Too Much Supply, Not Enough Demand In Florida
The Miami Herald reports from Florida. “Home prices in South Florida sank by double-digit percentages in January, posting some of the steepest declines since the housing market slowdown began more than a year ago. The number of single-family homes sold fell 48 percent in Miami-Dade, while the number of homes listed on the market increased 45 percent over the year before. In Broward, sales slumped 33 percent over last year, while inventory grew 18 percent.”
“The dearth of buyers forced seller Mari Redondo to mark down her Virginia Gardens home $70,000 over the last seven months. She is now asking $330,000 for the four-bedroom — just enough to pay off her mortgage. ‘It’s been horrible. The only thing I see is people renting because they can’t afford,’ Redondo said, ‘In about a month, I might put it up for rent.’”
“In January, lenders took back 641 properties in Miami-Dade from borrowers in foreclosure. ‘You are having to compete against properties that are $50,000 to $100,000 less than yours is. So, you don’t have a good chance of selling before they do,’ said Dee Del Castillo, a real estate agent who focuses on Southwest Miami-Dade County.”
“Her phone finally started ringing in January from potential buyers. All, she said, had asked to see bank-owned homes or foreclosures.”
The Sun Sentinel. “When Ellen Levy moved to the Carriage Pointe townhouse development in Boynton Beach two years ago, she thought it would be a vibrant, stable neighborhood. Instead, the community has turned transient. Four of the 158 homes are in foreclosure stages and roughly a third have liens imposed by the homeowners association for not paying their monthly dues.”
“Carriage Pointe’s homeowners group doesn’t have sufficient income to replant dead trees and make other repairs and improvements, said Ellen Levy, former president of the homeowners group. While some Carriage Pointe homes were vacant, others had the opposite problem: two or more families crowded into them.”
“‘It’s sad,’ Levy said. ‘It’s definitely not what we bargained for.’”
“Phil Thomas, a retired lumber yard manager from Idaho who moved to Carriage Pointe 18 months ago, said he figured he’d have to endure a special assessment or two. ‘But what’s frustrating is knowing that so many people aren’t paying,’ he said.”
“Even more disappointing: watching property values decline and the development deteriorate over the past year. Thomas paid $345,000 for his unit, but some of the townhomes now are on the market for less than $300,000.”
“‘I thought we were buying into a more upscale kind of community,’ he said.”
“Irano Fleurancian, a construction worker from Haiti, paid $121,000 for his small Delray Beach house in 2002. He refinanced two years later thinking he would get a better rate that would lower his $1,300 monthly mortgage payments.”
“Instead, the adjustable-rate mortgage increased his payments to about $1,800. When the interest rate on the loan reset, the monthly payment soared to $2,300. His attempts to sell the house have failed.”
“‘How is a guy making 15 bucks an hour going to afford $2,300 a month?’ said Jim Di Paola, whose foreclosure-rescue firm in Delray Beach tried to help Fleurancian. ‘That’s a recipe for disaster. And it’s happening over and over again.’”
“South Florida’s housing troubles are playing out in dramatic fashion along the 7900 block of Ramona Street in Miramar. Since last year, nine of the 37 homes on the tree-lined street have slipped into some stage of foreclosure.”
“‘It’s really, really quiet now,’ said Maria Dennett, who moved here 17 years ago. ‘Really, really quiet.’”
“‘Banks were taking a lot of risks because they could. It was a frenzy, almost like a drunken stupor. Nobody was saying, ‘Stop it,’ at the time,’ said Gus Zambrano, Miramar’s economic development and revitalization director.”
The Naples News. “There were more foreclosures in January in Collier County than for the entire year in 2005. Kevin Lilly, a tax analyst with Tax Appraiser Abe Skinner’s office, said somewhere down the line in 2008, the county will collect the taxes on all those foreclosed properties from 2007, but it will likely represent a compounded loss for the banks that issued the mortgage.”
“‘Never in my experience has the mortgage industry been in such disarray,’ said Jack Ablin, the corporate chief investment officer for Harris Private Bank. Asked if the savings and loan debacle in the 1980s, Ablin acknowledged that he’d have to return to about 1986 to find a parallel.”
“‘Think about it this way. Two years (ago) the Bush administration was touting that the homeowners rate was as high as 70 percent,’ Ablin said. ‘The problem is, the natural rate of home ownership in this nation is 65 percent. As a nation, we sold home to 5 percent more people than should have been in those homes.’”
The St Petersburg Times. “Tampa Bay area home sales have spent two years grasping for a ledge to arrest the plunge into the canyon. Home sales totaled 1,235 last month in the three counties, the Florida Association of Realtors said. That’s 24 percent below the 1,627 homes that sold in January 2007 and 59 percent below peak January sales of 2,995 in 2005.”
“Reflecting a glut of more than 40,000 houses and condos for sale on the market, median home sales prices declined from $220,100 to $187,100 the past year.”
“Housing boom prices exceeded rents and incomes so much that a few years of stagnation are in order, said University of Florida economics professor David Denslow. ‘Look at San Diego and other boomtowns,’ Denslow said. ‘In those places you have six to seven years of declines followed by six to seven years of boom. That could become our pattern.’”
The Tampa Tribune. “As builders try to unload finished inventory or secure sales contracts to build new ones, they increasingly are competing against homes they recently sold but have come back on the market as resales, either from people seeking to avoid foreclosure or from banks that have seized properties.”
“Lenders, anxious to rid their books of foreclosure homes, tend to slash prices significantly lower than what it costs builders to construct a similar home, said Jack McCabe, of McCabe Research & Consulting in Deerfield Beach.”
“‘This renders builders uncompetitive,’ McCabe said. ‘If you can buy a new home from a developer for $300,000, or a year-old foreclosure home just like it for $200,000, it’s a no-brainer. Especially when it’s in the same neighborhood.’”
“A 4-bedroom, 2,134-square-foot home built in 2005 is on the market in the Live Oak Preserve neighborhood in New Tampa. It’s in foreclosure. List price: $202,500. The builder, Engle Homes, has a similar, recently completed home in the same neighborhood on the market for $329,990.”
“Just last week, Default Research said it tracked 919 new foreclosure lawsuits, which lenders file to take back properties, in January in Hillsborough County. That’s up 9.7 percent from 838 cases in December.”
The Ledger. “Polk County’s housing market continued to struggle last month as existing home sales dropped to their lowest level since 1999. ‘Off the top of my head I felt it was the worst I’ve seen in six years. But eight years? I believe that,’ said Tony Fridovich, broker/owner of Lakeland-based RE/MAX Paramount Properties. ‘I have to say February’s not looking any better.’”
“In addition, Fridovich said Polk still has more than 3,000 existing homes sitting on the market. ‘That’s twice the inventory we need,’ he said. ‘Too much supply, not enough demand and that’s what we got.’”
“Broker associate Sean McDonough said realistic pricing is still key for sellers.”
“‘If these Realtors continue to put homes on the market with what the seller is hoping to get - is willing to wait 12 to 18 months to get - then our numbers aren’t going to change,’ McDonough said. ‘We certainly want to list all the homes we can, but we’re realistic with folks and we put the right price on homes, not just stick a sign in the yard.’”
The News Journal. “With distress sales dragging down the real estate market, Volusia-Flagler home sellers sacrificed their properties in January for the cheapest prices in nearly three years.”
“A total of 321 existing single-family homes changed hands last month at a median price of $179,100, the lowest level since February 2005, the Florida Association of Realtors said Monday. Prices were down 12 percent from a year ago while sales volume plunged 35 percent.”
“Mark Dougherty, executive officer of the Daytona Beach Area Association of Realtors, said the market remains weighed down by a growing number of foreclosed properties being added to the area’s inventory.”
“‘We really expected the inventory level would drop before we enter our seasonal lurch,’ the period when longtime homeowners try to unload properties on special-event tourists, Dougherty said. Instead, 1,710 more owners listed their real estate during January just in East Volusia, adding nine properties for every one that was sold.”
The Northwest Florida Daily News. “When it comes to the state of the housing market on the Emerald Coast, two sets of figures offer a stark reality. In January, home foreclosures in the region nearly equaled single-family home sales.”
“And there actually were more foreclosures in January than single-family sales in Walton County, according to county records and information from Metro Market Trends Inc.”
“‘I don’t think we’ve seen the worst of this,’ said Melissa Neal, of the University of West Florida. ‘We’ve done some research on when we’re going to cycle through this, and it appears it would be 2009 before sales come around and we have a normal amount of homes for sale.’”
“Longtime Realtor Ray DiTirro in Destin said selling a foreclosed home can be a nightmare.”
“‘These people are walking away from the homes and then the utilities get shut off,’ DiTirro said. ‘We showed one last year that had been sitting for 90 days, and there was mold and mildew everywhere. The swimming pool was bright green. So the seller would get maybe 50 cents on the dollar because of all it would take to get it corrected.’”
“Just a couple of years ago when interest rates were low and adjustable rate mortgages proved so enticing, some people borrowed money to buy condominiums they were going to use as rental properties.”
“‘Lenders were lending money like drunken sailors,’ DiTirro said. ‘Now there’s thousands and thousands of condos for rent for less than market value. If you own them, you can’t even get your overhead back. A lot people are stuck. I know of one that was bought for $425,000 in 2005 and it’s selling for $150,000.’”
Hey Ben, why didn’t you post the “glimmer of hope” nonsense from the Palm Beach Post?
They compared every other market to January 2007 but they compared Palm Beach County to December 2007 to show that prices went up. I can tell you RIGHT NOW that prices are falling like a BRICK in Palm Beach County. Don’t use silly spin to decide to catch a falling knife in this market!
I’ll probably get to it tomorrow. I didn’t have room for Sarasota or Ft Myers either.
Yeah!! 2 days of FL threads in a row!
They are usually the funniest and most deluded.
LMAO..at the IDIOT who bought my house…why?..because he thought that property taxes were going to be ELIMINATED in Florida and that meant home prices were going to go up..he went from a $300K home into a “$800K home”..well as of today..he is over $200K UNDERWATER(and still hasn’t paid his property tax bill!)
P.S. also never got the 300K house sold either(total due for taxes on both house over $15K. Probably will cc it)
Ann:
You have every right to be proud of yourself. Dumping anything you know is way overpriced to a Moron willing to pay it, is what smart people do, whether its a house, classic car or some junk on Ebay!
Now the media should base any national real estate numbers on ‘EX-Florida and California’. Like they do with the CPI - minus food and energy. That will help the numbers look better in true government fashion.
Here’s something for Cape Coral/Fort Myers - #1 foreclosure market in the country.
http://www.nbc-2.com/articles/readleearticle.asp?articleid=17813&z=14
And another great one from the Naples News -
http://www.naplesnews.com/news/2008/feb/25/property-owners-try-stay-upbeat-despite-struggling/
Don’t be distracted by the upbeat title - the entire story is about how bad things are. But the best part is the comments; everybody seems to be losing sympathy for those stuck in homes they can’t afford and should have never purchased.
‘In January, lenders took back 641 properties in Miami-Dade from borrowers in foreclosure.’
I thought it was curious that the MH reported percentage declines, but not the numbers. So I checked the stats:
Single Family
Condos
I see 276 houses, and 298 condos sold in January.So it looks like Miami has joined the ‘more foreclosures than sales’ club. Wow, how many does that make in January alone!
“It’s been horrible. The only thing I see is people renting because they can’t afford.”
I guess this is the intermediate stage. Sellers grasp the problem in the abstract, but fail to make a connection to their own situation.
“She is now asking $330,000 for the four-bedroom — just enough to pay off her mortgage.”
Why are you selling? Why not just live there? If that wasn’t the intention, for at least 10 years out, you should not have bought, and if you HELOCed or invested, your decision was even worse.
I, for one, am not convinced by this statement.
For many many people, they would neither have lived in such splendor nor gotten the “free” cash that they did to spend as they did in the last seven years. All in exchange for a less-than-worthless credit rating.
They will never have such a free ride again, all courtesy of the foolish decisions of foreign central banks.
In an almost bizarre sort of way, there was “reason” behind the madness. Think micro not macro.
Yep, exactly: they don’t have a macro mindset. They’re micro ALL THE TIME. Remember the last time you were at a party and there was a big ol’ chocolate cheesecake and you ate half of it because you were crocked on PBR ? Or when you were at the monster truck rally and you spent $7 on a gigantic plastic tumbler of redpop with a lurid, hideous picture of Gravedigger on it because it was superhot that day and you forgot to bring water? No? Okay, then. Well, still, you must’ve been in some similar situation at some point. Perhaps you were all alone in a sumptuous bedroom at the ski lodge in Vale with a shattered elbow while everybody else frolicked on the slopes and so you drank ginheavy brunch beverages and watched 18 hours of TV a day for two weeks straight and had to go inpatient at McLean for a while to deal with the resultant depression. Everybody is forced by short term circumstances now and then to make small, unwise decisions. Some people, though, don’t have a long-term lobe. These unfortunates have to make gigantic, idiotic decisions. At the monster truck rally, the PBR party and the ski lodge, you knew it was dumb to eat the cheesecake, buy the $7 redpop, watch the HSN programming and drink bloody Marys for two weeks. Nevertheless, you did what you done. The buffet was open and you had to eat from it. Same deal with these poor schlubs. They had to partake. It was there.
At the monster truck rally, the PBR party and the ski lodge, you knew it was dumb to eat the cheesecake, buy the $7 redpop, watch the HSN programming and drink bloody Marys for two weeks.
Bloody Marys: you either love ‘em or hate ‘em. Like kitty-cats.
Your post = pure genius. Well done.
Yeah, the invocation of color is one of the most vivid I’ve seen.
Olympiagal, you got some serious competition, girl!
That post was Queen Sh*t. Well done!
Aw, man! Thanks, y’alls!
Brilliant post.
The only thing I see is people renting because they can’t afford.”
That will also put even a more downward preasure on housing prices. I think that the disparity between rentals and home prices is so wide, that people will continue to rent for some time.
it looks like Miami has joined the ‘more foreclosures than sales’ club.
It also looks like the advertisments by the NAR and RE associations are incorrect that home prices double in 10 years. I think it’s more along the line of false advertising!
They are saying prices double every 10 years “on average”, which i believe is a little on the high side.
What they are not saying and have refused to say, which we have been saying for about 5 years now, is that the doubling in 2-3 years of 2002-2005 was WAY WAY out of line with long-term trends. Unsustainable. Had to crash. No one could really afford this.
They were telling us prices would keep going up indefinitely. This was not a bubble. IF we didn’t buy now, we would never be able to afford it….blah, blah, blah.
Don’t listen to their propaganda. They are picking and choosing their data-points. IF they wanted to use trend-lines, then they would have been right here with us saying “housing is OVERPRICED”.
“‘This renders builders uncompetitive,’ McCabe said. ‘If you can buy a new home from a developer for $300,000, or a year-old foreclosure home just like it for $200,000, it’s a no-brainer. Especially when it’s in the same neighborhood.’”
Lots of No-brainer housing advice in the last 8 years.
Why pay $200,000 when you can get it for $100,000. Banks can’t hold all of these REOs. Pennies on the dollar
“Why pay $200,000 when you can get it for $100,000. Banks can’t hold all of these REOs. Pennies on the dollar”
It’s been my experience that banks just go in and list 10 to 15% less than the lowest listing in the same neighborhood. Lowest list in my neighborhood was $200K until a foreclosure listed at $180K which was the lowest price until the next foreclosure listed at $150K. Banks need it off the books quickly…especially if property tax/homeowner’s association dues will push them further off the cliff. As the banks compete with each other for the next lowest price, we’re going to be begging to see 2001 prices again, let alone 2005 prices.
“It’s been my experience that banks just go in and list 10 to 15% less than the lowest listing in the same neighborhood.”
Not where I live. Here the banks are still asking for full price, plus they want the buyer pre approved and ask them to sign an as-is waiver. One recent foreclosure we looked at was priced “below market” and sold in two days, but that’s still the exception here. Mostly the foreclosures languish on the market at prices that barely make up for the damage done by the vacating owers.
Patience, grasshopper. We’re still in the second inning and this one’s a double header.
Think solvency not liquidity. When insolvency beckons, and it will I assure you, they will take any price they can get. Of course, you will be in no mood to buy a house at that point but that’s your problem not theirs.
Also keep in mind that if the loan carried PMI or had a piggyback second the bank’s cost basis is about 80% of the initial loan balance plus foreclosure expenses. So a bank can sell REO at 85% of the former sales price and break even. At 70% of the former sales price the bank’s loss is only about 18% which would now make most bankers happy.
Non-bank REO (those in conventional MBSs, CDOs, CMOs, etc.) typically grew out of uninsured, 95%+ loans so the loss is much bigger for those holders. I suspect the better deals are for bank REO while the bad deals are for bank-serviced REO. The security trustee is probably demanding wishing prices to keep the security holders from realizing too big of a loss.
Anyone who pays 70% of peak for a house whose price was doubled-to-quadrupled over the past 5 years is a dolt. No other way to put it.
I, for one, could care less about what the friggin bank is eating for a loss. Wake me when prices are sub-2000 so I can start to look around for properties to bid 1997 prices on.
When we bought here the thought of how much the bank was losing never entered our minds. It was, “OK, here are the comps, we’ll offer this much lower.” Then to the bank, ‘Here’s our offer, with a quick settlement and no contingencies. Take it or leave it.”
They not only took it, they paid for the owner’s (our) title insurance policy. They didn’t want us coming back at them for any reason.
Later, when our county finally started putting land records on line, we calculated they lost between 15% and 20% of the original mortgage amount. But that was May, 2005. Don’t settle for that small a discount in today’s market!
“The problem is, the natural rate of home ownership in this nation is 65 percent. As a nation, we sold home to 5 percent more people than should have been in those homes.”
I’ve never heard of the “natural rate of home ownership.” Can anyone explain where this comes from, or is it just more BS??
Thanks.
Probably the historic level, which was stable for years before the bubble. But I think 65% might be a tad high. And this stat ignores oversupply from second homes (or third or fourth via flippers).
I also agree the historic level is too high, based on the level of geographic mobility in the U.S. Government subsidy and culture may be the explanation. People who move every two or three years should not own. And people certainly should not own something they do not plan to stay in.
Heck, only ‘fourth’? Remember that story about some LV guy who bought (40) forty homes? Wonder how he’s doing now? Actually, I don’t wonder. I suspect I already know just how he’s doing lately.
“natural rate of home ownership”
is based on the “historical” trend being ~60-65%
“Can anyone explain where this comes from, or is it more BS??” Mmmmmm….let me think.
The number is from here:
http://www.census.gov/hhes/www/housing/hvs/hvs.html
see table 5.
Historical average (going back to 1965) is about 63-64%. Recent peak was just above 69%, though it’s now down just below 68%.
Problem with the numbers for me. Housing was expanding along with ownership (ie. some people buying more then one house) and now we have more houses than possible owners in many areas if we go back to owner occupied only.
Bad math day. That 65% is a static number based on a total universe. With the rate jumping to 70%, the increase in the rate is 70/65, or 7.7%.
Make mine 8 million homes with a side of default.
Blano,
Scroll down to the table.
Leigh
http://www.census.gov/hhes/www/housing/census/historic/owner.html
Fascinating table Leigh, thanks
“The problem is, the natural rate of home ownership in this nation is 65 percent. As a nation, we sold homes to 5 percent more people than should have been in those homes.”
Ignoring the minor point that the “5 percent” is actually 1/13 (7.7%) of the 65%, I take issue with his assertion that there is a “natural” rate of home ownership. In many countries, a minority of people are homeowners, and MSM in recent months have argued (I forget where!) that this leads to more flexible economies, as people are freer to move around. When LLs get used to renting out houses, we may find that the new “natural” rate of US homeownership is 60% or 55% or who knows what. The previous “natural” rate was probably connected with the fact that most houses were owner-occupied and most rental stock was apartments.
As with other things posted on here, such as prices, perhaps too the ownership rate will overshoot the median and indeed go to 60, 55 or maybe even 50 or below for a while.
Quite true. While I was born here and am an American citizen, I spent many years growing up in one of said countries. That, plus seeing the gradual deterioration of my grandparents’ neighborhoods over time, helped me realize that the joys of homeownership can be a fantastical crock of s__t. It all depends on the circumstances. Just my opinion, but in the future the ability to move will be worth much more than home equity.
You’re right to point that out. The REIC has bloody hands from its “blockbuster” antics during the days of urban decay. No one likes to talk about that history (it’s not PC), but many people lost a lot back then and there was never talk of a bailout for anyone. Luckily (for the REIC) most people grew up far from the convulsions of those collapsing cities - so they can still “justify” spending so much on housing with a mind that RE never goes down.
They should party on, keep smiling, and for pete’s sake keep buying into Mayberry/Bedford Falls/Seasame Street or where ever.
State Farm announced they will not be writing any new homeowner or even commercial property insurance policies in Florida.
“State Farm announced they will not be writing any new homeowner or even commercial property insurance policies in Florida.”
This is true, but not such bad news. They don’t want to be in a pissing match with the governor like Allstate. It will motivate people to shop elsewhere for a policy that will likely cost them less anyway.
There are smaller insurance companies that have grown quite large who will write insurance outside of Citizens for less money. If a homeowner is with Citizens, it’s for lack of trying or the home is simply a mess and not insurable anywhere else.
But will they have the money to pay up when the SHTF? Cheapest is not always best. It’s a little more complicated than that when counterparty risk raises its nasty little head.
For all the nuts out there who think that insurance rates need more control in FL; I am sure that State Farm decided not to write anymore because they were making SO much money off FL, right? If you can’t get insurance it means one thing; you’re not paying enough for it. FL regulates insurance rates, so, in effect, State Farm is saying that the risk of writing in FL is not balanced with the max allowable insurance rates. Kind of the same reason that a risk pool exists for very accident prone drivers; they simply cannot charge enough to cover the exposure.
Now, all of this comes from actuaries “guessing” on the chance of loss, which, personally, I think is probably overestimated now. However, the point remains; if there was SUCH gouging/overcharging going on in FL the insurers would be lining up to get a piece of the pie (see: Housing Bubble). However, in this case, they continue to pull out.. Wonder why?
“…the point remains; if there was SUCH gouging/overcharging going on in FL the insurers would be lining up to get a piece of the pie…”
This is a true statement. What’s starting to happen though is the smaller carriers are begining to line up for your business. It’s the large carriers who were buying reinsurance from parent companies and not the state who don’t want to deliver on the lower rates that are backing out. With that said, there’s no reason that a governor, state representatives, and state senators should have tried to promise lower rates in a free market.
Mike Fink reply;
Mike, living in PBC, you know median property values went up, from like $175K to $425K, from 2002 to 2005…
Insurance companies are/were on the hook for those replacement values….
IT HAS TO REFLECT INTO THE RATES…PLAIN AND SIMPLE
Yup, I on the same page with you on that point. Higher home values (replacement costs) have to push up the rates, no way around that. However, my other point is that the rates are still not high enough, if they were insurers would be tripping over themselves to write more and more FL business.
Don’t worry, they are heading back to 175K.
“Insurance companies are/were on the hook for those replacement values….”
You certainly can’t fault insurers for builders who were getting away with charging $150 per square foot to build/rebuild.
I disagree, insurance only covers the replacement cost for the home itself, which unlike the underlying value of the property, probably did not go up that much. So, the rate increases do not necessarily reflect increases in values of the homes themselves.
Insurance companies are pulling out of Florida because the state is giving them grief (i.e. regulating) their fees.
Make no mistake; there is gouging going on in Florida. I rent (and cannot even get renters insurance because i live too close to the water), but i have a dozen coworkers who own and have seen their insurance rates go up substantially (and in some cases triple), without ever filing a claim. Commercial properties are struggling because their insurance costs have also doubled and tripled (also without ever filing a claim).
But the insurance companies aren’t losing money; they are fighting so vigorously to keep from paying the claims anyway so I’m suspicous as to how much they have paid anyway.
My brother lost his house in Katrina, and is still fighting with his insurance company over his claim, more than two years later. They essentially want to give him about $0.15 on the dollar. Most people will have to give up, as they can’t hold out any longer and will have to take what they can get (which is a fraction of what they were promised while they were paying 10, 15 years of insurance premiums).
“I rent (and cannot even get renters insurance because i live too close to the water)…”
I beg to differ. You could get renters insurance if you lived directly ON the water.
Not from Allstate or State Farm. They refused us renters insurance but had no problem insuring our cars and business equipment. Refused to insure the boat, too, since it isn’t stored in a slip.
So you’ve successfully tried to get renters insurance in the last two years? Give me you agent & I will call him/her. We only tried four different places (not Citizens).
Additionally the price of housing has nothing to do with renter’s insurance, which is for contents only.
Also - defending insurance companies? You’ve got to be kidding! Have you guys ever tried to file a claim? Been cancelled for no reason (like my coworker last month). Had your insurance premium tripled in one year (another coworker)? You have noticed their executive compensation?
I was able to purchase renters’ insurance, and I live about a mile from the water, but the insurance contract reminded me about a half-dozen times in all caps that any losses due to wind-driven flooding (i.e., storm surge) were not a “covered loss.”
(DD - I’m in the same boat)
I live in a rented condo directly on the water. Cannot get renters insurance from anywhere except Citizens, even though I’m on the second floor. I point blank told the insurance lady that since State Farm will insure the cars, “i’ll make sure they’re left behind when the hurricane comes so at least I’ll get something”.
Property insurance in FL is a mess, and it’s only because the whiney rich geezers who own waterfront property do not want to pay their fair share, and expect inland homeowners to subsidize them.
they continue to pull out.. Wonder why?
Yes, it’s because they did not get what they wanted and decided to pull out. Don’t be fooled that insurance companies were not making money, they were making lots of money, but they were losing loads of money due to poor investments.
Yes. The bought the same MBS that the banks bought. Safe investment, don’t you know.
So State Farm isn’t going to be writing homeowner policies, and Allstate “MIGHT” be forbidden to….Seems they are the largest private insurers in Florida…..Beside Citizens Insurance, which is a State Sponsored Enterprise..
I read the other day, that some Legislator wanted to open up the Re-insurance program, that the State of Florida is sponsoring for the homeowner insurance companies…Saying that NEW legislation could increase costs by 45%, for homeowners
This sin’t looking good for Floridians no matter which way you slice it
It is important to understand that insurance companies must set their rates to develop adequate reserves for the large events that will again happen in Florida. If they can’t, one large event makes Florida unprofitable for years to come…an insurance companies do need to be profitable.
When I hear folks say ‘there are lots of small companies picking up the slack’ , I know that means that there will be a number of small carriers that declare bankruptcy immediately following the next big event.
Insuring with a larger company with good reserve will ensure that they are there to pay your claims when needed.
The people who reside in Florida should be pleased that State Farm is no longer writing policies. Sate Farm and Allstate should be banned from writing auto insurance policies in Florida.
said Jim Di Paola, whose foreclosure-rescue firm
WTF is that ?
bet most of these are getting taxpayer dough
even Homeland security $ was used in neighborhood wonderfulness /welfare schemes
“‘How is a guy making 15 bucks an hour going to afford $2,300 a month?’”
Why wasn’t that question asked in 2005? Why hasn’t His Majesty Hank Fishkind ever asked that question? Somebody needs to post that quote about south Florida operating off of “a different model than any of us have ever seen” again.
This particular collection of articles also is amusing for the number of references comparing what happened during the bubble to excessive alcohol consumption.
I am sensing a new level of desperation here in Tampa, in the form of an all-time high number of “for sale” and “for rent” signs.
Or the logical expansion of that argument:
How is a median home price of 400K supportable with a 40K median income?
Either question is equally valid, and equally unanswerable. This is just the micro view of the macro problem that is going on in all these bubble areas. You canont have home prices this disconnected from the median incomes for long.
Well, sure you can Mike.
You just need “serial refinancing” that keeps putting the actual payments you should be making further on the back end of the mortgage.
It’s called financial alchemy. Works great until someone finally asks if the borrower should be owing $480,000 on a $150,000 loan. Then realization of the situation results in panic.
OMG, we lent him how much money?? Stop. Stop now!!!
Like this one?
“‘Banks were taking a lot of risks because they could. It was a frenzy, almost like a drunken stupor. Nobody was saying, ‘Stop it,’ at the time,’ said Gus Zambrano, Miramar’s economic development and revitalization director.”
How can a frenzy be compared to a drunken stupor?
From Dictionary.reference.com:
“stupor
“noun 1. suspension or great diminution of sensibility, as in disease or as caused by narcotics, intoxicants, etc.: He lay there in a drunken stupor. 2.
A state of mental numbness, as that resulting from shock; a daze. 2. mental torpor; apathy; stupefaction.”
I wonder what Mr. Zambrano’s definition of “economic development and revitalization” is.
Stupor/Frenzy. Hmm…kind of like the inflation/deflation argument. Well most of us think Stagflation. Maybe the banks had a stupenzy? Or a frenpor?
I wanted to know how a guy making $30k a year could even afford a $1300 house payment.
An even better question is, how does a guy making 15/hour afford a 121K home?
Assuming he works 40hrs/week, 52 weeks of the year, that’s $31,200.00. 121K/31K does not equal 2.5-3X income.
I am sensing a new level of desperation here in Tampa, in the form of an all-time high number of “for sale” and “for rent” signs.
If you start seeing a big rise of listings on the MLS, it’s probally due to people who had removed their listings and then relisted the homes again at the later date. Based on what I have seen, is there is a large pool of homes and foreclosures that are not listed on the MLS in the Tampa Bay area. By the way, I am tracking Mr. Fishkinds predictions that were mentioned in the MLS and to date, he has been wrong. I plan on releasing a report on his predictions and how they compared to the market in the 1st quarter or around the end of March, 1st of April.
Good deal, let me know if you need help. Fishkind is an idiot and I would love to refute his garbage. Also Mr. Snaith at UCF too.
I’m going to speculate that the Haitian construction worker took some cash out when he refi-d. In other words, he couldn’t afford the payments on his $121K purchase from the beginning, and simply delayed his eventual bankruptcy and got to live beyond his means for 5+ years thanks to foolish lending. F#*% him and the others like him living beyond their means. The days of HELOCing at the mall are over. Hope he ends up on the street where he belongs.
“Irano Fleurancian, a construction worker from Haiti, paid $121,000 for his small Delray Beach house in 2002. He refinanced two years later thinking he would get a better rate that would lower his $1,300 monthly mortgage payments.”
“Instead, the adjustable-rate mortgage increased his payments to about $1,800. When the interest rate on the loan reset, the monthly payment soared to $2,300. His attempts to sell the house have failed.”
Ugh.. I certainly hope your right! Someone who feels like doing the math, please tell us, what interest rate requires a 2300 dollar payment on 121K of principal? Lord in heaven, he should have bought it on his Amex!
Public records to the rescue! You are somewhat incorrect in your assumption - the refinance added only about $10,000 to the original loan balance.
HOWEVER, what Mr. Fleruancin doesn’t mention is the SECOND home in Delray Beach he bought in 2006 for $215,000 (apparently as an investment since it doesn’t have a homestead exemption). THAT is the real story.
Victim? Not so much!
LOL. The mortgage holder, whoever it is, should be referring to this guy as Mr. Four Anacin.
Just saw on TV last night that a lot of banks are suspending home equity loans because the home values are falling so fast.
Need help from the Florida regulars who post here…
Getting ready to contest my property tax bill when I receive the new number this August.
The situation is as follows - I purchased a home from a builder to live in for the next 10+ years well below the market. I knew when purchasing the market would go lower over time, but I like the location and the house and purchased it way below what others paid in the community.
I did not get any of the fancy extras that others did in the neighborhood such as crown moulding, granite countertops, upgraded floors, paint and on and on…The reason that I did not purchase all of those extras was because of the education I have received from the people on this blog. People have stated that the builders mark things up way to much and that not only could you do any upgrades for much less money aftermarket, but the main reason is that all of those upgrades also increase the price of your home and therefore your TAX BILL.
Here’s the rub, it now appears that since I have applied and received my Homestead they did an initial appraisal on the property and they are pricing my home exactly the same as all of the non-housing bubble educated homeowners who purchased all of the fancy upgrades.
If anyone is familiar with how to properly contest the assessed property value based on the facts I have presented please inform. Thank you all in advance.
For the record, the market still has not come down to the price we purchased the home, but we know that day is coming thanks to our education from folks on this board. We wanted this exact lot and home and we are here to live, not to speculate
Normally I do not associate with people who don’t have granite countertops, but I’ll make an exception here. You don’t say what county you live in, but I believe in all of them you have the right to present your case in front of a value-adjustment board. The information might even be on the back of your tax bill.
And please don’t tell me you have no stainless applicances…
Boy, such lowlifes. I’ll bet they mow their own grass and have a savings account, too.
You nailed me turnoutthelights. I do get some funny looks when I mow the grass in August in near 100 degree weather with near 100% humudity especially when I am bagging
No grass cutting when it is 100. Late in the evening after the afternoon shower burn off or you must be English or a mad dog….
I’ll go a step further SFC since your last line made me laugh. We plan to put in hardwood floors throughout most of the house. To give you an idea of how cheap we were with the design department we chose “vinyl” for the entire first floor. Yes that’s right vinyl
Basically we took everything that was free and then got a huge discount on top of that from the builder. We are into this property for about 25% less than similar homes purchased at the end of last year. For a variety of reasons we ended up with a great price and the market has yet to reach us, but we know that day is coming and will undoubtedly decline to an amount lower than our purchase price.
Regarding upgrades we are doing all of them ourselves with sweat equity, what a concept
Stay away fom Pergo, the stuff is noisy! Esp if you have dogs or kids, clack clack clack…
When I was growing up, my family had a dog who delighted in click-clacking his way across any hard floor that he had.
You should have heard him after he had to have his foot bandaged. (I accidentally stepped on it.)
Talk about Stomp City. He was in heaven over how much noise he could make with that bandaged foot.
I just bought some black ortho booties for my older dog. Now he pads around the house and stands without the trembles. I think I’ll keep them.
29.00 bucks at petco.
No designer colors?
Stained concrete, I’m telling you. The stain reacts with the minerals in the concrete to create a random, natural stone affect. While sanding the concrete, it makes a bloody dusty mess, so invest in a good dust mask and be sure to use plastic sheeting to seal off the rest of the house.
You sound very smart, Watcher. I believe this upgrade and Home Depot crowd is a marketing ploy to separate idiots from their money. Generally if it’s trendy I do the opposite, so I’m well positioned for the next trend. Dark cabinets, anyone?
“Normally I do not associate with people who don’t have granite countertops, but I’ll make an exception here. ”
I saw you- we crossed paths last night when you picked up yer disheveled daughter at the local AM/PM min-mart, after she went slummin for some jungle lovin! (when o when will these kids ever listen and not venture outside the gates unless in a pack of DG sunglass wearin Prada sportin Hummer drivin Buffies & Ashleys so the whole world obviously sees their elite status as a hands-off-you-dishwasher warning? did daddy slave away at that bulge bracket salt mine all these years for, for ..THIS)!??
sheesh. kids these days . . !
((all joking aside, great post))
“Getting ready to contest my property tax bill when I receive the new number this August.”
The problem you will run into is the fact that it’s always the previous year that they go by. For every 3 comps you give them to show that they are wrong, they’ll show 3 more that show higher values than yours. From personal experience I will tell you it’s wise not to waste your time.
Thanks Bad Andy, do you have any more info that you think would help because I am stubborn and am going to attempt to get the assessment lowered.
“…do you have any more info that you think would help…”
Yes, there are companies that will do this on your behalf for a % of the tax savings that you see. They are only slightly more likely to win, but if you’re stubborn…
Thanks again Andy.
Sorry I don’t have the answer to that. I’m also curious. Does anyone know
how likely a challenge to the assessed value will be approved under circumstances where the market value is well below the assessed value because prices are rapidly falling?
1.] I’d say go talk tom them, and find out what your options are
2.] I’d say, you’d have to get an independent appraisal, based on “”cost”"”, rather than comparative market value…which is the ‘norm’ for most appraisals today….
3.] When the builder took out their permit, they declared the market value, “”then” for future tax purposes….
Good Luck
Lordship thanks for your comments, I think your comments are right on the money and number 1 and 2 will give me a chance to lower the assessment.
“I know of one that was bought for $425,000 in 2005 and it’s selling for $150,000.”
I wonder if this means it actually sold for 150K, or it is listed for 150K?
34 cents on the dollar? Now that’s my boy! How ’bout 20 cents and we have a deal? Wow, I am trembling with greed.
My mistake. I meant 35 cents on the dollar opening bid. What the heck, I am not that greedy.
Smells like cashback fraud in 2005 to me…
What is the condition of the property that was $425K and is now on the market for $150K?….Prehaps it has been trashed or stripped or the whole neighborhood has been taken over by multiple families occupying a sfr or squatters.
Anyone want to take a guess at to what this will rent at? Something tells me nowhere NEAR the 1% of price that she would need to get to cover the costs of this home (~3000/mo). My best guess would be closer to 2K a month, probably 1600-2100. Which puts the fair value of her home somewhere between 150K and 200K.
Don’t worry hun, you better off then my landlord. Rent under 2K a month, home purchased for 510K.
She is now asking $330,000 for the four-bedroom — just enough to pay off her mortgage. ‘It’s been horrible. The only thing I see is people renting because they can’t afford,’ Redondo said, ‘In about a month, I might put it up for rent.’”
In the example below, how could any bank loan more than say $180K against the $329K new home? Wouldn’t they have to use this foreclosure as the comp? How could the builder sell any houses? They’d have to find buyers that had $150K to put down, yet are totally insane.
“A 4-bedroom, 2,134-square-foot home built in 2005 is on the market in the Live Oak Preserve neighborhood in New Tampa. It’s in foreclosure. List price: $202,500. The builder, Engle Homes, has a similar, recently completed home in the same neighborhood on the market for $329,990.”
Apprasial fraud? That’s about the only answer that makes sense. Supposedly foreclosures are not considered “fair market” transactions (which, for the record, is total f**king bulls**t), but, I agree, any lender looking to step into that community has to be out of their goard to lend more then 180K. As soon as they start to realize this, and follow through on the execution of this policy, watch out below!
“Apprasial fraud?”
That’s the big one. Do you know I had one come across my desk that valued a home at $266K. The comps that they used were from 2005 and 2006. The listings in that neighborhood are $200K or less. Who does the 30% inflation hurt? The bank who loans based on it and the other buyers who have this yahoo’s comp on their report when making a purchase decision.
A 2-minute search revealed that Fleurancin refinanced in 2006 into a $198,750 mortgage. Wouldn’t want to report that, now - might take some of the punch out of the sob story. Poor Fleurancin spent $77,000 of borrowed money that will never be repaid. That’s the real story.
But then it’s not a “victim” story any more. Gotta have a victim; otherwise it’s not news.
Did you e-mail the reporter?
God, I hate sloppy reporting.
That’s pretty much the only reporting there is.
I posted to this higher in the thread - was that really a refinance for the first property, or a loan for the second property he purchased as an investment (In 2006)?
Regardless he made his own bed and will be lying on a cot at the homeless shelter.
‘If you can buy a new home from a developer for $300,000, or a year-old foreclosure home just like it for $200,000, it’s a no-brainer. Especially when it’s in the same neighborhood.’”
It would seem that if you can buy a home, and you DO buy a home, especially in Tampa at this point in busted bubble time, then you have no brain–that’s the real no-brainer part.
(cue music) If I only had a brain…
The average home price is Tampa is down to $187,000 from $221,000? Looks like we are halfway there. Once the average home price is $149,000 we can start to breathe a sigh of relief.
The average mini-McMansion should go for $120-150k here factoring for property taxes, insurance, and utilities. The fact they were able to sell them for $220k shows just how insane this market was.
Case-Shiller index shows miami down 17% yoy. That’s Amazing. Absolutely incredible and unprecedented in history. Mike Fink, your posting here and on the sun-sentinel boards has certainly added a few hundred basis points to that the 17%. Keep up the good work. BTW if you want to beat up on some incredibly stubborn Realtors and mortgage brokers this blog - http://www.miamicondoinvestments.com/ - is a good one. There are a some housing bears that don’t let them get away with too much but you can always pile on.
LOL, I do my best.
Frankly,the only reason that I even bother with blogs like the Sun Sentinel and the PB Post is because I can’t stand the slimy RE people on there trying to sucker more people in. I feel it’s like my “good deed of the day” to throw a few factual posts out there trying to keep others from making a terrible decision. I just can’t stand the thought of these REtards suckering more people into this scheme, especially when it’s so blatently obvious to everyone know that prices have a long way to fall.
I would like to take credit for a few hundred basis points; I really would, but unfortunatly, as well all know, it’s just a math equation; salaries cannot support the prices; the prices must fall. Simple as that.
But thanks; that did make my day to hear that!
I’m with you on the realtors. For the most part, they are vermin here in miami when it comes to misleading the public. Don’t let mortgage brokers off the hook either. These scoundrels were making 20 to 30K on big ticket subrime loan backend kickbacks unbeknownst to the buyer or seller. Think about it. If the realtors get 6% and the brokers get another 3% (via opaque credits, rebate points, etc when loans are sold to investors) why do buyers and sellers have to pay closing costs. Its a crazy corrupt mafia system from end to end that needs reform.
Miami realty-whores are vermin? Whoda thunkit?
Mr Fink, have you by any chance spotted buzzards flying over Palm Beach and Miami? The stench of the housing carrion there must be overpowering.
“‘I thought we were buying into a more upscale kind of community,’ he said.”
No.
You weren’t.
Sorry.
“‘I thought we were buying into a more upscale kind of community,’ he said.” They let YOU in didn’t they?
“Her phone finally started ringing in January from potential buyers. All, she said, had asked to see bank-owned homes or foreclosures.”
How nice!! So even if you are priced right, prospective buyers are passing you up to look at forclosures only. At the rate increse of forclosures and the short suply of buyers, its possible that there will be more forclosures than buyers.
The following popped up in the MLS on a bunch of properties in Celebration FL. Has anyone seen this kind of wording before. I’ve seen short sale, pre-foreclosure, foreclosure, etc., but I’ve not seen this before. Plus what exactly does it mean.
“Listing price may not be sufficient to cover all encumbrances, closing costs, or other seller charges and sale of Property at full listing price may be conditioned upon approval of third parties. Call for details.”
“price reflects current owner’s hope that the 27 home-equity loans he’s taken out against this house will be forgiven, and illegal cash-back financing charges will be dropped”.
price may be conditioned upon approval of third parties
That’s a short sale, plain and simple.
The listing price + expenses is less than what’s owed.
Americans are ‘financially illiterate’ - survey
http://tinyurl.com/3yj88w
The survey presented 1,000 people with a hypothetical scenario about credit card debt and asked them to compute how long it would take to pay it off. Only 35.9% of the 1,000 respondents could figure out how many years it would take for the amount they owe on their credit cards to double. A full 18.2% did not know how to respond and 31.9% of those surveyed over-estimated the timeframe.
Not a big surprise.
Eight power plants down in South Florida today? (around Miami)
Things are getting tough there.
Don’t worry, FP&L has their top Nuclear power plant guy on it. Homer somebody.
I just bought a house for 30% less than the listing and got a great fixed rate (5.75%/30yrs). I remember when you couldn’t borrow money for less than 9%. The cost of a house (which is PITI) will remain about the same ratio to your level of income regardless of what the actual number is. The question is what kind of house you get and who are your neighbors. A lot of people in this country equate new house with better house and its a big fallacy. Houses are not like cars, people. Just because it was built yesterday does not mean it will last. If you go to neighborhoods near any Florida downtown, you will see tons of places with unique character in fairly decent neighborhoods that are built to last. If they’re over 50 or 60 years old, then they lived through the hurricanes, floods, and other bad weather that Florida is known for. Try saying that about one of these Lennar/Centex/Pulte/WCI/US Homes/Minto nightmare clones that puts you within smelling distance of your neighbor. These places were built within the last 8-10 years and nearly all the older ones look like shit. The new ones will look the same. I look in a neighborhood where the houses were built in the late 1970’s and they all look just like they did then. Which ain’t bad.
New doesn’t mean good–it just means new. Buy 70’s and 80’s people!!
“The question is what kind of house you get and who are your neighbors.”
And that is the million dollar question and why I am in no hurry to buy until the lay of the land is clear. You can’t pick up the house and move it if the neighborhood goes downhill. I don’t want to be in a neighborhood with rentals, section 8’s, two families living in one house, cars parked on lawns, etc. I was in SB this past weekend at a very nice house and all I could think of was, ‘wow, I don’t know if I want to go back into home ownership and have to endure the maintenance related thereto. Many mall shops closed in a big SB mall, a sign of the times.
Or nothing at all for at least 2 years..maybe more.
You’re preaching to the chior here, but we are society where new=good and old=junk. Houses, cars, tv, wives, and everything else is now disposable.
I remember reading a long time ago, somebody commenting that the reason why you only see well built old housing (bearing in mind this was in England, where the definition of old is a tad more restrained than it is here), is that badly built old housing never lives long enough to become old.