To No One’s Surprise, Oversupply Has Caused Price Declines
The Palm Beach Post reports from Florida. “The outlook for the Palm Beach County housing market is none-too-stellar. Palm Beach County’s median home price in August was off 13 percent from its November 2005 peak, according to the Florida Association of Realtors. ‘Will prices fall further? Yes,’ writes University of Central Florida economist Sean Snaith.”
“But, he adds, falling prices will feel more like a fender bender than a full-on crash: ‘When a true speculative bubble bursts, the asset’s price doesn’t fall 6 percent or 15 percent from its peak; it falls all the way back to its pre-bubble values (see Nasdaq after the dot-com bubble burst). Will the same happen in housing? If you are waiting until this occurs to buy, you will spend the rest of your life as a renter.’”
The News Herald from Florida. “From the old Miracle Strip to Back Beach Road, from Bay Point to Lake Powell, a surge of construction west of the Hathaway Bridge is changing the landscape of the ‘island’ almost beyond recognition.”
“This ongoing activity appears to defy the marketplace. An oversupply of housing units, tighter mortgage credit rules, soaring property taxes and high insurance rates, have thrown many sectors of the local real estate market into a tailspin.”
“‘In 2004, we identified over 140 projects that were on the list as preparing for development,’ said Rick Dye, city president of Regions Bank. ‘Out of that 140, probably today, 80 or 90 of those are either complete, under construction or finishing up on permitting.’ The rest have been delayed or canceled, he said.”
“Upon completion in 2018, Breakfast Point will include 3,100 housing units’. Given the company’s vast land holdings and financial resources, St. Joe officials said the company is well positioned to carry out the development despite the current housing glut on the island.”
“‘Oversupply, tighter mortgage credit, higher insurance and falling prices have created a ‘perfect storm’ in the market,’ cautioned Pensacola real estate attorney Michael Wilboun. His business now includes a growing number of people trying to break out of condo sales because the appraised values have plummeted below their original contract prices.”
“Before real estate market values can appreciate again, the glut of both condo units and single-family homes will have to be absorbed, Realtors admit. That could take between four and six years for the resort condo market, several recent studies predicted.”
“Veteran Realtor Mary Jane Shields said in 31 years of work in the local market, she never has seen as big an oversupply of housing units as exists today.”
“‘There are 3,142 listings on the Beach, and 895 of them are houses,’ Shields said. ‘There were years where we’d knock on doors, we were so short of listings, but right now it’s a buyer’s market. If you are a seller, it’s very, very bad.’”
“The dominating factor has been the creation of a massive oversupply in condo units that has depressed resale values and trapped thousands of pre-construction investors into sales contracts that now exceed their unit’s market value.”
“The steady market decline already has scared off speculators and now is straining developers’ finances. Meanwhile, many buyers find themselves trapped in preconstruction sales contracts, committing them to a purchase price that is significantly higher than the condo’s actual value.”
“‘Builders and developers don’t make any money unless they develop,’ said real estate broker and appraiser Sam Portman, who specializes in the Panama City Beach market. ‘Even though the market is turning down, they will still build, as long as they are using somebody else’s money.’”
“The result has been a glut of condo units for sale that will continue to get larger as a secondary ‘bow wave’ of projects launched in the past two years reaches completion.”
“Regions Bank intern Steve Stokes found the combined inventory of hotel rooms and condo/town house units on the ‘island’ was projected to more than triple from 15,573 in January 2007 to 46,869 by the end of 2012.”
“To no one’s surprise, the oversupply has caused price declines. Average condo resale prices for identical units at the Beach fell by 15 percent from Aug. 1, 2006, to the same date this year, he said.”
“‘It’s still trending down,’ Portman said of market prices. ‘It’s hard to tell what’s going to happen.’ And the pain doesn’t stop there.”
“The reversal from a seller’s to a buyer’s market has not only hurt sales, Portman and other experts said. The glut of new condos also has depressed rental fees for existing units. That is an additional source of pain to owners who budgeted their investment on the premise that a condo unit would generate a healthy rental income to cover a large share of the mortgage, utility bills and other costs.”
“Two years ago, Portman’s investor signed a pre-construction contract at Laketown Wharf for a $350,000, three-bedroom and two-bath unit. He made a down payment deposit of $75,000 and planned to obtain a mortgage for the remaining $275,000 and another $20,000 for furniture and appliances.”
“Today, the investor faces a hard decision, Portman said. At closing, the buyer will come into possession of a $350,000 condo that in the current market is worth only $315,000 at best — and that is before the monthly cost of ownership.”
“Offsetting those expenses would be an estimated $1,666 in monthly rental income, requiring the owner to fork over another $900 to $1,000 per month to cover those expenses.”
“Portman calculated eight scenarios for the condo unit’s value over a five-year period. In only one of the eight pathways did the condo’s value exceed the owner’s investment after five years. In the other seven scenarios, the owner’s investment ranged from $44,000 to $166,000 in negative value after five years.”
“Portman said his client has decided the best option is to walk away from the deal, forfeiting the down payment. The client declined to be interviewed, but Portman quoted him as saying, ‘Why buy off the beach when you can buy on the beach for the same money?’”
From TC Palm in Florida. “Like most new home developments across the country, Tesoro has seen sales slow. According to county public records, Tesoro has sold five lots so far this year. That’s a fraction of 41 lot sales in 2006.”
“The developer, Ginn Company, sells only the land. Buyers receive a list of builders and have three years to start construction. Of the lots that have sold, only a fifth of owners have completed construction on their homes within the gated community.”
“‘That has to be disappointing the builders,’ said Brad Hunter, director of Metrostudy. ‘I think the experience there is reflective in the market as a whole, but Tesoro might be showing more sluggish movement because of the high price point.’”
“However, not every lot is owned by someone who plans to build a home. Tesoro was not spared by the residential real estate flipping craze of the last few years, said Bonner Herring of Tesoro. Last year, a group of unlucky flippers tried to unload their lots in a post-bubble auction. None sold.”
“Herring said Ginn hopes the tournament encourages some land investors to reconsider their original plans. ‘Our goal is to convert them into members,’ Herring said.”
The Orlando Sentinel from Florida. “Ask a real-estate broker, look at figures on new housing starts or pick up a newspaper. They all paint the same picture, the housing marking is in the doldrums. But that isn’t stopping two ambitious condominium projects in downtown Sanford from moving forward, at least when it comes to getting land-use approval.”
“Both projects propose a series of high-rise condominium towers on Lake Monroe that will be priced to lure potential buyers away from downtown Orlando. In all, the projects would add 660 units to an area that didn’t get its first condos until earlier this year.”
“‘A developer would be crazy to start vertical construction right now,’ said Sid Vilhen, whose 360-unit RiverScape on Lake Monroe project goes before the City Commission on Monday. ‘But in two to four years, the market will be back.’”
The Atlanta Journal Constitution from Georgia. “At first glance, Enchanted Forest subdivision looks like any other thriving suburban community of two-story brick and split-level homes.”
“But modern-day problems have tarnished some of the neighborhood’s medieval luster: Homes with no drapes or signs of life inside; code violations tacked to the front door of empty homes for overgrown grass and debris; ‘For Sale’ signs throughout the subdivision almost outnumber the trees.”
“Homeowners in every other house on one side of a keyhole-shaped street have faced the prospect of losing their home. Several properties in Enchanted Forest have been scheduled for foreclosure two or three times in the past year.”
“Even Grant, who had quickly and quietly resolved her foreclosure without her neighbors’ knowledge, was surprised to learn so many of her neighbors were facing similar situations — and often without a happy ending.”
“She had assumed the empty houses and ‘For Sale’ signs were the normal comings and goings of a neighborhood of mostly first-time home buyers. ‘Of course now that I know it’s going on, it’s a concern,’ she said. ‘The (sale prices of the) houses will probably go below [original market value].’”
“Bargain hunters might want to keep their eyes on the new home market over the coming months. An analyst with the housing-industry tracking firm Metrostudy told a lunchtime meeting that it could take builders until 2009 to sell off the thousands of vacant new homes and lots around the metro area.”
“That means new homes could continue to be an unusually good deal as builders work to unload unsold properties.”
“The number of finished vacant homes is three times the normal for metro Atlanta, and the number of vacant lots awaiting homes — 140,000 — is twice the usual number, according to Metrostudy senior analyst Domonic Purviance.”
“‘That’s the highest number we have ever seen in the Atlanta region,’ he said.”
From WRAL in North Carolina. “There were more signs Monday that the national housing slump has hit the Triangle. According to the North Carolina Association of Realtors, sales of existing homes dropped 24 percent for the month of September compared with the same period last year.”
“The slump has hit high-priced neighborhoods the hardest. ‘In certain price ranges, we’re seeing quite a lot of stagnation,’ real estate agent Gilbert Hensgen said.”
“Hensgen added that not only are sales slowing, but the market has become more competitive, with an overflow of listings in certain neighborhoods.”
”I’ve actually turned more pessimistic about the economy in the next six months. I think these numbers show the real estate slump has really hit the Triangle,’ N.C. State economist Mike Walden said.”
“‘Buyers are being very smart with picking and choosing and making sure they’re priced right. And not everyone is pricing them right,’ Hensgen said.”
From News 14 in North Carolina. “Real estate agents say the housing market is booming, but not everyone is keeping their home. Because of that, agents say more and more people in the Traingle area are getting good deals on foreclosed homes.”
“‘Sometimes they go for under 20 percent their value, so someone might get $80,000 off their house,’ said Robin Barton with Barton Estate Realty.”
“She adds that hundreds of people in the Triangle are getting steals just like that. According to Barton, from 2006 up until this year, 400 people in the Triangle had their homes foreclosed.”
‘The slump has hit high-priced neighborhoods the hardest. ‘In certain price ranges, we’re seeing quite a lot of stagnation,’ real estate agent Gilbert Hensgen said.’
For those ‘it’s different here in NC’ folks, step right up for some crow.
Ben, you are a lot more gregarious lately than you have been throughout the life of this blog.
It’s the Flag effect.
Egh? Flag effect? Sorry, I don’t know that one. But I must agree with TX, it’s good to see you having fun poking at these morons with the rest of us!
MF,
I’m joking. I just really like my new hometown. And I’m having to spar a bit with the local RE folks, and I know they are reading here. I am a little feistier because I am doing research on this blog for a book and I realize how right we have been, and that we don’t get enough respect for it. I think we should demand respect.
“we should demand respect”
AMEN!!
I think on the whole, people should in general try to speak up when something doesn’t make sense. Pick practically any piece of the housing bubble - it didn’t make any sense. Especially on a personal level, the best thing you can do is at least attempt to gentle “look at these facts” if someone is catching a falling knife.
I’m not sure, though, how you can look for respect other than stating the facts and letting it drop. People in the middle of manias have 10,000 reasons to discount everything you say and 100,000 arguments about why they are right. And they definitely don’t respond to “Hey, you’re a moron..”
My mother at various times of her life and my MIL in current frame of mind are my direct experiences with that type of thinking.
I find I get more respect when I state the facts of the case and let the matter drop. My MIL problably treats me with more gruding respect that she wants to because I (try) to control my temper and not try to talk her out of whatever current mania she wishes to follow.
In short, I’m not sure looking for the respect of morons is worth the time.
Warning them against follies, sure…the rest they have to work on themselves.
I used common sense when this bubble started, a friend was hot to buy in the Petworth neighborhood in DC. He actually said “RE in the city ALWAYS goes up.” I just said “If that were true there would be no such thing as a crack house.” I also predicted that creative financing would lead to foreclosures and a bust. What I did not predict was how long the boom would last and how insanely high it would go.
When I sold my property my whole family thought I was nuts, now they are grudgingly respecting me especially since a couple of them are now overleveraged and underwater on flips. Very sad. This could have been at least somewhat avoided with decent information available in the MSM.
“In short, I’m not sure looking for the respect of morons is worth the time.”
Nor would I look for the respect of those with criminal agendas, although I know that’s not what Ben meant. But, we have people in high places and jobs of influence who either have criminal and fraudulent agendas, or who are just plain insane. For example, you are never going to get through to a Congressional staffer who has no idea the sort of income it takes to support a $500,000.00 mortgage and cackles insanely when you try to talk sense and sanity. It’s like demanding respect from the inmates of a mental institution. And unfortunately, that’s who has the ear of the representative. At best, you’ve got a bunch of undereducated, wet-behind-the-ears staffers making decisions for the members of Congress and that’s the godawful truth. Many are the same age as Snaith, with about the same effective level of education, holding similar points of view. Some of us saw this when some of the younger Justice Department staffers were called to the stand during the demise of Alberto Gonzales. When I saw Kyle Sampson and Monica Goodling, I thought, “They’re just children, really”. And when it dawned on Sampson, for example, what he had done, there was in fact real remorse, but the damage had already been done.
As to criminal agendas, if I’m still around, when the Wall Street and Washington post goes up, I’ll link the AP story on Paulson’s recent pronouncements about China. Goes along exactly with what Ben says about watching the G-7 finance minister playbook.
If I can’t have respect, I’ll just have to settle for the 200k I’m going to save when I go to purchase my house.
If I can’t have respect, I’ll just have to settle for the 200k I’m going to save when I finally decide to purchase a house.
I like to speak up on a variety of subjects and so I do—loud and long and often–mostly because I enjoy speaking brutal words. Especially about developers, housing/credit bubbles, etc.
Also I just adore saying ‘I told you so.’ I even have a special snarky dance I sometimes perform on those occasions, with bum wiggles and amusing tragi-comic facial expressions. So see, I have to speak up, so I can truthfully say later : ‘I told you so.’
“I even have a special snarky dance I sometimes perform on those occasions, with bum wiggles and amusing tragi-comic facial expressions.”
You just described my normal gait…
HAW! Ahawhawhaw! Oh, golly, you’re funny.
Ben, repeat after me:
“It’s really tough being so right so often… but I can handle it.”
Best!
I know just try getting a job with Dan Rather or now Lionel on air america radio…i am too old to work for them, the entry level jobs MUST go to a 22 year old..
So the MSM just won’t hire bright smart people with critical thinking skills in the first place, so how can they produce articles and stories quoting Ben or this blog?
===================
Very sad. This could have been at least somewhat avoided with decent information available in the MSM.
“Snaith?!” There really is somebody walking around with that name?! It sounds like something out of Harry Potter - I assume he’s from Slytherin, right?
And didn’t we have a Mr. Flatum listed while talking about the Bubble deflating in an earlier post this week?
I am just waiting for somebody named “Frito” to show up so the transition to Idiocracy can be complete.
“I am doing research on this blog for a book and I realize how right we have been, and that we don’t get enough respect for it. I think we should demand respect.”
This is part of a huge trend affecting many industries and sectors of knowledge. Many journalists resent the accountability that the blogosphere foists upon them, and they see the public is increasingly turning to sources where they can get technically correct analysis and hear from real subject matter experts as opposed to shills with degrees.
Additionally, consumers are questioning what realtors are bringing to the table in their transactions and turning to discount brokerages, as the DOJ investigates the NAR for antitrust issues.
You might be interested in Seth Roberts’ blog, category “the decline of expertise”. http://sethroberts.net
Hey, Ben, when is your book going to be published? And, group, when it is and he goes on book tour, let’s have HBB gatherings in each city where he touches down. We’ll meet under the It’s Different Here banner.
I don’t think journalists resent the blogs as much as the media monopolies that are developing. The feds are right now trying to push through legislation allowing more consolidation. This will undoubtedly lead to a decrease in the quality of news we all get. Yes there is a lot of independent research that goes on here, but a lot of the news is gathered from the local press. This consolidation leads to Brittney spears news plastering not only the TV but your local paper. It also gives them more control over the message. When J6P watches the national news and hears the economy is fine and realestate is improving, and then reads in the local paper, and finally hears the same message on the local radio he’s going to believe it. The same goes for who we vote for, and what policies we support. There can be no democracy without independent accurate news.
I don’t think the “age of the expert” can die too quickly.
My Dad used a steoriod cream once for a rash. He knew it was overkill and when he starting using the cream, the rash got worse. Instead of ceasing to smear the cream on his body, he went along with the program because “he has a good doctor he trusts”. At the next visit, his doctor immediately switched creams because he had no idea that the cream was doing that.
I have had so many instances in my life where the “expert” didn’t know or screwed up and the worse part was that they blamed the “non-expert” person inolved.
Give me people in any profession who will say “I don’t know” or admit to honest mistakes rather than a degreed “expert”. A world without experts is scary but it is a far more democratic one.
“This is part of a huge trend affecting many industries and sectors of knowledge. Many journalists resent the accountability that the blogosphere foists upon them, and they see the public is increasingly turning to sources where they can get technically correct analysis and hear from real subject matter experts as opposed to shills with degrees.”
Absolutely! They can’t stand being challenged. They largely can’t stand the internet. It challenges their authority, their power and their livelihood. Long live the internet without government intervention!
While the internet is no panacea it is the biggest improvement, the best vehicle we have had in true free speech maybe since the Constitution was put to paper.
A world without experts is just a bunch of uneducated morons milling around. The people who will admit they don’t know something usually ARE experts - they are confident enough in themselves that they don’t feel threatened and can admit to not being omnipotent.
I grow tired of being surrounded by people who act like they know everything, refuse to admit that in reality they don’t know much, and get increasingly hostile when it becomes apparent that others know a lot more than they do. I hope I don’t sound too bitter, but I’ve just about had it with high paid moron executives that fumble a once in a life-time opportunity when it’s handed to them.
The hierarchy of Knowledge
Infant: You don’t know what you know
Learner: You know what you know
Idiot: You don’t know what you don’t know
Enlightened:You know what you don’t know
ROTFLMAO!
Yeah. Ben is quite boisterous out of the chute….he must have just signed a new 5 year rental lease
Can you do a chapter entitled, “A Joshua Tree, Some Popcorn, and a 20lb Frozen Trout”?
I lose more weight from laughing here than I do on a five mile run!
Sounds more like a book title.
It IS different here in Western NC!
Worse…..
Oooooh, Mr. Big Scary Realtor. Your advanced analysis and threatening demeanor frighten and confuse me.
Puh-leeze. In another year or so, people will be waiting and waiting for prices to go back UP to pre-bubble values.
He’s an economist, which makes his statement all the more ridiculous.
right, spot on, prices do drop back to their pre-bubble levels. See Florida land prices after last century’s bubble. California housing prices 1995. Japan’s housing prices, now. Hong Kong condo prices 2005. Yep. Just like the Nasdaq.
Ill make you a deal, if it doesnt happen, ill continue renting. If it does happen, you quit being an economist……
Unfortunately, I live in the same city as “Mr. Snaith”. I wondered why I always felt like I had to take a shower. I guess his BS is in the air. It’s also unfortunate that this is who we have teaching our kids.
Hey, Snaith, we live scant miles apart. I don’t know which Palm Beach market that you refer to but the one here in Florida is rapidly worsening. 15%? Palm Beach passed that mark 6 mos ago. I think it’s actually worse than Orlando which is pretty bad or good if you’re a speculator.
What else can you say? This guy continually opens his pie hole and is consistently wrong. Prices are beginning to plummet in parts of Orlando and also in Palm Beach. Where does he get his info? Palm Beach is like the rest of Florida, primed for a price plummet. Yes, Mr. Snaith, prices will go to pre bubble prices.
In the face of all the evidence, he is not even acknowledging the bubble.
I’m still waiting for you or Palmetto to apply a trout to this guy’s head. What’s the holdup??
Where is his evidence that prices won’t go back to pre-bubble??
“apply a trout to this guy’s head. What’s the holdup??”
Around these parts, we prefer to use a mullet, or, if we’re in a real fighting mood, a big-ass grouper. I haven’t yet located a grouper of sufficient size. But I’m working on it…
I don’t know about the fish “slapping”, although it would be appropriate.
I say, find his email and mock him “back to the stone age”. He is with UCF. My daughter graduated from UCF, with a dergree in business. She seems unscathed by the “Snaith” effect.
Let me know if you need a hand swinging said grouper!
This guy Snaith was a shill on the west coast and has been here a scant year or two. Palmetto-don’t waste a good grouper on him, use a 2 x 4 from a vacant house.
…or a granite counter top.
Economists should be treated like the prophets of old. One wrong prediction and you’re done.
False prophets were stoned. I think this guy is stoned.
LOL. That’s funnier than condos in Sanford.
“When a true speculative bubble bursts…”
Snaith finally admits prices will fall after prices fall. Now, he concludes housing is NOT a ‘true’ speculative bubble so prices will not fall ‘much’ further. Therefore, it’s a good time to buy.
Yep, NASDAQ dropped back to where it was a few years before the bubble run. It did not drop back overnight. At one point in time it was down 6%…. at one point it was down 15%… and that was with relative liquid investments.
If it were possible to call a broker, ask the going price on a home, and sell immediately at that price a lot of people would have done that. It would have allowed them to bail out with a profit or with very little loss. Instead they have to sell a declining - and illiquid - asset into a market in which potential buyers must borrow large sums of money from increasingly more restrictive lenders.
Big difference. Why do these ‘economists’ check their brains at the door?
Because they’re paid shills. Next question.
“But, he adds, falling prices will feel more like a fender bender than a full-on crash: ‘When a true speculative bubble bursts, the asset’s price doesn’t fall 6 percent or 15 percent from its peak; it falls all the way back to its pre-bubble values (see Nasdaq after the dot-com bubble burst). Will the same happen in housing? If you are waiting until this occurs to buy, you will spend the rest of your life as a renter.’”
You should have read the real estate response to this comment on the post. They jumped all over it. I’m speaking from the ground in Palm Beach County and I can tell you that this is a lie. As big of a lie as you can get!
I had a client buy a single family 3 bedroom/2 bathroom/2 car garage home built in 1994 in Wellington for $199,000. That’s a full 40% decline from what it would have brought in during the peak.
Now we are talking.. PBC needs about a 40-50% drop from peak, and I think we are starting to see it on the margins.
The issue right now is that most people refuse to believe that it is happening. There is a home in my community that recently sold for ~700K. Home across the street (same model) last sale is 1.5M. There is just no way that kind of pricing stupidity is going to continue for long.
I still wouldn’t live in Wellington, not even for free… But, I am happy to hear that the prices are starting to come down out there; they are going to be another “poster child” for housing bubble stupidity.
“The issue right now is that most people refuse to believe that it is happening.”
That sums it up completely. The reason I use Wellington a lot is because I think it’s bubble central for this part of the county. It’s not really near anything except of course the other western communities but people were paying $300,000 for anything that popped up for sale…even townhouses and condos. It got so crazy that at the begining of the end an agent listed a home built in the 70’s wood frame construction at $220K just so it would move quickly. It did, people in 2006 got into a bidding war and the home sold for $250K. If you listed that same home at $220K today, you’d watch it sit on the market for months.
That Sanith dude is a riot. But this is the same county that gave us the butterfly ballot, so it’s not as if they’re geniuses to begin with.
I had a client buy a single family 3 bedroom/2 bathroom/2 car garage home built in 1994 in Wellington for $199,000. That’s a full 40% decline from what it would have brought in during the peak.
A lot of evidence exists that if you *have* to sell, prices in the bubbliest areas (FL/ CA/ Vegas/ Phoenix) are in fact down 30-40% from the peak.
“A lot of evidence exists that if you *have* to sell, prices in the bubbliest areas (FL/ CA/ Vegas/ Phoenix) are in fact down 30-40% from the peak.”
Also dead on. Those are the houses that are actually selling. When the mortgage crisis reaches it’s peak it will get even worse. I’m watching banks go in $20,000 below lowest comp as the list price on foreclosures.
Obviously that can’t continue forever, but take my neighborhood as prime example. The mortgage company came in, saw that the lowest sale in the neighborhood for the same house was $210,000 and listed for $190,000. That house sold. One more foreclosure came up with a different company and the home was listed for $169K. Anyone think that was an accident? Most recent foreclosure went for $129,900. Needed a roof from Wilma but can you imagine? This is only one neighborhood with 1200 homes!!
In my little neighborhood in Tucson, three houses have failed to sell in the last month or so. Two have reverted to rental status. The other is a case of the owners (very nice people, BTW) choosing to stay put.
“I had a client buy a single family 3 bedroom/2 bathroom/2 car garage home built in 1994 in Wellington for $199,000. That’s a full 40% decline from what it would have brought in during the peak.”
WOW! No NASDAQ like bust there. Just WOW!
We have been tracking the Jupiter, FL. market for 3 years now. 3-2-2 houses in Jupiter Farms are listing for $219000-300,000 off peak prices of $300,000-400,000. Pre bubble they went for $150,000-200,000. Inventory is huge, prices falling fast. Many parts of Palm Beach County are indeed heading back to pre-bubble prices, some areas maybe even below.
“We have been tracking the Jupiter, FL. market for 3 years now. 3-2-2 houses in Jupiter Farms are listing for $219000-300,000 off peak prices of $300,000-400,000.”
Jupiter Farms is another good example, but peak prices really got higher than $300K to start for a 3/2/2. It was probably more along the lines of $325K maybe even $350K in 2005.
Here in Parkland (N. Broward) we are seeing as much as $200,000 price reductions. The 4/3 market has just broked the under $500K mark and still sliding. They use to average $745K.
“The 4/3 market has just broked the under $500K mark and still sliding.”
Parkland was one of those WAY overpriced areas. I watched homes go from $250K to $700K seemingly over night.
Any idea about prices in Abacoa or Loxahatchee Club?
Tracking same time in Ormond Beach / Flagler Beach and everything is sinking about 15% per year. Add the last 18 mos to the next two and a half years and there is your 30-40% decline. Remember an increase of 50% is a decrease of 33%
gordo [renting in Ormond by the Sea
]
“But, he adds, falling prices will feel more like a fender bender than a full-on crash
Maybe he’s right. It might be fender bender after fender bender, kind of like a hundred car pileup on the freeway. Either way it’s going to take a lot of years to clean up.
Of course, this clown of a realtor was probably telling people “real estate only goes up!” a few years ago. Yeah, I guess now I should believe him that prices won’t go down too much - hahahaha… right!
“‘Oversupply, tighter mortgage credit, higher insurance and falling prices have created a ‘perfect storm’ in the market,’ cautioned Pensacola real estate attorney Michael Wilboun. His business now includes a growing number of people trying to break out of condo sales because the appraised values have plummeted below their original contract prices.”
There are many lawyers lurking on here…
Is this really a defense?
Generally, no, I think - few builders would agree to an appraised value representation in the agreement.
The people I’ve heard of successfully getting out tend to be doing so because of defects, or because the builders made changes to the units while building which are materially negative - hundreds of square feet less than represented, missing large window areas, etc.
Of course, don’t confuse the defense with the reason they’re trying to get out - the fact that they want to get out may be because the value has crashed, but that doesn’t have to be the excuse they use with the builder. (”Hey, this isn’t granite! I want out!”)
As another one of the lurking attorneys, I agree w/ Jim’s analysis. Short of a material change, misrepresentation or defect, these folks should at the very least lose their earnest money. Additionally, depending on the circumstances, they could be subject to additional damages.
The seller’s damage remedy on a buyer’s failure to tender the purchase price under a sale agreement is the excess, if any, of the contract price over the property’s value at the time of the breach, together with consequential damages according to proof and interest. If the property is resold for a price exceeding the contract price together with any consequential damages, the seller has no damages and may not recover from the defaulting buyer, regardless of the willfulness of the breach.
Consequential damages are any additional expenses that naturally flow from the breach and are necessary to assure the seller the benefit of his or her bargain. For example, the seller may recover expenses incurred in remarketing the property to be sold, including a broker’s commission. If the seller chooses not to use a broker for the resale, he or she may still be entitled to recover the amount of such a fee. The seller may even recover a hypothetical broker’s commission at the market price where the property is not resold at all.
As one of the lurking attorneys on here, I agree w/ JIm’s analysis. Short of a showing that the sellers made a material misreprentation or a material defect, these folks w/ at the very least lose their earnest money.
The seller’s damage remedy on a buyer’s failure to tender the purchase price under a sale agreement is the excess, if any, of the contract price over the property’s value at the time of the breach, together with consequential damages according to proof and interest. If the property is resold for a price exceeding the contract price together with any consequential damages, the seller has no damages and may not recover from the defaulting buyer, regardless of the willfulness of the breach.
Consequential damages are any additional expenses that naturally flow from the breach and are necessary to assure the seller the benefit of his or her bargain. For example, the seller may recover expenses incurred in remarketing the property to be sold, including a broker’s commission. If the seller chooses not to use a broker for the resale, he or she may still be entitled to recover the amount of such a fee. The seller may even recover a hypothetical broker’s commission at the market price where the property is not resold at all.
Thanks for your answers, lurking ones…
“But, he adds, falling prices will feel more like a fender bender than a full-on crash: ‘When a true speculative bubble bursts, the asset’s price doesn’t fall 6 percent or 15 percent from its peak; it falls all the way back to its pre-bubble values (see Nasdaq after the dot-com bubble burst). Will the same happen in housing? If you are waiting until this occurs to buy, you will spend the rest of your life as a renter.’”
Yes, if your doctor gave you only a couple more years or so to live…
“‘Sometimes they go for under 20 percent their value, so someone might get $80,000 off their house,’ said Robin Barton with Barton Estate Realty.”
You keep using that word (market) value……i dont think it means what you think it means.
Funny how “value” is only set at the peak, permanently, never in the trough, or even on the way down! Such is the perspective of a Realtor.
ROFL.
Yea, I see this misused all the time as well. “100K below market value” signs are abound in my community, and in the surrounding areas of PBC where I live.
Hey moron.. Market value is what people are WILLING TO PAY for an asset. I have said this before, but, in an open market, it’s almost impossible to sell something UNDER market value (a forced timeframe sale or a non-arms length sale would be 2 ways to sell under market). However, these idiots have their homes LISTED on the MLS at (20% under market value)…
Hey moron… If you put a home up for sale that was truly 20% under market value it would NEVER hit the MLS. Your listing agent would buy it from you the second told him you wanted to sell it at price X. The way the RE market works it’s pretty much impossible (IMHO) for ANYTHING hitting the MLS to be “under market” value. The RE establishment would grab that home up, strip the equity, and then put it back on the market 10 minutes later at market value…
I think that should be the new “thing” to say to the RE agents.
“This home is 15% under market value”
“Wow, that’s a great deal. Why haven’t you bought it and put it back on the MLS at market value? Why are showing it to me?”
Exactly.
We don’t know what a house is valued at in this market. Of, course, the real value of anything is always what someone, at least one person actually pays. Its all over the place.
It’s safe to say any livable house is worth $100. I think I can say that with a certainty.
“It’s safe to say any livable house is worth $100. I think I can say that with a certainty.”
In PBC I’ll agree with you. In many other areas in the state (and out of state) that’s not the case.
There are areas in suburban Detroit where you can buy a very nice home for $70,000.
Andy,
I meant one hundred dollars, not 100K.
non-arms-length sale is right, and you’d better hope there wasn’t too much money involved, or the IRS is going to be banging on your door soon.
Of course, it was interesting to read on here about how Realtors&tm; ripped homeowners for well below market value or at least well below what they flipped them for to the next sucker during the “white flight” of the 1960’s. By keeping both parties in the dark, the real estate agents made a fortune…
However, the internet makes plays like that rather difficult today.
It’s all for the marketing. I’m in marketing, and sometimes, I hate my line of work. Fortunately, I don’t have to do any “creative wording” in my job or for my company, but the ones who do always bother me. I’ve never agreed with marketing tactics… funny that I chose this line of work.
Just an FYI about a couple homebuliders from the Motley Fool.
http://tinyurl.com/28jj4t
“Over the past months, I’ve examined just about every major homebuilder’s financial statement and read each annual report. One thing is certain: Every homebuilder is feeling the pain of the excess capacity and saturated lending market. No matter how good you are, you can’t escape the laws of supply and demand, and right now there is lots of supply and very little demand.”
i think maybe we are around a 10-20% correction in NJ. Its just i see the same houses in july listed for 300k and now they are 260k three months later and still on the market. I am still waiting patiently.
–
How many people were warning about the over-supply in July 2005?
http://www.financialsense.com/fsu/editorials/jain/2005/0731.html
Jas
Nice article, Jas. And as it happens, 3Q census data on housing is due Friday. Looking forward to it.
I wrote in to the Bureau asking them to do a specialized run of American Community Survey data comparing rent levels with the ownership costs of recent arrivals with mortgages, adjusted for the size of the unit (in bedrooms) and location. To get a sense how far each metro was from rental equivalence last year. They didn’t write back, but I hope they do it.
“At first glance, Enchanted Forest subdivision looks like any other thriving suburban community of two-story brick and split-level homes.”
I wonder how much forest is left in Enchanted Forest??
The late, great radio personality Jean Shepherd had a theory that subdivisions (”Fox Run”, “Maple Grove”, “Clover Meadows”) are always named after what -used- to be there before the land was cleared and scraped.
The late, great radio personality Jean Shepherd had a theory that subdivisions (”Fox Run”, “Maple Grove”, “Clover Meadows”) are always named after what -used- to be there before the land was cleared and scraped.
In that case some of these developments should be called
Toxic Dump Ave
Abandoned Military Base Rd
Swampland Place
Mineshaft Dr
Oh come on. You can use the ever-classy “Brownfields Drive” and 99% of the populace would not even get the joke.
I love how people line up to live in places named “Brentwood”.
Brennen is German (or old Anglo-Saxon) for BURN, BABY, BURN.
We did have a Sluice Drive in Prince William County.
You should see some of the road names here in the (urbanized part of) West Virginia.
“Mud Suck Lane” is my hands down favorite.
“Stinking Creek Road” is off exit 144 of I-75 in Tennessee. Area looks pretty but I never had the nerve to turn off the interstate & investigate.
That’s why, in fact, I named my Florida “ranch” Swampworth! Even got a domain for it: http://www.swampworth.com/ (It’s made to poke fun at the snooty “Isleworth” http://www.isleworth.com/ just north of me.)
How about Oil Well Road (Collier County, Fla.)?
“The reversal from a seller’s to a buyer’s market has not only hurt sales, Portman and other experts said. The glut of new condos also has depressed rental fees for existing units….”
It’s not a speculative bubble. Speculords bought knowing rents would NOT cover costs. That’s rational decision making not the kind associated with speculation.
but all those realtors™ said rents were supposed to go UP when the bubble (which they said wasn’t a bubble) collapsed (which they said it wouldn’t do), to punish the bitter renters for not buying
“But modern-day problems have tarnished some of the neighborhood’s medieval luster: Homes with no drapes or signs of life inside; code violations tacked to the front door of empty homes for overgrown grass and debris; ‘For Sale’ signs throughout the subdivision almost outnumber the trees.”
Yep, that’s pretty normal. No speculation there. Someone needs to take Snaith on a reality tour. Show him some of these neighborhoods because the man has lost his ability to sense.
‘Will prices fall further? Yes,’ writes University of Central Florida economist Sean Snaith.”
“But, he adds, falling prices will feel more like a fender bender than a full-on crash: ‘When a true speculative bubble bursts, the asset’s price doesn’t fall 6 percent or 15 percent from its peak; it falls all the way back to its pre-bubble values (see Nasdaq after the dot-com bubble burst). Will the same happen in housing? If you are waiting until this occurs to buy, you will spend the rest of your life as a renter.’”
First of all this guy in an idiot.
Second, here is some examples of houses falling more than a few percentage points.
This house is list for $430,000, during the summer this and similar houses were trying to be sold for between $600K and $800k in Mirasol. FYI this is a short sale.
http://homes.realtor.com/search/listingdetail.aspx?zp=33418&mnp=29&mxp=28&bd=4&typ=7&sid=40a2cdd365d94ed6a104f5597b5b31d4&pg=3&lid=1089812372&lsn=24&srcnt=49#Detail
Paid $545,000 in May 2004.
Also check out this other blog http://www.soflahousing.com/
it has a great daily feature Today’s F*cked Buyer
2101 BRICKELL AV # 3405, Miami, FL 33129
3 Bed, 3 Bath Condo
Bought in December 2005 for $960,000
On the MLS for $730,000
Days on the MLS: 67 Days
Loss before the Realtor® commission: $230,000
Loss after the Realtor® commission: $273,800
105 TRANQUILLA Dr, Palm Beach Gardens, FL 33418
3 Bed, 3.5 Bath SFH
Bought in July 2005 for $800,000
On the MLS for $669,000
Days on the MLS: 283 Days
Loss before the Realtor® commission: $131,000
Loss after the Realtor® commission: $171,140
1616 NATURE, PALM BEACH GARDENS, FL 33410
4 Bed, 3 Bath SFH
Bought in July 2005 for $605,000
On the MLS for $520,000
Days on the Market: 84
Loss before the Realtor® commission: $85,000
Loss after the Realtor® commission: $116,200
1616 Nature is in my development. They are NUTS asking 520 for that home.
That property (I have actually been in that particular home) will fetch about 300K once this correction is over. It’s too close to the tracks, and there are many homes on the market right now that are much nicer, away from the tracks, and 100K less then this property..
NO way.
Yes, Michael, but you don’t understand.
The owner “needs” that much to cover his HELOC and neg-am mortgage costs even with the short sale from the bank.
http://www.trulia.com/real_estate/Philadelphia-Pennsylvania/
Look at home sales. I had no idea things were this bad in Philadelphia.
Number of sales from july-sept of 07: 359
Number of sales from july-sept of 06: 8092
ouch
Something’s not right about that table. The sums aren’t working out. For the 1/2/3/4 bedroom lines, they have 2,7,38,6. And then ‘all’ gives a total of 359? What number of bedrooms then did the other 306 units have? It makes me wonder about the rest of their numbers. Anyone got any parallel data on this stuff?
Given the number of old Victorians around here houses can have upwards of 11 bedrooms, and I think the table only goes to 4. So it didn’t include these. Also the website tracks the price of 1br-4brs. But not lofts (which might not have any true bedrooms) etc.
OK, that can account for some. But 85% of housing units are either lofts or more than 4 bedrooms? Seems too high, but then again, I’m not Philly-knowledgable.
do your all’s comments show up immediately?
Not always.
It seems to depend on
* how often you post here (Ben may have to toggle your name to “always allow” status
* whether you’ve posted under multiple names from the same IP address
* whether your posts contains any dirty words (Ben generally seems to let them through as long as you’re not using them on other posters, but I think they get flagged for review)
for another possible reason, i’ve noticed that when many posts are simultaneously “Added” mine may not show for a few minutes or longer.. seems to be a backlogged queue that are posted in order in single file..
Something else. Looking at michael f’s post below that eventually made it through, it seems long links may delay the process. You may want to use tinyurl instead.
Sorry if this comes up twice….
‘Will prices fall further? Yes,’ writes University of Central Florida economist Sean Snaith.”
“But, he adds, falling prices will feel more like a fender bender than a full-on crash: ‘When a true speculative bubble bursts, the asset’s price doesn’t fall 6 percent or 15 percent from its peak; it falls all the way back to its pre-bubble values (see Nasdaq after the dot-com bubble burst). Will the same happen in housing? If you are waiting until this occurs to buy, you will spend the rest of your life as a renter.’”
First of all this guy in an idiot.
Second, here is some examples of houses falling more than a few percentage points.
This house is list for $430,000, during the summer this and similar houses were trying to be sold for between $600K and $800k in Mirasol. FYI this is a short sale.
http://homes.realtor.com/search/listingdetail.aspx?zp=33418&mnp=29&mxp=28&bd=4&typ=7&sid=40a2cdd365d94ed6a104f5597b5b31d4&pg=3&lid=1089812372&lsn=24&srcnt=49#Detail
Paid $545,000 in May 2004.
Also check out this other blog http://www.soflahousing.com/
it has a great daily feature Today’s F*cked Buyer
2101 BRICKELL AV # 3405, Miami, FL 33129
3 Bed, 3 Bath Condo
Bought in December 2005 for $960,000
On the MLS for $730,000
Days on the MLS: 67 Days
Loss before the Realtor® commission: $230,000
Loss after the Realtor® commission: $273,800
105 TRANQUILLA Dr, Palm Beach Gardens, FL 33418
3 Bed, 3.5 Bath SFH
Bought in July 2005 for $800,000
On the MLS for $669,000
Days on the MLS: 283 Days
Loss before the Realtor® commission: $131,000
Loss after the Realtor® commission: $171,140
1616 NATURE, PALM BEACH GARDENS, FL 33410
4 Bed, 3 Bath SFH
Bought in July 2005 for $605,000
On the MLS for $520,000
Days on the Market: 84
Loss before the Realtor® commission: $85,000
Loss after the Realtor® commission: $116,200
I just posted a fairly long post and it does not seem to want to show up?
Medieval Luster?
Ah, the good old days when you took a bath once a year and ate gruel, and if you questioned the idea of an almighty deity, they’d burn you at the stake…
“But modern-day problems have tarnished some of the neighborhood’s medieval luster: Homes with no drapes or signs of life inside; code violations tacked to the front door of empty homes for overgrown grass and debris; ‘For Sale’ signs throughout the subdivision almost outnumber the trees.”
Has anyone heard from “Professor Bear” aka GetStucco? He is in SD.
I’ve heard some strange names for developments, but “Breakfast Point” may be the strangest. “Yeah, Breakfast Point is pretty nice, but you gotta see Brunch Villas, or our flagship community - The Enclave at Late Night Munchies “.
Good Lord. I’ll bet all the streets have breakfast-food-themed names: Scrambled Street, Omelet Way, Cereal Circle.
I live at 8549 Hash Brown Court, how ’bout you?
1130 Mimosa Drive
..
I would like to have a home on either Sausage Way or Oatmeal Place.
I wish I could afford to live over at Quiche Lane. Nice homes there.
However, you couldn’t pay me to live over at Eggo Boulevard.:)
I ADORE hashbrowns, so that would be a good name for my street. I would insist upon a ‘Ketchup’ street being next to me, though. Otherwise that makes no sense at all.
It could be a cross street…
The corner of Hashbrowns and Ketchup.
Eww my god.. IPRE stats for PBC, number of homes for sale vs. number of homes sold:
http://www.ipre.com/trendg/images/palsld.PNG
Looks like:
24,882 for sale
472 sold
Ewwww my god.. What’s that work out to? About 50 months of inventory…
That’s truly mind boggling.
Does anyone know if there are historic records on this kind of thing? Are we going to hit the “highest ever” months of inventory for sale in some of these markets (or already have)?
Looks like the jumbo/NINJA loan pullback has fully hit. Nine+ years of inventory of over $1 million lisitngs, 6.5 years $500K to $999K.
Exactly, Palm Beach County is a sea of for sale and for rent signs. Each month, the ‘number of months of supply’ goes up. And we still have a wave of mortgage resets to go, foreclosure numbers increasing, higher gas and utility costs, historic levels of consumer debt, and tightening lending standards. This Snaith character is trying to conceal the obvious. We are on the edge of a collosal housing price crash in PBC.
IMHO, we have already fallen off the edge. Now it’s just a matter of waiting to hit the bottom. As mentioned above, I am seeing 30+% off from peak prices already. But, frankly, what I really want to see is the median price get back in line with incomes. Yes, some of the 1M dollar homes are now selling at 700K.. However, that’s still TOTALLY out of line with the local incomes in this area.
Add in the tax and insurance crisis.. I doubt we need another home built in PBC for the next 10-15 years… And certainly do NOT need another condo built for at least 15 years!
My fav (I am numb to for sale/for rent signs) are the sign spinners.. It just reeks of desperation. I also rather enjoy telling a RE shill my household income and watching them count the dollars.. Until they realize that there is NO way I am wasting this hard earned income on a home that is still 1.5-2X where it should be..
There is some fierce competion for the “bubbliest” housing market. But I really think that PBC (and most/all of South FL) has to be top 3, if not number 1.
For those who have never been here, I suggest taking a vacation to FL this year just to see it for yourselves.. It’s something to behold; that’s for sure!
Yes, it’s different here.
“Today, the investor faces a hard decision, Portman said. At closing, the buyer will come into possession of a $350,000 condo that in the current market is worth only $315,000 at best — and that is before the monthly cost of ownership.”
What’s hard about that? Just leave it alone!!!!!
it’s not buyer market, it’s “dumb buyer market” !!!!!!!!!!!!!!
“The developer, Ginn Company, sells only the land. Buyers receive a list of builders and have three years to start construction. Of the lots that have sold, only a fifth of owners have completed construction on their homes within the gated community.”
Only 20% drank a fifth of Ginn, luckily
“The developer, Ginn Company, sells only the land. Buyers receive a list of builders and have three years to start construction. Of the lots that have sold, only a fifth of owners have completed construction on their homes within the gated community.”
Glad to hear that Ginn’s sells have slowed down. My house sits near the entrance to Laurlmore, a gated golf POS community Bobby Ginn plans to build here in the NC mountains (over 7,000 acres). I have been against this overpriced development (more traffic, higher property prices, etc.) since day one.
Forgot to mention, that it was while I was doing research for an anti-Laurelmor letter to the editor I was working on, that I discovered this blog. That was about two years ago, and I have been a regular reader ever since.
This is AZ but here’s a “million dollar house” for rent at $1600/month! If I thought the “owner” could hang on at that price for more than a month or two, I’d be damned interested!
http://flagstaff.craigslist.org/apa/456678113.html
Holy crap! That might win for the worst price/rent ratio on EARTH.
A 1M dollar home in PBC rents for about 3K a month. This is nearly 1/2 of that (already insanely low) rent!!
Can anyone top this one?
BTW, this house looks really nice from the few pics! I would pay 1.6K to rent it, that’s for sure!
Eeeeh, from the outside it looks more like an old gas station than a house. You (?) Arizonans have strange ideas about what constitutes appealing residential architecture.
Top of the mesa….
These rent ratios are common in northern Arizona, as I have been pointing out for a while. Actually, that place is in BFE Rim Rock. You can do a lot better than that and have a pool near Sedona.
Oh my god..
You guys are foo*ed out there!
I have heard you talk about it, but, until you actually see it for yourself, it’s difficult to manage.
Can the people who live there comprehend how far the prices need to fall to bring price/rent ratios back in line? That home should be around 200-300K (max, that’s WAY too much to pay for a 1.6K rental, but I will just let is slide)… WTF, did the sun cook their brains?
I pay 2K per month for a house that would sell at most for 250K.
Wouldn’t you think that you could get a paved driveway for $1MM?
Foolhardy, not ambitious
“Ask a real-estate broker, look at figures on new housing starts or pick up a newspaper. They all paint the same picture, the housing marking is in the doldrums. But that isn’t stopping two ambitious condominium projects in downtown Sanford from moving forward, at least when it comes to getting land-use approval.”
Ah but here’s the clincher.
Top Builder’s own Santa Fe style home,
Anyone see a desperate builder here?
From just west of Panama City Beach:
http://www.nwfdailynews.com/article/9719
Okaloosa County (180K residents) foreclosures in 07 so far- 717
Santa Rosa County (144K residents) 07 foreclosures- 610
Walton County (50K residents) 07 foreclosures- 501
Looks like lots of people just walking away from second home beach developments they paid way too much for.
It was mentioned in a Bay Beacon article (unfortunately not online) that something like 85%+ of foreclosures in Okaloosa in the firts six months of 2007 had loan activity on them at the peak of the market in 2005.
Hey! Dat’s my old homestead!
“But, he adds, falling prices will feel more like a fender bender than a full-on crash:
But your car is a total loss and the insurance company won’t pay you on your policy due to fraud.
Will the same happen in housing? If you are waiting until this occurs to buy, you will spend the rest of your life as a renter.’”
Not if the consumer does not purchase at these high and unaffordable prices. Let’s see who wins the battle, the seller with overpriced property or the consumer who refuses to buy at the high prices. I’ll bet on the consumer!
But the editorial page of the key west newspaper says now is the time to buy
http://www.keysnews.com/editorial.bsp.htm
Potential buyers of real estate in the Keys would do well to seize upon the advantages of the lower prices and interest rates, while choosing the house of their dreams from the largest available supply in years.
But the editorial page of the key west newspaper says now is the time to buy
Whenever I hear the phrase, “Now is the time to buy a house” it only reminds me of the marketing that is done by the NAR.
The general public is being fooled into believing this false advertising and it makes me question the ethics of the management at the NAR. However, all you need to look at is the court case(s) filed against the NAR by the DOJ. Perhaps you should shed some light onto the NAR by posting the most recent court case filings by the DOJ, etc against the NAR. That would open the eyes of the general public.
And before the tax base of our primary market evaporates.
What the heck is it with those various Florida universities? First UF now UCF are putting out this idiocy. I’m not sure what this “economist” is thinking, but he’s totally ignoring the leveraging involved. Of course home prices won’t fall as far as other speculative bubbles - but they don’t have to, for the same (or in this case more) to be felt.
In the tech bubble perhaps 20-40% of people used leveraging (margin) in their investments. Just an off-the-cuff estimate; not sure where real numbers are, but I’m sure most people would agree.
Contrast the real estate bubble - where probably 99.9999% of investors used leveraging, and huge amounts of leveraging at that (90-100%).
Exhibit A - skyrocketing foreclosures, when prices have only dropped about 1% nationwide so far, and about 10-20% even in the most bubbly areas. How many people lost their house and had their credit shattered when the tech bubble burst? Not many, compared with what’s happening right now, at only the beginning of the downturn.
“for the same (or in this case more) to be felt.”
Meant to say “for the same (or in this case more) amount of pain to be felt.”
We’ll I just bought a 1750 sq tf, 4 bedroom, 2 bath in the Triangle here in N.C. Paid 187k. The sellers ended up coming down 7k from their original offer. I think I got a pretty good deal, especially with the price of renting an equivalent house with a yard (for my dogs).
Total buyers market here. The house I bought was on the market 60 days with no offers, until mine. You can’t swing a 2×4 from an abandoned property without hitting a ‘forsalebyowner’ sign. Houses are just sitting, sitting sitting…
I just came from California where I considered buying a house in August 2005 (500k gets you a shack)…I still have nightmares sometimes that I actually DID buy it…
If prices drop, which they will, at least the dogs have a yard.
Sounds like a reasonable deal, though I gotta say this: If you just came from California, make real sure you aren’t still in the sticker-unshock phase. House prices that make you think “good deal” might make the locals cringe.
There might well be even better deals ahead, but if your monthly PITI is down as low as the price of renting the same house, that ain’t too bad.
Better drop your prices fast sellers before they drop more.
ooooeeeoooeeeeoooooo