They’re Going To Have To Give Them Away In Florida
The Herald Tribune reports from Florida. “The crowd filed in to the large white tent behind the Bahia Mar resort for Friday’s real estate auction organized by Sotheby’s and Daniel DeCaro Auctions as a four-piece jazz band played a peppy rendition of ‘I Feel Good.’ Only a handful of the properties would be selling absolute, where any bid would be accepted. The rest carried a non-disclosed reserve, or minimum bid. The auction, which was anticipated to take four to five hours, wound up clocking in at barely two.”
“The first property out of the gate was not a good omen: auctioneer Daniel DeCaro tried opening the bidding for 1850 South Treasure Drive in Miami Beach, a waterfront lot, at $1 million. There was no response.”
“He then tried to get something started at $500,000, but again, no dice. $250,000? Still dead air. $100,000? Silence. At that point, DeCaro threw in the towel and passed the property by.”
“‘Please come see us afterwards,’ he told the crowd.”
“By the time it was over, 67 of the 99 properties on the block had no bids. ‘This was a disaster,’ said Fort Lauderdale broker Paul Merlesena following the auction. ‘They’re basically going to have to give them away now.’”
The Bradenton Herald. “Realtor Don Schroder said some of his clients are floored by the prices currently available on Anna Maria Island.”
“‘If people haven’t been to the island in two or three years, they are finding prices are way, way down,’ he said. ‘The prices on Anna Maria Island are down probably to 2002 or 2003 levels…Even the homes on water are starting to stabilize. I know there is a canal front property on the island that I saw the other day that is under $600,000, which is extraordinary.’”
“With approximately 575 homes and condos on the market on Anna Maria Island, broker Jesse Brisson said wealthy buyers have the opportunity to be more selective.”
“‘In the past, when a buyer would come in the door and say, ‘I am looking for a three-bedroom house on the canal with a 10,000-pound boat lift and a pool,’ it would be hard to find,’ he said. ‘But now, I can say, ‘Here is six.’”
“Real estate broker Marie Franklin said she has seen a lot of changes in the market since she first began selling homes in 1974.”
“‘The condos that people are amazed they can now get for $200,000 to the mid-$200,000, do you realize that in 1973 when those things were built they were going for $8,000 and $11,000?’ Franklin said. ‘People don’t realize it but we are just going back to where we should be. So have we increased in value? Of course we have. It is just that we aren’t the inflated market we saw in 2004 and 2005 where people were going crazy.’”
The News Press. “The narrow slice of east Fort Myers is sandwiched in between Palm Beach Boulevard and the Caloosahatchee, stretching from Royal Palm Park to Riverside Community Center, near downtown. Eclectic is an apt description of U.S. Census tract 3.01’s inhabitants and its homes.”
“Rental housing is plentiful. Some of the empty rental units in the tract belong to Charlie Walters. Walters said he has apartments and single-family homes for rent in 3.01 and that his vacancy rate has skyrocketed over the last year, as the economy has faltered.”
“‘I’ve cut the rents on almost everything I have from $100 to $400 bucks a month and I’ve got more vacancies than I’ve ever had,’ he said.”
“‘Roofers who don’t have anything to do now, they’re on their way to Alabama, Louisiana and Mississippi,’ he said.”
“He has a building with seven, one-bedroom apartments on Veronica Shoemaker Boulevard where three of the units are empty, despite the fact he’s lowered rent to $450 from $600. ‘I’ve had it for about three years and I never had this problem before,’ he said.”
“Bonnie Gaschk and her husband Harry have lived in 3.01 for three years, in the gated-development The River. ‘We moved here from Wisconsin and we think it’s a paradise,’ said Gaschk.”
“She said they considered some of the waterfront high-rises closer to downtown, ‘and for the value and the price, we could get three-to-four-bedrooms and four bathrooms, approximately 2,400-square-feet, with a boat lift on the river for approximately $300,000.’”
“Gaschk said they love life there, but have their home on the market for $289,900, so they can move to a single-family home they own in the Waterway Estates community in North Fort Myers. She said they plan to make their departure a temporary one, by selling the Waterway Estates house to purchase another unit in The River.”
The Daily Herald. “With the nation’s housing market in a slump and the mortgage market in disarray, many home builders are putting up fewer supersize homes and offering smaller floor plans. That seems to be what buyers suddenly want in an era of high prices and tougher financing.”
“In some cases, home builders are making the shift to smaller, less costly homes in existing subdivisions, angering homeowners who bought large homes during an earlier stage of the project’s development.”
“David Raidman moved into his 2,760-square-foot lake-front home in Fort Pierce, Fla., last fall in the first phase of a gated community developed by Lennar Corp.”
“Raidman said he was told that his home would be surrounded by similarly sized and priced homes. But when he heard Lennar was planning to build much smaller homes in his neighborhood, he and other homeowners fought the company’s plans.”
“‘Our biggest concern is what it would do to the value of our homes,’ said Raidman, who doubts he can sell his home today for the $300,000 he paid for it last year. Standing on his back porch, he can look out across the lake and see at least six newer, smaller homes. ‘The garage looks bigger than the house,’ he said.”
The Miami Herald. “Seth Gissen is a process server, a sworn court officer called upon to deliver official notices to homeowners that their lenders have filed foreclosure. As the mortgage meltdown hits a critical mass in South Florida, it seems that his presence in neighborhoods throughout the region is becoming almost as common as that of the mail carrier or meter reader.”
“About a year ago, business from foreclosures started to pick up. In the last two or three months, it has become a deluge. Last month, 7,499 foreclosure actions were filed in Miami-Dade and Broward counties alone.”
“As the workload grows, the Gissen & Zawyer firm must hire. The firm is glad to be in a position to hire. Many recent employees have come from the real-estate industry — agents, mortgage brokers, appraisers and support-staff members driven out of work by the slowdown.”
“‘We have people that were without jobs for six, seven months,’ Sean Zawyer said. ‘They were dying. I feel like a few of them almost cried when we offered them a job. They were so happy.’”
“‘Most of them aren’t surprised,’ Zawyer said. ‘Most of the time, they’ve already been sent letters or been contacted by the banks and I guess they know it’s coming, or know it’s inevitable.’”
“That’s when the firm actually serves a homeowner, which has become increasingly hard to do in recent months. In eight addresses that Gissen visited Thursday night, three tenants were served, but not a single homeowner. A few of the properties seemed vacant.”
“Census figures show that Miami-Dade County had among the highest home vacancy rates of major U.S. metropolitan areas at the end of last year — about 4.4 percent, up from 1.6 percent in 2001. The national average is 2.8 percent. A lot of that is perhaps due to new construction.”
“‘Some of the people are walking away from their houses — they’re upside down,’ Zawyer says. ‘A lot of them were investors.’”
“When he steps into the lobby of Jade, a luxury condo building, Gissen says he is not optimistic about serving Raul Reina, who owes $1 million on a unit. Reina’s listed phone number in New Jersey was disconnected.”
“‘This is about the eighth time we’ve come here,’ Gissen says. ‘The people in this building, they’re never here. Everyone we’ve done here has been an investor.’”
“The concierge knows the routine; he answers no questions. The security guard, Yoel Estrada, also knows the routine. The man who works the 7 a.m. to 3 p.m. shift does, too. He takes Gissen to the 45th floor. Gissen knocks. Nothing. ‘It sounds empty. It sounds hollow,’ Gissen says.”
“Estrada nods. ‘These people think they can live a lavish lifestyle, but they can’t even pay the maintenance fees,’ Estrada says.”
“Gissen glances at the service papers. The party behind the foreclosure: Bear Stearns.”
‘When he steps into the lobby of Jade, a luxury condo building, Gissen says he is not optimistic about serving Raul Reina, who owes $1 million on a unit. Reina’s listed phone number in New Jersey was disconnected. ‘This is about the eighth time we’ve come here,’ Gissen says. ‘The people in this building, they’re never here. Everyone we’ve done here has been an investor.’
About Miami condos;in the spring of 2005, near the peak of the frenzy, there was something like 8-10 years of sales in the pipeline! Anybody could have seen this coming. But this morning I recalled what the media was excited about at the time, that only long time readers will remember; floating condos. And expensive ones at that. I wonder where those deposits went?
Down the drain?
floated out to sea.
They finally saw what that meant when Katrina hit the Mississippi Gulf Coast. Gulfport and Biloxi had “floating casinos”. I have photos of them sitting on the boulevards before they were demolished for removal.
A few sunk in place.
Others stayed anchored at their moorings, but their wasn’t much left of their contents.
Floating anything in a hurricane zone is a bad idea.
And who is to say, with Florida being #1 Mortgage Fraud in the country if
1)That is even the owner’s real name
2)That the owner of the condo is a legal resident
3)That the owner of the condo is even living in the USA
“Even the homes on water are starting to stabilize.”
Are the homes really on water, or under water?
Structurally, they are on the water.
Financially, they are under water.
Structurally, they will soon be under water too.
‘The prices on Anna Maria Island are down probably to 2002 or 2003 levels…Even the homes on water are starting to stabilize. I know there is a canal front property on the island that I saw the other day that is under $600,000, which is EXTRODINARY.’”
“You keep using that word. I do not think it means what you think it means” Inigo Montoya, Princess Bride
‘The condos that people are amazed they can now get for $200,000 to the mid-$200,000, do you realize that in 1973 when those things were built they were going for $8,000 and $11,000?’ Franklin said. ‘People don’t realize it but we are just going back to where we should be.’
Now that’s the money quote.
The following is from a post on the sptimes.com un real estate blog from a person who posts on this site, but is in denial about the RE market. Here was my response:
Ralph says, “I call BS on your undisclosed models. Let’s see ‘em!!!!”
“In fact, I think you’re a landlord or burned speculator just trying to rationalize a bad investment!”
Ralph:
I am not a burned speculator or a landlord and I do not have any bad investments in real-estate that I am trying to rationalize as you have falsely accused me of in your posting. As a matter of fact, I am very financially secure and the details are simply none of your business.
In fact, I do not invest at all in single homes as they are very risky and can be more of a liability than an investment when you subtract the cost of ownership during the period you own the property. Land on the other hand can appreciate, but over a very long time.
This blog site is not an appropriate place for me to post pages of research, data modeling, etc. just to answer your questions. In fact, I highly suggest that you do your own research and base your models on your own situation. The models I use are for specific geographic areas and businesses and are not intended for individuals like you. In fact, the data is very clear that there is a large disparity between rental costs and home prices in the Tampa Bay area. One of the main reasons rental costs are so low is the investor/flippers that got caught up in the housing bubble and could not sell their properties are renting them below what it costs to own. The huge influxes of rental houses are putting pressure on apartment complexes to lower their prices via many types of incentatives in order to compete. Rental costs are what first time home buyers can afford to pay and are tied to incomes for the geographic area.
In the Tampa Bay area, home prices appreciated by 138% from 2000 - 2006. The long term growth rate is 4%. By simply doing the math, anyone can determine that the housing market in the Tampa Bay area was significantly and artificially inflated. That is what caused the large disparity between rental costs and home prices and the correction is well underway and will continue for some time. In the meantime, wages have not kept pace with inflation let alone the huge increase in home prices in the Tampa Bay area. In fact, wages are in the negative territory overall.
If you still do not believe me, go back and research past history. One other example of bubble markets I like to show to those in denial is the dot com bubble that burst in 2000. The NASDAQ was heavy into Technologies and was driven up to 5300 or so prior to the 2000 correction. Today, nearly eight years later, it is at 2261.18 and has lost more than half it’s value from it’s peak and has never recovered. I believe that the housing market in the bubble areas will closely resemble what has happened to the NASDAQ and the data clearly suggests this is well underway.
Once again, you simply do not have the facts correct Ralph and that leads you to make incorrect assumptions and false statements about me in your postings.
That may be a realtor I’ve been butting heads with for over a year now. His writing style is certainly familiar. If you’re lurking “R,” don’t think I haven’t noticed that you just HELOC’d your house to the tune of $200k.
Muggy - how do you research that? I’d like to know the debt on houses for which I’d be tempted to make a lowball offer, but I don’t know how to learn what’s owed. Not going to bother for properties that are badly underwater relative to what my offer would be.
I don’t know which county you live in, but here is Pinellas:
http://www.pinellascounty.org/public_records.htm
chip:
look up the mortgage at local county recorder/auditor’s office, house mortgages and other details on properties are public record
Muggy - thanks. Sorry for the late reply - was out all day.
“You keep using that word. I do not think it means what you think it means” Inigo Montoya, Princess Bride
ROTFL
You beat me too it! Stabilization means a similar property would go for a similar price in three months… next quote. “Under $500,000″
As you and reuven are having fun with below… they will have to tear them down. Oh, not the nicest waterfront… but there will be bulldozers in Orlando! Not to mention inland Palm Beach… etc.
Any photos of abandoned skyscrapper frames yet?
Got Popcorn?
Neil
Actually, they’re not going to have to give them away! They’re going to have to tear them down.
as you wiiiisshhhhhhhhh……………………….
I’m sure they’ll try torching them first. Smoke ‘em if you got ‘em.
Don’t torch me bro!
There will be plenty of ROUSs soon.
(rodents of unusual size Princess Bride.)
‘Many recent employees have come from the real-estate industry — agents, mortgage brokers, appraisers and support-staff members driven out of work by the slowdown. ‘We have people that were without jobs for six, seven months,’ Sean Zawyer said. ‘They were dying. I feel like a few of them almost cried when we offered them a job. They were so happy.’
Note to MSM and Washington; This ferver about ‘keeping people in houses’ will change to ‘finding a job’ soon enough. You might want to reconsider your priorities.
This is sad. I know there are posters to this blog who delight in the misery of the perceived enemy, but most people are just trying to support themselves and their families, and this is as true of realtors as anybody else. But, why do these real estate types keep looking for real estate-related jobs, even to the point of starving while they wait, when they could do something else probably far more productive? I would think their sudden turns of fortune would serve as wake-up calls that what they were doing before the sky fell perhaps wasn’t pleasing to the Cosmos.
Because the last job they had before real estate was a WAITER OR STRIPPER.
Seriously, only a small handful left real jobs before getting involved with this mess.
———————————
But, why do these real estate types keep looking for real estate-related jobs,
Because they have no skills. DUH!!!
All of this was enabled by the boom. What the boom giveth, the bust taketh away.
There were once jobs known as “gas station attendant”, and “elevator operator”. No doubt there were many good and productive people in those jobs once. Now there are self-service gas stations and automatic elevators. So exactly why are Realtwhores necessary when you can take virtual tours of property on the internet? To pay dues and attend meetings of the NAR? Their collective “expertise” certainly seems to have harmed, not helped the public over the last 5 years. Why shouldn’t we cheer the coming collapse of the NAR and its monopolistic and oppressive real estate commissions?
Add “telephone operator” and “travel agents” to that list.
The fancy economics term is disintermediation, and allied with technology, it’s a powerful force.
Embrace it, or be disemboweled!
The lowtech redneck term is getting rid of the middleman.
Yeah, I like that one myself but I don’t use polite terms like “getting rid of”.
IF a re agent is good for moi, then I would prefer to utilize a good one’s experience so I can use my time for other things ie:job etc. I would still do ‘due diligence’.
Operative word, ‘good’. Not the crooky type.
Perhaps we should come up with a medical condition for people who took mtg money who could not afford to sevice the debt. Give me a break Incredulous.
I have no idea what you’re talking about. Are you one of the posters who thrill at the thought of former realtors starving?
I have been a realtor in NJ since 1980 and FL since 1994 and a stockbroker since 1986. Married a Harvard trained MD. Believe me when I tell you I am not starving. You know why? I am a renter.
We thrill at the thought of realtors’ noses being rubbed in the filth of their own sweat, p*ss and vomit.
Whenever a realtor starves, an angel gets resurrected.
I think “starving” is a bit of hyperbole. But, flat-broke and working a part-time job at minimum wage is probably their just desserts.
How many “hot-shot” Realtors have you seen cruising around in luxury automobiles, buying luxury properties, rolex watches, fancy jewelry and costly clothing, thinking they had found nirvana…..endless wealth creation from the housing boom. They thought they were clever, classy, and canny. Instead, they were conceited, contempable and curt.
They thought they had found a fountain of money. All it took was shills. Lots of shills, to keep buying and generating commissions. And why wouldn’t they?? The Real Estate boom won’t bust. Don’t get left behind. Buy today.
Worry about the rate increase tomorrow.
These people deserve prison for bad financial advice, leading families into bankruptcy and poverty, while lining their pockets with the proceeds of their pitiful financial tomes. Personally, I like to see David Lereah panhandling on the sidewalks of New York.
If he does, I promise to kick him in the shins. Really hard. Thrice.
Don’t kick me bro!
(sorry, I can’t resist today)
Don’t bust me, bro!
I take delight in all failures. They are the moments of true education. Life is a tragedy, afterall. Why not laugh a little?
I remember fondly the months that I’ve struggled in my industry. Live and learn. Also, die by the sword.
These were greedy speculators who refuse to take jobs that involve real work. They haven’t done anything productive. 90% of home sales should be automated on the net. There are jobs out there for people who want to work. Unemployment hasn’t yet spiked.
If you have technical skills? No job issues. Some of my coworkers are getting ready to retire from aerospace and will have fun going back to nuclear power plants. That construction will soak up the following engineering talents: civil, stress, fluid/thermal (my specialty), software, and electrical.
My grandfather sat me down and told me how nasty the work was that he took to survive the great depression. Some of his friends were “too good” to hop on a work truck to go out to a remote work site and dig ditches (or road repair, etc.). He was sad to see those friends starve to death (his jobs were often for a work week, living in tents. So if you didn’t take a job early Monday morning, there wasn’t any opportunities until the next Monday). He retired owning the same construction company he worked for.
It is about jobs. But the era of $300k incomes for doing nothing but screwing your fellow American is over. Now we have no choice but to balance out the trade deficit. That means brining back some of the dirty jobs.
Got Popcorn?
Neil
I notice glee, pure glee in the diatribes against agents etc instead of the ptb and mozilla types. I think it should be equal, but the posts are tending towards pure glee at hoping these scumbags in the lower echelons of the re group get worse than the ones on top.
Am I mistaken?
lol
But, why do these real estate types keep looking for real estate-related jobs, even to the point of starving while they wait, when they could do something else probably far more productive?
Everything else requires a skill or education. What skills would a realtor bring to any sales job? That is part of the problem with being a realtor.
Some of the realtors that I know have MBA’s & Law degrees…
Starving? Misery? Man, that’s a little much. Paint the picture however you want, what some posters here may express doesn’t mean everybody agrees. There isn’t any one typical reader here. At least not that I can see. And 99% never post.
BTW, the media tells me this is a serious disaster. Doesn’t anyone deserve a little poetic justice?
The media? I need to rant on that subject, Ben. They are the cause of ALL of the problems. How do I know? Because Fux News told me so yesterday. That was the conclusion of the Cavuto shills. If the media would shut up housing would be fine. Pretty ironic when shills on Fux News (the media) are criticizing the media. It is funny how the media gets bashed for everything. I believe they are boobs but I don’t blame them for everything.
The more I’ve watched this mess the more I believe the media is neither liberal nor conservative. It is just mainly fools. They don’t cause bubbles and they don’t cause busts. They just make fools of themselves during both processes.
As for real estate agents, I think that profession deserves a good kick to the wang. They’ve earned it. That’s not the same as wanting them all dead.
Amen NYboy/
“There isn’t any one typical reader here.”
I agree for the most part. But at least it seems that Diogenes, Palmetto and I all want a modest home at a fair price. That seems to be a recurring theme on these Florida threads.
I have no interest in living on the water next to O.J.
I was referring to the article about former real estate boobs being out of work for six and seven months, and some perhaps crying at offers of real estate-related jobs. Why are they allowing themselves to get into such straits in hopes of landing more real estate jobs, instead of looking elsewhere? I also noted that losing their jobs should have told them something important about those jobs, but the message isn’t penetrating. And I’m sure that some ARE going hungry rather than taking alternate jobs they think are beneath them.
If tens of thousands of realtors lied, misrepresented, fudged, etc. during the boom, they should be prosecuted, no matter how much money it takes to accomplish. The rest should be grateful they got out of a bad industry before they got dragged down, too.
I was careful about how I worded my original post, but some readers are selectively focusing on this or that part rather than the whole. It isn’t a defense of crooks and con artists, but an observation on strange addictive behavior. And yes, there are people here who would be ecstatic to seem some of these ex-realtors starve. They say so constantly.
If the authorities threw the real estate crooks in jail, they’d be well-fed, and maybe they could learn to make baskets or something they could sell on the open market. This would be far better than selling cardboard boxes known recently as “houses” to the gullible. Meanwhile, we still have realtor millionaire-wannabes driving Hummers drenched in advertising around south Tampa because they WILL NOT face the fact that their days as pseudo big shots are now over, and that many people now view them as pitiful hasbeens clinging desperately to a chimera.
I think you are referring to the “Hyde Park Realty” Hummer. I’ve seen it numerous times on Bayshore, South MacDill, South Dale Mabry, and South Howard.
Because these people add little or no value. They have been a part of one of the longest running scams around.
Their virtual lockup of the MLS was the enabler.
There will be an exhibit in the Smithsonian showing an early 21st century, overpaid real estate agent next to T-Rex, day trader, and TV repairmen exhibits.
Mike
This is what i am afraid of people commit mortgage fraud and then get jobs at law firms….because they have been recently employed and i haven’t.
I wonder how many of their new employees will be arrested for mortgage fraud while i sit here never been arrested and out of work?
I wonder how many new process servers are delivering foreclosure notices to last year’s clients? That could make for an interesting doorstep conversation.
I agree: Give them away.
“‘If people haven’t been to the island in two or three years, they are finding prices are way, way down,’ he said. ‘The prices on Anna Maria Island are down probably to 2002 or 2003 levels…Even the homes on water are starting to stabilize. I know there is a canal front property on the island that I saw the other day that is under $600,000, which is extraordinary.’”
This says it all. These Realtors are economic MORONS.
They really believed that despite No increase in incomes in five to 10 years, that prices are supposed to continue to rise asymptotically forever. That’s what’s truly amazing.
They think because cheap, easy money led to speculative buying that the prices actually have some sort of fundamental support. Yet, in the face of massive forclosures (including island properties), they sit in wonder at prices reverting to their historical means……….And they call themselves “experts”.
I wouldn’t take advise from any of these idiots. When the price gets back to 2000-2001 levels, then we’re in the ballpark………….Thanks for the update Mr. Realtwhore.
And a quote from this article that is even more indicative of brainiac abilities ….. ‘Here is six.’
You wouldn’t expect them to use proper English grammar, would you?
This is not rocket science after all.
It’s econ101. Supply and Demand with the FED mis-pricing the cost of money. Thanks Alan Greenspan, you idiot.
Stuning hose at .5 acres!! MUST SEE TO BELEAVE! Discloshure: realtor is uncle/father or owner.
And the wisdom of not drinking fluids while reading HBB strikes again.
Oh, my poor keyboard. LOL.
Stunning HOSE?
Got Hose?
Hosed at .5 gallons
WHAT A SURPRISE! Stunning 2 bed/1 bath mobile home. Dead in street. $750,000
It sure isn’t rocket science but this housing boom has been more like a US Gov’t Sponsored Racket Science Program so it’s easy to see how some people became confused
Grammar hotline strikes again!!
On this issue I think the grammar issue is appropriate. I see it with so many of the listings in my hometown. These people are trying to sell their biggest asset (or liability, in many cases) and they can’t even have somebody proof read their description for accuracy. I would love to see a study done about how much these grammatical errors cost sellers. I would guess they receive a smaller percentage of asking price.
In a dumbed down world simple competence often resembles excellence.
Indeed. But I’m never surprised when I have that reaction–I am a writer and editor, after all. It’s when others pick up on it that I am deeply gratified. (I’m a simple person, I guess.)
It really stands out on a resumé particularly with the science and technology types.
Bad spelling and grammar are pretty much a good predictor of sloppiness, in my experience.
We have a local blog called condohype that tracks (or mocks) advertising campaigns for local condo developments. A lot of the (professional) ad campaigns have poor grammar(and spelling. MayB txt msging mks ritng obslEt 2day?
grammar(and spelling.
_________
*blush*. I need a second draft!
A major problem with stupidity is that it makes it difficult to understand that there are lots of other people operating in a different universe than you, and that even though they can reach you, you can’t reach them. The fact that things that don’t seem important to you are quite important to others makes life extremely hard.
Another problem is that stupid people don’t understand why it is so difficult for them to become wealthy, and why other can, and thus they tend to interpret the world as unfair, potentially resulting in anti-social or criminal behavior.
“People don’t act stupid because they’re crazy, they act crazy because they’re stupid.”
Our congressmen pass laws they never read, but at least the laws are grammatically correct. Whether they make sense or not is another matter.
I seem to remember the couple featured in the New York Times’ “dream home diaries” blog buying land and building in Anna Maria. The planned house was the typical attention-seeking grandiosity favored by people who aren’t from here and who have no idea of scale, style or restraint. I commented on that and didn’t exactly feel the love from other posters, quite a few of whom seemed to be living vicariously.
I think real estate broker Marie Franklin got it exactly right when she said people were “going crazy” in the 2004-2005 market in the Tampa area. What happened there, and across the world really, was more than just perverse group behavior–it was mass hysteria.*
In the past, outbreaks of mass hysteria were usually confined to specific locations (a factory or a school), or among a group of people with similar cultural beliefs (the Salem witchcraft trials).
Here’s a relatively recent example:
http://www.abc.net.au/news/newsitems/200504/s1353989.htm
In the case of the housing bubble, an environmental trigger (easy money) led some people to believe something that wasn’t true (I can afford a house that costs 7x my income!) and begin to act on that belief. Due to constant media, REIC, and peer-group reinforcement, this irrational behavior spread–globally.
For the HBB’ers who have felt frustrated over the years that they can’t talk sense into their family members, friends or coworkers, don’t feel so bad. From the reference frame of bubble participants, everything seemed perfectly logical.
*I am not a medical professional and the preceding does not constitute a medical diagnosis.
‘The prices on Anna Maria Island are down probably to 2002 or 2003 levels…’
Oh no……….1997 prices at best. You don’t flood the market with supply and then have a full credit contraction and expect things not to overshoot to the downside.
You know I was assured just yesterday, that despite every media outlet in the world screaming how hard it is to get a loan, there is a huge credit increase going on.
I love when you are sarcastic, Ben. You’ve been angrier lately. It is nice to see.
“there is a huge credit increase going on.”
Exactly what I am seeing. Bwahahaha. But what would I know? I just live in NYC and work in an industry that deals heavily with credit creation. The debt peddlers that I know continue to cry that nobody is lending. Way to go mainstream media. But I thought Fux News said it was the media’s negativity causing all of the problems. The media, to me, still seems downright cheery in some ways. Clueless on the way up and clueless on the way down.
Tell that to my Sister who just had her house sale fall through because the buyers lender (Countrywide god forbid) couldn’t close the deal for a bunch of nebulous reasons.
If she can’t pay her bills, NYCityBoy can help her find a potential “buyer”.
For a 6% fee, of course!
Mo Money…your sister needs to get LESS money and quickly get the deal done or she is really screwed
Ben,
Jesting aside, I don’t see the credit contraction in my day to day life. every week I get offers of new credit cards. My existing credit cards send me 0% or 1.9% checks daily it seems. Same cards have been extending my limits. One is up to $28,000. I carry $0 balances on all cards. And the 0% car loans are everywhere as are the “don’t pay until 2012″ deals for furniture, pools, etc.
For all the supposed lack of lending out there, I see a hell of a lot of lending.
Ben- You are right. I had a call this past week from a lender. They asked me to go into area I rarely go and I asked, “why me”?
The lady said that all the appraisers are slammed with refi’s. People are refi’ing to the end. One last gasp of air then,Gllooomp!
The Bradenton Herald article describing property prices on Anna Maria Island continues with another of Ms. Franklin observations:
“But she said one aspect of the island will always remained the same: waterfront properties keep their value.”
“What I’m finding is a repeat of what we had in the recession of the 1980s with more reasonable prices for properties in the middle of the island and the condo market,” Franklin said. “But the gulffront and bayfront properties are remaining at a high price because, with only seven miles, we can’t make anymore.”
That is a cliche often ridiculed on this board. However, I have observed activity on the island for nearly as long as she has. While some properties on Anna Maria Island have been sitting on the market for years, others are being discounted and selling more quickly. Nevertheless, lucky waterfront sellers are still getting rich prices relatively smoothly.
Tell me a realtard that does 6% worth of work and then I’ll feel sorry for them.
this is an interesting comment below because it is probably a pretty good indication of where we should be. if you take the mid-pt of each price range and calc the annualized return you get close to 9.5% appreciation for 35 yrs, which is probably too high. if you use a % rate of 7%, you get close to $100,000. even 7% could be a stretch, but could be close to actual inflation over the time period. another 50% down to go maybe?
“‘The condos that people are amazed they can now get for $200,000 to the mid-$200,000, do you realize that in 1973 when those things were built they were going for $8,000 and $11,000?’ Franklin said. ‘People don’t realize it but we are just going back to where we should be. So have we increased in value? Of course we have. It is just that we aren’t the inflated market we saw in 2004 and 2005 where people were going crazy.’”
I think the rate of appreciation and/or depreciation relative to the CPI or other measures of inflation/deflation doesn’t mean much to me.
I think the most important thing is income to price ratio. Off course this relates to everything we consume.
It doesn’t matter if house price appreciate by 10% per year, so long as income keep pace we should be okay. Same goes for gas, bread, milk etc.
Cinch
You’re right on that because areas change. Major employer leaves (a la rustbelt) or major employer comes in. Change in income, change in housing market. Price to income and rental equivalencies are paramount (except where rents are highly manipulated).
On the ground from Lee County here:
The whole freaking county is for sale.
Loss of population/jobs: This place is getting emptier and emptier. I have quite a few students (6 in one class alone) whose families are planning to move this summer. They’re waiting out the school year before they move out of state. Most, it seems, are moving back ‘home’ to live with relatives.
A result of that is that schools are cutting positions (less students = less teachers, makes sense). I have heard stories of panic from teachers in different schools. Someone told me yesterday that a high school in the Cape is cutting 25 positions.
Everywhere I go, I hear talk of people losing jobs, how there is no work out there, people trying to sell their houses, people getting foreclosed upon, how we’re in a recession, etc., etc.
These days, all of my students are shopping at the new Steve and Barry’s that opened up a few months ago. A year ago, they wouldn’t be caught dead admitting their clothes came from a “discount” store. Nowadays, those 8.98 Starbury jersies are what’s “in.”
McMansion Ghetto: Stoneybrook (Gateway, 33913) is getting a fast reputation for being unsafe and filled with unsavory renters, some with gang ties (silly as it might sound, gangs are active in Lee County). There are about 80 houses for sale in Stoneybrook–houses that were going for 400-600k a year ago. (Who would pay that for any house in Lee County? Much less one across the street from Lehigh!) I’m waiting for the first Stoneybrook grow-house story to break any day now.
Floridian,
thanks for the post. I was telling a brother yesterday about the number of teachers being laid off in Cali…he was truly shocked. I’ll add your post to the email. He’s a principal of a special ed elementary school..I think he believed that public schools would be exempt from the economic carnage.
Teaches are being laid off in other states as well. My SIL has taught in the same school for 25 years, had her interim evaluation last week. The principal (she has worked for him 10 years) told her that there would be some reductions next year, that he had no choice. She still has her job and possibly for next year (but no guarantees even with tenure). She is sort of in shock but is also realistic about the situation. She will be eligible for a good pension and can draw SS in 2 years plus her house is paid for so it won’t be the disaster it may be for some of her friends.
Gee, TEACHERS
Betcha none of the administrator jobs will be cut.
Yesterday I went to a major-builder subdivision that started in 2004. Big change in approach from several years ago, not that that should be surprising. No more $1,000 checks to hold a lot. 10% deposit, non-refundable under any circumstances. No options at all - zero (but what they were offering appealed to us, aside from a blah elevation). Three floor plans, each with three elevations that have minor differences. The “new” plan of the three is much bigger than the other two, but at almost no increase in price - a slick way of lowering price per foot without overly irritating those who bought earlier. Even at that the prices are about 30% less than peak. Many upgraded materials thrown in and construction quality that was surprisingly good relative to the overall rating of the builder. The rep confirmed my guess that this is due to all the poorer quality boom-time subs long since having been let go. And zero spec homes, other than one of each floor plan for showing.
Seemed like a reasonable amount of adaptation to market conditions, given that they still have plenty of lots to move in which they have sunk a fair bit of money. I just wonder how long it will take to move those lots, given the pervasive fence-sitting by potential buyers.
Unbuilt lots have very little value in most of Florida these days. Of course, if you are talking about a few rare lots in a prized community, that would be a different story. Then you would have an opportunity for a custom built home in a developed community. But why would anyone want vacant land surrounding their home, with no guarantee that the land will be developed, perhaps for decades.
” But why would anyone want vacant land surrounding their home, with no guarantee that the land will be developed, perhaps for decades. . . ?”
I will gladly answer that one;
As a prisoner of an HOA in a small cul-de-sac, I would KILL to have some open land around me where -
1) Nosy pushy bitter bored Air Force retirees don’t monitor your every step outside & report every minor infraction to the board. Of course THEY are exempt from therules if living here more than 10 yrs.
2) Crazy asshole fast driving neighbors racing up the street endangering yer kids. Course THEIR kids deserve slow speeds.
3) Nonstop booming bass stereos from as far as 4 streets away. getting worse as the low-insome assholes can now afford to migrate out of the ghetto & overrun the average neighborhood with their wonderful lifestyle. 7 cars to a house, repairs in the street, and more.
4) The room to maybe have some animals, horses, or other low-impact creatures. Also the room to NOT HEAR the stupid neighbors dog yapping non-stop hour after hour after hour.
5) A an empty field/lot would let the structure price possibly start off at a fair market level instead of trying to browbeat the tax official back down from peak selling days on a resold unit.
I’m sure there are more advantages to lots ‘o elbow room living I’ve missed. feel free to add or disagree.
Boy, you make me happy that I didn’t buy into a community with an HOA. However, I really never did understand why people would pay some AH to tell them what they can and cannot do. Nevertheless, you’re points are well taken.
Oh, I see the advantages. However my lifestyle is living in an apartment building in a super high density city. For me, having vacant land around would be terrifying. Who knows what will develop there? Will it attract vagrants or crime? To each his own.
I grew up on 200 acres in PA. I never felt that any part of the property was “unsafe”. It was all home. I wandered at will.
I don’t feel that way anymore, though, after growing up and reading too much scary stuff, and also after the return of the black bears. But I wonder if it’s all in my head. I remember having a college friend visit from inner-city Philadelphia who was shaking with fear as the drive to the country grew more rural. I would have probably been shaking in fear in her ‘hood, though. (Country mouse and city mouse).
There was only one bad experience in living memory and that occurred after I’d grown and gone. A young man decided to set traps on Dad’s private property, catching the family cat by a paw near a creek hundreds of yards away. Thankfully no serious harm came to the cat - he was tough. But he always had a white ring around his black paw afterwards.
Well, I’ll tell you this: Living in a rural area with a little bit of land around you comes with a whole ‘nother set of aggravations! here are some in my area (thankfully not all are my problems, but friends have ‘em):
– Noisy dirtbikes all day on weekends and all evening during the week
– Endless sound of huge lawn tractors all weekend long in warm weather
– Cow manure smell (or pig, even worse) wafting over your BBQ once a week
– Chain saws most of the winter
– Not just one yapping dog, but a kennel full
– Hunters trespassing on your land but not having the decency to poach/remove any of your deer varmints
– Squealing tires from kids racing on your remote road at midnight
Come to think of it, the quietest places I’ve lived have often been brick townhouses smack in the middle of the city!
“1973 when those things were built they were going for $8,000 and $11,000?’ ”
Using Google. A Chevrolet Corvette $5,472 NEW in 1972. Chevrolet Monte Carlo $3,885 1974 .
So these places were 2x to 3x the price of a car. Geesh, you can’t even buy but a couple cars under $10,000 in 2008 - and they were more in 2006. I can’t even conceive of a place to live NEW for 3x to 4x that ($30,000 to $40,000).
You sure ain’t going to buy a new Corvette for under 10K. But a simple rule of ten would give us affordable house prices, put that Vette at 54K and the condos between 80-110.
I can’t even believe that. A lot that should START at $1 million went down to $100,000 and still had no bidders. Crazy!
See my comment below (if it appears). The thing is, the bidders probably knew that a $100k bid would just be rejected if it “won”, due to the (secret) reserve prices, so why even bother.
For all the supposed lack of lending out there, I see a hell of a lot of lending.
No, what you’re seeing is a lot of Attempted Lending.
Think as well what these prices backing off are going to do to the property tax base. The local .govs got quite addicted to the increases.
“No, what you’re seeing is a lot of Attempted Lending.”
They are trying to lend to people who don’t need it. The people who need it aren’t getting any credit, because the banks have finally realized those people can’t pay it back.
‘This was a disaster,’ said Fort Lauderdale broker Paul Merlesena following the auction.
The thing is, potential buyers now know that there are ridiculous reserve prices set on almost all of those houses. That removes a lot of the incentive to even try because it takes time and money to inspect a house well enough to consider a proper bid.
And with the typical reserve (read: wishing) prices being set in those auctions, you’ll end up wasting your efforts. I know I wouldn’t bother, given what I’ve seen of reserve prices in recent auctions.
If they actually want to get some decent bids, make the auctions absolute. Till then, or until they publish the starting/reserve prices up front and keep those prices low, their auctions will continue to be a disaster.