Waiting To See What Buyers Will Accept In Florida
CBS 4 reports from Florida. “These numbers are sobering: If you are a homeowner reading this right now, when you wake up in the morning, the value of your house will have dropped about 45 dollars. And that’s if you sleep just 8 hours. When a homeowner is losing $5.70 an hour right now, renters actually are the ones who are making money. The average home value in South Florida has dropped $100,000 in just two years. That’s roughly $4,100 a month, $136 a day.”
“‘I knew it was softening,’ said investor Philip Logue. ‘I just didn’t realize how quickly, how fast the market was dropping.’”
“When Logue put his Coral Gables house on the market, he thought for sure it would sell. He started at $650,000 in 2006. A couple of years later, and a $175,000 price drop. He’s now renting the house out.”
“‘I was really surprised,’ said Logue. ‘Especially at the end when we really dropped our pants down and I felt we were giving it away, and we still couldn’t sell it.’”
“Broker Ray Jourdain isn’t surprised by the numbers. ‘Can you afford the payments? Can you have the insurance, the property taxes, the monthly payments with a normal 20% down sale? Does it work for the average person? And when that happens, when we hit that, that’s when we hit the bottom,’ he said.”
The Miami Herald. “In Miami-Dade and Broward counties, the median existing home price fell an average of 20.5 percent in June to about $299,300. The number of home sales in Miami-Dade fell 6 percent in June from last year, while for-sale listings grew by 24 percent.”
“In Miami-Dade, 984 condos and single-family homes were sold in June, of 43,188 properties listed in the MLS. In Broward, June sales were 1,230 of 39,703.”
“In the three-month period ending June 30, more than 10.13 percent of borrowers in Miami-Dade with first mortgage loans were behind on payments by 30 days, up from 5.61 percent last year. In Broward, the delinquency rate was 9.34 percent, up from 5.15 percent during the same three-month period a year ago.”
“Robin Hood, who lost her job last year, had to put her home near South Miami on the market in January. Not yet behind but barely scraping by, she failed to persuade the lender to negotiate new terms. Having to compete with cheap foreclosures in the neighborhood has made attracting even window shoppers difficult. She’s on the edge of giving up.”
“‘I don’t think you can fault them because if I was a buyer, I’d be looking for bargains, too,’ said Hood. ‘I have to sell, and it just so happens to be in a market that is destroyed.’”
The Daily Business Review. “As more (condo) units go into foreclosure, communities - especially newly built or converted projects - are struggling with rising nonpayment of association fees. Beleaguered board members are ratcheting up legal pressure on lenders.”
“Colin Hendrick, president of Surfside’s Carlisle On the Ocean, is also going after delinquent lenders. Last month, the association began foreclosing on five condos owned by delinquent lenders, said attorney Ralph Ruocco, with Glazer & Associates in Hallandale Beach. The lenders are often trustees for the bondholders who invested in a securitized mortgage pool, according to public records.”
“Glazer & Association last month successfully forced the sale of a bank-owned condo at the luxury Residences at the Bath Club in Miami Beach. The condo at the Bath Club sold for $1.45 million during the height of the condo boom. At last month’s foreclosure auction, the unit sold for $438,100.”
“Ruocco predicts more lenders will lose properties to auctions because they didn’t make maintenance payments on time. ‘Their organization is horrible,’ he said. ‘Their left hand doesn’t seem to know what the right hand is doing. Banks’ representatives call me to ask me who the prior owner of a unit was because they are trying to figure out who internally is responsible for talking with me.’”
“Hendrick hired Ruocco’s firm more than a year ago, when the Carlisle was $300,000 in debt. At that time, only 30 owners were paying the maintenance fees, Hendrick said. ‘It was so bad, we had no idea how we were going to pay the electrical bill,’ he said.”
The Sun Sentinel. “Price cuts still ruled in June as South Florida’s housing slump trudged into its 30th month. Palm Beach County’s median price for existing homes was $334,300, off 12 percent from $377,900 a year ago, the Florida Association of Realtors said Thursday. Sales fell 3 percent, to 744 from 764 during the same period last year.”
“Individual sellers are struggling, in part because they can’t drop their prices as low as lenders, said agent Kulbeer Sanghera. ‘How can sellers compete with the banks on price? They can’t,’ Sanghera said.”
The Palm Beach Post. “The median price of an existing condominium in Palm Beach County fell 24 percent from June 2007 to $153,200 last month, according to the Florida Association of Realtors. The median price of an existing condo in Martin and St. Lucie counties fell 28 percent to $165,000.”
“The median price of an existing home in those two counties fell to $160,800 from $237,100 in June 2007 - 32 percent.”
“Inventory remains the elephant in the room in Palm Beach County, which has more than 22,000 properties listed for sale, according to IPRE.com. At June’s sales pace, that’s nearly a 17-month supply, Jack McCabe, CEO of McCabe Research and Consulting in Deerfield Beach pointed out.”
“‘Foreclosure sales will accelerate in the next 24 months,’ predicts McCabe. ‘As long as they do, there will be continued pricing pressures and we are going to continue to see price declines.’”
“Treasure Coast home prices have fallen more than $100,000 from their high point nearly three years ago, said mortgage broker Jim Sahnger. Qualifying income for a median-priced home has fallen $18,000 in the past year.”
“‘For Treasure Coast home buyers, monthly payments have declined $500 on a median-priced home, putting 10 percent down,’ he said.”
The News Journal. “Sales of existing houses and condominiums along with median sale prices in the Volusia and Flagler county market continue to decline.”
“‘The aura out there is not good in Florida,’ sand Nancy Dance, president of the Daytona Beach Area Association of Realtors. “We are waiting to see what the buyers will accept, waiting to see the sellers to be more realistic than the values that skyrocketed in ‘05 and ‘06. We’re waiting to try and find the level price. It will take awhile to lower costs and appraisals.’”
“‘This (declining housing industry) will still take awhile to turn around,’ said Jimmy Millhollin, head of the Flagler County Association of Realtors. ‘Many homeowners are still in trouble. One-quarter of our sales are short sales or bank owned.’”
The Herald Tribune. “Both the Sarasota-Venice and Charlotte County-North Port markets pushed to post-boom pricing lows during June as the region’s rampant foreclosure phenomenon made itself felt.”
“The median sales price in Sarasota-Venice dropped 20 percent to $235,500 from the same month a year earlier. It was the lowest median seen in the market since April 2004, and, because sales from Manatee County were not included because of technical difficulties, the true median is likely even lower.”
“The drop pushed prices out of the relatively stable band of $240,000 to $270,000 that they had maintained for nearly a year, data released Thursday from the Florida Association of Realtors showed.”
“The $141,000 median in Charlotte County-North Port — a 29 percent drop from $199,000 in June 2007 — was the lowest price since November 2003.”
“‘What’s happening is that the sale of all this foreclosed property is causing prices to fall,’ said Art Schwartz, a retired University of South Florida finance and real estate professor who lives in Sarasota. ‘Banks just want to get these properties off their books.’”
“‘Five years from now, people will point back and say this was the moment when they could get the greatest deals,’ Schwartz said. ‘And if mortgage rates start rising again, which may happen if the Federal Reserve starts reacting to inflation, people of the future will really be kicking themselves.’”
“There is a 78.4-week supply of single-family homes on the market, more than three times the normal 24-week supply, the Team DuToit numbers show.”
“‘For every three foreclosures that we’ve seen, there are seven more to go over the next 24 months,’ said consultant Jack McCabe. ‘It will take three years before we see price appreciation in the market, and I think prices will drop another 10 to 15 percent.’”
“The market clearly departed from fundamentals on the way up, said Bill Seider, a real estate attorney with the Williams Parker law firm in Sarasota.”
“Now it looks like it is departing from fundamentals on the way down. He pointed to the sale of a three-bedroom home in the Southgate neighborhood for $195,000. The same house sold for more than $400,000 during the boom.”
“‘That house has got to be worth $250,000,’ Seider said. ‘There are a lot of bargains out there.’”
The News Press. “Lee County real estate agents sold slightly more homes in the first half of this year than a year ago - but the future’s uncertain for the rest of the year. Most of the homes sold these days are low-end houses being sold by financial institutions that got them back in foreclosure and that’s reflected in the June figures released Thursday, said Steve Koffman of Century 21 Sunbelt Realty in Cape Coral.”
“The county’s median price of an existing single-family home dropped 19 percent in June to $172,400 from May’s $212,400, and June’s median price was off 32 percent from a year ago, when it was $253,900. It’s the first time since November 2004 that the median price fell below $200,000.”
“Prices and the number of sales have generally been declining since the market reached an all-time high of $322,300 in December 2005 at the height of the housing boom in Southwest Florida.”
“Expect a seasonal slump as the market heads into summer doldrums, but ‘I think the number of sales is sustainable,’ Koffman said.”
“‘The average person couldn’t afford a house and now they can,’ he said. He has a new house listed in north Cape Coral for $104,000 - about a third of what it would have gone for at the height of the boom.”
“At issue, Koffman said, is whether surging unemployment - now at 7.5 percent - and a local economy ‘in shambles’ will dampen demand for homes.”
“‘There is concern whether there are enough of those people,’ he said.”
From Hernando Today. “County commissioners didn’t need another reminder of the bleakness of the Hernando County economy. But they got one Tuesday after hearing twin reports from economic experts who gave a snapshot of current conditions.”
“‘This is just an ugly period of time,’ said Henry Fishkind, an economist with Fishkind & Associates. ‘This is the absolutely worst recession I’ve seen since 1975.’”
“Lee Ellzey, CEO of Pasco-Hernando Jobs & Education Partnership, started things off by saying 35 to 40 percent of Hernando County’s workforce leaves the county to go to work. Most of them travel south to Hillsborough, Pinellas and Pasco counties.”
“David Hamilton, also with the PHJEP, said much of the economic decline locally was fueled by the decrease in construction jobs, once the mainstay of the county economy. Construction jobs in Hernando County reached a peak in May and June 2006 and have declined steadily since then, Hamilton said.”
“‘We have lost 1,100 jobs in construction,’ Hamilton said. By contrast Florida lost 75,000 jobs during the last 12 months, mostly in construction.”
“More people in Hernando County are employed in the retail trade industry than any other sector, Hamilton said. Unfortunately, those jobs typically are low-paying.”
Several significant developments in these articles:
‘Both the Sarasota-Venice and Charlotte County-North Port markets pushed to post-boom pricing lows during June as the region’s rampant foreclosure phenomenon made itself felt. The drop pushed prices out of the relatively stable band of $240,000 to $270,000 that they had maintained for nearly a year.’
This area did lead Florida down, so there was a lot of hope there about having achieved a bottom. But now we see it was the bowling ball down a flight of stairs effect. Same thing recently occurred in Phoenix.
The HOAs pushing lenders into million dollar loses to keep the lights on. (real smart, Wells Fargo).
And what Jack McCabe said about unrecorded foreclosures in the pipeline is what I’ve seen here locally. Even at these record levels of default, the true number may be 3 times higher or worse.
And note the FB in the Miami Herald story losing the house due to job loss, and Fishkind falling all over himself to describe how bad the post-bubble economy is. It’s lower prices and jobs that will get us out of this, not loans.
“It’s lower prices and jobs that will get us out of this, not loans.”
Testify, Brothah Ben. BTW, the Spring Hill area of Hernando County is very similar to North Port in development patterns and is another area leading the way down in West Central Florida. The developers really savaged that area and exacerbated the sinkhole problem. I wouldn’t even take a home there if they gave it to me, and I’m serious about that. Talk about money pits!
“It’s lower prices and jobs that will get us out of this, not loans.”
Ultimately it’s jobs. Detroit had lower prices but no jobs, thus houses went to a dollar.
Oooops, “Detroit” should have been “Cleveland”.
Detroit works, too.
As will soon most of upstate New York.
They also ripped up a lot of wondferful land nearby when they built Tampa Palms. I always wondered whether the “build-out” consumed much of the nearby Green Swamp, a favorite haunt of mine on a bike in years past.
Many moons ago, I remember driving Bruce B. Downs. Not only did I not see any strip malls, I probably saw only five other cars in ten minutes. I thought to myself, “this is why I like it here.” If it’s rush hour, now you’ll see 1,500 cars in ten minutes. It has become an utterly forgettable place that elicits positive feelings only among those who became rich by ruining it.
“And what Jack McCabe said about unrecorded foreclosures in the pipeline is what I’ve seen here locally.”
It’s not an actual loss until the lender forecloses, no? Meanwhile, said lender makes the most optomistic provisional loss assumptions. The current economic growth rate is going to accelerate the downward rally in home prices.
Hey Ben,
And here’s an interesting note:
I’m living on Jupiter Island now, North end of Palm Beach, super rich (renting)
It’s not only the low end houses that are having a difficult time selling.
p.s. rent is $1450/month
This is just an ugly period of time,” said Henry Fishkind, an economist with Fishkind & Associates.
And although it appears the housing decline has bottomed out, it will take many months to pull out of this crisis, he said. Florida is overbuilt and has too many existing homes on the market. Until that inventory is gone, times will continue to be rough, he said.
___________________________
Ben, you know that no one drives me crazier than this guy. Fishkind should be in a habitat at Sea World as Florida’s ultimate captive intellectual. Amazingly, he’s still calling the bottom, but without conviction because this has to be at least the third time in the last eighteen months that he’s done so. Cue the seal!
In another seal-cueing event, the person in charge of the agency licensing mortgage brokers shows no intention of resigning despite $85 million in mortgage fraud tied to some of the 10,000 persons with criminal records licensed here from 2000 to 2007. God I love this state.
“More people in Hernando County are employed in the retail trade industry than any other sector, Hamilton said. Unfortunately, those jobs typically are low-paying.”
Yes, but the upside is, older homes in Hernando County are at pre-boom prices in many parts of Brooksville, etc. And they’re practically giving them away in Spring Hill, although they just about have to do that to get rid of them. Sinkholes are a huge problem in that area. They open up under houses and on streets at the drop of a hat.
Palmetto, you crack me up. You’re the only person I know of who is ever-conscious of potential sinkholes. Do you think you might have fallen into a crevasse in a former lifetime?
“‘I was really surprised,’ said Logue. ‘Especially at the end when we really dropped our pants down and I felt we were giving it away, and we still couldn’t sell it.’”
OK HBB’ers. Can you ask for a better setup line? Let’s see what ya can do.
lol
“I was really surprised, Especially at the end when we really dropped our pants down and” ‘These kids shoved a Joshua Tree up me.’
Never do they make the calculation to see if rent would pay as much as the mortgage plus taxes, Insurance, maintenance, etc. Never!
And what’s this with Florida homes getting less than the Federal minimum wage?!? Don’t they also deserve $6.55/hour?
I like Ben’s ‘bowling ball down a staircase analogy.’
Got Popcorn?
Neil
They dropped their pants, but did they have some lotion as well? He went above and beyond the tradition of cooking brownies for the prospective buyers.
If you can’t give it away chances are you can’t sell it.
“‘That house has got to be worth $250,000,’ Seider said. ‘There are a lot of bargains out there.’”
Speaking of giving value away, it is remarkable how many people think they know what the market *should* be. The market, while it can be manipulated, doesn’t care what people think it should be. Any more than Nature cares about how we think it should behave.
“‘I was really surprised,’ said Logue. ‘Especially at the end when we really dropped our pants down and I felt we were giving it away, and we still couldn’t sell it.’”
His idea of “dropping his pants” was emotionally parting with only a fraction of his bubble gains, not selling the house for market value. Cue the tiniest of all violins…
“‘Five years from now, people will point back and say this was the moment when they could get the greatest deals,’ Schwartz said. ‘And if mortgage rates start rising again, which may happen if the Federal Reserve starts reacting to inflation, people of the future will really be kicking themselves.’”
And this fellow was an economics profess? Damn, no wonder there are so many screwed up trains of though on economics. I am not sure he understands what he just said.
As someone who studied economics in college, I can’t understand how these university professors get away with being boosters for the REIC. We have it here at ASU too. These people should be the most objective on the matter, but they talk more junk than the used house salespeople!
I regret that I never took any straight Econ courses in college as I was really busy with my majors.
Did take 2 quarters of 10th Grade HS classes called The Math of Business and Finance where this crazy, dedicated teacher tried to cover basics in everything from GAAP to Common Sense in Markets.
Thank you Ms Brown
I took three economics classes at various times. Only one teacher was any good.
I found this the quote the most troublesome:
“And if mortgage rates start rising again, which may happen if the Federal Reserve starts reacting to inflation, people of the future will really be kicking themselves.”
So let me get this straight, if houses cant sell today because of tight lending standards and lack of affordability, increased rates will drive prices up rather than down to adjust? Also, why do ppl keep just assume everyone that wants to buy a home is some deadbeat that wants to put down little if any money. My house will be purchased with all cash. Isn’t it obvious that those buying today with little or no cash down because they are horrible at managing their own finances will be the ones kicking themselves when rates go up and houses become totally illiquid unless prices drop much further? I wish these “professors” would be held more accountable. I would ask for a resignation.
I think the article said he was retired.
They’ve given up on being rescued by Baby Boomers, investors, rich Northerners, Europeans or South Americans. “People of the Future” will be the buyers! See, I thought the futures market was something completely different. Is that where one sells homes to future people?
lol
So that’s who’s going to buy all those downtown Austin condos! I wonder if they’ll look like the exiled earthlings in Wall-E.
“And if mortgage rates start rising again, the prices will have to drop even lower,” is what he meant to say.
“And if mortgage rates start rising again, which may happen if the Federal Reserve starts reacting to inflation, people of the future will really be kicking themselves.”
Clearly this guy was schooled by someone who had access to the 10 edition of the NewSpeak dictionary. All good citizens own their homes, Winston. It’s a great time to buy, sell, and hold.
“The market clearly departed from fundamentals on the way up, said Bill Seider, a real estate attorney with the Williams Parker law firm in Sarasota.”
“Now it looks like it is departing from fundamentals on the way down. He pointed to the sale of a three-bedroom home in the Southgate neighborhood for $195,000. The same house sold for more than $400,000 during the boom.”
Attorney logic now? Housing detached itself from fundamentals on the way up, somehow reattached at the top and is now detached again on the way down? I don’t think so Mr. Seider(reminds me of another bullshit artist sharing the same name). Housing will reattach to fundamentals when the price falls back to affordability. And even at $160k in FL I’d say you’re all still living in fantasy land.
If it’s selling at $195k and should be worth $250k as he claims, why isn’t he buying with both hands?
“‘I was really surprised,’ said Logue. ‘Especially at the end when we really dropped our pants down and I felt we were giving it away, and we still couldn’t sell it.’”
Maybe it’s really really ugly. And moving on to the subject of your house? You priced it too high, ya dumbas*s.
There mighta been a bunch of tattoos and studs and rings. Many people are turned off by that stuff.
1. If the house “has got to be worth $250,000″, then it would have sold for $250,000. A house is worth what a buyer actually pays for it.
2. So if mortgage rates rise, buyers will be kicking themselves in 5 years for missing today’s bargains?? Did an economist in Sarasota, an area flooded with inventory, with lots more foreclosures on the way, really say that with a straight face?
“Robin Hood, who lost her job last year, had to put her home near South Miami on the market in January. Not yet behind but barely scraping by, she failed to persuade the lender to negotiate new terms. Having to compete with cheap foreclosures in the neighborhood has made attracting even window shoppers difficult. She’s on the edge of giving up.”
(’Robin Hood’…? And no one has yet taken advantage of this delightfulness?)
Look, at the very least, this woman needs to put on a dorky little hat with a feather and then go rob a bank. Why has she waited this long? I mean, that should be a mandate from some higher authority, or SOMEONE. It’s freakin’ Robin Hood, man! Doesn’t she respect the power of literature?
And then, after, she should run away back to her band of merry men in the forest, toting bags of clinking golden coins, only venturing out to shoot arrows at the county law enforcement cars and to give coins to deserving widows and urchins.
I noticed the name “Robin Hood,” too, OlympiaGal.
The other day it was Carmen Miranda, now it’s Robin Hood. Do these reporters truly not pick up on the names their interviewees are giving out? What’s next…an exclusive interview with Mr. I.P. Freely?
I was going to say. Who in their right mind would name a kid “Robin Hood”?
And if her house does get foreclosed upon, will it be the Sheriff of Nottingham that comes to put her out of her house….
All kidding aside, yesterday I saw two Sheriff’s cars in our development. Normally I would never give it a second thought, but these days you see that and wonder if someone just lost their house.
I was going to say. Who in their right mind would name a kid “Robin Hood”?
Talula Does The Hula’s parents…
http://www.msnbc.msn.com/id/25827708/
Not very nice parents, but there are worse.
I once heard of a woman named Ima Pigg.
You might be thinking of Texas philanthropist Ima Hogg, a great lady with an unfortunate name.
http://en.wikipedia.org/wiki/Ima_Hogg
from the Wikipedia article…
“Similar unfortunate baby names according to United States Census records include Ima Pigg, Ima Muskrat, Ima Nut, Ima Hooker, Ima Weiner, Ima Reck, Ima Pain and Ima Butt.”
Several friends of mine took classes from Prof. Dick Handler in college.
Right, I’ve seen a number of Craigslist posts for a Realtor that calls himself “John B. Straight”. Dude, give it up.
Realtor give it up, or me give it up?
Ol’ Dick is still mentoring the kids at my alma mater …
My friend had neighbors whose last name was “Fece.” They had a sign in their yard: “The Feces live here.”
I knew a family named ‘Loser’ who had a wooden sign out front “The Losers”. I guess people with these insulting last names like to flaunt it for some reason.
I know a Jim Main who claims every town in the U.S. has a street named after him.
I was also told that if I ever wanted my name to be in lights I should change it to “Exit”.
My grandma has a nice friend named ‘Utanna’. Her parents must have suffered a burst of patriotism at her birth, which was, of course, in Utah. Speaking of enjoyably silly Utah names, my mom teaches 2nd grade where I grew up, down in southern Utarr, cowboy country, and she had a kid in class named ‘Brody O’. ‘O’ was his middle name, not initial. The year after that she taught his little sister, who was named ‘Justa’ with a middle name of ‘Cowgirl’. Brodeo and JustaCowgirl. Gotta love it.
“‘O’ was his middle name, not initial.”
The “S” in Harry S. Truman didn’t stand for a name. He was given a letter instead of a name to satisy two relatives whose names began with S; Each relative was led to believe the S stood for their name.
Florida’s simply crazy. Long story short.
All the time I lived there, people had all sorts of reasons to explain the unprecedented price run-up. “This is paradise…everyone wants to live here.” “There’s no more undeveloped land.” “The Baby Boomers are all rich and all retiring here, right now!” “After all, LA/NYC/Tokyo/London are still much more expensive than Florida.”
I would hear these rationalizations everywhere. Sometimes from friends, sometimes from strangers. Over the last two years, these real estate gurus have been forced to accept the facts. Everyone does not want to live in FL. Baby Boomers, by and large, are going to have to work part-time during their retirements to make up for the retirement savings they didn’t put aside; they certainly won’t be purchasing $700K high-rise condos en masse. There’s plenty of undeveloped land (and plenty of empty high-rise condos). LA, NYC, Tokyo, London, et al are more expensive because they actually have lots of high-paying jobs to support those high prices.
I miss some things about Florida…warm winters, the ocean, palm trees. But I don’t miss the crazy. Not at all.
Thirty years ago we decided that we couldn’t live on sunshine. I’m glad we moved there and glad we didn’t stay.
Nor can one “eat scenery” ( If that were true we’d all live in the Canadian Rockies? )
… or next door to Hef’s Playboy Mansion.
smathis,
You are on FIRE today my friend! Firstly nice catch on the unchecked goofy name thing. I used to cold call ( a LOT ) and there were always signs the guy you’d be calling was a J.O. First hint is anybody with a celebrity name ( also as it happens ) spelled identically? I set aside what I called my “celeb stack” and 99 times out of 100 it was genuine J.O.
Danny Kaye, William J. Clinton, Doc Holliday, John W. Bobbit and on and on. There’s @ssclowns and then there’s malicious @ssclowns.
Ahhh… secondly, the fabled “City of Boomer Gold”. It should have an “X” marking the spot! Just as digging for Yamashita’s Gold in the P.I, more money has been made selling maps than has ever come out of the ground. But DO keep paying those NAR Annual Dues won’t you?
Thanks man.
Thanks for the nice words.
“Baby Boomers, by and large, are going to have to work part-time during their retirements to make up for the retirement savings they didn’t put aside”
And they’ll be working side-by-side with those Boomers who dDID prudently save and will have found thier money so devalued by the rising cost of living that their sacrifice will have been in foolish vain!
In Miami-Dade, 984 condos and single-family homes were sold in June, of 43,188 properties listed in the MLS.
That’s about an 44 month supply. It’ll be a while before we’ll hit bottom on that kind of inventory.
Rich Europeans are coming to buy them.
Don’t worry. the fundamentals are strong.
the “bottom” is already in. Hurry or you’ll have missed the greatest buying opportunity in history……blah..blah….Realtorspeak ™.
Quick! A broker recovered from the drugs! Hit him up with some more Kool-aid, STAT!
Why, oh, why is it so hard for anyone to say the obvious? “housing prices will fall until the average househould salary can afford the average starter house.” Until that happens, I’ll be dodging the falling knives, thankyewverymuch.
“Broker Ray Jourdain isn’t surprised by the numbers. ‘Can you afford the payments? Can you have the insurance, the property taxes, the monthly payments with a normal 20% down sale? Does it work for the average person? And when that happens, when we hit that, that’s when we hit the bottom,’ he said.”
“Quick! A broker recovered from the drugs! Hit him up with some more Kool-aid, STAT!”
That was precisely my thought. At last, a broker telling it like it is, without sugar-coating. In Sacramento, I’m guessing that will be approximately $120,000 for the average nice house. Just a guess, because I’m not sure anymore how many Americans have, or can save $24,000 for a down payment and still have 3-6 months living expenses in the bank. I’m sure some, but fewer and fewer young people.
What was Ray Jourdain saying 3 years ago? 5 years ago? It’s nice that he’s finally sobered up, but it would have been even nicer to have heard this when it could have made a difference.
You guys are pushing things TOO far.
The 20% down is not going to happen.
Fannie and Freddie lend for 3%-5% down.
That is why the govt. needs to save them for continuing the ponzi scheme.
That, in addition to having a place for all their wallstreet buddies to dump their bad loans………
“‘Foreclosure sales will accelerate in the next 24 months,’ predicts McCabe. ‘As long as they do, there will be continued pricing pressures and we are going to continue to see price declines.’”
McCabe is great, he was predicting the fall way before most others in Florida. But even a guy like this who has been as bearish as he has, got it all wrong. In early ‘06, he assembled a group of investors who put money into a fund that they were going to eventually use to buy distressed properties at what they called “early 2004 prices”. I bet they haven’t spent a penny of that money, they’re probably now waiting for “early 1998 prices”.
Thank you. I appreciate your compliment.
Regarding the fund;
I had planned to initiate my own fund at the inspiration of investment capital offers I began receiving in 2006 unsolicited. After much exploration, I decided against it , and rather to advise and consult the hedge funds, private equity groups, and investment banks that requested our services. We have also been involved in facilitating introductions of buyers and sellers, and are relied on for opinionating market value price points to establish transactional dialogue.
Overrall, the large scale deal flow has been fairly anemic and sporadic so far. As everyone is aware, there has been a large disconnect in price between what sellers want and buyers regard as profitable opportunities with the high risk involved. This is evolving as more time and pain passes. We will see more deals transacted this year and especially in 2009-10.
Next year will begin (in earnest) a historic, massive re-distribution of real estate, the largest since the great depression. Foreclosures, and inventory will continue to rule the day, regardless of the massive federal bailout.
Best regards to all. This is my favorite blog. Keep up the great work Ben.
“Will look back and kick themselves for not buying” . . .
What these realtors don’t seem to understand is that there ARE NO BUYERS!. . .the move up people can’t sell their homes, unemployment is going up so new buyers are scarce, and first time buyers now need 10 to 20% down to get a loan because banks are in panic. . .don’t look for those “Brits Abroad” to solve the problems, the UK housing market is tanking as fast as Florida. . .this is going to be a long long crisis.
After bird flu hits, houses will literally be free. They will be a liability to hold on to like cars.
Nahh they won’t be free but they’ll be close given the level of desperation out there. And just think, we’re only in the 3rd inning of this. I’m sure glad living day to day isn’t dependent on buying and selling worthless shacks though.
John Quincy Public: Mr.Treasury Secretary , you have nearly a hundred shaky banks operating in the North America right now. Your helicopter has dropped enough cash buoys so that a pigman could walk from Sternsland to Indyland to Fannyland without getting his feet wet. Now, shall we dispense with the bull?
Henry M. Paulson: You make your point as delicately as ever, Mr. Taxpayer…but wny not TELL it to somebody that gives a $hit
Forgive me Red October
Here in Daytona Beach, it’s stunning to see how many condos, newly-built and constructed during the boom, are sittimg empty. One condo alone in Holly Hill, Marina Grande Towers, with over 500 units, is empty. Fifty one of the 57 who boughyt are suing the owners, Boca Developers. Around town, empty ocean and river front lots dot the landscape with tall grass and fences, land bought by developers caught in the boom and now with no plans to build. It’s an ugly scene here. We need a stop to this greed.
Soon, you will see a scene straight out of Mad Max with bikers cruising the streets to overtake the abandoned areas of the city………..gangs converging on the wasteland that was once the vacation-land of America.
I love the smell of foreclosures in the morning……….it smells like “victory”.
Oh, now come on, RGL … you know and I know that those “vacant lots” in Daytona Beach look a HECK of a lot better than the crummy drug infested motels that dotted the beach ten years ago … golly, from A1A you can see the ocean (in parts).
“At issue, Koffman said, is whether surging unemployment - now at 7.5 percent - and a local economy ‘in shambles’ will dampen demand for homes.”
He must mean core unemployment (unemployment excluding manufacturing, finance, service, government, education, transportation and construction).
If they went by unemployment criteria used through the last century through the early 1980s, unemployment stats in that area would be hovering around 11 or 12%.
““‘That house has got to be worth $250,000,’ Seider said. ‘There are a lot of bargains out there.’””
Uh no, Dipwad. It’s worth what the MARKET will bear. I assume you are the fool that pays sticker on a new car? “HEY, it says here this Tahoe is worth $40,000!!!! Guess I’ll pay that!!!!”
Ben, in S. Fla. NOTHING is selling, not even the REO’s and short sales for a couple of reasons. First, there ain’t no mo sheeple left to sucker. Second, those with good credit either are now going to wait until prices drop another 20% or rent. Third, the slugs ( subprime and former liar loans) can’t qualify- the lenders are not lending and requiring real income, real deposits and real appraisals. Fourth, just try and get a loan on a condo. HAHAHAHAHAHA Fifth, there are too many FB’ s that are sooooooo under water and can’t sell. Sixth, lenders are not working with FB’s on said shortsales or REO’s. Seven, the builders are giving their remaining inventory away and the FB’s can’t compete. Eight, the comps are getting killed now. Nine, anyone with a brain is saving their money because of the economy and fear of job loss. Ten, there are so many houses for sale that there is no more motivation to hurry before it’s too late. Eleven, most people have at least one foreclosure or short sale property on their block and it is stopping them from selling their house unless necessary, therefore they won’t be upsell opportunities for the realtors. Twelve, no one is buying the 2nd , 3rd, or 4th house as an investment, flip, or vacation home.
Finally, potential buyers see the huge inventory of rentals and after about 30 seconds of back of the envelope math, figure out its about half the cost to rent vs. own.
I have some friends that I BEGGED not to buy a house in 2007. They paid $485,000 for a house ( put $50,000 down!)that at best is worth $250,000 in a normal market. Well,, low and behold on zillow, the “value” is now about $390,000. Factoring in the cost to sell, etc. and they are down about $150,000 IN ONE YEAR…. and they are struggling to pay the $3500 a month mortgage( $435,000!!!!), + insurance, + taxes, + upkeep, etc. They refuse to believe it is going to get worse and are convinced they made a wise purchase. I showed them the chart on Zillow where if you follow it, it is clearly heading back to 2000 prices.
On the house I am renting, the “value” has gone from $550,000 to about $420,000 on Zillow in the same time. I chose to rent it from the owner ( he wanted $560,000 LOL)..My rent is about half of the cost of owning.. and he put in a new A/C unit, resurfaced the pool, new dishwasher, new pool motor, new toilets, etc…
Funny how two years ago I was the fool. Now every one of my friends that bought a home since 2004 calls me a genius.