A Correction To A More Affordable Plateau
The Bradenton Herald reports from Florida. “The Florida Association of Realtors cited disruptions in the mortgage market and tightening credit as factors affecting Florida’s housing market. Statewide, sales of existing single-family homes fell 29 percent in the year-to-year comparison. The median price of homes statewide was $222,100, compared to $242,700 a year earlier.”
“While those numbers showed the local housing market continuing to struggle, things were worse in many parts of the state.”
“The picture was somewhat brighter in the local condominium market. Barry Gould of Island Vacation Properties attributes the falling condo prices and the increased number of sales to the same thing: investors.”
“‘Part of the reason is there were a lot more condos purchased as speculation houses and some of these people have to sell,’ Gould said.”
The Naples News from Florida. “Home sales continued their unsettling trend downward October both locally and around the state. ‘I know as an owner/broker I should be looking at those numbers every month when they come out, but it’s gotten to the point that I sometimes feel like I don’t want to hear it,’ said broker Joe Pavich. ‘I always try to stay upbeat, and I think we’re near the bottom, but the numbers can be discouraging.’”
“Figures for Lee County condos were bleak, with the median price and the number of sales both down 28 percent. Lee Clerk of Courts Charlie Green said there were 1,809 foreclosures in Lee County in October, up from 1,326 in September.”
“Pavich said sales prices today resemble what they were in 2002 and 2003, and serious sellers need to remember keep that in mind. ‘Nobody cares what you paid for your house and nobody cares what you owe on your house,’ he said. ‘It’s a buyers market and that’s what the price needs to reflect.’”
The News Press. “The number of sales of existing homes in Lee County was 405, down 36 percent from 630 in October 2006. With about 15,000 houses for sale in the county, selling a house can be tough.”
“‘In January it’ll be a year I’ve had it up for sale,’ said Rob Ross, who’s trying on his own to sell his three-bedroom, two-bath home in the Silver Lakes community in Gateway for $277,000. ‘The irony is I listed it myself thinking I could pass the savings on to a potential buyer but I’ve just been chasing the market down.’”
“Ross started out with an asking price in the mid $290,000s before cutting the price, and expects he’ll have to cut his price again because there are so many houses for sale in Silver Lakes.”
“‘I don’t like taking any listings in Cape Coral — I don’t believe I can sell those,’ said Alva-based real estate broker Cindi Infiesto. ‘The Cape is saturated with (speculatively built) homes and investor-related homes that are going into foreclosure. I didn’t see anything moving.’”
“The Bonita Bay Group eliminated 14 jobs Tuesday, bringing the cuts to 74 since the beginning of the year. ‘It’s basically because of the current real estate market,’ said spokeswoman Meredith Parsons.”
“Lee County has bigger problems than just foreclosures to contend with — the economy is already contracting sharply as the construction and real estate markets collapse, said Ray Kest, an economics professor at Hodges University who tracks local economic indicators.”
“‘I was shocked,’ Kest said, when he analyzed state sales tax figures for 2007. Since May, revenues collected have been lower than 2006 levels each month. ‘Our economy is hurting a lot more than people realize, and it’s hurting in all sectors.’”
“The bad numbers are a result of higher unemployment, Kest said — 5.3 percent in October compared to 2.8 percent a year earlier. ‘Those construction people were making a lot of money and spending a lot of money. The real estate people were buying Mercedeses and Lexuses; they’re not buying those anymore.’”
The Miami Herald in Florida. “House hunters looking for a bargain may want to consider a condo in Broward County. After falling for five straight months, the median price for Broward condominiums hit $159,300 in October, down 24 percent from a year ago.”
“Broward’s condo price drop was a singular dramatic move in a market characterized for more than a year by a standoff between sellers who don’t want to lower prices and buyers who refuse to pay up.”
“Of course, some sellers have been dropping their price, just not enough to entice buyers. Take Scott Parsons, a restaurant franchisee wishing to leave South Florida. He lowered the price on his three-bedroom, two-story town house in Pembroke Pines’ Villas Lake from $312,000 to $290,000.”
“‘We weren’t getting close to what we needed,’ Parsons said. ‘The offers were outrageous, $240,000, $250,000, on a town house that appraised for $330,000 eight months ago. The market is so terrible.’”
“After listing the town house for six months, Parsons said he has decided to keep it and tough it out until the market rebounds. ‘We’re willing to stay another two years,’ he said.”
From TC Palm in Florida. “The Martin County median home sales price in October was $225,000 down from $269,000 last year.”
“‘The numbers continue to show what appears to be a leveling off of the market for Martin County,’ said Dave Derrenbacker, president of the Realtor Association of Martin County.”
The Sun Sentinel from Florida. “Palm Beach County’s median price for existing homes fell in October for the 15th consecutive month, and analysts say sellers should brace for more hardship ahead as the housing slump intensifies.”
“‘It’s uncomfortable, but it makes sense,’ said David Levin, a housing consultant in Delray Beach. ‘We have to undo the excesses of our recent buying binge.’”
“The county’s median now has slid 17 percent since peaking at $421,500 in November 2005. The median price for existing condos plummeted 30 percent to $158,900 from $225,500 a year ago.”
“‘There’s no way we could sustain that,’ said Gus Pasquale, co-founder of Element Funding, a residential lender in West Palm Beach. ‘What we’re going through is a correction to a more affordable plateau.’”
“Candy Pritchard has been trying to sell her five-bedroom home west of Palm Beach Gardens since the summer. She originally listed the property on an acre lot for $649,000 but has since dropped the asking price to $599,000.”
“Unable to maintain the expensive property, she realizes she may have to come down even more before prospective buyers make an offer. ‘It’s a great market to buy, just not to sell,’ said Pritchard. ‘It’s very slow, very frustrating. If I didn’t have to sell, I wouldn’t.’”
The Palm Beach Post from Florida. “Condominium sellers blinked first. Prices of existing condos in Palm Beach County plunged in October - the sharpest annual decline since the Florida Association of Realtors started tracking them in January 2006.”
“‘Individual sellers are becoming more realistic and lowering prices,’ said Jack McCabe, a Deerfield Beach real estate consultant specializing in the condo market. Seller incentives have failed, he said, and appraisers have ‘returned to fundamentals.’”
“Palm Beach County has a 35-month supply of existing condo units, McCabe noted.”
“Despite falling condo prices, sales continued to decline. In Palm Beach County, sales of existing condos fell 12 percent, and on the Treasure Coast they fell 13 percent.”
“There’s a record four-year supply of condos and single-family homes for sale in Palm Beach County, according to Illustrated Properties Real Estate. ‘The high inventory shows that there is still a gap between buyer and seller expectations regarding price,’ said Mike Pappas, CEO of The Keyes Co.”
“The Seasons at Tradition was to be a gem of a 55-and-over community: Celebrity mansion-size clubhouse. Ten tennis courts. Indoor-outdoor pool. An activities director.”
“Now, the guard gate is guardless. The clubhouse, tennis courts and pool were never built. The activities director is being laid off today. And the fate of more than 1,000 unfinished lots in the community is unknown.”
“The Seasons’ builder, Levitt and Sons, got the go-ahead Tuesday in bankruptcy court to abandon its incomplete lots at the Seasons, plus about 3,000 others across the state.”
“‘It really is like living in a ghost town,’ said Phyllis Visakowitz, a retired nurse who moved in May from Great Neck, N.Y., into a $457,000 home at the Seasons. Among the seven homes on her cul-de-sac, hers is the only one occupied.”
“Other residents are living between denuded lots and half-finished homes with tiles stacked on the roofs. ‘It’s very scary when you feel totally abandoned,’ said Visakowitz.”
“The builder stopped construction in October, but not before it managed to close on about 90 homes at the Seasons, the largest of its 11 active-adult communities under development in Florida, Georgia and South Carolina.”
“In a sense, the Visakowitzes are among the lucky ones: buyers whose homes were finished. Sixty-four other buyers at the Seasons put down deposits on homes that Levitt and Sons never finished, court records show.”
“West Palm Beach residents Jerome and Marlene Greenfield shelled out a 10 percent deposit on a house at the Seasons in May. Now they have no idea whether their home will be completed or they will get their money back. ‘We were fortunate that we hadn’t sold our present home,’ said Marlene, who declined to reveal the amount of the deposit.”
“Residents, including Bill Quattrocchi feel that their home values have taken a hit. Quattrocchi thinks the builder duped him with a phony sales lottery that increased his home price by more than $27,000. ‘I saw this here as a promising community,’ Quattrocchi said. ‘A lot of pluses here, but we were deceived.’”
The Atlanta Journal Constitution from Georgia. “‘We were never a bubble market,’ insists Eugene James, director of the Atlanta regional office of Metrostudy.”
“Yet somehow, that nonexistent Atlanta bubble seems to have popped. New-home construction has taken a real blow, with ramifications that will ripple through the region and could significantly alter how Atlanta grows.”
“For example, the crunch is hitting hardest in exurban areas where thousands of lots sit vacant. Overall, it would take 40 months to build homes on all the vacant lots in the Atlanta region, according to James — twice the normal inventory.”
“That’s consistent with a report from the Atlanta Regional Commission that development of open land in the metro area has fallen 70 percent in the last two years.”
“The decline has even become apparent in our school systems, where classroom trailers have long been needed to handle the overflow of students. This year, when metro schools opened, enrollment fell 10,000 students short of projections.”
“‘Anybody tied to residential development — the carpet industry, the building supply industry, real estate attorneys — is feeling the impact of this,’ James says.”
“The strain is being felt particularly in local banking, which has made handsome profits for years by financing developers and land speculation. Now, with lots sitting unsold, developers have a hard time making payments.”
“‘I understand there are quite a few banks in the metro area, and some in the rest of the state, that got too much into land development,’ says state Sen. Tommie Williams, a member of the Senate banking and finance committees. ‘Auditors are specifically asking banks what percentage of their loans are in speculative land development.’”
“That warning is echoed by a federal bank regulator, who told me that they’ve already seen ’severe asset-quality problems emerge at several metro-area banks. If the real estate market does not turn around soon,’ he says, ‘I think the problems could get really big.’”
“According to James, the hesitancy of would-be Atlanta home buyers can be blamed in part on media coverage of collapsing prices in California and Florida. ‘Prices weren’t tumbling here, but all the news in the national media started artificially forcing prices down [for new-home construction],’ James says.”
The Sun News from South Carolina. “Shaken investors along the Grand Strand are being extra cautious, experts say. Many are shying away from real estate and finding other investment vehicles - or not investing at all.”
“‘There’s money on the sidelines right now, waiting for the bottom of the market,’ said William Harrison, director of the Center for Real Estate at the University of South Carolina. ‘Once that money has perceived the bottom, you’ll see that money moving into the residential market to take advantage of those rates.’”
“But nobody is sure when that will be, he said. Some predict there may be an uptick in the market as early as the spring, but Harrison doubts it will be that soon.”
“‘A lot of us tend to want to believe good news that there is a solution to this around the corner, but there’s not, and I’m one of the believers that it is going to get worse before it gets better,’ Harrison said.”
“Local real estate analyst Tom Maeser said he sees a rebound in the residential market sooner rather than later. ‘The main reason buyers aren’t buying right now is because they’re being told by the financial media to hold on, prices are going to go down. I think our buyers are going to start realizing that the prices are not going to come down a whole lot,’ Maeser said.”
‘According to James, the hesitancy of would-be Atlanta home buyers can be blamed in part on media coverage of collapsing prices in California and Florida. ‘Prices weren’t tumbling here, but all the news in the national media started artificially forcing prices down [for new-home construction],’ James says.’
And people pay Metrostudy for this kind of cheerleading? BTW, sounds like Atlanta is headed into the dumps, and even in SC, people hang on to that median like it will save the whole market, as things fall apart around them. Just like Florida.
The only thing that saves Atlanta vs. Florida is that they have strong employment that is not tied to real estate..yes there are many empty lots but all it has done it put alot of illegals out of work…
What I mean is that bank and builder problems preceded the crash in Florida, and it is looking similar in Atlanta, stalled condos and all.
Good point.
“The only thing that saves Atlanta vs. Florida is that they have strong employment that is not tied to real estate..”
what does employment have to do with the PRICE of real estate and the lack of any credit to buy any over-priced property??
Oh! I see! It’s different in Atlanta.
B.S. I’ve seen lot’s of stories about real estate fraud in and around Atlanta. It’s got more fraud than Florida. Keep dreaming, but Atlanta is going down, too.
“The decline has even become apparent in our school systems, where classroom trailers have long been needed to handle the overflow of students. This year, when metro schools opened, enrollment fell 10,000 students short of projections.”
“‘Anybody tied to residential development — the carpet industry, the building supply industry, real estate attorneys — is feeling the impact of this,’ James says.”
————————————————————————-
Looks like London won’t be overrun by horse manure in 1940 due to the expansion of horse use (reflection in 1920 on a prediction done in 1900).
OFHEO came out with their housing value numbers today. First drop in national home prices in 13 years.
http://www.ofheo.gov/media/pdf/3q07hpi.pdf
Other interesting things:
- Asheville still going up fast (maybe due to Florida’s problems?) Wilmington, NC though was also going up, but took a sharp turn down.
- Miami and Jacksonville finally showing a decline
- Many FL areas that were declining moderately are now dropping like a rock - Tampa, Ft. Lauderdale, WPB, etc.
- CA is odd in that some areas are getting hammered, but others are not. San Francisco had a big uptick for some reason. Generally the biggest cities - SF, LA, SJ - are not declining (yet) but outlying areas - Santa Rosa, Sacramento, and even San Diego are dropping a lot.
- Atlanta - after rising at a relatively non-bubbly and very steady rate for years - is now falling.
- Same with Denver - though they had an inordinate rise about 6 years ago.
“SF, LA, SJ - are not declining (yet) but outlying areas”
Speaking from LA - it is declining - houses are not selling! The houses I’m watching (from my route to and from work) have been on the market for over six months. NO SALES! Just this week, one posted a new sign - ‘Make an offer’
Asheville going up ? There was just an article the other day in the citizen times of million dollar homes piling up. One ancedotal indicator — a close friend who is a carpenter is needing to call in favors from people he hasn’t spoken to in 2 years to find work…
OFHEO news comes out two months after the previous quarter, which itself represents houses which were contracted an average 2 months earlier. Take mid-quarter as an aveage - price data, even if accurate, is nearly a full half-year behind.
SJ is not holding up. Just people not jumping off their buildings yet.
Talked to an old neighbor who’s been looking around for 2 years, he recently made an offer for a 4 br in SJ for $650k, he is the only person who has showed up with that open house. In 05 it would’ve sure been $850k or more.
The irony is, he still thinks he has $200k equity in his current home. And he bought CFC at the dead cat bounce $14ish.
Oh, and that irksome drought in Atlanta clearly has no bearing on the market either. My cousin’s landscaping business is tanking because her wealthy clients aren’t allowed to water their expansive yards.
I like the title - I am imaginging the real estate frauds describing a sheer cliff (the future of housing) as a “series of small, very stable plateaus arranged next to each other.” Right…
Let’s get those housing prices down to where people’s (dwindling) incomes can afford them, and then we can talk about permanent plateaus.
In Atlanta, collapsing prices have more to do with IO loans being taken out, and the fact that wages do not support the home prices here.
..and the credit crunch that has resulted. Atlantans will always over extend themselves to drive the nicest cars to keep up with appearances.
…then of course, there’s the real estate fraud that Atlanta was known so well for the past few years…
Bit late for the post, but a Georgia agent, when we first started tire-kicking there in late 2005, showed us some very nice golf front and lake front houses. I distinctly re member her saying, “Not a lot of people around here make that kind of money.” She was referring to the household income required to support the cost of owning such houses. The conclusion clearly was that they were depending on out of state buyers or speculators, both of which dried up within a year. Now I watch many houses sit on the market for more than a year while the wishful sellers cling to hope that they will get a price that just isn’t going to happen.
“Palm Beach County has a 35-month supply of existing condo units.”
My cousin is trying to sell one of them. He’s just taken it off the market and plans to put it back on the market shortly, to “freshen” the listing. Luckily for him, he and his wife are actually living in it every winter. He’s a rehab-flipper, but has recently moved into the “sell and rent” column, i.e., wants to sell this unit and be a tenant for a while. Good idea for 2005. Still a good idea if they can actually find a customer. I’m not holding my breath.
and here is todays Orlando Sentinel opinion http://www.orlandosentinel.com/news/columnists/orl-miket2907nov29,0,5478765.column
My previous comment was eaten… so here is a new one:
Now that pipe dream is over. And 32 other condos in your development have For Rent signs. The apartment complex next door also is offering deals. Your renter bails for a place $200 cheaper as your adjustable rate loan resets and increases your holding costs $300 a month.
Bummer that pipe dream comes with quite a hangover.
Years of inventory…
I typed before about a cousin who wants to buy a condo in downtown LA. Hopefully I had delay this idea until its obvious to him that its smarter to rent.
Got popcorn?
Neil
what is worse about pbc is that rents are even falling because the population of the area is slightly falling, especially the working class. the article regarding falling condo prices is big. people will have to drop prices sooner than later. the later they wait, the more trouble they will be in. from the front lines, it is not pretty in pbc.
Hey Neil,
In honor of the distinguished NAR President, would you consider changing your tag line to:
“Got FunYuns”
I’m fighting a battle to keep a cousin from buying in downtown LA. My best guess is that if he can be kept from buying for another six months, he’ll lose all interest.
If he buys? Well… that will be problem. What can we really do?
Spectate.
Got popcorn?
Neil
Time-Travel back to 1925, with me…
“The picture was somewhat brighter in the local condominium market. Barry Gould of Island Vacation Properties attributes the falling condo prices and the increased number of sales to the same thing: investors.”
“‘Part of the reason is there were a lot more condos purchased as speculation houses and some of these people have to sell,’ Gould said.”
That is rather disturbing… Anyone else notice just how many things have hit the “hasn’t happened since the Great Depression/right before the Depression” mark?
“In a sense, the Visakowitzes are among the lucky ones: buyers whose homes were finished. Sixty-four other buyers at the Seasons put down deposits on homes that Levitt and Sons never finished, court records show.”
This seems bass-ackwards to me. 64 people got lucky and might only lose deposits, whereas those whose homes were finished are certified knife catchers living in a “ghost town.” Doesn’t sound lucky to me.
Right. With the lots around them heading to the auction block, that $400k house may have the keys left on the counter-top.
Exactly. Instead of losing a 20K deposit, the people whose houses are finished will find that their 400K home is, in very short order, only worth 200K.
The people who lost deposits are hurting. But those that had to close are looking at a MUCH larger loss in the future. Be glad your stupidity was not punished more sternly.
LOL. Too true.
“‘We weren’t getting close to what we needed,’ Parsons said. ‘The offers were outrageous, $240,000, $250,000, on a town house that appraised for $330,000 eight months ago. The market is so terrible.’”
“After listing the town house for six months, Parsons said he has decided to keep it and tough it out until the market rebounds. ‘We’re willing to stay another two years,’ he said.”
What was outrageous was the appraisal he got eight months ago, not the offers he’s getting now. At least he’s getting offers. Many aren’t so lucky. Some days, ya just gotta admire the sheer stubborness of the FBs.
Yeah. The quote from that KoolAde drinker got me too. I hope his B Plan includes accepting even less than what he characterizes as “outrageous”.
When the offers come in at $175,000, he will consider them “despicable”.
(With a lisp)
I agree Palm. They have about 3 years of inventory IF current sales rate stays even and no more houses are added, yet this guy thinks waiting a couple of years is the strategy to pursue? He’ll be lucky to get 180K out of the deal in 2 years. Pretty soon the banks are going to have a “come to jesus” moment and start dumping properties. I don’t know what has to happen before these idiots start to capitulate but I hope it happens pretty soon. These piddly 10-15% cuts are getting boring, bring on the PAIN!
Next year he’ll jump on one of those offers if he has any brains.
Parsons Project
Ode to Parsons, past and present tense.
http://www.youtube.com/watch?v=Q_Ev4r0MKLc&feature=related
Key FB phrase: “what we needed,’ Parsons said”
What you need is some KY for the financial pounding you are about to take for the next two years+ for your stubborness.
There’s some weird passivity in these FBs. They see the market tanking, they know a lot of folks aren’t getting looks, let alone offers, but they are “outraged” by below wishing price offers.
And now he plans to wait it out 2 years. By mid-January he’ll be freaking when the offers, if any, are below 200k.
These housing “investors” have no exit strategy—probably rode their jdsu stock down as well.
“…These housing “investors” have no exit strategy—probably rode their jdsu stock down as well. ”
DOH!!! Cut to me in the last seen of “Dr. Strangelove or: How I Learned to Stop Worrying and Love the Bomb ” where the bomb has JDSU written on it. At least I was wise enough , from sage advice from my depressionera father not to buy a house you cannot afford. Confirmed by the frugal and intelligent posters here.
“Take Scott Parsons, a restaurant franchisee wishing to leave South Florida.”
It’s too bad Scott doesn’t like south Florida. If he doesn’t act decisively right now, he will have a choice between foreclosure or living there for a lot longer than two more years.
We’re willing to stay another two years,’ he said.”
He’s going to have to stay a lot more than 2 years to get his $330k.
“‘We weren’t getting close to what we needed,’ Parsons said. ‘The offers were outrageous, $240,000, $250,000, on a town house that appraised for $330,000 eight months ago. The market is so terrible.’”
OUTRAGEOUS?…INSULTED? .. by the offers, humm..
You really DO need to SUFFER somemore. Hang in there and ENJOY the PAIN you BLOCKHEAD
OUTRAGEOUS?…INSULTED? .. by the offers, humm..
Maybe they’d rather have no offers? This hasn’t even begun. Rents aren’t going to be flat, they’re going down.
Per exter:
I hope his B Plan includes accepting even less than what he characterizes as “outrageous”.
And that’s the funny part of a declining market. Prices nationally are dropping 0.5% to 2.2% PER MONTH. Hold on as long as you like… what idiots.
Got popcorn?
Neil
““‘We weren’t getting close to what we needed,’ Parsons said. ”
Damn those buyers! How dare they make an offer on what the house is worth instead of what the seller NEEDS! Don’t they know it’s their duty to pay off this idiot’s HELOC?
Next you know it, those nasty buyers will expect to only pay what they can afford to service over the life of the loan for a house! The horror!
“According to James, the hesitancy of would-be Atlanta home buyers can be blamed in part on media coverage of collapsing prices in California and Florida. ‘Prices weren’t tumbling here, but all the news in the national media started artificially forcing prices down [for new-home construction],’ James says.”
I beg your pardon. What I said was that all the news in the national media started artificially forcing prices up. It was a typo. Prices aren’t actually going down, because real estate is local, and it’s always a good time to buy.
“Figures for Lee County condos were bleak, with the median price and the number of sales both down 28 percent. Lee Clerk of Courts Charlie Green said there were 1,809 foreclosures in Lee County in October, up from 1,326 in September.”
A tune for you, Lee Co.
http://www.youtube.com/watch?v=auE5-NtPCtk
When I was a lad, replacing your gas cap, with a locking one
Was a rite of passage…
During the gas crunch of 1979~
Atlanta has around 60 days of water left, and look what’s happening:
“Some DeKalb County businesses got a hard lesson on just how serious Georgia’s drought is — someone’s been stealing their water — and police are taking this crime very seriously.”
“So imagine their surprise when they got their water bill and it more than doubled, saying they’d used 41,000 gallons.”
http://www.11alive.com/news/local/drought/article_drought.aspx?storyid=106786
Cisterns are becoming quite popular here in Arizona. When I install mine, it’s going to have a ball valve to which I can attach a lockout/tagout device. Or I’ll find a hose bibb with a removable faucet handle. Either way, I’ll have the cistern equivalent of a locking gas cap.
It’s gotta rain before your cistern works. Good luck with that. I had to haul water from 30 miles away for 4 years when I lived in north Idaho. No more of that. Got good well water now, streams and ponds. People don’t appreciate water till they really have to work for it.
It’s raining right now.
You can take a lesson from Jean de Florette…
“Cisterns are becoming quite popular here in Arizona.”
I thought that they were a mandate in NAZ. I had a friend locate to Flagstaff over 12 yrs ago and that’s all she was allow to have on her property (no drilling).
“‘We weren’t getting close to what we needed,’ Parsons said.”
He should have listened to broker Joe Pavich:
“Pavich said sales prices today resemble what they were in 2002 and 2003, and serious sellers need to remember keep that in mind. ‘Nobody cares what you paid for your house and nobody cares what you owe on your house,’ he said. ‘It’s a buyers market and that’s what the price needs to reflect.’”
and also, “nobody cares what some sleazy appraiser ‘appraised’ it at a year ago.”
What sellers don’t get is that most of the appraisals they’re referring to are for equity loans. Those are usually done by a bank appraiser and are always a lot higher than an appraisal done for a sale. In all the years I sold RE I never saw an appraisal for an equity at true market value. I guess banks figured if you were a good mortgage customer they could let you borrow to put more money in your house even though it wouldn’t appraise that high for sale. People always whipped those appraisals out when I was trying to give them a price to list their house at. However I’d whip out 20 houses just like theirs with the current sales prices. I’d try to explain to them that an appraisal is obsolete after even a few days, but some stubbornly didn’t or wouldn’t get it.
‘The main reason buyers aren’t buying right now is because they’re being told by the financial media to hold on, prices are going to go down. I think our buyers are going to start realizing that the prices are not going to come down a whole lot,’ Maeser said.”
To an extent, I can see that Joe6P now “gets” that the real estate market is stalled, thanks to the MSM.
But some of us didn’t need mainstream “news” outlets to alert us that something was wrong in the market. My questioning began when the first condo I looked at was on the market for 75 days. And there was one right next door for sale that was a no-sale for almost as long.
That was May 2006. The communities I’ve been tracking are down 5-10% since then. I didn’t need anyone in the “financial media” to tell me to keep my powder dry.
It appears that MSM encouraged the bubble during the last few years. Now the same MSM is discouraging the potential buyers. Govt should act against MSM instead of messing around with interest rate cuts.
OTOH, the blogosphere is right on top of things. From another blog, here’s some career advice for real estate agents:
http://whinecountryrealestate.blogspot.com/
LOL! That blog is worth bookmarking, IMO.
“Pavich said sales prices today resemble what they were in 2002 and 2003, and serious sellers need to remember keep that in mind. ‘Nobody cares what you paid for your house and nobody cares what you owe on your house,’ he said. ‘It’s a buyers market and that’s what the price needs to reflect.’
I have a family member that lives in Naples. Between 2002 and 2003, his condo value jumped by $80K. This was the first year of many major jumps. So, from what I can tell, we are still in bubble territory. Prices will fall further. Especially,when you look at all the empty buildings in the area.
I’m very familiar with that area. 20 years from now it will look like the crappy area of Miami. What a shame. Nice area til equity locusts took over.
‘The main reason buyers aren’t buying right now is because they’re being told by the financial media to hold on, prices are going to go down. I think our buyers are going to start realizing that the prices are not going to come down a whole lot,’ Maeser said.”
Just goes to show how low their (Re “Professionals”) IQ is, or how low they think everybody else’s is. When oh when will someone call these used house salesmen on this Dumb Ass comment.
How do you explain the multitude of problems with condos in short words for the masses? I’ll put it this way: in one local condo group, they couldn’t give them away for $55,000.00 in 1996. By 2006, they were listing for $275,000.00. I fully expect by 2016 they’ll be back in the area of $65,000.00 (higher or lower, adjusted for inflation).
what buyers? see this is what they dont get. there are no buyers right now. prices must correct before people can afford. the main reason people are not buying right now is they have no downpayment and cannot afford outrageous prices.
“what buyers?”
Good question Simon. Back in the day anyone w/ a 700 FICO could qual. Really, no questions asked. What the mort. industry is grappling with right now is that there are SO many people that DO have excellent credit scores based on their payment history but that doesn’t mean they aren’t overleveraged to the hilt or that they can put together 5K without resorting to plastic!
That’s what has ground me down all along. The whole FICO thing was and is misleading at best.
i just think most are in a position to purchase but are not due to overinflated prices. Those who want to sell and downsize or supersize (its almost lunch on east coast
) cannot because of declining values. Throw in an economic slowdown and you have the ole perfect storm. The glut can only be cleared by time…and declining values
I have a low FICO / low credit score, even though I have no debt. I’ve done some research on it, and am gaming my score up right now. It doesn’t seem to be too difficult, but to get loans you gotta play the game to meet their models of what a good borrower is.
What if you’re following Ben Franklin’s advice? As in, neither a borrower nor lender be?
If you have no debt, that is WHY you have a low FICO.
When my grandgather was in his late80’s, my mother decided that he should have a credit card around as a ‘just in case’ if, say, he was ill and needed something or a bill had to be paid, then someone could put it on the card for him. No credit card company would issue him a card - he had the minimal FICO score. The score was minimal because the man had never borrowed money for anything - he owned 2 houses and 2 car (new) but had paid cash, purchase price in full for everything his whole life. His local bank finally intervened and got a card issuer to come up with a Mastercard/Visa.
You are so right about buyers. This is a no person market. Matter of fact it’s not even a market at all.
I don’t claim to know zillions of people, but in the crowds I run in, I’m not aware of a single person trying to buy a house. Not one.
Can’t say I know any homebuyers either.
My friend just bought a condo in Santa Monica. I try not to give long passionate speeches to my friends, so I told him my opinion before he bought it and called it a day.
I knew a few here and there- despite the fact that I advised them to hold off a bit and sent them links to a few sites, 2 bought within the last year (LA and Charlotte). 3 others that wanted to buy in DC Metro, held off, and are still holding off. Those that held off consistently thank me for saving them between 50 and 100K thus far. The 2 that bought, well, let’s just wait and see how that works out for them.
A More Affordable Plateau?
Whatever happened to the New Permanently HIGH Plateau?
Since when is a decline described as a plateau?
P’cola,
Well “I” hear ya! It’s just that with Lawrence Yun doing his level best to out dumb David Lereah it’s surprising how quickly those idiotic comments get swept under the carpet. Let’s try… tailspin? Crater?
I think Fun’yun has Lereah beat for shear stupidity.
Lereah always seemed more devious and snake-like while Fun’yun is more like a child’s doll spouting the same couple lines regardless of the circumstances when the string is pulled.
In general the word plateau is just code for “It’s stabilizing”, and it’s an idea that’s usually promoted by those who fear that it isn’t stabilizing at all.
I have a sister in pasco county, she’s been a H.S. teacher for 15 yrs., makes 41K/yr.. I would say thats your avg. homeowner, in which case, your avg. home price should be 145K. Theres a long way to go down in west central FL.. Has anyone seen what they build in FL? No basements, no attics 2300 sqft homes on 40×80 properties. No street parking so the builders make streets about 17 feet from curb to curb. Builders have been raping FL for decades. The margins they were working on is obscene.
“Candy Pritchard has been trying to sell her five-bedroom home west of Palm Beach Gardens since the summer. She originally listed the property on an acre lot for $649,000 but has since dropped the asking price to $599,000.”
According to Palm Beach County records if I have the right property and person she paid $280,000 in 1997.
Oh please, BP, the poor woman had to live in that house. Don’t you think she deserves some compensation? A mere 319k profit for all she’s endured? Where’s your compassion?
Yea I know I can be a real SOB sometimes! My real point is that PBC really is still years away from reality. The mass delusion of the bubble years and resulting collapse would be a good topic of a psychology book one day.
South East Florida is still extremely overpriced. The mantra still touted here is, “they aren’t building any more land”. Sellers really believe this is the “ultimate fact”, and Realtors are happy to confirm. I’ve heard many people say that “the market will pick up in 2008 because buyers will realize that prices are not going to fall much and they aren’t building any more land. Buyer’s pent up demand will cause an explosion back to the market of 2004/2005: Sellers market.”
Renter…
What you say is so true. Which is why I’m laughing so hard! I can’t wait to see their expressions as the market falls apart in 2008. Bwaa haa ha!
Oops, I really need to keep that from coming our loud.
Got popcorn?
Neil
Why would you need much land in SE FL when everything is being built up (skyward).
Then 2008 will be the year of the bottom and there is hope for 2009.
Some people never learn. And for some of them, there is foreclusure/builder/recession for the cruel awakening.
I heard baby boomers are retiring, they are not making anymore people, hey there is a thought about my job on a permanent 15% rising cycle.
Fiberglass shingle roofs that last 6-7 yrs. in the FL heat. Taxes are about 2% of assessed and the ins. in Pasco is astronomical. Good place to live if you bought 15 yrs. ago.
Everywhere is a great place to buy as long as you bought a decade or so ago.
Er, Rochester, Detroit, Youngstown?
You’ll love it @ Levitt…
“Now, the guard gate is guardless. The clubhouse, tennis courts and pool were never built. The activities director is being laid off today. And the fate of more than 1,000 unfinished lots in the community is unknown.”
“The Seasons’ builder, Levitt and Sons, got the go-ahead Tuesday in bankruptcy court to abandon its incomplete lots at the Seasons, plus about 3,000 others across the state.”
“‘It really is like living in a ghost town,’ said Phyllis Visakowitz, a retired nurse who moved in May from Great Neck, N.Y., into a $457,000 home at the Seasons. Among the seven homes on her cul-de-sac, hers is the only one occupied.”
If she bought in May, they evidently don’t have TV or newspapers in Great Neck NY. She deserves everything she get.s
The median home price in Great neck was $ 750K in 5/06. She’ll be alright.
I have absolutely nothing against nurses, but if we assume she is flying solo than she either has one heck of a pension or she has first class seating on the FUBAR ship with some sort of toxic loan. $457k for a house is surgeon territory under normal fundamentals.
Again, nothing against nurses.
“‘It really is like living in a ghost town,’ said Phyllis Visakowitz, a retired nurse who moved in May from Great Neck, N.Y., into a $457,000 home at the Seasons. Among the seven homes on her cul-de-sac, hers is the only one occupied.”
Phyllis may come to regret being so candid with a reporter.
–retired nurse living alone beside six empty houses. Check.
–no guards. Check.
–lots of desperate people. Check.
I can only assume homeless people or thieves also read these stories at times. Phyllis may soon have company in her ghost town.
Phyllis better get a gun and a big dog. Two (of each) would be better yet.
You’re not kidding. Maybe I’m too cautious but why would she advertise that ? I think the same thing when I see these home decor magazines or newspaper articles on decor. They make it easy for burglers or worst. Give location, floor plans, family members, including kids ! and pictures to boot. There are not many crazies out there but all it takes is one.
From TC Palm in Florida. “The Martin County median home sales price in October was $225,000 down from $269,000 last year.”
“‘The numbers continue to show what appears to be a leveling off of the market for Martin County,’ said Dave Derrenbacker, president of the Realtor Association of Martin County.”
Since when is a 20% drop “leveling off”??? Pure verbal Diarrhea. Just drink your Kool-aide and be quiet. “ALL IS WELL”
http://www.sellstatepineisland.com/
At one time, before Hurricane Charley, we considered retiring on Pine Island. I still follow their market and this is what I saw yesterday. The realtor seems “awake and aware.” He’s advertising foreclosures and says you can get a new Cape Coral house for $125 or less. He also admits a lot of foreclosures are still overpriced but says he’ll take your offer to the bank.
‘Nobody cares what you paid for your house and nobody cares what you owe on your house,’ he said. ‘It’s a buyers market and that’s what the price needs to reflect.’”
- Amen brother!
“Pavich said sales prices today resemble what they were in 2002 and 2003, and serious sellers need to remember keep that in mind. ‘Nobody cares what you paid for your house and nobody cares what you owe on your house,’ he said. ‘It’s a buyers market and that’s what the price needs to reflect
It’s NOT a buyers market. RE RATS and sellers are just feeling a few mild Hunger Pains.
I wouldn’t even consider buying ANYTHING until these RE Rats and their sellers are totally OUT of their self induced GREED COMAS and well into their their Ramen Deficiencies:)
Wrong you fool.
You ran out of idiots to buy your overpriced P.O.S. houses using funny money loans that they could never afford to pay back.
The banks have had their epiphany. The funny money is gone. Elvis has left the building. The keg is dry and the party is over.
Until prices come down to affordable multiples based upon median incomes the banks ain’t financing and the sheeple ain’t buyin’.
I get a belly laugh everytime I hear one of these cargo-cultist Realtors(tm) spew their idiocy.
…
Exactly. Even if these fools want to pay the still-ridiculous asking prices, they can’t get the same idiotic financing that they could get a year or two ago, meaning no sale. And rich people, the only ones that could afford the asking prices without exotic financing, aren’t going to pay that much for mediocre houses.
“The decline has even become apparent in our school systems, where classroom trailers have long been needed to handle the overflow of students. This year, when metro schools opened, enrollment fell 10,000 students short of projections.”
Combine this news, with the rental truck rates coming vs going to Florida, and they are well into their recession, no doubt.
Being the copycat country that we are, the Right Corner Pocket state will show us how the rest of the country will react, in time.
Yes, but 720,00 people still bought a home and I’m sure about 700,000 people will again. People want to own their own home. It’s a different kind of bubble than a stock bubble. It will be a long slow decline in prices because there will always be people buying on the way down. Different than a stock bubble where there are few buyers as the bubble pops.
heres something interesting and maybe for bits bucket…most of these builders use fnma/fhlmc standards when they build these condominiums in normal times. Not too sure but the guidelines for these are quite liberal. I mean you can but with 100% or 97% financing. However, once that fnma approval expires and presale is not met….20% downpayment is required. of course all the common elements must be completed…clubhouse, pool, tennis courts. You can find some banks to finance with smaller downpayments but the rates are always higher. so if you really want to find the bottom in the condo market it begins with FNMA project standards page which by the way is open to all. Look for an approval expiring and that should signal a significant fall in prices to meet 20% downpayments which are going to be smaller…i may be off on downpayment actually. it may be 25%
of course the builder can always apply to extend the approval but if your already hurting…how/why do you do it?
That’s pretty interesting.
Nearly all the MSM articles I’ve seen this year portray the national economy as so vibrant and strong, that even a protracted “housing slump” would not likely put the economy into recession. I disagree. Here’s the latest from AP on unemployment claims:
“WASHINGTON (AP) — The number of new people signing up for jobless benefits last week jumped sharply, suggesting that the labor market is softening as national economic activity slows.
The Labor Department reported Thursday that new applications filed for unemployment insurance rose by a seasonally adjusted 23,000 to 352,000. It was the highest level since Feb. 10.
The report surprised economists. They were forecasting claims to hold steady around 330,000.”
I wasn’t surprised, and I’m only an amateur economist. What I’m surprised about is that we don’t have peple talking about how we will almost certainly experience 7 or 8 quarters of negative economic growth, a classic depression.
Simply because this seems to horrible and negative for the MSM, White House, Larry Kudlow, and Oprah to fathom doesn’t mean it won’t happen. In fact, it appears to be unavoidable.There is no modern precedent for the combination of negative savings rate, punctured asset bubble,deficit spending, trade deficit, and lack of domestic manufacturing base, during a time of “war”. The most likely outcome for 2008 and 2009 is negative growth; there is really nothing the Federal Reserve, the Treasury, the much vaunted American consumer, or the media can do at this point to prevent it. And, I’m being optimistic here, folks. There will be many claiming, soon, that the end the world is at hand. No, it won’t be that bad, just the end of life as many Americans knew it.
Give or take a word or two, that’s close to my view. Thanks.
Impossible, because the CPI will show a healthy economy, meat replaced by catfood, catfood replaced by grubs. And on the energy front gas replaced by propane for diy propane cars, propane replaced Red Bull for bicycle and walking power. Manufacturing, cars replaced by bicycles, bicycles replaced by shoes. See, everything will be fine. We have lots of growth ahead of us, especially when you factor the falling dollar into all of that, dollar denominated GDP will be through the roof. LOL
cars replaced by bicycles,
well at least we’ll all lose some weight
Jeez, am I getting bored hearing these realtorwhores and brokers (what’s left of them) keep trotting out the same excuses:
1. “It’s the negative media drum beat.”
2. “It’s the financial advisors.”
3. “Once people realize prices are at the bottom.”
As opposed to the one and only reason:
1. “IT’S AFFORDABILITY!”
I know that this is the wrong thread for this question but I was wondering if the same thing was occurring in your neck of the woods.
I am astonished when I hear that people are chasing the market down. Does anyone ever do there home work any more?! I look at the local MLS in the Inland Empire (SoCal) every week and I see prices all over the place. I’ll see some homes that are 2500 sq ft, good area, and a newer model for 350K. Then I’ll see the same model for 420K up the street or the builder has it at 380K. It doesn’t make sense! Why the hell would I buy you home for 420K when I could get it cheaper? I’ve seen the pictures and there really isn’t that much of a difference besides paint and carpet color.
I’ve notice that a lot of sellers are getting a little desperate lately. I found the following in the MLS yesterday.
http://www.immobel.com/personal/1/listingDetails.do?featured_int=0&c_mtype=res&searchId=0&minprice=300000&c_type=&xml=1&serverId=0&rpp=5&c_year-built=&c_garage=&la=EN&cu=USD&ssid=0&per=mrmls&c_zipcode=92506&c_city=&st=0&maxprice=330000&back1=%2Fpersonal%2F1%2FsearchResults.do&of=22014890 90
The higher price home has magic beans hidden in it somewhere. its not in the contract but trust me its there.
Houses with “awesome potential” scare me.
Zillow lists the last sale in 3/91 at 158K, and its ‘value’ at 194K in Jan ‘03 (sounds fair). Yeah, lots of room here.
Why the hell would I buy you home for 420K when I could get it cheaper?
Because the seller thinks their house is “special”.
I’m convinced the official numbers on employment, GDP, etc; are created out of thin air based entirely on political gain or loss. Like the Iraq vet suicide rate: when the families got the MSM involved, the actual rate turned out to be over a hundred a week… an astonishing number.
It wouldn’t surprise me if the GDP numbers remained positive until the next White House resident moves in. If it’s a Repub… same same… if it’s a Dem… instant crash into recession.
Same with employment and housing. The numbers from the Bushies have been spun for political gain from the get, and will remain delusional on some level until they leave. I submit that these numbers are like SIVs: Nobody has any idea what they are.
What’s clear from this board is that the knives are falling far faster than anyone can catch.
“Local real estate analyst Tom Maeser said he sees a rebound in the residential market sooner rather than later. ‘The main reason buyers aren’t buying right now is because they’re being told by the financial media to hold on, prices are going to go down. I think our buyers are going to start realizing that the prices are not going to come down a whole lot,’ Maeser said.”
I can’t believe people still say this! A couple of simple facts:
1. If you’re looking for a home and there are multiple homes for sale in the same neighborhood that meet your needs, then you’re not going to be offering at the asking price, You’d be offering at slightly lower, because you can always try the other house for sale. A person doesn’t need to be “brainwashed” by the media to understand this. Any rational person would do the same
2. Even if we accept at face value that prices aren’t going to go down any more, there’s still no evidence that either house prices or interest rates will go up anytime soon. There’s no “hurrry”
3. Florida is screwed up, in general. You’d be wise not to start burdening yourself with home ownership in an uncertain ecomony.
I can tell you exactly where the prices will end up! The median household income for Florida, according to US Census figures, is around $45K.
3.3x that (i.e., traditional lending standards) is 148K. That’s how low the median home price in Florida will go.
Let’s rephrase this a bit, shall we?
THE ORIGINAL:
“Local real estate analyst Tom Maeser said he sees a rebound in the residential market sooner rather than later. ‘The main reason buyers aren’t buying right now is because they’re being told by the financial media to hold on, prices are going to go down. I think our buyers are going to start realizing that the prices are not going to come down a whole lot,’ Maeser said.”
NEW VERSION:
“NATIONWIDE real estate OBSERVERS SAY THEY see NO rebound in the residential market ANYTIME SOON, POSSIBLY EVEN FIVE TO SEVEN YEARS. ‘The main reason buyers aren’t buying right now is because they’re AWARE OF THE FACTS DISSEMINATED BY the financial media THAT CLEARLY INSPIRE THEM to hold on, THAT prices are going to go down A LOT, LOT MORE. I think our buyers are going to start realizing that the prices are DEFINITELY going to come down a whole lot, SIMILAR TO JAPAN IN THE EARLY 90′S,’ ONE OBSERVER said.”
Fraud from the getgo- As an appraiser I have seen a lot of fraud but for the first time I am in at the beginning. I have been asked to appraise a number of condos and I know them well as they I drive past them in my PUD everyday. In fact I lived in one as an apartment.
They converted about 2 years ago and sales have been dead slow. Suddenyl I got these appraisals in and there are 2 people buying a bunch of them. How about that.
After my shock wore off I began to review the contracts and noticed that the sales price was at least $50 per square higher than anything I had seen in my area. The contract stipulates that 2 commissions are to be paid. 1 of $12,000 and 1 of $37,000 to brokers in far flung places. Whoa-now that is the business I want to being.
As part of the research effort I pulled the sales in the project and found that suddenly this year units started selling for over $50,000 more than last. Huh?….it seems that apartment dwellers living 200 miles from here are buying investment condos like crazy.
Next step was to pull the developers site. He has none. That is weird. Craigs list has a place for me to go tho. I pull it up and it is under a brokers name whose address is the same as the sales office in my project.
Clearly the first line is this- 21% of sale to be given back to the buyer to use as you see fit. Back to the contract I go. 21% of the purchase price adds up to the exact amount of the 2 commissions. Wow!
I begain to look thru the mortgages already closed on the units sold this year and everyone is 100% financing for the full $240,000. Do you think the lenders knew about this commission part? It is in the contract surely they read it. BS….my guess is there are 2 sets of contracts. Here is the rub. The appraiser was given thsi contract and should have deducted the usurious part of the commission to adjust for favorable financing which would kill the deal altogether and bring the units to market. Isn’t that marked to market? Same thing as Wall Street right? Sh*t…well folks I am going to do my job and appraise them as I was sked to do. Then I am going to contact every lender who has made a loan in this place and alert them to their exposure.
I thought about the authorities and I am investigaing the channels to got thru to actually get someone’s real attention. Those condo sles figures you see out there. Most are bogus. Believe me this is just one of many. I will keep you posted.
GREAT STUFF !!! I enjoy a lot of the stories, info and perspectives around here - but I love the tales of fraud uncovered more than anything else. Best of luck, and PLEASE keep us posted.
And the REIC will point to sales figures propped up by these bogus transactions as proof that the market is about to turn around.
Dime — please, please give your info to Todd Ullrich at Channel 9 News. He’s a bulldog on stuff like this.
Really going out on a limb here. I’m going to predict the bottom for all of us. The bottom is: (drum roll please) “ZERO”.
The “median price” quotes have long lost their significance.
Go to any area of contagion and the new housing is inevitably at the high - or ultra high - end of the market.
A far more useful figure - and the one that’s only occasionally featured in the PR releases and “what, me worry?” articles - is the inventory level and that number keeps going up and up.
If I am discerning one of the above stories correctly, the number of foreclosures in Lee County is greater than the number of units sold.
Futhermore, as sales are falling, the foreclosures are increasing.
That isn’t exactly going to help to drive prices up, now will it?