Waiting For The Bottom To Drop Out In Florida
The Associated Press reports from Florida. “Travis Munnerlyn just wanted to add on to his Orlando home to make room for grandchildren coming to live with him and his wife. A couple years later, Munnerlyn cannot make the increasing payments on his adjustable rate loan - not even close - and could lose the house. ‘Right now we’re seven payments behind,’ Munnerlyn said. ‘There’s one due today and I don’t have it.’”
“Many borrowers are told not to worry about increasing interest because they can refinance again before the higher rates take effect. That’s what Munnerlyn’s mortgage broker told him he could do when he refinanced his house to do the addition.”
“Only it didn’t work out that way. Munnerlyn’s income took a dip when his wife was laid off and he might not have been able to refinance anyway even if she hadn’t been. Only nobody explained that to him.”
“Now his payment is $2,500 a month on a 3-bedroom, 1,300-square-foot home, and he’s wallowing in late fees and his credit is ruined.”
“‘I can’t buy a box of matches on credit,’ said Munnerlyn. ‘It ruins people.’”
The Orlando Sentinel. “Despite the persistent slump in housing starts and sales, the Homebuilders Association of Lake County is upbeat about this year’s Lake-Sumter Parade of Homes.”
“‘Right now, basically there is a lot of inventory,’ Jean Kaminski, executive director of the association, said. ‘Builders have reduced their prices, they won’t go any lower.’”
“Single-family home builders are dropping their prices, and not just for standing inventory, said Jim Lewis, president of Charles Wayne Consulting, but developers of condominiums and other attached housing are cutting their prices even more.”
“Thousands of condo units remain on the market, he noted, and the lack of demand has brought construction and conversions almost to a halt.”
“According to Dan Fasulo, director of market analysis for Real Capital Analytics, apartment-to-condo conversions soared because investors saw an opportunity to undercut single-family sales as fast-rising land prices, construction costs and other factors drove single-family home prices to unsustainable levels.”
“In 2005, at the peak of the conversion craze, 65 apartment complexes were bought by converters for a combined $2.5 billion, creating a pool of about 20,000 would-be condo units.”
“‘That game is now over,’ he said. ‘Last year, there were zero apartment complexes sold in the Orlando market with the intent to convert to condos,. I’ve never seen an industry slam on the brakes faster than that.’”
“In what could go down as the great Hail Mary pass of 2008, the federal government will send consumers more than $100billion in tax rebates this spring, hoping they will spend freely and prevent the U.S. economy from taking a dive.”
“At Sam’s Music Bar Bistro in MetroWest, the familiar lunchtime din has trailed off a bit in recent months. Owner Kevin Dalgarno blames the dropping decibel level on the slumping economy, which he says has reduced the appetite to spend.”
“‘Customers are telling us that they are having more financial problems and they aren’t dining out as much,’ Dalgarno said. ‘We hope that we will get some kind of kickback from this, but I don’t have a lot of hope for the immediate economy.’”
“John Leahy, a salesman at Sound Advice on East Colonial Drive in Orlando, was pacing the specialty-electronics vendor’s showroom one afternoon last week, hoping for a customer. ‘The market has been in decline,’ Leahy said. ‘The housing crunch began around when I started here, and that’s hurting. You have all these guys who were building houses a few years ago who are out of work now and not spending as much.’”
“Leahy said people are worried about paying for basic needs and keeping up with debt payments. ‘It’s horrible,’ he said, and glanced at a wall of flat-panel televisions across the showroom. ‘These are nonessentials.’”
“Leahy said he personally understands the problem: His pay is based on sales and, in the current slow market, he is having a hard time affording basics. ‘I would like to buy a nice TV,’ he said, ‘but I have a car that I might not get another year out of to think about.’”
The Miami Herald. “At Key West’s quaint Tropical Inn on Duval Street, the communal microwave is heating a lot of food these days.”
“‘More guests have been bringing back leftovers from the restaurants,’ said Jane Lowe, owner of the inn. ‘Instead of going out for dinner and lunch the next day, they’ll eat those leftovers for lunch. We see a lot of people cutting corners.’”
“‘It’s slow on Duval Street, but it’s slow all over the country,’ said Virginia Panico, executive VP of the Key West Chamber of Commerce. ‘There are times when we don’t feel it, or are the last to feel it. But we are in the midst of a slowdown.’”
“It seems difficult to believe times are tough for Duval merchants by simply looking at the city’s main tourist drag. Since Christmas, there have been crowds of people on its sidewalks day and night. ‘But do you see any of them carrying bags?’ asked Tony Gregory, owner of an eclectic jewelry and T-shirt shop that has been at the same Duval Street location for 26 years.”
“There are 31 properties or businesses (about 10 percent of the total) for sale or lease on Duval Street, according to the Key West Association of Realtors. ‘No question the national economy is affecting it,’ said Claude Gardner, co-owner of Prudential Knight & Gardner Realty. ‘For too long, we believed that Key West is insulated from the rest of the economy.’”
The News Press. “Experts painted a picture at a conference Thursday of a Southwest Florida real estate market battered by excessive speculation but ready to recover next year - with an avalanche of baby boomer retirees not far behind.”
“But before that bonanza, there will be some hard times in the local home-building industry, said Michael Timmerman, Naples-based senior associate with Hank Fishkind & Associates.”
“‘Foreclosures are just beginning to come onto the market,’ he said. ‘We won’t see the full effect until the foreclosures flush through the system.’”
“About 1,000 houses a month have been going into foreclosure in Lee County in recent months, and there are about 16,000 houses on the market. The bottom line, Timmerman said, is that there will likely be no measurable change until early 2009 with a real expansion not in the works until 2010.”
“Low interest rates instituted by the Federal Reserve in 2002 and 2003 sparked the speculation that resulted in an over-supply of homes and a collapse of the market at the beginning of 2006, he said. ‘Real estate was the best investment because you got free money.’”
The Tampa Tribune. “The Polk County Commission rejected a pair of efforts to roll back the county’s impact fees during a contentious Wednesday afternoon hearing. Many supporters of the rollback wore red, white and blue badges and held signs reading ‘Save Our Jobs.’”
“Supporters proposed the rollback, billed it as a short-term plan designed to kick-start Polk’s home building industry.”
“A slightly smaller group of opponents of the rollback argued that the housing market slowdown is a product of overbuilding during a housing bubble and that impact fees are needed to help pay for the needs generated by the new residents who bought homes before the bubble burst.”
“A pair of county economists pointed out, however, there were more than 5,200 existing homes listed for sale in the county as of December. During that same month, only 250 sold. Based on that rate of absorption, it will take 21 months to absorb the inventory of existing homes.”
“Gordon Kettle, an economist with Polk’s economic development agency, said: ‘I don’t think cutting impact fees is going to make much of a difference. It’s not going to restore the housing market to what it was. We could lower impact fees to zero, and it wouldn’t change this housing market overnight.’”
The Ledger. “Commissioner Randy Wilkinson was skeptical of the builders’ claims that impact fees are related to the slowdown in construction. Wilkinson cited Duval County, which he said has no impact fees and still suffered a slowdown.”
“A procession of builders told commissioners how they have had to lay off employees because of the slow housing market. ‘Everyone’s running skeleton crews,’ said contractor Chuck Hunt. ‘Put our people to work.’”
“Contractor Doug Thomas said the impact fee cut is worth trying. ‘We won’t know until we try,’ he said.”
“Al Whittle from Florida Bipartisans criticized the proposal, calling it ‘the wrong solution to the right problem.’ Impact fees have nothing to do with the housing slump, he said, laying the blame instead overbuilding and unscrupulous lending.”
“Polk County recorded just 151 permits for new home construction last month, making it the lowest January total in Ledger records dating back to 1994.”
“‘It just shows that the activity is still slow and hasn’t picked up. It’s still declining,’ said Scott Coulombe, executive director of the Polk County Builders Association. ‘We’ve got people who are barely hanging on now, and if things don’t pick up, you’ll see people going out of business before the year is up.’”
“Ongoing price cuts and incentive wars among builders also have kept potential buyers on the sidelines. ‘Some people are still waiting for the bottom to drop out,’ Coulombe said.”
“Lakeland-based Southern Homes is specifically trying to lure cautious buyers with a recently unveiled program called ‘Price Guard,’ which makes customers eligible for any price cuts that occur during the construction of their home.”
“Jared Weggeland, Southern Homes’ director of sales and marketing, says the program should help determine the impact price anxiety is having on sales.”
“‘We don’t have any results yet, but we hope it will expose that objection as something that can be overcome,’ Weggeland said. ‘If that’s the reason people say they’re not buying, and we take away that reason.’”
The Herald Tribune. “Seven bargain hunters, most wearing shorts, slipped into a white stretch limousine Wednesday morning, hoping their adventure in luxury would lead them to a good deal on a home.”
“By the end of the three-hour tour of properties in foreclosure, two couples were considering a second look at a 3,500-square-foot, canal-front home with a pool and hot tub in Rotonda West. The asking price: $289,000.”
“Even the limo driver, Frank Rieck, became really interested in one property. It was a sea-green home in South Gulf Cove with a barrel tile roof, high living room ceilings and three bedrooms for $189,000.”
“The owner had bought the property to flip it, but by the time it reached the market it was too late, said real estate associate Pam Civitillo. The bank owns the property now, she said.”
“If the foreclosure tours help sell homes, the benefits to the market can be widespread, said Ken Wieand, a professor of finance who teaches real estate classes at the University of South Florida.”
“‘It sounds a little ghoulish,’ he said. ‘But it kind of makes sense to clear the market. By and large any effort to get the unsold inventory off the books is a good thing.’”
“Mark Maudlin of Bers & Co., an affiliate of Prudential Palms Realty, wrote in to discuss the foreclosure mess.”
“‘Homeowners usually struggle to retain their family home in any way they can, but it’s different for investors and speculators, who seem to be involved with a large percentage of the foreclosures,’ Maudlin said. ‘Present economic conditions give them no reason to hold on.’”
“‘One investor called us this morning about a $500,000 new construction home he has had under contract for two years. He’d made a $70,000 deposit but even before he could close, the developer and builder cut prices by $100,000 for other comparable new homes, and they included upgrades in the deal.’”
“‘Now he’s already lost $100,000 on the home’s value. If he closes, he’ll spend another $50,000 during the first year for principal, interest, taxes and insurance, plus about $12,000 in maintenance fees. If he tries to sell, transaction costs will add about $30,000 more to his expenses — for a property that’s already lost $100,000 in value if not more.’”
“‘In that context, he figures he’s ahead of the game if he gives up the $70,000 deposit,’ Maudlin wrote.”
“‘Based on the calls we’re getting, it looks as if foreclosures will continue for the immediately foreseeable future. We don’t see any soft landing at the bottom of this downturn.’”
‘Right now, basically there is a lot of inventory,’ Jean Kaminski, executive director of the association, said. ‘Builders have reduced their prices, they won’t go any lower.’
Riiight Jean! That will bring’um running to snatch one or two up before the prices… Do what? Go lower.
WMBZ, clearly you didn’t hear her. She said they won’t go any lower. That’s that. Market be damned.
But what about the lenders who issued their revolving credit facilities and other funding vehicles? Most have financial convenants they have to meet or the developer has to starting posting collateral. That’s even before debt service shortfalls begin. Where is the money going come from? The game only works for so long.
Tim, I see your mouth moving but I’m not hearing anything.
Jean said the builders have already reduced the prices. Maybe you don’t understand. They won’t go any lower, she said so herself. You should probably buy immediately or, who knows, you could end up as a priced out, bitter renter forever.
At some point threats become laughable when backed by insufficient force. We are well beyond that point. I can think of a few parting words I’d leave with Jean.
“Maybe you don’t understand. ”
I think it is you who do not understand.
I think it was just in jest. Sarcasm is so hard to get right on the net.
Jean said that the builder already lowered their price. Legally you are be required to purchase the house. Even if you have no association whatsoever with the property - - you walk by, the builder leans out and says “Lower Price!” and if you don’t buy it, you can be sued and you will lose and you will be stuck paying the lower price. Because they aren’t going to lower it again.
So sayeth the Jean.
(sarcastic enough fer ya?)
Sarcasm on the net just makes you seem dense. Spare us
And acting like a d*ck is supposed to make you seem what, smart? Spare me.
Tim, I see your mouth moving but I’m not hearing anything.
Jean said the builders have already reduced the prices. Maybe you don’t understand. They won’t go any lower, she said so herself. You should probably buy immediately or, who knows, you could end up as a priced out, bitter renter forever.
Your voice is soothing, but the words aren’t clear.
You don’t sound different, I’ve learn the game….
You’re right I guess I just don’t get it!
“‘Homeowners usually struggle to retain their family home in any way they can, but it’s different for investors and speculators…In that context, he figures he’s ahead of the game if he gives up the $70,000 deposit.”
All the homeowners would be better off walking away, and renting for a few years. The whole bailout thing is intended to prevent losses for rich investors by disguising that fact from them. In the end, even if the bailouts succeed, the homeowner would be kicked out as soon as the lender could sell for a profit. Since these loans could never be paid back, a profitable foreclosure (because house prices always go up) was always the game plan. It had to be.
True
While I agree that the bailout plans are intended to help wall street, and not the homeowners. The more complex issue is whether allowing the foreclosure rate to sky rocket without intervention and further destroy the credit and liquidity markets is the best thing for the economy (i.e., whether pop or deflate). For example, is there a way to string this out over 4 or 5 years so that banks and insurers lose money each year as opposed to collapse? Im torn on the issue, and am open to thoughts. I do agree it has nothing to do with the actual person going into foreclosure, except it might be good for a politician’s image (but then again may backfire as more educated ppl can see through it). I am less concerned with commentary about whether bankers and insurers were culpable, as I am more concerned about the overall economy, and believe even at banks and insurance companies the first ones to get the ax are the innocent or well intentioned. Those runnning the machine have golden parachutes.
The downside of that is the economy may stagnate for years if this is strung out, as houses remain too expensive for people to buy and bad loans keep popping up. That may mean the finanical institutions have no profits to offset against the losses.
The question is, could the government and investors create new institutions (banks, a new Fannie and Freddie) to replace those who disappear.
Another aspect — senior citizens hold wealth, whereas the young have nothing to lose and everything to gain if asset prices fall. They will be stuck with the bill if government money is borrowed to try to prop them up. The generational war again.
One thing I struggle with is the thought that the new instutions will probably be run by those that caused the mess. Wouldnt they just quit, let the old institution file for bankruptcy or just do miserably, hurting everyone that did business with the formally rated entity, and then begin working for a new start-up? You do it right, and you might never have to miss a big bonus. Oh the complexities. I dont know the answers, but I certainly see questions. Lots and lots of questions.
“For example, is there a way to string this out over 4 or 5 years”
I’m currently of the “let it break down quickly and naturally, then start picking up the pieces and rebuilding” mindset. Attempts to “string it out over 4 or 5 years” could potentially string it out 10 or 15 years…10 or 15 years of slow pain. No thanks, let’s get this over with, and start rebuilding the economy based on people saving for the future, and not spending more than they make.
I’m also one of the people that are against incentivizing high risk behavior, at least not above and beyond the actual incentives. In other words, if the bad consequences of risky behavior are carried by someone other than the risk takers, that will foster even more risky behavior down the road. Why not? If someone else pays for the risk, there is no real risk to the so-called risk taker.
If the game is “heads I win, tails you lose”, you’d be a fool not to play.
In the interest of fairness, I have to confess some bias as I am a securitization attorney whose clients are investment banks. I didnt touch the subprime, but the current credit and liquidity crisis leaves the future of my clients and my own position uncertain. Im on the front lines right now working entirely on emergency bridge financings, liquidity sources, etc. If I wasnt in the biz I would be leaning much more towards collapse. Some ppl think that collapse will serve some justice. The truth is that the brain trust will jump ship to other high paying jobs and that the dying companies will shift the financial hardships to their investors and those that had other financial dealings with such companies.
Tim:
If a collapse serves to educate people and bring about a return of values, trust, honesty, fair dealing, and could you imagine, the golden rule, then bring it on, I really don’t give a rats ass if I lose my job. It’s not like smart, hardworking people will not find their way.
I am leading toward that position also. The only slight tweak I would make is that rather than trust and honesty, I see the bright side being instilling fear in ppl again. Not irrational fear, but the fear that our grandparents had into jumping into financial risks with the knowledge that things do not always go up. We need ppl to rely on common sense again, not put it on the shelf believing everything has changed as greed takes over reason.
I do want to point out that it’ll be ruinous either way. It’s not like we’re just going to shake the Greenspan Housing Bubble off — supporting the economy for ten years on fake money is going to create a lot of damage. Regardless of how many investment (or retail!) banks survive, our economy generally is not going to be able to absorb the greying baby boomers, rising energy costs and climate change with any grace.
You just gave me an idea. I would love to join in an effort to make everybody see the reality of what Greenspan has done to the American (and world) economy and to help wipe that smug smile off his face (although he surely knows that the whole house of cards in beginning to crumble).
I’d also love for the general (I mean Joe and Jane Sixpack) consensus to be that Greenspan was a charlatan and a disaster as Fed Chief.
I still have educated friends (PhD, no less) who, in a recent conversation about things economic, both expressed their dismay that Greenspan was no longer at the helm. He was an “economic genius” according to these friends of mine. I must have gone on a 10-minute rant about why they were oh-so mistaken about Andrea Mitchell’s husband.
In order to facilitate taking the bloom off of Greenspan’s rose, I commit to calling the housing bubble the “Greenspend Housing Bubble from now on!”
If you guys will do it as well, maybe this view will seep into the public consciousness.
Thanks!
I would prefer people getting credit for the consequences of their actions (not just for the causes); so let’s call it the “Greenspan Second Great Depression” or alternatively the “Bush/Greenspan Second Great Depression”.
Well If you are of the opinion that you are against any bail out how’s about signing this petition: http://financialpetition.org/ Or you can just go to Thetickerforum and click on the petition link at the top of the page. Please take a look and if you agree sign this thing. This site is centered around the stock market and trading. I am not a trader but it is this entire mess around housing in Florida that got me into looking at all the angles that I never really even considered. Fact is, the more you look the worse it is. The forum above gives points on both sides of what is a bad deal any way you look at it.
There is an assumption that the houses are still there and their value whether high or low stands frozen in time but it isn’t. A house requires constant input of money and time. I just read about a little subdivision (out in Arizona I think) where something like 50 out of 150 homes had been vacant for two years. Well even without vandalism or squatters, two years is about as long as you could call these houses new. James Kunstler wrote about a house across from his that was just destroyed during the foreclosure process. Foreclosures should be as quick as possible in order to preserve the value of the house.
There’s going to be an “avalanche” all right - but it’s not going to be an “avalanche of baby boomer retirees” headed to SW Florida.
Unless there’s an a secret hidden demogaphic bump of retirees who cleverly sold their house in ‘05, rented or lived with the kids for a few years, and are now ready to swoop down and pay cash in suddenly-more-affordable Florida.
I’m sure such people really do exist. But the bad news is, there’s about 50 of them total.
I’m one of those boomers who sold in 2005, has been renting since, and retired at the end of 2006. In the future I’ll buy a smaller, cheaper house, all cash. Unfortunately for the Sunshine State there’s no way I’d live in Florida.
My parents are of the boomer generation; my father is retired, and my mom is thinking about it. There’s no way I’d advise them or any of their peers to retire to Naples or Fort Myers, although I admit that Sanibel/Captiva has some appeal, partly because the island isn’t overrun with tract housing and strip malls.
“There’s going to be an “avalanche” all right - but it’s not going to be an “avalanche of baby boomer retirees” headed to SW Florida.”
Talk about whistling past the graveyard. Why would a fixed income retiree want to move to Fla. Property taxes and Property Insurance are going through the roof. I’m close enough to that age to start thinking about it and the first thing I think is “I’m never moving to Fla”
At this stage I can’t believe that they’re still preaching:
“……but ready to recover next year - with an avalanche of baby boomer retirees not far behind.”
The first boomers, those that can, will retire this year at age 62. IF they can sell their house up north and IF thay choose to come to Florida, they may buy a house or two.
Only the self deluded continue to hope and pray for the “avalanche of baby boomer retirees”.
You would not believe how many Florida Realtors still cling to this. The wave of retirees coming in the next decade or so will be a negative on the overall economy, as a the ratio of people in the work force decrease as compared to the retirees, who now live a lot longer, by the way.
The Baby Boomer Retirees ain’t a good thing for most segments of oue economy.
What’s worse, Arizona has already claimed the baby boomer retirees. Sorry, Florida, but they’re moving here.
How do I know this? Because our REIC and government officials say so, that’s how.
And did I mention that the MSM sez so too? This just in from one of Tucson’s rags:
http://www.azstarnet.com/sn/biz-topheadlines/226398
Price point Slim….@ a buck eighty it may be compelling ??
Also, could this not be a good example of what we have discussed here (particularly Ben) about the builders leading the way down ?? Check out the Reno blog…The builders are doing it there also…Bad news for re-sale’rs in the same market…
And did I mention that the MSM sez so too? This just in from one of Tucson’s rags:
http://www.azstarnet.com/sn/biz-topheadlines/226398
They don’t mention the boomers in the story, but, hey, we’ve gotta start building NOW! Those boomers will be here before we know it!
Yeah, but if they can’t sell their house in Des Moines what makes them think that they’ll be buying in AZ?
I have more hope from the SoCal locusts than from the snowbirds.
Speaking of Florida, some guy on CNBC just said he’s looking to pick up condos in dt miami for 25% of peak, and “we’re almost there”.
For clarity, not 25% off, but 25 cents on the dollar.
Yeah I heard that. It was Ron Peebles. Boy it was brief. They just glanced right over it.
“some guy on CNBC just said he’s looking to pick up condos in dt miami for 25% of peak, and “we’re almost there”
$1,000,000 condos are selling right now for $300,000. So yes, he’s right.
25% of peak, or 25% off peak? There’s a big difference. If it’s the latter - he’s a fool. If it’s the former, maybe not so, but it’ll still be a couple of years - I can’t imagine prices are really near 75% off yet.
Never mind - I see the clarification above (dang it takes forever for these posts to make it onto the server)
I looked into Miami condos and the pricing is not bad in isolation. Luxury highrise condos with ocean view for as low as $300 per sq foot (or in some cases even lower). That may sound high to some, but for those living in high cost areas its not bad. You pay more for that here in Lodo (in Denver) for parking garage views. Then I realized that HOA, taxes and insurance can cost you $2k a month even if you buy with all cash down. The carrying costs alone appear to equal or exceed rents.
I should note that I dont think we were near the low, but I fill my spare time by trying to figure out which areas may have the best opportunities so I can be ready to buy when the time is right. Im thinking 2010 earliest, but am anal as hell and like to have my own solid data of trends that I have verified personally.
Tim - I think that’s howe a lot of people got screwed - by comparing prices in Place A to prices in Place B and buying in B because it was cheaper per foot. That is roughly equivalent to asking a lender to base comparable prices, for the purpose of a loan, on houses in two different states.
No doubt. Im in Denver and FL looked cheap. I have no doubt that ppl from the NE (NYC, DC, Boston, etc.) or Cali thought that $500k for a decent place in FL was a bargain despite the fact you could get a comparable property for $150k pre-bubble, and taxes and insurance, especially for out-of-state ppl, can be crazy.
They had a developer on saying that he was looking for land to buy at 25 cents on the dollar.
“I can’t buy a box of matches on credit”
Now, what would he need a box of matches for anyway? Freudian slip?
I wondered the same thing. Just boin it.
“‘I can’t buy a box of matches on credit,’ said Munnerlyn. ‘It ruins people.’”
It’s getting credit that ruins people, Travis. Not being refused it. If you’d been refused the HELOC you’d be fine now.
Borrowing money for anything except a cash flow positive investment (e.g. a properly priced house) makes you worse off, not better off.
“Many borrowers are told not to worry about increasing interest because they can refinance again before the higher rates take effect. That’s what Munnerlyn’s mortgage broker told him he could do when he refinanced his house to do the addition.”
“Only it didn’t work out that way. Munnerlyn’s income took a dip when his wife was laid off and he might not have been able to refinance anyway even if she hadn’t been. Only nobody explained that to him.”
Stupidity is expensive.
“‘I can’t buy a box of matches on credit,’ said Munnerlyn. ‘It ruins people.’”
Don’t do it, Travis. The blogosphere is watching.
“Ongoing price cuts and incentive wars among builders also have kept potential buyers on the sidelines. ‘Some people are still waiting for the bottom to drop out,’ Coulombe said.”
Ha ha - I don’t think that means what it think you means. The bottom dropped out about 2 years ago - that’s why people are waiting on the sidelines. Those waiting on the sidelines are waiting for the bottom to return.
Speaking of Florida…
I get a lot of “it’s unaffordable” comments on this board when speaking about Palm Beach County. Here’s some fresh information.
Single Family on the water in Palm Beach Gardens, last sale $570,000 in 2005 bank owned in 2007, current price $245,000.
Single family homes in established neighborhoods are selling for $75 to $100 per square foot. And yes, the key word is selling because that’s all that is selling.
Homes are selling new construction for $100 to $125 per square foot all over the county. Minto will give you a 4BR 2-story brand new home for $299K these days!
Here’s the best part…we’re not even at the bottom yet. I bought WAY too soon, but you live and learn.
On the other coast, houses that actually sell in my old Sarasota neighborhood are now in the $90 to $100 per sq ft range. That’s approaching 50% below the 2005 peak.
It’s limbo time, as in “How low can you go.”
If you get low enough, maybe folks will drain out of NY to FLA after all. Unless we get low enough to compete.
“…maybe folks will drain out of NY to FLA after all…”
I’m already seeing it. I’m starting to see the trend of more new move-ins than move-outs for the first time in about 2 years. The houses that ARE selling are people moving in from out of the area. No one is moving “around” from old house to new house yet. I think they are the smart ones waiting for the bottom.
Wow - that sounds good. I’d like to eventually buy around Sarasota. What neighborhood were you in? What would recommend? My preference would be an older area (say homes in the 1900 - 1950’s range, if possible) with open water canals - either no fixed bridges or high fixed bridge (want to have a boat). Any particular advice on things to watch out for (aside from the obvious taxes, hurricanes, etc.)?
Not looking to buy for quite a while - anywhere from 3 to 12 years or so, but trying to do a bunch of up-front homework. I have family in Bradenton that we visit quite often, and plan to do some physical legwork checking out areas as well.
“I bought WAY too soon, but you live and learn.”
Bad Andy, Bad!
Seriously though, thank you for returning to this website and continuing to post. I appreciate your honesty and modesty.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aejJZdqodTCM
I’m amazed that foreclosure lawyers even filed the papers without documentary proof of chain-of-title for the mortgage. An affidavit of ownership is BS; the affiant isn’t available at the hearing for cross examination. If I was the defaulted borrower I’d show up with a certified copy of the recorded mortgage. Point out to the judge that the orginal mortgage bank (now long gone) is the holder of the mortgage, and tell the plaintiff to piss off until it can prove ownership. Motion to dismiss granted, without prejudice. (Probably could stay in the property another 6 months or get the note-holder to pay me 5% of the balance to hand over a deed-in-lieu.)
Yep, that’s what I would do too and some debtor’s counsel are doing. I’d pull some variation on that if I was a renter in a foreclosing property too.
Want to set up a website ;-)…
We could call it.
StayInYourHomeForFree.com
or for renters who’s landlord defaulted…
PayNoRentFor1year.com
We could give people advice on how to stay right where they are.
I told any number of lenders this would come back to bite them. I told them when they wanted to go “paperless” that they needed to keep the original notes because they are negotiable instruments and the only evidence of authenticity. I told them I had personally seen borrowers show up and challenge their signatures and challenge the assignments on copies of the note. There is no rebuttal to such a challenge save for someone or a set of people who can individually testify as to the endorsements or handwriting experts, which are uncertain propositions at best, and excruciatingly expensive failures at worst. Did they listen? Hell no. They all thought that MERS was the New Thing, that pretty soon there would be a national database of all property and that someone else could worry about the few problem cases later. They thought the cost of storing a 4-page note in someplace safe was somehow less expensive than litigation. Talk about penny-wise, pound-foolish.
Technically, the problem isn’t so much the note as the mortgage instrument. The note evidences the debt, the mortgage instrument evidences the interest in the land (right to foreclose if the borrower defaults). Every time the loan is sold the acquiror should obtain and record an assignment of note and mortgage.
What I bet happened was the originating mortgage bank pocketed the recording fees paid by the loan purchaser and never recorded the assignment. As the loan changed hands everyone else pocketed the recording fees and never recorded the instrument. What a mess for the creditor’s attorney. The lawyer now has to get evidence from everyone in the chain of loan ownership. How many of these parties are now bankrupt or no longer doing business? The documents are now all in boxes, not catalogued, in suburban storage facilities. Big “Kelly Girl” fees to be paid by creditor.
New line of business for retired lawyers and paralegals: obtain evidence of mortgage loan ownership. They could get rich just off of DB!
“‘I can’t buy a box of matches on credit,’ said Munnerlyn. ‘It ruins people.’”
Not really. It teaches people to live within their means,causes them to save, sleep better at night and gives them an overall sense of pride and accomplishment when they are able to forge ahead economically in the “old fashioned way.”
If they have the luck to get out of debt before they’re totally ruint, maybe, but it doesn’t sound like Grandpa Munnerlyn has been that lucky. I think Shakespeare’s conception of credit is more accurate. “Borrowing dulls the edge of husbandry.” Easy money makes people dumb, that is to say.
There’s much in that story that could have used some fleshing out. He is seven payments behind. So if he were intent on paying if he could, apparently there is a seven-fold factor of income loss and payment increase. Possible? I suppose. Likely? I don’t think so. There’s more to it than was told here. Reminds me of divorces — it’s always the other one who was the jerk.
” ‘Gosh, it’s going to be really hard to drive down U.S. 41,’ cracked Mark Vitner, senior economist with Wachovia Bank, in his speech to the Urban Land Institute’s 11th annual Winter Institute on the Gulf at the Naples Hilton & Towers.”
“He was referring to the likelihood that Lee and Collier counties will get their share of the baby boom generation born between 1946 and 1964. The oldest of those people turn 62 this year and will be eligible for Social Security.”
I wonder if Mr. Vitner would be interested in a bet on the relative prices of U-Haul rentals in and out of SW Florida from/to various cities in the East and Midwest in 2009.
Builders can whine all day about ” price guarantee ” incentives but they’ve already made their bed by their own reprehensible actions. With all the years of documented tap dancing around contract loopholes, would YOU trust a builder to honor a contract to lower or rebate to a buyer any drop in appraisal for purchase price of a house that goes for hundreds of thousands of dead presidents!?
Nah, me neither. Now they can all lie in the bed they made.
Once those builders go bankrupt, all guarantees are useless. Good luck collecting on that one…ha
Excellent point –much like all those “extended service warranties” retailers love to sell. Useless once they’ve gone T.U.
Its costs very little to guarantee the house prices through closing when you aren’t selling many houses.
Seems to me that the one othe things about the housing market that must change is selling houses before they are built. If builders can’t obtain financing and build to meet the market at the time it is finished they should be in another line of business. Why buy a pig in a poke? But then I look for established neighborhoods too.
my in laws sold their home in south jersey last fall and they (against my advice) purchased a new home in summerfield fla
it is being built from the ground up and they paid cash for the place
they were in aruba for a vacation a few weeks back and the sales rep was emailing me the progress and what not, well they wanted to start doing some work and i could not approve the changes as it is not my house.
the sales agent was pressuring me for an answer and i could tell they had pretty much no other work to do at that time as she could not wait until monday (it was friday afterall) to get an answer
does anyone know about that area? i love them but they think i am a loony tune for my rantings on the bubble
It’s in Marion County near Ocala, which is in the central part of the state about a two-hour drive north from Tampa. Some thoroughbred farms in the area, but too far north for citrus. No high-paying jobs to speak of.
The closest main artery is US441, which is a traffic nightmare. IMO, the nice part of the Ocala is northwest of the city, out Rt 27 toward Chiefland and Perry. That’s not Summerfield. BTW, you didn’t mention why you didn’t call your relatives in Aruba and give them the salesperson’s name and number to call.
they were traveling that day unreachable
I guess the consolation might be that they could have paid less than people who bought there in 2005. I haven’t been in that area in a couple of years, but it would seem reasonable to guess that builders have been dropping prices there just like in other places. I think they have one advantage in being there — pretty good medical care in the area, both in Ocala itself and at Shands in Gainesville. Personally, I’d rather be hospitalized at Shands than here in Orlando.
the only reason it’s hard driving down ANY intrastate highway in FL is because the state puts up EFFIN STOP LIGHTS EVERY 2 MILES!! Or less.
I have NEVER, EVER, seen any traffic laws so effed up as the hodge podge crazy quiltwork of Florida. No other state has as many non-essential traffic lights on a freeway as Florida. You cantg make any progress on US 41, 301, 19, or even 1 or 1A because of the damn stoplights whenever you get within spitting distance of a town. It’s obvious why this happens; corrupt pandering govt lackeys kowtowing to all the local strip malls,strip clubs, c-store & boiled peanut stand that demands cars slow down or stop on the slight chance they might/have to drop some dollars. Or whining wealthy retirees can’t cross the highway in their golf carts whenever the hell suits em. (Sarasota)
** if you see a golf cart by an intersecton get ready to apply brakes ASAP because that light will go red in a heartbeat! Cant make mable & harry late for tee time ya know - with all their retirement money in the banks they call the shots ***
typical FL BS.
rant off - for NOW
(no offense to you Palmy - like the state/hate the govt ! )
Actually, you are quite wrong in your assessment.
I’ve live here my whole life. As a kid, when I first got a driver’s license, I used to drive from Tampa to Crystal River to go diving. We drove down Hillsborough Avenue to US19, then north to Crystal River…..very few lights, very little traffic, easy driving. A little more than an hour to get there, traveling 55-60MPH with few stops.
Mostly vacant land. Crossing Tampa Bay to anywhere in Pinellas County……mostly saw palmettos and scrub-brush with pine trees. Ultmerton Road an easy trip.
US 301, US41, all drives for tourists going around.
More people came, more traffic, more people being run down by motorists. Citizens demand traffic lights so they can cross the road where their children and friends had been run-over by speeding traffic.
More and more development, more and more traffic, more and more slow-downs. Now, it’s grid-lock.
It was the natural development of the areas, where no one was far-sighted enought to put in over-passes on major highways. Do you think you could have sold the idea to retirees who are now complaining about taxes??
I doubt it.
I sux. I don’t like it, but that’s where we are today.
When we were kids MOST of the gulf coast has NO, and I mean NO condos. That was the 1960’s. Miles and miles of OPEN BEACH. It was great. Now look.
I feel bad for kids today. There are no more open spaces here in Florida, just KEEP OUT signs and clogged roadways.
It’s being reported that we are getting closer and closer to a government bailout of FB’s. Several plans have been put on the table. One being that if a FB has made just 6 payments on a home but are now in trouble, they can get into one proposed government plan which will let them pay lower interest, etc, plus a “freeze” any foreclosure attempts. One thing is almost a 100% guarantee. This mess is so out of hand and the damage is spreading beyond sub-prime, that the government (with tax payer money plus Bahgdad Ben Bernanke’s 24/7 dollar printing machine) are going to do something.
Of course, as usual, the perpetrators of this mess, realtors, banks, mortgage brokers and the head of the snake (Wall Street) are going to walk away without a scratch. They walked away with billions of dollars, based on nothing more than fraud and deception. The Godfathers of Wall Street probably salted away their ill- gotten gains in places like the Cayman Islands or bought luxury property in Bermuda. Depending on the advice of their lawyers. The lesser minions of Wall Street bought lots of toys. How much somebody made in this travesty simply depended on where you were in the food chain.
Now it’s average Joe Sixpack who’s going to pay the price.
Wouldn’t it be nice (for a change) if those who committed the crimes paid for their crimes. We could start with some of Hank Paulson’s “brothers” on Wall Street. Or we could go after the real estate brokers. Not the bottom feeders but the big guys who own the frachise like Century 21 or Re-Max. How about the banks? We might not get it all back but it sure would soften the blow and at least make us think, for once, that we hadn’t been taken to the cleaners (again!) by the Financial Gangsters Of Wall Street.
However……don’t hold your breath.
Your house is decreasing in value every day.
Your living costs are increasing every day.
You’re seeing more and more news about people walking away from it all.
You deduce that maybe you could just melt into the crowd when it’s all said and done, even with a bad FICO and credit hit, you’d really be no different (i.e., the stigma is gone).
Maybe your job isn’t as secure as you thought it was.
You have an ingrained suspicion of banks and the PTB, you’ve watched both exhibit questionable morals and values.
You check out the rentals, they’re a LOT cheaper than your mortgage.
Why the H-E-doublehockeysticks would you try to stick it out??? Even with gubmint bailouts, what’s different? You still owe more than it’s worth, you’re watching the economy tank.
I vote they’ll walk. The government can’t hold this one back, they’re powerless.
Yeah, in the case of FBs who don’t have a job - but still have a house - there is absolutely no reason why they should tie themselves down any longer. Who knows where they’ll have to move to find work - or at what wage they’ll find it.
” I am just a poor boy and my storys seldom told, Ive squandered my resistance
for a pocketful of mumbles, such are promises
All lies and jest, still the man hears what he wants to hear
And disregards the rest, hmmmm
When I left my home and my family, I was no more than a boy
In the company of strangers
In the quiet of the railway station, runnin scared
Laying low, seeking out the poorer quarters, where the ragged people go
Looking for the places only they would know
Li la li…
Asking only workmans wages, I come lookin for a job, but I get no offers
Just a come-on from the whores on 7th avenue
I do declare, there were times when I was so lonesome
I took some comfort there ”
The Boxer; Simon & Garfunkel
Lost - I agree with you. I think that the majority of those who initially take the bait will eventually learn, from people they talk to or see or read about, that being so far underwater is a bad deal even if the interest rate went to zero.
It’s called intertia. If you’re single, it’s doable, but most single people aren’t in trouble.
You’ve got your riding lawnmowers, power tools, the dog has his doghouse, the kids have their childish stuff on the walls (moving is hell for children), all the pots and pans are stored, everybody knows where you live, all your accounts are tied to your address, etc.
What happens when you move? Where do you store stuff, what is your new permanent address, what do you tell neighbors/associates, etc.?
Gee, if I can just come up with $2500 I don’t have to think about all that crap for another month.
When just the principal still owed, divided by 360 (30-yr amort.) is still noticeably higher than rent for an equivalent place, they’ll figure it out. Never mind any negative amortization that could be slipped in.
The recent reports that 2007 teaser-rate mortgages are defaulting at a rapid clip, even though none of them have reset yet validates your argument. If they or upside-down, or even if they can’t expect 15% yearly increases, they are bailing out. It would probably cost $200K per homeowner to reverse that - pay down their mortgage amount + subsidize their interest rate forever + send them some synthetic home appreciation HELOC (SHA-HELOC) cash every once in a while.
“Leahy said people are worried about paying for basic needs and keeping up with debt payments. ‘It’s horrible,’ he said, and glanced at a wall of flat-panel televisions across the showroom. ‘These are nonessentials.’”
Don’t say that. Our economy is dependent on consumption. Those flat panels are *needed* by J6P to watch his sports.
Now put those flat panels on super sale and you’ll sell me one. I’m not sure if I’m happy that blue-ray one the next-gen-DVD format war… But I’ll admit that might get me to buy a flatscreen… in about July.
Got Popcorn?
Neil
“blue-ray”
With Blu-Ray “winning”, there will be less confusion, but less competition as well. Prices may spike a bit.
nice to see Sony win a round for a change. Wonder if they twisted arms behinds scenes for Bluray? I bet they called in a lot of favors, cajoled, payola, etc to win this one - instead of passive market participation . . . like how they lost out on the technologically better Betamax back in the 80’s.
Dont get me started on Sony…one of the greatest storage media ideas of the 90’s the Mini Disc was so screwed-up by sony its pathetic…We DJ’s invested lot of money time on these, because CD recorders were $4000 each..
Sony so screwed the MD that had to resurrect the 3″ cd and dvd for their cameras and camcorders. They have a 2gb double sides MD which could hold 2 hours of almost dvd quality, and it literally indestructible, no worries about tape jamming hard drives crashing….
nycdj
interesting info about the MD you have. I was considering themback when new - but as you mentioned they kinda fizzled out & I never really knew why. And I wasnt about to convert format AGAIN from cassettes to CD’s to MD’s!! just too many formats in too short of time. I felt like as a consumer I was being led around by the nose to waste money chasing the latest techno format fad. thats when (1990’s) I just decided to hold off for awhile & not purchase any new music to see what the hell was going to happen. Of course, a little program called Napster helped kill some time while providing an ” economical” way to keep listening while the big boys sorted it all out. (for the record back then myself & everyone we knew all agreed that if the damn labels would just get their act together, stop being so greedy, & sell single tracks for a reasonable price, people wouldnt be tempted with illegal downloads.)
pardon the topic deviation.
Just wanted to add:
There would have been NO zip or Jaz drives, no 3M dual drives, it could have been put into cameras, an alternative to the VHS camcorders.
We DJ’s all bought them just to get rid of all our 45’s and LP’s that had 1 or 2 good songs on them…it really was a godsend on our backs!
But NOOOO….sony was so dumb when they introduced the VAIO, you could NOT get a factory installed MD or CD Recorder even though sony made BOTH…DUH!
The most shocking part is how VAIO computers somehow survived the moron Sony Management.
like how they lost out on the technologically better Betamax back in the 80’s.
Yes but they came back with 8mm, then JVC developed VHS-C then Sony developed Super 8 then JVC developed SVHC-C, then sony developed…
I looked at some reduced flat panels the other day, if they get cheap enough I might buy one
typical dumb-ass thinking by the sales drone; ” duhh, sure would like to get me one o them flat screen TV’s but mah car is going out on me .. duhhh “.
hey elmer, before you even think about a freakin dee-luxe TV why dont you get a backup (2nd cheap but reliable) car in case the primary one goes down? nahh, that would be thinkin ahead too much, so you just go on pacin back n forth waitin for something to happen instead of taking the initiative to make yer own future happen YOUR way.
I know, I know, it aint necessary cause yer cuz gots yer back. aint no thing cause its sure fire thing to be back in da bling. fo’ schizzle.
dats how you roll. dog.
Flatscreen TVs - Yesterday they busted a burglary ring in Evanston, IL and found $100k in loot - flatscreens figured prominently on the list of seized items.
It was strangely comforting to read the inventory of items they stole and realize I owned like one of the types of items on their preferred booty list - and it’s due for replacement anyway.
The world’s largest garage sale, courtesy of FBs, is about to open up.
Neil, Buy a Phillips. Best quality at same price as all the rest. I bought the 32 inch for $750 at Wal Mart. It weighs 32 pounds. Picture is incredible. Be sure to plug into the S-video port for max picture quality.
“More guests have been bringing back leftovers from the restaurants…Instead of going out for dinner and lunch the next day, they’ll eat those leftovers for lunch”
Maybe I’m insane, but isn’t that behavior (having the “doggy bag” leftovers from dinner as lunch the next day) considered normal?
In this day and age, most restaurants have portions so big that you would feel physically uncomfortable to finish them. It just makes sense to save the rest for another meal.
Or is this behavior considered “low class”?
If so, I’m pretty low class, cause I can get 2 meals out of those leftovers. Restaurant meals are huge - it’s no wonder they operate on such close margins.
I’m the doggie bag champ of Tucson.
The wife and I usualy get a extra three to four meals (mainly for lunch) when we go out to sit down dinner…We just can’t consume the amount they give us anymore…
I would never think that behavior to be low class. It would be wasteful to throw the food away if you could otherwise make a perfectly good meal out of it. I say it’s a smart thing to do, not at all low class.
Contrary opinion. This is actually a relatively new American thing, and it IS low class. In Europe, for example (especially France), it is considered very uncouth (and generally not allowed) to take uneaten restaurant food home. I’m sure this is also true in NYC.
I agree one reason it has happened is beause of the large portions, but, especially in nicer restaurants (not talking here about half a pizza), it’s still uncouth, IMO. And obviously women are more inclined to do it than men, since they generally eat less in a sitting. (Men are more likely to think this is cretinous behavior than women are, just like there are things men are more inclined to do that women think are gross - please don’t list them.)
BTW, despite what your mother said, whether it gets thrown out or taken home is not going to affect whether anybody in India does or doesn’t get fed.
No, but it affects the degree of gourmet chow my dogs get. Just cause they think it’s low class in Europe and in NYC and in your mind - well, all the more reason I think it’s just fine. Please don’t impose your values on me and I’ll do you the same favor, thanks.
I’m not imposing values, I’m expressing an opinion. Your response and your last sentence are hard to square.
OK, you have a right to your opinions, I agree. Even if you think I’m square…LOL
It’s uncouth (if someone else whose opinion you value) says it is. In some high class French restaurants, having the temerity to add a seasoning to a dish the chef labored over will get you thrown out & banned from that establishment.
“and it IS low class. In Europe, for example (especially France), it is considered very uncouth (and generally not allowed) to take uneaten restaurant food home.”
A contrary opinion to the contrary opinion - Us hoi polloi unwashed masses cowboy types think it’s just fine to bring home a ‘doggy bag’. Uncouth? I don’t see how taking food out of a restaurant is “ill mannered” or “unrefined”. Is ordering take-out from a restaurant considered ‘uncouth’ as well?
Arroyo - Note I’m reponsding to “I would never think that behavior to be low class.”
It is clear to me that most Americans are unaware that this behavior is a recent American invention, and is frowned on in most of the world, as well as by some Americans. I’m simply pointing that out. But, hey, do your own thing. No biggie.
And, as to your last sentence, the whole idea is that take-out is take-out and sit-down dining is sit-down dining.
Paul, fair enough.
In some parts of the world, dogs are uncouth. In other parts of the world, dogs are dinner.
“Even the LIMO DRIVER, Frank Rieck, became really interested in one property. It was a sea-green home in South Gulf Cove with a barrel tile roof, high living room ceilings and three bedrooms for $189,000.”
There’s still a long ways to go.
the back story is that the limo driver took the guests around to the side of the Quay where a shoe-shine boy was unloading some of his short sales at a great price!
For those who know Florida, is Miami Shores a place likely to hold its value more than other areas? I recently found out that someone I used to know purchased a 50 year old, 4/2 sfh there in 2004 for ~$650,000. Digging up past sales, I discovered this house sold for ~$180,000 in 1999. Where would the estimated bottom be on something like this in that area?
Being a SFH in an established area, and very close to the ocean, it should hold it’s value better than many other areas of Florida. I’m not sure that’s saying much, though. In the land of the blind a one-eyed man is king and all that.
If the insurance crisis does not end soon and insurance rates drop back to normal levels, coastal properties values may plunge in the future.
A first guess would be a bit above $300,000. If the 1999 price was at market, that plus 5% a year for the nine years since puts you at a reasonable price today.
If insurance gets unavailable ot rates get too high, look for banks to provide or at least facilitate the insurance coverage on REOs they’re trying to unload.
In my opinion, waterfront properties were a bargain in 1999.
I owned one at the time. Tampa area.
About then, they took off. I personally doubt that waterfront prices will ever got lower than 1.5 to 2 times 1999 prices, and I’m a bear. There’s plenty of land, but very little is waterfront
single-family.
“There are 31 properties or businesses (about 10 percent of the total) for sale or lease on Duval Street, according to the Key West Association of Realtors. ‘No question the national economy is affecting it,’ said Claude Gardner, co-owner of Prudential Knight & Gardner Realty. ‘For too long, we believed that Key West is insulated from the rest of the economy.’”
maybe making all the hotel rooms cost $300 a night has limited the number of people coming here?
my friend in the water sports industry says most of the people who go out on his boat all stay somewhere outside of Key West due to the crazy hotel prices
“maybe making all the hotel rooms cost $300 a night has limited the number of people coming here?”
Well, look at it this way………you can buy a “conch-house” on Key West, that was selling for $12,000-$15,000 in the 1970’s for about $850,000 now.
That’s in Bahama village area, if you know what i mean.
So, $300 a night seems pretty cheap.
Remember, everyone buying had a business plan. If houses sell for upwards of $500,000 for a 1940’s shack, then obviously, Key West was working under a whole new financial paradigm………rich people would be going there forever and spending vast amounts of Tech-bubble money. It just hasn’t worked out that way.
Not enough million-aires to go around, I’m afraid.
Bahama village is so much nicer then where I lived in NY
“Many borrowers are told not to worry about increasing interest because they can refinance again before the higher rates take effect.
That’s what Munnerlyn’s mortgage broker told him he could do when he refinanced his house to do the addition.”
Mr Munnerlyn is 60 friggin years old. How can people that age think nothing of signing on to a new 30 year mgtg??? No matter what the terms. Can’t these people see beyond their next paycheck?
Sorry, to break the news to ya, Sean, but they can’t even see halfway to the next payday.
Mr Munnerlyn is 60 friggin years old. How can people that age think nothing of signing on to a new 30 year mgtg???
It’s because they believed the hype and drank the Kool-Aid provided to them by the commision only realtor and mortgage broker.
Its the second greatest myth of the baby boomer generation besides RE prices will only go up-we do not believe that we will die!
Second greatest myth of the baby-boom generation-We will live forever!
By the way has anyone recently seen “Night of the Living Dead”? or “The Body Snatchers”?
Yesterday I drove from Sanford, on the north side of Orlando, to Titusville, which is on the east coast south of Daytona Beach and north of Cape Canaveral. I drove Route 46, a two lane “back road” that has the sole virtue of being by far the most direct route from Sanford to Titusville, about 30-35 miles. Haven’t been on that road in almost a year. I was very surprised at how many for-sale signs there are - it seemed that every other house along that road is for sale. And this is the boonies - reee-mote. I can’t imagine how those people have much hope of moving those properties and I never would have gone there with the expectation of seeing so much inventory. Of the few things that surprise me anymore about real estate in Florida, that was one.
Chip, I was wondering how that area would fare. I was back that way last year, and there were large areas that were flattened with the blue pipe strewn around of scattered developments. The housing market was obviously toast yet they were speeding for the stop sign.
My parents live in the Fawn Lake neighborhood off SR 46. Area is stuffed full of McMansions on 1 acre lots. The place was a hotbed of speculators. Now they’ve found out that with an average income of $49K, the number of folks who can purchase $600K houses are about nil. Probably 1 in 10 houses are for sale, most REO. I’ve been thinking about buying one to live in, but with just a wife and one child, I don’t need the carrying costs.
The east side of SR 46 is the unincorporated area of Mims, not Titusville. Us Titusvillains look down our noses at Mimsians. What with their having livestock and airboats in their yards and all.
Right - the area I’m describing is between Sanford and Mims, enroute to Titusville (Dixie Crossroads). They do not look to be high-end properties. Sorry, didn’t mean to imply that so much is for sale in Titusville.
Rt. 46 West of Sanford is a different story altogether - out past Lake Forest - many of those houses are very large and have high wishing prices.
I live off of 46 in Geneva in a subdivision call Seminole Woods. Each lot is over 5 acres and it is a gated equestrian neighborhood. The homes range from 400k to 2M. We are about 20%-25% off the peak in terms of prices.
Buyers of houses which have declined are usually in worse situations than they know. Some time ago I said that builders were getting desperate enough to sue on broken sales contracts. I’m seeing these suits now. The good Mr. Travis can expect not only to lose his $70k deposit, but, unless the contract is worded in his favor, which is very unlikely for builder contracts, he can expect to be sued for the total decline in value of the property, be it $100k, $200k or more. The $70k deposit is only that: a deposit. It is very seldom pure liquidated damages. Oftentimes the seller can elect to take the deposit or can sue for actual damages. Currently, builders are suing for actuals. He could a) settle on the property and take the title and equity loss, with the potential to resort to jingle mail later if the laws in his jurisdiction favor that, or b) get sued, spend time and money defending, and probably lose, in which case he has neither title nor deposit and will probably owe a good deal more besides.
Countrywide Exec’s Living large on their ill-gotten gain…No recession for us !
http://www.cnbc.com/id/23293219
“Despite the persistent slump in housing starts and sales, the Homebuilders Association of Lake County is upbeat about this year’s Lake-Sumter Parade of Homes.”
“‘Right now, basically there is a lot of inventory,’ Jean Kaminski, executive director of the association, said. ‘Builders have reduced their prices, they won’t go any lower.’”
Really, folks from the Orlando area should check out Cape Coral to see how much farther prices can fall. Seeing 70% drops now back to 1998 levels. Yes we are near a bottom in prices in that market..
‘ Then everybody simultaneously saw the writing on the wall, and panic selling ensued. With thousands of sellers and very few buyers, prices came down with a sickening thud, twitched a bit, and then crawled down even lower.’
1926 Florida ..Hmmm….reminds me of somethin’
http://www.investopedia.com/features/crashes/crashes4.asp
Builders have reduced their prices, they won’t go any lower.’”
The prices will drop if nobody continues to buy the overpriced inventory!
“Only it didn’t work out that way. Munnerlyn’s income took a dip when his wife was laid off and he might not have been able to refinance anyway even if she hadn’t been. Only nobody explained that to him.”
What the hell? NO ONE TOLD HIM? Are these losers totally incapable of doing any research - any thinking at all - on their own?
Listen up idiots - you finance a loan, you better make sure you can make the payments NOW, because a refinance NEVER WAS, IS NOT and NEVER WILL BE guaranteed.
Until you get this through your thick skulls - quit breeding!
In case one wonders where the inspiration for movies like “Idiocracy” comes from, here it is.
“Lakeland-based Southern Homes is specifically trying to lure cautious buyers with a recently unveiled program called ‘Price Guard,’ which makes customers eligible for any price cuts that occur during the construction of their home.”
I looked at the Southern Crafted homes two weeks ago and their prices are still at the level they were at in 2005/2006 and have not dropped. There is nothing in their price guard program that protects the buyer from price drops driven by the market after they purchase the property.
Bottom line, you are still purchasing an overpriced property that will lose it’s value when others in the community begin to sell their properties at a loss. Southern Crafted informed me that they were different than the other builders. I agreed that they were different because the Southern Crafted homes were much more expensive than their competitors properties! One of the realtors at Southern Crafted homes informed me that she had sold three properties in January. However, it looks like none of them closed to date.
The people at Southern Crafted homes just are not getting the message from the consumers and the results are clear when you visit their sites!
Fuzzy Bear, I invite you to visit the showrooms of all the local builders in Polk County, graph the print outs of the base prices of the homes on offer and compare them thoroughly. You will see that Southern Homes of Polk County Inc, (Not Southern Crafted homes) is generally near the lower end of the market pricing currently available. We graph these monthly ourselves to keep in line with market demands. In fact, many of the sales people still have some of the printed base price lists from 2005 and you will see a dramatic difference from the February 2008 pricing when compared accurately. By the way, if you know anyone that needs a home from the $140,000’s in Polk County, please give them our information. I appreciate your comments and thoughts.
Southwest Florida real estate market battered by excessive speculation but ready to recover next year - with an avalanche of baby boomer retirees not far behind.”
Fishkind and associates are deeply tied to the RE industry. The baby boomer statement is nothing but hype and false information. I am in the baby boomer group and live in the Tampa Bay area. I have already made up my mind that Florida will not be the state that I retire and live in. Florida is just too expensive for a person living on a fixed income and has too many issues that often impact the retirees income.
I read too quickly, and didn’t realize that the “expert” was with Fishkind’s firm. Cue the seal!
“It’s slow on Duval Street”
Tomorrow the Vulgar T-Shirt, Sex-Pun-Shot-Glass, and Dumb Fridge Magnet industries will announce massive layoffs.
Was in St. Augustine yesterday - the area around St. George isn’t too different from Duval in KW. The crowds seemed normal (i.e., heavy) for a Thursday in February, but I think it’s mainly the outdoor bar/restaurants, tour guides, and the ice cream vendors getting the business. Not the gift shops/antique shops/jewelry stores. For lease/for sale/for rent signs no more abundant than a year ago. A few more people playing music on the street.
WTF just happened in the market? Emergency rate cut?
Traders looked around and realized the knife catchers in AAPL are almost all lying on the floor with bloody hands already.
NEW YORK (Reuters) - Banks rescuing Ambac Financial Group Inc (NYSE:ABK - News) could announce a plan as soon as Monday or Tuesday, CNBC’s Charles Gasparino said on Friday.
The details of the deal are still being worked out and the plan may fall through, Gasparino said.
Ambac shares rose after the report, trading at $9.90, up 7.3 percent, in trading on Friday afternoon.
(Reporting by Dan Wilchins; Editing by Andre Grenon)
Unbelievable, and even with “…the plan may fall through.”
Another wall-street media crony floats a rumor.
Stocks rebound.
Criminal prosecutions not expected.
Betcha the mkt will gap up or down big on Monday. That’s one way to get past 1375 resistance - gap over it.