All The Buyers Ran For The Hills In Florida
The Orlando Sentinel reports from Florida. “She misses her grandchildren, who live in Winter Park, but Ann Ortstadt had to move away. She couldn’t afford Central Florida. The grandmother of two now lives in Atlanta, which ranked second in population growth last year, according to today’s U.S. census report. ‘Although prices in Central Florida have come down a lot, it is still very expensive compared to the rest of the country, especially when you add in taxes and the cost of insurance,’ said Dan O’Hara, a Maitland real-estate agent and mortgage broker with 24 years of experience.”
“O’Hara said many residents moving out of Florida are finding it hard to sell their homes, which have depreciated greatly. Often, these residents are forced to rent in the city they move to, putting them in limbo, he said.”
“Ortstadt decided to move to Orlando in 2004 when her first grandchild was born in Winter Park. She sold her Atlanta home and bought a house with a pool in Winter Springs. ‘I enjoyed Florida living,’ she said.”
“But her annual taxes and insurance totaled more than $6,000 a year, she said. ‘Finally I said, ‘Oh, this is not going to work,’ Ortstadt said. ‘I had to choose between being close to them or not worrying about how I’m going to pay my bills. It was really tough. I’m the kind of grandmother who likes to put my arms around my grandkids.’”
From NBC 6.net. “The South Florida area leads the nation in the drop of home sale prices. A home with professional appliances and a slate floor that was designed by the owner, who is in restaurant management, barely attracts one buyer visit on a weekly basis. There are 350 other homes for sale in the Grove.”
“‘Maybe two years ago it would’ve been around $660,000, $620,000, $650,000,’ Realtor Michael Mahar said. ‘Now I’ve dropped the price to $499,000.’”
“‘It’s an excellent deal and in Coconut Grove for under $500,000,’ Mahar said. ‘This is as good as it gets.’”
“Mahar said it’s been a tough two years. ‘Just watching it drop and drop,’ he said. ‘And now I have to sell it.’”
From Local 10.com. “The Standard & Poor’s/Case-Schiller index for January 2008 showed sharp drops with prices down 11.4 percent nationwide. Miami and Las Vegas tied as the worst performing cities in the nation with prices falling 19.3 percent.”
“In Miami, homeowner Zoe Lemus recently dropped his asking price by $100,000 in the hopes of attracting a buyer. ‘People like it, they want to buy it, they just don’t have the money,’ said Lemus.”
“‘We’ve got another 20 to 25 percent to go,’ Deerfield Beach Jack McCabe real estate analyst told Local 10’s Mark Joyella. McCabe said South Florida’s home prices rose so dramatically at the height of the housing bubble that it will take longer for prices to stabilize.”
“‘You’ve got a situation where prices have to come down so people can afford homes, and that’s where we’re at. We’re going through this correction cycle. It’s a very healthy thing,’ said McCabe.”
From Bloomberg. “Miami-area homeowner Richard Welch is spending $70 less on groceries a week after his house lost $145,000 in value. Rita Roland cut off 11 inches of hair to save on salon trips, and Victor Parris stopped drinking his favorite brands of dark ale.”
“The residents of Melrose Cove, a Miramar, Florida, subdivision 23 miles north of Miami, are cutting back after regional house prices tied with Las Vegas in dropping more than any other U.S. metropolitan area in January.”
“‘Absolutely, I feel less wealthy than I did in 2006,’ said Welch. He said he and his wife, Barbara, are slashing spending by 30 percent, including canceling their cable television.”
“Welch said he bought his house for $201,000 in 2001, and watched its value climb to $595,000 by early 2007, then drop to $450,000. He took out a home equity line of credit in 2006 to refinance a second mortgage with a variable rate.”
“Eight of Melrose Cove’s 153 single-family homes are in foreclosure, Welch said. Fifteen percent of the other households are delinquent on quarterly homeowners’ dues, he added.”
“Roland left Los Angeles and moved to Melrose Cove in 2004, lured by the lower costs and slower way of life. She bought a three-bedroom house, her first, for about $350,000 and intended to sell for a higher price after five years, she said. Her house hasn’t appreciated since January 2007, when it was worth about $425,000.”
“‘I looked at my house as a bank account that was going to accrue interest on a daily, monthly, annual basis,’ she said. ‘I’m looking at not gaining money on this stock that I call a house, and may actually lose money.’”
“Martha Rodriguez said her husband’s sister bought the house next door for $330,000 with no down payment in 2006. Her sister-in-law, a manicurist from New York, moved out of Melrose Cove in August after her monthly house payments jumped to $3,000 from $1,900 and the property fell into foreclosure, Rodriguez said.”
“Next door to Parris is a home that’s been in foreclosure since last year. Parris stopped buying Guinness and Royal Extra beers for himself or a round for friends, which used to cost $50 to $60 every Friday night. He’s also giving up weekly dinners to save more of his $69,000 salary, Parris said.”
“Annette Aquino put her three-bedroom home up for sale after a divorce in October 2007. She’s dropped the price from $400,000 to $370,000, and is dismayed to be getting offers between $250,000 and $300,000.”
“In 2006, Aquino and her then-husband spent $2,500 for a vacation to Puerto Rico. Last month, she bought two tickets to New York City on Spirit Airlines for $77. Total cost of the five-day trip that included a stay at a friend’s place: $200.”
“‘I’m not in the same situation as those people in foreclosure,’ Aquino said, knocking on her wooden kitchen table. ‘But the way it’s going, I could be.’”
The St Petersburg Times. “Felix Amon dreamed of building taller than Trump, but now finds himself hammered by the slump. Poor sales and tighter credit have forced Amon, based in Daytona Beach, to seek Chapter 11 bankruptcy protection for his Tampa Tower 2 project.”
“Amon’s is the third Tampa condo project to declare bankruptcy this year. Even the best-known local condo project, Trump Tower Tampa, has threatened bankruptcy should its financing efforts fail. The 52-story building, licensing its name from New York tycoon Donald Trump, has yet to get off the ground.”
“‘Just remember what’s happened to Trump Tower, and all the other projects,’ Amon said. ‘All the buyers ran for the hills.’”
“Amon said the bankruptcy filing doesn’t apply to another of his local condo buildings, Clearwater’s Station Square. The downtown redevelopment project on Cleveland Street offers 126 units and a rooftop pool. ‘Station Square is just about finished,’ he said. ‘Luckily that was sold before the crisis started.’”
The Tallahassee Democrat. “When Florida’s Realtors hosted lunch in the Capitol courtyard Wednesday, they were hoping for good news to go with their Chinese chicken salad. Elected officials gave them a feast.”
“Gov. Charlie Crist reported Floridians experienced a 16-percent reduction in home insurance ‘in the last year.’ He also cited a ‘fantastic’ lowering of property taxes, anticipating ‘a $25 billion reduction over the next five years.’” “‘It’s not enough, but it’s a heck of a start,’ he said.”
“‘We’ve reached the turning point (in home sales),’ said Florida Chief Financial Officer Alex Sink.”
“U.S. Sen. Mel Martinez gave a national perspective. ‘We have a real crisis on our hands,’ he told the Realtors about the residential real estate market. ‘We need to do something to draw down the inventory of unsold homes.’”
“Realtors travel to Tallahassee each March for the FAR’s Legislative Days. About 800 members attended committee meetings and conferred with their legislators during the two-day gathering.”
“Realtors noted other signs that real estate sales’ downward trend is reversing. Summer Greene from Broward County said her area has seen a 16 percent increase in pending transactions.”
“‘It’s like everybody woke up Feb. 1 and said, ‘Enough of this,’ she said.”
‘Finally I said, ‘Oh, this is not going to work,’ Ortstadt said. ‘I had to choose between being close to them or not worrying about how I’m going to pay my bills. It was really tough. I’m the kind of grandmother who likes to put my arms around my grandkids.’
Note to MSM and Washington: high prices = bad.
Note to grandma: rent
‘A new report says Orlando has more vacant homes than any city in America and, if you drive by any neighborhood in Orlando, chances are you’ll see plenty of ‘for rent’ and ‘for sale’ signs.’
‘According to the Census Bureau, Orlando leads the nation with the highest home-vacancy rate of 7.4 percent. In fact, four of the top ten cities with the highest number of empty homes are in Florida.’
‘Economists say vacancy rates are important because they could affect future price trends.’
It appears that the slogan “Your future is in Florida, fair white goddess of states,” does not apply to everyone!
I think there is a fundamental problem that most people are not realizing in the housing crisis. House prices are disconnected from income (too high).
The median house prices should not exceed the median income in a particular area by more than 3x. 3x debt leverage would be considered healthy. If its any more, there will higher chance of home owner distress and likelihood of default. This is why the FHA sets PITI vs monthly gross household income at no more than 29%.
And keep in mind less and less people are patient enough to come up with the 20% so chances are they are at best financing 90 to 95%
of the home purchase.
And thus by extension if the median home price is more the 3x the median income of the area, its over rated and too high.
Also whenever house price appreciation exceed 3-4% YOY, it has always corrected back to the trend line.
With Bill Clinton signing NAFTA into effect in the 90’s, when labor exceeds a certain percentage of the cost of production for a particular good or service today, it will always get shipped overseas to cheaper markets or they will simply bring in Mexican labour or H1Bs from the 3rd World to do the job here cheaply. This will result in job loss or lowered incomes.
Because of this, incomes in the US will not be growing to support overinflated prices on McMansions.
House prices have to come down.
Don’t be a revisionist. NAFT was sitting on Clinton’s desk when he took the job. It was a big deal to the Republican leadership, they wanted it as did a lot of southern Democrats. Ross Perot opposed it & so many (r)voters voted for Perot that Clinton ended up the winner.
Or so the story goes…
For FHA loans the PITI limit is 31% but can go to 33% for energy efficient properties.
A $300,000 home that requires $3,000 in taxes and $1,500 in insurance can be purchased with an income of $85,000 assuming a 6.5% interest rate and 5% down. House/Income ratio of 3.5 for PITI of 31%.
Re: Note to Grandma…rent!
Great point. Granny seems to want a big house first and foremost. Lots of Grannies live in one-bedroom apartments.
I had a Grandma who never owned a home her entire life. She was perfectly content.
Grannie can rent a huge home in Orlando for a reasonable price. She’s really just trying to get away from those bratty kids!
Either that or the love bugs.
Actually, she’s the type of grandma who likes to talk about putting her arms around her grandchildren from Atlanta. It gives her the sense of social responsibility and moral highground you just can have when talking about it and living next door.
But im sure she’s still a really good person, just ask her.
As someone who lives in the Atlanta area..renting vs. buying in this area is fairly even or better in terms of buying..here you can find a new community..in a nice area..with brand new homes from $150K-200K..
Remember that in GA when you reach retirement age your property tax bill is reduced by 80%…so cost wise owning here is a not a bad option..insurance on that price range about $300 dollars a year..Had a friend’s mom move down..sold house she owned for 40 years up north..bought the house for cash and stashed the rest away in safe investments..her annual cost of living is pretty cheap.
so prop tax bill in GA. drops 80% upon retirement age, eh? now that seems like a good thing; gives one certain . . . ideas . . .
maybe I could move my reclusive packrat mother-in-law to a GA. singlewide, save mega money on prop tax with her pension, SS & other misc retirement funds, and bank the difference … hmmm … then again those 24 cats might get cabin fever. wonder how much U-Haul rate is from CA to GA . . . ?! however, with her warehouse-load-of- junk in her current house it’d take a convoy of semis to move her … DAMN IT, THANKS ANN, FOR GETTING MY HOPES UP !
I’ll agree somewhat with that. However the median income in the State is pretty low. The median income for a family in the City of Atlanta is $55,939. Being generous and calling it 60k, The average house shouldn’t be more than $180,000. Finding that in a single family inside the city is difficult. Condos and townhouses can be had for much cheaper though.
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“Note to MSM and Washington: high prices = bad”
Couldn’t agree more. Guess who want to “stabilize the housing prices?” NAR and CEOs of Fannie and Freddie, among others. Are these people serving the American People?
Funny part is how many wanted to “stabilize the housing prices” on the way up? You can divide the groups of good and bad based on who want high prices and who want low prices for homes.
Jas
“‘Just remember what’s happened to Trump Tower, and all the other projects,’ Amon said. ‘All the buyers ran for the hills.’”
While the so called “HomeOwners” in Florida all scamper for for a HIGH spot on the TITANIC
“But her annual taxes and insurance totaled more than $6,000 a year, she said. ‘Finally I said, ‘Oh, this is not going to work,’ Ortstadt said. ‘I had to choose between being close to them or not worrying about how I’m going to pay my bills.”
But, shouldn’t she have done this calculation before, rather than after, she sold her house in Atlanta and moved to Florida in the first place? Imagine the time, money, and trouble that she could have saved.
I wondered why Granny only just realized that Florida was too expensive. Is it only too expensive now that she can’t live off HELOC money till she dies?
I’ve seen peoples taxes here go up 400% in one Year! If she bought a used house the last persons taxes may have been 20% of what her taxes would be.
Don’t blame Grandma. They work real hard at suckering in the out of staters here.
“Amon said the bankruptcy filing doesn’t apply to another of his local condo buildings, Clearwater’s Station Square. The downtown redevelopment project on Cleveland Street offers 126 units and a rooftop pool. ‘Station Square is just about finished,’ he said. ‘Luckily that was sold before the crisis started.’”
A rooftop pool. In Florida. Sheesh.
What? Why shouldn’t we splash around at considerable elevation?
Easier to jump when you’re upside down. At least you’ll die clean.
You need to go by the site. I drive by regularly, as this is the old route to Clearwater Beach, prior to the opening of the new bridge and the demolition of the old.
This is an old hotel building that was originally designed, I believe, with rooftop pool. There is no room on the site for anything but parking. You have this high-rise building right off the roadway, surrounded by asphalt. It’s lovely, just lovely.
I’m certain most of the buyers are speculators. They just couldn’t get out soon enough.
There may be some retirees, but it’s not a location I would chose to live, unless I was poor.
“I looked at my house as a bank account…”
And there folks is the problem. This is how it wasn’t just investors who were greedy and it wasn’t just investors who drove the market to what it became.
Jack’s comment about another 20 to 25% off is probably pretty accurate if we’re using the bottom of the current market as our starting point. Homes in my neighborhood are listed as low as $150,000…or about what they sold for in 2001. If we take 25% off, that would put a starting price home $112,500. That’s in line with what people in Palm Beach County can afford. It also means the McMansion developments that are still listed in the $400K range would then be priced at $300K or so. If an average home costs $112,500 the McMansion could probably command $299,000.
I agree Bad Andy..many people looked at it as a personal charge card….with an unending limit..
Seeing lots of foreclosures staring to get lower in prices…guess banks are getting nervous having that inventory on for such a long time…I think they read the report that prices have gone down by 20% and will continue to slide..
I still think the banks are asking way to much…they need to start dumping..
“U.S. Sen. Mel Martinez gave a national perspective. ‘We have a real crisis on our hands,’ he told the Realtors about the residential real estate market. ‘We need to do something to draw down the inventory of unsold homes.’”
One simple solution, cut the prices (at the minimum) by 50% and sellers paying all closing costs.
In Central FL, they built way too many homes. Even if they all dropped the prices 75%, they all wouldn’t sell!
“In Central FL, they built way too many homes.”
Central Florida is a mess for sure. You’re right, they wouldn’t all sell even with a 75% drop. The overbuilding is a complete nightmare for certain parts of Florida. The posts that Ben has put together illustrate the whiffs of desperation that are beginning to gather here.
whiffs of desperation ………………
Sounds about right.
Next: PANIC.
And finally……………Capitulation.
That’s when we start seeing sales pick up.
Resulting in……….Despondency. (The Bottom).
This is where things get messed up. Right now people (even on this blog) are interested in buying, just at the right price. But this attitude is why prices still haven’t fallen as far as they are going to drop. When we do get to the next phase of this I doubt most people on this blog will be willing to step up to the plate. It is going to be a lot harder to do than we think. Everything we read, see and hear from the media, friends, family, etc. will tell us not to buy. It is a bad move. And it will be very hard to do when the time is right. I think people need to come to grips with the situation now, so they are ready when the time comes. I also think we need some data to use as a guide so we can start to determine possible entry points. I was analyzing the case-shiller spreadsheet and see a few opportunities. In any case, we will need a plan to take the emotion out of it when the time comes.
One more thing. The big risk is obviously buying early. So I am focusing on confirmation signals to know when the time is really right. I think we will have lots of 1-2 month false bottoms. Probably will use some moving average calcs to smooth out the data a bit. The trick is finding the happy medium that doesn’t react to fast, or slow, to the situation.
When the sheeple masses collectively decide “now” is not the right time to do something, that is precisely the right time to do it.
“The big risk is obviously buying early.”
While that’s true to an extent, someone could also overanalyze the market to the point where they never buy. That might necessarily be a bad thing depending on perspective, but if the median prices come down far enough and someone plans to buy long term for residential rather than investment purposes, there’s no reason to wait to buy until prices are at the absolute bottom.
I agree 100% Bob. First it has to make sense financially. Everything else is secondary. But people can be negative on housing - and then it can drop another 30%. So I think I am going to try to spend more time analyzing raw data and past cycles to see what I can come up with.
Relax there rob. It would be very bad to buy early but not to buy late…. you see when housing does hit bottom it wont shoot up at 10-50% per year as in the bubble. It will creep along at 3-4% per year like it has in the past (return to the mean).
so unless you think you cant pass up a specific property I would hold and wait til housing price has stopped dropping for 6 months or a year.
Plus I hope the builders keep building…more inventory please! keep pushing those prices lower! Tax breaks for builders and developers, free cookies, car wash and t shirts…just keep building please.
I think you just hit on a problem in many areas of the country. The value of many of these homes is $0. The only thing that can be done is to bulldoze them. This is one of the many reasons why this will take years to play out, banks will put off writing down the value of these assets as long as possible.
I seem to recall Our Fearless Leader, Ben, noting that the bulldozing thing happened in Texas during the 1980s.
I don’t know about bulldozing them, but I felt like that with my home down there then. We had to come to the closing with a check. My spouse is flying off into space every time they talk about a bailout on this. No one bailed us out then, but then it was a more contained crash.
When we sold our home in Long Beach CA in 1996 that was purchased in 1989 we had to come to the table with $75,000. Maybe I can ask for a rebate check from the Feds.
Ouch.
“In Central FL, they built way too many homes. Even if they all dropped the prices 75%, they all wouldn’t sell!”
Absolutely right! Just take a look on the stretch of turnpike between I-4 and about 30 miles North of Yehaww Junction. There are communities that are 1/3 built with no Turnpike or other major road access for miles and miles. Who would want to live there? The answer is no one…but they made for good speculation.
“In Central FL, they built way too many homes. Even if they all dropped the prices 75%, they all wouldn’t sell!”
Not just in Central Florida. Check out this data about the national vacancy rate from Bloomberg:
“The national vacancy rate, the share of empty houses that are for sale, increased to 2.8 percent in the fourth quarter, matching 2007’s first-quarter rate that was the highest in records going back to 1956, the U.S. Census Bureau reported Jan. 29. There were 17.8 million U.S. homes standing empty in the quarter, the bureau said. Of those, 2.18 million were year-round homes for sale, more than half of the average 4 million properties on the market during the period.”
So, using the miracle of subtraction, does that mean 15 million were second homes?!
http://tinyurl.com/386lxp
“In Central FL, they built way too many homes. Even if they all dropped the prices 75%, they all wouldn’t sell!”
Add to this line “….and the local builder/developers are still building and developing!”
Thye must be counting on all those $10/hr workers at Disneyworld to “snap up” the excess inventory.
They should empty all the FEMA trailers from the past five years’ worth of hurricanes into these houses rather than just dumping people on the homeless shelters. The houses are just as formaldehyde-ey and crappily built as the FEMA trailers, but at least they’re nice and big. Plus they’re safer: storm savvy residents can mine the kitchens for their solid construction materials and construct in-house granite and steel storm cellars so as to survive the next big one.
‘We need to do something to draw down the inventory of unsold homes.’”
As if the number of properties listed for sale at any given moment is the problem — there are just more waiting in the wings!
As much as they’d like to control the flow of properties onto the market, the REI won’t be able to manage it. Individual homeowners will make a break for the exits at moments of their own choosing.
Running for the hills in Florida…
You’d be running for a while, like all the way to Georgia or the Carolinas.
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I was wondering if there are any hills in Florida. I lived 25 miles inland from Ft’ Lauderdale for six months and wherever I traveled I don’t recall seeing any hills. I lived in a brand new townhouse on an artificial lake and the elevation, if I recall correctly, was 26′. The area was flat as a pancake. The area homes were going (back in 1985-86) for 100-125K and town homes for 75-100K.
Jas
Try eastern Hernando County, and the area around St. Leo University in east Pasco. That’s a good bike ride. The closest thing to hills in Tampa are the “humps” in the Howard Frankland and other highway bridges that cross Tampa Bay.
I can recall climbing some nasty hills in central Fla. Was on the Florida Bicycle Safari, which is a wonderful event for those who don’t like to act like a pseudo-racer.
There is a “ridge” that starts in southern Polk County and runs up the center of the state. They are not huge, but there is a natural hilliness in that ridge area where the elevation fluctuates between 100~312 ft above sea level (Sugarloaf Mountain in Lake county).
My former in-laws live in Mt Dora about 20 miles north of Orlando. They proudly proclaim that they have climbed Mt Dora, elevation 184 ft.
I was wondering if there are any hills in Florida.
Clairmount and Leesburg areas.
“You’d be running for a while, like all the way to Georgia or the Carolinas.”
One only needs to run to Highlands County, home of beautiful Lake Placid and Sebring. There’s such a land shortage there fueled by Baby Boomers and Europeans. Now is the time to buy!
One of the funniest stories I ever read on this blog was about someone from the northeast who paid $265k for a house in Sebring.
“…someone from the northeast who paid $265k for a house in Sebring.”
Is it 5,000 square feet on 30 acres?
Tallahassee has some decently hilly areas.
It’s a bit hilly around Lake Wales… And Tallahassee definitely has hills.
I seem to recall reading that Expediation Everest, a mountain themed rollercoaster at Disney, is taller than any natural elevation in Florida.
“Gov. Charlie Crist reported Floridians experienced a 16-percent reduction in home insurance ‘in the last year.’ He also cited a ‘fantastic’ lowering of property taxes, anticipating ‘a $25 billion reduction over the next five years.’” “‘It’s not enough, but it’s a heck of a start,’ he said.”
Good Time Charlie, with the sympathetic moist brown eyes and endless supply of sunshine to blow up the posteriors of Florida citizens. Everything’s great, it’s fantastic here and real estate only goes up.
“Good Time Charlie…”
I can’t fault the guy for talking up the state. It comes with the territory and is in the job description.
That said, Charlie’s in la la land. Those evil insurance companies must be stopped. Those taxes must be cut while we try to spend more (I think it’s W. Math).
Bottom line is if the millage rates are frozen on taxes and prices continue to fall, we have no more property tax problem. If insurance companies were greedy and out to rake in the money, they’d be lined up around the block to insure Florida homes. The fact that EVERY national carrier has reduced exposure would tell a sane and rational person that there’s not enough money to rake.
Charlie is an idiot. A smile without a brain behind it. If anyone is old enough to remember the old Benson TV show, they have seen what he is really like.
“In Miami, homeowner Zoe Lemus recently dropped his asking price by $100,000 in the hopes of attracting a buyer. ‘People like it, they want to buy it, they just don’t have the money,’ said Lemus.”
she is a freaking genius give her a prize
“‘It’s an excellent deal and in Coconut Grove for under $500,000,’ Mahar said. ‘This is as good as it gets.’”
For now, Mahar, hold on it’s going to get better. Prices have a ways to fall.
What? this isn’t the bottom? Have you NOT been watching TV?
Its funny, a few years ago visiting family in Miami, all you heard was Grove this Grove that, if you don`t live in the Grove you are crap. lol I bet there are a lot of sheople that wish they had never heard of the Grove.
Lane
Especially considering that a good portion of it is Crackville.
Let me tell you about the grove. It was a lower class neighborhood for a long time. then in the 1960’s, the hippie movement took over part of the grove near the water. after that, developers found the grove near the water and the marina and redeveloped the area. there is still the old grove, west of the new grove. i never really understand how people expect to get so much for homes in that area. the only plus is that you are near downtown and coral gables?
a house should be a home and not an investment.
““‘It’s an excellent deal and in Coconut Grove for under $500,000,’ Mahar said. ‘This is as good as it gets.’”
Oh no! It’s going to get a lot better! Trust me!
Most shortsale & foreclosures are currently for 50 Cents on the Dollar. That’s still above 2000 prices and above what most people can afford. Especially if you take taxes and insurance into consideration which are 4-5 times as much as in 2000. So you buy a house for $200K that was $400K at the peak. You’re still looking at $4K in insurance and around $8K in taxes. That about doubles your mortgage payment if you put 20% down.
“You’re still looking at $4K in insurance…”
Not by any stretch of the imagination Mike. Home insurance in Broward county on newer homes is about 0.65% (or less) of the replacement cost. $350,000 in coverage shouldn’t cost more than about $2,275…and even that’s a bit on the high estimate side.
Wait, I bought a house in broward county in 2004 for 325,000. My insurance, including flood, was 3500. The house was built in 1992.
“Wait, I bought a house in broward county in 2004 for 325,000. My insurance, including flood, was 3500. The house was built in 1992.”
In 2004 that probably was the going rate. Today it would be much less assuming storm shutters and a newer roof. 1992 doesn’t consitute a newer home in FL though. I’m talking 1996+ in Broward.
Property tax in Florida is 4%???
And I though California was bad at 1.25%
Don’t forget though; Florida doesn’t have a state income tax.
An awfully good reason to become a Florida renter. The rents seem to run LESS than the property tax alone!
These idiots make we want to scream!
“‘Absolutely, I feel less wealthy than I did in 2006,’ said Welch. He said he and his wife, Barbara, are slashing spending by 30 percent, including canceling their cable television.”
“Welch said he bought his house for $201,000 in 2001, and watched its value climb to $595,000 by early 2007, then drop to $450,000. He took out a home equity line of credit in 2006 to refinance a second mortgage with a variable rate.”
He bought his house for only $201K and it is supposedly still worth twice what he paid for it. 100+ % appreciation in 7 years. What the fu@k is he whining about! Why does he need to turn off his cable? What is scary is that the news media and some in Congress actually seem to feel sorry for these type of morons. Is anyone sane anymore?
“He bought his house for only $201K and it is supposedly still worth twice what he paid for it. 100+ % appreciation in 7 years. What the fu@k is he whining about!”
Answer: “He took out a home equity line of credit in 2006 to refinance a second mortgage with a variable rate.”
http://i2.photobucket.com/albums/y49/pspauld/tinyviolin.jpg
He took out a home equity line of credit in 2006 to refinance a second mortgage with a variable rate.”
What does this line mean anyway?
I’m not sure, but I suspect it means he’s HELOCed up the wazoo, and the equity ATM is now closed.
Reporters (professional writers) are not too good at writing. The sentence, as written, means he had a 1st mortgage and a 2nd mortgage then paid off the 2nd mortgage with a home equity LOC, secured by a replacement 2nd mortgage.
“These idiots make we want to scream!”
Idiots and liars. When I read some of Ben’s regional summaries, I think my blood pressure skyrockets, from the sheer lunacy and spin. Where DOES all this come from? What it looks like is a bunch of moronic retards who took one too many positive thinking courses, after graduating from one of Florida’s substandard schools.
who took one too many positive thinking courses,
So many times when reading these articles I wonder if this is partly the result of esteem-based education and all that happytalk psychobabble they’ve used to indoctrinate the chilluns.
Do you know anything about the Naples market? I was there last week, and the For Sale signs were discreetly placed, they don’t scream at you like everywhere else. Also I was surprised to see a fair sampling of empty retail spaces in the tony shopping areas.
When I was in school, self esteem was developed by accomplishing things. We weren’t praised just for the sake of being praised.
I certainly think there is in addition to the “it ain’t my fault” attitude. It is almost always someone else’s fault.
“Do you know anything about the Naples market? I was there last week, and the For Sale signs were discreetly placed, they don’t scream at you like everywhere else. Also I was surprised to see a fair sampling of empty retail spaces in the tony shopping areas.”
Phillygal, I don’t know where you were but there is plenty for sale and not much is selling. Prices are more sticky than other parts of Florida because most owners had more before the bust.
Try driving down Vanderbilt Beach Rd. My favorite is the ’50s redo / flip effort with a Mercedes SLR 722 and the Range Rover parked in the driveway all of which have “For sale” signs on them.
Concur Fran. Plently of for sale signs in Naples. I like to look at the bank’s REO portfolios and there is an inordinate percentage of Naples foreclosures. Most seem to be in the 3 to 4 hundred thousand range, but there are plenty of homes that originally sold for a million or more and are now REOs.
My husband was driving around the Golden Gate area just this week (east side of Naples) and he was amazed at the number of FSBO properties in the neighborhood. It really struck him how under-reported the inventory really is.
Didn’t drive down Vanderbilt Beach Rd…However I did see a fair sampling of unoccupied new construction in my meanderings. Also on the 24-7 REal Estate TV channel, a hideous condo project was advertised. It really did look like the old public housing towers they demolished in Philadelphia. Asking prices were around a million dollars.
Other than excursions to the Everglades and Botanical Gardens, we pretty much stuck to the same “loop” in town because we had a b!tchy Garmin that wouldn’t shut up. One night that biatch piped up from the back seat after we thought we had turned her off. I felt like I was in a Twilight Zone episode, you know, when inanimate objects suddenly take on a life of their own…
(plus it didn’t help that I was slightly inebriated hearing that damm voice coming at me from the back seat like we were in the middle of an Invasion of the GPSes.)
I never had cable television. If people spent less time watching TV and envying what other people have they’d be so much happier.
I can attest to that. I don’t own a TV, and oh, boy, does that make my life a lot happier. OTOH, I’m the biggest book junkie you’d ever want to meet.
I knew you were brilliant Az Slim! We don’t have a tube either, but with John Adams - the HBO mini series on, I wish I had somewhere to watch it. I’ll wait until it gets on DVD, and borrow it from the library.
You’ve got to admit, hanging at Borders and reading for free is liberating.
Climber- One thing for sure, I buy what I need these days, without the ads brainwashing me with wants.
Have I got a hanging at Borders story for you. When I was a University of Michigan student during the seventies, one of my favorite free reading hangouts was the original Borders store on State Street. The place played classical music, and it had wonderful wooden benches. Perfect for a bibliophile like the young Slim.
I was amazed to see a lot of other people doing the same thing, and I kinda wondered how Borders was staying in business. It sure wasn’t due to Yours Truly, but, obviously, a lot of other people were buying from them.
” …I kinda wondered how Borders was staying in business …”
It may not be in business much longer. Borders wants to put itself up for sale.
“When I was a University of Michigan student during the seventies, one of my favorite free reading hangouts was the original Borders store on State Street…”
I was there then, too. It was the first book store I ever hung out in. I still shop at Borders, because of that original store.
“I don’t watch much TV!”
“I can top that: I never even had a TV”
“What’s a TV?”
The smugness meter just went to red.
‘I never had cable television.’
Forget cable, I never even had a television growing up. My role models and referrent groups were assorted farm animals, such as goats. Perhaps that is why I still like to climb on top of cars and chew the bark off fruit trees and make lots of noise.
That sounds hot.
Now, now Blano, where is your mind going? Off to Sunday School for you, boy.
‘Absolutely, I feel less wealthy than I did in 2006,’ said Welch.
You were never wealthy.
“Summer Greene from Broward County said her area has seen a 16 percent increase in pending transactions.”
“‘It’s like everybody woke up Feb. 1 and said, ‘Enough of this,’ she said.”
And I would be interested to see how much of that “pending” translates into actual sales. And, what an idiot statement about “everyone woke up on Feb. 1″. Dang. Give the lady a Darwin award. The humidititty has rotted her brain.
You see this across the country - the normal seasonal increase in RE activity is trumpeted as some sort of incredibly favorable news for the RE market.
Funny how last year’s “Time 2 Buy” campaign from the NAR simply evaporated. I read yesterday that Tampa’s median price officially dropped 15% in 2007, so it clearly was not the time to buy, not that any admission will be forthcoming. It’s also amusing how quickly the realtors have seized on the latest numbers, when it could not be more obvious that Florida has entered into a recession that could turn this state into a tropical Ohio.
The only thing that has any hope of bouncing back is candor, and I’m not holding my breath. It’s going to be a long, hot summer, and I imagine the next story will be about how people here are cutting back on running their air conditioners.
Funny how last year’s “Time 2 Buy” campaign from the NAR simply evaporated.
Imagine how you would feel towards the realtor associations that had told you now is the time to buy or it is a great time to buy and a year later you lost 15% of what you paid for the property.
The sheeple of the world will just never understand that special interest groups like the NAR are serial bottom callers and often put out incorrect information to fool the public. They just ignore the saying, if it sounds too good to be true, it most certainly is not true!
I’m sorta glad that people aren’t as easily able to move out of Florida. To me, the state if seems to be full of ex-scumbags from New Jersey who wanted to get rich quick, and once they realized that it wasn’t working in FL, they decided to do the same thing and try and leverage themselves into NC, TN, GA, etc etc. Sort of like an infectious bacteria that causes over appreciation. It’s good to see that cycle stop.
When I was in TN, I can’t tell you how many FL plates I saw. Probably the same people that buy giant Mcmansions in the area. Speaking of Atlanta… Holy Sh*t. I was in Chattanooga and there were actually people there who were living in Chattanooga, commuting to Atlanta over an hour and a half away. What I don’t get is why? Atlanta has a massive foreclosure problem and even now, it isn’t impossible to find something in the 150k range or even less.
jb,
That’s an hour and a half at 2am. At rush hour in the ATL, more like 2.5 hours. Or 3.
Right on jetsonboy. Sneaker wearing metro morons ought to be rounded up and put on a garbage barge and sent east.
Because Atlanta didn’t always have a foreclosure problem. The run up was pretty steep. Plus the job market here wasn’t always this good. I suspect more people would like to move, but they have to sell the old house first, remember?
“‘Maybe two years ago it would’ve been around $660,000, $620,000, $650,000,’ Realtor Michael Mahar said. ‘Now I’ve dropped the price to $499,000.’”
“‘It’s an excellent deal and in Coconut Grove for under $500,000,’ Mahar said. ‘This is as good as it gets.’”
NewsFlash to idiot Nahar from NAR and her greedy wannabe seller.
IT’S the continuing Housing BUST that is DROPPING the Prices, NOT you and it ISN’T over by a long shot.
Oh!..and “THAT is about as GOOD as it GETS”
Geniuses at work
http://www.msnbc.msn.com/id/22425001/vp/23824858#23824858
I can’t wait to see how they feel when that lower price they refused to go to seems like a lot of money.
That’s like saying, “I’ll wait as long as it takes to take a shower.”
Pretty soon no one wants to be around you.
Just like Encino Girl and her $1.1 million boondoggle.
OMG that piece of sh#t and she wants 1 million? Looks over priced by about 95%.
David Lereah makes an appearance!
Speaking of Lereah and nar car tar far nyar war mar iar oar aar etc, everyone has one, anyway, friend who is re for over 30 yrs says that lereah has to do those rah rah things in order to keep some of the re agents from disappearing, building up the troops morale.
–
“‘I looked at my house as a bank account that was going to accrue interest on a daily, monthly, annual basis,’ she said. ‘I’m looking at not gaining money on this stock that I call a house, and may actually lose money.’”
Do these people get prop to give stupid quotes? I mean, where do the reporters find these bambos and bimbos?
Jas
Stupid people: one thing this country has a serious surplus of.
Himbos not bambos, if you please.
You read these stories and these people still have no clue. The level of denial, greed, stupidity, arrogance,and ignorance is so high that there is no other outcome but pure disaster. This housing mess in Florida will end up even worse than us long time HBB readers even predict.
Amen, JimKing. I think it is going to be far worse here in Florida than anyone every thought.
The prices have to go down to a point where it is cheaper to own than to rent and mortages need to be given regardless of fico scores. As long as you have a job you are approved. Florida does not have the income base it even had 10 years ago. The pool of buyers has diminshed to those that could buy but will not untill it is worth it. Others already bought…. Remember 70% nationwide ownership rate.
I totally agree with that Palmetto!
In the Tampa Bay area, property values shot up 138% from 2000to 2007. A 15% drop year over year means we have a long long ways to go before affordability kicks in. In the meantime, people who bought now will be in for a big surprise as they will probally be upside down by 2009. So is now a great time to buy, only if you enjoy losing your a**!
hill-bama both offer bailouts
Obama proposed relief for homeowners and an additional $30 billion stimulus package to address the nation’s economic woes.
“If we can extend a hand to banks on Wall Street, we can extend a hand to Americans who are struggling,” he said.
“If we can extend a hand to banks on Wall Street, we can extend a hand to Americans who are struggling,”
He’s speaking the truth. The only problem is, we shouldn’t be doing either. Let the meltdown happen so we can move on!
I never thought I’d say this, but I’m agreeing with McCain on this issue.
I thought the same thing!
McCain cozying up to the ‘tard isn’t cause for concern?
http://apnews.myway.com/article/20080327/D8VM2AI00.html
Obama criticized McCain’s plan, saying it “amounts to little more than watching this crisis happen.”
http://www.iht.com/articles/2008/03/27/business/speech.php
That’s precisely what should be done. If Obama wants to help struggling Americans, he should let house prices drop so responsible savers can buy a home and irresponsible borrowers get their arse handed to them in a hat.
Both Obama and Hillary (I’m really beginning to hate that smirk she wears 24/7) are out to lunch on economics. McCain might have a shot after all, especially by November when it’ll be patently obvious that bailouts aren’t going to be effective.
Ah yes,
The leftist impulses will clash when “bailing out” homeowners meets “keeping prices too high for renters and first time buyers to get a home of their own”.
McCain needs to play up this angle - why oh why do HRC and BO want to use taxpayer money to keep housing unaffordable for the working class? What if they proposed the same thing for gasoline - the gov’t would buy all gas priced under $3.50 a gallon to support the market, keeping prices painfully high?
The fact is that McCain appeals to the 60% “middle” with moderate, common sense takes on most things. He’s NOT conservative, and probably doesn’t even know the 20% radical liberal left exists, let alone care what they have to say. If he picks Joe Lieberman as VP, look for a 40 state sweep as the “common ground” ticket annihilates any possible combination of left-wing jokers.
Someone here yesterday said “crappy”, “crappier”, and “crappiest”, when descriping our presidential candidates.
(Forgot who, with all due respect.) I agree.Who ever we get stuck with, its a one term deal. They will get blamed for the economy, as it gets worse.
“Miami-area homeowner Richard Welch is spending $70 less on groceries a week after his house lost $145,000 in value. Rita Roland cut off 11 inches of hair to save on salon trips, and Victor Parris stopped drinking his favorite brands of dark ale.”
Great ideas! How about pulling unecessary teeth out to cut down on toothpaste and dental bills.
That makes me think how many stores, restaurants, etc. are right now hanging on by the skin of their teeth. So early in the game - hoping for a bounce back - conditioned to absolutely believe this will be over by summer. How many already wince at the arrival of every invoice, every payroll?
I wonder how many small businesses were surviving by HELOCs, a source of funding that is closing up.
Not only will the drying up of HELOC money directly affect small businesses, it will indirectly affect them as their customer base is unable to HELOC their spending.
Spending less on food may be an issue (depending on what you bought to begin with), but its difficult to feel sorry for someone who no longer frequents salons or can’t have his dark ale. (He just switched to Bud, and she’s now going to Supercuts).
I’m not living on the edge, but once I got married I let my wife cut my hair. That saves me $200 a year.
I know what you mean, potential buyer. These people sound like a bunch of spoiled brats. As my mother use to say to us kids, “you’ll live”.
And on the subject of food, an amusing article in the NY Times food section about making a tasty meal with ingredients from the 99 cent store…
http://tinyurl.com/39bjh4
I’m in CA. I especially thought this was amusing:
“O’Hara said many residents moving out of Florida are finding it hard to sell their homes, which have depreciated greatly. Often, these residents are forced to rent in the city they move to, putting them in limbo, he said.”
That is one idiotic statement…”forced to rent”…as if they will die a thousand deaths if that were to happen. But in their pea brains, I suppose it would be a “social death” of sorts…trying to keep up with the Joneses and all. And heaven forbid if their friends find out they are (oh, my God) RENTING!
On the other hand, if they DID rent and their friends find out and notice that they are now able to SAVE money….maybe they will start a trend. Yea, that’s the ticket!
I think I’ll change my signature quote at work to read “There is nothing wrong with renting.” A subtle hint for co-workers AND outside vendors.
BayQT~
Here’s the thing. For most of the past 100 years in many areas, renting has had its liabilities.
With homeownership, most of the cost of shelter is locked in, and eventually falls when the mortgage is paid off, while rents continue to rise. Maybe not in Texas, but certainly in New York City. For seniors on a fixed income, that can be harmful.
Recent trends have turned this all around.
With ARMs, the cost of owned housing is not locked in. And if it is locked in, it is locked in at an unaffordable level. And if you HELOC, the mortgage is never paid off. Meanwhile, in many markets rents will fall, either because they had spiked and must now retreat, or due to oversupply.
They are still talking about an affordability crisis here in NYC, where an independent candidate ran for Mayor on the “rent is too damn high” party in 2005.
Remember the concept of a mortgage party, where a homeowner would burn (a copy) their note. History will rhythm for those who paid attention to this fiasco.
WT,
Thanks for the summary but I am very well aware of everything you’ve said. I’ve been a homeowner AND a renter, and I’m currently both, as I’ve owned a rental on the East Coast for 9 years. I continue to personally rent in CA. None of what you said was lost on me.
My point was that in this market is it (in most cases) better (and cheaper) to rent but many people don’t see that part. They’ve all gotten high on the need to own their home and have forgotten the fundamentals that must be in place for it to make sense. That’s all I was saying. You are actually preaching to the bear choir.
BayQT~
I wonder when “forced to work and earn a living” will become a feared phrase. Doesn’t the government owe us all a big house, life of leisure, free medical care, free education, child care, and a guaranteed income for life? Oh, that’s right, not yet, that’s just the Democratic Party platform.
Mormon_Tea
The other equally nefarious party, isn’t any better on the corp welfare side. Let’s not kid ourselves.
Crist almighty…
“Gov. Charlie Crist reported Floridians experienced a 16-percent reduction in home insurance ‘in the last year.’ He also cited a ‘fantastic’ lowering of property taxes, anticipating ‘a $25 billion reduction over the next five years.’” “‘It’s not enough, but it’s a heck of a start,’ he said.”
Excuse me guv,
But if you lower the property taxes by $25 billion, who’s gonna pay for upkeep?
Geeze … stop parsing this logically :-). The $25B was off their original rosy growth projectsion. It will be still over flatline.
“Rita Roland cut off 11 inches of hair to save on salon trips, and Victor Parris stopped drinking his favorite brands of dark ale.”
I have long hair. I trim it myself, with judicious snips and snaps of my favorite scissors, to keep it wavy and a lightly feathery effect here and there, and I usually cut it after enjoying a few beers. I tell people that when they compliment me on my pretty golden tresses. ‘Why, thank you! I cut it myself, when I’m drunk.’ I like to see their reactions.
Truly, though, I know just what I want it to look like, and I know where my own cowlicks are, and I have steady hands, so why the he11 would I pay lots of money and take time out for someone else to fiddle with my hair?
Think of all the money I save on salons. Lovely money that goes to buy beer-brewing ingredients, such as dark ales.
If Rita and Vic were wise like me, they’d have all the hair-cutting and dark ale they could want. And that could be a party!
You’re a sweetheart. I tried cutting my hair once…it wasn’t a look I want to repeat. Besides, I like attractive young women hovering over me while they cut my hair…it’s money well spent!
I know a guy who referred to his trips to the salon as “getting his elbows polished”
think about that
I have long hair.
I did too back in the late 60’s and 3/4 of the 70’s. Past my shoulders.
Whew! I’m so glad I put my drink down before reading Olympiagal’s latest story.
I used to cut hair of various dorm buddies. My peak experience was helping “clean up” the cut of one friend who got stoned and decided to cut her own hair late one Saturday night. I got it to the point where she could leave the dorm the next day and go straight to the hairdresser and get a real cut.
“Miami-area homeowner Richard Welch is spending $70 less on groceries a week after his house lost $145,000 in value. Rita Roland cut off 11 inches of hair to save on salon trips, and Victor Parris stopped drinking his favorite brands of dark ale.”
Gift of the Magi, updated…
http://en.wikipedia.org/wiki/The_Gift_of_the_Magi
“Realtors noted other signs that real estate sales’ downward trend is reversing.
It is reversing and the RE market will continue to go in reverse for a few more years. However, the realtors think that a slight uptick is a full blown turnaround. The true numbers paint a totally different picture than the used house realtors are saying.
people need to reach out and challenge the BS the realtors are putting out to the public. let the public know the truth and let the public understand that if they listen to the hype by the realtors, they too will become a victim of the housing mess!
“‘It’s an excellent deal and in Coconut Grove for under $500,000,’ Mahar said. ‘This IS as good as it gets.’”
“You keep using that word. I do not think it means what you think it means” Inigo Montoya, Princess Bride
“It depends on what your definition of ‘is’ is.” Bill Clinton.
“What if this is as good as it gets” Melvin Udall, As good as it gets.
This guy Mahar just makes it way too easy
Nice, Jasper. That Princess Bride quote never gets old when applied to these posts.
‘All the buyers ran for the hills.’
Hmm, there aren’t too many hills in Florida.
“Remember that in GA when you reach retirement age your property tax bill is reduced by 80%”
What age does Georgia consider retirement age for that reduction, and how long will that 80% reduction last in tax revenue strapped Georgia before they lower the reduction and raise the qualifying retirement age?
Was it just a year or two ago that Florida realtors were bragging:
“1000 people per day move to Florida”
“We have reached a permanent high plateau in RE price”
We still keep those comments on this blog, for the record.