‘Sellers Doing What Would Have Been Unthinkable’: Florida
The Miami Herald reports on falling prices in Florida. “Around South Florida, many are doing what would have been unthinkable six months earlier: They’re slashing the asking price of their houses, townhomes and condos, and even throwing in incentives. The Florida Board of Realtors reports that prices of homes were lower in February than in January in Miami-Dade and Broward counties.”
“Take an owner of a 1,400-square-foot pool home just west of Coral Gables. The owner had already dropped the asking price by $62,000, asking $588,000 for his remodeled home. But when Juan Saiz came to tour the ranch-style three-bedroom home at an open house, the owner had knocked off another $10,000. Saiz himself settled for $35,000 less when he recently sold his Coral Gables condo for $390,000.”
“In the last few months, the market has begun shifting to buyers, who have more than double the number of homes to choose from than they did a year ago. ‘The market has definitely shifted,’ says Keyes real estate agent Luisa Mackay. ‘Nowadays, there is so much more inventory.’”
“Some owners have been steadily dropping prices. Sellers of a 2,700-square-foot home south of Bird Road near the Palmetto Expressway, for example, have dropped their asking price twice, from $749,000 to the current $660,000.”
“Philip J. Spiegelman, who represents dozens of condo developers, says the current market is likely to discourage many from building additional condos in the near future, even if they have done pre-construction sales, because they would lose money.”
“Even apartments being turned into condominiums have been affected. Many developers are resorting to creative incentives to lure buyers. The Marquesa condominium in Pembroke Pines recently was giving away a 27-month lease on a Jeep Liberty with any purchase of a two-bedroom unit. ‘No strings attached. Buy the unit, get a car,’ says Israel Kreps, a spokesman for the development.”
“Others are just resorting to the basic discount. In one gated community in western Miramar, Keyes real estate agent Nancy Remedios was telling prospective buyers at an open house that her client had lowered his asking price from $929,000 to $898,000 for his 5,700-square-foot luxury home. Plus, he had just called to tell her he would help pay closing costs. That’s a good tactic, real estate agents say.”
“After all, buyers ‘are looking for the best deal they can find,’ says (agent) Tony Rios Jr.”
By utter coincidence, condo prices happen to be simultaneously falling in SD as well!
“Downtown downturn?
With more condos on the market in central San Diego and appreciation flattening, boom appears to be slowing”
By Mike Freeman
STAFF WRITER
April 2, 2006
http://tinyurl.com/jaba2
Another strong hurricane season, South Florida markets will be gone with the wind. And tomorrow is far away.
“Pembroke Pines recently was giving away a 27-month lease on a Jeep Liberty with any purchase of a two-bedroom unit. ‘No strings attached. Buy the unit, get a car,’ says Israel Kreps, a spokesman for the development.”
At least they’ll have a free place to live for 27 months.
And what a nice cushion they could build if they socked that money away for the 27 months. Woo hoo!
That’s if they are *really* smart.
BayQT~
$588K for a 1400 square foot house is still obscene. Drop it to $288K and maybe we’ll talk.
Yes, most prices are a joke. I am looking in the 150-250 range myself. I could afford those payments w/o suicide financing. People up hear near roseville outside of sacramento are throwing around 500k prices like it is the norm. There are definitely the have and have nots around here. I see lots of heloc cars around here too.
I live in the East Bay,too…Dublin…but never in a million years would I have thought I’d see prices like $500,000 in Sacramento.
BayQT~
I LOVE it.
the scary thing is there are thousands of new condos still going up.
Ditto for SD, as indicated in the article posted above.
From today’s Houston Chronicle, an amazing tale of greed, lies and idiocy. In one neighborhood, “67 percent of mobile homes have been foreclosed on since 2001.”
It is a major clusterf***. Buyers, lenders, developers and appraisers all appear to be at fault.
“In the last few months, the market has begun shifting to buyers, who have more than double the number of homes to choose from than they did a year ago. ‘The market has definitely shifted,’ says Keyes real estate agent Luisa Mackay. ‘Nowadays, there is so much more inventory.’”
At least inventory is not a problem for the downtown San Diego market, as explained by a couple of local experts:
‘“People keep waiting for that nasty story that the market is falling. But I don’t see it,” said Rich Gustafson, a principal with CityMark, the developer of M2i and Fahrenheit condo projects downtown.
Of the couple thousand available units in new projects, only one-third will be ready for move-in sometime this year, said Russ Valone, a principal with research firm MarketPointe Realty Advisors.
The remainder won’t be finished until next year or the year after. High-rise developers commonly market their projects and enter into contracts with buyers before the building is complete, since it takes up to two years to construct a residential tower.
Valone thinks there are plenty of buyers for the 650 unsold new units – many of them condo conversions – that are hitting the market this year. “The glut in inventory downtown is a misconception,” he said.’
Gee. This clown is the developer. What would you expect him to say?
About what he said.
It seems to me that cheap condos ,(not overpricd condos),would be ideal in Florida . Florida seem to have a big market for snowbirds ,second residences ,and low wage workers.This turn key life style of the condo could be ok if the condo’s weren’t over priced and driven up by the speculative fever.
I don’t get it. At these prices it’s cheaper to stay in a hotel than own a condo.
Say you live in Florida for 3 months out of the year. If you stay in a hotel for $100/day, that’s 9k.
Just the property tax on a $450k condo will cost you that much, before you even start paying for mortgage, hurricane insurance, condo fees etc.
I would stay in a Hotel myself ,but if you could get a condo
between 50 and 100 thou it might be good for the people that want to stay there maybe 6 months out of the year .Im dreaming because now days they won’t sell the condos that cheap . Not that long ago you could see some Arizona condos for sale for 35 to 50 thou.
Besides being less expensive, hotels offer the advantage that you can leave town when the hurricane warnings are issued. Of course one can do the same with a condo, but if the hurricane severely damages the hotel, then the hotel owner ponies up for the repair. Condo owners do not come out so fortunately.
Housing Wizard,
I agree, there is a price point where it would make sense to buy a condo, and 100k is about that. In Ft Lauderdale 2 bedroom condos are about 400-500k. The cheap 1 bedroom ones 2 miles from the ocean are about 300k.
OT:
Big Price reduction in landmark coastal property.
Original story of historic hostel going up for sale due to aging owners.
http://www.ocregister.com/ocregister/money/housing/article_970966.php
Today’s story advertising the discounts.
http://www.ocregister.com/ocregister/news/local/article_1083969.php
Started out at $2.6M now at $1.9M.
$700K markdown over 25% reduction in price.
I am still not buying, maybe after another 20% reduction.
How one buyer ended up in a bind over a mortgage
I detect lawsuits and possible criminal charges.
A lot of bad, bad stuff going on there in Houston. I agree with you…I think criminal charges are in order.
You’re posting some very interesting articles, Lou.
BayQT~
Years ago in the late 80″s a developer in Texas did the very same thing to get out from under a overpriced project . I know a underwriter who got fired over the ordeal in spite of being given fradulant data .The developer/builder fled the country .
I’ve said it before and maybe in a few years, ya’ll will remember ol’ TXChick, the Texas housing bear. They’re crooked-er here in TX than damn near anywhere else, as these clueless wonders will soon find out. From shoddy building, to shady lending, there ain’t a scam that ain’t being perpetrated on a grand scale here now as we speak.
These real estate transactions remind of one of poker truisms- “If you don’t know who the mark is… it’s you”
“The Marquesa condominium in Pembroke Pines recently was giving away a 27-month lease on a Jeep Liberty with any purchase of a two-bedroom unit. ‘No strings attached. Buy the unit, get a car,’ says Israel Kreps, a spokesman for the development.”
NO STRINGS ATTACHED? More crap. This is a lease. No strings my ass, wait until you exceed mileage or the car depreciates too fast and you’ll find you have an umbilical cord attached to the car dealer. BTW, can’t wait for the IRS to step up to the plate and inform these people there are extra taxes incurred.
How often people forget that there is no such thing as a free lunch.
Reasonably priced condo or small house is exactly right for Florida. Who wants to sink a fortune or borrow excessively for a hurricane lottery ticket in a State where the summertime heat can be oppressive. Plus the cost of insurance there has skyrocketed.
Reasonably priced condos would work for a lot of areas, not just Florida. San Diego, San Francisco, Washington DC — heck! Maybe the condo glut will turn out to be a good thing.
My husband’s parents just returned today from Anna Maria Island, Florida, and told us that the city/county (not sure which one) just passed an ordinance for April 1 that you can’t have a “for sale” sign in front of your home, apartment, etc. without first buying a license. When we were there for a week visiting a few weeks ago, the place was filled with signs. It was kind of depressing. Someone will surely have more info than I on this. But it is sounding frighteningly familiar to the areas that won’t even allow “for sale” signs.
I noticed this too somewhere else in Florida. I drove through the neighborhood and there were no for sales signs, but on zipRealty and fsbo there were about 15 houses for sale in about a 4 block area.
I remember seeing for sale signs couple of years ago in that neighborhood, so maybe the HOA banned them?
In March, I drove through a development and was surprised that there were no for sale signs out. After a while I noticed that people were posting for sale signs on the inside of their front windows. Then I saw plenty of units for sale.
“My husband’s parents just returned today from Anna Maria Island, Florida, and told us that the city/county (not sure which one) just passed an ordinance for April 1 that you can’t have a “for sale” sign in front of your home, apartment, etc. without first buying a license.”
HA! What about putting a “SOLD” sign in front of your home? I’ll bet you don’t need to buy a license for that!!!
I haven’t stopped by Anna Maria in about 6 months. They were already getting quite a few signs along the strip back then.
I suspect it was a deterrent to the “owner/occupants” who want to maintain their values, as a high number of signs would indicate a “buyer’s market”.
Most likely the city council got pressured to limit the sign exposure.
This is not unusual in Florida. Many cities have sign license requirements to limit the size, location of signs along the boulevards.
However, i have been on Sand Key and St. Pete Beach, to the north of Anna Maria. I was there yesterday, and will be leaving in about 15 minutes for a little R&R.
The beaches are collecting lots of signs “FOR SALE or FOR RENT”. A year ago, the sign wouldn’t stay up 2 days before someone posted a “SOLD” sign.
Now, they are gathering, more and more.
Some are still selling. Lots more open houses.
“The spike in foreclosures and the homeowners’ allegations have spawned a web of suits and countersuits that has touched nearly everyone associated with these sales.”
Wow, we are further along this bubble bursting then I would have thought.Litigation hit China pretty quick too and things turned quickly there.
when i was growing up in WPB we all lived in pretty small houses.
When I grew up we had smaller houses and larger yards. In those days we spent more time outside. We enjoyed our lives more because we weren’t tied to a house. Houses weren’t overpriced and people could follow the job market by putting their house on the market and finding a buyer within their moving parameters.Every city was affordable, even SD, SF, San Jose.
It seems most homes built today don’t have usable yards. The front yard is large enough to be decorative but still too small for games, and too close to the road, so unsafe for small children. And a good portion of the front yard is occupied by the SUV display platform, aka the driveway (the garage being full of unused junk). The back yard is even smaller, and partially encroached by a deck. The back yard is never landscaped well by the developer, so the grass barely grows and there is no shade in the summer. Also the back of the house is coated the ugliest vinyl siding to be found, which doesn’t help make the yard any more pleasant to be in.
No wonder people spend more time indoors.
The reductions are far from enticing. It reminds me of when the Nasdaq went from 5000 to 4000 in a hurry, then bounced again only to become the biggest % decline since the Great Depression. Put the word out. Boycott prices because they’re no where near bottom.
Let’s just agree that Miami and SD condo prices are in a veritable free-fall, and in a couple of years when we see the price charts, we will all be amazed at how steeply the prices reverted to normalcy…
And I suspect we will redefine “normalcy.” Markets have a tendency to over shoot going down just as they over shoot going up. Prepare for drastically lower prices.
Does anyone know if the Tampa market is falling? My friend has been traveling all over, looking for investment property. First he considered Austin. Now it’s Tampa. He just returned yesterday, and told me the housing market has only just started taking off, no chance for a hurricane (cab driver hadn’t experienced one in his 30 years in Tampa), and he could buy a couple condos and have the tenants pay it off in 30 years.
What do you think? Is Tampa a good investment?
He sounds like some of the dumbest money out there.
Tell the clown that ol’ TX Chick said to consider three things
Put the money in an ETurd Account or whoever his online shyster of choice is
Buy October S&P puts at the money
Collect his double or triple in the second week of October
Oh, and the fourth thing
send a contribution from the profit to the animal welfare charity of his choice.
That’s it.
“Is Tampa a good investment?”
I don’t know. You might suggest to your friend that there are vehicles for investing in real estate other than direct investment and there are asset classes for investment other than real estate. He doesn’t have to buy property. For example CD’s aren’t looking too bad at the moment.
in home, he is going to leverage. I dont think he is investing HIS own money. So CDs are out of question, I think.
If Hurricanes Wilma or Charley last year had just veered a little more to the north, Tampa could have been slammed twice.
It can happen. Stuard Fla, on the Atlantic side, took a direct hit twice in 2004.
No hurricane in 30 years?…sounds like they may be due for one according to climatology…..
Tampa really has not been slammed by a major hurricane sinces the 1920’s. Pre 1970’s contrustion is probably the best. Most houses built after that are poorly built stucco on frame, those houses have also had there structures weakened by termites. I believe if a category 1 hits Tampa, it will flatten most of the city. Tampa is also a dump of a city.
I was in the process of shopping for a new home in 2001/2002 when i decided the competition was getting too much and the prices too high.
Prices in the area are “nuts” based on past history, and incomes.
On average, i would say prices over that time until now have increased about 50% -100%.
Would you say that constituted a “bubble”?
Or is there some fundamental change in the marketplace??
I am sitting on the sidelines, watching the number of houses increase in inventory.
I think your friend is probably not watching very closely to the changing market.
Prices have only moderated a little, but the rising inventory tells me that this too will change.
In retrospect, i probably should have bought in 2002, but i couldn’t predict Great Depression interest rates/ no docs/ zero down terms. I assumed rates would return to more “normal” terms much more quickly.
As they are now doing that, i would “STAY AWAY FROM THE REAL ESTATE”. BE AFRAID.
BE very afraid.
Have a nice day, though.
We haven’t had a direct hit since 1950, but your friend’s comment about “no chance for hurricanes” is one of the dumbest things I’ve ever heard–ask the few remaining insurance companies writing homeowner’s policies here if there’s “no chance.” Seriously, in 2004 I evacuated for Charley. I put everything I was sure I wanted to see again in my car, and left my apartment fully expecting it to be destroyed by wind and/or storm surge. This area was fortunate when Charley swerved, but Punta Gorda and even some areas well inland were very unfortunate. It’s just a matter of time.
As for “a good investment,” we’ve long since reached the point where the first reaction to all matters real estate is, or should be, laughter.
Texas Chick - I didn’t understand your comments. Can you put it in plain English?
He says Tampa has not seen bubble-like increases, and he was just there. The city has money, and is improving infrastucture: roads, bridges, airport. He didn’t notice any house dumping or price declines.
Ask him if he has numerical evidence that Tampa is a good place to invest (what is the price to rent ratio? what is the income to price ratio? what is inventory and DOM doing? etc.) or if he is just sunny optimist.
Sunny optimist. He believes that summer will bring out all the buyers, the families buying homes.
“Does anyone know if the Tampa market is falling? My friend has been traveling all over, looking for investment property. First he considered Austin. Now it’s Tampa. He just returned yesterday, and told me the housing market has only just started taking off, no chance for a hurricane (cab driver hadn’t experienced one in his 30 years in Tampa), and he could buy a couple condos and have the tenants pay it off in 30 years.
What do you think? Is Tampa a good investment?”
Tampa is no more of a good investment than any opther part of FL right now. Tampa prices have been run up 20%+/yr although the median there are a bit lower than some other parts of FL. Inventory increase has been staggering the past few months. No chance of hurricanes?? Don’t tell that to anyone that has been in the area for the past 2 years. Several very close calls. Your buddy is late to the game, he might as well find something else to invest in….IMHO.
Price runup in Tampa has been north of 30% for the last year or so, but pretty much crapped out in about September. If you want a nice (if not somewhat doctored) perspective of Tampa’s market, check out gtar.org. Tampa is a dump–the traffic is terrible, the streets riddled with potholes, and the jobs here suck. My husband and I are both attorneys, and make well above median income, but we’re renting until prices come back down to at least pre-2003 levels, because to pay anything more would be suicidal. We have spoken to numerous real estate agents and mortgage brokers who have said that business almost completely halted in fall ‘05. But if mtnrunner2’s buddy wants to buy a crappy condo conversion on a converted phosphate mine, check out Harbour Place City Homes–I just moved out, and it was a real craphole.
AZdude,
are you up by Placerville? I am looking in that area for my dad, and for the price at least you get some acreage. Still, I am waiting for a price drop. Noticed houses on market for 150 days. They just re-listed, same price, but now they have been on the market “2″ days. Interesting….
patricia,
I am actually renting in roseville right now.I left az on march 15th for work out here. I know placerville quite well. It is a nice area but prices have gotten high. You can find acreage up there but you might have to go to outskirts for any decent price. The bubble has reached the rural areas too. I worked up in camino at one time and traveled most of the forests up there and saw a lot of great country. I remember one little town across the s. fork of american river called swanboro I believe. The road to get there was hell but it does have a small airport. Not sure about prices up there recently. You might look up towards georgetown area too. I know they have some decently priced acreage up there.
TXchic57
just out of curiosity, what do you do for a living? You seem very well informed.
Profession stock trader. Or non-productive leech depending on who you ask. LOL
Thanks AZ, I’m heading up today, about a 7 hour drive. Beautiful down here today, but supposed to hit some weather when I get up there.
The weather is supposed to be bad up here but hasn’t started yet.Have a great trip.
thanks, will do….