Ditched And Left To Rot In Florida
The Tampa Tribune reports from Florida. “Ernie Harpster fell behind on his mortgage payments last year. The lender filed a foreclosure lawsuit. Harpster then did something troubled homeowners may never think of doing: He fought back. Harpster has been living payment-free for nearly a year in his Wesley Chapel home. His case is trickling through court, and there are no signs he will be kicked out anytime soon. ‘Not having a mortgage payment meant I didn’t have to file for bankruptcy because I could pay other bills, like credit cards and the electric bill,’ said Harpster, whose income as a real estate agent dried up along with the market. ‘But I’m not trying to take advantage of the situation. I tried to do what I thought was right. To me, it’s the bank’s fault this has stalled.’”
“‘A lot of people just roll over because they know they’re wrong, they haven’t paid their mortgage,’ said Timothy Kingcade, a Miami lawyer. ‘If you’re accused of a crime, do you walk in court and say, ‘I did it!’? You have a right to make the bank prove its case.’”
“Homeowners who protest sometimes find their cases pushed to the bottom of the pile, said Lutz lawyer Ralph Fisher. These lenders ‘are freaking out,’ he said. ‘We’re asking them how they own this mortgage, and they can’t answer.’”
“One of Fisher’s clients, David Clark, hasn’t paid the mortgage on his investment property in Land O’ Lakes in nearly a year. The foreclosure paperwork was puzzling; the mortgage company said it had lost the original note. ‘So what happens if some other bank comes along later and says they in fact own the mortgage?’ Clark asked. So far, the lender hasn’t responded and renters avoid him because they don’t want to get kicked out when the bank takes over the house.”
“Tampa lawyer Stanley Galewski said one of his clients has been in his home - payment-free - for 27 months. He asked the lender to produce the note and other paperwork, and the lender hasn’t answered. ‘It’s like the lender just lost interest,’ Galewski said.”
“John Muratides, a Tampa real estate lawyer, said delaying the case in a declining real estate market could cost homeowners more than their houses. That’s because when the house is eventually foreclosed, it likely will sell for less than it would today. Lenders could file a deficiency claim to force the homeowner to pay the rest of the amount owed. That, Muratides said, would push many homeowners into bankruptcy.”
“For Harpster, who’s waiting on his mortgage company to make the next move, fighting has made life simpler in some ways. His teenage son has been able to stay in his neighborhood school another year. He has been able to stave off bankruptcy and put money away to relocate to an apartment. But fighting foreclosure didn’t take away the stress. Now, he said, both he and the lender will suffer even bigger losses.”
“‘I have my boxes packed, and most of my stuff is ready to go,’ he said. ‘I have no idea how much longer I have in my house.’”
The St Petersburg Times. “Cash-strapped builders breathed easier last year when Tampa’s Metro Development Group, founded by Canadian businessman John Ryan, bought thousands of their idle new home lots. But after defaulting on millions of dollars in payments to banks and business associates this year, Metro is feeling financial pressure of its own.”
“Adding to Metro’s troubles, unpaid contractors, including a landscaper and an environmental consultant, have filed a rash of lawsuits for nonpayment. Metro spokesman John Heagney said the suits are no cause for alarm. As a multimillion-dollar company with 30,000 home sites across Florida, legal entanglements are par for the course.”
“‘Having 10 lawsuits at the same time is pretty much the norm,’ Heagney said.”
“But the 5-year-old company has never defaulted on a loan as large as the one from Mercantile. Metro reported $200-million in income in 2006. The company went on a lot-buying binge last year, scooping up 8,300 home sites from Lennar and 1,000 from M/I Homes. In January, Metro announced a joint venture with a global investment firm. Private investors staked the partners to $250-million to scout land buying opportunities.”
“That hasn’t stopped Metro from defaulting on earlier land deals. Marvin and Roberta Swain, from whom Ryan bought the Prospect Hollow parcel a couple of years ago, said Metro paid cash for half the purchase price and had been making mortgage payments to them for the remaining half. The payments ceased this year. ‘They told us they were out of funds,’ Roberta Swain said.”
The Daily Mail. “Instant Access Properties said it has given thousands of investors, mainly middle-class professionals, the chance to build lucrative property portfolios. It boasted how they could ’start from scratch, live on easy street instead of struggling for a living.’”
“But the controversial firm, which was founded by property tycoon Jim Moore, has gone into administration leaving 4,500 exchanges uncompleted.”
“In the past two years, The Mail on Sunday has featured stories from several investors who, far from becoming property millionaires, have lost thousands after signing up with IAP. Many paid up to £8,000 to belong to the firm’s property club, which promised to select and recommend suitable homes for investment.”
“Janet Lay was among those hoping to set themselves up in retirement when she attended a course in 2004 run by IAP’s sister company Inside Track, which went into administration in April. She was persuaded to sign up to two unbuilt properties – one in Basingstoke, Hampshire, and another in Bahama Bay, Florida.”
“By 2006, when the Basingstoke flat was completed, its value was far lower than the price she had agreed to pay, despite a supposed discount and booming market. She could not afford to complete the deal because no mortgage lender would stump up the price. She puts her losses, including the cost of pulling out of the Florida deal, at £40,000.”
The Associated Press. “Despite the glut of homes on the market, falling prices in many areas, and competition from bargain-basement foreclosures, plenty of homeowners still want to sell their properties without a real estate agent. One recent successful seller was Jim Seidel, in Miramar, Fla. With skidding prices and slow sales, Seidel wanted to avoid paying the commission.”
“He noticed a neighbor was being foreclosed upon and the house was for sale. So he found out the price, and slashed his asking price on his Internet listing by about $100,000 to $355,000, and sold his home in just five weeks.”
“‘Obviously we wanted to save money in commissions,’ said Seidel. ‘We wanted to sell it right away, rather than wait, because we figured the prices would keep falling. We did a quick price comparison and we priced it fairly.’”
The Orlando Sentinel. “Metro Orlando’s apartment market tightened a tiny bit this past spring and summer, as the vacancy rate declined slightly to 10.4 percent by September, according to a recent local survey. That could mean higher rents in coming months, though there are signs the trend may not last because the region’s population growth is stalled and job creation is all but flat.”
“In March, the area’s vacancy rate was 10.6 percent; a year ago, it was 9.2 percent, according to the twice-yearly survey by a Maitland-based real-estate research and consulting company. Charles Wayne President Jim Lewis said that, during the past six months, another 11 condominium-conversion projects — ‘most with low occupancies’ — had returned more than 1,300 unsold condo units to the area’s rental pool.”
“That has kept the overall vacancy rate from shrinking much, he said. Another factor contributing to vacancies: The metro area’s ‘anemic employment gain’ of the past year has resulted in ‘fewer new employees moving into area rental apartments,’ he said.”
“The tightest apartment market on record for the region was in March 2006, when the vacancy rate sank to 3.6 percent. At the time, thousands of rental units were being converted to condominiums and put up for sale as complex owners sought to cash in on the soon-to-end boom in housing sales.”
“Many of those condo projects have since returned to the apartment market as sales collapsed.”
From CBS 12 News. “Homes are being ditched by owners and now left to rot by banks and lenders. The hardest hit: Port St. Lucie with 1,800 foreclosures reported in August, nearly 10,000 this year alone. ‘This is what the housing bubble burst has come to, this is what the mortgage mess has come to. This is how it plays out in real people’s lives on real neighborhood streets, especially here in Port St. Lucie.’ said Port St. Lucie City Communications Director Ed Cunningham. ‘Now the city is backlogged with these houses, there are so many of them and it is making the process move even slower.’”
“‘Those are missing one day they were in the living room and then they were gone. ‘all the appliances?’ Yeah.” said neighbor Tom Eder, who watched crime multiply once the house went empty off Gun Club Road in Palm Beach County.”
“‘I get to live next to this,’ said Brad Baldwin, who reported his neighbor to code enforcment with no response just outside West Palm Beach, ‘It appears to be an abandoned house that is being foreclosed on, and next house over is the same thing, same owner.’”
“”If the property is owned by one of these banks and it collapses, somebody has to buy those assets and we got to track down who that is, the next bank in line responsible. Yyet another delay.’ Cunningham said.”
“That means already frustrated neighbors must wait for action. ‘Someone needs to step in an say hey enough is enough.’ said John Brady, who reported a home vandalized beyond imagination. The bank responsible claimed to not know it was a hazard.”
The Keys News. “Joe O’Connell, owner of Safe Harbour Marina on Stock Island, said he fights every summer for his livelihood, and that of the dozens of fishermen, boat mechanics, treasure divers and others that work at his marina. The fight is against the county’s property appraiser’s office, which each year increases the value of the 10-acre, 60-boat-slip piece of so-called ‘working waterfront,’ because developers have gobbled up similar properties in the Keys at ever-higher prices in recent years.”
“This year, O’Connell said his tax bill nearly tripled from last year, mostly because of a steep rise in his property’s assessed value. But he’s taken a step to prevent this from happening again. ‘We’re in negotiations to work on a deed restriction so nobody can ever develop the property. The [property appraiser’s office] is working with us,’ O’Connell said.”
“Frank Herhold, executive director of the Marine Industries Association of South Florida, said Broward County lost six of its 19 boatyards to redevelopment. In Key Largo…developers purchased (a) site for a luxury housing development, but a deal with Monroe County to transfer building permits to the site fell through.”
“Michael Reckwerdt, who owns Robbie’s marinas in Stock Island and Islamorada, said deals like the $90 million purchase of Holiday Isle Resort and Marina a few years ago has impacted the values of smaller marinas like his.”
“‘My taxes in Key West are over $100,000 a year, well over,’ Reckwerdt said. ‘I’m a boat yard, and you have to haul a lot of boats, a lot of boats, to make $100,000 in profit just to be able to pay the government. That has forced people to sell.’”
The Palm Beach Post. “Lixkarime Padilla’s family loves South Florida, but high prices and the sour economy have them thinking it might be smart to move someplace cheaper.”
“‘We have friends who couldn’t sell their house here so they rented it out and moved to North Carolina,’ said the 24-year-old Colombian immigrant. ‘They said rent is so much cheaper there that they can pay for food and everything else for what they used to pay here just for housing.’”
“The impact is being felt by school districts, which are seeing declining enrollments and face funding shortages, as well as municipal and county governments, many of which are making cuts as revenues drop. The state budget hasn’t been immune, either, facing a $3 billion shortfall when lawmakers met this past spring.”
“‘We still have only preliminary numbers for 2008, but the evidence so far is showing a very substantial slowdown, the largest since the 1970s,’ said Stan Smith of the University of Florida’s Bureau of Economic and Business Research.”
“‘Certainly the housing slowdown and the credit meltdown affected the superheated economy in Florida,’ said William Frey, a demographer at a Washington, D.C. think-tank. ‘But to see it have such a large impact on population growth is quite surprising.’”
“In Palm Beach County, growth was essentially flat last year, with an increase of only 99 new residents. County officials are bracing for worse news this year; Smith’s team has warned them that the county’s population may actually fall in 2008, the first drop in decades. Hardest hit in 2007 was Broward County, where population fell by 13,000 to 1.76 million. Five Broward cities were among the fastest shrinking in the nation, and overall 26 of the county’s 31 municipalities lost population.”
“Hollywood was the biggest loser, dropping 1.4 percent as its population fell by 2,000 residents from 142,000 the previous year.”
“Maurice Bernard, 57, moved to Hollywood 40 years ago from frigid Canada, buying up a string of rental units and a small motel. After decades of easy living, things have gotten tight. ‘I believe the hurricanes are starting to scare people away,’ he said. ‘And everything is built out here; there’s no more land. The population goes down because kids grow up and move away.’”
“Padilla said her family is considering moving to Gainesville, where she and her sister attended the University of Florida. ‘Taxes are up and insurance doubled,’ she said, noting that at the same time the family’s business - a clothing boutique - has seen about a 50 percent drop in sales.”
“After hurricanes socked the area a few years ago, Bernard saw his insurance premiums on an apartment building he owns jump from $2,200 to $4,700 a year. At the same time, he’s reluctant to raise rents because he knows his tenants are struggling.”
“‘I really worry,’ he said. ‘Gas is up, insurance is a nightmare, and people can’t afford to live here.’”
‘Cash-strapped builders breathed easier last year when Tampa’s Metro Development Group, founded by Canadian businessman John Ryan, bought thousands of their idle new home lots. ‘
Yes, I remember when this savvy Canadian came in to ’snap up’ distressed lots. Now he keeps buying while he defaults on the earlier deals. Real estate is a pretty scummy business, I’ve come to feel.
Alligators snap things up too.
Good point. We’ve seen that with individual buyers recently - people buying a new similar (even identical home) while their existing one is being foreclosed on - you don’t think about the same thing being done at a larger scale though.
This to me points out that there’s still too much credit available out there. Otherwise John Ryan’s lenders would be saying “no deal”.
Prole exit-strategy:
“‘I have my boxes packed, and most of my stuff is ready to go,’ he said. ‘I have no idea how much longer I have in my house.’”
“Harpster has been living payment-free for nearly a year in his Wesley Chapel home . . . But I’m not trying to take advantage of the situation… said Harpster, whose income as a real estate agent dried up along with the market. I tried to do what I thought was right. To me, it’s the bank’s fault this has stalled.”
I think we finally found a ethical real estate agent who is just trying to do “what is right.” My apologies for any injuries my stereotypical comments of real estate agents in the past may have caused.
LOL!!!
Nice use of sarcasm.
This was contained in the larger article:
“How did Harpster buck the bank and delay foreclosure? He forced his lender to prove its case. By doing so, he joins a growing segment of homeowners who are delaying their evictions for months or, in some cases, years. In the process, they’re buying precious time to save money to relocate or sell their homes.”
So “doing what is right” according to this realtor means knowingly not paying your bills and trying to get a free ride based on a technicality (i.e., making them come up with the paper work to prove what you already know to be true). I bet there are more reasons than just one that his business dried up.
It *IS* amusing that the lenders can’t even prove they own the loans.
Nothing like lending out hundreds of thousands of dollars and pitching the paperwork.
Remember the Ohio judge(s) that was saying that the owner of the loans had to sign on the foreclosure paperwork, where the owner is supposed to sign? It was throwing things into a tailspin because the “owners” were huge investment pools full of misrepresented garbage.
I have handled buying and selling notes for commercial mortgages. There is a lot of due diligence needed to get it done safely for your clients… nearly as much due diligence as should be done for writing a new mortgage. I ran into one problem where a sequence of eight banks had held a defaulted not where the possessor had been in and out of bankruptcy for years, dicking everybody around.
When the title search turned up that one of the assignees for the note had made a minor mispelling when they recorded their assignment, it became very difficult to get title insurance for the note.
Keeping secured instruments secured is a demanding process. I can’t believe there are investors who can not cough up the original promissory note on demand. These investors have no right to be in the business, and they are going to get creamed.
I never thought I would live to see the day that I’d be speaking in favor of a realTwhore.
It may surprise some of us to know that some lending and financial institutions are also devoid of ethics, and behave fraudulently on occasion. When you balance the odds of prosecution with the certainty of losing your job if you don’t hit the quarterly targets …well, desperate times justify desperate measures. I could see some ‘wishful thinking’ foreclosures. The foreclosing bank could even have owned that mortgage once, in one of its investment bundles, prior to pawning it off on the next lower investor class. In that case, the “honest mistake” defense would likely suffice to wipe out fraudulent intent, eliminating down side risk. Heck, you could even dummy up the paperwork. Just saying.
Just because we haven’t seen it in the headlines doesn’t mean it isn’t happening. The rigor applied to analyzing the detail behind these toxic tranches by our investigative reporters is …umm.. legendary.
What HAS hit the MSM is: the bottom feeders of the credit card industry - the collection agencies - resell discharged (as in Chapter 7) or collected (as in paid off) debts to other collection agencies with impunity, for fraudulent/duplicate collection.
These skanks reside in business friendly states, who do not regulate the collection agency industry. Virginia is one. Therefore, if you live in Virginia, and you have EVER had a collection notice, from whatever state or country of origin, rest assured you will be hounded to pay it again. Forever. (This DID happen to me. I wrote letters and sent proofs of payment to every state agency in Virginia, copying the US Attorney General’s office).
I did read an expose a year or so ago which cited chapter and verse on how credit card collection agencies refuse to honor correctly filed bankruptcy discharge documents. I wish I could cite chaper and verse, wish I’d saved the article. I know anecdote is a dullard’s evidence. Sorry.
Anytime a realtor talks about “doing what is right,” it’s a given that they mean, “by me.”
ROFLMAO
I too feel the shame as I called them horrible names and said they were unethical, selfish and greedy.
My bad.
ACK………..why am i so unlucky and have a landlord whose house is paid off and expects the rent today?
It’s the bank’s fault that he isn’t paying his mortgage… WTF???
Wake me up when the Florida Government is offering to any American a free acerage and a shotgun in Weston…
I’ll tell my redneck neighbor about how nice it is!
“One of Fisher’s clients, David Clark, hasn’t paid the mortgage on his investment property in Land O’ Lakes in nearly a year. The foreclosure paperwork was puzzling; the mortgage company said it had lost the original note. ‘So what happens if some other bank comes along later and says they in fact own the mortgage?’ Clark asked. So far, the lender hasn’t responded and renters avoid him because they don’t want to get kicked out when the bank takes over the house.”
I am i reading this right? the lender doenst have the note? the hard proof of the loan? The FB can just tell the leander “okay prove in court you own this house, then forclose” and the lender just goes “damn we dont have the note”
“I am i reading this right?”
Yes.
Something’s not right here.
When a house is foreclosed, *someone* has to:
- Send the “payment is late” notices.
- Post the foreclosure such that it shows up in listing services like RealtyTrac.
- Call the sheriff to post the foreclosure notice on the house and maybe kick the person out later.
Wouldn’t this *someone* have to have a copy of the paperwork that they own the loan?
For that matter - this someone must have at one time have been servicing the loan - i.e. sending mortgage bills and collecting payments. That means that this someone (company I mean) must have been triggered to do so by something, with that something being the purchase of the loan (be it diced or not). Would not this purchase of the loan also include the paperwork proving that they own it, and therefore are the primary lienholder on the house?
Something’s missing in the discussion here. Even if a loan is diced up and sold as parts of various investment vehicles - wouldn’t at least one of these vehicles have to be considered the “primary” holder of the mortgage, such that the entity that purchased it would then be responsible for collecting the mortgage payments, and the balancing the books with the other entities who bought the other parts?
Something I’m not getting here.
Well they will eventually find it in most cases. The problem is that many of these large securitizations involve pools of 100s of mortgages, which have been assigned to various persons along the way and ultimately end up in a Trustee’s vault somewhere. Thus, one can try to slow down the process by demanding the original note and a copy of each endorsement in the chain of title. Some trustees are better than others, but you wouldnt believe some of what I see go on. Clearly there will be documents evidencing the sale of the note, and the payment therefor, but I know it does take weeks for me to get copies when I request them from clients.
It is estimated that 80 percent of sub-prime loans do not have a physical mortgage. In the height of the rally, lenders got lazy.
A lot of it has to do with the fact that the “deal” ppl were paid handsomely while the back office ppl are paid lowly salaries and given little respect. Give important responsibilities to ppl willing to accept crappy jobs and treat them poorly, and you can guess the result.
Bingo. The Lexus-driving mortgage brokers and the clueless Beemer-driving loan officers who signed whatever crossed their desk just shoveled the paperwork onto lowly “administrative assistants” who were underpaid and overworked. And who got turned out onto the street when the business went south. Given the number of hands these loans passed through - most of them unscrupulous, or, in the case of the poor office girls, unemployed - lenders are going to have a tough time proving anything in court if FBs dig in their heels and refuse to meekly slink away when ordered to do so.
This gets more and more entertaining. I can only imagine the kind of safeguards the burned lenders - those still standing - will have in place by the time I sign my mortgage next Spring or Summer. Fine by me - I don’t feel like competing with every howmuchamonth Harry willing to sign anything put in front of them.
I am i reading this right? the lender doenst have the note? the hard proof of the loan? The FB can just tell the leander “okay prove in court you own this house, then forclose” and the lender just goes “damn we dont have the note”
Yes you are reading that correctly. I have already ran into a similar situation on a home that is LP for ONE YEAR now and no foreclosure in sight. I spoke with the listing agent and he said the can not foreclose on the house because of this.
This just blows my mind, what little is left of it. Sure, we know that risk management was a joke, but who would have thought that the mortgage bunglers would have neglected to do the basic paperwork and record-keeping?
If the government is so inclined, I’ll bet hundreds of people could go to jail on SarbOx charges. Maybe a few thousand.
We’ll need more “Club Fed” facilities for sure. Maybe we have finally found a use for those tainted trailers that were found in New Orleans… We could park a bunch of them on a golf course in Las Vegas and put a fence around it.
I like your idea. Heck, wouldn’t it just be easier to leave up the construction fences around some of the newer Las Vegas developments? Add a few guard towers and use the ‘community center’ as the commadants HQ and we’re set. Maybe six prisoners per McMansion.
Oh wait… it should be up to one per bedroom. 
Got Popcorn?
Neil
That is correct. My husband has a client who has been living “mortgage free” in his house for the past 18 months…according to his attorney..they have no idea how long this will continue..and he doesn’t even get a mortgage statement NOR is it being recorded on his credit..he plans on buying a new home in the same community in the next 6 months..since he lives in FL and the homes in his community are averaging 40% less than what he paid.
Race to the bottom of the seize…
=====================================================
“He noticed a neighbor was being foreclosed upon and the house was for sale. So he found out the price, and slashed his asking price on his Internet listing by about $100,000 to $355,000, and sold his home in just five weeks.”
“‘Obviously we wanted to save money in commissions,’ said Seidel. ‘We wanted to sell it right away, rather than wait, because we figured the prices would keep falling. We did a quick price comparison and we priced it fairly.’”
The last of the smart ones seem to be leaving.
We’ve debated Kübler-Ross before, but at this point, I think we’re still in denial. There are increasing outbreaks of anger and bargaining, some entering depression and sprinkles of acceptance, but mostly still denial.
“They who dream by day are cognizant of many things which escape those who dream only by night.”
E.A. Poe
Certainly there are people who still Don’t Get It.
But I’m going to present an argument that FL may already be reasonably priced. Robert Shiller was on that dumb show “Wealth Track” this past Friday evening. He says prices are still falling rapidly throughout the US, but he says REAL prices in Miami are almost back to 1997 levels. (Which we may define as “fair”.) This is not to say that they cannot fall further: Shiller said RE is still a very risky play and he wouldn’t advise anyone to regard it as an investment. I was just amazed to hear him say that Miami, Las Vegas, and Phoenix have given up almost all of the inflation-adjusted gain that they accrued in 1997-2005.
Do you have any statistics on this point. I am still seeing properties at 2-3x 1999 pricing in some of these areas, but that is just based on a few properties I have run the numbers on.
Can’t speak for Miami, but for the condos I’m watching in the Keys, asking prices are about four times what they would have sold for 11 years ago.
looking at homes and their price history through the MLS…homes price are averaging around the 2002/03 price range right now..with a few dipping into 2001…I haven’t come across a home that has hit 1999 prices yet.
I can only say, Shiller should know ’cause he has the Index. It could be that transaction prices (his basis) are now a lot lower than asking prices; and don’t forget he takes inflation into account, which has been lowish but not nothing.
According to the first inflation calculator I found in a google search, the dollar lost about 22% of its value between 1997 and 2007. This is based on data from the Statistical Abstracts of the United States. So even if you believe the government’s cooked inflation numbers, inflation has been nothing like lowish, more like a sharp stick in the eye.
People sometimes forget that the magic of compounding applies to inflation as well as interest.
Shillers data is based on sales. Maybe the wishing prices, well, haven’t led to sales yet.
Florida Real Estate is Not like anything I have ever seen , and buying at any price without knowing the real inside story is a BIG BIG MIstake.
I’ve been putting together a Fun Florida RE Site with 3 years of amazing facts, To hopefully raise enough CASH to buy a Home here and to help others who may be thinking of moving here or Investing here.
Trust Me , I have 30 years business experience , buying and selling anything and everything and Florida RE is not for out of towners and amateurs. I could retire in 1 year here if I had Funds but only because I have all the “REAL inside info ” on everything about Florida .
Don’t think about buying in Florida without seeing the Real Story at “RealEstate4Idiots ” .com.
This leads me to another “RED FLAG” for anyone thinking about Florida. This is an inciteful post from another board. Read it:
—————————
Muggy,
It may appear inane when you first read what I am going to say, but please consider… Your personal environment/ home can only be as good as your neighbors. It would be great to find a deal on a foreclosure, if you are not surrounded by neighbors close to foreclosure status themselves. It would be outstanding to land a job that paid you a livable wage, as long as, most of your neighbors had the same. It would be great to send your child to a school where he/she is receiving a superior education that will prepare him/her for the challenges of life, as long as, all of the children in your geographical region receive the same.
Business is down in most sectors of the economy, as many US citizens are struggling to buy just the essentials. Florida is being hit especially hard because of the factors that I have shared above. Nice weather and beautiful beaches mean little if you are moving (or staying) in an environment of indifference or quiet resignation. Frank is correct that only you can determine your own best personal environment. I agree with one addition… consider the plight of your potential neighbors/town/city/state. Good luck!
——————–
So, when you tell me Schiller is calling inflation-adjusted prices from 1997 available NOW in Miami, I think to myself, per the above quote, “That’s great, but what about the culture-adjusted price?”
What good is a nice house in a chitty ‘hood? It’s so hard to tell down here. It’s all ‘hood to me.
Let these words haunt you like a ghost:
Your home can only be as good as your neighbors.
Your home can only be as good as your neighbors.
Your home can only be as good as your neighbors.
Your home can only be as good as your neighbors.
Your home can only be as good as your neighbors.
That is pretty funny since I have heard the govt plans on selling off the repo’d homes they end up with to low income families…
Low income doesnt’ mean chitty ppl.
I know many, alot, quite a few, seniors/retirees in their 70s that don’t have an extra nickel to do anything but shop at the dollar store for goods.
And they are quite good neighbors.
There are some who aren’t that mature that are nice/good ppl but who work at crap paying jobs.
I know some folks that are well off/middle etc who are lousy neighbors.
Low income housing or living wage paying jobs. ?
These kind of people don’t usually beg?
A lot has happened since 1997. Until prices and people’s ability to buy meet there will be no deals. I think we can safely say that right now most people have no savings and feel unsure about their future job prospects. The number of those who have something socked away and are confident in their job is not large enough to make a dent. Again the customer determines the price.
What good is a nice house in a chitty ‘hood? It’s so hard to tell down here. It’s all ‘hood to me.
Amen Brother! What good does it do to have 1997 prices, if the neighborhood that was a great place to live in 1997 is now a blighted, soulless eyesore?
I have seen many asking prices at 2001-2002 levels.
Maybe that is what Schiller is referring to as inflation adjusted.
I’ll go on the limb here, I constantly (meaning every day) watch carefully at least 6 zip codes. I also look at another half dozen occasionally because they give me a feel for how the wind is blowing and I happen to know the area.
The areas I concentrate on are in Miami-Dade, then 3-4 zips in Palm Beach, look at Hobe Sound, Jensen Beach for fun, further North I look at Melbourne Beach and Indian Atlantic and then skip over to Daytona and Ormond Beach.
I can say that I have seen MANY houses that sold in 05-07 for 450-600K were they are now asking 250K-300K.
In my opinion, only my own opinion, it is still a mistake to buy now.
Speaking as someone who currently rents in Melbourne Beach and would like to eventually buy in the Melbourne Beach/Indialantic/Satellite Beach area, I would have to agree. Prices are down 40% - 50%, but it still WAY cheaper to rent than it is to own. For example, we pay $1000/mo to rent a 2100SF townhome across the street from the beach. These units sold brand new for $420K in early 2006, and there is now a short sale priced at $265K that has been on the market for months with no takers. Even if it were to sell for $265K, renting still costs almost half as much as it would to own. We still have a long way to go. What’s really funny is that 5 or 6 other units are for sale here from $365K to $402K. These people are obviously out of touch with reality. They are probably part of the wave of Alt-A ARM holders that is due to bust in about 18 months… that’s when the even more entertaining sequel to today’s crisis comes out. Reserve your tickets now and make sure you have plenty of popcorn ready.
Anyone who is surviving on near-term credit is doomed. CASH IS KING!!!
Comment by az_lender
2008-10-05 08:12:51
“Certainly there are people who still Don’t Get It.”
Yeap, I posted last Sunday pretty late in Bits about the REDC auction I went to, a real circus with whistles, blaring music, tuxedos abound and the mandatory girls clapping.
The Prof asked me to do so and I was happy to oblige.
People still asking about Brickell condos as investments, even as the association is behind 400K to Florida Power & Light.
Comment by az_lender
2008-10-05 08:12:51
Robert Shiller … says prices are still falling rapidly throughout the US, but he says REAL prices in Miami are almost back to 1997 levels.
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I have seen many asking prices at 2001-2002 levels.
Maybe that is what Schiller is referring to as inflation adjusted.
I’ll go on the limb here, I constantly (meaning every day) watch carefully at least 6 zip codes. I also look at another half dozen occasionally because they give me a feel for how the wind is blowing and I happen to know the area.
The areas I concentrate on are in Miami-Dade, then 3-4 zips in Palm Beach, look at Hobe Sound, Jensen Beach for fun, further North I look at Melbourne Beach and Indian Atlantic and then skip over to Daytona and Ormond Beach.
I can say that I have seen MANY houses that sold in 05-07 for 450-600K were they are now asking 250K-300K.
In my opinion, only my own opinion, it is still a mistake to buy now.
He says prices are still falling rapidly throughout the US, but he says REAL prices in Miami are almost back to 1997 levels. (Which we may define as “fair”.) This is not to say that they cannot fall further
Fair in 1997 didn’t include overcapacity built in the intervening years… Whack another 1% for each month of inventory?
Those boats, like the houses will be underwater very soon
“‘I’m a boat yard, and you have to haul a lot of boats, a lot of boats, to make $100,000 in profit just to be able to pay the government. That has forced people to sell.’”
RE prosperity run amok.
“John Heagney said the suits are no cause for alarm.”
He says as he gives the audience a big Sarah Palin wink!
It is embarrassment and disrespect toward the American people when we have high office candidates who wink, giggle and give the roundabout “never answer the question” show that you would expect from a freshly arrested prostitute. You mean that in this big country, superpower, there was no one else to fill that spot,- even for appearances sake?
A chain is only as strong as it’s leakest wink.
As usual , profound.
Following this standard, we’re screwed no matter which party is in charge.
She was winking at her family. Don’t be so melodramatic. I’m not embarrassed, and since when do the American people need to be “respected” by displays of wooden fomality? If you’re offended, I bet you keep up-to-dates lists of inappropriate, politically incorrect words. You must be a barrel of fun.
I studied debating in college. Roudabouts and dodges to annoying questions were often considered clever, not disrespectful, and often earned higher points than grovelling answers.
The political “debates” are infomercials, not world-shattering events, and not real debates. I’ve never known anyone who took them seriously, except partisan fanatics with special (i.e. selfish) interests to protect.
If that is the case in regular debates/debating contests, why didn’t one of our MSM talking heads figure that out and tell the public what is acceptable? I have asked around, and no one has the answer you just gave regarding the ‘cleverness’ of debating styles.
I agree that the “debates” are just for each others team.And to rope and hornswoggle in the gullible public.
Actually, I did hear a debate coach admitting this on one of the national news programs, so it isn’t a secret and new concept. It is certainly no worse than looking into the camera and reciting prerehearsed speeches, complete with feigned emotions, that actually do address the questions, but untruthfully or misleadingly.
I would much prefer to see candidates question each other, than spew talking points.
I do not think Sarah Palin insulted the American public by her manner, or offended anybody but those who already hated her and would have been offended (because they wanted to be) even if she’d morphed into the goddess Aphrodite or the Virgin Mary, and ascended to heaven. Were they offended when Bill Clinton answered questions about his underwear? Bet not. And one can’t get much trashier than that.
“Homes are being ditched by owners and now left to rot by banks and lenders. The hardest hit: Port St. Lucie with 1,800 foreclosures reported in August, nearly 10,000 this year alone.”
That’s some ugly stuff. It’s time for a road trip.
I was going to say, that number is unbelievable. Somebody needs to drive around there with a camera and post the photos here while there’s still time, because the next thing to visit PSL might be a bulldozer. And if that town alone has ten thousand foreclosures this year, it would not surprise me if our state as a whole has a quarter million.
The Tampa Tribune debuted a new format today, and our official cataloguer of the housing bubble, Shannon Behnken — who I suspect reads this blog — has her own column now. Shannon, don’t let those blame-the-media types from our venal real estate and development industries get you down, because the truth sets all of us free.
The bubble’s deflation doesn’t seem to have hurt Hyde Park. Houses are still selling here for outrageous prices, and they actually ARE selling, though nearly as fast as they did two years ago. There are almost no foreclosures, especially south of Swann from Swann and Bayshore to South Howard Avenue (the real Hyde Park; north of Swann doesn’t count). I guess there are a lot of pretentious wannabes still moving here. Go figure.
I can’t believe people would even want to live in South Tampa. For what? The privilege of having your shop or residence flood after a marginal rain shower, every time a vehicle creates a wake? Of course, that’s assuming said vehicle didn’t stall out in two feet of water. The drainage stinks while South Tampa sinks.
It’s really bad south of Kennedy from Westshore to Dale Mabry, though the flooding isn’t too terrible in Hyde Park or Golf View. I got stuck off of Gandy in a flash flood, and spent hours trying to get home.
People want to live here because they’re told this is the place to be. It is convenient, but the traffic is really bad. What I don’t get is how so many twenty-somethings can afford to live and party here. Kids today must make fabulous money right out of college, or else they’re living it up on credit.
Looking For interesting Facts and Photo’s on Florida RE. Go to RealEstate4Idiots.com.
I have 3 years of amazing facts , inside Info and Photo’s to put up . Work in Progress but already some amazing Fun Facts on Florida Real Estate .
“‘Those are missing one day they were in the living room and then they were gone. ‘all the appliances?’ Yeah.”
Reminds me of my squatting days when I returned to find all the appliances missing, including the heater.
The bankrupt landlady justified it by saying she didn’t profit from it, she gave them away. I was still paying rent at that point and was just dumbfounded. Didn’t last long as a squatter - wasn’t the missing appliances as much as the climate of disfunction - some free things aren’t worth the price.
“He noticed a neighbor was being foreclosed upon and the house was for sale. So he found out the price, and slashed his asking price on his Internet listing by about $100,000 to $355,000, and sold his home in just five weeks.”
“‘Obviously we wanted to save money in commissions,’ said Seidel. ‘We wanted to sell it right away, rather than wait, because we figured the prices would keep falling. We did a quick price comparison and we priced it fairly.’”
Whad’ya know — the strategy of lowering your asking price to current market value can result in a very quick sale, even in a declining value market!
Whoa, PB! That road-to-Damascus ephiphany must’ve hit you like an ice-cream brain freeze! Lower the price, sell the house! By Jove, lad, you’re on to something!
So the only Hope we have is Bob?
Nope. That Hope is dead too.
Bob Dobbs is dead?
BTW, don’t forget, November 19 is
Hate for the Sake of Hating Day and
December 14 is Whiny Victimization/Co-Dependency Day
Lost, you are priceless!
Whiny Day. Going to work that one all day!
Here’s a little report about my trip to Palm Beach last weekend. The hotel next to the airport had two altercations involving the police while I stayed there. The rental car company also gave me a full sized SUV since nobody wanted to rent a gas guzzler and they were sold out of economy cars. It was pretty amazing walking down Clematis Ave’s bar district on saturday night. Less than a hundred people were wandering around. Most places the few patrons were glued to the tv’s watching and discussing the bailout. Less than 20% of the lights were on at night in the surrounding condo towers too.
Further out on the island at the Breakers resort It was almost entirely baby boomers vacationing there. A few were fed up hurricane victims from Houston who were getting away from the mess. Others told me stories about the $17,000 a year it cost to keep their kids in private schools in the Northeast. I wondered if some of the crowd had any savings or if they simply burned thru money as fast as they earned it.
It was pretty amazing walking down Clematis Ave’s bar district on saturday night. Less than a hundred people were wandering around.
Holy crap… when I worked in Palm Beach, we’d put together groups of 50+ on our own! Literally, we’d ‘take over’ a bar! If Clematis is that dead, there is no local money.
Has Palm beach dropped below 10 years of inventory yet? (That number always blows me away.)
Got Popcorn?
Neil
On Friday night I visited State St. in Santa Barbara where all the hot bars and clubs are. I expected to see the usual revelry but instead most of the dance clubs were completely empty while music was blasting away. In the bars, just a few souls were sitting around sipping beers. I’ve NEVER seen it that dead was in downtown SB. Spooky!
The sad thing is that Florida has not yet been affected by the major “other shoe” waiting to drop. That would be sharply declining tourism. I think we easily could see 10% unemployment.
Double-digit unemployment. Had to suffer through it during the mid-seventies. At least this time, I’ll be retired.
We are already at the 10% unemployment, but the state and federal governments won’t admit it. The unemployment numbers you read about are not even close to the true numbers. The unemployment numbers provided by the state only includes those collecting unemployment and not the self employed.
Even with prices falling this has to be the worst time to buy for anyone. My husband and I have been spending our free weekends going to open houses. We’re starting to see some nice houses come within our price range. We can afford it now. My husband has a good job, and we have the savings. But when I think of just how potentially bad things could get in the next 4 years, I think this is the best time to stay mobile and uncommitted to a home. A lot of people who are buying “great deals” this year, may find themselves in the position of having to move to find a job in a year or two from now. That’s going to be another financial blow for a lot of people.
Excellent point. Many jobs, even many careers today last 5 years if you’re lucky. I think this leaves the potential homebuyer with 2 options:
1) As you mentioned, don’t buy, and stay mobile. Pack up every few years and follow available employment from place to place.
2) Endure family separation. One parent takes high-paying work in remote locations (see “Deadliest Catch,” “Ice Road Truckers,” or “Black Gold”) while the looks after the kids and works part-time at Walmart.
A lot of people miss this when doing the rent vs. buy calculations! The fact that I was able to pick up and move when I was younger shaped my life. I simply left Long Island in 1988 when the aerospace industry was fading and moved to Silicon Valley to join what was then a tiny little company with 50 people….
and from the Sarasota Herald Tribune
When Florida lawmakers expanded the state’s hurricane fund in 2007 to force lower premiums, they tied the ability to deliver billions in insurance coverage to something as volatile as tropical storms: Wall Street.
http://www.heraldtribune.com/article/20081005/ARTICLE/810050347/2055/NEWS?Title=Hurricane_fund_crisis_could_put_homeowners_at_risk
Holy Chit! Florida is one major hurricane away from complete and total financial disaster.
Hopefully it will come before CA gets all the state coffer IO loan guarentees.
Plenty of knife catchers out there in zip 33470.
I had put in two different offers and both times I have been told that there is “a higher offer” being considered.
On the short sale the FB declined my generous cash offer and on the REO the listing agent wouldn’t present it to the bank. That property is now listed as “pending”.
I bet the short sale deal fails and the REO continues to sit with all of the hundreds of other ones.
LOXAHATCHEE, FL 33470 - from zipskinny.com: Median Household Income: $61,644
Educational Achievement: (well below USA average)
Bachelors or higher: 15.7%
Actual affluent households (people able to afford homes over 400k) only 4.6%
Household Income
$150,000-$199,999 2.5%
$200,000+ 2.1%
Anything priced over $180k in this town had better be a mansion
Here you go, and at this price (180,250 ) this EVEN includes the mold!! and needs a new roof.
http://www.realtor.com/search/listingdetail.aspx?zp=33470&mnp=21&mxp=20&typ=1&sid=760748b725ed4ad1b64e823b8072195f&pg=2&lid=1103532825&lsn=13&srcnt=37#Detail
And floody.
Hey Palmetto- imagine how good the fishing from my kayak will be a year with no boats on the water as it is now. People moving out, clear waterways, abandoned homes along the coast. Now that is my kind of Florida. Back to the 50’s-love it.
Gonna be lots o’ skeeters tho….all those black/green pools.
Hey, Dime, I’m hoping my neck of the Little Manatee and Cockroach Bay clear out. I also wish many people would lose all hope and abandon the area, most especially the FBs, builders and illegals. Whew, it would be awesome to see some of the polluted lakes and rivers clear up as runoff gets less. I was up at Lake Thonotosassa yesterday. Practically empty. But it was so weird to see all those estate type homes with the obnoxious gates and pavered driveways, surrounded by dispirited mobile homes.
Palmetto-Did you catch 60 mins tonight. CDS amt to 50-60 TRILLION Denaro….good lord are we toast or what?
Palmetto-my email is jconnor3@gmail.com
Like I said in my email, scrap the system and start over with a Constitutional monetary system. And get rid of the Fed. Central banks are monkeys on our backs.
Category 6 finance hurricane approaching tomorrow. Check out theses numbers…
“In sum,the Fed has had little or no choice other than to play the role of liquidity provider of last resort,” BNP said in a note to clients. “While the politicians have wrangled over $700 billion, the Fed has injected close to $300 billion into the financial system in just two weeks.” To fund this, the Fed has essentially had to print money, boosting the monetary base by $68 billion dollars, an annualized increase of 600 percent in two weeks. That in turn had put downward pressure on the overnight rate, which was trading around 50 basis points below the Fed’s 2 percent target.
This morning C-SPAN was asking the question, “Is this financial crisis worse than 9-11″ and most of the callers said no.
We haven’t hit bottom yet.
Any signs yet of the mob coming in and applying the old Bronx 2-step?
Step 1. Buy the paperwork-impaired loan cheap.
Step 2. “Arrange” for the occupier to depart without damaging the property.
At some point it’s going to look like a deal if a genuine note-holder can’t get possession because of technicalities.
Using violence to collect a debt results in forfeiture of the claim to the debt at all. I’m sure the state would be very interested in prosecuting a note-holder who tried to collect this way, too. Can you imagine running for re-election as the attorney general who “put the banker in jail”? Instant win!
To me, it’s the bank’s fault this has stalled.
No Ernie Harpster, you signed the mortgage and by doing so you indicated you could afford to make the payments. Why would a consumer trust a realtor for advice who cannot adhere to a financial contract.
The area mentioned in the article was an area loaded with RE owned by realtors. I bet Ernie is kicking himself for believing back then that “Now is a great time to buy”.
holy smokes! up 500 pnts in a matter of minutes…