May 24, 2008

At The Mercy Of A Mean, Bottom-Feeding Market

TC Palm reports from Florida. “Sales of existing single-family homes and condominiums in the region increased in April, a report from the Florida Association of Realtors showed Friday. However, home prices in the Fort Pierce-Port St. Lucie metropolitan statistical area dropped 34 percent to $159,200 in April, down from $242,600 the prior year. The last time prices were this low was during September 2003, when the median price was $154,100.”

“‘This is stating the obvious, but the overheated housing market caused escalation in the pricing and market value of homes that was just not sustainable,’ said Richard Hope, past president of the Treasure Coast Builders Association. ‘Consumers became well aware of this and backed off on home purchases so they didn’t end up upside down.’”

The Sun Sentinel. “Sales of existing homes in Palm Beach County dropped slightly in April, FAR said Friday. The median price of an existing home in Palm Beach County last month dropped 17 percent, to $314,000 from $376,300 last year.”

“The supply of foreclosed properties will continue to drag down prices across the area, real estate experts say. ‘It’s shark time right now,’ said Ryan Greenblatt, a real estate agent in Boca Raton. ‘Everybody’s swimming, looking for deals.’”

“Greenblatt’s clients, Seth and Stefanie Ellis, bought a four-bedroom home in a new development west of Delray Beach two years ago. But they’re already outgrowing it.”

“They started by asking $799,000, then reduced the price to $775,000. Even so, they’ve had only a few showings in three months. ‘I’m surprised,’ said Seth Ellis. ‘There are a lot of opportunities for buyers out there.’”

“Many buyers are bottom feeding on so-called short sales. Agents say they aren’t having much luck negotiating those deals because overwhelmed lenders don’t respond in a timely manner. In some cases, banks are foreclosing on properties and listing them for less than the short-sale offers that they either rejected or failed to acknowledge.”

“‘I won’t even show short sales anymore,’ said Pamela Orr of Balistreri Realty in Palm Beach and Broward counties. ‘Ninety percent of the time, it doesn’t work out.’”

“‘Nationally, housing activity remains weak,’ said Chris Lafakis, associate economist covering Florida for Moody’s Economy.com. ‘But in Florida prices are coming down and sales activity is picking up. The only way to work through this correction is for prices to fall to a level that’s best for housing affordability and demand.’”

The Miami Herald. “In April, the median price of a single-family home in Miami-Dade fell 24 percent from a year ago to $291,900 and 18 percent in Broward to $298,100. Condo prices also fell in Broward by 24 percent, to a median of $150,000.”

“Doug DeWitt, a Miami real estate agent said he has nine properties under contract and more listings — mostly bank foreclosures — than ever. But, he added, he wouldn’t want to be a seller. ‘If you have to sell right now, you’re at the mercy of a mean, bottom-feeding market.’”

“Tracy Lopez said she and her husband took the plunge last month despite the likelihood of further price declines because they were tired of renting. Lopez said they negotiated a great deal with a motivated seller who cut his asking price by $100,000.”

“The couple got the deal on a home that sits on an acre behind Baptist Hospital, partly because it had been on sale for nearly a year and a half. ‘What my husband’s tactic was, he went in very low. The house was listed at $999,000. He put in an offer at $850,000 or less,’ Lopez said.”

“Eventually, the sellers settled on $900,000. The couple will close next month. Lopez said they found plenty of homes for sale, but many they considered still overpriced. ‘When you look at a $1 million house, you expect a castle, what we found were average houses. What we were finding was really nothing.’”

The Daily Business Review. “Buyers hoping to profit from South Florida’s troubled condo market - are eyeing the expanding inventory of thousands of unsold units. But they can’t get them for the rock bottom prices they are willing to pay.’

“The vultures put much of the blame on lenders who won’t agree to deals. Developers mostly have their hands tied by pricing set in loan agreements made before the condo market crashed. The bargain hunters can be patient. They have the upper hand.”

“An investor who acquires the remaining units in a failed development can be responsible for many of a developer’s legal liabilities, depending on the percentage of units owned by the investor, according to Martin A. Schwartz, an attorney at Miami-based Bilzin Sumberg.”

“Broker Peter Zalewski said most developers are willing to remain liable for any problems that surface in a project for a year after the sale, he said. He said the one prime reason more deals haven’t closed: ‘The moment of capitulation has not occurred with the banks yet.’”

“Until banks are willing to take a short-sale, bulk condo deals will not happen, Zalewski said. ‘There is not a lack of funding, product or willingness,’ he said. ‘Developers want to sell, buyers want to buy, but banks don’t want to take a writeoff.’”

“Zalewski and others in the condo industry said the game will turn once regulators step in.”

The News Press. “Existing homes sales in Lee County in April rose sharply from a year earlier as prices plunged and builders offered deep discounts. The median price fell 29 percent from $283,200 to $200,300 in the same period. Charlotte County sales showed a similar trend: The price was down 27 percent from $197,100 to $143,400.”

“One recent buyer said he’s glad to be buying after a long decline in the market. The median price of a single-family home is now 37 percent off the all-time high of $322,300 reached in December 2005.”

“‘We found it cheaper to buy than rent,’ said Bernie Connor, 71, a retiree from Maine who’s under contract to buy a four-bedroom, two-bath house in northwest Cape Coral for about $110,000.”

“‘I found it more reasonable to buy, naturally, because of the equity,’ he said. ‘The low home market’s probably going to last for another year or so but then it’s going back up - there’s no question about that.’”

“Lawrence Yun, chief economist for the National Association of Realtors, said he saw reasons for optimism for the second half of this year. ‘I would encourage buyers who were disappointed by poor mortgage options to take another look at the market because the lending changes are significant,’ he said.”

“However, other economists were not as optimistic about a rebound in sales. ‘With prices collapsing, the incentive not to buy a home is increasing by the week, and with inventory showing no sign of improvement, prices will keep falling,’ predicted Ian Shepherdson, chief U.S. economist at High Frequency Economics.”

The Herald Tribune. “Realtors have been saying for several months that sales were perking up in Southwest Florida. ‘The market is much healthier now than during this time last year,’ said Luke Andreae of Re/Max Harbor Realty in Punta Gorda. ‘I don’t mean prices, I mean the number of buyers and people out there looking.’”

“Sales in other part of the state continued to fall. In Miami, sales dropped 47 percent, with just 281 homes changing hands — only 13 more than were sold last month in Charlotte County-North Port.”

“In Southwest Florida, median sales prices are still lower than a year ago: 11 percent lower in Sarasota-Bradenton and 27 percent lower in Charlotte County-North Port.”

“Lillian St. George of Punta Gorda Realty thinks it will be several more months until sales pick up significantly. Some homeowners in her territory still refuse to accept the reality of the market and lower their prices, she said.”

“‘Those owners will never sell their properties,’ she said. ‘They’re waiting for the next big boom.’”

“Steve Dutoit, a broker in Sarasota, said inventory is the real problem now. ‘We’ve seen an increase in sales activity, which is good, but we’re still very far away from a balance in our inventory,’ Dutoit said.”

“Before the exuberance of the boom, for example, there were about 2,500 listings in the Sarasota MLS. There are now more than 12,000.”

“While the pace of sales is increasing, there is trouble closing a sizable percentage of pending offers — a phenomenon Dutoit thinks is partly because of short sales being denied by the banks.”

“‘We’re seeing over 50 percent of the homes that go pending come back on the market,’ he said.”

“Markets where speculation was rampant during the boom also showed rebounding sales during April. In Fort Myers-Cape Coral, the number of homes sold spiked 41 percent last month, with the median price slipping by about $83,000 to $200,300.”

The Bradenton Herald. “For the past year, Realtors have talked about pricing a home properly but in an ever-changing market, that is not always an easy task so Ron Cornette, director of training and marketing, and Wagner Realty VP Polly Gaar have been going to all the company’s offices teaching agents how to price homes right.”

“‘You almost have to do a new market analysis every 60 to 90 days because the market is changing,’ Cornette said.”

“Determining what people are willing to pay per square foot to live in a particular neighborhood is one way to ensure a home is priced properly, Cornette said. ‘Our job is to sell it, not just to list it,’ Cornette said.”

“As predicted, condos are taking longer to show signs of recovery. In April, condo sales were down 16 percent from last year, and average prices fell 11 percent to $212,000.”

“‘It took a long time for us to get in the real estate mess we are in today, and it could take a long time to get out of it,’ said broker Rod Rawlings.”

The St Petersburg Times. “Pending sales, homes under contract waiting to close, were up in April in every county in the Tampa Bay area compared to a year earlier. Higher sales correlated with lower prices. The Tampa region’s median home price is $176,000, 26 percent below the high mark of $239,300 in June 2006.”

“‘Price, price, price is what sells a house. Period,’ said Nikki Ubaldini, a Palm Harbor real estate broker. ‘Nine of 10 people just want to know they’re paying a fair price.’”

“April sales in Pinellas, Pasco, Hillsborough and Hernando counties totalled 2,087. That’s 8 percent below April 2007’s total of 2,257. Purchases approximated those of April 1999.”

“Tempering the optimism is the recognition that many homes changed hands through short sales. One-third of Ubaldini’s current business is short sales.”

“The market seems most stable in Hillsborough, where the Greater Tampa Association of Realtors reported sales down only a hair year to year, 1,235 vs. 1,249 a year earlier. Deborah Farmer of Star Light Realty, this year’s president of the Tampa association, hopes to press that advantage into what is now the peak selling season.”

“‘If we don’t make it in April, May or June, that’s pretty much it for us,’ Farmer said.”

The Naples News. “Broker Carla Bonten said one major reason why the Sunshine State defies the country’s average is Florida’s weather. ‘We’re in paradise. That’s what everybody says,’ she said.”

“Broker Wes Brodersen said…when it comes to interpreting how the housing market is doing…people will often see what they want to see. ‘Perception is everything in this business,’ he said. ‘Doom and gloomers always find doom and gloom. They’ve been telling me the sky is falling for the past few years, and you know what? I don’t have a single piece of sky in my hair.’”

“The Tampa Bay metro area lost at least 27,000 jobs in the past year, according to a report released last week. Three days before the report came out, Carl Smith was standing outside the room he had rented by the week. With him were his only possessions - a suitcase and a guitar. The room was clean and the rent was cheap. Only $150 a week. But he could no longer afford even that.”

“So now he had to decide whether to keep trying or give up on Florida for good, take what was left of his savings and hop the 7 p.m. bus to Nashville.”

“Smith is 50, single, and has worked as a carpenter for half his life, usually making around $18 an hour. But that was before the housing market tanked last year.”

“He said that in order to compete for the few remaining jobs, contractors have had to slash costs. To do that, they hire people willing to work for less than half the going wage.”

“‘Illegal workers,’ Smith said. ‘It’s frustrating as hell. I’d be glad to work for a living. I can do framing and high-end trim work. I can cut rafters and stairs. I know what I’m doing. But try to make it on $6 or $7 an hour.’”

“He sold magazine subscriptions over the phone after the construction jobs dried up. But after he paid his rent last week, he had $20 left. ‘You’ve got to eat,’ he said. ‘And the bus costs $3 a day. I don’t know what to say. I’d just as soon get out of here.’”




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91 Comments »

Comment by Ben Jones
2008-05-24 06:46:04

‘They’ve been telling me the sky is falling for the past few years, and you know what? I don’t have a single piece of sky in my hair.’

‘The Tampa Bay metro area lost at least 27,000 jobs in the past year, according to a report released last week.’

And I thought I was disgusted by the realtor’s on the way up. They have proven to me that they don’t care about their role in this disaster. As long as they skip along, it was no big deal. And this is what bugs me about how the press and government have decided to ignore the fact this was a financial mania. Lives have been torn apart left and right, and they are pretending that if we just get out there and buy, buy, buy, it will be alright.

This is like encouraging people to put their life savings in dot com stocks half way down. Wake up MSM! And for Washington, I suggest you consider the 27,000 JOBS LOST in one Florida metro alone.

Comment by Jas Jain
2008-05-24 07:31:26


Power of the Propaganda Machine in action, be it economics or politics. Propagandists feed on common people because that is where the money and votes are. It is lot easier to fool, or manipulate, people than we imagine.

Jas

 
Comment by polly
2008-05-24 07:51:57

But, Ben….20,000 of those people had a two hour babysitting job in the last month, or a neighbor paid them $30 to feed the cats and water the plants and take in the mail while they were on vacation, or they sold some of grandma’s figurines on e-bay, so they aren’t really unemployed at all. They have new economy jobs.

 
Comment by Sammy Schadenfreude
2008-05-24 08:29:12

There’s no “waking up” the MSM. They will hawk whatever propaganda and distractions the financial oligarchy that owns them orders them to, while contrary facts and information will be deliberately obscured or relegated to the memory hole. Real information, real truth, and independent points of view will only be found in forums like this one.

 
Comment by Fuzzy Bear
2008-05-24 08:35:36

‘The Tampa Bay metro area lost at least 27,000 jobs in the past year, according to a report released last week.’

The St. Petersburg times touted that sales were improving, but when you dig deep into the numbers, it only shows sales under contract to which a large number fail to secure financing.

Many of the posters on the sptimes are realtors or investors who are stuck holding their upside down properties. What the majority of these people don’t take into account is macroeconomics. Most of the 27,000 jobs lost in the Tampa Bay area were the higher paying jobs. For instance, one company just outsourced 300 I.T. job to Tata consulting who uses low cost labor from India. The major problem is there are no replacement jobs at the wages these people were making in Tampa Bay.

Bottom line, all the hoopla about the improving housing market will soon be muted as the impact of high oil and gas prices followed by increasing unemployment take their toll on the economy.

 
Comment by Ann
2008-05-24 09:02:04

(sorry for the bold something going on this morning)…anyway..I love how these realtors are just full of crap..there is still such a wave of foreclosures coming…I can see it on the MLS as short sellers getting close to the end of the rope are lowering by 100K,200K or more..pretty much pricing the house at around year 2000-01..and inventory is still at record levels..550 homes sold in the month of April when inventory is over 17,000 isn’t anywhere near a correction or a bottom..

 
 
Comment by reuven
2008-05-24 07:13:16

“While John Gilletti sits safely in his villa in Colombia, the lives of the Fort Myers families who rented or bought homes from him are in shambles.”

I personally know several renters who are being victimized by landlords who don’t reveal the rental is in foreclosure.

About a month ago, I wrote to my local Rep. Anna Eshoo suggesting that they pass legislation to criminalize this, or at least offer some protection to renters. I got back a form letter about the “housing crisis” basically saying that Anna “cares about erosion of home values” and is doing everything to keep prices propped up.

I guess since 99% of the letter she gets that mentions something about housing are from FBs asking for a handout, she just sends out the standard form letter and she’s right 99% of the time.

I am so nauseated by our government punishing careful savers and people who chose not to buy into the bubble. I own a house, but it’s 100% paid up and I don’t care what it’s “worth”. I care more about the miserable interest rate I can get on my savings and seeing my hard-earned money eaten away by a devalued dollar and inflation.

Comment by polly
2008-05-24 08:17:45

Try writing to her other office (if you sent this one to her DC office send it to her local office and vice versa) jsut to see if you can get it opened by a different baby staffer. Be sure to state in the first sentence that the previous form letter you received about keeping prices up doesn’t address the issue of renters being defrauded. If you do this often enough, you might force them to open up another category in their list of items that constituents have written about. You could also try to find out who the senior person is in the local office and send the letter to that person’s attention.

These offices handle a huge amount of mail. You will have to work very hard to get them to realize you aren’t complaining about your home equity disappearing. Try to NOT use the word housing or equity in the letter. If you can figure a way to do it, even try to avoid the word forclosure. Your goal is to keep them from tossing it in the “housing” pile with a 5 second scan of the letter.

You might try cc’ing your senators as well. And the chair of the committee that would end up considering such legislation. And the ranking member of that committee. Including the committee chair and ranking member means you will be contacting an office that actually has some specific knowledge of the subject area. Anyone with responsibilty for consumer protection would be good.

Also, it is really more of a state issue since it deals with contract law. You might get more attention from your state legislature.

Comment by Sammy Schadenfreude
2008-05-24 08:31:22

Unless you’re a major contributor, no Congressman or staffer gives a rat’s ass about your concerns.

Comment by JP
2008-05-24 08:52:01

Not completely true. Only mostly.
A typical office will count letters + phone calls. They will assign something like 10 votes to every letter, and 50 to a phone call. (I don’t know what count is assigned to an email. Probably something like 2.)

If the yea’s and nay’s on an issue are anywhere near close, then they lose nothing by deciding based on donations. However, if an issue is lopsided, then the donations have to be commensurately larger to swing the vote.

So at least write the letter and make it more expensive for the opposition to win. Who knows? You may start a movement.

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Comment by aqius
2008-05-24 09:29:40

JP

yer comments are dead-on accurate.

with politicians it’s always “money vs. pitchfork mobs” when it comes down to influence. amusing watching em play both sides of the fence on issues . . . bandwagon jumping . . . switching sides w/tortured wordplay justifying whatever they do to be on the “right” (more votes) side of whatever garners attn.

(of course sometimes you DO have the occasional ace-in-the- hole/dirty secret/skeleton-in-the-closet to use against an elected official, but thats few & far between.)

 
 
 
 
Comment by Prime_Is_Contained
2008-05-24 14:12:55

“I am so nauseated by our government punishing careful savers and people who chose not to buy into the bubble. ”

I’m not feeling punished. My rented house is losing “equity”, but it’s not my loss; stocks will get punished, but I’m not complaining because I’m invested on the short side.

How am I being punished again? My net worth is increasing…

Comment by No Genius
2008-05-24 20:28:47

I see your net worth has increased markedly from the short side since March, eh? Wait, let me guess, you went long USO and all the transports just before it launched and you turned negative on this market two Fridays ago. Am I right?

 
Comment by reuven
2008-05-24 22:58:33

If you have savings, you’re being punished! While I congratulate you on your short sales, you certainly can’t blame someone who just wanted to put his money into bonds or CDs, can you? Certainly someone who saved carefully and wanted a fixed-rate investment can’t be blamed because he wasn’t savvy enough or risk-tolerant enough to short stocks.

And responsible people who saved money are being screwed by our government with lower interest rates, a weakened dollar, and inflationary policies. That’s being punished.

You’re being punished, too, because you’re forced to take risks with your money that you may not have. Just because it worked out well for you doesn’t mean the situation is right.

I, too, took moves to protect myself. I saw the bubble burst coming years ago.

While I don’t care to short stocks because of the potentially unlimited losses I could incur, in 2005 I started moving more money into foreign stocks, and stopped buying broad-market domestic index funds (which had a considerable amount of exposure to banking and housing) switching to a hand-picked set of conservative dividend-paying stocks with as little exposure to banking and housing as possible.

Just because I made money in, say, Scandanavian index funds doesn’t take away from the fact that I’ve been victimized by low interest rates. I’ve been punished so Harry Howmuchamonth’s house won’t drop in price as fast as the market says it should.

 
 
Comment by snake charmer
2008-05-24 17:05:54

The funniest part of that snip was “safely in his villa in Colombia.” I’ve been to Colombia recently, and many parts of the country have improved dramatically, but all the same it only would take is one FB angry enough to put a contract on Mr. Gilletti’s head and he’s a dead man. If I were him I wouldn’t take the same route to work too many days in a row.

 
 
Comment by Tim
2008-05-24 07:14:04

“‘I found it more reasonable to buy, naturally, because of the equity,’ he said. ‘The low home market’s probably going to last for another year or so but then it’s going back up - there’s no question about that.’”

Cheaper than rent, not based on the cashflows, but based on the equity? Market is down over 25% and this moron is still banking on “obvious” equity. Not only do we need 20% down requirements, there should also be some kind of IQ limit.

Comment by reuven
2008-05-24 07:16:33

The 20% down requirement was, indirectly, an IQ test. It takes some degree of intelligence to plan, budget, and save $40K to buy a $200,000 house.

 
Comment by Houstonstan
2008-05-24 07:24:15

It’s worse than that : He is 71 so may not get to see that supposed equity growth. I hope he has a strong ticker for when he finds out he was wrong.

I can see it now on the corroners report. Cause of death: The bursting of his bubble.

Comment by Incredulous
2008-05-24 13:56:39

Hilarious.

 
 
 
Comment by Ben Jones
2008-05-24 07:15:50

‘In Miami, sales dropped 47 percent, with just 281 homes changing hands’

Jeebus folks, this is a disaster. Aren’t there something like 80,000 condos built or in the pipeline in Miami alone?

Comment by Tim
2008-05-24 07:26:10

I am aware of over 15 highrises under construction in the Miami area, while the existing ones are over 30% down in price from the peak, with huge inventories. Most are foreclosures or short sales. It is reasonable to expect to pay 30% or less of peak prices at the bankruptcy and bank auctions that will occur over the next few years.

Comment by spike66
2008-05-24 08:21:43

“It is reasonable to expect to pay 30% or less ”

I think efforts to unload them will have prices cut far lower than that. Job losses alone will cause rapid price destruction.

Comment by Tim
2008-05-24 08:37:43

Note that is “30% of” not “30% off.” Hell if we get less than that, I’ll probably pick one up. You can already get ocean and city view for $300 sq ft. Less than $100 sq ft for a well built highrise would be sweet until the storm damage comes.

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Comment by SeattleMoose
2008-05-24 07:23:51

“‘It’s shark time right now,’ said Ryan Greenblatt, a real estate agent in Boca Raton. ‘Everybody’s swimming, looking for deals.’”

Just another ploy from a starving REwhore to bag a commission. The “deals” will be had when the market is done crashing. It is only in the midst of crashing.

FOOL!…….(said loudly with a mohawk and lots of gold chains)

Comment by Prime_Is_Contained
2008-05-24 14:18:40

And one of the signs that’s it’s close to done crashing will be when the general societal concensus is that those sharks are crazy to be buying.

Interest twist, isn’t it? When everyone thinks what we think right now, we shouldn’t think it anymore.

 
Comment by desertdweller
2008-05-24 18:42:41

Dang, I Wish it would improve in my gated community.
“It is different here”. I swear, the prices have not adjusted downward in particular,Right Here.
I just pulled up the MLS for 1999 and the prices in here were $120k to 170 max and now they are still at the peak which is list $435-465k.
Um, I guess it IS different here.

Waiting for a shoe to drop.

 
 
Comment by taxmeupthebooty
2008-05-24 07:28:12

2003 wow pricing = recession
2001 pricing and you in a “D”………….

Comment by Fuzzy Bear
2008-05-24 08:43:42

2001 pricing and you in a “D”………….

2000 pricing and you will fall back to the normal long term growth trend which is the correct pricing for todays market!

 
 
Comment by diogenes (Tampa,Fl)
2008-05-24 07:29:38

‘If you have to sell right now, you’re at the mercy of a mean, bottom-feeding market.’”

I cannot help but look with contempt to these moronic Realtors(tm). They really think overpriced and manic purchasing is NORMAL. When things settle back down to a reasonable price level, it’s “Bottom-feeding”.

I truly believe, based on everything they say, that they expect a short-run trough in prices and sales, and then off we go to the next “new paradigm” of massively escalating prices and sales.

What this idiot fails to perceive is that the BOTTOM is the New TOP!!! Welcome Deflation!

Comment by Grey
2008-05-24 07:48:27

I swear, it’s like the concept of affordability is some strange and alien concept!

Paying 40 percent of your gross income towards a mortgage and all the other accoutrements that go with it, is NOT affordable. If you subtract taxes, retirement contributions and healthcare premiums, it leaves you with substantially less to pay for housing. If you run the numbers, factor in the cost of living, it becomes painfully obvious to intelligent people that something is seriously wrong.

Obviously, idiots in the real estate industry completely dismiss items such as savings and healthcare needs. However, those two things are the MOST important to my husband and me, especially since my husband has MS, and we spend a tidy sum on medical expenses.

Don’t any of these people have calculators or read the news about the rising cost of essentials, like fuel, food and healthcare?

Comment by Fuzzy Bear
2008-05-24 08:40:38

Obviously, idiots in the real estate industry completely dismiss items such as savings and healthcare needs.

Most in this industry have only a high school education, but want you to believe that they are professionals who know finance and economics. The bottom line is they don’t give a damn what happens to the consumer as long as they get their commision!

Comment by Grey
2008-05-24 09:43:13

Absolutely agreed. Back in 2001, when I purchased a home in Franklin, TN, I had a limit to what I was going to spend on housing. So, I find this house, make an offer, the sellers counter-offered, and I could not get them down to where I needed to be, so I didn’t make a counter-offer and walked away. There was a $ 4000 difference, which isn’t really much. Naturally, the agent pitched the “but it will only cost you a few dollars more per month.”

My reply was, “What’s the point in having a budget if you’re going to deviate from it.” I knew she was angry, but I didn’t care. A few days later, the sellers said they would come down to my final offer.

This agent was sort of a friend of the family. When I sold my house, the potential buyers wanted me to fix things that did not require repair. I told my agent to call off the deal, and those buyers could go find another house. Once again, she said “but it will just cost you a few hundred more dollars, and you’re going through a divorce, and you may not sell it”. I went ballistic on her. Naturally, after the potential buyers were told that I was not going to “fix” the bullcrap items, and said they could look elsewhere, they dropped their demand to have anything else “fixed” and we closed on the house a month later.

Sadly, my sister used her twice, and, long story short - this lady was so full of sh*t. I have despised real estate agents since then, because it was so clearly obvious that the ONLY thing she was interested in, was her commission. Agents capitalize off of people’s emotional involvement in buying a home, and unless you are logical and detached (or perhaps hard-headed like me), you’re bound to find yourself in a difficult situation.

Being hard-headed does have it’s advantages… sometimes.

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Comment by snake charmer
2008-05-24 17:13:50

Excellent story. I find myself understanding realtors a lot better now that I have started treating everything they say as a lie.

 
Comment by flato pa
2008-05-25 09:12:13

The one thing that I REALLY hate is Realtors buying anything that might be a good deal then selling it. When I was looking to buy everything that I liked at the price I could afford was bought the first day listed. Few months later some were for sale again for more money. Could Kick myself for not paying more in 2000 but like others I HAVE A BUDGET. The POS I ended up buying will be paid off in 44 months I paid 127K but to me it is maybe worth 80K I did not nor will I ever buy though a realtor. The seller of this POS had 10 offers from Realtors before I bought for more money or promises they could sell the place for more than asking. Thank you greedy realtruds for making price discussions impossible.
So Realtors knowing what is coming on the market the, Greed of salespeople has made getting a house that is both livable and within ones budget a “Pay me now or pay me more later” game of speed deals. Realtors know what the AVREAGE income level is which were personal 34K, household 70K when I bought, so EVERYTHING livable was marketed at 3-5 or more times the average, no matter what the condition, the seller NEEDED or thought they could get. Buying this place was a very big mistake for me, thank you very much Realtors for buying something I would have liked at I price I could have handled before you even listed it! So how’s that work? 6% off because you are the agent then jack the price up 20-50K then sell it and make 6% on the jacked up price, you have who’s best interest at hart, Seller? Buyer? Anyone doing this can DIE in Hell, Burn in Financial flames of ruin. Tell me the system is NOT GAMED prove to everyone Greed is not a factor. Integrity, Honesty you know those words are in a dictionary but that’s about all you know about them.
Strapping your butts to a fire ant mound for a day while I ask you questions might make me feel better until the screams stopped or you told the truth, the screams would stop first, the truth hurts more than the bites. E.S.A.D!

This did not make me feel any better only bitterer. Sorry for the rant, I will read it tomorrow and laugh at myself, maybe.

 
 
 
 
Comment by jimo
2008-05-24 07:50:29

i’m totally with you. there is absolutely no way to reflate housing this time without inflating personal incomes. and that ain’t happening any time soon. so everyone who is out there buying, better be doing it because they want a place to live and expect to lose money off of their new ‘investment’. and now, when they calculate the total cost of their home, they need to include annual price depreciation.

Comment by kirisdad
2008-05-24 08:25:36

Agree, how do you increase wages when Tampa lost 27,000 jobs? Wages will go down with competition for jobs. IMO you can’t have sustained inflation without wage growth. Continued stagflation will bring on the next depression and it will begin in Florida, because wages aren’t going anywhere in FL. The only solution for FL is that home prices have to continue to fall and fall faster than they have been, to date.

Comment by yogurt
2008-05-24 09:59:44

IMO you can’t have sustained inflation without wage growth

Sure you can. Check out Zimbabwe.

You can’t have sustained house price inflation without wage growth, but you can certainly have consumer price inflation. Houses are assets, not consumables.

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Comment by diogenes (Tampa,Fl)
2008-05-24 07:38:11

“Until banks are willing to take a short-sale, bulk condo deals will not happen, Zalewski said. ‘There is not a lack of funding, product or willingness,’ he said. ‘Developers want to sell, buyers want to buy, but banks don’t want to take a writeoff.’”
“Zalewski and others in the condo industry said the game will turn once regulators step in.”

This man understands that the banks aren’t going to get the “appraised price” that was in the contracts. It was all really just a bad joke.
What he doesn’t seem to recognize is the banks CAN’T take the write-offs. They leverage money at 10:1. If they write off $100,000, they lose $1 Million in lending capacity.
The banks are so over-leveraged on these deal that they are essentially INSOLVENT. Can you say that…..I N S O L V E N T..??…………I knew you could.

Notice more and more stories of banks not forclosing, or waiting a year or longer?? If the regulators force the sales, it will be time to close the doors on another greedy lender.
Can we say Financial Crises? Yea, I knew you could.

Comment by joeyinCalif
2008-05-24 09:10:31

Sure.. they could absolutely crush the banks if they wanted to, but i don’t think regulators will force anything.. support and stabilization of the financial system is the plan, however long it takes and at whatever cost.

 
 
Comment by Tim
2008-05-24 07:39:46

To recognize the facts would mean that Realtors who think they are “professionals” would have to consider the possibility they will lose their McMansions and have to beg for a job at McDonald’s. Sometimes dreams are all you have.

 
Comment by svguy
2008-05-24 07:40:38

When I see a quote from Lawrence Yun I automatically skip that section.

What a useless POS.

Mike

Comment by Fuzzy Bear
2008-05-24 08:46:03

When I see a quote from Lawrence Yun I automatically skip that section.

Lawrence who?

Comment by Ouro Verde
2008-05-24 10:29:50

Me too.

 
 
Comment by Olympiagal
2008-05-24 09:44:50

I, on the other hand, eagerly read what Yun produces because I know I am going to get a hearty laugh.

 
 
Comment by RJ
2008-05-24 07:41:11

‘When you look at a $1 million house, you expect a castle, what we found were average houses. What we were finding was really nothing.’”

so we bought it.

Comment by diogenes (Tampa,Fl)
2008-05-24 08:00:59

………………….so we bought it.

Pavlovian Conditioned response from RealtorSpeak:
“Prices always go up”
“Buy now or be priced out forever”.
“There’s never been a better time to buy”.
………….blah, blah, blah.

He listened to the “professionals” and made a rational decision.

 
 
Comment by Ouro Verde
2008-05-24 07:42:14

“So now he had to decide whether to keep trying or give up on Florida for good, take what was left of his savings and hop the 7 p.m. bus to Nashville.”

I am not sure who I feel more sorry for, this guy who is single, or some dad who is supporting kids, wife, mortgage, and a three hour commute. Let’s hear it for Dads! Head of house holds remind me of that movie where they built the pyramids, one stone at a time.
It could get worse.

Comment by Faster Pussycat, Sell Sell
2008-05-24 08:12:32

Nobody asked the “Dad” to pop out three sprogs without the wherewithal to pay for them.

They are fully equivalent.

One could possibly feel sorry for the crotchsprogs for having a deadbeat of a father but not for the “Dad”.

Comment by spike66
2008-05-24 08:31:06

“It could get worse.”

I do think it will. This kind of financial meltdown has social and political consequences. I suspect the lame efforts by Congress to mitigate foreclosures is a recognition of what might happen when you have a few million formerly middle or working class Americans now burning with resentment and anger, and millions more with limited prospects for reasonable employment and facing rising food and gas costs.

 
 
Comment by palmetto
2008-05-24 08:20:01

“‘Illegal workers,’ Smith said. ‘It’s frustrating as hell. I’d be glad to work for a living. I can do framing and high-end trim work. I can cut rafters and stairs. I know what I’m doing. But try to make it on $6 or $7 an hour.’”

This is a large part of the problem here in FLA. There were skilled carpenters were passed over in favor of illegal workers. Having skills and knowing how to do things right, these were not exactly considered valuable during the bubble. I think we’ll be hearing many, many stories of disastrous construction defects over the next few years, especially in Florida. And I hate to say it, but I’ll be smiling like the Cheshire cat when I hear some numbnuts local homoaner whining about the mold, the leaking roof, the cracks in the foundation, the windows popping out and the front door that won’t close.

Comment by palmetto
2008-05-24 08:26:45

Oh, and LMAO, went for a tour of a few of the “fucco” (false stucco) developments around here recently, and noted that in some cases, chunks of the crap are falling off already.

Comment by JP
2008-05-24 08:55:35

fucco = LOL. I plan on stealing that.

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Comment by Ouro Verde
2008-05-24 10:33:56

If stucco is false cement, then what is false stucco?

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Comment by Incredulous
2008-05-24 14:06:28

faux cementoid?
faux cement to the second power?
pseudo-faux-cement?
Luxury Florida Housing?

 
 
Comment by Kid Clu
2008-05-24 11:01:18

Palmy,
In GA we have “bricko”. False brick that comes in sheets the same size as plywood. In less than a year, you can see every seam where the bricko is put togther on new houses.

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Comment by Sammy Schadenfreude
2008-05-24 08:38:41

American workers continue losing their livelihoods to illegals, yet continue voting zombie-like for the same Republicrat whores and swindlers who are actively aiding and abetting illegal immigration or amnesty. It probably never occurred to Smith the Carpenter or millions like him to turn off their TV and start actively supporting groups like NumbersUSA, that could bring a real change to our suicidal immigration policies and back worthy alternatives to the Republicrat Bozos now oozing through the corriders of power.

Comment by palmetto
2008-05-24 08:55:46

Forget about livelihoods, how about Americans losing their lives? Here’s a review of a book called “God’s Middle Finger”, by a British travel writer who spent time in the Sierra Madre. Americans have no idea what’s coming soon to a community near them, if it hasn’t already. Anarchy.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/03/17/DDJAV0BL0.DTL

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Comment by Bill in Carolina
2008-05-24 10:38:44

If you had a goback machine you would be able to read posts on this blog starting in 2006, predicting “blood in the streets” by now. After all, a million FBs were not going to go quietly.

 
Comment by Ouro Verde
2008-05-24 10:39:24

A store in MO is offering guns or gas.
And my buddy sam told me to buy a trumpet boat horn for protection instead!

 
 
Comment by CrackerJim
2008-05-24 16:52:00

I don’t think this is a Republican mentality; it is a moronic Congressional mentality. Democrats are fully on board with amnesty for illegals. Republicans want them for cheap labor; Democrats want them for cheap votes.

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Comment by Jas Jain
2008-05-24 07:52:07


“‘Those owners will never sell their properties,’ she said. ‘They’re waiting for the next big boom.’”

For twenty years?

Maybe, they wouldn’t need to sell. They will let lenders take the property off their hands. Forced liquidation is where many would end up.

Jas

 
Comment by diogenes (Tampa,Fl)
2008-05-24 07:56:33

“While the pace of sales is increasing, there is trouble closing a sizable percentage of pending offers — a phenomenon Dutoit thinks is partly because of short sales being denied by the banks.”
“‘We’re seeing over 50 percent of the homes that go pending come back on the market,’ he said.”

Which begs the question: How many houses actually SOLD?? By which I mean….Closed and title transferred.
Not under “contract”.

With that as anecdotal evidence, are “sales” really improving, or is there just a lot more speculating on the downside??

Comment by Tim
2008-05-24 08:03:59

Sales are actually increasing many of the harder hit areas as ppl are finally beginning to accept substantial haircuts. The lower numbers set the new comparables. Many ppl are pulling the trigger because they think that a foreclosure 10-20% of the last set of comparables is a steal. Price decreases, however, are accelerating.

 
 
Comment by Bill in Carolina
2008-05-24 08:18:11

“… I don’t know what to say. I’d just as soon get out of here.”

“We gotta get out of this place,
If it’s the last thing we ever do,
We gotta get out of this place,
Girl, there’s a better place
for me and you.”

 
Comment by Left LA / Moved to Chicago
2008-05-24 08:18:43

“Broker Carla Bonten said one major reason why the Sunshine State defies the country’s average is Florida’s weather. ‘We’re in paradise. That’s what everybody says,’ she said.”

These Florida “paradise” comments are laughable. As someone who has done a few laps around this planet, Florida and its weather is far from paradise. If 5 months of beautiful weather coupled with 7 months of steamy, stormy hell is your definition of “paradise”, then Florida is for you.

Because I travel so much, people often ask me where is the ideal place for weather in this country. My answer: San Diego county (ex La Jolla/Del Mar).

Comment by palmetto
2008-05-24 08:22:24

I agree with you, lefty. I spent a little time in that part of CA and left with the impression that if ideal weather existed anywhere in the US, that’s where it is.

 
Comment by Fuzzy Bear
2008-05-24 09:01:13

“Broker Carla Bonten said one major reason why the Sunshine State defies the country’s average is Florida’s weather. ‘We’re in paradise. That’s what everybody says,’ she said.”

Carla Bonten: Just tell that to the individual who just lost their job in Florida! With the rising number of foreclosures in Florida, it certainly does not look like the sunshine is paying the mortgages.

Carla, the only sunshine is the sunshine you are blowing up peoples butts with your BS!

 
Comment by Sammy Schadenfreude
2008-05-24 09:05:53

Getting accosted by panhandlers every ten steps in places like downtown Tampa and St. Pete’s isn’t my idea of paradise.

Comment by palmetto
2008-05-24 09:09:05

I used to get panhandled in downtown Miami, near the government office buildings, but so far haven’t had it happen in Tampa. Wouldn’t know about St. Pete, haven’t spent enough time there to get panhandled, LOL!

 
 
Comment by Olympiagal
2008-05-24 09:52:54

Perfect weather might depend on the person. My manufacturing specs do poorly in high heat and lots of sun. For me, Olympia has the perfect weather, almost never too hot, winter has little snow, pretty and refreshing rains fall…just right!
I do wish we’d get a bit more rain, though. I actually have to get out the garden hose in summer.

 
Comment by svguy
2008-05-24 09:59:20

I attended a seminar recently were the speaker was from Sarasota.
So before the meeting started I started to ask him about the Florida
real estate market. He said prices had come down, blah, blah, blah. But what was really funny, and believe me this guy was funny, was that he described Florida’s weather as great in the winter time and “African hot” the rest of the year.

Mike

Comment by svguy
2008-05-24 10:00:45

Edit- where not were.

 
Comment by Bill in Carolina
2008-05-24 10:43:12

To me, Sarasota has two months of cool to chilly weather and ten months of great weather. You could often find me playing golf (and walking the course) from June to September, when the green fees got really low.

“Mad dogs and Englishmen,” I suppose.

 
Comment by Meerteekah
2008-05-24 13:24:44

I’ve lived in South Florida for 34 years, and it’s three months of hellish hot/humid/stormy weather (and in the worst years, hurricanes), and three months of exceptionally fine weather: truly paradise. Some years, four or five months of fine weather. This winter lasted a bit longer. March and April were lovely. Heat didn’t really hit til May. July/August/September are horrible. June and October varies, but tend to verge on quite uncomfortable, depending.

But November through April tend to be pleasant, with December/January/February/March being our months with the best days. February is always magnificent. Lots of festivals to enjoy outdoors for good reason.

But for folks who hate the heat, those three “deep summer” months are a nightmare. For folks who like heat and beaches, they’d probably think it’s just fine. And I know folks who love that blazing light and thick heat. Weird.

Me, I live for those five beautiful month, am okay with the 4 lesser but nice months, and dread the three months-of-hell and the terrifying hurricane watches/warnings.

I do think prices need to drop more. And I say that knowing I’m losing–I have a paid for home and undeveloped lots (owned for years and years) that now are worth a LOT less, and will be worth less in the year(s) to come. But for people to live decently, we need to deflate from the crazy-ass boom. It’s better for the general good, rather than for investors and RE folks. And that’s fine with me.

M.

 
 
Comment by SaladSD
2008-05-24 10:43:02

No, NO, NO, san diego sucks. It’s raining, right now!!!! (please don’t foist anymore lazy-assed carpetbaggers on us…)

 
Comment by deeogee
2008-05-24 15:10:06

not much coral reefs unfortunately in San Diego, plus the water in CA is freezing

 
Comment by lonestarQT
2008-05-25 03:55:43

Exactly! We lived in south Florida for two years after being transferred from San Diego and I heard this “paradise” line all the time. I’d say, “Are you kidding me? Have ya been to southern Cal or Hawaii? I’ve been to paradise and this ain’t it.” Hot sticky weather, hurricanes Katrina, Rita and Wilma, crime, racism, horrible scary schools, killer lightning every day at 2:00, voted rudest (and uninsured) drivers and the meanest people you’d ever meet. Couldn’t wait to leave.

 
 
Comment by Chip
2008-05-24 08:26:01

“Tempering the optimism is the recognition that many homes changed hands through short sales. One-third of Ubaldini’s current business is short sales.”

OK, I give. Why should this temper optimism, rather than fuel it? Actual sales mean “price discovery” is happening - there IS a price at which a buyer will buy that house. Reminds me of the anecdote yesterday, here or elsewhere, about the grossly obese man who wanted to keep his armrest up, claiming it was a problem. The woman sitting down next to him simply asked, “And how is that MY problem?”

I don’t think would matter one bit if ALL sales are short sales - bad timing and decision-making that caused debt on a property to exceed its current market value in no way affect that current value.

There are two companies that created a method of growing real diamonds - I think one in Boston and one near Miami. There is great incentive for the diamond cartel to either murder the people who hold this secret or to buy them out. Initial reactions included, “I’d still rather have a real one.” (Note that these are really truly real diamonds and cannot be distinguished from others by spectography or other means.) so the “What-if” question was posed: You walk up to a rich young couple at a cocktail party; you are well-known to them; you show them two identical x-carat diamonds and offer to sell the grown one for 30% of the cost of the other. Which one will the woman choose?

That was a brief summary of a long story - I’m sure I can find the link. The point was that a house is a house and the value of that house is in its location, its construction, its view, its neighbors - almost anything EXCEPT what is owed on it.

Comment by palmetto
2008-05-24 08:33:46

Wow, Chip, excellent post. Right on, bro’.

 
Comment by Sammy Schadenfreude
2008-05-24 08:52:03

I believe one of the methods of creating real diamonds is to shove a lump of coal up some greedhead FSBO’s ass, and in two weeks they’ll clinch it into a real diamond.

 
Comment by Fuzzy Bear
2008-05-24 08:53:54

The point was that a house is a house and the value of that house is in its location, its construction, its view, its neighbors

And over time, that can change to the negative which is part of the problem in Florida with the increasing foreclosures and those who have ruined the home because they were foreclosed on by the lender.

 
 
Comment by Renterfornow
2008-05-24 08:42:26

Listen up realwhores.

It is NOT a good time buy a house.
Plus you get no commish and eat grass. Ramen getting to expensive for ya.

 
Comment by Sammy Schadenfreude
2008-05-24 08:42:34

‘They’ve been telling me the sky is falling for the past few years, and you know what? I don’t have a single piece of sky in my hair.’

Please line up behind me to trout-slap this smug little anal polyp.

 
Comment by Sammy Schadenfreude
2008-05-24 08:47:25

“‘It’s shark time right now,’ said Ryan Greenblatt, a real estate agent in Boca Raton. ‘Everybody’s swimming, looking for deals.’”

Swimming with the sharks…unintentionally, this realtor conjures up the accurate spectacle of foolish knife-catchers venturing back into the water to get a deal, unaware of the legions of Great Whites lurking in wait for the Greater Fool Feeding Frenzy to begin in earnest.

 
Comment by Sammy Schadenfreude
2008-05-24 09:03:01

‘What my husband’s tactic was, he went in very low. The house was listed at $999,000. He put in an offer at $850,000 or less,’ Lopez said.” Eventually, the sellers settled on $900,000. The couple will close next month.

Bravo, Genius Husband. Negotiating a whooping 10% reduction on a still grossly-overpriced property. Wait till the comps start showing 50% and 60% haircuts and are being sold to more patient renter-vultures before you start complimenting each other on your home-buying acumen.

Comment by Prime_Is_Contained
2008-05-24 12:38:09

You got it, Sammy! Median already shows a 24% drop, with much more to come, and they settle for 10% off on a property that sat dead in the water for the last 1.5yrs.

Friggin mental giants.

 
 
Comment by AnonyRuss
2008-05-24 09:15:39

“Then he came to her home and threatened her with an eviction. Freed said she told him: ‘Go ahead, I dare you. They’re looking for you on eight properties. Go to the courthouse and I can come and watch.’”

Nice !

 
Comment by Muggy
2008-05-24 09:50:51

“‘This man is going to take advantage of another family,’ Freed said. ‘They will be the ones out on the street while he takes off with their money.’”

If you are lurking and new to this blog, hello. If you are like me and navigating the rental scene in difficult times, please use this site and some other sites to make good decisions. If you live in Florida, all of the information you need to make an informed decision is free and public. For example, if you live in Pinellas County, you should use two public sites:

1. Property Appraiser (http://www.pcpao.org/)
Click on ‘Search our database’ and search by the address of the place you are considering renting.

2. Public Records
(http://www.pinellascounty.org/public_records.htm)
Once you see who actually owns the house, you can browse the public records to see what type of mortgage the owner has.

Do not be afraid to post questions! Seriously, even though most of us can be snarky a-holes, we’re good peoples.

Comment by Muggy
2008-05-24 10:38:07

That post is my good deed for the year, back to my haranguing self.

 
 
Comment by walt
2008-05-24 13:25:40

Remember those million dollar trailers in Briny Breezes

Three for sale less than 300k now!

http://www.realtor.com/search/searchresults.aspx?ctid=9808&typ=8

Comment by FLDude64
2008-05-25 15:09:35

The last bona fide arms length sale in there was for $125,000 on 4/15:

Legal Description: BRINY BREEZES INC MOBILE HOME LT L-29
Parcel Control Number: 09-43-45-34-40-012-0290
Sales Information:
Apr-2008 22587/0010 $125,000 PRIOR LEASE-COOP
Mailing Address:
FRENCH STEPHEN M TRUST
29 CORDOVA AVE L-29
BOYNTON BEACH FL 33435 7382

 
 
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