‘Desperate To Sell Before Things Get Worse’ In Florida
The Sun Sentinel reports on some worried real estate professionals. “The real estate industry would be ‘brought to its knees’ if homeowners aren’t allowed to take a property tax break with them when they move, Palm Beach County Property Appraiser Gary Nikolits said Wednesday. ‘We’re going to reach a point where people are not going to be able to afford to move,’ Nikolits said.”
“Nikolits also thinks portability should be restricted to a homeowner moving within the same county. Broward County Property Appraiser Lori Parrish agreed. ‘We could devastate a small community if it were to go statewide.’”
“Real estate agent Mike Kleinrichert, who attended Nikolits’ speech, said at least a third of his listings are from people who want to move out of Florida, in part because of rising property taxes here. ‘Portability would be a fantastic thing for our community,’ he said.”
From the Miami Herald. “Residential developers proclaimed last year the time had come to move Miami-Dade’s Urban Development Boundary to build new homes on hundreds of acres of land. But now the same developers are in headlong retreat. On Wednesday, developer Lucky Start became the third home builder in recent weeks to announce it is yanking its bid.”
“The three biggest residential projects are now out of the bidding. Lucky Start’s 193-acre Newest Kendall project was the latest, Shoma Homes withdrew in February and Adrian Development Group withdrew last week. ‘It’s a beautiful project, but the timing is not right,’ said Commission Chair Joe Martinez, who met with Lucky Start’s Fernandez this week. ‘Let them apply next cycle.’”
A reader sent in this press release. “Cane Island is D R Horton’s flagship development for 2006. The luxury condo resort community is centrally located on the south side of US 192, almost within sight of Walt Disney World and Celebration.”
“The developer reduced prices substantially a few weeks ago to try to get more contracts signed. The problem is that there are very few buyers around to take advantage of the reduced prices. In a further effort to get things moving in the face of a stagnant market, D R Horton has announced that they will increase co-operating broker commission for the next few days in the hope of getting brokers to push their buyers into action.”
“Hightower Realty followed the builder’s announcement with one of their own, they will add the full amount of the increased broker commission to their cashback offer. So buyers over the next few days will get $13,000 cashback on condos priced from $283,000. It is too early to say if the extended period of weakness in the Orlando property market that has followed the last two years of unprecedented price rises is past the worse.”
And a March report from that realtors website. “Any hope of an early return to a balanced market were firmly dashed by February’s statistics. The inventory of short term rental homes surged again to by far its highest level, bringing our in-house index well into the red zone for the first time.”
“The number of vacation homes added to the inventory increased by almost 15% as more owners decided the time was right to take the capital gain on their homes. Buyers, meanwhile, remained thin on the ground, with only half as many sales closing compared to the heady days of last summer.”
“Based on these figures it is difficult to see how a more balanced market could re-appear for several more months. Prices have already dropped by 6 or 7% from their peak of last summer, and it now looks as though my earlier guess that the market would bottom out at 10% down may be optimistic. An eventual drop of 15% from the peak is a real possibility now, still a long way above prices of even two years ago, but disappointing for sellers who were already getting ready to count their capital gains.”
“For buyers, of course, the latest statistics are much more comforting. Prices are already well off their peak, and there are some exceptional bargains where sellers are desperate to sell before things get worse. Now is the time to start looking seriously, although you don’t have to rush, as there will still be plenty of homes to choose from for several months at least.”
Thanks to the readers who contributed to this post.
Just leafing through condos on the MLS in Naples, Fl. There are tons of them, and the number of those with “Price Reduced” “REduced for quick sale” “Lowest price in neighborhood” is quite stunning. There is a wild race to the exits going on in the most unaffordable city in the US. Hurricane season is approaching. Watch the numbers rise even more.
I am already seeing 10 to 15% price reductions and properties are still sitting. This is just starting. Check out this transcript from a real estate expert in the South Florida area. You can almost sence the anxiety in some of the posts.
Link ?
I have to applaud The Sun Sentinel for its’ unbiased, mostly realistic reporting throughout this whole “Housing Boom” mess here in FL.
The Orlando Sentinel, the Tampa Tribune and the Lakeland Ledger, on the other hand, continue to trumpet that “values are to be found everywhere”.
I am sick of this silly waiting game. I have worked hard, saved my money, and want to put down ~$20,000 of my money ( I earned it the old way …by working at a real job ) to get myself a home. But I can’t right now. It would be foolish.
I hope that these tinhorn Realtors(tm), greedy flippers, shady mortgage brokers and lying appraisers get what’s coming to ‘em.
At the link below please find, for your reading pleasure (in reverse order), the live internet Q&A conducted today at 1PM, between South Florida readers of The Sun Sentinel and The Sun Sentinel’s long time, award winning, real estate journalist, columnist, and EXPERT….. Mr. Paul Owers.
Funny thing happened.
After he answered his 1st question (at the bottom) I asked him this:
—————–
If you recommend buying NOW, with rapidly declining sales, sky rocketing inventories, plunging demand, and all time low affordability, during what type of market conditions do you think it may be wise to “hold-off” on buying for a while?
—————–
He choose not to answer that question.
Then I asked him this:
—————–
I think we (your readers) would be well served with regular updates on inventory statistics in our area. Of-course the real estate industry tries to prevent such reports at times like this when inventories are climbing rapidly. But “inventory” is one half of the “Supply and Demand” equation. Is there a chance The Sentinel will give us more frequent updates on inventories?
—————–
He answered it last (at the top) but CHANGED my question!
—————–
http://www.sun-sentinel.com/business/realestate/sfl-realestateanswers,0,5681540.customform
I liked his answer to this realtor’s question:
Q: As a Realtor, I am wondering if there isn’t a better way of reporting a slowdown in the market so that it doesn’t cause people to think that if they wait long enough, prices will go back to what they were 2-3 years ago. Customers are telling me that the market is bust, and everything they read in the newspaper is influencing them to “wait and see.” Any ideas for the media’s help here? — Connie in Fort Lauderdale
A: Connie, for the past several years, the Sun-Sentinel has reported on the hot housing market, but now people, including real estate agents, are upset that the newspaper is devoting so much space to the slowdown. A few experts think that the market will soften considerably, while others believe it will keep growing, just at a more normal pace. The paper has presented both viewpoints, but some people think that we have no business reporting the negative news. That’s not the way it works.
Thats right ….It would be unfair to buyer’s not to report the truth .
If prices are going to drop 20-30% in the next three years, how much per year will they rise in the next two years? Do the math - “they will go up 40 % in the next five years”. From what basis or starting point? If they are down 20% then up 60 % in two years. My head hurts. Please do the math for usted.
If the prices actually DID come down quickly, then buyers would have no reason to “wait and see” and homes would sell and RE agents would earn commissions.
It shouldn’t be too long before RE agents realize that it’s in their best interest to lead prices downward as quickly as possible so that sales can resume.
Prices only need to be reduced by half the percentage points to revert back to the means.
If someone says I am got 15% appreciation last year, and then they report prices are down 7.5% this year, then they are back where they started. To your normal average homeowner, they would think you were still up 7.5% but this isn’t so.
Let’s assume you have a house you bought at $100,000 and it climbs to $200,000 in assessed value. You now have 100% appreciation. Not if the property depreciates from $200,000 back to $100,000 you have a 50% slide, but you are back to where you started.
RE: Lying appraisers…it’s the mortgage broker’s who make them do so, by withholding work unless you give them the number they want…
Despite all the finger pointing at everybody else they are the one’s ultimately responsible for this mess, because the money flows from them. Make no mistake about this.
Want to see what a property is really worth?
Go to a cash only system…
I had your same thoughts the other day . Maybe you could say the actual building costs comes close to the raw worth ,at least on new construction .$80 to $100 a sq. foot is typical .I dont know . I wonder if any builders could post average costs per square foot to build ?
I find it interesting that if you go to DR Horton’s website (and many other builders’ websites for that matter) and look at their communities in the Orlando area, many (if not all) no longer have price lists. Instead they say, “Priced from: Please call.” I guess that’s the ultimate way of not advertising price drops.
It also lets them keep their options open on price — in a market that might indeed be plummeting, even a “Reduced to” price in an ad sent to the newspaper might be too high by a couple of grand just two or three weeks later when the newspaper hits the streets.
Plus it lets them bargain car-dealer style with people who call. I wonder if they do the old “let me talk with my manager” routine.
Prices have already dropped by 6 or 7% from their peak of last summer, and it now looks as though my earlier guess that the market would bottom out at 10% down may be optimistic. An eventual drop of 15% from the peak is a real possibility now, still a long way above prices of even two years ago, but disappointing for sellers who were already getting ready to count their capital gains.”
I say how about 50%?
Simmssays…
http://www.AmericanInventorSpot.com
AmericanInventorSpot.com
I say condos, used BMWs and plasma screens for everyone!
All yields approcaching muti-year highs. I am beginning to think the Fed, which kept rates WAY to low for Way to long will do exactly the same on the way up, and keep raising rates much higher than the market thinks and keep them up there for far too long. 2007 and 2008 could get really ugly in Fl, AZ, NV and all the other bubble areas.
I agree with you. It is hard for the Fed to know when to stop raising rates and very likely they will overdo it. Good chance of a RE caused recession with the current conditions of high debt levels, declining RE market, and on/off inverted yield curve. Recession or no recession, prices are going to drop. They just drop faster with a recession. There has been a RE down cycle every decade: 70,80,90’s. Can the 2000’s be an exception? Highly unlikely, might be better odds winning the Lotto.
The quote was from the article for those who didn’t know. I forgot the “. Sorry.
Simmssays…
http://www.AmericanInventorSpot.com
AmericanInventorSpot.com
Florida & Arizona = Sodom & Gomorrah
Not a God-fearing man, but you get what you deserve…
Very rough but; if taxes in FL are going up $100/mo and hurricane insurance is going up $100/mo and interest rates are going from 5.5% to 7.0% on a $200k house then the prospective homeowner is seeing $400/mo in higher costs. That’s a $60,000 difference in sales price. Seeing any $200k –> $140k reductions yet? To make things worse, there are fewer people today who qualify for $140k than who qualified for $200k in October.
There are no 200K houses here in So-Florida that I’m aware of.
Actually I take that back. There are some, but they are littered with bullet holes and drug paraphernalia.
My friend’s townhouse can be bought for 200K or thereabouts but that’s overpriced by at least 75K IMO>
I was thinking about North Port/Venice (hi mom!) where $200k seems to be the sales price point of choice.
Don’t forget Hurricane season starts June 1 or in about 2 months. Yikes. The Florida flippers must be getting more desperate.
David
Bubble Meter Blog
So, for someone who buys this weekend that would be right about the time the escrow closes. Welcome to your new home!
Wow , that is going out on a limb..
This guy is a tool. He offers NO advice that is usable.
I like the answer he gave that BECAUSE inventory is up and prices are down, NOW is a good time to buy.
“He offers NO advice that is usable.”
You are absolutely correct. He talks every which way but is of no help at all. Accomplishing the exact opposite of what he gets paid for.
“…. but disappointing for sellers who were already getting ready to count their capital gains.”
Sweet music to my ears… As far as I am concerned, it will be justice only if the sellers face capital losses. The insanity has go on for too long.
Talking to someone who works for the foreclosure department of a nationwide lender. Last week they had a big meeting and the boss told them to “close out” the loans as soon as possible. He cited the drop in property values in several markets…mentioning Florida. He said “I would rather take a small hit now than a huge one in six months”
The standard FNM secondary market appraisal form has a box which you have to check as to whether neighborhood values are increasing, stable, or decreasing.
FNM won’t buy mortgages in a declining market.
I wonder how the hack’s are fudging this on this at the moment
I am sure that property owners have the same concern for you “poor” renters who have sat on your hands for the past 5 or 10 years and now can only buy if prices crash. If prices drop as much as you want, there will be an economic fall-out that will affect everyone negatively - not just homeowners.
Be careful of what you wish for. The affluent will probably be fine financially regardless what happens. It is the middle and lower income bracket that will be harmed. IOW, business as usual - the rich get richer.
Lol! Property owners or loan owners? If someone bought property for the desire to use it productively i.e. farming, manufacturing, even strip mall, then I think their concern will be very little. Nobody should have any remorse for loan owners, pity maybe, but not remorse. You run with the herd, you die with the herd. When the herd is fueled by debt, well then the only thing the can extinguish debt is either more debt, or complete monetary collapse. Pick your poison. We know what helicopter been will choose.
Helicopter Ben. I had an ignorami moment.
No. What happens is that the run up in prices over the last couple of years has been fueled by insane price over-valuation in expectation of more price appreciation.
Most homeowners that bought pre 1999 in most areas are going to be fine as long as they did not refinance and took equity out of the house. If they on the other hand are double heloced out, and have maxed out Credit cards, then nothing is going to save them.
Even if RE falls 60% in my area, those who bought 10-20 years ago, still have massive amounts of equity left. Those that are screwed royally are the people who bougth 800 square foot tear downs for 350K, or anybody who bought a condo in the last 3 years. These people ARE going to be miserable, ARE going to be eating RAMEN noodles for the rest of their working lives, and if they used creativ financing, ARE going to be in a world of hurt.
Are people going to get hurt in massive numbers? Yes and No. Some people will choose to stay in their homes, and wait for the next peak. Some people will have no option but to walk away and get the KB jelly out. It all depends…
This is a false assumption. because if they didnot borrow on the home all these days, US growth would be lot less or we would have gone into recession (may be that would have been better than the Depression)
Huh? You’re reading that statement wrong if you think it is referring somehow to the national economy.
No, Troll. Only WILL buy if prices crash. IOW, not interested in monetizing some greedy jerk’s little windfall. Sorry.
How about some greedy jerks’ HUGE windfall. BTW, what makes one a “greedy jerk”? What if someone makes tons of money day-trading? Is it just Real Estate investors who are greedy?
OT, but I hear Venice is affordable. I know you have your heart set on Naples- but as the Stones’ put it “you can’t always get what you want…..
I don’t agree with you and wonder why you think it will affect “everyone” negatively. The whole money deal is always in an overall equilibrium. There will be an equal number of people making good on the housing crash (those of us who are waiting to buy) as those that you say will lose. In reality the only people that will truly lose anything are the speculator/flippers (i.e. I call anyone that did not intend to stay in their home for at least five years, a speculator. That was the old rule of thumb…stay put for five years to break even or you should rent). For everyone else sitting on “paper gains”, if the prices of their homes drops, then it doesn’t actually do them any harm, but allows others to stimulate the market by buying. Those new buyers will then have the excess $$$ to further stimulate the market by making improvements to their new homes, etc. Then…after about 7-8 years when everyone becomes stupid again, the whole cycle will repeat. I have the money to buy a house now if I want (LOTS in the bank and a 6 figure income), but I am waiting for prices to settle back down. I’d rather have some discretionary income left when I buy my home and use it on things like new cars, trips, and summer camp for the kids than over paying for a house and having it all sucked into P & I and be house poor.
OutofSanDiego,
When I said that “everyone” would be adversely affected I was generalizing to some extent. But my comment was prefaced on the fall-out that would occur if some on the site get their wish for a huge crash of over 50%.
This would cause a depression in my opinion. I was responding to the remark that all sellers should have to bring cash to the table - something to that effect, anyway.
Obviously, the rich will be OK. Or at least are smart enough to land on their feet and remake the money.
If there were a 50% drop, couldn’t homeowners petition for a re-assessment of their property for taxation? Or would there just be an increase in the legislated tax rate if that happened?
Wouldn’t help if you have no job to pay any tax let alone your mortgage payment. I’m talking Depression - massive layoffs, bank failures, stock market crash…
Robin — yes, and probably yes.
va-investor,
I believe there will be a recession/depression/financial collapse. Who will be better off? Someone who has sufficient cash (metals, foreign currencies, etc.) or someone who is deep in debt with absolutely no margin for error?
Most of the people on this blog are in the first category. We have money. We could buy TODAY if we wanted to match our REAL money/good income/excellent credit with the stated-income/low FICO/”suicide loan” money.
What would you do if you were in our position? Wait, or jump in at the worst time in RE history?
CA renter,
I would hold-off for a couple of years at this point. The writing is on the wall. My point is that there will be collateral damage that some on this board can’t see.
I doubt many here have as much cash as you. If the right “deal” presented itself, however, I’d be all over it now.
Hurricane season begins June 1st. Yikes. The flipper must be getting desperate.
David
Bubble Meter Blog
you could probably do a blog on US property taxes issues due to the housing bubble.
As politicians campaign across New York, they’re hearing the same thing from voters everywhere: They want something done about jobs and property taxes, now.
The 4 percent state sales tax would be removed from clothing and footwear starting Saturday, families would receive a child-tax credit and school property-tax-rebate checks would be increased by 30 percent under agreements reached Tuesday by state legislative leaders.
BS
many counties in FL have caps, hense taxes arn’t forcing them to move
3% in Lee and others
Yeah, but cashing out and moving up will cost you dearly.
People are happy to cash out and pocket the 100’s of K tax free gains, but then are pissed about having to pay a few thousand more a year on property taxes if they want to stay in the same area…go figure. YA CAN”T HAVE IT BOTH WAYS. Everyone now wants their cake and to eat it as well. The property taxes should stay at current levels and should theoretically stop the rampant price appreciation. Only now after the Florida knuckle heads ran the prices up so high, did they say Uh Oh… now I’m getting screwed by my taxes if I try to cash out and move. Solution…have a state income tax, yeah, right, let’s hear the crying if that were to come up in Florida.
Yeah, they have 3% annual caps on property tax increases; BUT…if you move out of your old house and buy another residence everything resets to the current appraisal on your new primary residence. Flipper houses are exempt from the 3% cap and you pay full taxes on those.
Florida Affordable Housing License Plate - now I’ve seen everything!
http://www.dataresearchlogistics.com/homeownership/
Pay money to have houses bid up in price even higher - what a solution.
Wow that’s the best. Hope it passes — one of those will be great for my office, right next to my 1-share post-bust stock certificates of WebVan and eToys. And if I gotta buy a beater in Florida to get one, then I might just do that.
The Sun Sentinel reports on some worried real estate professionals. “The real estate industry would be ‘brought to its knees’ if homeowners aren’t allowed to take a property tax break with them when they move, Palm Beach County Property Appraiser Gary Nikolits said Wednesday. ‘We’re going to reach a point where people are not going to be able to afford to move,’ Nikolits said.”
This is a very bad idea, because it still preserves the great inequities of freezing property taxes. Better idea: assess property tax rates based on market value and set the rate low.
A tax with a low marginal rate assessed broadly is generally preferred to a high marginal tax assessed more narrowly.
I just wish they would raise the homestead exemption, and make in relavent again. A $25k homestead exemption in 1982, when the median price was about $50k made sense, but the idiots in Tallahassee forgot to install an inflation increase (like the personal deduction from the IRS). If they just raised the homestead to $100k, or there about, and included inflationary increases in the future, than things would be much more reasonable.
Only $7k in California.
i think it is a violation of equal opportunity law…for the same new house, new owner would pay 3 times old owner..it would be huge class action
It’s been like this for years. When you sell, the new buyer gets taxed based on the purchase price and if they fill out the homestead exemption papers get locked in there with the annual cap on increases.
Last year I lost my job in Florida and decided it was time to sell because I knew I’d have a difficult time finding a job at my salary and also knew that I was going to be seeing sizeable increases in insurance. I decided to leave Florida because there was no way downsize and have a lower house payment because with the inflated prices, any saving on the mortgage payment would be eaten up by the jump in property tax payments.
Since a large number of rental units were undergoing condo conversion finding a rental last summer was getting difficult so I decided to leave FL. Was an easy decision since I hated the place.
The folk who bought my place are paying 10K a year for property tax and I paid 4k for the same house. The system is seriously f’d up. Everybody should be taxed at the same rate.
You’re absolutely right about that.
A major factor in holding up realestate prices is the prop 13 type laws that prevent fair appraisals on existing houses. In Naples you have situations in which long term home owners complain that they are paying $8,000 in tax on $4,000,000. (they think) properties. The new buyer is expected to pay $56,000. (1.4%) once the property tax is recalculated. Many flippers are going to get caught holding that bag. What is fair about the “greatest generation” not paying their share of property taxes and demanding more and more from medicare and social security? Meanwhile their grandkids get screwed. There is a geriatric time bomb overhanging high end real estate over time as the “greatest generation” passes on. Their children will have the taxes readjusted and will not be able to afford the homes. They will then dump the properties. Who is going to buy?
Where I live in Tampa the tax rate is 2.5% of the selling price or appraised taxable value, so a 4 M property would have to pay 100K a year in taxes, far more than in Naples, which is a much nicer place (Tampa is a dump). A mile or so away, people pay almost nothing in taxes. There are thirty different tax rates in this county alone. How can this possibly be Constitutional?
No matter, the politicians are milking the bubble for every tax penny they can get, and this includes real estate taxes and sales taxes. What happens when the bubble collapses and the revenues dry up? Will the Florida legislature revise the tax law, so people don’t lose their homes to tax lien leeches? Will properties be re-appraized at their new, collapsed values?
These politicians got us into this mess in the first place, but I seriously doubt they have any plan for getting us out.
If all the properties get dumped, then prices should come down, along with the related tax bill since the percentage is roughly based on the sales price. See, it all works out.
Don’t count on it. Here, in Fairfax County, VA, when prices dropped throughout the early to mid 90’s Tax bills did not fall. I recall getting a large number of new assessments in the mail one day. In every single case, the house (improvements) value dropped and the Land value went up by precisely the same amount. Quite a coincidence, huh?
The county was much slower to revise downward as the years went on. Contrast to huge leaps on the way up.
California’s Prop. 13 is a model for property taxes every where!! 1% of purchase price plus special districts assessments less homeowners $7000( off value) exemption. Can not raise taxes more than 2% per year or inflation, whichever is less.Democrat Politicians and public employee unions don’t like it. That means it’s good for me and joe six pack as well.
“California’s Prop. 13 is a model for property taxes every where!”
This has to be one of the stupidest statements I have seen on this blog. Your state is BILLIONS in debt and you think we in other states should emulate this? Please. And it’s Democratic, not Democrat, moron.
>Your state is BILLIONS in debt and you think we in other
>states should emulate this
Oh, I forgot, state debt is caused by not filching more and more from taxpayers…SPENDING has nothing to do with it. Boy, I’m glad we voted in the California lottery, our schools are now models of educational efficiency, just like we were promised! Yup, overspending isn’t a problem over here…it’s that California doesn’t take away enough money from the people actually working.
And as far as being a moron, riddle me this batman: If it’s “Democratic politician”, and not “Democrat politician”, is the flip side “Rebublicanic politician”? As in, “hey, I’d never vote for him, he’s a Republicanic politician”. WTF?
>moron
Brilliant, just brilliant. Harfurd educated?
It is better to keep ones mouth shut and have people think you are an idiot, than to open it and prove them right.
http://home.comcast.net/~garbl/stylemanual/d.htm
Democrat, Democratic Party Many members of the Democratic Party (not Democrat Party) believe in “priming the pump” to stimulate the economy by aiding workers directly, instead of stimulating corporate profits that might “trickle down” to workers. Lowercase democrat and democratic when not referring to the political party and members of the party. See party affiliation; political parties and philosophies.
Maybe you shouldn’t get your english lessons from that drug addict Rush Limibaugh.
You know a republican by what he thinks his country is worth—as far as I can tell Republicans think America is worth 0 because that is what they want to pay for it.
Dorm eyed for condos
Harris: Condos for students hot sellers
They have tons of this stuff in Gainesville, FL. On top of that, there are at least three major condo conversions happening right now. Somewhere in the neighborhood of 600 units to be sold. In one condocon I visited, prices have dropped by 12k and closing cost plasma tv incentive are being offered to the tune of 8k. NoFla is a dump.
I used to live in Gainesville, when my father taught at the University of Florida. Gainesville is the most horrible place I’ve ever lived, and I still have actual nightmares about it. I am not exaggerating. If you offered me twenty million dollars and a palace, you could not get me to move back.
Twenty mil? AND a free castle? I’ll go.
two of my posts are missing.
I found them, the dog had burried them in the back yard. Do you want them back?
Centex agrees to sell Centex Home Equity
Print | | Disable live quotes By Katherine Hunt
Last Update: 3:39 PM ET Mar 30, 2006
SAN FRANCISCO (MarketWatch) — Centex Corp. (CTX : Centex Corporation
3:24pm 03/30/2006
(CTX63.00, -0.37, -0.6%) said Thursday it has agreed to sell Centex Home Equity Co., its sub-prime home mortgage lender, to an affiliate of Fortress Investment Group LLC. The purchase price will consist of a payment based on the book value of the company, plus a premium, the Dallas-based home builder said. Based on current information, Centex expects that net after-tax cash available in connection with the sale will be about $575 million, which will be used for investment in home building operations and additional share repurchases. Centex expects the sale to close within 90 to 120 days, pending approvals.
——————————————————————————-
In need of some cash?
interesting. any bad press out there on Centex Home Equity? Dominion sold a majority of there lender to Wells recently. I’m guessing that this is a way to avoid regulatory/pr type problems. “Don’t blame us, we just bought them” - “Well, don’t blame us, we don’t own them anymore.”
Nice way to get rid of future liability! Give Centex credit for dumping subprime loans that Centex originated by selling Centex houses to individuals that wouldn’t have been able to get a loan from any other source. Now they cash out!! I would not buy that portfolio of loans - Oh yeah - I forgot about the greater fools in the MBS’ finance.
I think that’s the guy behind Rock Financial, who as best I can tell:
a) knows what he’s doing
b) has plenty to lose if a is incorrect
As best I can tell he sold his online mortgage origination company to Intuit (remember Quicken loans) for about $400 million in Intuit stock (which didn’t crash after the bubble). Then he bought back 90% for about 35 million a few years ago. In between he started Rock Financial and Fortress Capital which is a pretty decent mortgage broker and private equity fund.
Good observation. It makes sense also to sell a business that’s inevitably going to decline over the next couple of years for four or five independent reasons.
net after-tax cash available in connection with the sale will be about $575 million, which will be used for investment in home building operations and additional share repurchases
Ahhhh, there we go.
Fortress Investment Group, hey? They’re the people who bought Michael Jackson’s loans from Bank of America! They hold the mortgage on Neverland Ranch.
I guess they really do specialize in high-risk investments.
“Any hope of an early return to a balanced market were firmly dashed by February’s statistics. The inventory of short term rental homes surged again to by far its highest level, bringing our in-house index well into the red zone for the first time.”
Looks like the Soft Landing(TM) is here.
slightly off-topic, but real estate prices measured in Gold are dropping several % per day now, both in the US and Europe.
We might have the first 30% downward correction in RE prices within a month (maybe more, if the dollar starts to slide which looks more likely every day). Actually this is starting to look like hyperinflation, even if it doesn’t show in the CPI.
Gold and Silver are growing at an unprecedented pace. Unreal if you look at the charts.
Factor in the whole Iran-connected-to-Nukes-connected-to-Oil mess and we are gonna see gazzoline prices over $3.00 /gal before the summer season hits.
Oh, and did I mention that the 2003 ARM’s are fixin’ to reset this summer as well ?
And Bird Flu….well its’ a comin’ boys and girls !!!!
absolutely, till gold/silver/copper keep going gangbusters, bernanke cannot pause. No way jose.
don’t forget that if the dollar slides, export from the US will increase. this will mean more jobs avaiable.
Nope. We’ll just import more workers from Mexico Inc. Got to keep those wages down, don’t we. By the way, all of us in Cali and the other border states send our thanks to the rest of the country and the US Senate for “having our backs” on the immigration debate. Being sold out doesn’t feel so bad after you get used to it.
Read about Centex to sell sub-prime mortgage unit for $575 mln.
“The company will use proceeds from the sale for investment in home building and to buy back shares.”
This sounds very familiar. Father has owned home in So Cal for 32 years, was 30 year fixed, paid off well before the 30 years. Annual property taxes $534. Yes, three digits. Even if he wanted to leave that heat hole, where the hell is a senior going to go where the housing costs are comparable?
While the working families front the bill for public services. Sick. Very unequitable tax. Perhaps have no property tax and only tax on income to pay for services.
looking at the blog entry and how it talks about a homestead tax break. Why should Florida residents who already own property get tax breaks when people who buy for the first time get no local taxbreaks (and pay more than anyone else)? that just doesn’t make any sense.
It makes perfect sense if you are a baby boomer that is trying to stick it to your kids. Unfortunately with home prices, property taxes, insurance, gasoline all through the roof and the extra FICA taxes we’ll have to pay to cover the pending social security crisis, well guess were all us boomer kids will be living 5 years from now - back at home with the parents. And somehow it was all our fault.
People moving out of FL? The spin I’ve heard from realtors says that 1000 people move to FL every day, therefore home prices can only go up. The people who will really move because of taxes are the folks who bought in the last 1-3 years. They are the ones who paying the most. Those that have lived at their homes are protected from tax increases. Hope these flippers like their new taxes, but afterall they can just pass it on to their renters.
Should be interesting to see how the flippers and 2nd home investors do over the next year with huge hikes in property taxes and insurance rates…
Even talks about a law that would make non homestead exempt properties in FL and properties over $1 million no longer eligable for insurance through Citizens (State run insurance)…
Dude, people are moving out. If you’re stuck in a “starter home” the only way to get into something bigger and nicer without getting spanked by insurance and taxes is to move out of the area. A lot of my white collar professional-type colleagues are moving to RTP, NC. I would do the same thing if I didn’t have so many South Florida family ties.
I wish we could go to RTP, too, from N VA, but may as well just wait ’til prices drop here and get inflated there . . .
I don’t know how the FL thing works, but my mom finished off the upper level of her Cape Cod and got hit with a revaluation. She lives in MI.
So, you don’t have to move to get hosed by the higher tax rates. A remodel may do it.
In California, every permit I pulled for a new roof, central A/C and heat, upgraded electrical, etc., caused the assessed value to increase. Do it right and pay more.
main reason people don’t pull permits.
DId you get re-assessed for the full market “value” of the property, or just for the improvement? There’s a big difference.
I know and like Mike K , but I must disagree. People are not moving out of state due to taxes, because with the Save Our Homes (Homestead) Act, they cannot have more than a 3% increase year to year. People are leaving South Florida because of the higher homeowners insurance costs, the congestion, the general rude nature of the inhabitants, the hurricanes, the crime and the desire for a less hurried lifestyle. And yes, the flippers, the snowbirds and the landlords are not protected by the homestead act. They are taxed at what is basically market value every year and their taxes (at least in Palm Beach County) have more than doubled in the past 4 years.
Reverse of multiple-offer strategy - in these times of multiple houses for a single buyer, a smart realtor (who only gets paid if a transaction occurs), may now wish to reverse the strategy. A “buyer’s listings” where you advertise a buyer who has a certain amount of money to spend buying property. Have all these sellers pitch their homes to the buyer, and then the buyer selects the most competitive home.
This idea does not sound so ridiculous anymore, does it?
Sounds plausible, but probably wouldn’t happen for a few more months at least. This market for most sellers will be like cutting yourself with glass; you don’t even know that you’re bleeding until your clothes are a complete bloody mess.
Ever happened brfore that anyone knows of? Could be a great strategy.
It’s already being done in commercial real estate has been for years. Don’t know how successful that strategy would be for SFR’s unless you were talking sales price of a million plus
Funny how history repeats itself.
We have crossed from the denial stage to the fear stage.
Wait until the I/O resets start in 2 months, right around Hurricane season.
Chicago: 2000 Ft Tall Condo/Hotel Complex Planned. 300 Condos, 150 5-Star Hotel Units
Ruby Keeler will be at the opening.
I think the vast majority of us are still in the denial stage.
Simmsays…http://www.AmericanInventorSpot.com
AmericanInventorSpot.com
What nonsense! Buyers are terrified of buying in a falling market. What could be comforting about the idea that the house you are buying is going down in value?