What Was A Bargain May Be Overpriced Today In Florida
The Orlando Sentinel reports from Florida. “The Orlando Regional Realtor Association reported that its members sold 922 houses and condominiums in February, 40.2 percent fewer than changed hands in February 2007. Combined with the revised total of 813 homes sold in January, it was the worst start to a sales year since January-February 1997. Steven Moriera, president of the Orlando Realtors group, said he thinks the year-over-year declines are beginning to moderate; the 40.2 percent drop in February was the smallest in six months.”
“‘The market isn’t moving down very much now, nor is it moving up,’ he said. ‘We believe that there is light at the end of the tunnel, but we don’t know how long the tunnel might be.’”
“Moriera said sellers have finally begun to lower their asking prices to reflect the market’s retreat from all-time highs reached several years ago during the nationwide homebuying frenzy.”
“‘They are becoming more realistic,’ he said. ‘There is an understanding that someone who is pricing a house at what it was worth last year has very little chance of selling.’”
“The number of houses for sale in the Realtors’ database rose by 260 in February to 25,984 — an inventory that would take more than 28 months to sell at the current sales pace.”
“‘There are houses in Windermere where people paid $1 million for a house and they got a $700,000 loan, and now their houses aren’t worth the value of the loan,’ said Austin Jones, an appraiser in Orlando.”
“From downtown Orlando condos to raw land and homes near the beaches, the ‘bid-calling’ patter of auctioneers has been picking up speed in Central Florida and across the country. Privately run real-estate auctions are gaining ground as the economy sours, even as courthouse sales fail to attract bidders.”
“Home builder Christopher Wardlow in St. Cloud said he recently decided to try to raffle off two houses he built on east Lake Toho. It is a desperation strategy, he concedes.”
“‘I’m not trying to make a profit. I’m just trying to avoid taking a loss,’ said Wardlow. He built the two houses on the lake as ’spec homes’ last year. But now the homes are 95 percent complete and regular sales effort through a national real-estate company failed to generate enough interest or offers high enough to cover the bank debt, Wardlow said.”
“He said he needs to raise about $655,000 to cover the loans for the two homes and the two lots, and anything raised beyond that would be donated to charity. The raffle tickets are $250 apiece. Wardlow said he needs to sell at least 3,000, to cover costs and the debt to make it work.”
“So far, he’s sold about 60 in the past few weeks, with four weeks to go. And four of the tickets went to the fellow who installed the granite countertops in the homes.”
The Palm Beach Post. “The overbuilt real estate market has dragged the Treasure Coast into a recession, but the end is within sight, economic and real estate experts said on Tuesday.”
“‘We’ll kind of get past this housing market,’ said economist Hank Fishkind. ‘Already, I believe, we can see the shape of the bottom.’”
“But even he - a self-proclaimed optimist who lists major developers among clients - conceded that the economy appears to be in a recession. ‘We have a classic kind of cyclical downturn in Florida,’ said Fishkind.”
“On the residential side, quarter-acre lots in Port St. Lucie that sold for about $80,000 two or three years ago are now selling for $25,000-$30,000, said Pat Murphy, president of Fort Pierce-based Hoyt C. Murphy Realtors Inc.”
“Murphy’s firm is handling a lot of foreclosure sales, and he noted another upside on that front. About 80 percent of the foreclosures were investor-owned homes, and about 80 percent of the buyers picking them up plan to live in them, Murphy said.”
“Fishkind has dramatically tempered his outlook since he spoke at the same conference in 2006. Then, he told attendees that Florida’s robust population growth would absorb the surplus homes on the market within nine months or a year. Two years later, the inventory has only grown.”
“Fishkind conceded Tuesday that Florida would lose some of its growth to the Carolinas. But he estimated that the Sunshine State would continue to add between 200,000 and 400,000 new residents a year.”
“‘Florida’s not over,’ Fishkind said. ‘Florida’s different.’”
The Tampa Tribune. “For the past three years, the developers of Trump Tower Tampa searched coast to coast for a lender willing to finance the $300 million luxury condominium. Now, after being turned down by numerous traditional lenders and 10 hedge funds, they’re poised to walk away and sell the waterfront site in downtown Tampa, the project’s developer says.”
“‘We’re either going forward or coming to an end,’ said Frank Dagostino, CEO of the company developing the project.”
“The tower’s only hope: one last New York hedge fund must agree to finance the project before March 31, Dagostino said. The developers set the self-imposed deadline in new contracts they persuaded buyers to sign.”
“‘No one wants to lend money in Florida right now,’ he said. ‘Every developer is desperate right now.’”
“Dagostino said the company has $85 million in contracts. It originally had $137 million in signed purchase contracts, he has said. If the company does call it quits next month, Dagostino said the company will try to liquidate the property and ‘pay everyone we can.’”
“SimDag paid $16 million for the property in 2004. They would likely get only about $10 million to $12 million for it in today’s market, even though developers may have invested as much as $25 million in infrastructure on the site, said Patrick Berman, senior director for Cushman & Wakefield in Tampa.”
“‘The land is worth what it will yield,’ said Patrick Berman, senior director for Cushman & Wakefield in Tampa. ‘The market for 50-story condos is no longer viable.’”
“Buyers put down 20 percent deposits on the condos, originally priced between $700,000 and $6.5 million. Half of the money was put into escrow so it could be returned to buyers. The rest was turned over to SimDag and used for site preparation.”
“Don Wallace, who with his wife invested in two units, said buyers are ready for a resolution, no matter what that is. ‘Everybody wants closure,’ Wallace said of the Trump Tower buyers.”
“‘The thing that messed this whole thing up is that Donald Trump didn’t step in and make this happen,’ Wallace said. ‘If we all knew this was in the hands of a local developer, I certainly wouldn’t want to buy a unit. With the Trump name behind it, we thought we’d be OK, even if problems arose.’”
The News Press. “Hovnanian Enterprises Inc. wrote off 1,345 houses in Lee County after the buyers were unable or unwilling to close on the deals, company officials said Tuesday.”
“Meanwhile, lawyers in a class action lawsuit against Hovnanian filed court papers Tuesday alleging that fraud and misrepresentation by the company resulted in the failure of those deals to go through.”
“Technically, the houses involved are considered ‘delivered,’ Hovnanian Chief Financial Officer J. Larry Sorsby told the analysts. He explained that buyers purchased them with construction loans that paid for the lot - then Hovnanian would take draws from the loan to pay for the house’s construction.”
“Buyers were originally supposed to convert the construction loan to a mortgage on completion of the house but many were unwilling or unable to do that as prices plunged and lenders tightened credit policies after the market started to slide in early 2006.”
“‘Basically we determined we had no ongoing involvement with those homes,’ so for accounting purposes the result was the same as if the buyers had closed on them, Sorsby said.”
“The class action suit, filed in federal court in Los Angeles, alleges that Hovnanian officials including Sorsby and CEO Ara Hovnanian deceived stockholders and the investment community by misleading them about how little many would-be buyers had at stake: as little as $1,000 per house even for investors who never planned to live there.”
“Sorsby said in an e-mail Tuesday afternoon that ‘We believe the suit is totally baseless and without merit. We will aggressively defend ourselves.’”
“Most of the 1,345 houses ended up in the hands of the National Credit Union Administration, which got them when two credit unions failed after making thousands of home loans in Lee County.”
The Daily Business Review. “Now that residential development has hit the wall, builders and lenders are partners in misery. Developers in the field — from small-scale operators to national home-builders — who aggressively acquired land during the go-go years of the early and mid-2000s, are now stuck with hundreds of acres of land they have no use for and cannot afford to hold.”
“Local experts point out that most overpriced land deals transpired at the peak of the residential market in late 2005 and early 2006. The loan terms on land acquisitions are normally between two to three years, lenders say.”
“Now, as the payoff deadline for many of these loans looms, owners are left with overpriced and undeveloped land, and mounting debts.”
“Many smaller, private developers, however, are still ‘hoping for a miracle,’ said Ronnie Issenberg of Miami-based Marcus and Millichap’s land division. ‘They are still hoping for a profit. It’s not going to happen. People need to get realistic and learn how to weather the storm.’”
“One developer in a bind is Scott Lehman. Lehman paid $5.33 million in May 2006 for a one-acre parcel in Lantana where he planned to build a 15-unit luxury condo with units priced between $1.4 million to $2.2 million. (The seller had acquired it seven months earlier for $2.3 million).”
“When the loan came due late last year, Lehman had to negotiate an extension for the payoff that is now scheduled for March 23. The parcel has been listed for sale for about three months, Lehman said, but the interest has been ‘minimal.’”
“‘Everyone thinks they deserve a profit,’ Issenberg said. ‘I don’t understand the logic behind it. If you are not going to develop it because it’s a bad market, how can you expect me to shop for someone who will?’”
“‘2009 is going to be worse than 2008,’ he said. ‘As time goes on there is going to be great infill locations either owned by the bank, that are being sold at auctions and we are going to have enough developers that are going to be in such pain that they will have to come to the table.’”
“Even industrial buyers now are getting cold feet, said Neil Merin, chairman of a West Palm Beach-based commercial real estate company.”
“‘Through the summer [of 2007] a number of industrial developers thought they were getting good bargains on the land, but they are realizing if they had waited another six months they would have gotten another 25 percent off,’ he said. What was a bargain six months ago may be overpriced today. It’s that bad.’”
From CBS 4.com. “Record home foreclosures in Florida and across the country are prompting some people to walk away, even before a bank steps in to take their home.”
“Lori Nicholson is packing up, abandoning the house she and her children have lived in for more than two decades. ‘23 years this year, my son I actually brought him home from the hospital in this house,’ said Nicholson. ‘It’s tough, it’s very tough to leave.’”
“Six years ago Nicholson took out a second mortgage on the house to pay for a divorce. With declining home values, she owes more in mortgages than the house is worth.”
“With the downturn in the housing market, many homeowners find themselves like Nicholson, who is basically stuck with a bad loan. Even if they are able to make her monthly payments, there’s little incentive to. So they are walking away, leaving the bank holding the bag.”
“One financial research firm predicts that if home prices drop an additional 10 percent, 20 million families will owe more than the value of their homes.”
“For Nicholson, the decision to walk away came when the bank wouldn’t help her figure out a way to stay in her house.”
“‘I just don’t know what else to do,’ explained Nicholson. ‘I’m tired of fighting the bank, I’m tired of fighting a situation. I cried for days and days and days, because I’m thinking this house is coming to an end and now I’m seeing it.’”
Lots of FB developers in that DBR article.
“‘The thing that messed this whole thing up is that Donald Trump didn’t step in and make this happen,’ Wallace said. ‘If we all knew this was in the hands of a local developer, I certainly wouldn’t want to buy a unit. With the Trump name behind it, we thought we’d be OK, even if problems arose.’”
this guy is just funny. just he made his decision based on Trump’s name and not what the market situation is. beside, never trust a guy with a funny hair do.
Never trust a divorcee with more bankruptcies than ex-wives.
Nothing speaks more to the sorry detachment from reality of the average American than holding up a man who has made a career out of stiffing creditors and business partners as some sort of guarantee of propriety.
Well said.
LOL, was he expecting The Donald to be in there installing the granite countertops?? What a dunderhead.
Ok, everyone else leave the room and bring Mr. Trump back in here. Donald, “you’re fired!©”
(Trump was attempting to acquire the copyright on that phrase)
http://www.msnbc.msn.com/id/4557459/
For the locals, Don Wallace is known as the guy who lives in the giganormous house on Bayshore. I am not sure how he made his $$, but I heard someone say once that he owns RV dealerships. His wife looks like she’s approx. 25 years younger than him. I am not shedding any tears for these folks. Anyone who can afford $170K per year in property taxes can probably weather a bad condo investment or two.
Here’s the link to the property appraiser’s website for Wallace’s house:
http://www.hcpafl.org/perl/re2html.pl?strap=1829264TW000000A00000A&c0=1&c1=1&c2=1&c3=1&c4=1&c5=1&c6=1
“Florida is different.”
Fishstick always makes me spit out my morning coffee. Florida most certainly is different, but not in a way that is going to watch 200,000 to 400,000 new residents come each year. Whatever this guy is on, he needs to either share or join a 12-step program for people who drink too much kool-aid.
It seems like that quote is in every article where some local is denying that their state or city is going to be hit by the downturn. The denial is completely emotional and beyond reason. I have friends who live in the Raleigh area, who are convinced that because the area didn’t see a huge run up in price that they are immune from the market downturn. When you ask how all of the buyers from the Northeast are going to continue to buy in North Carolina if they can’t sell their existing houses, you get a combination of anger and blank stares.
I’m facing the same thing here in the San Antonio area. Folks are in denial. The local media is helping by regularly reporting that job growth is up, hiring is up, companies are expanding, sure days on market are going up but real estate is fine… they too seem to think that since they didn’t experience a huge run up like on the coasts, they’ll dodge a bullet. My neighbor the other day told me that she, huz and grown son are currently looking for a house to flip! The is soooo much inventory for sale and they just keep building more. I can tell whenever I voice that things are not all well with housing, they think I’m nuts. My hubby and I went to a huge “open house extravaganza” last weekend at River Crossing in Spring Branch. Over 65 open houses on the map and 75 lots for sale. Many houses were new, never lived in. Several foreclosures, a builder who’d gone bankrupt (Legacy), a house we personally walked 18 months ago is still for sale, agents telling us they’ll accept near any offer. Prices still too high. Will give details on the weekend.
Here in Tucson, there’s a double-flip attempt taking place near me. The “for sale” signs just went up.
Wanna have some fun? Well, I found the MLS numbers for both properties:
1. For 239 E. Waverly, MLS #20810014. Asking price is $214,900.
2. For the fabuloso guesthouse behind, 237 E. Waverly, MLS #20810022. Asking price is $214,900. (Guess they ran out of other prices at Win3 Realty.)
Ain’t no way that those two houses, and the land they sit on, are worth $430,000. And I want a puff of what the owners and their agent are smoking. Just one puff. That’s all I ask. Pretty please?
“And I want a puff of what the owners and their agent are smoking.”
I’d advise against it. Meth will ruin your life!
http://www.youtube.com/watch?v=WHVHqCQH0_U
Do you live next door to the Montalongos??
No, but we the neighbors think that the property owners watched too much of the Montalongos.
And, being the kind and caring soul that I am, I’m about to start a foreclosure betting pool with the neighbors. My bet? Within six months.
“…where some local is denying that their state or city is going to be hit by the downturn.”
It’s this way in life, not just the newspapers. I have clients tell me all the time about how “valuable” their homes are. Someone in my neighborhood in a house that would draw $225K at the most today told me he was thinking of selling. When I asked how much he was going to list the house for, he responded with, “I could get $350K pretty easily, so I’d list at $375K and see what happens.”
Since it’s not my business, I didn’t want to burst his bubble…he he he…
“Fishkind has dramatically tempered his outlook since he spoke at the same conference in 2006. Then, he told attendees that Florida’s robust population growth would absorb the surplus homes on the market within nine months or a year. Two years later, the inventory has only grown.”
Since this moron “economist” ‘can’t forcast anything accurately, why does he get press? It is just for entertainment value??
Let’s face it, our predictions about where the housing market was going, what the end result of massive cheap loans would be and the general direction of the economy, have been FAR MORE accurate than Fishhead and Snaith, and the various other “intellectuals” that have filled the newspapers.
We have a laugh here, regularly, at these “forcasts”. Does anyone ask our opinion?
The press finally stopped talking to Sniath about his ‘housing souffle’. Could it because the reputation of the UCF economics program was becoming muddied?
Fishkind isn’t in academia so he can keep spouting off, but my suspicion is that he is constantly reducing his potential client base.
“But even he - a self-proclaimed optimist who lists major developers among clients - conceded that the economy appears to be in a recession. ‘We have a classic kind of cyclical downturn in Florida,’ said Fishkind.”
What a contrast with the comments of the Anderson Forecast yesterday (no recession in CA because this isn’t like the last recession). Maybe he and the Anderson eCONomists should meet. I’d suggest a large shark tank as the meeting place, somewhere in the middle.
“‘We’ll kind of get past this housing market,’ said economist Hank Fishkind. ‘Already, I believe, we can see the shape of the bottom.’”
He’s lying - no way he can see the bottom from where his head is.
“Florida’s not over,” Fishkind said. “Florida’s different.”
CUE THE SEAL!!!!
Ya gotta love old Fish-breath, ““‘Florida’s not over,’ Fishkind said. ‘Florida’s different.’”
Yea Fish boy, it is very differant. It’s much worse than most states.
I agree with the guy who said that we may be bottomimg out, in terms of unit sales, but prices have a looong way to go. As far as Orlando unit sales being 991 or so, thats great, but inventory keeps rising. The amount of foreclosures coming on the market will keep increasing, through 2008 and beyond.
People are walking from houses not just because their subprime interest rate just reset. If you owe $300,000 on a house you cannot sell for $175,000, with prices likely to keep decreasing and inventory keeps piling up, driving rents way down to 1995 levels you’re better off to take the hit to your credit, rent for way less and if you can, (read, have the discipline) save the excess. Your credit will recover probably sooner than the Florida market.
From the ground, I can tell you that it is way worse than it looks in central Florida. What NAR and Fish boy are spreading around doesn’t nearly paint the bleak picture. Who is that moron economist from UCF. Is that Fish-wipe?
I see it as opportunity, but like the guy said a bargain 6 months ago is not necessarily a bargain now.
I see no end anytime in the next 12 months to increasing inventories and falling prices. Florida’s economy and real estate market could be stagnant for 5 to 10 years. Retirees aren’t moving here in great numbers becasue they can’t sell their houses up north.
We can no longer make big money selling real estate to each other.
They are becoming more realistic,’ he said. ‘There is an understanding that someone who is pricing a house at what it was worth last year has very little chance of selling.’”
I LOVE THAT…so they are becoming more realistic as short sales and foreclosures let them realize that their selling price is 30-40% more than what the market wants…
I guess that the sign of “BANK OWNED” has to be staring them right in the face as they pull into their driveway!
Yeah. There is a distinct and significant shift in the language coming out of the RE mobsters, albeit a dollar short and a day late. I’m wondering how client relations are going with all the sellers.
“Less than last year” is still not being realistic.
“Less than 4 years ago” is realistic (at this point - in about a year only “Less than 6 years ago” will be realistic - etc.)
Ann,
Excellent point. Now that they’re literally gargling in short sales and foreclosures…? Mmm… my favorite is REO Mint! We also have Default Lime, Foreclosure Frost and NOD “Original”.
Since it’s about time for March Madness, I think that an HBB-themed bracket would be in order.
You’d have to be here to really feel it.
It feels like a reverse-orgasm.
“reverse orgasm”. LOL. Quality stuff!
Summary of today’s learnings (so far) on the HBB. LOL
Dimedropped: I’m not but my brother-in-law just bought in Cape Coral. What do you think?
I think he just caught Excalibre by the pointy end.
Dimedropped: thanks
Big thanks. I was in FL recently for a week and checked out Cape Coral, Fort Myers, Fort Myers Beach, Bonita Springs areas, etc. I was just curious. Some nice areas to be sure, with many listed far beyond my price range. Looked up a few foreclosures and the property records online.
Sat in a few bars and chatted with the locals. One guy in FMB told me he was an investor and had a house for sale for $1M and another for $2.4M. Another in CC with, you’re smart to be looking now. And another, it’ll be back in 18 mos…
I’m always interested in what the FL HBBers have to say.
Those guys should have bought you a beer, seeing as how they’re so flush with good fortune and all. Did these saloon interactions take place during weekday afternoons by any chance?
Yes. I was wondering why there were so many middle-aged/younger people in the place (not older retirees) during the afternoon.
My friend went into an open house and the first words out of the RE agent’s mouth were the list price is $100k too high.
“‘Already, I believe, we can see the shape of the bottom.’”
Awwwwww yeeeeeeaaaaaah! Bwow wow! buh-buh-bwaaaow-wow, wacka-wacka!
Hot erotic bubbletalk daily on the Internets!
(Okay, sorry.)
I’d hate to see that bottom without any clothes on. (Reminds me of the joke, “As rare as an Elvis fan with a firm bottom!”)
I think the bottom is about to release some gas in his face
That Fishkind is a quote machine and a barrel of laughs. He should do stand up.
2009 is going to be worse than 2008? I wonder what Hank would say to that statement.
“I wonder what Hank would say to that statement.”
Florida is different.
I wonder what Hank would say to that statement.
There’s a tear in my beer.
Irony of the housing market as both of these article appear in the Sun Sentinel paper in Fl….
http://www.sun-sentinel.com/news/local/broward/sfl-flbcondos0312sbmar12,0,3232241.story
http://www.sun-sentinel.com/business/sfl-flzcredit0312sbmar12,0,2963109.story
I think someone needs to send a copy to the developers..!
Buying a condo in Fl right now is SO BLACKLISTED by the lenders..Chase like other lenders are requiring min 30% down, certain number of OWNER occupancy, certain number of min listing, and mutiple appraisals…good luck!
“One developer in a bind is Scott Lehman. Lehman paid $5.33 million in May 2006 for a one-acre parcel in Lantana where he planned to build a 15-unit luxury condo with units priced between $1.4 million to $2.2 million. (The seller had acquired it seven months earlier for $2.3 million).”
Wow……nice flip for someone.
That article has a bunch of that. It was true mania behavior that developers were doubling prices on raw land in months. I thought it was interesting that the land loans were mostly 2-3 years. This might wash out more quickly as a result.
I wonder what banks are holding the land loans and whether they established any loss reserves against the loan balances. Also, did the lenders grant credit lines to cover the interest payments on the land loans? I suspect that in many respects we’re replaying the S&L and sunbelt banking disasters of 20 years ago.
If today the CEOs of banks are age 55-65 they have absolutely no excuse for the mess they created for their shareholders, creditors and the FDIC. They were in the business during the last go-round.
Boy you said it Ben- Here in a small town named APopka, well known for nurseries, they had a project in which lots sold for $100,000 initially then the flippers started and in the end 3 months later they were flippin them back and forth for $1,000,000 each. Now they are vacant lots in the middle of nowhere.
Cough cough - $1.4M to $2.2M condos in LAN-FREAKING-TANA!!!
I want some of what that guy was smoking. Even during the peak of the boom that was absurd.
I used to live right next to Lantana. Here’s a tidbit - Lantana is the headquarters of the National Enquirer, or was until it recently moved to Boca. That ought to give some info on the kind of people that live there. Not the kind of place that people who can afford condos like that want to live.
There are some nice bedroom communities in Lantana - but they’re just that - bedroom communities. It’s certainly not Manhattan or Miami Beach - the only places in the U.S. IMO that a condo might realistically be worth more than $1M. In Lantana “downtown” is basically strip malls.
“only places” — some Santa Barbara condos now listed in the $2M-$3M range might remain above $1M in the long run; or might not
Can’t see condos worth $1mm in MB, especially since there is no real beachfront in the high-rent districts and so you have to walk across a busy road and deal with gangbangers on the beach, as well as in the shops - Miami Beach probably has greatest ratio of tattooed area/body area in the U.S. MB and Miami more likely to go back to seed for awhile - Miami has a heyday every 20 years or so and the most recent one has ended.
I have a reporter friend who used to work for the Palm Beach Post. He said that the Enquirer paid very well; it had to, because once you took a job with that publication your career as a serious reporter was over.
“Your future is in Florida, the fair white goddess of states” Advertising slogan from the 1920’s Florida land boom and bust.
“Your future is in Florida, the fair white goddess of states”
Does FAR know about this? It’s time to start advertising swamp land to the northerners again! We can turn this around people!
Did native Floridians ever stop “fishing for Yankees” every winter?
I am a native Floridian and I have never fished for the scourge of Florida; the snowbird or worse; the “damn yankee” (which is one that comes and won’t leave).
“Did native Floridians ever stop “fishing for Yankees” every winter?”
It’s not the native Floridians you have to worry about. Most of those swamp land salespeople were from the Northeast.
The only goddesses I have ever seen in Florida are of the tanned, topless variety
“‘Already, I believe, we can see the shape of the bottom.’”
And it is flat.
With a bunch of bloody knives sticking in it.
“Most of the 1,345 houses ended up in the hands of the National Credit Union Administration, which got them when two credit unions failed after making thousands of home loans in Lee County.”
Wonder how many credit unions across the country have failed to this point.
someone please post the permanently high plateau quote - I need a fix…..
Premonitions of a bubble on the verge of popping do not ruffle those who are bullish on real estate. In Miami, Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors, predicted that a limited supply of land coupled with demand from baby boomers and foreigners would prolong the boom indefinitely.
“South Florida,” he said, “is working off of a totally new economic model than any of us have ever experienced in the past.”
“South Florida,” he said, “is working off of a totally new economic model than any of us have ever experienced in the past.”
Stop with this quote or you’re all going to have to pitch in for my new laptop when the coffee destroys mine. It never gets old or less laughable.
I always include the name of the idiot who said it. It would be nice to see what he thinks about the current situation. He’s probably telling people it’s a good time to buy, never more choices or better prices.
More great quotes from Ron Shuffield, President EWM Realtors:
“A new book which just hit the bookstores this Spring titled, Are You Missing the Real Estate Boom?, is filled with great statistical data and sound reasoning regarding the direction of today’s U.S. real estate market. It was written by David Lereah, the Chief Economist of the National Association of Realtors”
“I also speak with people who are convinced that the market is going to come to a grinding halt. Well, that’s not reality”
“The one very large difference in South Florida and most every other U.S. market is our access to buyers from literally every corner of the globe. The western hemisphere has 800 million people… and we are smack-dab in the middle!”
“Going forward, we will continue to become more of a secondary-home community than a primary-home community… which is a good thing.”
“…most acknowledge that we will experience rates of growth far-exceeding national averages. The long-term perspective for our markets is one of continuing world-wide attraction.”
“While some skeptics still claim that the real estate ’sky is falling,’ I am comfortable stating that all that we have witnessed over these past six months are some ‘cloudy’ days of uncertainty due to the fact that the storms caused us to veer off course for a few months. ”
“Is the inventory of single-family homes and condos for sale growing? Yes. But, I would suggest that it was necessary. Historically, and I mean over the decades, six-to-nine months of inventory is healthy”
“While it is impossible to look into a crystal ball when it comes to the real estate market, I would submit that we will not have a true reading of inventory until we move into the Spring ‘06 selling season. I believe that we will continue to see a growth in inventory over the next six months until the market ‘rights itself’ from the months of distraction created by the storms of last year and the media attention being given to our growing inventories. The very positive benefit of having a greater supply of inventory is the affect that it will have on slowing the rate of appreciation. We believe that while we will continue to have increasing values in almost all segments of the market, the rate of growth will return to the single digits that Florida has been enjoying for the past 30 years. Increases of value in the range of 25% to 30% year after year is simply not sustainable.”
“While ‘marginally’ designed condos built in ‘marginal’ areas may experience a slight softening of value over these next 24 months, we believe that any softening will be slight, and that it will remain for a very short period of time due to our continued demand.”
“Will there be any residential properties that decrease in price? Only those that were significantly overpriced in the first place”
“Most agree that South Florida is still an under-valued real estate market in comparison to other world centers”
“At its foundation, the real estate business is relatively simple. Real estate values are created by “supply and demand”. As the demand increases for homes (or any type of real estate) and the supply decreases, values will always rise. If we can accurately measure the demand for housing and correctly project the future supply of housing, it’s fairly easy to predict the direction of sales activity and the subsequent changes in value. The data needed to arrive at these conclusions is readily available”
“Someone recently took me aside at a function and whispered, “OK, what are you really concerned about with this new cycle?” What I’m really concerned about has its roots in Greek mythology. I’m concerned about something called the “Pygmalion Effect.” ”
Has he no family? Why doesn’t someone get this man away from the microphone and get him the help he so desperately needs?
I believe the “Pygmalion Effect” refers to the phenomenon of the self-fulfilling prophecy. The best description of Mr. Shuffield’s rambling, however, is the “Dope-ler effect.”
You are right Snake. He further elaborates on the effect:
“A self-fulfilling prophecy can be extremely positive, or extremely negative. Believe in something strongly enough, and we can certainly affect its growth or its descent. A more contemporary concept says that “perception is greater than reality”. If enough of the world’s population believe that South Florida’s values will continue to strengthen . . . it will happen. ”
And, if they don’t?
Putting Shuffield on the couch for a moment, I suppose that for all his public display of confidence in the Supply-and-Demand curve and market fundamentals, he finally admits his only real faith is in belief-systems.
His real fear is that the Fla. Real-Estate-Belief-System will fail. As a follower of Greek mythology, therefore, Shuffield is condemned to forever labor in the Sisyphean task of rolling positive-belief-stones up the real estate hill - as are all Realtors©.
I know that salesmanship is all based on great communication, but at some point it’s very important to stop talking, even if you are a salesperson. That point is when you begin to talk like this:
“‘The market isn’t moving down very much now, nor is it moving up.’”
If you say, “The market isn’t moving down very much now,” what have you said? That is to say, what *meaning* is left, finally, after the weaseling and the squirming and the desperate attempt to imply without saying it that the market is stable? Why, look at that! Mirabile dictu, what you have said is that the market is moving, not stable, and that it is moving in the direction of down! If your whole job relies on your relative success convincing people you’re an expert, you should avoid making hideous stuttering tautologies like “The market is moving down now; the market is not moving up now” because they tend to make you look crazy with the dumb.
Furthermore, if your whole job depends on your ability to make nice, you should avoid publicly insulting your clients: for instance, you should not call reluctant buyers subhuman. You should not appear in the daily paper announcing that your potential clients are listening for a special whistle that only they can hear. That is calling your client a dog. Is that what they told you to do in your “How to Make Friends and Influence People” seminar?
In my own business, I’ve found it’s best to let my potential clients do most of the talking.
Ha ha. I’d have more respect for him if he went with an outright lie - something along the lines of “We’ve definitely hit bottom - I see 5-7% appreciation by this time in 2009”- rather than the weaselly “The market isn’t moving down very much now, nor is it moving up.”
Hey - if you’re going to be deceptive - might as well go all out. The market is a disaster - and it’s going to get worse until we work through all this inventory and the forclosures (or desperate/short sales in lieu of forclosure)revert to a normal pace. Don’t try and sell that as “The market isn’t moving down very much now…”
“‘Florida’s not over,’ Fishkind said. ‘Florida’s different.’”
That’s a keeper.
“With the downturn in the housing market, many homeowners find themselves like Nicholson, who is basically stuck with a bad loan. Even if they are able to make her monthly payments, there’s little incentive to. So they are walking away, leaving the bank holding the bag.”
What do you mean “BAD LOAN”? They basically took out ALL the money they could get out of their house and spent it. Now, instead of paying the debt they owe, they figure they’ll just pack up and leave. That sure beats going to work and paying off your debts, doesn’t it.
I don’t think I can take another sob story of someone who borrowed and spent $100,000’s of dollars and then won’t pay the loan because the collateral is worth less. It’s all the banks fault they are broke. I just can’t take much more.
It is obnoxious. So many people have this distorted sense that they can borrow, spend, and it is never their fault when things go bad.
“It is obnoxious. So many people have this distorted sense that they can borrow, spend, and it is never their fault when things go bad.”
Plenty of blame to go around here. For the person who used the “equity” in their home as spending money, I put it 80% on the bank and 20% on the borrower.
For the person who bought 12 homes while working at the golden arches who was going to hold them and flip them, I’m going with 50% bank and 50% bag holder. Shame on the bank for allowing it, shame on the bah holder for trying to get rich without any work.
I put it 80% on the bank and 20% on the borrower.
I prefer to distribute it more like 100% and 100%. The bank is 100% for whatever losses it experiences and the borrower is 100% responsible for whatever losses (or negative results) he experiences.
What drives me insane is that there are loan programs out there for 1 YEAR OUT OF FORECLOSURE…(So much for the credit crunch)…you see the news media keeps reporting that there are people PAYING all the other bills except the mortgage..but they won’t say WHY?…it is because they can go for another home loan in 1 year if they keep their credit clean on everything else!!!!…imagine how many more would be doing it if they put the truth in print!
I don’t think that *she* is the one with the bad loan. Back in my real estate class in law school, a bad loan was something that the bank got stuck with. We also read some caselaw in bankruptcy law stemming from the great 1980’s Dallas housing meltdown. Left a lasting impression, and made it very easy to spot this bubble for what it was when I moved to FL in 2005.
We believe that there is light at the end of the tunnel, but we don’t know how long the tunnel might be.’”
People also believed there were Martians on Mars even though they could not see them just like they can’t see the light at the end of the tunnel.
The housing tunnel is long and deep and since they are not seeing light at the end, it means that the corrrection has a very long ways to go before it even hits bottom.
Depending on the shape of the bottom. Because never forget, it could be an apple bottom! (Bwow-wow-wow-wacka-wacka- what? Stop making the joke? But… it’s my most special best one!)
(…sniff…)
The number of houses for sale in the Realtors’ database rose by 260 in February to 25,984 — an inventory that would take more than 28 months to sell at the current sales pace.”
I just finished doing some research on the Florida market and the above information does not come close to the true inventory for that area. What I term as the hidden inventory, clearly demonstrates that there is a significant amount of inventory such as foreclosed properties, homes now rented as people wait this out, for sale by owner and properties in the foreclosure process, but have not been foreclosed on.
If you double the 25,984 properties listed on MLS, that in my opinion would be a very conservative view of the current inventory which is probally much larger than my conservative view.
pent-up supply
These lots went for $2,000-$5,000 in 97. So we have not hit bottom yet.
“On the residential side, quarter-acre lots in Port St. Lucie that sold for about $80,000 two or three years ago are now selling for $25,000-$30,000, said Pat Murphy, president of Fort Pierce-based Hoyt C. Murphy Realtors Inc.”
““‘We’re either going forward or coming to an end,’ said Frank Dagostino, CEO of the company developing the project.”
Nice to see at least one developer has a workable plan.
–
“One financial research firm predicts that if home prices drop an additional 10 percent, 20 million families will owe more than the value of their homes.”
That would mean more than 40% of home-debtors under water since the total number of home-debtors in the US is below 50M.
If the price decline were 15% home-debtors under water would be more than 50% and that is the least we are headed for.
Jas
“‘We’ll kind of get past this housing market,’ said economist Hank Fishkind. ‘Already, I believe, we can see the shape of the bottom.’”
BULLS**T Hank Fishkind!!!!
And I think that said bottom has more than a little cellulite.
“‘Already, I believe, we can see the shape of the bottom.’”
I actually have to agree with Hank on this one little statement. I can see the shape of the bottom. It’s ugly like I could never ever imagine. Banks slashing prices to be 10% less than the next lowest listing regardless of true market value. Homes that can’t be built for $150,000 are being listed for less than that in Palm Beach County. I still want to know how they keep that median propped up. Is it the number of sales on the island? I can’t imagine that being the case because I’m watching HUGE numbers of foreclosed homes being sold.
“I actually have to agree with Hank on this one little statement. I can see the shape of the bottom. It’s ugly like I could never ever imagine. Banks slashing prices to be 10% less than the next lowest listing regardless of true market value. Homes that can’t be built for $150,000 are being listed for less than that in Palm Beach County. I still want to know how they keep that median propped up. Is it the number of sales on the island? I can’t imagine that being the case because I’m watching HUGE numbers of foreclosed homes being sold.”
Zip code please.
33414, 33415, 33463, 33410, 33467…shall I go on?
Thanks, I just wanted to have a look as I am not looking in those areas.
No offense but outside of 33414, 33415 those areas are horrible and not safe or nice.
33410 is Palm Beach Gardens. You can’t lump all of gardens into “horrible.” 33463 has developments like Winston Trails. 33467 is West Lake Worth and “Wellington.” There are too many nice communities to count in these particular zip codes. I did say that I saw homes that cost more than the $150K to build. I wasn’t referring to the blowout sales in “less than desirable” areas running less than $100K.
Seriously: what is this “see the shape of the bottom” supposed to mean in the first place? I don’t speak jive. He said, “shape,” so he must be talking about the bottom as represented by a curve on a graph, right? Where the X axis is time and the Y axis is money somebody might get out of somebody in exchange for a small, unassuming, conveniently located house? He is claiming we can see the shape of the curve now? Great, so why doesn’t he name the shape, then? Is it… a V shape? Or a U shape? Maybe a W shape? What font is the V, U or W in? In claiming that we can see the shape of the curve, is he also claiming that we know WHERE on the time axis the lowest point, money-for-housewise, of the curve whose shape we so clearly see… IS? Because there are just two things I’d like to know about this ripe, luscious bottom everybody keeps dangling in front of me: How low does that baby hang? When is it going to be traipsing through my town, swinging low and begging for a smackin’? If the economists do not know these two things then they don’t know anything useful about bottoms, and I’d just as soon they keep their trashy talk to theirself.
Hank Paulson, US Treasury Secretary, has learned to stop calling housing market bottoms. Will the REIC-dependent economists wisen-up?
‘We believe that there is light at the end of the tunnel.”
Ah yes, the ol’ light at the end of the tunnel. Being from the Vietnam War era, I was fooled by that light once; but I know better this time!
Fishkind said. ‘Florida’s different.’”
Florida sure is different. Let me name a few:
1. Large disparity between home prices and rentals.
2. Home prices that have outpaced incomes.
3. High property taxes.
4. Extremely high insurance costs.
5. High mortgage and realestate fraud.
6. Poor job market.
7. More people moving out vs. moving to Florida.
These are just a few of many examples why Florida is different.
My mortgage is $1,000 a month (including escrowed taxes and insurance) for a 2-year-old, 5 BR , 3000 SF house near Tampa with plenty of upgrades. Tell me where I can rent a house like that for a grand a minth. Cheapest rental I’ve seen on a house that is $1,650.
So even if my house has lost $25,000 — which it probably has — in three years I’ll be no worse off than when I rented. And I got a tax deduction on both the interest and the property taxes all that time and don’t have the hassles of landlords raising rent, moving at some point, etc.
Do I hate the tax system in FL? Yes. Does it punish new homebuyers? Sure. But why would I pay $1,700 or more a month when I can OWN for $1000?
Your example does not ring true even a little bit. You obviously do not have a mortgage and insurance and property taxes for $1000/month.
Just insurance and taxes on a 3000 2 year old house would be $1000/month. So you are either making it up or you paid cash…in which case why would you have a “mortgage”.
Taxes are $4,500, insurance is $1,600/yr. So $500/month…
My mortgage is $1,000 a month (including escrowed taxes and insurance) for a 2-year-old, 5 BR , 3000 SF house near Tampa with plenty of upgrades. Tell me where I can rent a house like that for a grand a minth. Cheapest rental I’ve seen on a house that is $1,650.
So even if my house has lost $25,000 — which it probably has — in three years I’ll be no worse off than when I rented. And I got a tax deduction on both the interest and the property taxes all that time and don’t have the hassles of landlords raising rent, moving at some point, etc.
Do I hate the tax system in FL? Yes. Does it punish new homebuyers? Sure. But why would I pay $1,700 or more a month when I can OWN for $1000?
Your situation is different than most, obviously you had a substantial down payment or got the house for a pre- bubble price tag.
Your payment is what most people on this blog are waiting for.
I know I certainly am.
When you add up the cost of the insurance and property tax, that in itself is a mortgage payment.
Exactly. Taxes would be at least $6000/year, insurance $2000, maintenance $5000. Thats $1000/month right there.
If he did pay all cash, calculate the interest he would earn on that money spent for the house, on top of the drop in his house’s value. His rosy scenario is not so rosy anymore.
Well, considering what crappy interest rates we are seeing right now, he is not losing that much.
I was getting 5.05 APY with Emigrant Direct just before the FED started slashing. Now Emigrant is paying 3.03. I just bought some CD’s from IndyMac (off book rate) and I am getting 4.19 for five months. A big difference from where we were with the interest rates. VERY UPSETTING. to say it mildly.
I agree the interest is not a lot. But even so, he is not calculating his scenario properly. If he paid $500,000 for the house and had that money in a 3.5-4.5% account the last 2 years….AND his house has also dropped in value.
Lets just say he would have be much better off renting.
I agree, Ralph’s monthly payment is the insurance and taxes on a paid off house.
Just the electric bill for a 5BR, 3000 sq ft house would be $300/mo, unless he doesn’t have A/C.
My TECO bill has never been over $139/month…
If I had rented and banked my down payment at 5 percent, it would have netted me, after the added federal taxes, about $666/month. Could I rent a 5BR house for $1,666 per month — the “break even” point for revting versus buying? Perhaps. But then I’d have no tax deduction, which weighs in favor of owning. Plus, my payment is locked in at $1K/month FOREVER, whereas a landlord can and will keep raising the rent to pay the uncapped taxes — or until he loses the house in forclosure.
But, trust me folks, the lenders almost passed out when they saw my down payment.
I live in an 1150sf home and yours is 3000sf. My electric bills reach $180 in the summer and your highest ever is $139? According to the Department of Energy, your state has higher electricity prices than mine. The only way that is true is if you don’t use the A/C.
Nope. I use the AC, keep the upstarirs warm in the daytime when no one is up there. It’s a really energy efficient house. And, typically, you dont need AC at all from Dec - March
ralph - your numbers don’t add up, unless you made a *huge* down payment. If you did do that - then you could have otherwise put that downpayment into some kind of investment instead and made probably $500-$1,000 a month on that investment. So you still would have come out better renting.
Other option is that you perhaps inherited your house or got it via some kind of gift. In which case it’s also invalid comparison (renting vs. buying).
BTW you’re not including maintenance costs.
Ralph is a troll, probably a realtroll. 3,000/5bdr. two years ago? If true, which I doubt, his loss in equity would be closer to $250,000 than $25,000 and if the rent would be $1,650 than the value would be $175,000-200,000. A house like that in the Tampa area would have cost him $450,000 min. two years ago, with taxes of $9,000/yr. Ralphs got a little Cramden in’em.
House cost me a little over $300K with seller concessions, which was right in line with the comps at the time — and about $105/SF of finished space. Last sales in the neighborhood — and there haven’t been many have ranged from $285K to $328K. My sense is that they’ll go lower, and there’s still a lot for sale. But, for frame of refernce, hardly any new construction in my area of Tampa is going for less than $95 a SF, even in this tough market.
I’m not saying that I haven’t lost money in the short term.
What is your “area of Tampa”?
southeast Hillsborough
So you made a huge down payment.
You didn’t include opportunity cost of lost investment gains on that down payment.
My mortgage is $1,000 a month (including escrowed taxes and insurance) for a 2-year-old, 5 BR , 3000 SF house near Tampa with plenty of upgrades.
I do not believe you one bit! The math just does not add up as you claim.
I see several posters have called his bluff. His numbers are not even close.
Sure he could rent for $1600/month. But his costs for buying with 20% down and a conventional mortgage, plus maintenance, interest, and property taxes would be closer to $4000/month for a house such as he described.
I put quite a bit of money down — pure profit that I made on a house in a hyperinflated market that I bought before the bubble bust in that other market. So think way higher than 20 percent down, and it’s perfectly reasonable. In fact, a lo of lenders were asking what I wanted such a “small” mortgage — and a few wouldn’t take my business at all.
Easy come easy go
But why would I pay $1,700 or more a month when I can OWN for $1000?
Ralph: it’s time for you to prove it!
Provide us the address or location of the property to prove your point. There is nothing listed in MLS, for sale by owner or even forclosed properties that I can find with that low of a payment.
It’s time for Ralph to prove he is telling the truth!
“It’s time for Ralph to prove he is telling the truth!”
Since no one else has officially done it yet, I’m calling shenanigans this instant! My $225K home with 20% down has a higher payment than $1,000 per month. Come on Ralph!
By the way. I goofed. I looked at my last bank statement, and the payment was $1,050/month. So, for those of you keeping score, there you go.
Ralph:
If you only financed $100K, your payment is still more than what you stated. Come Ralph, show us the numbers!
$300K @ 5% for 30 years is $1400/mo. And you’re payment includes insurance and taxes? Right.
Right, indeed. I put about 70 percent down — money I got that was pure profit from a hyperinflated market elsewhere. Has it been the best investment for the short term? No.
Two years ago you could have stuck 200k in a bank CD at 6% and be living rent-free off the interest. You are a fool to say you are “only” paying 1000 a month and ignore this fact.
Also rents in his area are no longer $1700/month. Those houses that have dropped to below the $300,000 that Ralph says he paid now rent for around $1000 month…depending on how the tenant negotiates. There are loads of them all over the area.
Add in the $1000/month before taxes his down payment could have earned in a 6% CD locked in 2 years ago. And the fact that housing is going to be dropping in that area for years and years.
Even with his rosy scenario he would have been much better off renting.
Jim:
Please find me a current rental listing that supports $1,000 a month for a 5BR house.
Among the rentals in my neighborhod that are occupied are a 3/2, 1,700 SF that goes for $1450 and a 5BR that goes for $1750. Both are recent rentals, so that must be close to the going rate. A friend of mine lives not far away from me and pays $1700/mo for 4BR, 2500 SF.
But please do show me a 5BR for $1,000/month
Jim:
$200K invested @ 6% nets about $9K /year after taxes ($750/month). Doubtful that I could have lived “rent free” as you call it for $750/month — at least not in (what would have been at the time) a new 5BR house.
So what’s your point? If I put 70-100% down then my mortgage would also be lower than rent. We’re talking about a traditional mortgage, which is 20% down and 30 year fixed here. You had to put down $200K to get your mortgage below rental rates. How much does a renter have to put down? Now take that $200K and invest in tax-free munis at 5% and you get $10,000/yr tax free and no maintenence and upkeep of the property. I doubt that you need 5 bedrooms and 3000sf, so you are only wasting more money on energy and upkeep. As far as these hassling landlords that people talk about, I’ve never had to deal with one.
Exactly. That market has just started to crash. That house he paid $300,000 for will be worth $175,000 at the bottom. He is not including maintenance.
And anyone shelling out $1700 for rent in that market has no clue how to negotiate.
Not according to the comps in my neighborhood.
There’s a phrase for guys like you: Lifelong renters. You all seem so defensive and bitter about renting. If that’s your thing, that’s cool. But then why are you on a HOUSING blog and not a RENTAL blog?
If your version of the American Dream is to rent, that’s cool. But how many of you were smart enough to buy low and sell high?
And, Jim, I’m still waiting for those $1,000 a month rental homes.
If you all are waiting for 1985 prices and 1985 taxes and insurance, keep waiting. Meanwhile, I’m going to go chill in the den … or maybe the 5th bedroom … or the bonus room …
Jerry,
It seems like you want something for nothing. If you dislike the cost of living, go where you can afford it. Even 20 percent down on a $300,000 house still leaves a mortgage of ONLY $240,000.
That’s easily affordable for a two-income family. Historically, families and resposible individuals have always found paths to home ownership. And you can, too, if that’s your thing.
And besides, there are plenty of 3/2 tracy houses for well under $200K. That’s affordable by most nay standrard I can see. Now go getchaself one!
Not according to the comps in my neighborhood.
Ralph: The comps are tainted. In order to provide you the information regarding rentals, I need to know what area you live in. Based on the numbers I have looked at, your $300K + house is now worth about $270 K and prices are still declining. In fact, the decline will chop off about 20-30% more in the next couple of years. So, in the short term, you will lose more and in the longer term, 10 years or more, your property value will stay flat. The reason is the large group of baby boomers who will retire, will put a downward demand on homes the size of your home.
I rent a house now despite being able to pay cash for properties that are in greater cost than yours. Why? It’s simple Ralph, all you have to do is the math and you will find it out! By the way, the tax write off you mentioned is not a a savings. Why would you spend $1 to write off 4 cents? It makes no financial sense!
The key difference between your situation and mine is that you are losing money on a declining asset that is a liability and costing you every month and I am gaining money by investing my cash.
And what will you have to show for all those years of renting at $1,700 plus per month? Nada.
Besides, I have never lost a dime in real estate OR the stock market. And, no, the comps aren’t tainted. Sale prices have consistently hovered at $100/SF since the day I moved in. I watch it literally every week.
Unfortunately, what’s really dragging down a lot of neighborhoods is RENTERS. They don’t care a whit about anything past next month’s rent payment. They have NOTHING invested in a community, and frankly they just don’t keep up their properties like owners do.
Plus, at the end of it all, I’ll own a 5BR house into which I’ve pust less than $100K of my own money. The rest was money I took from a sale in another hyperinflated market.
Things go up. Things go down. I don’t invest for the short term, so I’m not worried in the least.
The trouble with some people is they want a 2008 house at 1998 prices. That’s not going to happen.I’d like a 2008 car at a 1998 price, but that’s not going to happen, either.
There’s a phrase for people who wai tfor the absolute bottom of the market: lifelong renters. So while you’re enjoying the bare bones life in a rental house with minimal amenities and the vagaries of a landlord, I’ll be luxuriating in a place that will be paid off in 20 years.
And besides, I can HELOC my equity, invest it and get a SECOND tax deduction while actually making money on the bank’s money. Can you do that with a RENTAL?
Plus, FuzzyBear, I know of what I speak.
I was savvy enough to turn a 144 percent profit on my last house in only six years. I knew exactly where to buy, when to get in and when to get out. And I netted an obscene amount of money on it.
How’s your track record compare? Have you ever owned property?
So the down payment was “70%”? Still does not add up.
$100,000 mortgage, maintenance, property taxes, and insurance on a 3000 square foot 2 year old house is not going to be $1000/month.
$500/month taxes and insurance + $95K @ 5.7%/30 yrs + $1,050/month.
Ralph, your situation is very unique. And even so, it is pretty much a wash as far as the costs of renting vs owning in your case.
But life throws curve balls at you. If you were forced to sell soon you would have 2 choices, sell at a lower price than you purchased or rent it out to someone who could trash it. Had you rented you would have faced no stress at all, just move on if you had to.
Going forward, very, very few families will want a 5 br house in the Tampa area. Not many would have the need for that much house or the desire to cool a 3000 square foot house. You may find there is little resale value down the road.
I wouldn’t be forced to sell. I could live on two $8 an hour jobs if I had to (trust me, I’ve done the math)– because my house payment is FIXED at $1,050 — not determined by a landlord. Whereas, if I was renting and lost my job, my payment would be much higher.
Plus, if something bad happened, I’d just pay off the mortgage with my savings and only have a $500 a month house payment.
My point: Chide not the people who work hard, get ahead and do the right thing.
How many of you grew up saying: “I want to live the American dream of being a renter in a transient community full of other renters. I want to uproot my kids and change their school if the landlord screws with me. I want no permanency, no long-term neighbors and no one who is invested in their neighborhood for anything longer than the length of a lease. Yes, that’s what I want.”
ralphy
you put 70% down. it doesnt stop the train from passing us by. florida is toast. it is just reality. i am happy with a roof over my head. i dont care if you pay for a house at this time. when you own it, talk to us. renting verses paying a mortgage is not the problem. ITS CALLED PAYING TOO MUCH FOR A HOME!
Ralphy
If you get satisfaction for your house then good for you and bravo for making YOUR goals a reality. I see it like gambling. You are losing money and or mobility but you enjoy it so have at it. to each his own.
I lived in Tampa. SE hillsborough aint great. You made 144% in a rising mkt–BFD!!! A rising tide raises all boats!! Comps ARE tainted cuz forclosures are counted as the loan amout and listed as a sale…..not reality. I don’t live in a transient hood, I live right on the beach and TODAY it is cheaper to rent…. it may change but right now you are wrong Ralph regarding cost/comps. Yes it is nice to own but you pay a premium for that. Its not that most of us here cant afford it– but just feel it is wrong to waste money. I will wait til ave price to income is in line with historical means.
““On the residential side, quarter-acre lots in Port St. Lucie that sold for about $80,000 two or three years ago are now selling for $25,000-$30,000, said Pat Murphy, president of Fort Pierce-based Hoyt C. Murphy Realtors Inc.””
Still overpriced. I was thinking $15k per 1/4 acre lot. That comes out to $60k an acre. Loxatchee “acreage” will drop to $30k per acre.
“…Even if they are able to make her monthly payments, there’s little incentive to…‘I’m tired of fighting the bank, I’m tired of fighting a situation.”
Bugs (dressed up as a Navy Admiral) : “There… beyond ye distant horizon…looms our destination: Affordability, ye but row fast… for the clouds of lost jobs is beginning to gather overhead and the headwinds of qualification are sure to slow ye down, row faster I say… least ye find yourself in the current of rising interest rates.”
Daffy: Hey Captain Bugsy, what happens if we don’t make it to Affordable Island before all those bad things happen?
Bugs: “eh, well Daffy…you ever had Duck Soup?”
To share a story with you:
My girlfriend bought a 1 bd 1ba condo in Viera for $109K in 2005. These units zoomed up to $140K at the peak. We just signed a contract to sell for $80K (and we consider ourselves lucky). The bank made the buyer come up with 10% down (she actually works for the bank). We are moving into a brand new townhome (to rent) in Melbourne Beach: 3bd, 2ba, 2 car garage, 1 block from the ocean. A majority of these units were sold for $440K, but 3 leftovers recently sold for $265K. Our landlord-to-be picked up one of these units for $265K. She is renting to us for $1000/mo (cable tv included). I have no idea how she is doing it.
On another topic, while I was signing a lease, I noticed that the agent was having a hard time finding a lockbox. Apparently there are so many properties for sale, a lockbox shortage has come about. Buy some lockbox maker stock!
I have no idea how she is doing it.
Good story, but haven’t you heard? Other places may suffer but not the beach. Beach property ALWAYS goes up. If I can recoup 4% of my principal in rent every year and it will cover all my insurance and taxes - when I resell, it will be pure profit!
Boy, that’s logic. I’m sure some Realtors could use your insight.
“The raffle tickets are $250 apiece. Wardlow said he needs to sell at least 3,000, to cover costs and the debt to make it work.”
“So far, he’s sold about 60 in the past few weeks, with four weeks to go. And four of the tickets went to the fellow who installed the granite countertops in the homes.”
I wonder if that’s even legal. I sure wouldn’t pay $250 for a lottery ticket unless it was regulated in some way. Actually, I wouldn’t pay $250 for a lottery ticket anyway, but that’s beside the point. Wanna bet that the granite countertop guy winds up winning the lottery, and makes a nice under the table kickback to the builder?
With only 60 of 3000 tickets sold, is he obligated to have a drawing anyway? Refund tickets if he can’t sell 3000? Pocket the cash and skip town anyway?
It is legal if done right. He said anything over his costs go to charity. I am sure he sold the tickets contingent on selling the minimum of 3000. He will refund the money since he won’t reach that goal.
hmm.. i was hoping to get some details, like how long he has to raise the dough / sell 3000 (a year or more?), but i can’t get any hits searching Wardlow’s lottery.. notta one.
found it.
http://houseraffleonline.com/main.sc
“Dagostino said the company has $85 million in contracts. It originally had $137 million in signed purchase contracts, he has said. If the company does call it quits next month, Dagostino said the company will try to liquidate the property and ‘pay everyone we can.’”
In other words, all the signers of these contracts are screwed.
“Six years ago Nicholson took out a second mortgage on the house to pay for a divorce. With declining home values, she owes more in mortgages than the house is worth.”
Crap. How much does a divorce cost? My buddy recently got one…I’m pretty sure it was 4 figures.
Bluprint - reading between the lines, I think that she would have paid out a trifling sum to her ex-husband in order to buy his share in the former matrimonial home.
30% of a low-ball valuation at the time, put it on the 2nd mortgage, and wait for the capital gains to make her rich.
Happens all the time.
Ralph where are you?
about Wardlow’s houses: are they built to survive flood?
Speaking of raffles, the dude on the Oregon Coast has managed to sell 500 tickets — no way he’ll get his 3000 before he has to foreclose
http://www.win-this-home.com/rules.htm
All winners will be given an IRS form 1099. Each individuals tax situation is different and winners should consult tax advice prior to accepting any prize.
So, whoever wins the home must turn around and sell it immediately to raise enough money for the tax hit..
You could rent it out or live in it for 2 years then sell it to avoid capital gains taxes. But the loss in value might cancel the tax savings anyway. If only 500 tickets were sold, this house is worth $125k or would sell for that much after taxes.
“The United States is in a recession that could be “substantially more severe” than recent ones, National Bureau of Economic Research President Martin Feldstein said on Friday.”
He’s predicting as bad as just after WWII.
Wow. I just mean - WOW!