Florida Prices Down, ‘Projects Going To Be Strained’
The housing market is big news in Florida. “Attendees at a little-publicized workshop in Tallahassee received a harsh storm warning this week from the head of Florida’s Office of Insurance Regulation. Insurance premiums are going nowhere but up for the foreseeable future, and there is nothing he or anybody else can do about it.”
“‘I don’t want to disillusion you in any way,’ he said, addressing the likelihood of achieving lower rates. ‘But we’re not returning anytime soon to a reversal in insurance premiums.’ McCarty rendered a stark and candid picture of..his powerlessness to contain its costs. ‘For a long time, seniors of fixed means came here when land was blissfully cheap,’ he said.”
“All panelists agreed, the proactive prevention of damage from hurricanes must ultimately become everyone’s responsibility. As McCarty pointedly observed, the only other alternative is the California solution to the problem. ‘In California,’ he explained, ‘insurance policies don’t cover earthquakes.’”
“Some bankers are concerned the flush economic times might be ending. Grand Bank CEO J. Russell Greene said the loan market is slowing and his bank’s commercial real estate lending is flat. ‘We’ve been in a very good economy that I think is seeing its slowdown,’ Greene said, adding that ‘the test of the bankers is yet to come.’”
“‘Loans are slowing down dramatically. Interest rates are rising,’ he said. ‘The cash flows of some of these companies on some of these projects are going to be strained.’”
“Despite a slowdown in sales of existing single-family homes and condominiums in Collier this season, housing starts surged in March, increasing 71 percent compared to the same month last year. As for sales of existing homes, the Florida Association of Realtors reported in late March that sales of existing single family homes in Collier were down 47 percent compared to last year’s robust resale market.”
And a Fed Govenor spoke today in Naples. “While some U.S. residential housing markets ‘have a degree of froth,’ investment activity in these regions is starting to slow, Federal Reserve Board Governor Susan Bies said on Monday. When asked by reporters after a speech to a community bankers’ group which particular markets concerned regulators, Bies said: ‘The markets where the relative growth in housing prices far outpaces the growth of basic employment and population.’”
“In her speech, Bies expressed concern about practices like ‘condo flipping,’ where condominiums under construction are bought and sold by speculators long before buildings are complete.”
Don’t miss the tables showing prices and starts at the bottom of the Naples News link.
So froth=relative growth in housing prices far outpaces the growth of basic employment and population.
But bubble=something the Federal Reserve doesn’t know about until after it has burst.
Well, gee, that clears things up for me.
Bies said: ‘The markets where the relative growth in housing prices far outpaces the growth of basic employment and population.’”
My questio to Ms. Fed is, Which state stayed affordable and doesn’t have froth?
Oklahoma maybe. Nebraska. Kentucky. West Virginia maybe. Alaska?
IOW, please NOBODY wants to live!
Na, Alaska is suprisingly expensive for a home. I think its because they are built to withstand earthquakes, blizzards, freezing weather and other freak envirnmental issues they deal with up there.
Actually from what I understand much of the buildable land is not in private hands. Many many miles of land is in the hands of the federal government and large chunks of the rest are native american reservations and also wildlife parks and preserves. It pushes up the available land prices.
Plus you have the dividend premium. Alaska pays its residents so that income work it’s way into the value of a home in Alaska.
that sounds right…places where even all those ‘new jobs’ serving coffee and stonecoldcholesterol aren’t coming.
Not Iceland or South Africa, according to today’s WSJ…
With accelerated global warming, most scientists believe the trend is now irreversible. Greenland is warming up again and seems promising.
Actually, house prices have appreaciated quite a bit here in Omaha, and we are now seeing increasing inventory and houses sitting much longer than last year. Nebraska is not immune to the effects of easy money.
(And Omaha is a very nice place to live, IMHO.)
I have lived in Florida a long time now & I hate how everyone is blamming the hurricanes for the slowing home sales. The majority of homes built here in Florida can withstand major hurricanes with minimal damage.
The slowing homes sales is due mainly to the false demand created by short term investors. For the last 3 years here everyone and their mothers became real estate investors. They say 40% of homes went to investment & 2nd home purchase but I am sure the number is a lot higher than that considering many developers & lenders were screening out “investors” so the investors would lie on the application or buy the home or condo under a relatives name.
Now there seems to be a real lack of interest to buy real estate as an investment & ordinary owner occupants can’t afford to buy. Homes are simply not selling, the real estate machine seems to have grinded to a halt. No one is buying the “entry level homes” therefore no one is moving up into bigger homes. Everything is priced way out of reach of ordinary people here, since the frenzy is over it seems people are just waiting it out, the fear of “being priced out” or there “not being any homes left to buy” is gone and buyers are simply waiting for prices to drop.
What is even more comical to me is that the same Realtors were using hurricanes in ‘04 and beginning of ‘05 as a reason home prices were going up…
Then when the market changed, they started using hurricanes as a reason RE in FL is going down…
Much like the stock market some news is always picked up to explain the trend… but an incredible amount of the trend (up or down) in the stock market or the RE market is driving not by news necesarily, but how people decipher that news to create a mass phscology state of what the market will do next…
This is much like my grandma’s religion. God was rewarding her if the weather provided good growing conditions for her garden; when the weather was nasty, it was God’s punishment.
So do you figure all these houses the big builders like Lennar and DR Horton are building are “hurricane proof”.
I would think not. They build them as quickly and as cheaply as possible and comply with minimum building standards.
They are interested in selling and moving on.
Sure a structure can be built to withstand a bad hurricane, but it is going to involve lots of steel, concrete and other heavy duty techniques. How many people can afford to build and above ground bunker?
How’s Homestead (was it?) . Have they rebuilt yet?
Did you guys not see the news about tornadoes in Kentucky over the weeekend? It seemed that most of the damage was done to newly built tracts of Mc Mansions. Not much left after the storm. That is how well these things are put together. Imagine paying a lot of money (do not know how much a Mc mansion is in Kentucky) just to be lumped in with the trailer inhabitants next door!
This is a point I have pounded on ad nauseam about the “great deals” people think they’re getting in TX on giant houses compared to what they left in Cali or wherever . . .
People, they’re JUNK. They’re cheaply built with every conceiveable corner cut! And higher price does not translate into higher quality. I’ve gone and looked at some new homes in the $1M plus range. Inner city ones built by what should be higher quality custom builders for a more discerning market. So, the first thing I always look at is windows, faucets and plumbing fixtures. In $1M plus places, I’m not seeing Dornbracht or KWS faucets or Pella or Anderson windows. I’m seeing Home Depot Delta faucets or worse, and junky aluminum windows.
If that is the quality of what they’re using on things you can actually see, I shudder to think what you can’t see!
I look at bathrooms, fixtures, doors, and exterior. If it has vinyl siding, with plastic doors, cheap laminate counters, and no name faucets, I am walking out the door, no matter how little they are asking. The price delta between the cheap, and the better, or even good stuff on a 350K to 900K house is minuscule.
It speaks to an attempt to cut corners and as I said, if they’ll do it on things you can see . . . watch out on the innards of the house.
I also think it shows a contempt for the potential buyer.
I HAVE A CERTAIN CONTEMPT FOR THAT BUYER/FLIPPER/MORON MYSELF.
I think from what I have seen, those little deatails, that they have been building complete crap for at least the last five years now. The stuff is as cheap and ugly as what you see in “low income” housing(seen both). These byers are living in a world of make believe-believe and it is-good luck…
Also saw that on the news - those McMansions were as flat as any double-wide Airstream, nothing left but junk and splinters.
I’m an East Coast builder. I wouldn’t buy anything built in the last 5 years around here. And I know I have 10 years of work ahead of me repairing all the junk that has been slapped up.
Homestead was a lot of wood frame homes and trailors. Just about all of Florida they build homes out of block and have very high standards on construction. Yes in a cat 4-5 storm you will get roof damage, but the walls of the house are pretty much 8″ thick block walls filled with concrete.
All those pictures they keep showing over and over on the news when a hurricane comes through are pictures of trailor parks. There should be an all out ban on trailors in Florida.
As far as homestead goes, yes that was rebuilt with in about 2-3 years of Andrew. Builders came in and cleared the wasteland and built block homes there. Lennar, Pulte, all the builders build homes that can withstand hurricanes. They have to, they won’t get permits or pass inspections if they don’t.
as much as SE florida construction, primarily due to CBS, offers more protection than typ tampa/orlando homes, they are still not tested to a true cat 4/5 hurricane in the last 10 yrs or so..Wilma was a low cat II and yet had considerable impact on SE florida thru power outages (poles destroyed) that lasted months and many roofs impacted ,many of them are tarped even now…
So Wood roof, in place due to wood lobby, still is the major chink in the armour for SE florida…I work w/ a contractor that makes a concrete sloping roof for high end homes but these are very few.
BS. I see single family homes and condos being built on the water using wood framing. Lennar does build w/block and some even come w/storm shutters. But the rest of the house is crap. Big cracks in the deck and window gaps. They throw them up as fast and as cheap as they can.
They can’t build wood frame, building codes require block in most of Florida. The only area they can use wood frame would be the panhandle. New condos are concrete floors, block walls, and in much of south florida tile roofs. Big difference between homes in South Florida vs Homes anywhere else in the US.
Trust me, homes and condos in Florida are built to withstand some serious wind. Many of the older communities in Dade and Broward Counties (like where I grew up) did just fine during Andrew and Wilma. The major issues were the power outages. The structural and roof damage was done primarily to older homes.
Now the big issue is the condo conversion. Apartments are allowed to be built wood frame, many of them in central florida are, developers used that as a loop hole to sell wood frame apartments as new condos (but they are legally known as condo-conversions).
Also, storm shutters, shatter-proof glass, or some form of window protection (simple mounting points for pre-cut plywood sheeting) has been required on all new houses for about 15 years in Florida.
My folks built their house five years ago and it’s a wood frame. They say that the connections are hurricane proof, but the house if wood, thru and thru.
Nobody who grew up in Florida, as I did, will buy a “stick” house unless they cannot afford a block home no matter what. That’s the first thing you ask or tell your agent: block only. Note that virtually all two-story houses have a frame second story. The roof on any house remains vulnerable, but the new specs for trusses and clips help a lot.
If I am not mistaken, after Andrew new building codes were implemented to withstand a Cat 5. There will be damage, but your home will still be standing. LinOrlando is correct, things today are build out of a cement shell.
Get serious. I’ve lived in Florida most of my life, and the million dollar houses going up are glorified trash. Cement blocks are not filled with concrete, and most cement block structures are only partially build of block; these rest is constructed of particle board or chip board, with styrofoam architectural embellishments. All are sprayed with stucco to hide the fact that they’re flimsy garbage. Most structures in Florida could not survive a category three hurricane, much less a category four or five.
A million dollar house in Florida is maybe worth a hundred thousand tops; more likely it is worth less than half that, and only because of the land.
The building standards in Florida are probably lower than anywhere else in the entire civilized world, and developers are ranking in fortunes with their carboard boxes and sparkling stucco.
I don’t know about Lennar, but I bought a house from DR Horton in Palm Beach County and it went through Jeanne and Frances and came through both storm fine as did all the other homes in the development. Houses across the street by other builders lost roofs, tiles, etc.
Not sure how it fared in Wilma. I sold it a couple of weeks before Wilma hit.
Just to clear up some basic confusion most of you have: wood structures are just fine, and perform very well in hurricane conditions. That includes homes built of “oriented strand board”, the stuff you call “particle board”. It is not particle board, but is APA-rated structural sheathing.
Hurricane Andrew destroyed Florida City and Homestead because the houses were very poorly built. Inspections were not done, or done poorly and construction techniques were terrible….very poor quality.
The same applies to other areas of Florida and the rest of the Country. Forensic studies of the storm damage revealed things like wood sheathing with about 5 or 6 nails into a sheet where 32 should have been as a “minimum”. Roof hold-down anchors and end-wall bracing were not installed.
I could go on ad naseum.
But the main problems with the better constructed homes have been roof shingles/doors/windows. When these fail, the house gets a lot of storm damage. Even when the structure stands.
All the newer homes built since 1994, wood frame included, have seen little to NO structural damage with the most recent hurricanes. The biggest failure has been unprotected windows, resulting in broken glass and water intrusion. (loss of shingles, too).
The newer storm-resistant windows/ roof tiles/ and doors, all subject to product certification will eliminate most failures. There will still be the issue of deterioration of the roof shingles due to UV rays. That is why I am an advocate of metal roofs in Florida, but the maintenance of the home is up to the owner.
The problem with the Kentucky/Tennessee/Ohio, etc interior states is that they are designed to 90 MPH winds, not tornadoes, and the homebuilders don’t put sufficient detail into hold-down anchors/ fasteners and shearwalls because they are not required to do it. Those regions of the Country don’t worry about high-wind damage, and you can see the results.
As for the Atlantic Coast states of the Carolinas/Virginia, they are just now learning about high-wind construction.
You folks tend to forget, it isn’t just Florida that gets Cat 4/5 storms, as those folks in New Orleans found out (although downgraded to 3 at landfall). Include Mississippi and Alabama and Texas.
The biggest problem is not WIND, it is STORM SURGE. The damage is from big waves washing everything off the beach. No buildings should go on barrier islands, but that is where all the people with money live, so restricting building will not happen.
The problem is, however, that the insurance system socializes the “risk”, making inland cheaper homes support the cost of rebuilding the waterfront. It is rigged to encourage building multi-million dollar homes on the “coast” because the owners have not been saddled with the true “cost” of insuring their homes. These homes will always be at-risk.
The post-Andrew/post 2001 Florida building code for coastal areas is actually pretty good, and probably the toughest in America. (Though not quite as tough as Caymans or Bahamas building codes) Homes built to that code properly generally came through Charley, Ivan and the like without major structural damage from wind.
However, fit and finish is not covered under that code, and is about as atrocious as you might expect.
The Cayman Islands were pretty much levelled when Ivan hit as a Cat 5. My sister lived in a nice condo by the beach. After the hurrican, when she went back to her place to assess the damage the only thing left of her place was the tile floor in the kitchen. Everything else–furniture, walls roof, was gone. Disappeared. So, I would hopeFl has better code than the Caymans. BTW, that hurricane was enough for my sister–she left and will never live in a hurricane zone again.
Even a building code that’s deisgned for 200mph winds isn’t going to be able to do much for storm surge if the structure’s 15 feet above mean sea level or less, and you’ve got a 20 foot or more storm surge hitting land. I’d say almost all of the Caymans damage I heard about was from surge and not wind.
No, the majority of newly built Florida homes cannot withstand a major hurricane. They are junk, built to look sturdy. Home inspectors are jokes. The building standards we hear about are rarely followed. Chipboard (”oriented strand board”) dissolves when it gets wet. A tile roof on top of this crap will collapse under stress.
If Florida home builders are so great, how come so many home owners have filed complaints against them?
http://www.hadd.com/
RE:Homestead- yes it is in the process of being overdeveloped as we speak. Way too many POS developments built on former potato fields that go under water with the first rainstorm. Ain’t no way these houses are built to withstand a major storm.
I agree for the most part. Investors are a huge reason for the increased prices. As people have said on this site before, investors react with a herd mentality. Once they smell trouble it’s a stampede to get out.
I have noticed a large increase in our Sunday real estate section and most importantly a lot of “just reduced” labels on homes. I would say 15-20% of the homes had those labels where as just 3 months ago I saw none. In addition, I didn’t see any full or half page adds for condo complexes they were all small individual home/condo adds. I guess they need room for all the inventory.
Orlandosentinal is full of ads for condo, condo conversions and new homes. They have many full page color ads advertising free HOA fees for 1-2 years & no closing costs for starters.
One “The Stratford” is offering a 15% discount if you buy 5 or more units.
Another was having a blow out sale a couple weeks ago offering to pay your mortgage for the first year (but only on the first 50 units bought that day).
My rule of thumb which made the housing bubble obvious to me several years ago was a simple question to any home seller, “Can someone in your profession/economic bracket, i.e. income etc., afford to buy your home” or “If you were just moving here, could you afford to buy your own home”. In a bubble situation the answer is always NO. Therefore, it was easy to predict that the housing bubble would collapse on itself once the regular pool of first time buyers got priced out.
I like to call this a buyer’s strike. I think we should stay on strike for a long time too!
‘In California,’ he explained, ‘insurance policies don’t cover earthquakes.’
And I have always found it odd that CA home valuations do not seem to reflect earthquake risk…
Repeat after me:
The government will bail me out…
The government will bail me out…
Works best if you are swaying back and forth at the time.
Forgot about that implicit govt insurance…
There isn’t all that much risk with an earthquake. How many homes have been destroyed in California in the last 50 years due to earthquakes? It’s a lot less than homes in Florida! Termites is probably a bigger risk.
Most people also don’t understand the purpose of the state insurance regulators. It isn’t to make sure insurance companies don’t overcharge, it’s to make sure they don’t undercharge. It’s very easy to sell insurance if you don’t care if you have enough reserves to cover the damages from a hurricane. Sell very cheap policies, declare lots of profits, and go out of business when the storm hits. State insurance regulators are not there to protect the consumer from high premiums; they are the ones requiring the higher premiums.
Your property insurance company requires you to purchase an earthquake rider which covers a large part of the structure, but leaves some of the responsibility to you (first 40K or something). The earthquake insurance is issued by a different entity.
FROTH MY ASS!! THESE MARKETS ARE FOAMING AT THE MOUTH!
Another area with a YOY decline!
A coworker informs me that he has “several neighbors” with multiple places for sale if I was interested in a condo in Sarasota. Funny thing - he told me they “all bought hoping to flip”. HOPING is going to be the next great fad.
dd
LET THEM EAT DOG TURDS…IN HELL!!!
FLIPPERS ARE GETTING THEIR SKIDS GREASED.
ROTFLMAO.
Glad you added “…IN HELL!!!” - apparently eating dog turds alone isn’t sufficient.
BANKRUPTCY WILL BE THEIR NEXT FAD!! GOOFBALLS!
Yeah I go to Sarasota often, just about every 3rd home is for sale there. Bradenton south to Naples was the hottest area for speculators, now there is a 2 year supply of resale homes on the market and builders are offering some pretty steep discounts.
Problem is everyone was predicting this massive wave of baby boomers but does not appear that any have arrived yet…
Yes Florida was a great place to retire back when you could easily sell your home up north and use that equity built up over 20-30 years to pay cash for a place when homes cost 90-120K in Florida 5 years ago. Now you try and tell someone who is 65+ you expect them to pay a half million for a house in Sarasota… Good luck, that retiree is headed to the Carolina’s, Texas or elsewhere.
Too many of those boomers cashed out their home equity to “invest” in FL real estate. Now that a crashing market is handing them back their heads on platters, they have no retirement money left to live out the remainder of their daze in Paridise…
I finally got around to reading a book my mother in law picked up at a yard sale here recently. It was written by a couple of people from the Palm Beach Post newspaper here back in 1994, and called “Pioneers in Paradise.” Some real eye-opening stats and copy about how the 1920s real estate boom went bust down here, swallowing up millions of speculator money and helping plunge the region into a nasty economic downturn that lasted for years and years. Educational, to say the least.
I heard that, lots of people in the 1920’s lost a fortune in real estate in 1928-29. Every 10-15 years someone starts the rumor down here that we are running out of land. It happend in the 1980’s when i first moved here and again in the 90’s. Same speculative fury, running out of land better hurry and buy before they run out of land and you are priced out forever and sure enough speculators start unloading, inventory goes through the roof and real estate stagnates or crashes for 4-5 years. The 90’s just saw stagnation. Early 80’s it was an all out crash.
There will never be a shortage of land. Don’t get me wrong, some day there will be but as long as we have greedy politicians we will never have a shortage of land. Governments designate land for public use or for protection, but money is king. If a developer wants a piece of land all they need to do is line the pocket of some politian. Naturalists make a big stink about it and go to court (as they should) but in the end the developer gets their way because he’s got more money than the naturalists do. It happens all the time. We are constantly infrining on so called “protected” land because developers either convice the community that developing it is in their best interest or they line the pocket of some politican.
I guess the neighbours can do the flipping between themselves then; maybe they can even drive up valuations and make sure the whole neighborhood profits for the extra home equity
I always love “earthquakes, who would live there?” from people in tornado alley or hurricane coast or winter wonderlands. What people in Florida don’t understand is that the hurricane premiums they are paying this year are in response to the hurricanes of 2004! not 2005. The increases this year will rise double for next year to cover 2005. The senior population are going to scream. The best part of the return to normal multidecadal hurricane patterns is that the most recently built porperties are the ones that will be affected most. There is some justice.
Normal? These are specifically cause by George Bush because he hates minorities.
But it is normal for the liberal media and marginalized leftists to blame things like hurricanes on a Republican administration.
Lets just blame the war on Bush, Halliburton stock is up 800%, have any sons you want to send? no
“But it is normal for the liberal media and marginalized leftists to blame things like hurricanes on a Republican administration.”
No, but it is easy to blame brain dead statements like the above on superficial ding dongs like you.
Perhaps a year ago on this blog a poster put up two photos of a small section of FL coastline (bay/harbor, Gulf Coast I think) to show the development which had occurred. Every square inch had been filled in. Yet another example of “market” (if anything in the US can be called that, given the tax code, et al) forces at work. Too bad when it comes to a sensitive part of the US like FL, we couldn’t have been more forward thinking. Warmer waters= more hurricanes plus higher sea levels. Not a good combo for the sunshine state.
Having early childhood memories of Florida I remember asking my dad why all the houses were all in the same place while there was so much unused land. This was early-mid 60’s when the last cycle was still in their collective memory. Simple. he explained, the houses that were there once got wiped out. Now 40 years later the houses have returned and so won’t the hurricanes.
(I have lived in Florida a long time now & I hate how everyone is blamming the hurricanes for the slowing home sales. The majority of homes built here in Florida can withstand major hurricanes with minimal damage.)
You would the hurricanes would increase the demand for new homes relative to flimsier existing ones.
Then again, other than having a cement ground floor occupied by utility rooms and living space starting on the second floor, it’s hard to stop damage from a flood.
Actually not all florida is beaches and coasts. Once you get a few miles inland there is not much flooding and homes are just built on concrete slabs that sit about a foot or two off the ground. I live in Orlando and we are a 45 minute drive from the nearest beach. Florida is a massive state, lots of land. Even a cat 5 storm would only bring water in a few miles, once you get west of I-95 you have little to worry about flooding even in the worst case storm. The winds will get you though.
have 2 places in FL- can’t give em away
Sure you can. Just contact me by email.
ANYONE NOTICE HOW OIL IS HEADED FOR $69 A BARREL? I’M SURE THE RE INDUSTRY CAN PUT A POSITIVE SPIN ON THAT.
Well, since people will no longer be able to afford to drive anywhere, they will want comfortable, luxurious houses to be trapped in.
Lots of people will start into condo’s to avoid commuting, so buy your condo now and avoid the price rises :D.
-start
+move
71% starts increase- are they nuts ?
OT but I just picked up my mail and had seven offers for CC’s, loans, etc. I think that there is an air of despairtion out there. I loved an added insert in my CU banking statement that lists a 4 yr new car loan @ 9.9% and a 5 yr @ 14.9%….does this tell you where they think interest rates are headed.
Given that recreational merchandises loans (auto, boat, RV, etc.) are tied to prime I think they will continue to rise at least another .5-1%. Makes me glad I bought me and the mrs.’s cars(used of course buying new is asnine IMHO) in 2004 @ 5.5% on 60 month notes. lol The only reason I even have these is to maintain my credit scores for when this unravels and the ony good loan programs require either a 720+ score or (if they can get it off the ground) an 850 “Vantage” score.
btw my new game on the phone with friends from out of state while driving around the neighborhoods is to utter “open house, open house, open house” with a smile.
When asked by reporters after a speech to a community bankers’ group which particular markets concerned regulators, Bies said: ‘The markets where the relative growth in housing prices far outpaces the growth of basic employment and population.’”
In other words, she is generally talking about markets where houses are bought and sold.
No, she is saying that the market that concern regulators are the markets where there are problems… it’s nice not to have to be specific.
OT - But, NOVA numbers are out on NVAR.COM / Market stats / Market Reports. YOY declines in most counties.
Yep, almost all areas listed are showing either YOY declines or flat prices for SFH.
The question is: will prices flatten out like in 1990 or eventually plunge:
http://tinyurl.com/mld22
“In her speech, Bies expressed concern about practices like ‘condo flipping,’ where condominiums under construction are bought and sold by speculators long before buildings are complete.”
I am getting sick of this false compassion of ‘concern’ from the RE industry, loan Co.’s, government agencies all after the fact when they have been left with their hand caught in an empty cookies jar.
OT-check out this Slate reaction to the new Century 21 ads:
http://www.slate.com/id/2139572/
These ads are horrible and stereotypical. The realtor plays on the wife’s emotions and gangs up on the husband. I guess this is the realtor “how to”: work on the wife because the husband (who has been reading this blog) won’t budge without her help.
I went driving around in Parkland Fl, an upscale suburb in NW Broward County. It has many 80’s homes on 1 acre plus lots with no HOA, and the newer Mcmansion communities with HOA, club houses etc..
An auction in the real estate pullout caught my attention. It was open bidding then round robin starting at $350k. Everything in the area on 1+ acre lots are $700k and up and that starts with the junk.
This was one of them. The current owners were there about a year and I beleive paid $590k. A good deal a year ago. The place smelled awful, rotting wood trim outside, filthy bathrooms etc.. There were 3 pages of bids, last I saw was around $430. Someone will most likely buy for the land and build a mansion. Anyway signs in this wealthy community are everywhere, most were FSBOs. Also did some browsings on realtor.com, virtual tours, Whats up with the homes with beds on the floor and half the rooms empty? These idiots buy homes they cant even afford to furnish and want to sell it at a huge profit not even a year later. Even saw one with a sign “We dont back up to the main road, stop and take a look”.
These people are screwed. The peak of tourist/snow bird season is over in 2 weeks, so if there isnt a miracle and sales skyrocket for April its all over.
I cant beleive the number of homes for sale on the high end. Who can afford these homes on a So Fla income? The taxes are $15k and the insurance can run $6k and up. I beleive these despearate owners can hold out for a few months but once their funds dry up, credit cards max, no more equity line, this is going to get very ugly.
Let them eat cake.
Bluto, I saw that same property.Obviously, they are living for their house and thought they could flip it for a profit but got stuck.
Parkland has NO commercial tax base so it all falls on the home owners backs. Taxes of $15,000 and Up are the norm- crazy.
Drive up and down 441 sometime and see the number of FSBO signs popping up. You are correct in that the “season” is over in a few weeks and the number of homes available is up almost 11% in ONE month and 100 % in SIX months. As I have been saying for some time, wait until the resets start to hit in June. Then you will see the panic set in.
Annual property taxes can be way higher than 15 thousand for many of these places. Try 25-50 thousand (up to 2.5 percent of the selling price, depending on location).
That’s an awful lot of money to pay year after year for the privilege of living in a glorified cardboard box with plastic trim.
bluto68,
There are plenty of people in S Fla that own business and can legitimately afford a Parkland house. Also doctors, lawyers,etc are making a ton of money.
Yes there are and I guess thats why so many of their homes are for sale. I make what is considered an Excecutive Salary in South FL, top 10% and I cannot afford to live what I consider comfortably in any home that is $500k +. That is with any savings at all or discretionary income left over.
Here is an example of falling prices. To the best of my knowledge nothing in this new community is priced under $500. In fact most of the listings I’ve seen are $650+, now there are different phases with varying sq ft and lot size, nut even still when this home sells at $489 or under it will begin the fall for the comps. Just takes one. This home is a steal considering the asking proces in the area now. Im waiting as I beleive these homes will be back at $400k in a year. In 2003 you could build one for $350-400. This asking price is already alomost back to ‘04 prices. Prices NEVER GO DOWN!
The link
Ok I dont know how to get the link to work
“http://westpalmbeach.craigslist.org/rfs/150086705.html”
Re: Susan Bies’ comment - The national increae in housing prices was 12% last year, IIRC. That fits her definition of a bubble, unless pop & employ increased by 12% last year…
OT: Quebec Housing Starts up 29% in March