The Housing Bubble

The Miami Herald reports from Florida. “The median price of an existing single-family house fell in Miami-Dade and Broward counties by roughly 20 percent in May. The number of houses sold were down 31 percent in Miami-Dade and 8 percent in Broward for the year. Compared to houses listed for sale, the raw sales numbers are striking. In both counties, 33,678 houses were for offered for sale, yet fewer than 900 changed hands.”

“Existing condo sales dropped dismally from last year but. In Broward, the median plunged 31 percent to $138,900. Real estate agents have attributed Broward’s steeper declines to the high number of conversion projects. The two counties had a combined 49,255 units for sale; 1,059 were sold.”

“One heavily discounted example: A one-bedroom, renovated unit in the Roney Palace Oceanfront Condominium, last purchased for $460,000, was listed at $165,000.”

“In 2004, Gabhan Kenna, a real estate investor and landlord, saw an opportunity to expand his business in Broward. Leveraging his appreciating properties, he increased his portfolio to nine homes. He rented several as Section 8 housing. Four years later, Kenna faces foreclosure on all nine because the rental market won’t support the overhead.”

“‘I am a landlord for 10 years. I have three kids in school. I am 47 and I have hit a brick wall,’ Kenna said.”

“All nine homes are for sale at less than $200,000.”

“Baton Rouge, La. investor Jerry Harper bought a second home last month at the Cosmopolitan, a luxury condo. The unit was reduced to $350,000 from $565,000 two years ago.”

“He also bought a second unit overlooking the water for $155,000, which he plans to rent. ‘Well, gee, when that stuff prices at what my stuff in Louisiana is pricing for. . ., it’s a no-brainer,’ Harper said.”

From CBS 4.com. “Because of recent skyrocketing short sales and foreclosures in Miami’s real estate market, many high rise buildings now have mold growing inside. Even some of the most luxurious condos in town have been affected.”

“This often happens because owners who are going through short sales or foreclosures end up cutting off their AC, sealing up the unit, and never looking back.”

“Even if the unit owner is long gone, condo law lawyer Kristy Phillips says once a bank takes over, legally it has to act like any other owner. This is something she says many banks are resisting. ‘They’re not paying their assessment the majority of time; they just leave the units vacant, they don’t turn the power on or anything,’ Phillips said.”

The Sun Sentinel. “Palm Beach County’s median price last month was $330,900, down 15 percent from $387,800 in May 2007, the Florida Association of Realtors said Thursday. The county had 702 homes change hands, off 5 percent from 741 a year ago.”

“‘Sellers are willing to make concessions, but they’re not willing to come down to what I call the ‘frantic’ prices,’ said Douglas Rill of Century 21 America’s Choice in West Palm Beach. ‘Buyers are still trying to buy at frantic prices.’”

The Palm Beach Post. “‘We believe the bottom is behind us,’ said Mike Pappas, CEO of a Miami-based brokerage. ‘Prices are at their bottom or close to their bottom.’”

“He acknowledged that the mounting number of foreclosed homes is bad for home prices: ‘The catch is the foreclosure market.’”

“Falling consumer confidence, rising job layoffs and higher mortgage rates still stand in the way of a sustained housing rebound, economists say. ‘We do not expect residential real estate markets to turn around soon,’ said Stuart Hoffman, chief economist at PNC Financial Services. ‘In a sea of weak data, home sales will remain an anchor, not a lifeboat.’”

The News Press. “Statewide, the number of houses sold dropped 5 percent to 12,175 from 12,882 a year earlier while the median price dropped 15 percent from $239,000 to $203,300 in the same period. Sales edged up and prices reversed a downward spiral that’s been going on since October for existing homes in Lee County.”

“The median price reached its all-time high of $322,300 in December 2005. Compared to May 2007, the price was down 25 percent from $281,500, but the number of sales was up 43 percent from 575.”

“So far, at least, the bottom end of the market’s been driving the boom in sales, said Charles Richardson, regional senior VP of Coldwell Banker Residential Real Estate, Southwest Florida.”

“‘There’s been a substantial number of price reductions over the last couple years, and now you see great affordability in the market,’ he said. Even with the increasing number of sales, he said, ‘It’s still a very strong buyer’s market from a point of view of being able to negotiate aggressively with sellers.’”

“The number of condos purchased fell, from 351 to 257. Wendy King and Steve Kimball of Cape Coral are trying to sell the two-bedroom, two-bath canalfront condo they own on Tudor Drive for $299,000. They paid $340,000 in November 2005.”

“With direct access to the Gulf of Mexico, King said, ‘it’s a fantastic location and that’s a little less than what we paid for it three years ago when the market was great. We get very little traffic and maybe we’re asking too much, but we’re not in the position to lose $30,000, $40,000.’”

The Cape Coral Daily Breeze. “The housing collapse in Southwest Florida has caused great upheaval in realty and construction, and the numbers produced by the ESRI show just how devastating the home value drop was over the last year.”

“The average Cape home was worth $274,120 in 2007, but that number dropped to $219,781 this year. The northwest section of the city was particularly hard hit as the typical house’s value fell from $268,538 last year to $202,668 in 2008.”

“City economic development director Mike Jackson sees a silver lining in the numbers. While home values may be shedding even more value because of foreclosures, he pointed out that many homes in the Cape that are in foreclosure have no residents.”

“‘Thirty percent of those (properties in foreclosure) are lived in by people,’ said Jackson. ‘Seventy percent of those are investor homes that have never been lived in.’”

The Herald Tribune. “May sales in Sarasota-Bradenton climbed 11 percent from a year ago while rising 24 percent in Charlotte County-North Port. It was the third consecutive month of gains to the south and the second to the north.”

“Prices were another story, with only one market in the state posting a gain. Sarasota-Bradenton’s median sales price fell 16 percent last month to $246,200 from the same time last year. The median was also 8.2 percent less than April’s $268,200.”

“A total of 2,161 foreclosure filings — default notices, auction sale notices and bank repossessions — entered the court systems last month, a 12 percent increase from the previous month.”

“‘We are still having some difficulty with banks, because they haven’t been been set up to deal with these foreclosures and short sales,’ said said Helen Sosso, president of the Sarasota Association of Realtors. ‘But that being said, it’s getting better by the day. Banks are getting better at understanding that it doesn’t matter what is owed, that’s not the value of it anymore.’”

“Dave Richie, an agent in Sarasota, said, ‘If people can qualify for a loan, they are going to get one heck of a deal.’”

“He pointed to one of his listings: a four-bedroom, three-bath home with a pool in the Whitfield neighborhood that was worth about $390,000 a little over a year ago and now is going for $180,000.”

The St Petersburg Times. “A divided County Commission has approved Little Harbor’s request to allow daily rentals in 158 condo units. In a meeting earlier this month, representatives of developer Earthmark Inc. said the change would help make the Ruskin resort more appealing to tourists and decrease the project’s impact on surrounding neighborhoods.”

“But several residents who live near Little Harbor disagreed, arguing that late-night parties and traffic jams would destroy their peaceful community.”

‘That, Mariella Smith said, ‘is a Tampa hotel, not a Ruskin hotel. There’s no market for this in Ruskin.’”

From WMBB TV. “If you’ve crossed the Hathaway Bridge in the past year, odds are you’ve seen the Marina Landing. ‘This is probably the most beautiful condo on the whole coastline,’ says Project Manager Ward Pell.’

“The 16 story building has 87 units, only 30 of them occupied. ‘When you build something of this magnitude, it is disappointing,’ Pell said.”

“The project finished two years after the 2004-2005 housing boom, just in time to see the market slow down. ‘People can not close on their units,’ says Site Director Sue Levin. ‘This has happened to a number of developers and it isn’t just here it’s all over.’”

“A two bedroom condo initially sold for nearly 600-thousand dollars at Marina Landing. Now those unclaimed condos will hit the auction block. When bidding opens for 45 condos, half of them will have no minimum price.”

“‘We did a great accelerated marketing program for them and we hope that people can appreciate the beauty of this building and Panama City Beach,’ Pell said.”

The News Journal. “Falling home prices are encouraging more home sales and possibly signal a bottoming out of the declining housing market. Realtors in Volusia and Flagler counties sold 607 existing homes in May, down 6 percent from 644 homes sold in May 2007, according to a Florida Association of Realtors report.”

“The median sales price of an existing single-family home in the two county region fell 12 percent from $196,800 in May 2007 to $174,100 last month.”

“‘Our prices went up so fast in 2005, you can throw that year out as an abnormality. The decline in home prices is not as big as it seems,’ said Gloria Weimer, head of the New Smyrna Beach Board of Realtors.”

“Sales of existing condominiums in Volusia and Flagler fell 16 percent from 99 in May 2007 to 83 last month. That is below the 10 percent statewide drop in condo sales, but not as bad as the 54 percent drop in Jacksonville.”

“After months of home sales in Flagler County hovering close to 100, about 135 homes sold last month, said Jimmy Millhollin, head of the Flagler County Association of Realtors. ‘We are seeing a small rise in residential sales and inventory of homes is down,’ Millhollin said. ‘We are little different here.’”