Excess Inventory Bursts Speculative Bubble In Ft. Myers
The Charleston Post and Courier looks at nearby bubble markets. “In Fort Myers, the raging real estate market came to a screeching halt late last year. The growing pains in Fort Myers bear striking similarities to those in the Lowcountry.”
“‘The brakes went on, boom!, it stopped,’ said local builder Bart DeRosso. ‘It’s definitely, definitely dried up.’”
“DeRosso called Florida ‘the next California,’ a state grappling with high taxes, insurance rates and medical costs, immigration issues and natural disasters. He and other Realtors and investors said rising interest rates, higher construction costs and an excess of housing inventory burst the speculative bubble.”
“In Fort Myers last month, nearly 12,000 condos and houses were on the market. Too many, DeRosso said. ‘If you want to know where the market’s going, you look at inventory,’ said Denny Grimes, a Realtor in Fort Myers. ‘We don’t have a demand problem, we have a supply problem. We had a market binge and now we’re going to suffer a little bit.’”
“In the Lowcountry, some say the housing market has started to soften. Homes that recently sold within weeks now might sit on the market for months, and prices are starting to come down, said (realtor) Sandy Stone. The long-term rental market in Charleston is showing some signs of a slowdown, Stone said.”
“The Charleston Trident Association of Realtors reports that the average area home price has slipped from about $305,000 in October to about $296,000 in February. The number of homes sold also decreased, from 1,365 in October to 998 in February.”
A little over a year ago the press quoted people saying Florida was the ‘next California’ , meaning the new boom area. It isn’t a compliment anymore.
must not have hired enough DJs.
OT… Data from Marketwatch ticker…
U.S. April home builders index falls to 50, 4-1/2 year low
Last Update: 1:00 PM ET Apr 17, 2006
WASHINGTON (MarketWatch) - The U.S. housing market index fell by four points to 50 in April, the lowest level since the recession ended in November 2001, the National Association of Home Builders said Monday. A reading of 50 indicates builders’ views about the market were evenly balanced between good and bad. The index was at 67 a year ago and has fallen 18 points in the past six moths. The survey shows builders are somewhat optimistic about the current sales climate and about sales in the next six months. But the traffic of prospective buyers at developments is not hopeful. Views of builders in the West and South, the hottest regions for new construction, remain positive.
AIN’T THAT A SHAME.
New Housing Starts Tuesday AM before market open! Also D.R. Horton announces earnings (preview was last week), also before market open.
12,000 homes & condos thats nothing, its the typical winter lull. You just wait until after the holidays in the spring when everything picks up again, we expect right after the Superbowl in the Spring buying season baby boomers, immigrants and young professionals will be out in full force…
In February, the Ft. Myers\Ft. Pierce region had a little over 800 combined sales.
You are talking about a huge area of Florida; with Ft. Meyers on the west coast and Ft. Pierce on the east coast directly across from it.
I was here during the Great Condo Bust of the early ’80’s.
It has the same smell and feel to it right now down here.
Everybody keep your powder dry, and don’t fire till you see the whites of their eyes !!!
Do you remember details of what happened and time line for condos then? Was is like it is now with conversions - how did it all play out. Thanks.
I lived just north of Palm Beach, in Stuart back then.
Orlando was still a cow-town and I-4 only had four lanes; so there’s no comparison to Stuart at the time ( 1980-1985 ).
As I have posted on here before, they overbuilt on Hutchinson Island and there were signs everywhere in 1981….”Closeout”….and “Recently Reduced” were popular phrases back then.
I saw 2bdr/2ba OCEANFRONT condos going for 75,000 - 80,000 dollars.
I lived in a half-empty condo tower just south of the St. Lucie Power plant with a roomate…my rent : ~$ 650.00 month ( split two ways ).
My ex-fiance/girlfriend’s dad bought condos at Island Beach Club from some busted Canadians for pennies on the dollar….at one time he held like six of them and he did seasonal rentals. ALL were cash-flow positive. He sold ‘em in 1999 ( too early ) and still made a killin’. He told me one night that he paid $ 40,000 to $ 60,000 each for them…some were not “ocean front” but were still on the ocean in the same building.
My Dad came down to visit me and stayed overnight in my rented unit. He decided the next day to purchase a unit in the same tower…but later on got cold feet. Several years later he lamented that fact to me; wishing he had bought at the bottom. He coulda paid in cash at $ 70,000 a pop if he wanted to.
It will all repeat itself again; and soon.
we expect right after the Superbowl in the Spring buying season baby boomers, immigrants and young professionals will be out in full force…
Don’t forget the flying pigs!
Notice they said “boom!” not “pop” — don’t want to contradict the no-bubble-pop party line.
” Homes that recently sold within weeks now might sit on the market for months ” ……What like 12-24 months ,if then ? A couple reductions ,and still no sale….
Just on CNBC , Hovnanian Bldrs. 52 week low
Centex is on the threshold of 52 week low.
Home builders index Lower
No buyers, and all sellers…
Dollar down, Gold up, $70bbl oil…..
probably no bubble, just a pause in a “normalizing market”
Its all up hill from here. LOL!
A stock technician from thestreet.com mentioned HOV over the weekend. “Too late to short, too early to buy”, he said. Harrumph! HOV could be cut in half in the next year.
I want to see a headline that announces RE price declines in FLA. When they put THAT in the headline then we know we are starting to have fun!
Auger:
OT: I replied to your Hopkins query. It is on the “Daily Bit Bucket” from the other day (I think 2-3 days ago), located right after your query. Let me know if you don’t see it. I put as much info as I know to help out. I tried to reply last week, but it wasn’t posting for some reason
Hope that helped.
Clouseau. (reply here so I know you saw this, otherwise I’ll try to catch you later)
Thanks, I’ll go back and find that. Thanks again!
my old man has a place on a canal w davits in Ft Myers
can give it away
Seems like most idiots are “all-in” when it comes to RE. It’s their version of poker.
Exactly Death;…The World tour of Poker mentality on investing in real estate…
Have to indulge in some schadenfreude…just came from the SD investor’s forum, where I read that Jeff owns 4 houses in Fort Meyers - cash-flow negative of course. LOL.
Let’s hear about Jeff’s appearance in the belly-up court. Will it be in San Diego or Ft Myers?
I would wonder what has happened to the lady in Las Vegas that bought 16 homes in a sub-division before the builder cut the new home price, and leaving her with $4M in debts. Anyone know? Another belly-up victim?