Condo Market Has ‘Totally Collapsed’ In Naples
The Naples News has this report on another failed condo project. “In a sign of the times, the for-sale sign has come down at Intermezzo, a luxury waterfront community in Naples. The developer, Phil McCabe, has closed the sales center and temporarily suspended sales at the mid-rise condominium, saying he will wait for the market to improve before opening his arms to buyers again.”
“‘It was just my judgment that the market was too much in turmoil for me to proceed at this time,’ said McCabe. ‘It’s the market. The market has totally collapsed.’”
“He’s returned deposits worth about $40 million. That was for 20 units. ‘My goal was to get 50 units under reservation to go full-speed ahead, 100 miles an hour,’ McCabe said. ‘We obviously didn’t achieve that.’”
“In March and April, the Naples market continued to soften, and so did demand, McCabe said. ‘I am most concerned about the future,’ he said. ‘It’s a major real estate correction going on.’”
“Following a national trend, there has been a shift in the Naples market. Home sales have slowed, listings have grown and investor interest in buying real estate has waned. In February, existing single-family home sales in the Naples metro area dropped 47 percent from the same month a year ago.”
“McCabe considers the waterfront location superior, however. ‘It is not the case that there are buyers not wanting to buy there because of the location,’ he said. ‘It’s because there are simply no buyers period.’”
“Ross McIntosh, a Naples land broker, said he wouldn’t be surprised to see more condominium developers following in McCabe’s footsteps in Collier and Lee counties. He said condominium builders are pulling the plug on projects in other markets, such as Miami and Las Vegas, because of changing conditions in the real estate market nationwide.”
“High-rise and mid-rise developers have to put up entire buildings at once, making financing trickier, especially when demand isn’t that strong, he said. ‘In this coming year, we will see further announcements or further evidence of projects not going forward,’ McIntosh said. ‘Some people are not going to make a big announcement. They are just going to quietly crawl away with their tail between their legs.’”
“He expects to see projects fail and be taken over by their lenders or investors. ‘Heads will roll,’ McIntosh said.”
Wow, I’ve got first crack at comments! But what the heck do you say to this….??
We are finally seeing the market turn. Remember this great florida quote:
South Florida,” he said, ”is working off of a totally new economic model than any of us have ever experienced in the past” according to a realtor who predicted that a land shortage will support higher prices indefinitely.”
- New York Times, Trading Places: Real Estate Instead of Dot-Coms, 3/25/05
Until human race ascends to some higher being, history will repeat itself over and over again. But once ascended, there is no need to own a house any more.
That’s just great. Who am I going to sell to?
To those who hasn’t evolved yet.
You guys are cracking me up!
What happened to all of the “South Americans” that were flocking to Florida buying up properties? What happened to ” They are running out of land?” ” What happened to” there are over 400,000 people moving to Fl every year?” What happened to,” There is never a bad time to buy real estate?” What happened to ‘ There is NO housing bubble?”
As Emily Latelle used to say,” Nevermind.”
You left out , “The Baby Boomers are coming down all at once this spring and will buy up all the inventory !!!!….Buy NOW or be PRICED OUT FOREVER !!!”
I’ve got a 15,000 RPM RAID 0 Array I like to call “The Duplex”
Or how about this one:
I just don’t think we have what it takes to prick the bubble… I don’t think prices are going to fall, and I don’t think they’re even going to be flat. ”
- Diane C. Swonk, chief economist at Mesirow Financial in Chicago, New York Times, Trading Places: Real Estate Instead of Dot-Coms, 3/25/05
This bitch has been wrong her entire life. That’s why she keeps changing employers.
Yes, Ms. Swonk is the Abby Joseph Cohen of real estate.
Head in the sand - and if not, one has to fully question her motives.
Neither Swonk nor Cohen is paid to be “right” — they are paid to say what “needs” to be said.
Ignore the liitle man behind the curtain!!
Only a Fool would not have seen the writing on the wall down here.
The bloodbath will start in Naples and Sarasota, move rapidly east to Miami, then up the coast to Palm Beach and Port St. Lucie, across to Orlando, west thru Tampa, and finally, will move north to finish off Panama City.
It will be ugly.
Pass me the popcorn, this movie is starting to get real nice.
I hope we will see some falling prices in the next few months. So far the sellers keep holding out, correct.
South Florida,’’ he said, ‘’is working off of a totally new economic model than any of us have ever experienced in the past” according to a realtor who predicted that a land shortage will support higher prices indefinitely.”
- New York Times, Trading Places: Real Estate Instead of Dot-Coms, 3/25/05
Perhaps this will go down as the poster child quote of the bubble.
The bell has rung…. FORTY million dollars returned.
I recall an analyst saying the same thing about stocks in 99 or early 00. Oddly enough a report had a quote from a dutch trader in the 1600s that made the now exceedingly funny claim that in the future we would be working off an economic model based on tulips. I’m now convinced that the best way to spot a bubble pop is imminent is that some one close to the action states that the asset is going to become the basis for a new economic model.
Bluto’s law has a nice ring to it.
LOL. When they start talking about new paradigms then we are not far from a top.
I love the attitude of these builders. “If I can’t play the game my way I’ll take my marbles and go home.”
Biggdaddy63
Are you the same bigdaddy on CBS sports NBA rumors?
Nah,
I’m da former rap star… lol
I do live in your area Mike. I can’t wait until the snowbirds all leave and these “investors” are left holding the bag on all of these POS condo’s. It will be like the early 90’s again. I bought several of them for 20-30k that were “worth” 40-50 2 years earlier.
Been to Hutchinson Island or along the Ft. Lauderdale strip? There are literaly hundreds of empty condos for sale.
bigdaddy63
I dont live In OC Florida, OC California!!!
I been to Ft Lauderdale on tour though, at a minor league baseball field?
Your Local Radio station’s have Rockfest there everyyear???
The developer, Phil McCabe, has closed the sales center and temporarily suspended sales at the mid-rise condominium, saying he will wait for the market to improve before opening his arms to buyers again.”
20 years from now he can sell them as “retro” condos!
As someone who went from being a homeowner to a renter late last year with the hope of picking up a house after a correction (or at least after a few years of my investments beating the housing market), I am not please that builders are slowing. I want them to keep building like mad. I want a damned glut!
Believe me, we already have one here in Florida, just with the ones already under construction, ore recently finished. The next phase will be the pull-back on new construction causing unemployment to rise, which will then trigger the REAL price declines. Watching it happen is like having a squirrel or bird move in the path of your car, and knowing you can’t help but hit it, no matter how much you hope to miss it (in slow motion).
Florida Waterfront Condos…AKA Hurricane Speedbumps… LOL
I say:
Waterfront speedbumps for everyone!
Sorry SF Jack, it was just too tempting.
Bubblegram:
Naples High-Rises =
Seeing harsh slip
Helps hissing era
No problem at all, Jim!
In fact, provided Ben gives his permission, I take this opportunity to freely license to anyone here at THB the appropriate use of said phrase:
“I say: ‘XXX YYY for everyone!’”
Have fun!
I’m all over that.
“XXX YYY for everyone!” for everyone!
sf - you and me grilling carne on our 12th floor dtsd balconies, overlooking petco park!
Yes!
And eating cereal, too.
When you have a builder like McCabe discussing the market shift as “this is a major correction,” you wonder how many others share the same sentiment but are not willing to call it like it is.
-tim
Yup. CNN has a story on a piece done by Inman that allowed RE “professionals” to blog anonymously. Once under the cover of anonymity, the RE industry professionals were much more bearish than they will admit publicly.
http://money.cnn.com/2006/04/18/real_estate/agents_bearish_in_blogs/index.htm?cnn=yes
Totally off topic, but did I just hear that more votes tallied in American Idol than voted for President??? What a mess. We get what we deserve.
Fred,
Apparently you can vote more than once for American Idol. Kinda like voting for the mayor of Chicago.
Can’t blame it on Ca. We voted democrat……
You are totally missing his point…
Totally missing the point for a Californian is sort of a trademark thing, like signing off with “good night and good luck.” I think it’s a function of the dismal public education system here.
Actually I think she is totally making it.
Unfortunately, politics is no more than entertainment nowadays.
It is the circus side of bread and circuses.
I have quit voting. It’s over for Democracy.
Sic transit gloria mundi.
And you think a Democrat in the White House would have prevented the housing bubble? Just like another Democrat “prevented” the dot-com bubble. You are so naive if you think any of this has anything to do with party-line politics…
Excuse me, but did I hear someone mention that unnecessary tax cut that we got after the 2000 election? You remember the one? The one where a lot of people said “We don’t really need a tax cut. Why don’t you keep the money and keep balancing the budget?” And the Prez and his VP said “Nah!! We got a $527000000000 trillion dollar SURPLUS so we are going to give you a TAX CUT!”
Ahem. I seem to recall A REPUBLICAN was the PRESIDENT when that happened….
Uh. Whatever. I know some people tried to vote more than once in the last Presidential election. And some dead people voted as well.
But American Idol encourages you to vote over and over. And people of any age can vote for American Idol. My pre-teen doesn’t stop voting until she’s given Paris at least five votes.
So I don’t think there’s any moral to your story.
Florida has quite a few double voters. Snow birds vote in their home state by absentee, and in person in Florida. It was the most under-reported part of the “hanging chad” story. When they did all the follow-up analysis of the chad votes, a significant number of the voters were also recorded in other states (predominantly New York/Jersey).
Ahhhh…….democrats. There goes Al (I invented the internet) Gore’s conspiracy theory.
I like Paris too.
I hope the Republicans win all the elections this time around so we can see how they plan to either 1) get us out of this mess, or 2) handle the collapse after it happens (and the blame for it all). Should be fun!!!!!
When do we see the headlines that prices have fallen? I want to be sure that I’m back from the concession stand in time for that.
Yeah, I’m dying to see that “Median Home Prices Falling” headline myself. Can you bring me back some Milk Duds?
Sure, any soda with that?
That “Median Home Prices Falling” year over year headline will be here in another month or two. Look at these stats from the NAR:
Sales Price of Existing Homes
Feb 2005: $189,000
March 2005: $193,000
April 2005: $205,000
May 2005: $206,000
June 2005: $217,000
July 2005: $216,000
August 2005: $220,000
September 2005: $213,000
October 2005: $218,000
November 2005: $215,000
December 2005: $211,000
January 2006: $210,000
February 2006: $209,000
March 2006: ??
April 2006 ??(If its lower than $205,000 its the first year-over-year decline)
http://www.realtor.org/Research.nsf/files/REL0602EHS.pdf/FILE/REL0602EHS.pdf
Yep, March maybe, April probably, by September ABSOLUTELY.
I’ve been posting for months that April and June are the 2 BIG hurdles for year-on-year price.
And back in my high school days many, many years ago I saw someone not quite get over a hurdle because their trail leg slipped a little on takeoff. Gave a whole new meaning to the phrase “World of Hurt”.
If not by April, barring an RE miracle, we will be looking at YOY declines by summer.
For RE prices to top August 2005 levels, the declining price trend would need to reverse direction today and prices would need to increase by 5.26% by August (10.5% on an annualized basis).
NAR loves quoting the YOY price statistics. I wonder what they will trot out next. I’m sure the spin doctors are already working on this. …”Prices temporarily down, if you missed out, this is your big second chance. Never been a better time to buy!”
Tuesday April 25 is the release of March Existing Home Sales! (Another reason that today’s short-squeeze of homebuilder stocks is so transparently fraudulent.)
Auger:
I replied to your Hopkins query on April 15th, under the “daily bit bucket” thread. I put a detailed response, hopefully it helped. Let me know if you see it! (reply here or after my reply on that april 15th thread so I know)
Clouseau.
Clouseau, Thanks, I’ll go get it!
They stole your idea, Ben.
Real estate insiders go bearish in blogs
I wonder if that is the S_crowe who posts here?
None of the comments on that blog talk about the causes of the decline…the difference here is that we’re trying to build a model of why the system is trashed. They’re just asserting the effects, which is all we might expect out of them. I suppose that’s a big step for them.
OT–a house I’ve been watching was recently pulled and relisted under a more desirable adjacent zip code than the one in which the house is located! The actual zip is 21234 but relist has it as 21236. Is this illegal? I’ve seen where the listing states “Acual zip is 212xx”, but this one does not. Just a bold faced lie.
I’ve seen that before as well. Don’t know if it’s illegal (it should be), but it’s definitely unethical.
Could it have been a typo. Sometimes that does happen. We’d get fined for that here typo or not. Not illegal though
Apparently, nothing is illegal on the MLS list. Not in WA state anyway.
And as Mr. incomestream says, they can always call it a mistake.
Good way to push inventory around when it’s piling up too fast in one area.
although I have a vested interest in Naples, I don’t really care what happens over the next 20 years. I have some friends, however, that want a place there - so I will keep my eyes open for them.
OT
market reaction: unbelievable. Nikkei fed off another all time high for emerging markets…what a liquidity fed bubble it is.
and yet the wall street feels FED is nearing end! pinch me.
Yes. My stocks up 3% today! I think I’m beating the real estate market pretty well!
Not for long. It is all going down.
ALBANY, N.Y. Thanks to a Florida real estate deal, Governor George Pataki’s income jumped 47 percent last year.
http://www.wcax.com/Global/story.asp?S=4779951&nav=4QcRSEeI
you guys missed this gem in the article.
“Naples is not in any way in trouble and neither is the real estate market,” Candito said. “This is paradise, and people still want to move to paradise. People up North are looking to move to paradise. We talk to them all the time.”
You would think that paradise does not include $400k for a shack in the swamps… but maybe I have a different view of paradise
Maybe they’re lost. Maybe they are looking for Paradise AZ.
“Paradise” that you can not live in between May and October because its so damn hot and hunid. Hurricaines?
Another overlooked gem from the Naples News article:
“The fact that the development is near the flight path of Naples Municipal Airport and that it’s close to the city’s wastewater treatment plant may have hampered sales, said Ross McIntosh, a Naples land broker who provides an annual snapshot of the residential market.”
It’s time to wake up and smell the roses!!! LOLOL…
All the regular bloggers on this blog show take a bow for a job well done predicting a lot the things happening now in the RE market such as this in FL.
Oops, where’s “va investor,” that savvy RE maven with the heloc checkbooks? I thought she had 100 condos in Naples or something like that. LOL
I already commented above. Still hoping for my ruin? Don’t hold your breath. BTW, are you obsessed with me?
va SPECUvestor!
Remember: Bradenton condos = pets.com = tulip bulbs.
What is your definition of “specuvestor”? I’ve been investing in re for 25 years. My Naples properties are PAID for.
agents turn bearish
http://money.cnn.com/2006/04/18/real_estate/agents_bearish_in_blogs/index.htm
$40 million in DEPOSITS for 20 condos? $2 million dollar deposit per condo? Am I seeing that right? Is that a typo?
If 2 million is a deposit, what price is the actual condo? You could probably buy a whole town in Kentucky for that. *puzzled*
No oxide you saw it right . I think its a typo because I can’t imagine people putting 2 million each on a deposit .
I don’t know about a town in KY, but there was a town in CA for sale on EBay for around $1.5M. Don’t know the outcome. Of course, up in the NE corner of CA where basically nobody lives.
Maybe they are looking for Paradise, CA - a little town outside of Chico, CA.