‘When Will The Buyers Market End’ in Florida?
Some reports on the Florida housing market. “Boca Raton — Frustrated by the snail’s pace of Eden Condominium construction, city officials will not rule out requiring that the community be demolished if the apartment-to-condo conversion continues to drag on. The city ‘is evaluating the merits’ of the firm’s explanation as to why gutting and rehabbing the 204-unit complex has lagged since spring 2003, when the sales office opened for business.”
“Some Eden sales originally expected to be closed last summer have been pushed back to this September, or even January, according to buyers.”
“Still reeling from 2005 hurricane losses, Atlantic Preferred Insurance Co. said the company won’t renew more than 140,000 homeowner policies in Florida. With few insurers willing to take on new homeowner policies, many of Atlantic Preferred’s former customers could end up in state-backed Citizens Property Insurance Corp. That will put even more stress on the already-burdened company, said Steve Burgess, Florida’s insurance consumer advocate.”
“Two years of catastrophic hurricane seasons have drained the state’s insurance industry, and now the reserve fund that backs up the insurers is $1.55 billion in the hole. That means virtually all Floridians could pay for as long as 10 years to cover the fund’s shortfall.”
“These storm-related charges come on top of surcharges all state homeowners are paying to bail out Citizens Property Insurance Corp., the state-backed home insurer, and the higher prices individual property insurers are charging Florida residents.”
From Realty Times. “Large gluts of inventory spell great news for buyers, and not so great news for sellers. Take Cape Coral, Florida, for example. Our experts have reported that there is nearly 2 years worth of inventory to sell.”
“Our experts report that there is a wide spread between asking prices and actual sales prices in this area? A possible cause? With a larger inventory on hand, while a home may be figured in at a market value of $150,000, with so much competition sellers may have to lower their price if they are needing to sell in a hurry.”
“Prices for houses and land are on the down trend. Inventory is increasing dramatically: about new 400 listings and about 600 + price reductions every DAY!!! Sellers have to adjust their asking prices down, while buyers make low offers.”
“Overnight, it has turned into a BUYER’S MARKET. Lately, I have been selling MANY REAL investors who are ‘thinking outside the box.’ WHAT DO I MEAN? Now that these ‘investors’ have their new houses nearing completion, they reallize they cannot afford double mortgage payments. They are panicing & figure.. ‘well, I’ll settle for $40,000 profit instead of $60,000– just to get out!’”
“Many of you have e-mailed me asking, When will the buyers market end in Cape Coral? At this time we are finding investors would rather reduce their price for a quick sale rather than carry a mortgage payment. Some investors have taken their homes off the market and put renters in place hoping to cover some of their expenses. The problem is so many of these homes are hitting the market at the same time (approximately 25 to 30 a day) and there are not enough buyers to keep up with the inventory.”
From a strong sellers’ market to a definite buyers’ market in 4 months = POP.
The panic is just starting. Sellers still are holding on to a sliver of hope. With Hurricane season only a couple months away, the panic should build steadily. By next year the new reality will set in. Real estate agents have already changed their tune significantly. As they get more desparate to generate sales, they’ll really start talking the market down.
“When will the buyers market end”
The buyers market will begin when the median price of a one-family home is three times or less the median income of a family with children, and the median condo price is three times or less the median income of other types of households.
Great point s Larry. Here in Palm Beach County we don’t have a buyers market, we have NO market. There are virtually no buyers and a plethora of sellers. The correct term is a stagnant market. I wouldn’t sniff buying anything here until the price is about 30% off 2005 comps. The condos could drop over 30% when all is said and done. I keep telling people to rent, save money for a downpayment and keep your FICO score up. Those who do this and are patient will be rewarded.
Ha- You know I was passing through west palm on 95 & saw a bill board advertising a 3bed 2 bath home for sale. Not sure if it was a marketing ploy by a builder with dozens of spec homes or if was a desperate seller.
“The problem is so many of these homes are hitting the market at the same time (approximately 25 to 30 a day) and there are not enough buyers to keep up with the inventory.”
Thank you, Caroline Reeve. You have given a perfect, if inadvertent, ground-level description of a real-time crash. It sort of brings to mind the bubble itself — hiding right there in such plain view that nobody working in the RE industry could detect it…
“Two years of catastrophic hurricane seasons have drained the state’s insurance industry, and now the reserve fund that backs up the insurers is $1.55 billion in the hole. That means virtually all Floridians could pay for as long as 10 years to cover the fund’s shortfall.”
Not to worry — those 10-years worth of premium costs will soon be capitalized into lower housing values, as those unwilling to pay them, not to mention reluctant to remain exposed to future hurricanes, move away in droves.
Good point. Any ideas on the insurance implictaions for NOLA?
I have a friend in Boca Raton Fla… They have a condo, that last year had damage when the electric was out throughout the city for approx. 2 weeks. They only suffered some wind damage {broken window}….However this week they received an association damage assessment for their PRORATA share off the the deductible. IT was $3,500….Do ya think the floppers have this in their cashflow plans.?
‘Some investors have taken their homes off the market and put renters in place hoping to cover some of their expenses..about new 400 listings and about 600 + price reductions every DAY!!!’
Speculators shouldn’t hold their breath waiting for a new sellers market. Where are the homebuilders with their talk of shortages now?
“selling MANY REAL investors … panicing”
how REAL are they if they panicKing?
“They are panicing & figure..well, I’ll settle for $40,000 profit instead of $60,000– just to get out!’” ….he he..good joke…
Damn, I hate those people. How about a 40K LOSS, you jerk?
tick tock tick tock tick tock
That’s really “thinking outside the box”!
Does this mean the Superbowl rally never arrived? These people remind me of Linus waiting in the pumpkin patch waiting for the Great Pumpkin to arrive.
Heh, I like that!
the Linus rally?
oh you just wait until after Easter … er, I mean after May Day … or Memorial Day … then there’s Fourth of July. Right after the fourth, there’s going to be a FLOOD of new buyers. Ha-ha, then all you bubble doom-sayers will get your due!
And yes, this is completely tongue in cheek.
By the way, CNBC running reports today about condo boom-turned-bust in D.C. The camera is panning around showing all the cranes in Arlington and buildigns going up … and talking about how NOTHING is selling … and how “investors” are starting to get hosed.
Terms like “investors are starting to get hosed” which sounds like someone else is to blame. The term should be something more like “investors are finally feeling the effects of hosing themselves with poor financial decisions”.
Waiting for the Great pumpkin to arrive:
It just did,
Honey, remember that home builder that held your $15,000 earnest deposit, they just called “closing is next Friday”. And a 30yr fixed is 6.49% 15 yr 5.97%…
“When will the buyers market end?”
Damn, coffee all over my keyboard. Tell ya what, rather than hold your breath, here hold this bag. Now that you are the last one left holding the bag I’ll tell you. It won’t be a balanced market until at least 2009. Hey? Is that bag you are holding getting heavy? Snigger.
Your always good for a laugh Cote….
Gosh I hate settling for $40,000 profit instead of $60,000.
I mean that happens twice a month… boom! There goes your yacht payment.
Whaddya gonna do?
“Balanced market is when your calendar says 2011″ so said someone who knows much more than me.
“Do not buy till price has come down TO 20%” so said someone who knows more than most of us in this Blog. Probably he made the low 20% figure to emhasize the point that he expects fall will be much greater.
If price does not fall significanly, I expect value of all my $$ SAVINGS to FALL significantly. IMHO
Am I wrong. RSVP
Just wait until:
1) Everyone sees purchasing as a “big important somewhat scary decision.”
2) Cost of traditioanl financing is near cost to rent.
3) You have SOME sort of safety net (family / savings / second income) to support you.
MSNBC just stated on street signs …..hot condo market slowing down and they are going to take you to one…
As long as these flippers are still exiting for a profit the bubble is alive and well. We have to wait until the stories of losses hit everyday in order to find some sort of bottom in pricing. Like or lump it but home prices are still through the roof in bubbleland.
Yes I agree . The sellers and realtors are still waiting for the big spring/summer selling season .
The real price drops don’t occur until the Banks get in the mix…..When you start seeing short sales by the Banks, then you will see the panick….
I agree.
Once the overextended IO/ARM tewntysomethings in those 3000 ft2 homes start leaving the keys on the granite countertops then the tumble will begin.
The bankers will smell the urine and feces they will flush this mess and recoup what they can.
Then, there goes the neighborhood. Once the comps start their downward death spiral then all bets are off.
Guideposts To Recession ? Depression:
1) Helicopter Ben takes the rate on up to 5-1/2 to 6 % by July 2006.
2) First of Toxic Bubble Loans reset the Summer of 2006.
3) Gasoline over $ 3.00 gal keeps the Hummers in the driveway.
4) Immigration “reform” further equilibrates the middle-class American standard of living to that of the Mexican laborer.
5) Dollar tanks against the other fiat currencies and Gold goes to $ 800 / oz.
Anybody care to add more ?
Well stated. Investors’ Summary:
1. Go long on gold and energy.
2. Short HBs and mortgage Cos.
3. Peak Oil: Consider trading in the SUV for a Hybrid or Diesel. Don’t buy an energy-hogging McMansion.
Herd Chemist…I would make a few adjustments to that analysis..
1) Helicopter Ben stops raising rates……but delays in dropping rates, waiting to “mine data” on “targeted” inflation..
2) By year end 2006, Ben recognizes the opportunity to “test”fly his helicopter that got him the Fed Chair.
3) By 2011 street cleaners are sweeping up Ben’s “graffetti”
4) 2006 ARM foreclosures go to Supreme court to test Banking Act of 2005. Debt bubble burst, men in “black robes” stuck between death and another hard place- rule for Nationale banks- Facism begins.
5) No immagrant work for illegals, {not because of legislation but they went back to MExICO} there was NO work. Further exaserbating the housing supply issues that began in 2005..
6)USD tanks but unexpectedly Gold falls too….as deflation has grips the globe….
7) Ben thinks about cutting rates like Japan. But just as in Japan after 18 years of near 0% rates and 20yrs. straight of falling real estate prices. R.E. continued falling yet another 2.8%, keeping pace with the recent drops seen in 2004,05,& 06.
Just found this at yahoo. Last line, very funny. Look out FL - last one out, turn off the lights.
Five Hurricane Names to Be Retired 1 hour, 30 minutes ago
WASHINGTON - Never will Katrina be so little missed. Nor Dennis, Rita, Stan and Wilma — four other hurricane names from last year’s devastating storms that have now been officially retired.
ADVERTISEMENT
Normally six lists of names are used in rotation for storms in the Atlantic-Caribbean-Gulf of Mexico region, but names of particularly destructive storms are retired.
The decision to retire these five names was made by an international committee of the World Meteorological Organization meeting in Puerto Rico, the National Oceanic and Atmospheric Administration announced.
They were part of a record 27 named storms and 15 hurricanes that occurred in 2005.
The retired names will be replaced by Don, Katia, Rina, Sean and Whitney.
Some 67 names have been retired since storms were first named in 1953. The first to be dropped, in 1954, were Carol and Hazel. Last year’s five is the most retired in a single year.
This year’s hurricane names will be: Alberto, Beryl, Chris, Debby, Ernesto, Florence, Gordon, Helene, Isaac, Joyce, Kirk, Leslie, Michael, Nadine, Oscar, Patty, Rafael, Sandy, Tony, Valerie, William.
If that number of names suffices.
___
On the Net:
NOAA National Hurricane Center: http://www.nhc.noaa.gov
NOAA Hurricanes Page: http://hurricanes.noaa.gov
Retired Names: http://www.nhc.noaa.gov/retirednames.shtml
Boca Raton readers, make sure to get us some pictures when the bulldozers make it official down there…
HA..Boca Raton—some snobby, materialistic people reside there..and yet supposedly they are still building like crazy in Palm beach county…….
Boca Raton is usually rated by I think Travel Magazine to be the 2nd rudest city in the US.
“Large gluts of inventory spell great news for buyers, and not so great news for sellers. Take Cape Coral, Florida, for example. Our experts have reported that there is nearly 2 years worth of inventory to sell.”
Yes, it’s such great news for buyers so I’m buying now. I’m eager to buy into a neighborhood with a blossoming and growing garden of multi-colored “For Sale” signs all around. Sounds like a good time to buy for me…NOT!!
Just got off the phone with my mom in Fort Myers, and nobody is buying. An individual she works with moved to Columbus, OH six months ago and still hasn’t sold his home. He hasn’t even gotten an offer and is beyond the panic stage at this point. The market there turned on a dime last summer when the speculators quit buying and it’s all downhill from there. I wouldn’t even think about buying in SW Florida until prices come down 50-60%. They are looking at quite a few years of stagnation down there.
Thank you! I am glad I am not the only one on here who thinks prices & reality will meet up somewhere in the 50-60%-off bin. That’ll correspond nicely with the discount-bin wages they pay here.
I think you’d have to cut that in half again, and then half again, to match up with local wages.
8612 according to realtor.com for sale.
in cape coral
Maybe the government has enouraged the condo glut so after the crash and bank bailout they can be used to house Bush’s stampede of “guest workers”.
The Cape Coral-Fort Myers area’s prices have been rising since 1997Q1, and strongly since 2000Q1. Flippers, you’ve had your turn.
“Overnight, it has turned into a BUYER’S MARKET. Lately, I have been selling MANY REAL investors who are ‘thinking outside the box.’
Pretty soon they’ll be living “inside the box,” as in a cardboard box in a back alley.