There Is A Major Lack Of Common Sense Everywhere
The Tampa Tribune reports from Florida. “Florida ranks behind only Nevada in the percentage of foreclosures fueling the current housing bust, Pasco County Community Development Manager George Romagnoli told about 120 people at the Richey Suncoast Theater. Some lost their jobs. Some got divorced. Others who attended the homeowners education seminar Saturday simply bought houses they could not afford.”
“There were 630 foreclosure lawsuits filed in Pasco in January, and more than 75 percent of those cases involved homesteaded properties or owner-occupied homes, he said. ‘Half of the loan failures have balances of under $150,000,’ Romagnoli said. ‘These are affordable homes.’”
“‘In other counties, it might be speculators losing properties; but in Pasco, for the most part, it’s homeowners,’ Romagnoli said.”
“Steve Masterson of Holiday is a bit of both. He said his wife sued for divorce two weeks after they bought what was supposed to have been an investment home, where he now lives. Instead of renting out the home to make a profit, Masterson said he is struggling to make mortgage payments that include spiraling insurance costs.”
“Masterson said he used to make good money as a construction crane operator, but there is no work for him in today’s depressed real estate market.”
“‘I got a raw deal, but I’m trying to dig my way out of it,’ he said.”
“Fred Sager of Shady Hills said he got into mortgage trouble after his son lost his job and could no longer make payments on a home in the Shadow Ridge subdivision. Sager was a co-signor.”
“He said the seminar inspired him to try and renegotiate the loan terms, so he can sell the now-empty house at a reduced rate. ‘I’m just a middle class guy trying to protect my good credit’ rating, Sager said.”
“Many of those in attendance did not want to be quoted by name. That is probably because they are embarrassed that they were talked into an adjustable-rate loan that has ballooned past the point they can afford, said mortgage broker Gene Cunningham.”
“‘What it comes down to is common sense, and there is a major lack of common sense everywhere out there,’ Cunningham said.”
“Real estate broker Len Trubia said he came to the seminar looking for solutions to share with clients. Trubia said he has refused to sell homes to people who obtained preapproval for subprime and adjustable mortgages he felt they could not afford.”
“‘Not everybody is innocent in this thing,’ Trubia said. ‘There has to be integrity in this business. I call it dirty money’ when a home is sold to someone who will not be able to make the payments.”
The Miami Herald. “Two condo developers filed for bankruptcy last week. The developer of Fort Lauderdale’s Strada 315 condo filed for Chapter 11 despite selling about 40 percent of the 117 units in the two months since completing construction.”
“Strada 315 LLC of Delray Beach couldn’t persuade Regions Bank to extend a $34.8 million construction loan on the project in Flagler Village.”
“Regions also put holds on any money the developer made on unit sales above the loan payments it owed, Strada says in court documents. Jack McCabe, a Deerfield Beach real estate analyst, said Regions’ stance with Strada signals lenders are becoming more aggressive in collecting debts from developers.”
“And Surfside-based Beach House Property sought bankruptcy protection. The 12-floor glass building was to break ground last year on the property of the Beach House Hotel. Beach House’s 20 largest unsecured creditors are owed $4.6 million.”
“At Strada, the condo has sales contracts on 51 of the remaining 69 units, but the developer admits it expects ‘a large number’ will not close and buyers will forfeit deposits because of the current economic conditions. Nevertheless, it adds it expects to close ‘a significant number of units in the next two months.’”
“Regions apparently isn’t as optimistic, McCabe said. ‘There’s good reason for that: We’re seeing such a high percentage of walkaways,’ said McCabe.”
“Regions last month blamed slowing real estate markets in Florida and Georgia for quadrupling its reserve for loan losses to $360 million. The bank is ‘acting quickly to address current areas of weakness,” said Dowd Ritter, CEO of the Alabama-based bank, in a Jan. 3 statement.”
The St Petersburg Times. “Mike Burgur returned from work last month to interrupt a break-in at his rented Clearwater Beach condominium.”
“The intruders were stripping fans off the ceiling and the knobs off the doors. They had carted out the refrigerator and yanked up a toilet. They’d even pulled the plates off electrical outlets and unscrewed the faucet handles.”
“Burgur had no trouble recognizing the culprit: It was his own landlady.”
“‘I’m going to strip this mother,’ the 70-ish property owner raved to Burgur, as she ripped apart the 950-square-foot unit on Island Way.”
“People who lose their homes to foreclosure and in a pique of revenge strip the homes before the bank takes them back. Local experts estimate such borderline looting occurs in roughly 20 percent of bank repossessions. But foreclosures are such an explosive growth industry in the Tampa Bay area that home stripping affects scores of properties.”
“‘She even took my shower rod and coffee pot,’ Burgur said of his landlady, who hadn’t paid her mortgage in full for more than a year before the bank seized the $300,000 condo in January.”
“There’s no denying that many strip jobs are deliberately destructive. Witness this single-story beige stucco house in St. Petersburg’s Northeast Park neighborhood. The old owner bought the house near the peak of the market in 2005 for $152,800 and couldn’t make the payments.”
“Neighbors were shocked last month when, as the bank zeroed in on the house, the former owner leased a Bobcat excavator and uprooted the wooden privacy fence and five palm trees. Postholes still litter the yard.”
“That wasn’t the end of it. The ex-owner dismantled and removed the garage door and the double French doors in the rear, leaving the home exposed to the elements. ‘They’re mad at the property when they should be mad at themselves,’ said Jerry Sigler, an agent specializing in bank-repossessed homes.”
“Burgur said his former landlady has missed payments on other properties so he expects the stripping and ripping to continue across Clearwater Beach. ‘I moved to a three-bedroom condo in Tampa,’ he said. ‘Hopefully the new landlord is better at making his mortgage payments.’”
The Herald Tribune. “James Russell Crain and his attorney, John Yanchek, developed a reputation for being inconsiderate property owners when they owned investment properties in The Landings, Bird Key and Deer Creek. Residents often complained that the two men failed to maintain the grounds around their empty houses.”
“Now that banks have seized most of Crain and Yanchek’s properties for their failure to make interest payments, one would think that problems with homeowners associations would disappear. But that is not the case.”
“Thomas Frey, a member of the Deer Creek Homeowners Association, said Port Charlotte-based Peninsula Bank, which foreclosed on a $400,000 loan to one of Crain’s corporations in April, is delinquent in paying association dues.”
“Jeffrey Kalaman, a Peninsula loan officer who made two loans to Crain and Yanchek, said he was surprised that the dues had not been paid.”
“‘We’ve been taking care of the property and fixing the pool,’ Kalaman said. ‘So I don’t know why the dues weren’t paid. Maybe it’s because they didn’t get the check or something.’”
From Bloomberg. “St. Joe Co., Florida’s biggest private landowner, said fourth-quarter profit fell as the company incurred restructuring expenses and land values declined. Revenue dropped 35 percent to $93.8 million.”
“St. Joe is getting out of homebuilding to focus on planning communities that include residential, retail, commercial and industrial properties. The company had pretax expenses of $10.5 million in the quarter to write down the cost of home sites and exit businesses.”
“The company owns 718,000 acres of land, mostly in Northwest Florida, an amount of property about the size of Rhode Island. Most of the land was purchased in the 1930s for less than $100 an acre, Chief Financial Officer William McCalmont said.”
“For the full year 2007, JOE had Net Income of $39.2 million, compared with $51.0 million for the full year 2006. Full year results were affected by: Pre-tax impairment charges for the full year 2007 totaled $23.2 million after tax, which included: Approximately $13.6 million primarily related to a write-down of costs on homes and home sites in JOE’s residential segment to approximate fair value.”
“‘This past year was clearly difficult,’ said CEO Peter S. Rummell. ‘As we prepare for the traditional spring selling season, Northwest Florida resort and residential real estate markets remain very weak…we will remain patient and disciplined in our approach to the sale of our assets with an eye toward maximizing the value of JOE’s land.’”
“On December 31, 2007, JOE owned approximately 700,000 acres, concentrated primarily in Northwest Florida. These holdings include approximately 310,000 acres within 10 miles of the coast of the Gulf of Mexico. JOE also owns approximately 14,000 acres in southwest Georgia.”
“On December 31, 2007, JOE’s land-use entitlements in hand or in process totaled approximately 46,000 residential units.”
“As part of the October 2007 restructuring plan, JOE announced that it intended to accelerate marketing and sales of its inventory of existing developed home sites and homes. The JOE Board of Directors approved a succession plan that calls for the promotion of Britt Greene to president and CEO.”
“‘Despite poor market conditions, we have seen some demand for high quality product priced to the market,’ said Greene. ‘To that end, JOE closed on 134 home sites and 31 homes in the fourth quarter. To harvest our embedded investment in existing inventory, we are focusing our efforts to be in position for the traditional buying season that starts in the spring.’”
“‘We are working on a number of strategic initiatives designed to stimulate demand as we put time back on our side; however, there are no quick fixes or easy answers,’ said Rummell. ‘We believe we are taking appropriate steps to improve JOE’s position to withstand these challenging market conditions.’”
“‘Longer term we continue to like our position very much,’ said Greene. ‘JOE’s strategic position is one that cannot be duplicated: low basis land, a lot of it, in Florida.’”
The News Journal. “Mint juleps, eye-catching billboards and country star Travis Tritt’s performance for an invitation-only crowd at the Saenger Theatre marked last spring’s splashy rollout of the most ambitious residential project in Santa Rosa County history.”
“The project called Jubilee promised a glorious new community with more than 500 homes valued at up to $1.5 million, a town center, a new school and a golf course designed by Pensacola’s Jerry Pate.”
“But the excitement was short-lived. Within months, Jubilee stalled because of unpaid debt, and celebration turned to uncertainty. Investor Barney Ng of California stepped in, taking over from the Atlanta-based Eagle Group, renaming the project Contrada Hills and vowing to press forward.”
“But now he’s facing a new hurdle that he expects will stall work again. Santa Rosa County resident Euby Black is suing Ng and other key players, claiming they deceived him and ultimately cut him out of the project into which he invested millions of dollars.”
“Ng said he never intended to be more than an investor in the project, and now, he realizes he has inherited a development that is many, many millions of dollars over budget.”
“‘We gave them money to help them develop part of the property in order to bring some investors to the table. Then they overspent,’ he said.”
Check out St Joe’s debt levels.
I had a big put position on that in August of ‘05. One of the best trades I’ve had in years.
“‘She even took my shower rod and coffee pot,’ Burgur said of his landlady”
I have seen this person - big and green, wearing a red coat. Has a small dog named Max, wears an antler on his head.
What chutzpah. I can’t believe someone would be collecting rent for a year without paying their mortgage note and would have the audacity to destroy the property that they failed to make payments on. How does that make sense?!
She may be a 70 year old woman, but she needs to be sent to jail.
There will be more and more of this..I already know of a mortgage broker who stripped one of his “investment” properties and is going to do the same to another..Do you think he is going to lose his license? Of course not! Just love the state of Florida..so screwed up!
Not just FL. I hearing talk all over of the “collect rent until the bank seizes the property” scams. It’s investors last ditch effort to recoup some of their loses. The thing that surprises me is how open many are about it, feeling that it’s something they’re entitled to. Again, the victim mentality promotes the “anything goes” attitude.
Yes, this will get far worse before it gets better.
Any renter today should pay a few $$$ for a credit check, criminal background check, and search for judgements against his potential landlord!
It’s amazing how the tables have turned, but now TENANTS need to be suspicious of the LANDLORDS!
She may be a 70 year old woman, but she needs to be sent to jail.
What she allegedly did was a 1st degree felony for grand theft which is punishable up to 30 years in prison in the state of Florida if the property was in foreclosure.
It most likely is a first degree felony, and I hope the Pinellas County Sheriff’s office is out looking for her right now. Stories like this are why I have counseled my friends who are looking to rent from private owners to include a clause in the lease that says that if the owner defaults on their mortgage payment and fails to cure within thirty days, that that constitutes a material breach by the landlord thus permitting the tenant to terminate immediately and discontinue paying rent. And, of course, all deposits and advance rent payments are to be held in escrow.
BTW, the caption by the picture in the online article says that deadbeat landlady is a Realtor. Hmph.
BTW, the caption by the picture in the online article says that deadbeat landlady is a Realtor. Hmph.
That explains it all! In fact, I believe that if the landlady is a realtor, she could also lose her license.
Collecting rent while waiting for the bank to foreclose is now standard procedure. The trick is for the tenant to watch public records and stop paying rent during the foreclosure process, which in Central Florida is taking up to a year.
Wait for all the commercial defaults where your office building is repo’d, while the owner has been collecting rent for the past year. It’s probably a good idea to find out who owns the property and ck the public records regularly.
There have already been two commercial foreclosures in central florida where the tenants didn’t know.
Some Florida Counties have a process by which a residential tenant is notified when a rental goes into foreclosure. My son is living in a condo that is in foreclosure in Jacksonville. There was a notice on his door in Sept and he has not paid rent since, with nary a peep from the FB who lives in Miami. Who would you pay in this case? Legally the rent should go to the “owner” who is in default. The lender cannot legally accept rent, as they do not own the condo yet. I told him to stop paying. There are a lot of renters getting a free ride. Enjoy it while you can.
You would think the notice tacked onto the building would be your fist clue but its easy for the building owner to intercept these.
These are crazy times, my friends and likely to get a lot crazier before any type of minimal sanity prevails. Lots of opportunities being created. You just have to recognize them.
“She even took my shower rod and coffee pot…”
That’s a country song lyric, all right.
Or, the way 70ish LL said: “I’m gonna strip this mutha…”
could be a George Clinton lyric…
Tear the Roof off the Sucka
“That’s a country song lyric, all right.”
She even took my shower rod and coffee pot …
She took everything, all that I’ve got …
She took my dog, she took my truck,
She took everything and left me stuck …
LOL!
You guys are very clever!
Fantastic Florid report, one of the best yet, IMHO. As to this:
“Real estate broker Len Trubia said he came to the seminar looking for solutions to share with clients. Trubia said he has refused to sell homes to people who obtained preapproval for subprime and adjustable mortgages he felt they could not afford.”
There’s only really one solution to this, and that is to let the prices drop to pre-2000 levels. When that’s going to happen, I have no idea.
RE prices should track inflation and income growth 3-4% compounded YOY. Anything more and you will have a fall back to the trend line. That is what is happening now.
Also boomers retring start in 2011 and selling houses will further depress prices. They were the primary owners and buyers of SFH.
Not all boomers are Gordon Gecko with million dollar nest eggs. Many do not have substantive savings. They will be forced to sell house to get money.
There is a trend now to go to south and central America to live to stretch their dollars further. They can live like kings. Cost of living is too HIGH in Florida and thus is not attractive.
Just as long as those Central and South American countries stay stable. And that they don’t mind an influx of Yanquis.
As long as the yanquis bring dinero they will be tolerated in most locales. The real questions are:
Are these locales safe?
Are they as cheap as we think they are?
Do they have decent medical facilities?
The reason I mention real affordability is that once you start comparing apples with apples many south of the border locales can be every bit as pricey as the US. Cars cost more. Quality housing is often not cheap (is one comfortable living with locals in their neighborhoods, or will one live with other ex-pats?). Most consumer goods will costa bout the same. Food might be cheaper, and health care too.
when did practical considerations such as these become a concern of amerkans?
My dad and his wife looked into a number of places in Mexico, but after doing the math they weren’t any cheaper than New Mexico. Mexico isn’t all that cheap if you want to live an American lifestyle down there.
Another factor, Americans can’t buy property in Mexico, they can only lease it from Mexican citizens. Americans get thrown off “their” property all the time due to title disputes, where the “real” owner comes forward and says he never leased the land, which he now wants to develop.
May I humbly suggest points further south such as nicaragua:
http://www.granpacifica.com
May I humbly suggest points further south such as panama or nicaragua. I must admit, however, that the areas of Panama I was interested in have become bubbly themselves (thinking of the highlands near Boquete). That’s prompted me to look even further south (such as http://www.granpacifica.com). I do wonder whether some of these non-extradition type locales won’t be doing bang-up business selling retreats to refugee hedge fund managers and mortgages serivicers, CDO packers, etc.
Another factor, Americans can’t buy property in Mexico
Actually, they can, but not near the coast nor the borders.
Property taxes and insurance are so high in Florida that many people I personally know are selling their homes that they have owned and paid for. High real estate taxes create an environment where you are paying a mortgage/rent to the government for property even if you had bought and paid for in full.
Don’t even get me started on insurance which has seen a rise to obscene levels following recent hurricanes.
It has become unfordable to live in a house in FL even when its paid for in full.
If you don’t protest RE taxes they will just keep raising their spending and taxes.
Property taxes and insurance are so high in Florida that many people I personally know are selling their homes that they have owned and paid for. High real estate taxes create an environment where you are paying a mortgage/rent to the government for property even if you had bought and paid for in full.
I don’t know of anyone (yet) who sold his Florida home because of property tax, but for people who make 100% rational economic decisions, it makes sense.
Property taxes and HOA fees can easily be $20K/year for a $800K home in a luxury development. If you can rent a home for that price ($1600/month), and you’re unsure about Florida, people who do the math can easily make the argument that it’s worth selling the home for $400K (assuming they have no mortgage to worry about paying off) and renting. It sounds nuts, but makes a lot of sense! That 20K/year will keep going up, while your neighborhood will keep deteriorating, services will decline, and your home resale value could go to $0 if boarded-up houses start appearing nearby.
Actually, they can be (in my community they are) a lot more then even that!
800K home in PBC runs about 14-16K in property tax per year.
6-8K in insurance.
And, of course, another 4-8K for HOA.
Best case, you’re not going to carry an 800K home (with no MTG) in PBC for under ~24K a year.
Absolutely F-ing insane, but it is what it is…
People with means, who will be the only ones who can afford to buy a 800K house with “traditional’ financing or cash, are also the most likely to be able to do the math and decide not to buy! $24K/year, with no inflation protection on the HOA fees, and no protection at all if it’s not your primary residence is simply too much money.
The math makes no sense for people to snowbird in FL and own their condo. And renting gives the additional advantage of letting you mix it up-one year in Tampa, the next in Palm Beach, and the next in Orlando, etc.
Florida is becoming unlivable for the median wage earner.
IF the Boomers, who begin to retire this year, (those that can retire at 62) CAN sell their house up north, other states with moderate climates and better real estate and tax situations , like the Carolinas, Georgia ect look more promising.
If you are a young family with kids making at or a little above the median wage, you don’t want to come here. The only positive is yes, rents are plummeting, literally, but where do you work? Florida has a service economy and no real strong economic base. Tourism is taking and will take a huge hit.
We flourished in the past decade when easy credit and booming real estate supported our only real “industry”, tourism. Once the construction jobs dried up, a lot of people have left. You can only build and sell each other houses for so long.
Florida was attractive because of the weather and it was cheap. Low property taxes, no income tax, low housing costs, all those factors are temporarily gone.
A couple of my friends and I are thinking of making a video series like “Girls Gone Wild”, but instead we’re going to call it “Florida Local Governments Gone Wild”. Flush with cash from the real estate boom that, of course was not going to end, since everyone knows real estate only goes up, Florida City and County Governments suddenly became collectively insane and spent money on the most idiotic projects you can imagine.
One Florida City that shall remain nameless (Ocala) actually lent (read gave) this Miami Developer (read huckster) a 1.5 million dollar loan for some downtown redevelopment something or other and to everyone’s surprise, he has defaulted on the “loan” and the project is no where.
Dozens of similar “Government Gone Wild” stories, if not hundreds.
Florida if f**ked for at least 5 years, probably 10. Still opportunities to make money, there always is for the astute. But, the “good old days” are so gone and so many Floridian real estate geniuses are bankrupt.
The best part is that this whole s**t storm has only just begun.
Some more from the St. Pete Times article:
Sigler will have to pick through the rubble of the Clearwater Beach condo for Fifth Third Bank. The former owner actually broke in twice, the second time in an unsuccessful attempt to pry loose the kitchen’s granite counters and the bathroom’s travertine tile.
In his 17 years selling repossessed homes for banks, Sigler has seen horrors far worse than missing medicine cabinets. Think human excrement spread over walls. Or half-starved Doberman pinschers left as a welcoming committee for the bank’s representative.
Interesting about all the destruction. There is a legal concept called loss mitigation or something like that (Misstrial or others can better explain it). As I understand it, the principle is that when you are entrusted with a financial asset in which you have an obligation, whether as a debtor or a tenant or a condo board, you must act in a reasonable and prudent way to protect the asset. Bottom line is I wouldn’t be surprised to see many of these people sued big-time for the destruction and theft.
No different that throwing a brick at the slot machine after it took your last quarter, IMO.
Good luck with that. Between this and the rotisserie plan, we have a full panopoly of Jerry Springer or COPS wannabes running amok.
Ive been watching the Miami luxury condo market for some time. Brickell, South Beach and Sunny Isles are the most over-developed areas I have seen in the U.S. with thousands of new units coming on line, and prices falling over 30%. It makes for an interesting case study since you can find every type of fraud and scheming imaginable. It will be interesting to see what pricing in 2010 will look like.
I’ve often thought that this housing bubble was like a gift from heaven for the people of Dade County, scheme capital of the world. Can you imagine how fast the word got around that you could have terrible credit, no job, no money, yet sign a few papers and get $100K+ cash back? Then you never make a payment, get the place foreclosed, and you’ve lost NOTHING! Your credit is no worse that it was before, as that would be impossible. The bank can’t go after you, because you’ve never had an on-the-record job.
Not to mention many of the buyers of these luxury units had citizenship in other countries. Bad credit in the US? BFD.
I remember reading a newspaper story, perhaps in early 2004, where a waiter on South Beach was rumored to have made tens of thousands of dollars by flipping a condo. Right then and there a red flag went up.
You know, I was just about to say “let the banks eat the loss” because they were the idiots that handed out the money. But now i realize that they have found a new and better way to socialize the risk and privatize the profit. They privatize the profit in the form of juicy fees (which are subject only to income tax corporate tax, and only if your tax lawyer is bad). And they “socialize” the risk by foisting their losses onto their stockholders in the form of lower stock prices.
The game is rigged.
I don’t think lower stock prices for bad business practices qualifies as “socializing” the risk. Stockholders are the owners. They should be impacted by bad business decisions and are not gauranteed gains.
The banks socialized the risk by selling the loans to your pensions funds, your municipalities, your insurance companies…
When these debt zombies walk from their mortgages - they aren’t f’ing the bank - they are f’ing you!
Guys,
I’m curious, is downtown Los Angeles overdeveloped in the same way as Miami (or even Vegas or downtown San Diego)?
Does anyone have any articles or sites that talk about downtown LA?
Thanks!
Wilson
The Atlanta condo market is also way overdeveloped, but I have not heard anything about Los Angeles, which is not to say that its not the case.
“We gave them money to help them develop part of the property in order to bring some investors to the table. Then they overspent.”
!
In a million years I could not have predicted that that would happen.
Hey, Kandy, just wanted to compliment you on your excellent research yesterday, in reply to my posts. Well done. I would have replied, but by the time I saw it, it was too late in the day.
Shucks, thanks!
I was delighted to find out that Harry Shearer is a New Orleanian. I suppose everybody on the planet except me knew that already.
“And Surfside-based Beach House Property sought bankruptcy protection. The 12-floor glass building was to break ground last year on the property of the Beach House Hotel. Beach House’s 20 largest unsecured creditors are owed $4.6 million.”
LMAO! A glass building on the beach. In Florida. Every one of those unsecured creditors ought to lose their investment, and then have their head examined for putting money in one of the most foolish types of architecture for Florida.
I’ve seen a number of glass buildings, mostly commercial, in different parts of Florida and it just frosts my patootie. First of all, the reflective properties of the glass generate more heat we don’t need into the environment and in the summer, it is particularly nasty. Not to mention that in the event of hurricanes or even just high winds, these can turn into human shredders. Slice ‘em and dice ‘em!
Water views are their major, if not only, selling point. You just need to get them to close, then they are on their own.
Actually, most of the creditors at Beach House are the real estate brokers who will never collect, now that the units will never be sold.
Did you hear that State Farm is cancelling about 50,000 policies that are within one mile of water. I’m certain this will put even more downward preasure on home prices!
I make a point of NEVER buying any kindof insurance from companies that write policies in Florida in the hurricane alley, the waterfront in the Carolinas or similar places.
The companies may claim that they keep the risk pools separate but that sure isn’t reflected in the price.
I remember seeing a photo of the damage in one city in FL after a hurricane or tropical storm hit in 2004 or 2005. It was a multi-story office building owned by the State of Florida. It was (or had been) a glass building. The glass was gone from the roof to the ground and you could look straight through into the offices. I thought then that whoever who building such things in the Florida was absolutely out of their bloody minds. When I read the caption and saw the state had built it, I have to wonder what other insanities they are approving for construction that will blow apart in a hurricane.
Sorry but if you want to live in the land of sunshine and warm and assume the risks of a hurricane, you can do it without me sharing the risk through my insurance.
And skip the ‘oh but ….in other places there are…..” I feel the same way about California and its wild fires and earhquakes. Tornadoes in the Kansas and other places don’t even come close to the destruction of a hurricane or earthquake. Never heard of a snow storm in the north collapsing more than 1 or 2 roofs anywhere during the year.
You also do not want to buy car insurance through Allstate, State Farm and Nationwide. Ask any personal injury attorney and they will tell you to stay away from these companies.
pressure too
“Instead of renting out the home to make a profit, Masterson said he is struggling to make mortgage payments that include spiraling insurance costs.”
“Masterson said he used to make good money as a construction crane operator, but there is no work for him in today’s depressed real estate market.”
“‘I got a raw deal, but I’m trying to dig my way out of it,’ he said.”
These double and triple whammies seem to be typical Florida stories. Dubious investment, divorce, job loss. And to add to that, the insurance costs have indeed gone out of sight in many areas.
More country song lyrics in the making.
And why in the world would his wife buy a house with someone she intended to divorce in TWO WEEKS? She’s obviously completely irresponsible - why do these reporters use these types of couples in their articles? How could the husband not have any clue that she was planning to leave, and buying a house together might not be smart? Can’t they find anyone who is not the cause of their own troubles? Show me one couple that would have been able to make payments on a 6.5% 30-year fixed mortgage + taxes and insurance on their house, that have been forced from this house because their adjustable-rate mortgage has reset.
Agreed, the reporters need to come up with MUCH better sob stories before I’ll shed any tears over it. Instead, we get the Human Comedy.
“People who lose their homes to foreclosure and in a pique of revenge strip the homes before the bank takes them back. Local experts estimate such borderline looting occurs in roughly 20 percent of bank repossessions. But foreclosures are such an explosive growth industry in the Tampa Bay area that home stripping affects scores of properties.”
And do you think there’s been even one indictment for this? Essentially, these folks are robbing a bank. Yet our government continues to treat FBs like “victims” instead of criminals or, at best, willing dupes.
The Tampa Tribune reports from Florida. “Florida ranks behind only Nevada in the percentage of foreclosures fueling the current housing bust, Pasco County Community Development Manager George Romagnoli told about 120 people at the Richey Suncoast Theater. Some lost their jobs. Some got divorced. Others who attended the homeowners education seminar Saturday simply bought houses they could not afford.”
Florida people are in a complete state of denial. I was on a conference call the other day with a company I consult for that does business in Florida and California. The people I spoke to were based out of Central Florida. I asked how they think the “recession’ may hurt them.
“Florida will do OK, but California may suffer,” they said.
“California has been hit hard by the housing meltdown.”
That cracked me up because, while both states are in deep sh*t, Florida leads California! But the Floridians haven’t come to terms with the fact that Condos built in Central Florida adjacent to an outlet mall are worth $0. (Especially since they’ve been owned 100% by “investors” and not actual residents.)
“Florida people are in a complete state of denial.”
Testify! I see it ALL the time. All you have to do is cruise Florida craigslist ads to see how much denial is here. Truly depressing. The sad thing is, this could all be put to rest so easily, by just accepting the state of affairs, dropping prices to pre-2000 levels, putting moratoriums on further building, etc. BUT NOOOOOO! People are going scam and spin all the way to the bottom.
But the Floridians haven’t come to terms with the fact that Condos built in Central Florida adjacent to an outlet mall are worth $0.
But I thought that everybody wants to own a vacation condo near Disneyworld!
BTW: Condos in outlet mall are no joke. Here for example:
http://www.lbvorlandoresort.com/
These units really are in an outlet mall parking lot. They show the nicely-landscaped part in the photo.
My guess is that 99.44% of the people who bought here did so as an “investment”. Nobody who thinks for more than a minute would want to live here.
And even a Disney fanatic wouldn’t want to buy a condo near Disney! You’d simply stay in a Disney hotel during your trip (which gets you the best “Disney” experience) or rent an of a zillion available condos in the area (like in Celebration) for a week or so.
(And I’m going to be at Walt Disney World next week!)
I can top that…
Cue my favorite building (seems that they only range up to 3.4M now, they must have sold all the 5M dollar units):
http://www.landmarkatthegardens.com/index.shtml
Yes, these are million dollar condos in a mall parking lot. And no, I’m not kidding (from the website; there is a REASON that it’s Palm Beach Gardens only high rise condo; namely that PBG has LAND everywhere).
Sorry, and just so everyone knows, I really don’t have any personal ax to grind with this condo, or developer. I would welcome high rise condos in the Gardens. But these prices are just beyond unrealistic, who in their right mind would pay 3M dollars to live in the mall parking lot??
They tell you in the write-up: “thirty feet next door” are the premium outlets. That sounds lovely. Especially with the freakishly-bright parking lot lights beaming in your windows all night. You can stumble out of bed in the morning and over to the Barneys outlet to spend $300 on a pair of fuschia spandex pants from Prada circa-1998. That’s living.
“‘I’m going to strip this mother,’ the 70-ish property owner raved to Burgur, as she ripped apart the 950-square-foot unit on Island Way.”
Burger was last seen running on Interstate North OUT of Florida clutching his SHORTS
Good one, mikey. Not all the older folks here in Florida sweet little old ladies and courtly old gents being taken advantage of. I’ve run into some of these hatchet faced old bags here and there.
Not all the older folks here in Florida ARE sweet little old ladies
Jeebus. More coffee.
In the description next to the picture - the “lady” that stripped her condo is a real estate agent! It’s a great time to buy! Nothing to see here!
“Don’t strip me bro!”
The nerve of that darn lender to foreclose on the old lady and take away her cash flow that she wasn’t paying the mortgage on .
This is a case that I really wish they would go after this old lady criminal ,after all they have a witness to the crime .
I have told this story before about a foreclosure I knew of that the foreclosed on party took the stairs and all the appliances on the way out .Now the wonderful borrowers, that banks should just give a chance to own the” American Dream”, are stripping houses .The Boston (AP) had a headline today being “Fraud may had fueled mortgage mess “. The meat of the article was that the government is expecting Wall Street to pay for some of their crimes to investors along with the government bail outs. I always thought that criminals had to pay for all of their crime . It’s a mad mad mad world .
I would say the land ladies activities were beyond “borderline” legal.
What’s next, she won’t give Burger back his security deposit because the place is trashed?
Oliver
Regarding the St. Joe report, can anyone interpret that for me? Honest to God, I have NO idea what they are saying. I suspect it’s a bunch of BS that essentially means “We’re screwed, but we’re going to put a good face on it and try to get by.” But it makes about as much sense to me as “When the bell rings, the air outside will turn green”. Sheesh. They must have been writing Greenspan’s reports to Congress.
When a company has as much of its assets in raw land as JOE does, it’s really hard to tell what its value is, due to carrying the stuff on books at cost, even if it was bought 80 years ago. This company can strip itself down to practically nothing (Its HQ in Jax is modest and it’s laying off people right and left) and not lose its core value, the way an HB does. My hunch is there is more value in JOE than in any of the top 10 HBs.
Well, that’s funny, right? Jubilee is the time when all debts are forgiven. I think it happened every seven years in the old Hebrew calendar.
That’s hilarious that he renamed the project “Contrada Hills.” In Santa Rosa County, Florida. Could it be any clearer that the target market was California speculators?
And, you’ll notice that modern BK law keeps that 7-year period.
Jews still observe the “Yuval” (Hebrew for Jubilee) or Sabbatical. (And “Yuval” is a common male Hebrew name. I know plenty of Yuvals.)
Actually, Jubilee was every 50 years; homes or lands which were sold were returned to the original owners, debts were forgiven, slaves were freed. Every seventh year, they let the ground lie fallow and didn’t work farms, etc. They lived off the plenty from the sixth year. There may have been something in the seventh year about freeing indentured servants, but it’s been awhile since I read Leviticus, so I don’t recall.
Whoops……..heap big honkin’ knife catcher:
“Ng said he never intended to be more than an investor in the project, and now, he realizes he has inherited a development that is many, many millions of dollars over budget.”
“‘We are working on a number of strategic initiatives designed to stimulate demand as we put time back on our side”
I dunno about anyone one else, but I am sick to death of “strategic initiatives”, whether they’re in Iraq or in the housing bubble. I don’t think American business or government is capable of successful “stategic initiatives” at this time. Or “strategery”, as shrubby likes to call it.
I’d say we now officially have entered the anger phase here in Florida, to be followed at an as-yet undetermined time by bargaining and acceptance. With brutally hot and humid weather about sixty days away, anything stripped and left open to the elements soon will join our growing population of residences worth nothing to anyone other than squatters.
One question I have, particularly in light of Tampa’s own Channelside towers situation — what are the potential outcomes for a completed, partially-occupted building when a condominium developer declares bankruptcy?
Well, that’ll fix the inventory issues for sure.
Sold by the bank, or FDIC, to a savy real estate operator. Priced as a rental (high cap rate, no potential appreciation). The property remains a hybrid rental for many years.
“‘Despite poor market conditions, we have seen some demand for high quality product priced to the market,’ said Greene. ‘To that end, JOE closed on 134 home sites and 31 homes in the fourth quarter. To harvest our embedded investment in existing inventory, we are focusing our efforts to be in position for the traditional buying season that starts in the spring.’”
Is there still, in this market a traditional spring buying market? And if so, is it of any significance?
Assuming a spring buying season, lenders may start dumping houses rather than face another winter.
“‘We are working on a number of strategic initiatives designed to stimulate demand as we put time back on our side”
lower the price…by a bunch.
Tears of frustration.
Years of inflation.
Please sir, some good news.
“‘Not everybody is innocent in this thing,’ Trubia said. ‘There has to be integrity in this business. I call it dirty money’ when a home is sold to someone who will not be able to make the payments.”
Let’s just call it fraud and start prosecuting the enablers of this Ponzi scheme who became filthy rich…
Some front line news from Florida. Friend of mine was talking about his boss the other day and he just recently had to move out of his rented condo when the police came with the eviction notice due to the owners forclosure. Not only did he loose out on the past months rent (half way thru the month) but did not get his security deposit back either. As most of you would guess his land lord had not made any payments the entire time he was collecting rent. Story number 2: same friend has a home accross the street that went into forclosure. This home was the most expensive home in the entire neighborhood bought for 475K or so. The family moved in and were out in less than one year. Now when they purchased this home it was easily the best looking home on the block. Durring the “owners” time at the home the entire front landscaping was torn out. Large sago palms just cut down! sculpted evergreen trees ripped out with a rope and a truck. This mess was in place untill they no longer occupied the property. There is a pourch on the side of the home where the supports on one side were removed and the whole thing sagged off the side of the house. Also the very large pine tree in the front yard that was nice and green has turned into a brown dead mess. Just over the past weeks some of this mess has been worked on but the dead tree remains. We often talk about getting into the home some time because we suspect that damage lurks behind that front door. There is a sign in the yard for sale by bank of course.
Comment by SFC:
“I’ve often thought that this housing bubble was like a gift from heaven for the people of Dade County, scheme capital of the world.”
Yeah. Here’s a bit I wrote from personal experience living in Miami:
Anyone remember the infamous South Miami ‘cocaine cowboy’ shootout at the Dadeland Mall parking lot back in the day when Crown Liquors was riddled with automatic weapon fire? I worked at Dadeland back then and saw the results up close. Narcotics-related homicides and shootings were rampant and right out in the open throughout South Florida back then, and with so much money, political corruption, and temptation - it just permeated every aspect of life in South Florida. The party scenes of that era centered around private clubs with “Champagne menus” (a half-dozen of the premier champagnes selling at nose bleed mark-ups flowing like water fountains). Clubs such as the Hotel Mutiny in the Grove (and several infamous South Beach clubs) epitomized this excess. These clubs had a short existence what with all the sting operations, drug busts, money laundering, and tax debts that helped shut them down. The big mystery of those days of obscene drug profits was - what happened to the billions of dollars in elicit gains? Good thing that the Swiss bankers have a strict privacy policy, or there’d be a lot of red-faced politicos and other benefactors from those days of wholesale drug profiteering. Yes, it’s generally acknowledged that Miami’s skyline was built upon those profits, and yet that’s only a tiny part of the drug profit pie.
I’ve seen/heard about enough corruption in Miami to last several life times: politician’s and law enforcement on drug dealers pay roll, pizza and media noche joints fronting for drug sales, off-the-books pharmaceutical sales, votes for boats, selling flooded cars for full price, etc.etc.
No surprise that housing and all the people involved from building to selling and buying wouldn’t be part of the time-honored South Florida creed of greed.
Excellent post, truly spot on. Not too long ago we were job transferred from San Diego to the Miami area and lived there for two years. We just left this past June. We very quickly picked up that corrupt vibe that permeated everything: police departments, local city governments, the county’s housing agency, etc. etc. etc. Every agency seemed corrupt. There were constant scams uncovered. The Miami Herald is a great paper that did numerous revealing reports. We called Miami the “land of the scam.” It was a daily onslaught: the housing authority director personally embezzeled millions and built himself an 11,000 sq. foot house… fake doctors injecting idiot women with antifreeze instead of Botox from “clinics” in suburban garages… city cops selecting immigrant-looking cars to pull over on fake violations in order to steal cash from their wallets… another cop caught openly selling drugs from his marked patrol car while in uniform… warehouses full of fake everything… everyone ran red lights because you learn quickly that the cops are too lazy to chase you.. no one bothers to have car insurance because there is no enforcement… stop and bump fake car accident rings… I could go on and on. And no one seemed to bothered about it. “Whattaya gonna do? It’s like this everywhere.” We felt that it was because so many people in south Florida were from someplace else, namely corrupt and impoverished banana republics in Latin America and the Caribbean that they merely brought their way of life and governance with them. Recreating the home environment, so to speak. And since there are so many different groups from so many different places, everyone distrusted each other. The racism was palpable. Balkanization, everyone was in a different tribe. And people were so rude! It seemed their attitudes were “I’m going screw you before you have a chance to screw me.” For us, the Miami and Broward county areas were simply awful places to live, we couldn’t get out of there fast enough. And that’s just my rant about corruption, don’t EVEN get me started about the crime, bad drivers, terrible humidity, unbearable heat, the killer (literally) lightning, hurricanes, high cost of living, crappy schools, no Trader Joe’s, no In-N-Out…
rant off.
Good thing that the Swiss bankers have a strict privacy policy, or there’d be a lot of red-faced politicos and other benefactors from those days of wholesale drug profiteering.
Those days are in the past. They are very transparent these days. Remember when Oliver North accidentally deposited the Iran-Contra money in the wrong numbered account? He did get the money back.
Lichtenstein is the new money haven these days…
I lived in Miami for around 5 years and was born in Ft Lauderdale i am a native Floridian but moved in 1995 to alabama so i could at least afford to live i could not make a living in fla anymore plus i saw things that i hope no person ever sees again including a murder in broad daylight right outside my place of employment and when the police showed up everyone was blind no one saw anything. Its something to see just how bad that state has become i survived 5 hurricanes including Andrew but the last straw was losing my Job due to the fact i would not learn spanish. So its good to see the state having problems maybe Karma does exist.
What’s that joke about raising the IQ of both states?
Strippers and burgers. I love it.
I keep noticing how the renters are getting screwed by this bubble too. The fraud and corruption is just totally out of control. It seems that at least 10% of the population is committing fraud of some sort.
“Steve Masterson of Holiday is a bit of both. He said his wife sued for divorce two weeks after they bought what was supposed to have been an investment home, where he now lives. Instead of renting out the home to make a profit, Masterson said he is struggling to make mortgage payments that include spiraling insurance costs.”
“Masterson said he used to make good money as a construction crane operator, but there is no work for him in today’s depressed real estate market.”
How many of these would-be “investors” reported their income to the IRS before the bubble burst? How many of these folks who bought second homes, took the tax deduction, but were actually renting them out in 2004 and 2005, accounted for everything correctly?
Of course, when the bubble pops, it’s “Boo hoo hoo! George, Hillary! Help me!” And our government and MSM is all too happy to shower them with money and sympathy.
Oh, and Masterson isn’t being entirely truthful. The divorce happened in 2006! He had plenty of time to sell it.
According to Pasco county public records:
http://images.pascogov.com/deed.aspx?c=6844|554|0&type=pdf
Note that this 2006 WD is changing his status from “A Married Man” to “Divorced/Single”
(Why can’t reporters spend 10 minutes searching public records before they pick someone to write about?)
News flash: Castro steps down as president!
US embargo to remain in place, for now at least.
How long until we get out casinos back?
just out of curiosity but how much hurricane damage would there have to be for citizens insurance to be bankrupt?
just out of curiosity but how much hurricane damage would there have to be for citizens insurance to be bankrupt?
I read a while ago, that the state of FL requires that the legit Ins Cos have $3.00 in reserves for every dollar of inurnace they write.
The state of Florida has 3 cents for every dollar they write!
Answer to your question: NOT MUCH
I was looking at some open houses at Mirasol CC in Palm Beach Gardens last week and in every open house the real estate agent after you asked what the price was basically begged for an offer, any offer. In some of the houses the owners were willing to throw in $60,000 to $90,000 country club memberships.
One house purchased in July 2005 and sitting vacant, the owner was still asking $80,000 more than he paid. Wonder why the house is just sitting there sucking cash?
“There is a Major Lack of Common Sense Everywhere”
True.
That is why we have people voting for a man due to his word “change” but they don’t care what kind of change. It is why we have a political party bubbling up McCain because he has experience, although he will add 12 million low income people to the welfare rolls (due to amnesty) and that means 12 million more people picking our pockets.
That is why I buy precious metals bullion…for cash.
“‘We gave them money to help them develop part of the property in order to bring some investors to the table. Then they overspent,’ he said.” Hey, sounds like our Federal “Government”!