to move his entire family and all of their belongings in that event. Not all landlords will sell on you but I had it happen to me when I was young and it was a real drag. And yes Neil they sound excited about the home so good for them .
With a family of 4, after tax they might be doing better during the next few years than if renting (assuming they can stay in the place 5 years or so).
Eventually we all want to buy. Now to get other areas affordable.
The mortgage pain is far from done.
Got popcorn?
Neil
Neil I was thinking more about this family’s purchase after you posted about the tax savings. The article says the home was over 300 thousand at the peak, so let’s pick a number like $325,000 at the top. Now they just bought the foreclosure for $198,000, that’s a decline of $127,000 from the peak or a decline of roughly 40% from the peak.
I don’t think this family made a bad purchase for their situation if like you stated they will be in the place for 5+ years. It will give them stability (won’t have to move) and their kids will enjoy the same school system during that period as well.
I guess I like this story because it is about affordability and stability for a family which is what the “American Dream” was supposed to be about. I hope these folks enjoy their new home and neighborhood
I still don’t understand why so many People think a 200 k House is affordable on a 60k income. Especially in Florida.
I don’t blow Money like I did in my Youth. Have been debt free most my life. But I do like to feed my Family Well, take a trip once in a while.
I live in a house that cost 101k New in 2005. Total Monthly costs ( not including upkeep ) is about $1600 a Month.
Point is with a Family of 4 , on a 60k income I personally feel that is all I would be able to ( comfortably afford ) on a 60 k income.
Many People say they are looking for 3x income. I have never looked for over 1.5 and before the BOOM I never paid over a Years income for a House.
I guess I’m just ” OLD SCHOOL” but I can’t believe People want to stretch themselves so far . I would lose my mind if I tried to live like some of my friends.
If RE crashes, the stock market crashes, and I lose my Job it won’t make a difference to Me. OH wait, I don’t have a Job.
I’m not saying this to belittle anyone. And to each his own.
But life can be so much better if You work to be Debt Free and live ( Truly within Your Means).
“I guess I’m just ” OLD SCHOOL”
You are more conservative than a great many people but that is great. Your family can live without the financial stress which many people find themselves dealing with today. I don’t think 3X income is out of line, but that is just me, your 1.5X income is just more conservative and there is nothing wrong with that. Congratulations on your frugality
How the hell does a $101k home cost $1600k a month?
I bought a place in 2002 (sold in 07) for $250k. Put down $50k, so I borrowed $200000k. My mortgage — with taxes and insurance, was $1400.
I am wondering the same thing. The mortgage on 190k, taxes and insurance, for us is around $1350. The house, however, is probably worth 165k now. Yep, another FB. Guess we’ll be living there a while!
10 year mortgage
I agree. Personally, if you’re making $60k you’re mortgage should be no more than $120k. Unfortunaly I think these people still overpaid, but it may work out for them. Hopefully for them (people who just want to live in their home and not gamble with their home) they won’t hit any job security problems.
Buy less than you can afford; finance less than you can afford (if you have to finance). Showboating attracts stockbrokers and real estate brokers.
“‘We’re actually going to be paying less monthly than we were paying in rent,’ Ferguson said.”
I say BS. People have a way of fooling themselves when it comes to numbers. I’d like to see the numbers and make sure that it includes PITI, assessments and a monthly maintenance and that the mortgage is fixed.
And the insurance … in Florida.
Maybe the two of you could locate the family and chide them a little bit, maybe that would make you both feel better.
A small minority of people on this blog are going to be negative regardless, that gets down to psychological issues and personality. I still think this is a positive story net for this family
Yes it’s a positive story for the MSM to get people back into the market. But I want the real numbers before I find it as positive as you, not just a ‘feel good’ story.
Well at least you got to chide me, that is easier than finding the family and better for everyone involved
I don’t really have a problem with people buying houses they can afford. I also don’t have a problem with people paying a small premium for a house over renting if that is their preference. I have a problem with bad math; ignoring insurance and property taxes in Florida and then comparing your new housing costs to renting, is bad math.
So the family might be guilty of bad math. By the way glad to see you don’t have a problem with people buying houses they can afford. Ok, there we all feel better now
Florida Watcher;
“‘My wife and I started looking when the market started cooling off,’ said Ron Temple. Recently he heard about a program by Riverside Bank of the Islands to sell homes taken back in foreclosure, and now they’re under contract to buy their first home in Lehigh Acres for $198,000 — $10,000 under appraised value and more space than they’d dreamed of having. ‘I keep pinching myself,’ said Temple.”
“The four-bedroom, three-bath house they’re buying in Cape Coral is ideal for them and their two children living at home but would have been out of their range at more than $300,000 two years ago.”
I totally agree with you that it’s a good thing that a family can find affordable housing.
However, 198K is still high and prices will drop from there. Look at supply vs. demand and the fact that foreclosures will accelerate thru the third Q of 2008, increasing inventories even more and driving prices down even further. My guess is there 198K house will turn into a 125K or less house.
If they can make the existing payments and plan to stay a while, long term they’re OK.
Honestly, good for them!! If you can make the payments and you’ve got the house you like, that’s a good thing. Working families who find affordable housing! Wow, what a concept! They were an endangered species. It’s really good to see them make a comeback.
IMHO, it still to early to buy. Were approaching but not at the bottom.
Also, my view is skewed as I invest/flip.
“IMHO, it still to early to buy. Were approaching but not at the bottom.”
Agreed, but isn’t it nice to see as you said,
“Working families who find affordable housing! Wow, what a concept! They were an endangered species. It’s really good to see them make a comeback.”
Prices we all agree will head lower, but it is nice to see a family of this size afford a 4/3 comfortably at roughly 40% off the peak. Much of the bloggers talk has focused on affordability of housing and this story is a big step in the right direction. Although not perfect, it is absolutely a step in the right direction.
Watcher — I hope this family remains happy and doesn’t lose money on the house. Palmetto know that area a lot better than I do, but as I recall, Lehigh Acres was a pretty low-priced area. Even $200K sounds high to me, relative to 1998-2000 prices. Of course, square footage, age, builder, block vs. stick — many things determine the value. But it just sounds very high for that part of Florida.
IMO, current appraisals likely remain too high, in general, compared to what they will be in another couple of years. Also, the less-than-rent euphoria might not take into account all the extra expenses of ownership that are not covered by the monthly PITI and utilities checks.
In realtor dot com, go to Lehigh Acres FL and search for SFR 3+2+ $100K - $200K. There are 1,238 SFRs for sale. Look at the one for $100K even — it is concrete block, brand new and unfinished. For the extra $100K, a buyer might be able to finish that house up just the way they want. Look at the one for $114,900 at 3212 25th — a short sale. That’s much more like what the prices should be, IMO.
Note — this isn’t a criticism of your observation. I was born and raised in central Florida and have been to all of these places, though not recently in many cases. Nevertheless, if the family truly is paying less than rent, they may be better off IF they can keep the house beyond further drop in value and subsequent recovery — that is key. My total annual rent is far less than the amount I’d have lost if I’d bought the place instead, so even if the first few years’ house payments were zero, I’m better off having rented it.
Chip, the person to ask about Lehigh Acres would be Cobradriver (Chris). Where is he? All this news about his area should be right up his alley.
Basically you are not buying a house that you could never afford…you are buying a house at true market value….the house was never worth $300K and probably wont be for 20 years…
I hate when people have that “I got a bargain mentality.” It is like going for a 50% off sale…if the item was inflated 1000% do you really think it is a bargain at 50% off..
Good God the negativity on this blog is sometimes (mostly rare cases) misplaced. Annette I did not get the feeling that anybody was talking about “bargains” the wife just seemed happy that the family was able to afford the house.
I agree.
200k is still way too high for the area.
And I’ll bet there are very few 60k incomes either . More likely both parents are maxed out in pay at 30K.
Happy they have a home, but not sure they will be able to keep it.
I know this area very well. Truse me, she can rent a home in Cape Coral for less that what she is paying for that house in Lehigh Acres. I’ve see many examples of four bedroom homes renting for between $800-$1,000. For some reason I don’t think she’s paying less than that when you add on taxes and insurance and whatnot. She may be paying less than what she was paying in rent. But that makes me think she was paying too much.
The mortgage alone would be $1098/month with 20% down and a 30 year fixed at 6 3/8%. We all agree prices will continue lower, this family did not purchase the “bottom” but it is a step in the right direction for affordability for common families.
Florida Watcher;
I think everyone is missing your point.
You’re saying they got a good deal if it works for them and their income, and I agree. Prices will no doubt come down, but if a family finds “affordable” housing in todays market, it is a good thing and it is a step in the right direction, as long as they understand the situation
If the buyer is starry eyed because he bought a “300K” house for 198K, he’s not paying attention. A $300K house sells for $300K, not $198K. If he has dreams of selling in 2 years for 300k, which he may be, again he is delusional.
His $198K will devalue. If it works for him, great.
What everyone is saying is that $198K still, in most scenarios is not a good prices. All would agree it is definitly a step in the right direction.
speaking of habitual refinacers, if fha and fannie/freddie are going to help out fb’s they need to look at the history of transactions with these fleas. What if they bought home in 2004 and refinaced once or twice and cashed out to finance their cars and credit cards and are back in the same posistion today, they should not be allowed to use the system, they are bad with finances and will continue to be. I am not in favor of any bailout, but if they do bailout peeps, they should stick to people who bought a house and have not cashed out.
No, No NO! Don’t cave! NO BAILOUTS!
In my opinion Bill the only bailout is continued paper money printing and rampant inflation, but prices still need to go lower and somewhere on the way down inflation will meet price declines and we will have our bottom (real value & affordability). It will be interesting to see just how far down to the bottom.
I’m not worried. The HUD secretary has said (interview on the NewsHour) that second homes were not eligable for Fannie bailout. If HUD is savvy enough to exclude speculators, I can only imagine that they would disallow second mortgages too. I am still of the opinion that if Fannie excluded all the income liars, primary-residence liars, and HELOC’ers, and required even 3% equity (equiv to 3% down), there would nobody left to bail out.
‘I keep pinching myself,’ said Ron Temple.
- I think that Ron will really be ‘pinching’ himself in the future when the value of his home has lost anther 40%.
LOL, that’s what I was thinking.
As I type this I am about 20 miles away from Celebration, here at work in Lake Alfred….
It is truly unbelieveable when you consider the number of homes that they quickly “threw up” in that area. There are THOUSANDS of empty McMansions over there. Most were bought by British and other European investors as second / investment / vacation rental homes. They mostly sit empty……there are alligators sunning themselves over there and enjoying their monthly $-feedings-$.
Good deals can be had on seasonal and weekly rentals there, but its still cheaper and better to consider the Disney hotels because they are right near everything. You have to fight your way down I-4 a few miles to get to Disney from Celebration.
Celebration will go down as one of the poster children of the housing bubble.
There is NO WAY in Hades that those homes will ever be occupied by REAL Florida people who live and work down here. Its like they just decided to build thousands of homes in the swamps around Kissimmee…..the infrastructure there is terrible. Not enough water, not enough roads, etc.
Celebration will be a ghost town in 2-3 years….heck it already is.
“homes that they quickly “threw up”
Great turn of phrase, Les. I keep reading about homes being “thrown up” in FLA and finally it dawned on me, yep, Florida is puking homes all over the place.
Well, they did “throw up” those houses.
Several of my “guitar pickin’” buddies are contractors….they have told me that they would never consider living in those stucco-over-styrofoam-and-chipboard sh!thouses.
I shared a good story on here several months ago about a twentysomething couple here at work that purchased a similiar home near Celebration with, you guessed it, an adjustable rate mortgage.
No kids, no money to really furnish the place, right out of college….and they go out and buy a 2-story 4,000 sqft 4 brd/2-1/2 bath home. Crazy.
Anyhow, I took my girlfriend to the “pre housewarming” party. They had just moved in and the young hottie was upstairs showing off her jacuzzi bathtub to the girls.
Went to drain the tub and approx 100 gallons of water drenched the subfloor, the downstairs ceiling and the walls.
Turned out that the Mexicans who “threw it up” forgot to connect the tub drain to the sewer piping.
We were downstairs drinking beer and I literally looked up and saw water draining through the drywall seams where the walls meet the ceiling. Water was also pouring through the ceiling fan fixture as well.
Needless to say the party was over at that point and we all went home.
The young wife doesn’t work here anymore…she got pregnant and they have started their family….but the last I heard in the breakroom the young couple was having financial problems.
They bought too much house; and it is crap construction.
I would hate to be stuck with that home. I am sure there are other skeletons that are buried in those walls ……..
“Turned out that the Mexicans who “threw it up” forgot to connect the tub drain to the sewer piping.”
Screwing the jobs that Americans won’t screw?
Contractor quality in general has been on the skids, no matter where they come from. Some eastern European contractors hooked up the hot water line to the toilet in a new condo my sister used to own 10 years ago - for weeks no matter what business you did in there - you left a steamer.
Builders have only two demands of a subcontractor- price and schedule. Quality? The word is not in their vocabulary.
That’s not my observation. That’s from a former executive of the NAHB, back in the early 1990’s.
“…I am sure there are other skeletons that are buried in those walls…”
Like leftover lunchtime bits of hamburgers and french fries inside the walls, to attract ants for a long time to come. “Take that, Gringo!”
Not to mention the big gulp cups full of pee! and YES I have seen this, unfortunately.
Amen, Chip. Like I said, I’d never buy a home built or even remodeled from 2000 on, not in Florida, CA or anywhere that illegal labor was employed.
“Not to mention the big gulp cups full of pee!”
Dang, I forgot about that one, you’re right! (shudder)
My favorite is the guys who take dumps in the attic and then wipe with the blown insulation. They are easy to spot because they walk funny - that’s gotta be itchy.
“Looks like the fellas working here are big mountain dew fans, eh?”
“that’s not mountain dew”
Les Pendens I was stunned to find out that 50% of the homes in Celebration were for sale. I knew there was a lot of speculation, but that is a huge number. Prices will crash fast there with that type of concentration on the sell side.
” You have to fight your way down I-4 a few miles to get to Disney from Celebration.”
Been there, done that. One of the worst Fla experiences ever.
Celebration will go down as one of the poster children of the housing bubble.
I never “got” Celebration. I always thought of it as a hot, humid, swampy, pretentious hell-hole created by pure marketing. What’s to celebrate about living there? Oh, gee, I’m near Disney, HOO-RAH!
The other thing is, it’s in Oceola county! A very classic rule of Real Estate is you never buy the “most expensive house on the block”. The Celebration homes certainly were.
(I used to have an office in Downtown Celebration, in one of those tall buildings! The Celebration people scared me. And it wasn’t a happy little community. They even arrested a kid who wanted to blow up the school!)
Palmy — I went there when it was brand new, and a few times afterward. You’re right — pretentious was the word that came to my mind. You were Hot Stuff if you bought in Celebration. What turned me off was the requirement that the garages be detached. I think it’s OK that they are around back of the house, but this is too rainy an area to have a garage without even a breezeway connecting it to the house. Momma’s not going to be feeling too romantic after she returns from grocery shopping lookin’ like a wet hen.
What’s the other one, Chip, Reunion? Isn’t that like Celebration? Sheesh, who was the genius that came up with those names? Supposed to make people feel all warm and fuzzy, I guess. Might as well just paint big smiley-faces all over the place.
“Might as well just paint big smiley-faces all over the place.”
ROFL — that is exactly the kind of feeling I got out there. Reminded me a bit of that Jim Carrey movie about the phony ‘hood.
A trip to Celebration 2 years ago is what alerted me to the housing bubble. I read so much hype how it was created like a “Disney theme town” and how everyone wanted to live there. The prices were crazy, $400/sft for 2100 sq homes on postage stamp lots. Not even room for a pool. The place was deserted. Such a waste.
“You have to fight your way down I-4 a few miles to get to Disney from Celebration.”
Actually World Drive (the main road into the Magic Kingdom) exits Celebration on the west end of town and will take you right by every park without ever touching I-4 or US-192 (an even worse road, but still not I-drive).
Not much cause for Celebration, is there?
Celebrate! Celebrate! Dance to the music! Bwahahahaha!
I remember 10 years ago when everyone in land development was touting how Celebration was going to be the icon of how new development was going to be done; part of the “New Urbanism.” (translation=teeny lots, house covering most of it, pseudo-victorian design and you can see your neighbor’s facial hairs [irrelevant of sex] in THEIR bathroom mirror).
‘When Realtors tell them they need to lower their prices, they say, ‘You’re being negative.’”
no kidding.. you latched onto that, eh?
Another illustration of how reality is perceived as “negativity”.
Holy crap, this country really is in some kind of delusional fantasyland. I didn’t know there were that many happy-making drugs out there.
Yeah, and I want some of those happy drugs. (For a clue as to why Slim is not happy this morning, check the Bits Bucket.)
“Richard Campo, CEO of Camden Property Trust, said Camden is recruiting failed homeowners to rent its apartments. ‘They’re pretty good renters,’ he says of foreclosed-upon homeowners. ‘But they didn’t realize what the total cost of ownership really meant. We are marketing to those people as long as they have reasonable credit minus the foreclosure,’ he says.”
So everybody goes back to their position in life, pre-bubble and all is honky dory, happy renters and all…
Except our economy is wrecked.
Whoops
This shoots holes in the theory that getting foreclosed on is the “worst” that can happen to a family. It’s not like they have to end up on the street, and if they were some of the 0% down folks they’re not even out a lot of cash.
I might also add that as house prices go down the people who buy them can afford to rent them out at lower rates. Those do gooders who are “trying to keep people in their homes” are just not helping. Prices need to come down, and foreclosure is a good means to that end.
“One of every five homes in Flagler County is for sale. Celebration is feeling the same pain because 50 percent of the homes there are for sale.”
O…M…G!
Celebration is feeling the same pain because 50 percent of the homes there are for sale.
Same pain?!? Every other house is for sale. That isn’t pain. That’s complete and utter destruction.
Wow… we knew that would happen somewhere… but ouch.
No recovery in 2008 for Celebration or Flagler county. If I hadn’t been reading the housing blogs for a while now that news would have floored me. Well… we have a location for the next Lethal weapon move.
Got popcorn?
Neil
“OMG” — yep, that was my thought, too. If that is true, IMO Celebration will have to set the record for the fastest and sharpest drop in “comps” of any residential area in the US that is not affected by a natural disaster. “Timber!” doesn’t even apply, because trees can’t fall that fast. Whoa.
At that point it’s better to just take a wrecking ball to the whole subdivision.
At that point it’s better to just take a wrecking ball to the whole subdivision.
Noooo! I want action movies to do the carnage! Can’t you just see the Governator leading the evil hoards through the suburban carnage? Perfect for a “Revenge of Conan” type of movie.
Got popcorn?
Neil
I was watching a 1947 movie last night called, “Dead Reckoning” with Humprey Bogart. Bogart narrates off screen a lot in the movie and, at one point when he’s looking for someone, he describes the neighborhood he’s driving through. It looks like Florida. Bogart remarks, “He lives in one of these houses which cost $5,000 before prices went up. Now they are $15,000.”
Working on the dates the film was made (1946 for release in 1947) that meant houses must have entered a “bubble” as WW2 ended and GI’s came home, married and bought property, thus creating a bubble 1947 style. Demand driving prices bubble.
I then looked at wages for the 1947 period. Minimum wage was 40 cents an hour in 1947. Okay, let’s say it was $1 an hour. That meant $50 a week for a 50 hour week or $200 a month or around, say, $2,500 a year. In other words, a returning GI could buy a property in 2 years if it cost $5,000 or 6 years if it cost $15,000 in a “bubble”. Obviously he had living expenses but for the purpose of this posting lets just use bare numbers.
Let’s go further. Today, minimum wage is around $7. However, let us say that a lot of people make $12 and hour. They don’t but but we are being generous. Let’s be generous and called it $100 a day or $2,000 a month or $24,000 a year. The average house in my area which is high end blue collar, is $600,000. At one point they were $700,000 but let’s call it $600,000.
Using these numbers, the “Average G.I Joe returning from the 2007 version of WW2 (say Iraq)”, making $2,000 a month or $24,000 a year, would have to work 12 years to buy a house.
It gets worse. Income taxes and all other kinds of taxes were LOWER in 1947 AND they were covered medically by the V.A
It gets worse. The majority of women could stay at home and raise the children in 1947 because the husband’s salary was enough. Now they have to work, raise the kids, look after the house, etc.
Interesting but it does tell me one thing. We are NOT better off in 2007.
Interesting observation. I doubt, however, that the average returning GI was buying $15,000 houses in 1947 - half that would be more like it. Wonder what neighborhood Bogart was describing?
That’s True. My Dad bought a House after returning from WW2. He go a job as a Teamster starting at 75 cents an hour. House on 1 acre in Town. $2000 .
In the movie it was called Gulf City and it looked like Florida.
My parents lived in a converted WWII Army barracks.
But Mike…. Don’t you know that everything is wonderful and the economy is roaring? Cocaine Larry Kudlow said so. You’re just being negative. You hate america. /sarcasm off.
“The majority of women could stay at home and raise the children.”
The apologists for the supply-side N.W.O. never seem to be able to explain how the near absolute necessity for two salaries equates to an “improvement”.
All the same - living today beats 1947 any day - so long as you stay liquid, retain mobility - and don’t slide too much into this world. It’s those who try to live like its 1947* in 2007 who are boned.
*as if we had 60 years of unprecendented stability to look forward to today
I’m going to sound like a misogynist–but the only thing that happened is when women started to work is prices doubled, and children got stupider.
(I’m all for fairness! The wife can work, and hubby can stay home!)
hmmm…. I don’t see how anyone can dispute that.
All the same - living today beats 1947 any day - so long as you stay liquid, retain mobility - and don’t slide too much into this world. It’s those who try to live like its 1947* in 2007 who are boned.
*as if we had 60 years of unprecendented stability to look forward to today
Too true. Freaking out about what was going on is what led me to this blog, in part.
We’re going back to 19th century boom-bust, except the pigmen are trying to prevent the bust part. Not gonna happen.
Someday, someone will realize that you had to prevent the waste of an uncontrolled boom to have real stability.
‘I then looked at wages for the 1947 period. Minimum wage was 40 cents an hour in 1947. Okay, let’s say it was $1 an hour. That meant $50 a week for a 50 hour week or $200 a month or around, say, $2,500 a year. In other words, a returning GI could buy a property in 2 years if it cost $5,000 or 6 years if it cost $15,000 in a “bubble”. Obviously he had living expenses but for the purpose of this posting lets just use bare numbers.
Let’s go further. Today, minimum wage is around $7. However, let us say that a lot of people make $12 and hour. They don’t but but we are being generous. Let’s be generous and called it $100 a day or $2,000 a month or $24,000 a year. The average house in my area which is high end blue collar, is $600,000. At one point they were $700,000 but let’s call it $600,000.’
You are defintely living in the wrong place if you want that lifestyle. New starter 3/2/2 homes in SW Florida now only $120k, suburbs of the large cities in Texas you can buy a nice 2500 sf newer house for $130k. These prices are comparable to the good old days based on rent and income.. Still a massive bubble in many parts of the west coast and northeast somehow has to resolve itself with time. Also as many of you know places like London are the bubble taken to extreme levels when you also factor in their strong currency. Something has to give in these places and look to London for clues as to what kind of crash to expect in our gateway cities on the coasts in the states. There is hope for those of you in Chicago land where the high rise condo bubble seems about as bad as in Miami and destined to give a bunch of good opportunities in the near future..
Still spouting the same old crap, I see. Did you take a bath on the Boca property? Of course not.
TX….. I read Johns post closely. Can one actually get a starter in SW FL for 120k or 2500ft. in TX for 130k?
Did you take a bath on the Boca property? Of course not.
ROTFLMAO!
“There is hope for those of you in Chicago land where the high rise condo bubble seems about as bad as in Miami…”
Will it be anything like the final scene of Fight Club? Because I have a front row seat and a crazy girlfriend to watch it with.
Got some bad news for you where London is concerned. I was born there 70 years ago (almost) and lived there for 35 years and still have family and friends there. London might decline but nothing like it will in the major US bubble areas. Here’s why:
Thanks to the US taxpayer (and I’m one of them) and mostly the gross incompetence of GW Bush, lots of middle easteners are buying property in London and France with the money they skimmed when GW Bush sent cargo planes loaded with wooden pallets holding $100 bills wrapped in plastic and the size of bricks. It’s no secret that billions of dollars are un-accounted for in Iraq. That, along with his massive 9 trillion dollar debt he’s stuck us with, is why the US dollar is now confetti money around the world and the oil rich (and even some poor countries) are swiftly dumping US currency as it continues it’s fall into the toilet. Btw, the Iraqi politicians don’t want the US troops to leave Iraq. Why should they? America is a money cow they can milk 7 days a week/52 weeks a year.
Remember, Bush is the moronic idiot who keeps telling us that more people have become home owners under his watch (lol). Actually, I don’t know if he’s been saying lately now that property has become a non-photo opportunity. I put him on “mute” whenever he’s on tv but he is good for a laugh even if my laughter is saracastic. I get my GW Bush laughter parts of Jon Stewarts Comedy Show.
The reason the middle eastern scam artists (politicians mostly) invest in London is because it’s mostly US taxpayer money and if they bought property in the US, the money might get traced back to it’s source. That means confiscation of any property they bought.
There’s more. The Russian mafia has bought tons of property in europe.
There’s more. The holders of the wealth in oil rich countries prefer to live in Europe. Don’t fall for the, “They prefer to live in the USA.” They don’t. They might like New York but they prefer London, Paris and Rome and they buy lots of property in places like the South of France or the Italian Riviera.
There’s more. London is now the worlds money center. Not New York. Like all money centers it will take a hit but the money from around the world still like the City of London.
The above might sound anti-american. It isn’t. My sons were born in the US as were my grandchildren and my wife is from Detroit. I just find it incredibly sad that a great country like the US has been dragged into the gutter by that clown in the White House and, of course, the fact that my grandchildren will live in a country that will probably never get out of debt and can only look forward to more taxes and a lower standard of living.
Americans need to stop waving the flag and THINK.
The holders of the wealth in oil rich countries prefer to live in Europe. Don’t fall for the, “They prefer to live in the USA.” They don’t. They might like New York but they prefer London, Paris and Rome and they buy lots of property in places like the South of France or the Italian Riviera.
Then I’m glad I was able to visit and enjoy those lovely European locales before the trash moved in.
Phillygal
Yup. My friends in London are totally pissed at the changes in London/UK over the last 25 years. In some places you would think you were in Iraq or Pakistan (literally) AND they usually turn those areas into toilets. Even the street signs where I was born (in London’s east end) have the names in arabic under the english name. If you dare to say something anti-muslim you can get charged with racial hatred BUT, if THEY say anything anti-British or anti-white christian, nothing happens. Glad I’m not living there anymore and glad I’m not going to see the changes in the world in the next 50 years. Just get me through the next 10/15 years and I can look back fondly at was once - and is no more.
Time to revoke the landing rights in Newark, JFK and LaGuardia.
Hear, hear, Mike. I enjoy your posts, btw. The only disagreement I have is that you say London is NOW the world’s money center and I say it has been so for at least a century, but covertly. Maybe NOW, it is out in the open.
I read the article in Vanity Fair entitled “Billions Over Bagdhad” and I know exactly what you’re saying. By the way, I’m glad these folks don’t want to come here. Europe can have them.
There was a lot of pent up demand after the war, as everybody was forced to save money, as there was nothing to spend it on, and returning G.I.’s had oodles of money, plus they were members of the 52/20 club…
“Another provision was known as the 52–20 clause. This enabled all former servicemen to receive $20 once a week for 52 weeks a year while they were looking for work. Less than 20 percent of the money set aside for the 52–20 Club (as it was known) was distributed. Rather, most returning servicemen quickly found jobs or pursued higher education.”
http://en.wikipedia.org/wiki/G.I._Bill
They got “separation pay,” too, as long as they were honorably discharged. I can’t remember how much - I’ll have to ask my dad, but I think he told me he got three or five hundred bucks walking out the front gate….real money in those days.
“Richard Campo, CEO of Camden Property Trust, said Camden is recruiting failed homeowners to rent its apartments. ‘They’re pretty good renters,’ he says of foreclosed-upon homeowners. ‘But they didn’t realize what the total cost of ownership really meant. We are marketing to those people as long as they have reasonable credit minus the foreclosure,’ he says.”
Say what you want, but I think this guy is smart in taking advantage of an opportunity and using a formula to determine if the renters will pay the rent. In fact, I think many of the former FBs will be so grateful for a roof over their heads, they’ll be delighted to pay a much lower rent than the screwy mortgage they were paying.
I’m so happy to see previous FB’s move into my complex. They are much better renters than those that entered in June through August. Thankfully, that batch is being evicted. The new renters are morose but amicable.
Got popcorn?
Neil
“The new renters are morose but amicable.”
That says a lot. I suppose it’s a bit like the folks in the Gulf Coast areas that were wiped out by Katrina — grateful to have a trailer to live in, considering the circumstances. It’s scary how many ways our lives can be turned upside down, even when we think we’ve got everything under control.
Speaking as a former FB (for the record we were never foreclosed on), current landlord has been quite happy to have us so far. We’ve fixed lots of minor stuff for her and just deducted parts cost from the rent and included receipts. A cheap water valve for a tub twisted off in the wall and started spewing water inside the wall while I was away on business. Turns out there’s no master water valve in this place!?!?! Wife had the fire dept there within minutes to shut if off at the meter and an emergency water damage recovery team there before the thousands-of-miles-away landlord could even locate her “property manager”. She got lucky renting to us and she knows it…I just hope she can feed the gator long-term :-). She doesn’t seem to be an FB, but she certainly is NOT covering her expenses with the rent check.
anyone else of a ‘certain age’?
———
….Why has the music stopped?
Where did all the happy people go?
I know they were there, songs everywhere
Only a moment ago
I only blinked my eye…and now the world that I used to know
Is changin’ on me…why can’t it be
Only a moment ago?
[Chorus:]
Only a moment ago (Only a moment ago)
It was spring and I was singin’
Only a moment ago
I could see where the road would lead
And what tomorrow was bringin’……
When the music’s over, turn out the light…
http://www.youtube.com/watch?v=RslEquXu9Kk
Wow, thanks for posting that Aladin. I knew that Jim Morrison was considered a prophet by some, but who knew he predicted the bursting of the housing bubble?
Even more prophetic…
“Into this house we’re born, into this world we’re thrown, like a dog without a bone, an actor out on loan”
http://www.youtube.com/watch?v=SMvfAYEaE8c
Was it a little pink house?
“In 2003 and 2004, at the height of North Port’s building boom, when 8,000 new homes went up, finding a rental was nearly impossible. As construction has slowed, however, that has changed.”
This is also very true of my area of West Central Florida. Other Florida posters might recall my frustrating search for a decent rental in South Hillsborough County at a price I was comfortable with. The price I’m paying now for a 2 BR in a nice complex with a pool is the same as what I was paying for a one bedroom, termite, ant and mold infested dump in a complex with no amenities that rented to some pretty rough trade. (In between I did find a nicer one bedroom that I liked, but a fire set by one of the residents drove me out) I drive by the dump complex almost every day and they’ve had the same “Now Leasing” sign they’ve had up all summer. LOL! At the top of the bubble, they were just about the only game in town for lower rents, but they’ve now increased the rents past what people can now pay in much nicer lodgings.
Rent is coming down in G’ville too, now that the condo conversions have reverted to apartments (repartments!) and so many new rental complexes for students have gone in (and are going in). Next year should be even cheaper.
Unless you’re on Section 8: expect to continue to pay 50% above market rate to live next to your fine fellow Section 8 tenants.
Hmm, maybe Section 8 is a plan to keep the cheap non-Sec. 8 units quiet and low on crime.
I wonder if you know what “rough trade” means…
OT. Someone posted a chapter from a neuro-economics-type book called Inside the Investor’s Brain. This caught my eye:
CHAPTER 6: Money Emotions, Clouded Judgment
Sometimes at social events, if I mention my occupation as “investment psychologist,” people are curious. Often, their questions are market related (“Where do you see the market in 12 months?”), and sometimes they are personal (“Why is my spouse so hopeless with a budget?”).
In early 2006, when Jodie heard my profession at a dinner, she asked me defensively, “Did someone send you to talk to me?”
[...]
After some pleasant conversation, Jodie opened up. She told me that she’d been having nightmares about poor old people living under bridges. In many dreams she herself was destitute. When she saw commercials on TV about happy older couples in retirement, tears would come to her eyes. This had been happening for about a year, and she didn’t really understand it, but she thought she might have a clue.
“What clue is that?” I asked.
“Well, I used to work at a major investment bank as a broker in the late 1990s. We were responsible for getting retirees to buy recommended investments in their private accounts. When I started in mid-1998, everyone wanted to buy Internet stocks. We’d call clients, offer a few shares in an IPO [initial public offering], and recommend some other stocks as well. They’d usually follow our advice without questioning, and they’d be much better off for it. In late 1999, we started offering these Internet mutual funds, and we would charge two points on the buy, in addition to our regular commissions.”
“Wow, that’s huge,” I muttered.
“Yeah, my boss told us that we’d be fired if we couldn’t sell the fund to 80 percent of our client accounts. It was my job to persuade dozens of mostly older retirees to buy shares in the Internet fund. Some of them wanted to put all their money in it, and I let them.”
“What happened?”
“I left in early 2001, when clients were calling me wondering why their accounts were shrinking. I told them to hold on, that things would recover. …” She paused. “I feel so rotten now. People really trusted me.”
Jodie took a sip of her drink and her eyes inspected the faces in the room, as if looking for someone else to talk to.
It didn’t seem like a fitting end for her story.
“Then what?” I persisted.
“I got my real estate license, and now I’m a real estate agent.”
“I got my real estate license, and now I’m a real estate agent.”
Wow. Great post.
Thankfully, real estate only goes up!
Interesting times ahead.
Got popcorn?
Neil
So the question is what b.s. bubble will our handlers at the top think up next to keep us all under control and continue to shift money from poor / working class to the elitist…
Exactly. I’d guess commodities.
My guess is green fraud- bogus “carbon credits,” fake energy-reduction products (perpetual motion machines), and the like.
Tulips. No wait. That has been done. Pinto beans.
She told me that she’d been having nightmares about poor old people living under bridges.
And that was after she’d rooked the old folks with her bogus securities.
Now that you’ve sold hyper-inflated housing to retirement-ready boomers, get ready for Round 2 of under-bridge-living nightmares, Jodie.
She went from being a garden variety as$hat to a complete and certifiable scumbag. Props to you, Jodie. You get an award for personifying the American nightmare.
“Sahnger said the home is for sale with an asking price near its value during the peak of the market. ‘When Realtors tell them they need to lower their prices, they say, ‘You’re being negative.’”
In unrelated news, a man attempting to design a rocket that can go at or faster than the speed of light responded to naysayers with “You’re being negative.”
Is it just me or are we suffering from totally stupid MSM? None of the reporters seem to be able to check property records to find out if people are serial refiers before the write the usual slob story. They aren’t willing to question the people about their finances. And they continue this idea that these people are losing their homes. If you bought for say $100K and refied over the years $200K and are now walking away due to forclosure, that’s not a loss - it’s a big ass profit. The refiers are making huge profits and walking away scot free and crying about it because they already spent the money.
That’s a great point. In fact, anyone who’s had a loan forgiven–even in BK–has had a huge ass profit! If you got to live in a house for two years and only had to pay interest on a mortgage for two years (minus a few months when you started to get behind), you didn’t do too badly either.
All I can say is–write a good, clear letter to the reporters! THey hate being accused (nicely, of course) of bias.
I got a personal answer from Gretchen Morganson (see 10/3 bits bucket) when I challenged her sob story in last Sunday’s _Times_
I don’t think bias is a good explanation here. I think journalistic integrity and more importantly a lack of journalisitic rigor and high standard is much more apt.
Sorry for the dumb question but I’m new - how do you check property records? How can you tell if they refied? I’ve nosed around my county’s web site and can’t seem to figure it out.
check this out:\\http://www.itulip.com/forums/showthread.php?p=17101#post17101
“In the choice between changing ones mind and proving there’s no need to do so, most people get busy on the proof.”
That part always worries me — am I keeping an eye on enough doors. I suppose it’s a big part of why I read Ben’s blog every day that I’m not on the road. Is what was true today, true tomorrow? And am I ever grateful that I get to hear the news here, rather than through the propaganda machine.
“As fast as subprime mortgages flew out its doors, alcohol and drugs were flying in. Rumors of illicit goings on were the norm. ”
This is the epitome I guess. The pinnacle of success!
“Still, there is a silver lining. Reform is in the wind. In the state of Washington, for example, new laws have been enacted requiring loan officers to pass state mandated exams which were, encouragingly, difficult. New restrictions on licensing barred all felons with convictions within seven years from originating loans. Many moved to California where, incredibly, law does not prevent felons, even those convicted of financial dishonesty such as fraud or embezzlement, from practicing in the finance industry.”
That always seems to be the answer. As if this has never occurred before. As if greed, debauchery and crooks just popped up because we weren’t regulated enough. Do we ever look anywhere besides the “government” to fix things? More government is not the answer but what do I know.
Thanks for the link.
“And once these homes go on the auction block, they’re not selling there either. 90 homes for sale today and all of them went back to the lender.”
Foreclosure does not equal good deal. Prices are beginning to fall, plummeting in some areas. A lot of banks are short selling. Still, we have holdouts, hoping H.G. Wells will whisk us back to that wonderful year 2005, when a refrigerator box on a vacant lot went for 300K
Get a load of this: The House today will be debating H.R. 3648, the “Mortgage Forgiveness Debt Relief Act.” Sponsored by Rep. Charlie Rangel (D-NY), chairman of the House Ways and Means Committee.
From http://www.gop.gov’s “Legislative Digest” link, here is the summary of the bill:
“The bill relieves individuals who receive debt forgiveness on a mortgage from having the sum of the forgiven debt treated as taxable income, effective for debts forgiven on or after January 1, 2007. H.R. 3648 suspends this tax law permanently, whereas a similar proposal issued by the President would have limited the exemption to a period of three years. H.R. 3648 offsets the estimated $1.4 billion over ten years cost of this provision with a revenue raising provision that limits the current capital gains tax exemption on the sale of a second home; the President’s proposal does not offset the cost of the decrease in taxes.
“The bill also extends the tax deduction for the cost of private mortgage insurance for certain low-income individuals through the end of 2014 and lowers the threshold for buildings to qualify as cooperative housing corporations, which allows tenants access to more tax deductions.”
Does that mean I have to put a clothespin over my nose and write to my Congress-critter?
Hey Charlie, ya bring the boys home yet? (long pause) No - didn’t think so! Failure! Now get to work on something useful for a change.
Testify, edgewaterjohn! Rangel is just another blowhard boob looking for his piece of the action and who cares if another GI gets vaporized. He’s got his.
Making foreclosure for refiers even a bigger profit maker. I’m feeling like I missed out on some easy money - hundreds of thousands in profits in really short time, tax free - and they have the balls to be whining. Men - please bring on the Joshua trees.
No debts should be forgiven.
These people played a high leverage “game” with other people’s money. Their bet didn’t work.
The bill is due.
Try to tell the casino owner that your gamble didn’t work out and see what happens.
I want to see people punished for playing money games.
This will stop the games. Houses are for LIVING IN, not investment flips. DEFICIENCY JUDGEMENTS have always been a fact in real estate purchases.
They force people to make prudent financial decisions.
I know the brokers used FEAR of “you’ll be priced out forever” to get people in houses they could not afford.
That is their problem. It should not be subsidized by me. Where’s my cut of the profits??
It seems to me that if this passes as written above, mortgage lenders will tighten up considerably more — 5% down will be out the window and 20% will apply to just about everyone. That ought to get prices moving down more quickly. Just when I though we might be in for a Japan-style slow-mo decline.
I doubt the lenders care about whether or not the debt forgiveness is taxable.
I am curious how they are going to structure the provision to prevent all W-2 income from becoming debt-forgiveness.
For all of you waiting for the results, the House passed HR 3648 on a 386-27 vote.
221 Dems voted for, 0 against.
165 Reps voted for, 27 against.
19 did not vote.
http://clerk.house.gov/evs/2007/roll948.xml
Our Representatives are scared. That’s why this passed–they needed talking points for their campaigns stating that they tried to do “something.” (I do this legislative stuff for a living.)
It’s now off to the Senate, where all legislation goes to die. Bet this one won’t though…vote totals like this out of the House indicate strong party support. The Senate D leadership will find something to hang this on for maximum publicity.
No word on the President’s support; I bet he won’t veto it. He’s already ticked off the Rs in Congress over the children’s health (nee states-to-DC wealth transfer) bill he shot down earlier this week.
This could only happen in evangville, USA…
the outlawing of Halloween
http://www.rockymountainnews.com/drmn/education/article/0,1299,DRMN_957_5713121,00.html
This Halloween I’m dressing up as Vlad the Impaler.
And I’m coming after YOU, aladin…BOO!!!!
*haha j/k*
Apartment owner: “We are marketing to those people as long as they have reasonable credit minus the foreclosure,’ he says.”
LOL. What this says is some lenders gave FB’s loans to people an apartment owner would not trust to pay rent. That sums up the bubble factor.
About newspaper reporters…
Why should they be any less lazy than the rest of the country?
My wife and I were on a sweet roadtrip through the Southwest last year, and we like to get our hands dirty reading newspapers, and we noticed that 85% of the reporting was a/p, in the fishwraps we read.
The other 15% was the opinion page.
Here’s a must read:
Price tag on this house: $40k to $770k in 35 years.
http://tinyurl.com/2wo2gl
If that’s not a horrifying measure of inflation, what is?
I calculate it at 8.82% annual “appreciation.”
Sure wish my salary had gone up as much in my 35 year career!
The House today will be debating H.R. 3648, the “Mortgage Forgiveness Debt Relief Act.” Sponsored by Rep. Charlie Rangel (D-NY), chairman of the House Ways and Means Committee.
If this passes.. which I hope it does.. the flood gates will open even more.. walk away and only your credit gets pucked.. well it is all ready pucked for for all these people already.. I’ve spoke to so many FB’s that are holding out because of tax issues.. this will open the gate.. hopefully this passes it will dislodge the pipe and let more pain run.. considering most to all can’t and will not pay anyway.. this will make the drop faster and deeper.. thoughts
With the Dems having instituted “Paygo” (pay as you go), I wonder what taxes will be increased to offset the loss in tax revenue from this bill?
The only thing I ever liked about Rangel was his response when asked if he though shrub took too many vacations. LOL, Rangel said “Oh, no, I don’t think he takes ENOUGH vacations”, LMAO.
Have to admit, that is funny.
Have you considered a remedial English class?
Celebration
I live in Celebration (as a renter), and I happen to enjoy it. Are there some pretentious people here? Absolutely. But there are plenty of nice people, and I enjoy many of the community activities.
It is true we’re close to Disney, but also day trips to Tampa are quite reasonable from here, as well as reasonable distance to downtown Orlando. And I frequently travel for work, so the fact that I can get to the airport quickly is nice, too (and the Orlando airport has alot of direct flights to alot of places).
The 50% for sale number seems very high to me (my gut is around 20%, which is still ridiculous, but not quite as ridiculous). I’m thinking it must include all the new condos they just built downtown and possibly condos which have not been built yet (and maybe will not get built). That being said, based on the price I pay for rent, along with the high insurance and HOA fees, I do agree that the bubble is quite strong here and prices have to come down.
Russell — good to hear an on-the-ground report. Don’t recall our having a poster before who actually lives in Celebration. That’s why I couched my opinion about the numbers with “if that is true….” 50% is a staggering number and you likely have it right that it includes sales of pre-CO condos. Nevertheless, the real inventory apparently is so large that you should be seeing decreasing rental prices.
“I live in Celebration (as a renter), and I happen to enjoy it.”
That explains it.
Not flaming ya, Russell, I live in Apollo Beach as a renter. The joke about this place is that Guy Lombardo used to have a house here and promoted it back in the day. So did one of the Backstreet Boys, I forget which one. Anyhoo, Apollo Beach is basically a sandspit sticking into Tampa Bay and downwind of all the pollution from the Port and the TECO plant. But we got waterfront condos. Boy, do we got condos. And some huge McMansions on the water. I like the proximity and easy drive to Tampa. I like it well enough to rent here, for the time being.
‘Fess up time. I have stock in TECO. Not exactly a market-beater.
Not taking it personally. There was just alot of questioning above of why people might want to live here, and I happen to think there are a number of good reasons that have nothing to do with being near Disney.
Sure, the houses are overpriced, but as I think we all know that’s true alot of places, not just Celebration. But if ownership costs ever come into line with renting, I’d consider buying here.
Thought I would chime in on what things look like in the “mid” section of the country (Cincinnati metro area):
Average new 4bdr/2f2h bth home with brick wrap front, minimal landscaping, tiny lot (translation=no backyard to speak of), finished basement, no deck, goes for about $275,000 - $310,000 depending on extras like bay windows, extended garages, decks, etc. That’s the AVERAGE new home. You can get a 3-8 year old home of the same specs for anywhere from $179,000 and up - with price depending on location and school district.
New homes in some higher end neighborhoods with grade-A schools can go into the upper $400,000 and $500,000 range. One thing that I noticed that hardly ever changes around here when talking about the difference between a $275,000 new home or a $500,000 new home is the lot size. You basically get nothing. My DH and I are huge on lot size. Our rental sits on an acre and is in a wooded area (absolutely beautiful).
There are large builders (Drees Homes being one of the biggest) who just don’t think there is any reason to lower their new home prices. They have only reduced SOME of their house plans by around 8 or 9 percent, and that’s it. Most of their homes run in the $310,000 to $500,000 range for the “average” home plan - and of course, the lots are crappy!
Just sayin’.
I have a question about the “tax relief” bill mentioned above vis a vis the bk laws. Does this mean that if you live in a non-recourse state like California, you can walk away from your mortgage, send the keys back to the lender, and pay no taxes on the forgiven debt? But if you don’t live in non-recourse state, you may be paying on the difference between the mortgage you took out and the price the lender received for a long, long time?
When Realtors tell them they need to lower their prices, they say, ‘You’re being negative.’”
The homeowners will soon find out the true meaning of negative as time progresses. The flipper will be flipped and flopped when they discover they are upside down and have no way out!
This is where you need to either do your homework really well or seek out a Realtor and ask for a Comparative Market Analysis (CMA) that shows all the recent sales in that area (within a 1-mile radius) within the last 3 months.
You do not need a realtor to do this work! The comps in the past three months and in the past are so tainted and the industry is so full of crooks in the apraisal side that you just cannot trust them anymore when it comes down to the true value of property. Throw the CMA and comps out the window. The true value can easily be done with simple math and property is only worth what someone is willing to pay in a normal market. Ignore the realtor gimmicks!
Anybody know where to get the number of short sales in Florida –Brevard county?
Dan
“‘We’re actually going to be paying less monthly than we were paying in rent,’ Ferguson said.”
Instead of bailout talks, how about more happy stories like these? Hey Congress, listen up…..
Let’s try to see past the petty politics, shall we? The roots of this overblown market were so years ago in Federal Reserve policy, a non-demoninational organization bought and paid for by corporate multi-national globalists. You know, like the Congress and the White House. Wake up and vote for Ron Paul.
I could not resist commenting. Well written!
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