Borrowers Did Not Plan For The Future In Florida
The Daily News reports from Florida. “The Daily News began tracking local foreclosures in August. Court records at that time showed that foreclosures in Okaloosa County had jumped by nearly 70 percent from 2005 to 2006 and are on pace to be about 83 percent higher in 2007 than in 2006. Santa Rosa and Walton counties also showed record numbers of mortgage foreclosures, far outpacing 2005 and 2006.”
“‘I don’t think we’ve reached the top as far as foreclosures,’ said Shirley Parker, president of Parker Mortgage Services in Fort Walton Beach. ‘I think it’ll continue probably through next year.’”
“Borrowers did not plan for the future, she added. ‘You can regulate people all day long, but if they want something, they want it,’ said Parker, who counseled many people out of buying more house than they could afford down the road. ‘I’d say to them, ‘At some point, this balloon is going to bust, and when it does, you won’t be able to afford this house note.’”
“One upside to the foreclosure crisis is the promise of some sweet deals in 2008. ‘You’re going to see a $300,000 house … and a lender willing to take $200,000,’ Parker said. ‘You’re going to see a lot of good deals on investment property.’”
The Orlando Sentinel. “Florida’s economy should hit its low point within the next three months and then begin a long, steady climb upward, according to the latest quarterly forecast from the University of Central Florida.”
“‘We see a dampening down of things going into the first part of 2008,’ said said Sean Snaith, director of UCF’s Institute for Economic Competitiveness and author of the quarterly Florida Forecast. ‘But we’re still in the [prediction] mode of a soft landing for the economy. The way we put it: ‘The runway has lengthened for when we take off again.’”
“In his quarterly Florida forecast, Snaith made no predictions on when housing prices would return to mid-2006 levels. But he predicted that annual housing starts, after bottoming out in 2008, would return by 2010 to the same levels seen back at the start of the decade.”
“‘People have been predicting an apocalypse. I see more of rapture than an apocalypse,’ he quipped. ‘There will be some rough quarters to get through, but the long-range economic outlook is an upward trend for the region.’”
“Florida’s population grew a measly 1.1 percent in the past year — just a little bit faster than South Dakota and a little bit slower than Oklahoma, according to census figures released Thursday.”
“The decline in the past year is largely the result of the housing slump and the mortgage crisis, said William Frey, a demographer with a Washington-based think tank.”
“What happened to Florida is the same for other ‘housing bubble’ states such as California, Texas, Arizona, Nevada and Georgia. Declining home values, foreclosures and the end of easy-credit mortgages put the brakes on people moving from state to state.”
“‘The bursting of the bubble means they can’t sell their house in New York and move to Florida. The credit crunch means they can’t buy a house in Florida,’ Frey said.”
“Orlando area complex owners put the brakes on the conversion-to-condos craze during the past year, and now the leasing side of the ledger is regaining a marketing advantage for them. RP Realty Partners, for example, decided in October against converting The Majestic of Downtown Baldwin Park to condominiums.”
“Marcus & Millichap’s recent third-quarter Apartment Research Market Update for the Orlando area found that ’supply and demand are still being realigned’ because of the ‘considerable number of condo conversions.’ The overall market’s vacancy rate is expected to be even higher.”
“In the Pine Hills neighborhood northwest of downtown Orlando, the Misty Oaks apartment complex is offering two months’ free rent for one-bedroom, one-bath units. That submarket is laden with apartments, and turnover in units is high.”
“Ali Muhammad, dressed in a Santa outfit, has been waving a bright yellow sign with the two-month-free deal at Misty Oaks. The complex is ‘also giving away a free iPod [digital music player] or $150 gift card. It’s not on the sign,’ Muhammad said. ‘Merry Christmas and Happy New Year.’”
From Builder Online. “After closing its doors in April and failing to sell its remaining inventory, Ponte Vedra Beach, Fla.-based Panitz Signature Homes has filed for Chapter 7 bankruptcy protection in the Jacksonville division of the Bankruptcy Court for the Middle District of Florida.”
“Citing the current downturn in the housing market, the luxury builder is calling it quits after operating in Northeast Florida for 27 years. At a May 19 auction, the builder was unable to sell any of its 11 homes, 25 home sites, or 32 townhome sites.”
The South Florida Business Journal. “Jorge Perez, CEO of condo developer the Related Group, is looking to create a fund to buy distressed units in South Florida’s saturated condo market. Matt Gorson, president of Greenberg Traurig, the law firm that represents Related, confirmed Perez is considering it.”
“‘The strong and smart developers would be wise to create funds and acquire distressed assets,’ Gorson said. ‘The Related Group would be in the mix.’”
“‘If he can purchase parts of a building or whole buildings for less than it would cost to build them, it’s a smart move,’ said Ron Shuffield, president of brokerage Esslinger Wooten Maxwell.”
“Perez joining the vulture investor ranks may further chill an already cooling real estate market, where foreclosures are rising and Miami-Dade County is saddled with between 35 and 40 months of condo inventory.”
“One unanswered question would be how Perez would deal with a potential conflict of interest if he ends up being the principal of a company negotiating to buy units at a discount from the Related Group.”
“Peter Zalewski, a former South Florida Business Journal associate editor, said groups buying blocks of units want a minimum of 100 units and ownership of at least 60 percent of a building, so they can control the association and rental rules.”
The Miami Herald. “The Standard & Poor’s/Case Shiller index says the South Florida region posted the worst decline of 20 major metropolitan areas it follows.”
“But Florida Association of Realtors sales data say median prices for single-family houses in Miami-Dade and Broward remained virtually flat at around $354,000 since October 2006 even as the number of homes selling plummeted.”
“‘Wall Street does not understand real estate,’ said veteran real estate analyst Michael Cannon, of the Case-Shiller index. Computer models, he said, can’t possibly account for all the variables that affect a home’s sale price or an overall real estate market. And the MLS that Realtors use accounts for only about 42 percent of the market, said Cannon.”
“So what is happening out there? Cannon, whose firm analyzes property valuations for banks, developers and government, says prices are declining from the overvalued peaks seen between 2003 and 2005 in certain segments. But, ‘overall, we have not seen any major decline.’”
“Homeowners who bought at the peak are probably losing money if they have to sell, but for the most part, homeowners are still ahead.”
“‘That’s why I call it a rollback, not a crash,’ Cannon said. ‘If there was a crash, you’d see tremendous price discounts being offered. You see all these sales pitches, but overall you don’t see sellers panicking.’”
“The average asking home price in Miami-Dade, says Ron Shuffield, president of one of the largest real estate brokerages in Miami-Dade and Broward, has dropped 44 percent since June 2005, from more than $1 million to about $600,000. The median selling price, he said, has fallen around 8 percent in that time. ‘Our sellers are becoming very realistic,’ Shuffield said.”
From NBC 2 News. “The Standard and Poor’s Home Price Index shows slashed prices and calls the state of the single family housing market ‘grim.’ But NBC2’s Patrick Flanary found out, the Southwest Florida market may not be in as bad of shape as you think.”
“If you take a look at the numbers over the last six years, Southwest Florida is doing OK. Some realtors say buyers are just fixated on the boom we saw two years ago.”
“Home prices are falling this winter, but Realtor Dick Truax says it’s not enough to attract buyers with the baggage they own up north. ‘They just can’t get rid of it up there. And they know there’s a great bargain down here, but it’s getting rid of the inventory they have there,’ said Truax.”
“He calls this year a roller-coaster ride in Lehigh Acres and he’s struggling to sell homes in the Majestic Golf Club. ‘I was going weeks where I wasn’t getting a single hit,’ said Truax.”
The News Press. “Housing permits continue to spiral in the wrong direction for builders, real estate agents and those impacted by the construction industry.”
“On its current pace, Cape Coral will issue fewer new single family home permits this month than it did during a record November, when only 12 were issued. Through Wednesday, only 5 permits have been issued for new single family homes.”
“Unincorporated Lee County, Bonita Springs and Fort Myers Beach also are not experiencing any kind of a holiday boost. Only 32 permits had been issued as of 4 p.m. Wednesday. In November, 60 were issued, compared to 357 in November 2006.”
“The declines, even for a slow time, are significant when compared to past Decembers. In December 2006, 90 permits were issued in the Cape, while 403 were issued in December 2005. The record is 858 for March 2005.”
“‘We keep thinking it can’t get any lower, and every month it gets lower,’ said Cape Coral spokesperson Connie Barron. ‘We just have to cross our fingers and know we have to get through this. It is just uncomfortable in the waiting room.’”
“The continued decline continues to surprise those in the industry. ‘I have never seen things get this low,’ said Sal La Spia, owner of European Construction of Southwest Florida.”
“La Spia has been in business in Cape Coral for six years, he said, through the most recent boom and bust. After building reached a zenith in 2004 and 2005, La Spia said he expected it to slow eventually, but he never expected this. ‘Property went up faster here than anywhere else, and then it went down faster,’ he said.”
“District 3 Councilman Bill Deile said the numbers were distressing. ‘That’s virtually down to zero,’ he said.”
“Deile figured the bust was coming in part because so many people in recent years have moved into homes they could not afford. La Spia agreed, citing high foreclosure numbers and a large inventory of unoccupied homes on the market today.”
“In the past year, actions have been filed on a more than 11,700 Lee County foreclosures.”
“Russell Weyer, a senior associate at Fishkind and Associates based out of Naples, said Cape Coral is suffering from an excess inventory, and doesn’t expect that probably to disappear overnight. ‘It won’t get absorbed overnight,’ Weyer said. ‘I would say there is about three years of inventory to work through.’”
“He said smart investors can weather the slump. ‘Now is not the time to put your house on the market unless you are in for a desperate sale,’ Weyer said.”
“What happened to Florida is the same for other ‘housing bubble’ states such as California, Texas, Arizona, Nevada and Georgia. Declining home values, foreclosures and the end of easy-credit mortgages put the brakes on people moving from state to state.”
Wow, that’s the first time I’ve seen Texas lumped in with that group but it’s absolutely true. It’s highly overpriced in all large (and some small!) Texas cities.
Yesterday one poster from S California was going on about how cheap Austin is.
Those just give me a headache. Not even worth responding to anymore.
Austin is off the corporate relocation radar right now. Houston is now in their sites.
Got popcorn?
Neil
How about those new home sales this morning? Down 9% month / month.Seems to me it is easier to pick which states are not bubble states.Wasn’t north dakota haveing a real estate party too?Pass the bubbly.
There was NO state that was not having a real estate party (How’s that for a double negative?)
Even the ones that superficially seem to be flat (MI, OH, CO, western-PA, IN, IA) would have had flat-out depressions had it not been for the bubble.
So a lack of price rises does not equate to no bubble. It just means that the recession was papered over by the cash-out refi’s and the flipping.
Don’t believe me? Take a drive through Michigan.
Those who mention Austin might have been correct just 2-3 short years ago. I remember when the thought of moving out of California first crossed my mind, Austin was one of the cities on my list. Apparently it was on a lot of other people’s minds as well. Three years ago, homes that were actually in Austin were as cheap as 100k or less. They’re more like 300k now.
People from other states don’t get that TX has some really high property taxes which makes homes over 200k incredibly expensive to own. I also suspect that many are looking at craigslist and homes for under 150k pop up in their search despite most of these being in outreaching areas like Barstrop and Round Rock.
After making that realization and prices got too high there, my list was altered. I am trying to stay away from anything remotely hip or likely attractive to Californians and people from the Northeast. So as for now, my list includes Nashville, Memphis, Atlanta ( not my first choice), and perhaps even Montgomery or even Pittsburgh PA.
Bottom line, almost anywhere else in the country is going to at least sound a lot cheaper to anyone from CA, NY, MA, and FL. That they think it is cheap is somewhat logical.
Well, I rented in Austin starting in 98, and I was paying half of what my (now bankrupt) landlord was paying on the mortgage. And that was the most I had ever paid in rent, at the time.
Pittsburgh is great and inexpensive, if chilly in the winter. But depending on your industry, you may find it hard to make a living. I’ve also heard that the taxes are ferocious–it’s one of those places with a shrinking tax base where the government won’t downsize, while the number of people bearing the burden shrinks. Hence, $16,000 a year spent per public school student, even though the schools aren’t anything special. My husband and I lived there as renting graduate students, and it was fantastic. (We paid $600 a month from 1998-2001 for a large one bedroom apartment in Squirrel Hill, which is a lovely walkable neighborhood a half-hour walk from University of Pittsburgh.)
Nashville already had it’s flood of CA equity locusts and is starting it’s swing down. It was my #2 choice after Durham, NC. Vanderbilt is one of the schools that is hiring away a lot of our faculty.
I was also looking at Blackburg, VA but after a trip out there, it’s off the list too. In the last 7 yrs, the building out there is crazy. What used to be a great little city now reminds me of suburban CA.
Believe it or not, Lawrence KS is topping my list of great small Univ towns. Ames, IA isn’t for behind.
I’m in the same boat, and looking at many of the same places. I spent a good deal of time in Lawrence Kansas, and I enthusiastically recommend it.
It’s a great college town with lots of culture — kinda a mini-Austin. And, if you need any of the big city stuff that Lawrence doesn’t have, KC is just 30 minutes away.
Frankly, I found the Lawrence/KC area to be far more cultured and livable than NoVA/DC.
How about Fort Collins? A nice town, I think. Or Laramie (umm, quite small, and cold, but boy is the State of Wyoming throwing money at its only University).
I’ve been watching Nashville for years now. I’m from TN, so the idea of being closer to family is ideal. It did indeed have what I’d consider a micro-boom. It got a nip of the ” it’s underpriced here” bug. But in the two years I’ve looked, I have been searching for homes under the 200k mark. The supply in that price has actually gone up, not down. There was a sharp spike this year and I’ve noticed a lot of reduced prices.
What’s more about Nashville is that it is surrounded by extreme rural areas on both sides. The population density is low, so you can easily live- say 15-20 miles outside the city and be within easy driving distance of the city and yet be in the sticks. I like that because that’s the way I grew up.
Other considerations are Memphis because my Aunt lives there and it is actually a really neat city with a lot of culture and art/music. It’s crime notoriety has so far protected it somewhat from investors and equity locusts who all want kid-friendly, whitewashed neighborhoods to raise their runts.
I’m still probably a few years off from making any kind of decision, but I am encouraged by the fact that prices in all of the areas I’m looking at are dropping, and in fact dropping faster than they are in CA. This means I’ll likely just pay half the loan off on someplace under 150k, and simply have a teeny little mortgage to nurse along and save the rest for retirement/investments.
Of course this is all a pipe dream, but at the end of the day, I see very little opportunity in California given the prices even if they were to fall a significant amount. Just look at the average age of those in cities like Austin, Atlanta, Nashville, and so forth. Is there any wonder that these cities are sometimes decades younger per capita than the more expensive ones? I think this will bode very well for future power cities with diverse, intelligent, energetic populations of young professionals willing and eager to kick California’s and New York’s ass at their own game.
“future power cities with diverse, intelligent, energetic populations of young professionals willing and eager to kick California’s and New York’s ass at their own game.”
Really?? Doing what? Producing what?? Be specific. What exactly do you identify as Cali and NY’s game?? I’m open to your opinion, but “diverse, intelligent, energetic populations” sounds like realtor cheerleading. Do you have specific ideas in mind where these cities can offer some real advantages? As for “young professionals” that’s pretty much a marketing label. If these cities have concentrations of trained people–in research and development in energy or medicine or pharma or agriculture –then what’s holding them back now? If not, then what fields do they excel in? Seriously, if you know the areas, I’d like to hear.
compared to S. Cal, most areas appear cheap and Austin is really cheap.
‘compared to’
And Matamoros, Mexico is cheaper still. But it comes down to affordability. Austin has the highest number of eateries per capita in the US. But guess what? That means the highest number of waitstaff.
Best time of my life was living in Austin, Texas where I tended bar at Katz’s on 6th Street. I think a one bedroom cost me about $600, off South Congress, around ‘95.
Not as cheap as Sugar Tit, South Carolina!
But do you really want to tell anyone that that’s where you live?
From the first article:
“You can regulate people all day long, but if they want something, they want it,” said Parker, who counseled many people out of buying more house than they could afford down the road. “I’d say to them, ‘At some point, this balloon is going to bust, and when it does, you won’t be able to afford this house note.’ ”
How utterly preposterous that statement is. By virtue of the fact that subprime WAS UNREGULATED is the reason we’re at where we’re at.
Unregulated? What about those recent Fed rules that outlawed liar loans, etc? The OFHEO, the comptroller of the currency, the SEC, the FBI, the Treasury dept, congress?
IMO, we had plenty of laws and agencies, but a failure to enforce.
Well, failure to enforce is equivalent to lack of regulation for all intents and purposes.
Can we change the title of this thread to:
Americans don’t plan for the future?
But acknowledging the need for planning also acknowledges the existence of limits (reality) - and the go-go consumer economy can’t have that. Realistic thinking is negative thinking in this day and age.
‘Well, failure to enforce …..’
-That would include illegal immigration here in SoCal. As the housing boom unwinds, the mantra of amnesty and benefits for all illegal’s seems to be slowing.
As the post yesterday quoted an illegal telling his kin folk back home, ‘Don’t come up here - there is no work’.
The problem in CA is not the illegal aliens but all the “free” benefits they help themselves to.
Otherwise there would be no problems associated with a mobile workforce that follows demand around the continent. If those workers also had to pay for services as they were used the system would smoothy self-regulate itself.
Mexican-Americans born here, that revere all things Mexican and speak the language, but have never been back to Mexico, and make the trip in their late teens or early 20’s down under, are thought of as not quite Mexicans, by the genuine article.
i.e., the most despised.
Just adding more fuel to the incendiary mixture…
The problem in CA is not the illegal aliens but all the “free” benefits they help themselves to.
If they did not receive the “free” benefits, their employers would have to pay for them directly or through tax witholding. That’s what this is all about - yet another robbery of the middle class by the rich and big corporations.The illegals are just pawns.
I’m reminded of an NBC reporter standing in front of a long line for rationed toilet paper in the former Soviet Union while stating: “The problem here is not communism, it’s the shortages.”
” there would be no problems associated with a mobile workforce that follows demand around the continent.”
Ah, the mantra of the corporate globalist. There is no citizenship, there are only moveable “labor units” interchangeable on the corporate gameboard. The rights and privileges of citizenship should be stripped from the “labor units’ as quickly as possible to ensure the quick, sure movement of labor to serve corporate needs. Any thought that the former “citizens’ might entertain that they are members of a republic, with the right to vote and thereby initiate or alter laws that ensure their welfare and common good are unnecessary and even dangerous to the globalist agenda. Globalists abhor individual rights and the existence of a functioning republic.
I am confused - I thought the Fed just recently adopted the regs, that there was no regulation of liar loans etc prior to that?
people on the far left conveniently like to confuse lack of REGULATION with lack of ENFORCEMENT, and FREE MARKETS with rampant FRAUD.
they’re not quite the same thing!
lack of regulation = no traffic laws
lack of enforcement = no traffic cops
Now could anyone explain just what the difference in outcomes would be between these two? I’m a little bit confused and I’m not even from the “far left”.
In lack of enforcement, some people will still do what is right. i.e, even though there is no cop, you still stop at the red light, drve the speed limit, etc.
no regs means just that, every man for himself, no order at all. Because there is no reg to follow even f the cop isn’t there.
Please name me one free market. I’ll even give you 3 tries.
Go.
‘Please name me one free market. I’ll even give you 3 tries.’
This is what I mean about your contradictions. You admit that there few free markets, and then proceed to blame everything on them.
Ben, my point is and always has been that the “free market” mantra is a strawman. A true free market plain doesn’t exist. Instead, we have a system that finds favor with and benefits the largest players which the ideologues(most of whom are prime beneficiaries) will point to and say, “here’s the model, here’s your free market”. How you and I define a free market and what criminals like Larry Kudlow characterizes as a free market are two entirely different things.
Ben, I disagree with you on this issue. Regulation is not the answer. We’re already regulated to death. Enforcement of laws, education, and information are the answer.
When people are given the information they need and can count on the authorities to prosecute the law, the system will become self-correcting. Self-correcting in a manner that is compatible with the notion of liberty and constitutional rights that this country was founded upon.
Yes, the lending mess is a huge problem. It will correct itself at a dear cost to those who lent the money, and the sting of that loss will make the lenders just a bit smarter.
We can’t regulate all our problems away.
‘Ben, I disagree with you on this issue. Regulation is not the answer. We’re already regulated to death. Enforcement of laws, education, and information are the answer.’
I think you misread me. I am saying about the same thing.
Laws and prosecuting breaches of such laws ARE REGULATION!
Your argument is meaningless.
That’s not fair. You know what I mean.
There are laws meant to maintain an even ethical and moral playing field for the citizens. Most people don’t consider that “regulation”. I.e. don’t kill or hurt other people, don’t steal, don’t lie on legal documents, honor contracts, etc.
Then there are what people call “regulations”. Such as: wear your seatbelt, get a smog check, or require lenders to document income or qualify a borrower at the highest rate on an ARM. While I’m sympathetic with environmental regulations, regulating how people transact arms-length business with one another is often a mistake. FDIC regulations are an exception because the government has to ultimately back insured deposits. Regulations on utilities are an exception because they are allowed to run as a monopoly that would otherwise be illegal. But there is no need to further regulate the lending business. There is only a need to enforce the existing laws.
“IMO, we had plenty of laws and agencies, but a failure to enforce.”
Please………don’t get me started.
I just don’t have the energy for an endless rant this morning!
Public pressure groups - Jesse Jackson and others - wanted the big mortgage companies to increase the number of loans given to “minority neighborhoods”, which many banks refused to do due to the associated credit risks.
But the gub’ment made it clear that banks couldn’t “discriminate” and that’s where a lot of sub-prime went.
One can Google for that stuff.
Big stick in many Md counties about how “blacks” were misled, etc. The the investigatins started and it was shown most were misled by other blacks, got “special” exemptons due to poor credit, etc. The stuff the Dems and Jackson types screamed for. And now, you can here a pin drop. Hasn’t been a “discrimnation” or “predatory” lending story for months.
Any guess how long the finger pointing about what caused the housing bubble to burst will last? My guess is certainly beyond ad nauseam. Gee can’t wait for all the “lessons learned” books.
The finger pointing will be in every direction, except the right one. The housing bubble burst for the same reason that every bubble bursts.
The prices just didn’t make sense.
I agree, but there is a further factor for housing that has to be taken into consideration.
Just because the prices don’t make sense for Babe Ruth rookie cards does not prevent people from paying 100K for them. The prices for many items don’t really need to follow any economic rules; if they come out with a 100″ LCD TV that costs 500K dollars; who the heck knows if it will sell or not.
The thing that is almost exclusively unique to housing is the percentage of income that it takes up, the need for shelter, and the extreme amount of leverage used to purchase it. Housing is, long term, pegged to incomes; if it were not, eventually nobody could afford housing anymore (compound it enough times at 30% YOY growth, and suddently you find out in 1000 years or so, your home will be worth more then the entire country of China).
Housing is pegged to certain fundamentals, which, for some bubbles, just do not apply. How much was GOOG worth as compared to Pets.com? Who in the heck knows; yes there are PE ratios and other indicators, but, for the most part, stocks (and almost all other asset classes) can go whereever the market takes them. Housing, long term, cannot do that; housing going up 30% YOY causes massive inflation.. Always has, always will.
for the most part, stocks (and almost all other asset classes) can go whereever the market takes them
No asset price can exceed fundamental valuation in the long run, and always for the same reason - supply will exceed demand, because you will run of out greater fools to pay for the lesser fools’ speculative gains. Fundamentals always prevail regardless of ability to pay.
All very true - and, a guiding principle for me in terms of investing. BUT - the kick in the shorts is that we are going to socialize the losses of greater fools and the financial industry who made these loans, so that this fundamental truth will not come back exclusively upon those who ignored it. THAT’s what pisses me off.
There seems to be an eternal differing point-of-view commentary between the people of real estate, who make their money from commissions, vs. the retail people who make it from set sale prices of tangible goods.
IE; the agents/brokers & such are always saying ” It’s not so bad, it’ll get better, now is a GREAT TIME TO BUY ” while the contracter/supplier type gets right to the nitty gritty & says ‘ things are NOT great & it’s bad and getting worse”.
Amusing watching these two camps bicker with their comments. Whom do YOU believe? I know who I would trust for an accurate portrait of financials, just because the tradefolk work with their hands at a skill & aren’t prone to spend large amounts of time to cleverly distort the income truth so much.
If Joe 6pack says he’s broke, he means plain & simply he AINT GOT NO PAYCHECK coming in. He doesnt blather on about tranches, Fed rate point cuts, or any other excuse making doubletalk.
Just look around closely for an accurate picture of the current & future direction of our country. It’s right there in front of yer nose if you just WANT to pay attn!
Bubble states???
To me that means all 50. They didn’t just offer these junk mortgage products in limited states.
This blog has proven over and over again that this bubble reached far and wide.
“‘People have been predicting an apocalypse. I see more of rapture than an apocalypse,’ he quipped. ‘There will be some rough quarters to get through, but the long-range economic outlook is an upward trend for the region.’”
I go to a megachurch in SoCal. Everyone is pro bubble and pro troops. You can cut the ignorance with a knife. WWJD? I know, hurl.
Yep. I can attest to that. Especially in mega churches. The grip of stupidity is slowing loosening though. I’d say half of our attendees reject the politico-pseudo religious mantra entirely. They realize they’ve been had. Of course I help it along a little bit.
For what it is worth, I told a lot of people not to buy houses over the last couple of years. Two couples, both Christians, listened to me and held off from buying. One of these couples sold a home where I live for a large profit and moved to Arizona two years ago. However, they chose to listen to me and are still waiting (and very happy).
All the others I attempted to educate (using several blogs, including this one as a guide), including two friends who proudly brag to be Atheists, jumped into the tide and “bit the hook”. One of these two atheists will be losing his “investment” in the next couple of months.
I don’t define the people I meet based on their particular religious (or non-religious) beliefs. You should try it sometime.
I go to a megachurch in the Sierras…
Everyone is so pro growth and pillars, of their community.
The oldest of the living ones are almost 3,000 years old.
And the ones that have surrendered to gravity, lay prone on the ground, it’s sturdy hardwood untouched for hundreds of years post-mortum, by Mother Nature.
A mere pine tree fallen in the same manner, decays in a decade.
http://en.wikipedia.org/wiki/Sequoiadendron
And best of all…
My megachurch is real, not imagined.
It appears that we’re all in the wrong megachurchs on this blog whereas it seems there is only one true religion and megachurch here in America lately.
It’s the Gospel of Real Estate and the Church of NAR . “Give me an Amen and another Subprime NOW”..as I scurry off to avoid the wrath of agents and the lenders lightning bolts for my failure to BUY NOW
The Minarets, Edison Lake, Mount Dana, Big Whitney Meadow,
The Bullbuck Tree, Hamilton Lakes - Now that’s God’s real estate.
They tell no lies, these giant trees.
aladinsane, your megachurch is more real than the opiate churches described further above. Nature, to be commanded, must be obeyed, a Francis Bacon saying (also known as “primacy of existence”).
My megachurch is the coastline of San Mateo County, the chaning of the seasons at Half Dome, Sentinel Dome, Glacier, Tuolumne, the large meadows on the valley floor. Yosemite.
I cannot shake the impression that Sean Snaith reads this blog. Some of his commentary, including this latest outlandish “end-times” evangelical religious reference, seems deliberately chosen to taunt us. Sean, if you’re reading this, I give thanks to God that I didn’t listen to you.
“‘That’s why I call it a rollback, not a crash,’ Cannon said. ‘If there was a crash, you’d see tremendous price discounts being offered.”
“And IF they built all those POS houses upon sinkholes, you wouldn’t be seeing this mosterous housing inventory”
Sean Snaith is wrong as often as a broken clock. I’m waititng for him to be right twice before I finish the rest of my statement….
snake, it really is the “end of times,” but only for the greedy buyers and those with out of control debt. For the rest of us, life just gets better and heaven is on earth!
Just ’cause you disagree doesn’t mean they’re ignorant. Nice try linking RE and the military. Talk about closed minded……gimme a break.
If you actually thought about what Jesus might do, you might not be so quick with the condescending commentary.
Let me guess. Jesus would bomb them with nukes. Better yet…. He’d deceive innocent folks, mortgage broker style as a means to enslave them. You know…. Jesus was all about enslavement right? /sarcasm off.
I guess it was too much to ask for you to tone down the venom during the holidays, but thanks for the chuckle anyways. Don’t they teach anything about anger and the tongue at your “church,” or are you just a slow learner??
If your church is as liberal as you are, I don’t think you ought to be bragging about how much you know about Him.
Blano, Dont feed exeter(the troll)…He cant help his ignorance.
And when one can no longer defend their own hypocrisy, the pull out the old troll accusation.
Pathetic.
I don’t think you ought to be bragging about how much you know about Him.
I don’t know any fictional characters.
Yesterday I was a flamer and today exeter is a troll. Can’t we all disagree and still get along?
People who are invested in a certain brand of religion or nationalism seem particularly prickly about their views. Get over it. Just because a group of people believe their viewpoint to be sacred and the one and only truth doesn’t mean the rest of us should have to tiptoe around them so as not to spoil the illusion.
If you disagree with something someone says, fine. Say so. But it’s cowardly to try to intimidate someone else for doing the same thing.
lol, religion
While not a direct link, there are segments of the population that like to be told what to do and think, especially if its accompanied with the promise of a reward at the end. They focus more on their expected reward then on trusting their own reason and common sense. Whether its blindly having faith in politicans, religious figures, or realtors; the theme is the same. As for the pro troops, lets not confuse that with pro GWB. The two are incompatable despite what the spin doctors would have you believe.
“Florida’s economy should hit its low point within the next three months and then begin a long, steady climb upward, according to the latest quarterly forecast from the University of Central Florida.”
We’re doomed.
“We see a dampening down of things going into the first part of 2008,” Snaith said Thursday. “But we’re still in the [prediction] mode of a soft landing for the economy. The way we put it: ‘The runway has lengthened for when we take off again.’
That is going to be one long runway. They better hope they don’t taxi around for the next 10 yrs.
“Florida’s economy should hit its low point within the next three months and then begin a long, steady climb upward, according to the latest quarterly forecast from the University of Central Florida.”
Wanna bet? I will give anyone 10 to 1 odds that the housing market in FL does not bottom in the next 3 months. Prices will continue to slide for years, not months.
The only thing that could make that happen is if 20-30% of the inventory was suddenly raptured from the earth, along with a simultaneous doubling of everyone’s income in FL.
Let’s see.. What do you think is more likely?
I watched and followed the RE market here in central Florida for 10 Years after moving away in 1990. For 10 years straight after the last boom in my county RE prices dropped 4.5% per year average for 10 years straight.
This time is much worse . Either way You could buy land cheaper in 2000 then You could in 1987.
We could return to 2006 prices around 2029.
Submit your idea to a megachurch pastor looking to save his flock from the housing crash. They can surround houses, link hands, chant and sing that gaaaaahd will take this evil house from our land and thus reduce inventory so that we may once again be enjoying our rightful housing appreciation.
Amen.
How about:
“Oh Lawdy, lawdy, lawdy! We pray that you can get all those commie pinko fence-sitters to stop throwing their money away on rent and buy the empty houses by the patriotic specuvestors, er, investors. Yeah ya!”
Reply to Mike Fink: The only thing that ‘totally’ amazes me, is the constant flow of ‘mis-information’ being perpetrated on/by the public….
“”OUTRAGEOUSLY ASTOUNDING”"”
“‘That’s why I call it a rollback, not a crash,’ Cannon said. ‘If there was a crash, you’d see tremendous price discounts being offered.”
followed by
““The average asking home price in Miami-Dade, says Ron Shuffield, president of one of the largest real estate brokerages in Miami-Dade and Broward, has dropped 44 percent since June 2005, from more than $1 million to about $600,000.”
IMO a 44 percent discount is pretty darn good.
OK, maybe not TREMENDOUS…
Yea… we haven’t seen the crash yet.
Sellers will pine for the days of the 44% discount. Soon. Everything I’m reading on Florida sales is that it continues to fall apart.
Got popcorn?
Neil
miami is in deep water! this is a city that is 25 below the poverty level. when the banks start adding foreclosures and the condos downtown are complete, it is going to be fun to watch how low prices will go!
It’s funny how all of these “economists” still think this mess will bottom and then go back to the good ol’ days.
Ask Citi, Morgan Stanley, California, Florida pension funds how they should jump back into these mortgage backed junk bonds again.
Not gonna happen. Do they think these once proud American banks like selling off 10 % of their companies while they are on their knees.
This thing will bottom below the long term trend and then go sideways for many many years. History will once again repeat itself.
“He calls this year a roller-coaster ride in Lehigh Acres and he’s struggling to sell homes in the Majestic Golf Club. ‘I was going weeks where I wasn’t getting a single hit,’ said Truax.”
- Mr Trax defines a ‘hit’ as a phone inquiry such as ‘Do you have any homes listed for sale?’
Very Glengarry Glen Ross’esque. I find it rather amusing that those that referred to themselves as investors were always referred to by those in the biz as hits and marks. I cant believe they are upset they are taking a hit. You either understand cap rates, economic trends, historical ratios, and cash flows or you dont. Same thing with those that were looking for fixer uppers. You either understand plumbing, electrical work, roofing, drywall, etc. or you dont. Any market where those that don’t know what they are doing can succeed is destined to fail.
In case of rapture, your house will be unmanned.
“‘People have been predicting an apocalypse. I see more of rapture than an apocalypse,’ he quipped. ‘There will be some rough quarters to get through, but the long-range economic outlook is an upward trend for the region.’”
“The Standard & Poor’s/Case Shiller index says the South Florida region posted the worst decline of 20 major metropolitan areas it follows…But Florida Association of Realtors sales data say median prices for single-family houses in Miami-Dade and Broward remained virtually flat at around $354,000 since October 2006 even as the number of homes selling plummeted.”
I guess you can fail to sell your house for whatever price you want. If there wasn’t a better guide to the unreality of the median sales prices as a measure, I don’t know what is.
“‘Wall Street does not understand real estate,’ said veteran real estate analyst Michael Cannon, of the Case-Shiller index. Computer models, he said, can’t possibly account for all the variables that affect a home’s sale price or an overall real estate market. We in the real estate industry find that a cocktail of LSD and tequila, along with a dartboard containing only positive numbers is much more accurate.”
S&P have a futures market based on Case-Shiller, so if Mr. Cannon indeed has insights that the index doesn’t capture the opportunity is there for him to make some serious money.
“Computer models, he said, can’t possibly account for all the variables that affect a home’s sale price”
How about these (somewhat obvious) variables:
1. Affordability (median price vs. median income)
2. Loan-To-Value ratio
3. Debt-To-Income ratio
4. % of “affordability enhancement” loans (Option ARMs, teaser rates, I/O ARMs, 2/28 ARMs, etc.) vs. all loans
‘2. Loan-To-Value ratio
3. Debt-To-Income ratio’
- In SoCal those terms are labeled as ‘intolerant’ by the aclu….you might get thrown in the slammer for saying that!
Seriously, there is a great article in the LA Times Business section today on ‘Prime Loans going into default.’
The next wave of the ’soft landing.’
Ignore the man behind the curtain. Relax and drink your kool- aide. The realtors are here to tell you the truth.
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHHAAHAHAHA
–
“Borrowers did not plan for the future, she added. ‘You can regulate people all day long, but if they want something, they want it,’ said Parker…”
How about the lenders? They are the ones who didn’t plan, my dear Ms Parker. Borrowers did have a plan — if things go sour, live for free for 6-9 months and then walk away. Lenders are supposed to worry about the return of the capital in addition to the return on the capital.
Jas
I have a feeling that these borrowers also planned a free Christmas, using credit cards they have no intention of paying back. If you’re going down in financial flames, may as well take as much with you as possible.
Lenders did plan for it - they sold the loans off as SIV’s and CDO’s - They timed their exit from the market incorrectly. The real problem for me is all of us comfy homeowners who bought within our means and are able to meet our obligations are going to get screwed because our “prudent” investment choices for our 401K’s and mutual funds are turning out to be junk because of fraud and the pack mentality of the banks, bond rating agencies and insurers .
The bit about the inducements to rent in the Orlando repartment complex is especially interesting — my favorite Tampa conversion, the former Coachwood Apartments, is doing the same, minus the iPod: not eighteen months after the residents were booted and a big banner went up renaming the place and offering the units for $160,000 each (and they are decrepit caves, I’ve been in them), people now are being offered two months’ free rent just to move in. How would you feel about that if you bought there?
On another note, I want to wish everybody in this community a Happy New Year. I found this blog and started posting here in early 2005, because the things I was seeing made no sense to me, and because I was tired of seeing the last beautiful and unique aspects of this weird state being turned into a disgusting and featureless commodity. At that time, I was telling everyone I knew — often at the expense of my credibility — that this would collapse like nothing any of us had ever seen, but if you would have told me that, within two years, the housing bubble would be affecting the solvency of small towns in arctic Norway, threatening my schoolteacher wife’s paycheck, and causing Citibank, Morgan Stanley and UBS to sell parts of themselves to foreign countries, even a bear like me would not have believed it.
HNY, snake. I warned and still warn friends and family. Now, I get to see them suffer the consequences of their decisions. It’s sad.
I’ve stopped talking about it completely. I just send links to articles and leave it at that. There’s enough in the media now so that I don’t have to be the tinfoil hat wearing whackjob. Best wishes to you and all for the new year.
–
The Orlando Sentinel. “Florida’s economy should hit its low point within the next three months and then begin a long, steady climb upward, according to the latest quarterly forecast from the University of Central Florida.”
Three months?! These academics are shameless. I wonder how many business interests influence their “thinking.”
Jas
I think they meant low point in the acceleration rate downwards.
Totally shameless. How the F7*% can FL recover without a job recovery? Someone please tell me where that job recovery is coming from? Yes… I know medical is growing there. But until nurses can afford to buy with their blue collar hubbies, the state won’t recover.
Bloomberg is right now discussing the negative savings rate. They’re also talking about the ‘paradox of thrift.’ (Quoting Keynes). ‘Thrift is good for the (economy) in the long run, but not the short run.’
I think the true turning point down will be when people start to saver (or pay of debt) rather than accumulating more debt. Eventually this credit crunch will force that to happen. When? Probably in six months or so… Any which way, entertaining.
Got popcorn?
Neil
Who needs jobs when you got retired New Yorkers? Oh wait, the debt leverage game died.
–
“How the F7*% can FL recover without a job recovery? Someone please tell me where that job recovery is coming from?”
I am sure, Neil, you know that employment is the laggiest of all the lagging economic indicators, as much as 20 months. FL hasn’t even started the acceleration in job losses, which happens 9-12 months after the beginning of a recession. Long way to go, I mean years, before anyone should even think about recovery in FL.
Got no popcorn!
Jas
Totally shameless. How the F7*% can FL recover without a job recovery? Someone please tell me where that job recovery is coming from? Yes… I know medical is growing there. But until nurses can afford to buy with their blue collar hubbies, the state won’t recover.
Exactly!
I spend about 25% of my time in Florida. (I’m in the “Themed Entertainment” business).
People make their money in FL two ways–serving tourists, and SELLING HOUSES TO EACH OTHER. I’ve always thought this was the most fragile, ridiculous economy I’ve ever seen.
Money comes to Florida also in the form of social security and other pension benefits. There are quite many towns in Europe that live of such money - not any state though.
“ I wonder how many business interests influence their “thinking.”
Its probably University of Central Florida business, if RE continues down then the State of Florida does not get as much tax money and so the University of Central Florida does not get as much money and the Economics Department at the University of Central Florida does not get as much money
“After closing its doors in April and failing to sell its remaining inventory, Ponte Vedra Beach, Fla.-based Panitz Signature Homes has filed for Chapter 7 bankruptcy protection….”
The condos next door just slashed prices by approx. 50K. They were marketed as luxury apartments for about a year before converting. This is in prime biz district within the city. More signs that Jacksonville is going down.
“‘We see a dampening down of things going into the first part of 2008,’ said said Sean Snaith, director of UCF’s Institute for Economic Competitiveness and author of the quarterly Florida Forecast. ‘But we’re still in the [prediction] mode of a soft landing for the economy. The way we put it: ‘The runway has lengthened for when we take off again.’”
If only the airplane wasn’t so overloaded with debt bombs, making liftoff impossible…
Right now asking prices in Miami range from delusional 2005 bubble prices to “highly motivated” with 50% off. The former are usually FSBOs while the latter are usually foreclosures or short sales. 2008 will be another down year in Miami, like 2007. Hard to say when things will bottom out here. My guess is sometime in 2009 with prices staying put for several years. There’s a tremendous amount of inventory to work through. As for a rebound, certainly not before 2012.
If you must buy now, segment the sellers. Short sales have a longer transaction cycle. Foreclosures can be really quick. It’s a toss up with builders; some are not serious until quarterend.
“‘That’s why I call it a rollback, not a crash,’ Cannon said. ‘If there was a crash, you’d see tremendous price discounts being offered. You see all these sales pitches, but overall you don’t see sellers panicking.’”
OK, then, have it your way - 2007 is just a rollback, no collective panicking on the part of seller yet. But soft landing ain’t gonna happen. So 2008 will have to be The Year of the Florida RE Crash.
2009 is only 12 months away and the inventory levels are 3-5 years and are getting worse!
As to 44% drop, my rough analysis - up til mid-2005, if you had listed your pad for $1M, you’d get $1M and maybe more.
Now, if you ask for $600K for the same place, you’d get $450K counters.
When do you all predict that the banks will start booking the loss on what must be massive books of REOs and really get in the game? From what I have seen, there have been some reluctant short sales, and tons of properties being offered as short sales subject to lender approval (not getting any bites), but no real bargains in terms of bank-owned properties. The number of foreclosures even in upscale, well-established south Tampa neighborhoods is staggering. I was driving down one street in Palma Ceia on Wed., and there were literally 12 houses for sale in three blocks. At least 5 of them have lis pendens by the lienholders. I would think that when the banks finally start unloading these properties, then the real price declines will begin.
As was discussed in yesterday’s threads, banks and wall street are keeping bogus mark-to-markets on their real estate holdings to satisfy regulators and auditors, especially since its year end. Selling for 300k would look bad when your balance shows an asset worth 400k. The question is how long they can continue to hide the ball. It may take them being seized and liquidated. Look at the end of 2008 and 2009 for this to occur.
dimedropped: a question on Cape Coral, are you there?
“Perez joining the vulture investor ranks may further chill an already cooling real estate market, where foreclosures are rising and Miami-Dade County is saddled with between 35 and 40 months of condo inventory.”
“One unanswered question would be how Perez would deal with a potential conflict of interest if he ends up being the principal of a company negotiating to buy units at a discount from the Related Group.”
Not a problem - ‘conflict of interest’ is no longer a detriment to employment consideration - it’s a ‘hidden’ asset.
Heh. In this country there is no conflict of interest that money can’t overcome.
Re the Jax bankruptcy: It’s not so much that prices have suddenly fallen or inventories have suddenly spiked so much as it is that people who have all or a lot of their livelihoods or savings tied up in RE have suddenly accepted the truth about the market, which has been obvious for 18 months, and apparent for a lot longer than that.
This causes huge reassessments of net worth, plans, etc. Most people don’t mentally mark their holdings down, say, 10K a week, because they live with the lie that Florida (or beach, or whatever) property never goes down. One day they get over this lie - and then they have to suddenly admit they are a half million poorer than they’ve been saying, AND (now that they’ve admitted it) getting poorer by the day.
Two items here, merely anecdotal. I’m in Siesta Key, FL (right next to Sarasota) for the holidays. Took a bike ride the length of the Key with Mom. Ho-lee sh1t! This place is unbelievable. I tried to count the number of places for sale and was overwhelmed. Plus Mom was telling me detailed stories about people that I don’t know.
Also, gave Countrywide a call last night after receiving an email telling me that I should call about the loan that I had with them (three years ago). I had had several Tom Collins’ at dinner and felt naughty (after being nice all year for Santa). I was surprised to be on hold for a few moments instead of being put through to Comm. Gordon on the Batphone. I was asked for my registration number that was on the email. Then I was asked how I wanted to consolidate my loan. Here’s the gist:
“What loan?”
“The loan on your property.”
“I don’t understand the question”
“Well, I’m going to help you get a new loan for your property”
“I don’t have any property. I rent my apartment”
“Oh. Well, are you thinking about purchasing any property?”
“No way, man! Not until the real estate market fully corrects”
“Well…sir. Then I don’t understand why you are calling me.”
“I got an email telling me to call Countrywide and I did that. And now you’re saying that you can’t help me?”
At this point he’s kind of laughing at me and he closes with “It just appears that you don’t need our help.”
“That’s great news. Have a good one!”
I’ve been reading “Tipping Point” and I’m just trying to do my part!
MrBubble
Sounds suspicious - I’m supposed to believe that someone young enough to have a mother who rides a bike drinks . . . Tom Collins?
LOL. We were going very sloooowly. Dad turned 61 yesterday and Mom is younger, but won’t reveal! I am just an eighty year old man trapped in a 37 y.o. body who likes old school cocktails and highballs.
Looking forward to 80: “Get off my lawn, you damned kids!”
Suffice it to say that FL looks like a disaster on the ground.
“likes old school cocktails and highballs”
Personally, I’m waiting for the Old Fashioned to make a comeback. Nothing like getting a free fruit salad with your drink. It’ll probably have to wait until the flavored martini craze burns itself out.
Hey, I am in my mid-30s and my cocktail of choice is a Tom Collins. When I was at Babbo in NYC, the bartender was amazed that anyone still consumed such a classic drink.
you guys are killing me…
can I get a shout out for a manhattan?
Hell yeah…problem is they make your hands/joints hurt……cuz I am passed out on the floor and people are walking on them
“It just appears that you don’t need our help.”
ROFL!
Yeah, I think you “need his help” like a fish needs a campfire.
BTW, I had some of the same observations down south of you in the Port Charlotte/Punta Gorda area. There was a funny quote on this blog about a year ago that went something like “a 9 out of 10 on the Oh Sh!t scale”. I’d say PC/PG was a full 10 when I was there recently.
Here is a lovly graph showing the price-to-rent ratio - and how inflated prices were and how far they have to fall.
“Housing: How far is down?”
http://krugman.blogs.nytimes.com/
Thanks, Ann. There was an article in the Washington Post recently that noted the average cost of renting in the DC-area was just above 15,000 annualy, while the average cost of owning was just above 32,000 annualy. It noted the relationship was about inversely proportional ten years ago - much cheaper to own than to rent.
Funny thing, though, the paper inferred that the current situation is somehow a permanent change- a “paradigm shift.”
Bwahahaha….
“‘We see a dampening down of things going into the first part of 2008,’ said said Sean Snaith, director of UCF’s Institute for Economic Competitiveness and author of the quarterly Florida Forecast. ‘But we’re still in the [prediction] mode of a soft landing for the economy. The way we put it: ‘The runway has lengthened for when we take off again.’”
Wow. The only things missing in Snaith’s report
are the orange hair, red ball nose, white frilly suit, size 22 shoes, and a midget car with 4″ steering wheel. Oh, and let’s outfit him with a seltzer bottle for old time’s sake…Ringling Brothers, Barnum and Bailey must have let Snaith in on their winter layover…but can we just have the dancing bears now, please?
The Barnum & Bailey circus, no joke, will be performing in Tampa from January 2 to January 6. I am going and will look for him!
“‘People have been predicting an apocalypse. I see more of rapture than an apocalypse,…”
A bubble collapse of biblical proportions??
Reply to Montana Jim;
Did the Greeks ever have a god of Real Estate???
Seems they had a god for everything else…
Maybe the promised land will be selling at auction for two-bits an acre
“Borrowers did not plan for the future, she added. ‘You can regulate people all day long, but if they want something, they want it,’ said Parker, who counseled many people out of buying more house than they could afford down the road. ‘I’d say to them, ‘At some point, this balloon is going to bust, and when it does, you won’t be able to afford this house note.’”
You know what I never understood? If you bought a house you couldn’t afford–except on the I/O Teaser rate–EVENTUALLY you’re going to have to give up the house, even if prices kept going up, ESPECIALLY if you take even more loans out against the equity (also with adjustable rates).
Folks with adjustable non-conforming mortgages and home-equity loans with adjustable rates should all be investigated for fraud because it was IMPOSSIBLE for them to ever make it work (without selling the house).
And, of course, it was mathematically impossible for prices to keep going up! I worked it out once, and if houses went up 20%/year, they’d all be worth $500 MILLION at the end of 30 years!
> If you bought a house you couldn’t afford–except on the I/O Teaser rate–EVENTUALLY you’re going to have to give up the house, even if prices kept going up,
I disagree. If appreciation is consistently highar than your mortgage and HELOC rates (and some people really believed that it would be), you could take out HELOCs regularly, to pay the interest of your mortgage, and your equity would still increase. The house would NEVER be debt-free, but what is the point of having so much dead capital lying around anyhow? (just joking)
Talking about buyers and prices, and previously having discussed the notion of an monetary inflationary environment surrounding a “riptide” of deflationary housing costs; I’m going to wade on in again with some direct firsthand observations. Here in Mesa, AZ the real estate market is very slow, with asking prices steadily eroding. It has been a nightmare year for the real estate and motgage brokers. The county taxes on my 3BR2-1/2BA are going up $1000/yr for 08. I happen to be the treasurer of our local 254 home HOA. There is one home in foreclosure.
95% are current on their dues, happily, which dues went up 10% this year, primarily due to the cost of watering the common grounds and citrus. Water and landscaping are over 2/3 of our budget. I have a business that supplies aircraft operators and aircraft repair stations. For 2008 one manufacturer, 3M, is raising the price of a commonly used film adhesive by 35%. Another manufacturer, Henkel, is effectively raising it’s prices on an entire line of epoxy adhesives and potting compounds by over 20%. Another manufacturer, Hexcel, is raising certain graphite products over 20%. For those places that might attempt a composite repair of a winglet, aileron, stabilizer, etc., this is a cost of doing business which will have to be passed on to the end user - US Airways, Southwest, Boeing, a Naval Air Station, the U.S. Marshall Service, Fedex, UPS, whoever. My point is, that from my viewpoint, inflation is ramping up in direct response to petrochemical and commodity costs, as well as the destabilizing decline of the dollar.
I fully expect substantive monetary inflation in the U.S. at the same time as housing costs deflate. I hope others can provide an insight from their own perspective, job, or industry on this phenomenon.
2008 - let it be great. Best of luck to all here; and thanks Ben, once again, for starting and hosting this fascinating forum.
I fully expect substantive monetary inflation in the U.S. at the same time as housing costs deflate. I hope others can provide an insight from their own perspective, job, or industry on this phenomenon.
It will get much more interesting in 2010 and 2011 when crude oil and natural gas liquid production have declined by 10% compared to today. On the oil drum blog, some fella by the screen name Khebab posts regularly and provides charts http://www.theoildrum.com/node/3439#more which extrapolate the world oil supply in the future, using Hubbert’s type of analysis.
Ignore it at your own peril. The less cheap oil, the more that precious metals and oil prices will go up.
Hey! the infamous Ron Shuffield speaks again!
He says now:
““The average asking home price in Miami-Dade, says Ron Shuffield, president of one of the largest real estate brokerages in Miami-Dade and Broward, has dropped 44 percent since June 2005, from more than $1 million to about $600,000. The median selling price, he said, has fallen around 8 percent in that time. ‘Our sellers are becoming very realistic,’ Shuffield said.””
He said then:
“”South Florida,” he said, “is working off of a totally new economic model than any of us have ever experienced in the past.”
http://www.nytimes.com/2005/03/25/business/25boom.html?_r=1&oref=slogin
Wow, Shuffield and Snaith in one thread. I think my head just exploded.
Seriously though, Snaith has to be careful with saying all that religious/rapture stuff, especially here in Florida. He might motivate a horde of FB’s to off themselves. There seems to be a high concentration of “Jesus wants me to do this” types down here.
Again, my prediction for 2008 is that it will be a year of increasingly bizarre housing analogies from Snaith. I originally predicted food/housing, but I’d like to include just about any topic that an analogy can be made with.
Snaith in 2008:
“The writer’s strike finally ended. Now that NBC’s The Office is running new episodes, I’ll finally be able to sell my Sebring Convertible. I need the cash.”
Snaith should do battle with Dan “It’s hotter than a Times Square Rolex” Rather.
Did David Lereah study under Sean Snaith at UCF?