Some Perception That Prices Haven’t Hit Rock Bottom
The News Journal reports from Florida. “More than 900 area homeowners were notified last month they could lose their properties as local foreclosure activity continued at nearly triple last year’s level. The new monthly numbers from RealtyTrac place Volusia and Flagler counties among the more heavily distressed areas of the nation.”
“One homeowner trying hard not to become another statistic is Dean Murphy, who just knocked $17,000 off the asking price for his three-bedroom property in Ormond Beach. Murphy, who lives in DeLand, said he tried to sell the home for two years at $199,000, but now has lowered the price to $182,000, just enough to cover his two mortgages.”
“‘We had it rented for a while but now we’re losing almost $1,000 a month on it,’ Murphy said. ‘It’s not in foreclosure yet and if we can sell it in the next month or so, we may be OK. But we’re still going to take a bath on it because we put a lot into it.’”
The Sun Herald. “Southwest Florida’s circuit courts are reporting foreclosures at triple their 2006 levels and actually getting momentum as 2007 draws to a close. For example, the Charlotte County Clerk of the Circuit Court reports 1,992 foreclosure filings compared with 664 in 2006.”
“With Charlotte County sale prices down 10 percent or more from 2006 levels…the fact that Charlotte County has been built on retirement income doesn’t help either. Jobs in home construction, mainly for retirees, have become scarce.”
“This leads local attorney Kevin Russell to conclude that ‘next summer is going to be a test of will for a lot of us … we’re at ground zero in Port Charlotte and North Port for a lot of what’s going on.’”
“Following Hurricane Charley in August, 2004, speculators descended on storm-ravaged neighborhoods, buying up houses in the expectation that any structurally sound dwelling would fetch top dollar during an anticipated long recovery.”
“Roger Miller, attorney with the Farr law firm in Punta Gorda, said the vast majority of the 30-some foreclosures currently on his desk are investment deals gone bad.”
The St Petersburg Times. “The National Association of Home Builders released a tentatively optimistic report Thursday: New home construction should begin a slow recovery in the summer of 2008.”
“Unless you live and work in Florida.”
“Association chief economist David Seiders said the Sunshine State’s housing market was so ‘grossly overheated’ that it will require a ‘long workout period’ to stabilize.”
“He saved his harshest assessment for the state’s condo market. The glut is so bad in the Tampa Bay area, it would take close to three years, at the current sales pace, to clear away the inventory.”
“Home sales indexes tracking new home construction have fallen to a 22-year low, Seiders said. New-home builders report fewer cancellations as speculators and dabblers flee the market.”
“‘It’s hard to be thrilled when it’s still sitting at a record low,’ Seiders said.”
The Palm Beach Post. “The housing market won’t ‘hit bottom’ until 2009 - a year later than previously predicted, the chief economist for the National Association of Home Builders said Thursday.”
“Rather than bringing an end to the worst housing slump in 16 years, 2008 will simply be ‘another down year,’ Chief Economist David Seiders told reporters and analysts.”
“‘We really are in a danger zone,’ Seiders said. ‘We’ll be looking at further erosion in house values in 2008 and hit bottom in 2009.’”
“‘The essential story here,’ Seiders said, ‘is a major run-up in unsold inventory during the second half of 2005, through 2006 and into 2007. There are currently 2.1 million vacant homes for sale on the market,’ he added, ‘with 700,000 being excess compared to more normal times.’”
“Subprime lenders went belly-up, Seiders said, ‘and it cascaded down from there.’”
“Nationwide, home prices peaked in 2005, he said. In Palm Beach County, they peaked in November 2005, when the median price of an existing single-family home was $421,500, the Florida Association of Realtors says.”
“U.S. home prices fell at an annualized rate of 7 percent in the third quarter of this year, Seiders said, ‘and there’s little doubt that the fourth quarter will be down further.’”
“Seiders acknowledged that his estimates were dependent on the success of government attempts to help homeowners whose monthly subprime mortgage payments were due to jump.”
“If those 800,000 homes go back on the market, ‘we’re in deeper trouble,’ Seiders said.”
The Ledger. “Polk County home builders had a lean November, pulling their lowest permit total for the month since 2000. It marked the 21st consecutive month of annual declines in permitting activity, and was the lowest November figure since 221 in 2000.”
“‘Right now the builders aren’t adding to inventory when they have existing inventories to move. That’s why you’re seeing these permits down,’ said Joel Adams, executive VP of Lakeland-based Highland Homes.”
“Permits fell in nearly every city. Auburndale dropped to one from 18 a year ago, while Bartow had just three in November versus 14 last year.”
“Adams said he expects 2008 to be another tough year for most in the industry.”
“‘There could be some perception among buyers that prices haven’t hit rock bottom. I’m not sure that’s the case. Over this past year new home builders have probably done all the price cutting they can,’ he said. ‘It’s going to take time to chew up this unsold inventory and get the equilibrium back in, and I think it’s going to take most of 2008 to do that.’”
The Bradenton Herald. “Some local builders think the Manatee-Sarasota market is already looking up. Auctions, foreclosures, short sales, vulture funds and discounted new home prices are part of the reason the move is in a positive direction, they said.”
“‘The bottom has been established,’ said Jerry Blumberg, co-owner of Gibraltar Homes.”
“John Cannon Homes, along with Gibraltar Homes and other local builders, are approaching 2008 like a normal year, with new models already under construction and set to open in the new year.”
“‘I don’t think it’s going to be a boom year, but it will be healthy,’ Blumberg said. ‘We were the first up, the first to bottom and the first to climb back.’”
The News Press. “Fallout from the housing downturn and an accounting charge helped Hovnanian Enterprises Inc.’s fiscal fourth-quarter loss nearly quadruple.”
“Hovnanian operates in Lee County as First Home Builders, whose assets Hovnanian bought in August 2005 for an undisclosed amount. The company has been particularly hard hit in Lee County, where it is now largely out of business.”
“It has a skeleton crew of about 50 employees, down from nearly 1,200 during the height of the boom in late 2005.”
“On Nov. 5, Hovnanian sold 812 lots in Cape Coral to Ocala-based Deltona Corp. for $16.2 million. The company’s Lehigh Acres lots are also for sale.”
“Two of the main lenders for First Homes construction loans are also in financial trouble: Colorado-based Norlarco Credit Union and Michigan-based Huron River Area Credit Union were taken over by the National Credit Union Administration because of bad debt due in part to their construction loans for First Home customers.”
“Hovnanian also faces lawsuits including a federal class action filed May 30 in Fort Myers by would-be buyers claims they were duped by First Home, the Gates D’Alessandro & Woodyard real estate agency and various lenders into financing houses at inflated prices with promises of a 14 percent return on their money.”
“The new-home building crunch has made a harsh impact, on Lee County impact fees. Impact fees are a one-time bill on new construction to defray the cost of providing and expanding services and facilities that benefit new development.”
“In the 2005 fiscal year the parks department collected $10.2 million for community parks, in 2006 it was $9.4 million. The recent market crash crushed the impact fees to just $3.5 million in the 2007 fiscal year, which ran from October 2006 to September.”
“‘I think overall it’s unwelcome,’ said John Yarbrough, parks and recreation director. ‘At the same time it gives us a chance to refocus, reprioritize and not that we don’t do that, but make sure our priorities are where they should be with the projects.’”
“Single-family home permits in unincorporated Lee, Bonita Springs and Fort Myers Beach have nosedived since fiscal year 2005 when 20,578 were pulled. In 2006 there were 17,141 and in the most recent fiscal year, 6,572…a 67 percent decline.”
“‘Our major funding source is tied to building permits, so that is the risk we run,’ said Dave Loveland, planning manager for Lee Department of Transportation. ‘The plus side is we are seeing bids come in less than our budgeted amount.’”
“The market turn has made construction companies eager for work, and they have become more competitive and are offering lower bids. In November, Posen Construction of Michigan’s bid on the $25 million Summerlin widening, came in $13 million under the county’s budget.”
“On Wednesday, the low bid for a widening project for Plantation Road expected to cost as much as $7.5 million came in at $4 million. ‘The cash is coming in less, but the bids are lower,’ Loveland said.”
“Michael Reitmann, executive VP of the Lee Building Industry Association, said the downturn should make the county consider other ways to generate revenue. ‘We need to get a handle on not just allowing impact fees to pay for infrastructure,’ he said.”
“The impact fees are deterring the building industry from pulling the permits and not to expect the new housing market to kick up anytime soon, he said. ‘We’ve got to get rid of the inventory because it doesn’t make any business sense to start building if you got homes out there.’”
‘On Nov. 5, Hovnanian sold 812 lots in Cape Coral to Ocala-based Deltona Corp. for $16.2 million. The company’s Lehigh Acres lots are also for sale.’
This free fall in land prices is occurring all over the country. And these people will put it right back into the market eventually, and certainly before the end of the downturn. So any MSM or government types reading here, note: price supports and refi plans will only hold out false hope to the FBs, and make the situation worse. Prices are going back to equilibrium, with you or without you.
Amen…. my brother…. say it like it is!!!
Whoooeeee…..!!
Save your breathe until after the elections. What how quickly the “bail out” talk ends after the elections.
That’s a long way off! Too long..
$20K/lot - now there’s a nice new comp. Now we get an idea of the value of the dirt under this tract housing garbage - essentially ZERO, relative to the structure on it. But RE always appreciates (I’m told) - sure the house might depreciate, but not the land, the precious land!
Yup, and my builder friends tell me they shoot for a house at triple the raw land costs, so we’re looking at $80,000 houses.
…so we’re looking at $80,000 houses.
Sounds good to me. I can put 1/2 down on one of those. :o)
Seems to me that house prices have always been about 10x average car prices. Back long ago when my father bought our house in Bellevue, Wa. cars cost $1500 and houses cost $15000. Not so long ago (before the bubble) cars cost $20k and houses cost $200k.
Good observation. And I guess somebody’s house would match the car. Audi/low Lexus drivers live in a $350K semi-mansion (at reasonable prices), Middle class lives in a $170K house with a Corolla (170 sounds high) and lower class in a 50K shack drives a 5K beater to Wal-Mart.
Hey,
Those 5K beaters last a lot longer then high flutin Audi/Lexus thing a mijings. Give me plenty of metal between me and the car that’s coming at me.
I’m sure it’s somewhat regional. Here in Texas land is around 15% of total cost. It’s also a sliding scale with respect to cost - land amounts for a lower percent of price the cheaper the total cost. Land actually lead to the runup in house sizes and extravegance in the worst bubble areas like Florida. When the cheapest land you can get is $750,000 and acre, about all the builders can do to make it pencil out is build a mansion (or else not buy and build at all, but that’s crazy talk). The idiots never even stopped to think who could afford all those McMansions…
My rowhouse, in an, ahem, “transitional” neighborhood sits on about 1,000 sq. ft. lot. The replacement cost of the house - 900 sq. ft., now frills, is probably 200K, max, and that is being conservative. Peak price on my block is a bit over 400K. So, 200K for the lot is an acre-equivalent price of about $9 million.
In the late ’90’s houses on my block sold for a pretty steep discount to replacement cost. One of my neighbors paid 70K in 1997. The land underneath hers was thrown in for free.
So from ‘97 to ‘05, land went from 0 to 9 million bucks an acre. My hunch it’s going back to zero.
Prices are going back to equilibrium, with you or without you.
A good bet that most of these assemblymen, senators, congressmen, and women ie. government types were speculators right in there with the mix. Of course they are not going to sit on their hands.
“Prices are going back to equilibrium, with you or without you.”
The problem with such an explanation: To those who understand how a market works, no such explanation is needed. And to those who do not understand, well, the explanation will fall victim to some stupid counterargument that is engineered for PR/reelection rather than being a solution.
But hey! tilting at windmills is sometimes the right thing to do. And who knows, maybe it will help somebody on the road to enlightenment.
gov types don’t gamble- unless it’s OPM
that’s why they work in gov- no one ever gets fired
Ben,
In November there was a huge jump in REO’s in Charlotte County.
Approx double from previous months. I can see us going crazy from here. Remember,those numbers are only thru the end of Novemeber.
We should be able to get a damn good picture by the middle of Jan. It usually takes a couple of weeks for all the sales to be listed on the counties website.
Here is a little teaser. My brother and I were bored over T-day. We went out for a drive around Port Charlotte. We wrote down any adress that looked empty on a street plus all the for sale listings on the streets we were on.
I looked all the NOT for sale/empty houses up in the county tax records for ownership. In Port Charlotte there are as many empty,not listed,REO’s as there are actual listings. Methinks next year is gonna get very ugly…..
Chris
Here in NE OH people start putting their houses on the market again about the end of Feb to catch the spring season. If, by chance, we have a mild winter a lot will hit about the middle of January. Then watch the numbers climb. Most people living in their houses during the holidays do not want them on the market.
That works out to $19,500 per lot, and they’re probably 1/4 acre lots. I’d say that’s still overpriced.
Actually ~ $20k/quarter lot would be about right if the lots are developed and ready for homes. At least it would be late 90s prices for normal, middle-class subdivisions in FLA. For a developer, that would translate into $30~$35k per acre for undeveloped residential land. The rest of that $45~$50k would be absorbed by designing + permitting + infrastructure (roads/sidewalks/water/sewer/electric) + right-of-ways + drainage.
“note: price supports and refi plans will only hold out false hope to the FBs, ”
Yeah but now FB’s can foreclose in splendor.
No muss No fuss.
Yeah, I’m sure going through foreclosure is a pure joy.
I’m not speaking from experience, but you put up with a few harrassing calls and demand letters, live rent free for several months, dodge a tax bullet when the bank finally takes it back . . . not the worst thing in the world if you have nothing to lose.
From experience watching a family member and friend get foreclosed on it is not pleasant, Sure, no one comes to your door and beats you with a stick, but the psychological exposure is degrading. It’s like being stripped naked in front of friends and family. It’s coming to the realization that you are not as smart or bulletproof as you thought.
The walk-away smiling attitude would belong to someone who does not have a conscience or ties to one’s community.
For the people who truly have nothing, being foreclosed on is not a big deal, think inner city. You just walk and keep walking and never acknowledge anything. So many people will be in this boat you’ll seem almost abnormal if you haven’t had a foreclosure or bankruptcy in your past. Still, not the path for me, but among the unwashed masses, it’ll almost be a badge of honor, “Yeah, that’s right, I’m mainstream.” LOL
In my Grand parents day 1920′&30’s if they had owned a house and been foreclosed on they most likely would have packed up and moved due mainly to shame of being a failure, and the stigma attached.
“It’s like being stripped naked in front of friends and family.”
Oh, come on! Like that hasn’t happened to ALL of us a time or two during a rowdy, vodka-soaked holiday celebration! At my house, we usually corner them between the sofa and the fireplace and peel their clothes off while Aunt Thelma bangs out ‘The First Noel’ on the piano. It helps if you tickle them a lot. You have to be careful though, because sometimes drunks will pee themselves. Its a regular holiday tradition over at the Beer and Cigar Guy household. C’mon!! We’ve all been there! Right, guys?! Guys? Hello? Buehler… Buehler…. Anyone?
Actually something like that happened to one of my buddy’s roomates while in the USMC. But he was the one who started taking off clothes because he was so drunk he mistook the sofa for the toilet.
The wives who were sitting on the sofa at the time were not amused.
I have a cousin whose home was foreclosed upon this summer. (I think she pulled out mondo phantom equity to prop up her business enterprise.) She still hasn’t come clean, and fabricated an elaborate story about the so-called buyer, which is really quite bizarre. I only found out about the situation through a random conversation with a 3rd party who happened to attend the bank auction.
Nobody is completely honest, but people who are foreclosed on - especially today - are obviously of a lower cut of honesty than the average person. I would tend to be skeptical of what they say, about anything. Also, people are accustomed to lying are generally more shameless than the average person so bankruptcy or foreclosure is just another bump in the road. I’m not inclined to cut any of these people any slack.
I’d like to believe in this case it’s a matter of overwhelming shame and humiliation; my family is fiscally conservative and old school midwesterners. and did I mention, quite opinionated verging on judgemental? OTH, this was one of those defining moments, and her blatant lies has revealed a lack of character that has been quite distressing.
Continuing saga with the crooked jeweler in our town. He got a loan from a small loan company and used a diamond he didn’t own for collateral, but he was holding it in the safe for a customer. Anyway today’s paper said he bought a property in the name of a small corp he formed, using $183k from the $500k loan. 4 days later he transferred the house to their personal name, not notifying the loan co. Then a few days after that he transferred the house to an LLC co he’d formed in his wife’s name. Judge here ruled the transfer was legit from the corp to their personal name. However the appeals court said the further transfer was illegal to the LLC and constituted fraud since the corp went bankrupt shortly after getting the loan. Oh the joys of having to have everything.
Did anyone here see the story on Nightline last night about Countrywide “helping” FB’s?? I only caught the last part of it, but the C-wide guy’s ability to deflect any and all questions back to his point of “I’m just trying to help borrowers” was rather impressive.
Of course what he really means is he’s trying to save his job. Most FBs would be better off away and renting (many are realizing this). Some money from a FB is better than no money.
Can somebody walk me thru this process. When do these tax write offs really happen?
What if wall st. guys start losing huge amounts of HF moneys? I hear its already happening in Newport, CA.
‘What if wall st. guys start losing huge amounts of HF moneys?’
You must not check in here very often.
We have not heard about the millionaires losing money.
I know they are but they aren’t complaining.
Hedge Funds are private investment partnerships that are only available to wealthy investors who are therefore considered “sophisticated” enough to evaluate the large amounts of risk involved in the HF’s investment strategy. Because they are not dealing with Joe6pack, HF’s are not required to provide the same type of disclosure that public companies and certain investment vehicles (like mutual funds) are.
Since they are allowed to be secret, they are whenever they can get away with it (rich, sophisticated investors demand some information on which to make their rich, sophisticated decisions). They also write clauses into their partnership agreements that would make your head spin - such as being allowed to halt all redemtions and even require additional capital contributions from the partners.
They would, of course, prefer not to do that, as they might then be subject to a “run on the bank” as soon as they lift the restrictions.
Now, remember that the general wisdom on Wall Street is or at least has been up until very recently, that this whole situation is a panic and the MBS’s and CDO’s and other garbage will eventually turn out to be worth much more than they would go for on the open market right now. So, to see where the HF’s are in trouble, you have to look for them seeking liquidity in the form of cash infusions other than additional direct investments from the managing partners (the other investors would certainly recognize that as a sign of trouble).
I can tell you I am seeing possible signs of this at work. It is not confirmed yet, but my guess is that is what is going on. I can’t talk about the details. Sorry, I know it is a tease, but I just can’t.
Anyone here, however, is free to go looking for it, now that you know what to look for.
In Newport lots of rich guys don’t even work. They invest and drink good wine. Some were bringing in big salaries but a big sport is big investments. These will hurt one portfolio at a time.
We know the companies are hurting but what about JoeMartini?
Find me one of those stories.
If I lived in China I would have to go to boot camp for internet addiction.
Shock treatment for four hours of reading Ben’s blog.
I know, I know. my house is dirty, my kids are hungry, and yet I type on…
“widening project for Plantation Road expected to cost as much as $7.5 million came in at $4 million”
“Posen Construction of Michigan’s bid on the $25 million Summerlin widening, came in $13 million under the county’s budget”
There’s not THAT much profit in construction, awarding these bids to the lowest bidder will result in cutting corners, inferior materials and poor long-term results IMO (maybe the use of a lot of low-wage illegals too).
I would wager that both jobs ultimately cost more than those rock-bottom bids. Don’t spend the “savings” on anything else just yet.
‘There’s not THAT much profit in construction’
When I was doing accounting for construction firms, I saw them routinely put in bids that would lose money just so they could keep the doors open a little longer. Same with the dotcom people. They would always justify it away.
That said, people will work cheap when times get lean, so you never know.
Exactly, that’s what builders do . . . they build.
“they build”
…unless they have a government contract.
wonder if BIG GOV has a site where you can enter data to see if you qualify for a bailout ?
or will they hire thousands of councilors at taxpayer expense ?
“wonder if BIG GOV has a site where you can enter data to see if you qualify for a bailout ?”
Thats a good question.
I need to go call the IRS.
Go to http://www.irs.gov first.
And, since the only “bail out” so far is the voluntary agreement by the banks, you can bet that they are the ones that will be implementing it.
I’m not going to type it out again, but to start a new government department within an existing agency would take no less than 18 months. I can’t imagine it being any less than that unless the plans/job descriptions/job announcements had already been in place and ready to be implemented previously. Even contracting it out to a private firm takes that long. And remember, a lot of the credit couseling organizations are under audit.
doyoufbqualifyforbailout.com
Please answer the following questions with a yes or no:
do you have any equity in your home?
did you buy in the last 4 years?
are there lots of for sale signs and foreclosures and price reduced signs around you?
Have you ever missed a payment?
Have you ever lied on a mortgage application or are lying now to any of these questions?
Are you sure?
Really sure….. under penalty of death sure?
Cross your heart and hope to die sure?
Pres submit, and we will email you back a yes or no very fast, but don’t count on a yes…. frankly we give out very few of those.
Ah ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha!!!
HA HA HA HA HA HA HA HA HA!!!!
Wow. Sorry - that was a pretty good one. I lost it there for a minute.
Bradenton/Sarasota is currently plummeting like a rock. Prices are falling just about as fast now as they rose 2004/2005, and the fall is not slowing. And record-high inventory is still rising!!!! I don’t call that having a bottom established.
Keep dreaming, sand-castle-boy. The cold wave of reality - in the form of bankruptcy - is about to come crashing to your shore.
A bunch of us in my family were out to dinner one night last week after spending hours at ICU with my Dad (who’s fine now). My nephew is a manager for Wachovia car loan division. He’s telling his brother, who’s older, that he (his brother) should buy a house now because it’s a buyers market and prices have hit bottom. His brother looked at me and said I told him prices have a long way to fall, years maybe, and right now it’s no one’s market. At least someone is listening to me. It wouldn’t affect the one nephew anyway because I sold him a house years before the boom, so he probably won’t be affected by all this. However, working for Wachovia, he should be following things more closely.
|||”"Some local builders think the Manatee-Sarasota market is already looking up. Auctions, foreclosures, short sales, vulture funds and discounted new home prices are part of the reason the move is in a positive direction, they said.”|||||||
AAHH Yes!!! Things are looking up….The vultures are up there circling, ready to decend & clean up this mess….
My advice is; Don’t look up to see what’s going down!!!!
“‘There could be some perception among buyers that prices haven’t hit rock bottom. I’m not sure that’s the case. Over this past year new home builders have probably done all the price cutting they can,’ he said. ‘It’s going to take time to chew up this unsold inventory and get the equilibrium back in, and I think it’s going to take most of 2008 to do that.’”
Silly me. I always thought buyers determine what the market price is. What Sellers think they need to get what they want is not really relevant. They take what a buyer offers, or they get no sale. Period.
Murphy, who lives in DeLand, said he tried to sell the home for two years at $199,000, but now has lowered the price to $182,000, just enough to cover his two mortgages.”
Damn this dim-wit tried for 2 years to sell? 2 years and now he drops the price. Just plain stupid, he’s screwed but brought it on himself.
Well, if he couldn’t sell for $199K two years ago I think I know the probability that he can sell for $182K today.
DeLand should be the poster child for the Wishing Price.
This guy can’t see farther out than 30 days. He’s been losing $1,000 a month for two years. If he’d lowered the price by $20,000 two years ago, he’d be rid of the alligator.
He’s about to be DeLanded in foreclosure.
We should have a contest for actual city/area names that are apt for describing the bubble. Deland is a great one.
We are going to see a LOT of this following the market down. It’s amazing to see someone pricing just a bit too high, not sell, drop a bit, but not enough, and keep going through this cycle. Sometimes it’s smart to take the hurt and get rid of the thing.
Have you have ever been to Deland? It’s beyond weird; it looks like something from the Old South a hundred years ago, covered in some kind of green ivy. All that’s missing is a bevy of hoop skirts. I cannot imagine anybody paying anything to live there. When God invented boredom, he named it Deland.
The Stetson kids call it “Deadland.”
…covered in some kind of green ivy.
Could it be that kudzu crap?
Roger Miller, attorney with the Farr law firm in Punta Gorda, said the vast majority of the 30-some foreclosures currently on his desk are investment deals gone bad.
“Trailers for sale or rent, rooms to let - fifty cents. No phone, no pool, no pets,….”
“We ain’t reached the bottom yet,… “
“Had to, ARM to get in this town
It’s reset, and now the market’s down
Can’t refi, so now I’m
Hittin’ the road,…”
(break - raise major third)
“I’ve been through every handout, now I’m on the ground
All those great HELOCs, I’m feelin’ so down
And every mortgage banker in every town,
Is locking his doors, they know I’m hangin’ around. . .”
“One homeowner trying hard not to become another statistic is Dean Murphy, who just knocked $17,000 off the asking price for his three-bedroom property in Ormond Beach. Murphy, who lives in DeLand, said he tried to sell the home for two years at $199,000, but now has lowered the price to $182,000, just enough to cover his two mortgages.”
“‘We had it rented for a while but now we’re losing almost $1,000 a month on it,’ Murphy said. ‘It’s not in foreclosure yet and if we can sell it in the next month or so, we may be OK. But we’re still going to take a bath on it because we put a lot into it.’”
Couldn’t sell for two years? He could have gotten out at the peak if he hadnt acted like an ass with respect to price. Perhaps there is a God, I hope he takes a huge hit.
Lowering prices… trying to rent the place out… losing money every month… taking a bath on the place… talking about foreclosure… dude already IS a statistic.
And the jailer bellows out…”DEAD FLIPPER FLOPPING”!
“said he tried to sell the home for two years at $199,000″
I don’t believe him.
I think his $182k is going to change in $128k before all is said and done.
That would be correct pricing for Volusia County.
However, he’s got so much “invested”, it will probably need to reach the courthouse steps to go for that price.
How much does it cost to subscribe to RealtyTrac anyway? I’d sign up for a free trial but I can’t tell what they’d rope me into after that. I don’t want to pay too much just to be nosy..
if you cancel on time no problem, if you sign up and cancel after one month at about fifty bucks amonth still no problem
39.95 or 49.95 mth. I’ve found the data to be dated in my area. You might want to look at one of the foreclosures.com sites.
off-topic and maybe something for the weekend discussion but is this a sad story or another FB’s story from Washington Post.
http://tinyurl.com/3eyayw
Questions
1. Did the house foreclosed in March 06?
2. Why didn’t her 25 siblings help?
3. Why didn’t she sell her house when her husband/boyfriend died unexpectedly?
if it’s in the WAPO it will be the bad white capitalist o-pressors
with big gov as the best solution
they have several articles like that in every issue
more gov = more readers
Yea you sure have the Wash Post pegged correctly. What’s funny about the great benevolent Post is that in the the 1970s they had a long stike and broke the pressmen’s union. High wages and and good benefits are everyone’s entitlement - except when the bleeding hearts at the Wash Post have to pony up $. Like most newspapers the Wash Post delivery people are sub contractors. No need to pay payroll taxes or benefits. Sorry for staying into politics. The Wash Post is just so HYPOCRITICAL it boggles the mind. Whenever they report about tax cuts, they never report how much the taxpayers will save. They always report that the tax cuts will “cost” the treasury or government $X.
With few exceptions news papers are liberal Nation wide (world wide for that matter) just the way it is. Pop into a journalism class sometime and it is obvious why.
Same here on LI with chicago tribune owned NEWSDAY. Liberal as h*ll, politically democrat, to the point of corruption, but they despise unions. Why? because they’re hypocrits, thats why.
The WaPo? Liberal? What are you smoking? For the Iraq War, scarcely a peep about the Republicans being the most obstructionist party in American history, etc. We don’t have a single major center-left paper in the entire US. Even the NY Times beat the drum for the Iraq War.
Of *course* they hate unions. Not hypocritical at all. Corporate-owned, serving their masters.
FairEconomist, point well taken.
NYTimes just built themselves an elaborate and expensive new home. And how did they do it? They need to buy and demolish a building to complete their site, the man who owned the thing didn’t like the price offered, and refused.
So the mighty times went to the mayor, and demanded the building be sold to them, at their price, using eminent domain. And, done. So much for the “liberal” NYTImes.
When it counts, they roll with the Wall Street Boyz.
Oh I forgot, they do love the powerful teachers unions. GO FIGURE.
Should be sorry for STRAYING into politics.
Well the real problem is that this is a jobloss/health/death causing a foreclosure story. Bad stuff does sometimes happen. This woman bought the house with a mortgage that was only $30 more than her rent had been. This is IN NO WAY indicative of the comming tsunami of foreclosures. She is vastly more sympathetic than the overhoused loosers, serial HELOCers and flippers that got us here.
One homeowner trying hard not to become another statistic is Dean Murphy, who just knocked $17,000 off the asking price for his three-bedroom property at 529 North Andrews St. in Ormond Beach.
Murphy, who lives in DeLand, said he tried to sell the home for two years at $199,000, but now has lowered the price to $182,000, just enough to cover his two mortgages.
“We had it rented for a while but now we’re losing almost $1,000 a month on it,” Murphy said. “It’s not in foreclosure yet and if we can sell it in the next month or so, we may be OK. But we’re still going to take a bath on it because we put a lot into it — a new roof, new fixtures and other stuff.”
Honestly, these people just do NOT get it.
Reroofing the worn out shingles does NOT increase the value. It just keeps the value from decreasing when you go to sell because that is ordinary maintenance.
Painting the walls does NOT increase the value (unless the place was 1/2 finished with bare gypsum wallboard when they bought it.)
Just putting in a new stove, refrigerator, dishwasher or different bathroon sink & toilet & tub does NOT increase the value.
Back when we had the energy, we would buy the house in the great location that needed work but had an excellent basic structure. What increased the value of those houses was things like: new subfloors with new flooring (wood or real tile); relocating walls; converting space to things like walk-in pantries, laundry rooms, baths, & family rooms; redesigning the entire kitchen from the wall out to replace the 30 year old never-changed original counters and design ; and adding on rooms. It was not painting the walls or a new countertop or a new stove.
The amount of added value is NOT the amount charged by the contractor for coming in and doing the work PLUS a profit to the owner. The value added was only what would be charged by a contractor for materials and labor. We always came out ahead because we did the work down to every last nail - helps to know how to do things and taping wallboard is not rocket science.
In fact most home improvment projects never fully pay for themselves upon resale. And that includes dropping $50000 on a kitchen designer, the contractor and those institutional appliances whicht might recoup 40-60% of the cost if the prior kichen was 10-30 years old.
Some things never pay for themselves such as pulling up the carpet and installing wood floors. The buyer might prefer carpet.
These ‘improvements’ are kind of like the New Math and Self-Esteem programs for kids these days. Everyone now wants extra smarty points and big Smiley Face and stick on stars laden Achievement Awards to put on their refrigerators at home for ‘accomplishing’ a mundane task somewhat correctly like wiping their ass. Pathetic.
AnnScott
I just have to say I enjoy reading your comments. Very well written, concise, informative, and often humerous. You seem to have a wide & interesting history; makes for a good read.
And heck, even though I may not agree with you 100% on all topics, I still appreciate the fact that you take the time to cover background details.
(Ok, enough blathering from me for now. Back to regular programming).
In short; rock on , Ann . . . rock on !!
Thank you kindly sir.
I collected advanced degrees like popcorn in my 20s and then married someone who had done the same.
We also were both raised with the attitude of ‘learn to do it yourself.’ My husband’s parents were in their teens and 20s in the Depression; my grnadparents were in their 20s and started a business that succeed during the Depression; and my great-grandfather told me a lot about the depression of ‘93 (1893.)
I also excell at being cheap (although when people are trying to be polite, they call it frugal.)
I took the position that if I could understand the material to get advanced degrees in law, economics, history and public policy, I could damn well learn about plumbing, wiring and load bearing wall.
Have a nice time during the holidays.
(I’ll be spending a lot of it typing up the data to explain to our rather dim village council members that when prices of houses that have sold have fallen 30-40% from the last appraised value, that means that tax revenue will eventually be going down so maybe we better not spend $10,000 to plant 10 trees.)
“‘The bottom has been established,’ said Jerry Blumberg, co-owner of Gibraltar Homes.”
In 1997
It’s not in this group of articles, but the Tampa Tribune had an inane editorial page piece today praising Hillsborough County for not “joining the panic” and pulling all its money from the state investment pool. My wife works for the school system, so if her paycheck is delayed in the future by reason of the state’s decision to be the bagholder for Lehman Brothers’ essentially worthless placements of mortgage-related securities, I may write my first-ever letter to the editor.
The same editorial mentioned, yet again, that “experts” had predicted a quick housing recovery. When is somebody in the mainstream media going to call for new experts? It is possible to *&#^%-up enough to lose the mantle of expertise.
Does anybody know if the employment stats cover realtors, mortgage brokers and other similar housing related employment? The reason I am asking is Florida’s employment numbers are not bad at 4.3%. I would think the numbers would be around 6-7% by now at the very least.
1099 are not counted accurately- neither are the illegals
Not realtors - they are considered self-employed.
Depends on whether the mortgage brokers were employees (witholding and all that stuff) or self-employed.
Generally the stats do not pick up the self-employed as they are deemed to just be having a bad run of business.
Self employed ,which is why the Job Stats are never correct.
Many either are in their own businesses or out of work. And many run out of unemployement, and take p/t min wage jobs just to have some $.
Job Stats are never accurate.
Realtors, mortgage brokers, appraisers, and a lot of construction workers are not included in the numbers in OH, so I would guess it’s the same in FL. They are independent contractors and get a 1099. They can’t collect unemployment because they are not employees of anyone.
“‘The bottom has been established,’ said Jerry Blumberg, co-owner of Gibraltar Homes.”
How absurd and delusional.
The Times has an “it’s different here” article about foreigners buying up the condos in NY. I guess the same could happen in Florida. Sounds like a voting block for immigration — FBs.
http://www.nytimes.com/2007/12/21/realestate/21condo.html
“Diane Ramirez, president of the real estate brokerage Halstead Property, said foreign buyers would make up about 20 percent of the firm’s sales transactions in 2007 in terms of dollars spent compared with nearly 15 percent in 2005. Ms. Ramirez said that five years ago, there were no apartments for foreign buyers because the market was made up mainly of co-ops whose owners would not welcome them into their buildings.”
“Foreign buyers often purchase quickly because they largely view these apartments as investments like a bond or a stock. ‘They’re not really sophisticated investors…’But they thought, ‘Where else can I put my money?’”
BLINDLY INTO THE BUBBLE.
Paul Krugman.
http://www.nytimes.com/2007/12/21/opinion/21krugman.html?em&ex=1198386000&en=d8024594add3366a&ei=5087%0A
OT… Smartest CEO’s… Ol Tanman right up there.
http://biz.yahoo.com/portfolio/071220/dcr7ba6571ce7d8376ce7f9429bcb05e192.html?.v=1&.pf=career-work
I think even foreigners know Flordia is screwed for now. What better place to visit and spend your high-valued Euros than NYC. You just land at Kennedy, take a taxi and your right there in your new Manhattan condo where property taxes are reasonable and insurance premiums affordable. In Florida, high property taxes for vacation home owners and outrageous insurance premiums are scaring away a lot of buyers. My husband reluctantly agreed to sell our condo in Islamorada, FL in 2001 (made 50% on it) with the understanding we would buy again later. However, this Philadelphia-area resident sees no time in the near future when buying back into Florida will be attractive.
(You just land at Kennedy, take a taxi and your right there in your new Manhattan condo where property taxes are reasonable and insurance premiums affordable. In Florida, high property taxes for vacation home owners and outrageous insurance premiums are scaring away a lot of buyers.)
I wouldn’t say NY taxes are low, but with a local income tax on top of the state income tax, they might be lower than Florida for those who don’t earn income. But the biggest break goes to 1-4 family homes.
Looks like a rich income stream for our public services — empty buildings with foreigners paying property taxes.
Relative to FL, NYC property taxes are extremely low, especially for 1-4 family housing.
When it’s all over, and prices have dropped, people will eventually fill up many of the condos in Florida. I’m writing this at my father-in-law’s condo in Clearwater and the weather is freakin great.
Can’t wait for the bubble to completely burst.
yeah, the weather is freakin great for about … 2 1/2 months per year, then back to the oppressive humidity & gridlocked traffic of Clearwater Beach. yer welcome to it.
Personally, 2 months of nice weather isn’t worth the other 10 months of owning anything on the Gulf Coast. East coast is better, somewhat, not so much humidity, nice ocean breezes, surfing, etc.
(Holiday Greetings to Palmy - holdin’ down the fort in FL) !
I’m vacationing with family in Clearwater in a really nice Condo - Mandalay Bay Club - and the pool deck and clubroom are completely empty. I wonder how many people actually live here.
there were a lot of “investor” buyers in Mandalay Bay and the other condos that were built in the last 5 years - a former Clearwater mayor was the subject of an investigation when he pushed through the 9 hi rise condo projects that went up on the beach, then got a sweetheart prebuild deal and flipped his condo a few months before leaving office and made a few hundred thousand in profit.
as a result of the condos and the building mania that happened (some idiot decided that the beach needed a $1M roundabout, that proved so controversial and inconvenient it was removed a year or two after it’s construction), Clearwater Beach has forever lost it’s old character. i used to go to the beach a fair amount, but i just can’t stand it now.
i hope a hurricane erases that whole stretch of development.
good observation & question re Mandalay Bay; they just saturate the area with advertising, so they are not an unknown entity.
My bet is a large portion of the condo owners are elderly & tuck themselves away in their living rooms, content with the satisfaction of wintering in Florida with all the status it entails. You wont see them much unless you get up at 5am to see the line of Caddys heading for Dennys EarlyBird Special. Why do you think the Hogans moved down to Ah-Mi-ahmi? Will Smith dont get jiggy wid it in Clearwater.
BTW, watch out for that stuck left turn signal & abrupt last-minute 3-lane-change.
“One homeowner trying hard not to become another statistic is Dean Murphy, who just knocked $17,000 off the asking price for his three-bedroom property in Ormond Beach. Murphy, who lives in DeLand, said he tried to sell the home for two years at $199,000, but now has lowered the price to $182,000, just enough to cover his two mortgages.”
A recent 10/07 comp in that hood for $157k assessed by the county at $148k. The Murphy house is assessed for around $10-12k less. We’ve had another leg down in two months and I bet this house isn’t worth more than $130-135k tops right now a reasonalbe drop from the top in 2005 when they bought for $182k.
“On Nov. 5, Hovnanian sold 812 lots in Cape Coral to Ocala-based Deltona Corp. for $16.2 million.”
Quarter acre Cape Coral lots now listed in MLS as low as $12k.. A tone listed at $14-15k now. Early in the fall there were none under $17-18k.. Some have utilities, some do not,all are paved roads..many with utilities have a huge special assessment that comes with the lot
http://www.realtor.com/search/searchresults.aspx?ctid=10263&ml=3&mxp=7&typ=20
That “special assessment” sucks. Only in relatively recent years have developers in this area flogged off their infrastructure costs onto the customer in this manner. I *think* that that is a big part of the unhappiness of owners in Baldwin Park in Orlando, but am not positive of that.