The Kool Aid They’re Drinking In Florida
The Charlotte Sun reports from Florida. “The annual Fishkind Report released Tuesday by Attorneys’ Title Insurance Fund projects Florida’s economy to rally last among all states, and possibly not until 2011. All Florida housing markets will be down through 2009, according to the report. First published by economist Hank Fishkind of Orlando in 1975, the report uses deed data for more than 30 Florida counties. No other report he’s done has been quite so grim, Fishkind said.”
“‘This is the worst recession our area has seen since at least 1975-76,’ Fishkind said. ‘As we look back on it, it will probably be the worst in post-World War II history.’”
‘Florida lost more than 150,000 jobs last year — the worst job performance in the nation, according to Fishkind. People without jobs can’t pay their mortgages, which ignited the state’s crippling foreclosure problem and throttled housing starts and prices. Florida’s west coast will recover only as quickly as it can wipe out home inventory and add jobs, Fishkind said.”
The St Petersburg Times. “Fishkind places little faith in the Baby Boomer retiree wave that’s supposed to re-energize housing sales. While a national economic recovery is possible by the end of 2009, many retirees won’t have the means to afford a big move. He joked that baby boomers’ 401Ks have become 101Ks.”
“Fishkind’s yearly forecast, sponsored by Attorneys’ Title Insurance Fund, flopped in 2008. Last year’s report predicted Florida home sales of 320,608, 42 percent higher than the 225,810 that actually sold. Fishkind said he learned from that mistake.”
“‘As I told my wife, I’m one of the only ones stupid enough to publish my predictions,’ he said. ‘I failed to anticipate the financial panic. I’m not trying to make excuses, but I think it’s a failure of my profession.’”
From CBS 4. “President of Watermark Valuation Services which offers property appraisals, said in South Florida we’re seeing prices back to the 2003 levels at times. Biber pointed to a nearly complete 6 thousand square foot mini-mansion on the water in Lighthouse Point as an example. The builder bought the lot for $800 thousand and the original asking price was nearly 3 million. Now it’s being offered for $1.3 million and Biber said a buyer could probably negotiate that down to $800 - $900 thousand.”
“‘That’s what’s going on. There’s desperation. We’re reaching a point where you can start thinking of buying something and covering your expenses with the expectation you will make money in the longrun,’ he said.”
From Bloomberg. “As the U.S. housing recession enters its fourth year, there’s no sign of a recovery because speculators account for most of the rise in sales. While the purchases are trimming the inventory of unsold properties, most of those bought by speculators will likely return to the market when prices rise again, hampering any recovery, said Nobel laureate economist Joseph Stiglitz and Yale University Professor Robert Shiller in interviews.”
“‘We’re creating a shadow inventory of homes that will be right back on the market as soon as the economy and the housing market begin to improve,” said Stiglitz. ‘We could see a double-dip in the housing recession if that happens.’”
“‘You don’t have it in strong hands, you have flippers,’ said Shiller. ‘These speculators are preventing the market from crashing now, and when they get out it could fall again.’”
“Robert Arnold, a real estate investor who rents out a dozen homes near Orlando, Florida, says he’s ready to sell when demand rebounds. Arnold bought an Orlando foreclosure in June for $60,000, about a third of its appraised value, and spent $20,000 repairing it. Four months ago he rented it for $950 a month. In November he bought a three-bedroom house for $25,000 in Longwood, Florida, and hopes to rent it for $900 a month, about six times his $150 mortgage payment.”
“‘Most of the houses I buy are junkers, but with a little work they become cash cows,’ Arnold said.”
The South Florida Business Journal. “A Singer Island-based group has paid nearly $13 million for 60 units at the Marina Blue high-rise across from American Airlines Arena in Miami. The unit prices ranged from $165,000 to $264,000. Robert Given, CB Richard Ellis executive VP in the South Florida Multi-Housing Group, estimated that the units sold for about $200 a square foot.”
“During preconstruction, units at Marina Blue were selling for about $400 a square foot.”
“Kevin Tomlinson, a…broker specializing in condominiums, speculated that Corus Bank, Marina Blue’s lender, might be getting less from the developer. With individual condo buys becoming harder to come by, bulk buys are a lender’s best chance at recovering any of their money. ‘The people who own the senior debt – they may be taking a discount,’ Tomlinson said, noting that the deal may not be what the banked wanted or what it was owed, but it is better than nothing.’”
The Palm Beach Post. “In a sign that bargain hunters are taking advantage of West Palm Beach’s condo glut, the head of a large Pennsylvania-based roofing company has snapped up 26 units at The Edge. Ed Dunlap, chairman of CentiMark of Canonsburg, Pa., paid $5 million for condos at The Edge, according to a deed recorded this week.”
“Dunlap paid $165 per square foot for the 26 units. To understand how cheap that is, consider that…the buyers who closed on 155 units at The Edge in 2007 paid an average of $368 a square foot, and as much as $475 a square foot.”
“The Edge isn’t the only West Palm Beach condo tower struggling to sell units. Jay Jacobson, South Florida director for Wood Partners, said drastic price cuts are the only way to move units in a moribund market. ‘Anybody that thinks they can close units in West Palm Beach without discounting prices, I’d like to get my hands on the Kool Aid they’re drinking,’ Jacobson said.”
The Daily Business Review. “The Related Group of Florida has often been at the forefront of trends, including helping launch the glut of high-rise condo buildings in downtown Miami. Now one of the nation’s largest condo developers is taking the lead in the selloff of excess units through discounted bulk deals.”
“In its most recent liquidation, Related’s TRG-Harbour House affiliate sold 101 units for $27 million in Bal Harbour’s New Harbour House. The 457-condo, 16-story New Harbour House is at 10275 Collins Ave. Related still owns about 100 unsold units there.”
“The New Harbour House buyer is HH Condominium Investments, led by Thomas Daly and Christina Cuervo. Daly is an investor in the Related Group, and Cuervo is a former Miami Beach assistant city manager. HH Condominium Investments paid prices ranging from about $285 to $260 per square foot, with some units discounted of up to 60 percent compared with sales to individual buyers that closed in the last two years.”
“In one example of the cut-rate prices, HH Condominium paid $297,073, or $281 per square foot, for Unit 1206, which has 1,056 square feet of air conditioned space, according to Miami-Dade County property records. An individual buyer paid $737,000, or $698 per square foot, for a similar unit one floor below in May 2007. In the bulk sale, the price dropped 60 percent.”
“In another sale, HH Condominium paid $239,057, or $267 per square foot, for Unit 528, which has 896 square feet. In September 2007, an individual buyer paid $476,900, or $532 per square foot, for Unit 428, a similar unit on the floor below.”
“Related lent HH Condominium $7.27 million through a purchase money first mortgage, according to public records. ‘This was an end-of-year strategic sale to pay off remaining debt on our project and end-of-the-year tax planning,’ according to a statement from Related chairman Jorge Perez and executive vice president and chief operating officer Matthew Allen. ‘We, along with our new buyer, are looking to hold on to the remaining inventory for the long term asset appreciation at Harbour House.’”
The Naples News. “In November — and in several other months this year — Fort Myers-Cape Coral took the top spot in the nation for foreclosure activity in a ranking of 230 metros by RealtyTrac. Lee County had 5,813 foreclosure-related filings, or one for every 59 households, in November. That was up 35 percent from October and up 201 percent from a year ago, according to RealtyTrac.”
“Though numbers aren’t finalized yet, on Friday it looked like there might be around 700 new filings in Collier County for December, Clerk of the Courts Dwight Brock said. ‘Collier County during my tenure has never seen that type of filings and foreclosure rates,’ he said. ‘That will bring us up to somewhere in the neighborhood of 8,000,’ for 2008.”
“In Lee County, hit hardest by the market slump, it was a near-record year for existing home sales. In the Naples area, the median home price dropped more than 40 percent to $194,000 in November. In Lee, the median price for existing single-family homes was $106,100 in November, down more than 50 percent from 2007.”
“‘We now have affordable homes again. I know people experienced what they think is a loss in value. But we really had gotten beyond the means of most of the people wanting to buy in the area,’ said Wes Brodersen, a broker with Exit Gulder Real Estate on Bonita Beach Road.”
“Developers of two neighboring well-to-do private golf course communities, Palmira and Quail West, found themselves in financial trouble. In September, The Ronto Group suddenly suspended club operations at Palmira in Bonita Springs, saying it could no longer afford to keep the doors open.”
“Residents united to get the club back open. Instead of regular dues, golf members were asked to pay $3,000, and sports members were asked to pay $1,500 by Oct. 15. They were to make a second round of payments in the same amounts by Jan. 1. Meanwhile, residents are in negotiations to buy the club from the lender, GMAC.”
“Bonita Springs-based developer WCI Communities in August began an effort to reorganize and restructure its debt under Chapter 11 bankruptcy protection. The struggling home builder, which saw its losses grow and demand plummet, faced about $2 billion in debt.”
“‘Like so many other builders, they overleveraged and tried to rapidly grow, placing all their eggs in the luxury condominium segment,’ said Jack McCabe, CEO at Deerfield Beach-based McCabe Research and Consulting.”
The News Press. “Day three of Samir Cabrera’s real estate fraud trial ended around 5 p.m., after Cabrera Capital’s chief operating officer testified for nearly five hours. The government’s questioning of Tom Pence focused on his interaction with Chicago attorney Mitch Goldsmith, who drafted operating agreement documents to investors on behalf of Cabrera’s company. Pence said Cabrera never told him to tell Goldsmith that the company planned on flipping Fiddlesticks properties to make a profit.”
“Six investors from Pennsylvania, Minnesota and Ohio testified this morning that they didn’t know Samir Cabrera flipped properties he owned at a higher price. Cabrera, 32, is charged with 12 federal counts of fraud and money laundering in connection with two companies he organized that owned land on Fiddlesticks Boulevard near Daniels Parkway. He faces as many as 190 years in prison if convicted.”
“Georgia Ann Bohar, an Ohio truck stop waitress, testified that she invested nearly two years of her salary in one of Cabrera’s failed investment deals. She said she never would have sent the $25,000 she invested if she had known what was happening.”
“‘No I didn’t know that,’ she said, referring to Cabrera flipping a property. ‘Definitely not.’”
“‘Definitively no,’ investor James Andersen - a Naples property manager and broker - said when asked by Assistant U.S. Attorney Jeff Michelland if he knew the property at 13701 Fiddlesticks Blvd. in south Lee County had been flipped. Andersen invested $50,000 in the project on Feb. 6, 2006, seven weeks before one company controlled by Cabrera purchased the land for $3.9 million from the original owner. Then Cabrera’s firm sold the land again the same day to a company in which Andersen and other investors had put their money.”
“By the summer of 2007 the project was largely defunct and Andersen said he had a heated conversation with Cabrera, asking him ‘How could you be out of money the first year of a three-year project?’”
“Cabrera never gave him specific answers and he, Andersen, never got back his money, Andersen said.”
“Another investor, Wall Street derivatives broker Mark Stanley Perkins, testified he invested $150,000 in the same project and also lost it all. Asked by Michelland if he was told anything about the flip, he replied, ‘No, nothing.’”
“The Fiddlesticks deals and other Cabrera projects were financed in part by Frank D’Alessandro Equity Funding, a lending company owned by Cabrera’s broker at the time, the late Frank D’Alessandro. D’Alessandro died in September 2007 while kayaking off the coast of New Jersey.”
“Cabrera’s father-in-law, Lee County Manager Don Stilwell, also was mentioned in court testimony Tuesday as someone involved in the collapse of Cabrera’s companies. Don Turner, who along with Cabrera worked for the D’Alessandro & Woodyard real estate brokerage, said he became concerned the balance sheets were ‘desperately’ low for Fiddlesticks and Cabrera’s other projects. Turner said he first told D’Alessandro of his concerns about Cabrera at an event at Harborside Event Center and D’Alessandro told him to approach Stilwell.”
“Don (Stilwell) asked if we could have a meeting at his house” and subsequently Stilwell, D’Alessandro and Cabrera met with him at Stilwell’s house to discuss the companies’ finances, said Turner - who laid out the figures at the meeting. The reaction of Stilwell and D’Alessandro was ’shock’ at the news, said Turner, who brought some of the investors into the Fiddlesticks projects.”
“Then, Turner said, ‘Frank told us at the meeting, pardon my candor, we were all screwed, the projects were going down.’”
From WBBH TV. “Some people would call Lehigh Acres ground zero for the Southwest Florida foreclosure crisis as hundreds of homes there sit vacant. Still, Lee County Commissioners approved a 500-plus home development and the builder is excited about the prospect. Tuesday, Lee County Commissioners gave their final approval for almost 600 homes to be built and more than 200 of those will be affordable housing units.”
“Lee County Commissioner Frank Mann was the only commissioner to vote against the development and called the decision foolish. ‘It’s at the wrong place at the wrong time and it’s counter productive to try to turn this economy around and fill up those homes that are empty today,’ said Lee County Commissioner Frank Mann. ‘It just bordered on insanity in the face of the economy!’”
“The developers say they’ll wait to break ground until the timing is right with the housing market. ‘The best time to have the final paint on the walls is right when everybody is showing up to buy new exciting affordable housing,’ said the developer’s attorney Richard Pringle. ‘There are going to be folks interested in this property that might not be interested in all of the other residential units out there on the market today.’”
“Commissioner Mann says this project will only slow down the housing market’s recovery. ‘Surplus housing is what’s killing us right now. We need to eat this inventory up and get people into those homes instead of approving a whole lot more empty homes, right next door,’ he said.”
‘The New Harbour House buyer is HH Condominium Investments, led by Thomas Daly and Christina Cuervo. Daly is an investor in the Related Group, and Cuervo is a former Miami Beach assistant city manager…In one example of the cut-rate prices, HH Condominium paid $297,073, or $281 per square foot, for Unit 1206…according to Miami-Dade County property records. An individual buyer paid $737,000, or $698 per square foot, for a similar unit one floor below in May 2007.’
‘Related lent HH Condominium $7.27 million through a purchase money first mortgage, according to public records.’
As I mentioned when the Condo King first announced these condo deals, this guy is a real piece of work. Strategic indeed…
“Commissioner Mann says this project will only slow down the housing market’s recovery. ‘Surplus housing is what’s killing us right now. We need to eat this inventory up and get people into those homes instead of approving a whole lot more empty homes, right next door,’ he said.”
Sweet dukey! Can this be?! An elected official with a brain!
Too bad he seems to be the ONLY one they got, down there in Lee County.
Still, I find it heartening.
‘“The annual Fishkind Report released Tuesday by Attorneys’ Title Insurance Fund projects Florida’s economy to rally last among all states, and possibly not until 2011. All Florida housing markets will be down through 2009, according to the report.’
WTF is wrong with these morons? Given the ongoing collapse in housing prices in some parts of FL, it seems to me FL may possibly lead the many other states out of recession so long as asswipes like Fishkin get out of the way.
I agree Florida is going to come out of this better and earlier than many if not most other states. I am speaking in relative terms here.
Once house prices collapse, Florida regains its advantages. It has:
(1) Low property taxes for cheap houses (due to 50K homestead exemption) lived in 6 months a year.
(2) Low utility costs due to warm winters.
(3) Low cost of entertainment/recreation due to beaches, warm weather, and a large number of physically-active people.
From my perspective, Florida offers a good quality of life at a reasonable cost. You don’t need to make much money to live comfortably here. The weather in the winter in south Florida is unbelievably good - much better than the Southwest. Another advantage here (versus, say, California) is the good air quality.
um, dude, I grew up in Florida, and about those utility costs….remember summer! holy cow, especially if you don’t have an efficient AC system.
I’m paying over $200 for electric heat in Albany, NY this winter on 800 sq ft apartment I keep at 65 degrees not to mention I still need to run the wall unit AC during the summer as the humidity is so high here.
Hmmm… we have an Albany reporter too.
Walt, What kind of garbage spin are you hearing in the Alb/Schen/Troy geography? Aside from bought and paid for Chris Churchill propaganda in the TimesUnion that is.
I have lived in many places and Albany has some of the most overpriced, unkept, deteriorated, overtaxed housing. The “luxury” apartment I live in ($1000 a month for a one bedroom no w/d, electric heat, hear your neighbors TV, not remodelled since built early 70’s) is a dump.
Sounds like Southeastern Virginia! Low paying jobs and high priced housing. But but but it’s different here because of the NAVY!
Rents are real reasonable down on ten broeck st
Since I have an efficient A/C system, am often not in the house during the days, and am comfortable at 78 degrees, my A/C cost averages about $2/day in the summer. I turn it up to 83 or so when I leave the house, 86 if I leave town.
Right on, Paul. Keeping energy bills low in Florida is possible, if you know how to manage them. Many people don’t, but I have a feeling they’ll be learning.
So what is happening with Albany SFH prices?
(4) You can shelter your personal residence from creditors…
Paul,
I can get onboard with the ‘earlier’ part, as far as ‘better’ well that remains to be seen. Never considered the air quality aspect though, well said.
And don’t forget it has its own tag on fark.com!
Those property taxes are the deal killer in FL. Prices may be way down, but at what price is the assessor going to tax you? From what i’ve heard short sales and forclosure prices are not considered in the comps for tax purposes. At 2% of assessed value, we’re talking major bucks. Especially, if you’re buying to rent.
Correct!
Sorry to be different than you but:
http://www.bcpa.net - if you buy a foreclosure your property taxes will not be based on what you paid for the house BUT THE COMPS IN THE AREA. So you will not save on property taxes.
Utility Bills: Forget it. Since hurricane Wilma and the recent shortages in city revenue. Those utility bills are horrenduous. My water bill in GA for 5 people runs about $20 a month..in SFL..it was $75 a month…my electricity bill in GA..avg $160..in SFL.. for smaller home $560 a month..Florida is far from paradise..
Low cost entertainment…the beaches are horrible. Florida got cheap with erosion and replaced most of the sand with crushed seashells..trying walking on hot sand during the summer..physical active..maybe in South Beach..but SFL has some of the fatest people around..more like LACK OF PHYSICAL ACTIVITY..way way to hot during the summer.. and the rays will speed you up to being a skin cancer poster child..
Air quality is good..however..the landscape of SFL is changing..too many concrete commerical properties popping up on every corner..it really is a shame..
Yes Winter in SFL is nice weather wise..was just down there…but I would hardly call SFL..affordable compared to so many other places across the country…especiall if you have a family…
Yes, but outside of South Florida, it can be OK. However, I like that you keep posting those things about Florida. Please, keep doing so. People should definitely be warned.
exeter sounds like a true Florida realtor.
If only nobody said the obvious, maybe the problem would go away.
Florida real estate is not about to recover. Burst bubbles take decades to correct. Florida did not recover from its 1920s bubble until the end of WWII–some 40 years later. The relatively modest Houston bubble of the 1980s tood 8 years to fully deflate and another decade to recover.
First median prices must fall to affordable levels. Price rent relationships must reestablish, existing housing prices must fall below replaement levels, and price income relationships must normalize. You certianly don’t expect an income boom to double or triple disposable income in Florida in the near future do you? While there may seem to be bargans among foreclosed properties, prices must fall enough to attract buyers people who want to live in them, not speculators figuring on renting for 5 or 6 years before turning a nice profit. There are at lest two more years of declines to go before median prices even normalize
Once the prices correct, they must then attract all the people needed to fill all those empty houses in Northport, Cape Coral and Pt St Luce, as well as the all the condos in Miami, Naples, Palm Beach and Sarasota. And it is not just those obvious areas of massive overbuilding, far too many inappropriate McMansions were build in more attractive areas as well. Siesta Key is a great example.
What the current crop of greater fools –er “investors”– will find is that rents will not stay high enough to cover the costs, espeically maintanence and repairs. You don’t really expect taxes to fall? Florida still has relative low taxes, dispite the silly homestead exemptions, but water bill, at least, must rise substantially.
So you buy a house now and wait for some new solar technology make Florida a land of abundant energy? Get real.
I tend to agree, if Florida can get back to it’s basics, low housing, low wages, lots of jobs (especially seasonally), I believe it will pull out before many other areas of the country.
I’ve got an offer in (90 days now) on a short sale at 75% off the high back to mid 80’s pricing in Lee county. Will pay cash and be happy to be warm again.
I disagree that Florida ever will bounce back. The post-WWII version of this state was the product of a historically unique set of circumstances ranging from cheap energy to retirement patterns to a broad middle class to reckless credit. All of those things will be different in the future. Tomorrow’s boomtown, if there is one, will be somewhere else.
–
““In a sign that bargain hunters are taking advantage of West Palm Beach’s condo glut…”
Who all are stupid enough to buy into areas where the prices are falling 20-30% annual rate, more or less steadily?
Is $165 PPSF a real bargain in FL?
Jas
“Is $165 PPSF a real bargain in FL”?
Not no way, not no how! These ’savy’ RE investors are screwing themselves. I imagine they think the sharp young ‘edgy’ infestors will be snapping them up again. The condo market above and beyond everything else is burnt toast for years to come.
they think the sharp young ‘edgy’ infestors will be snapping them up again.
Anecdotal:
Friends’ children about to graduate with professional degrees are worried about whether they’ll even get a job in their chosen field.
One is a pharmacist.
I’m not a youngster, but I can see we’re in a period where we should all be grateful just to be employed. That’s the priority, then comes infesting.
One is a pharmacist ??
That is the saddest part for me….Its one thing to screw around during your twenties and find yourself behind the job eight ball……Its quite another to dedicate yourself to completing a difficult technical degree and then find there is nothing for you at the end of the day…
I don’t know if that particular grad was just overly pessimistic or perhaps expressing concerns that were circulating among his fellow students.
Just to illustrate how the zeitgeist has changed in the past five years: I have vivid memories from my time in the REIC of twenty-somethings planning their fantastic future as Flippers to the Rich and Famous.
Preach it, Philly! I was looking across the street over the weekend, and what should I see but the father of the young lady who lives there and rents rooms to other young ‘uns.
Back in ‘04, the plan was to buy this young lass a house to live in while she attended the University of Arizona. I imagine that her family was following the same game plan that a lot of others were: Sell when she graduates, and make enough money to pay off her student loans and who knows what else.
Well, that was then and this is now.
The reason that Dad was across the street was because he and a crew of young men were replacing the roofing felt that had blown off the carport roof during a July 2006 thunderstorm.
Yup, you read that right. It took them 2.5 years to fix something fairly simple. And I doubt that the building materials and the young men’s time cost more than a few hundred bucks.
Methinks that the neighbors’ housing investment scheme hasn’t panned out the way they had hoped.
I’m beginning to feel sorry for the house (not the occupants).
311 Sandtree Dr
Palm Beach Gardens, FL 33403 $60,000
2 Bed, 2 Bath, 1,338 Sq Ft
Here is one under $45 a Sq Ft , these units were north of $200,000 in 05-06
Florida also appears to be leading the way in being able to make a living once again buying and renting properties, if you can deal with the hassle.
Hassle is right!
I’ve known quite a few people who were landlords at one time. To a man and woman, they all say that the hassle factor motivated them to cease landlording.
Paul, those cheap houses (under $100,000) could be taxed at $150,00-200,000. The tax/ins could cost $400/mo. Even $900/mo rent wouldn’t cover costs.
It does, I know a guy who owns units in Sandtree, has since the 80`s. It didn`t work at $150,000 - $200,000 but it does at $60,000.
“President of Watermark Valuation Services which offers property appraisals, said in South Florida we’re seeing prices back to the 2003 levels at times. ”
I agree home prices are currently there and going down even further…
I’ve seen places like this, in the $35-45/s.f. range, being offered as regular sales, not short sales. PBG, Melbourne, Palm Bay, probably true over on the other coast, too. Usually they are faceless unattractive but serviceable boxes that need some TLC. A dilemma for landlords is that if they want to attract snowbirds, the complex needs a pool and this runs the condo fees way up, relative to the value of the unit. If they want to attract workers, there must be jobs. Tough to win that one, right now.
Wait’ll we get all those solar plants up and running, then there’ll be plenty of jobs, LMAO! Maybe some people could get jobs keeping Charlie Crist groomed. Couple of attractive women with fans, a masseuse, a tanning bed operator, etc. Gotta have those women fanning him, though.
Every time I see our governor I cannot help but laugh. He may be the shallowest person I have ever seen in my life. You could replace him with a mannequin for a day and no one would notice.
Reply to jeff saturday;
That place @ 311 Sandtree, is back behind the Home Depot on Northlake…Trying to get out of there, onto Northlake, which is usally jambed up with traffic, is horrible….
Thanks, but no thanks
$165 PPSF a real bargain in FL ??
No opinion on whether that is a bargain or not but if it is a high rise condo (Above four stories) $165. per foot is likely well below replacement costs…High rise construction is very, very expensive to build…
News: Were bumping $200 on some upper end new condos here.
Lower end brand new condos on Brickell have been pushing $125-150.
-
I personally predict $75.
Is $75 a bargain?
Well at $75 psqf the PE is 25.
-
Here it is again for those that missed it.
My rent: $1650
-
Taxes $7448
HOA $750 / month
-
From Assessors office.
Taxes: Combined taxes and assessments (gross amount) for 2008 : $7448.64
Amount due if paid by
November 30 2008 : $7150.69
December 31 2008 : $7225.18
January 31 2009 : $7299.67
February 28 2009 : $7374.15
March 30 2009 : $7448.64
Muir…Am I reading that correctly ?? $7500. per year in taxes and $9,000. per year in HOA ?? If so, I am not sure I have seen anything like that before Fixed cost vs. Rent
That is why SFL..will never be affordable when it comes to condos..the condo may be cheap..but the HOA, taxes and insurance will kill the deal every time. HOA’s only go up never down!
Ditto Muir and Ann. There are two ways condo fees can be handled in FL, IIRC. One is that the fees include a replacement fund - it is a true sinking fund and there rarely if ever would be an assessment. The other way, which requires the signed agreement of an overwhelming majority of owners, lets the association pretty much run bare relative to maintenance, so that any big projects like repainting often require an assessment.
I don’t know if it is a requirement or not, but all new condos that I see have common hot water. This makes sense for a number of reasons, not the least of which is not worrying about the old water heater one floor up leaking into your unit. But the biggest beneficiaries are renters, because they get free hot water.
And those taxes are on an assessed value of around $350,000-400,000, I bet.
scdave,
Yes!
I rent
-
Here’s the kicker, if I bought at $75 psf, the ‘PE on the house’ would be 25.
How’s that for an expensive stock?
Of course, the units sold for $350+ psf!
Kirisdad,
Property Information:
Primary Zone: 6100 RESTRICTED COMMERCIAL
CLUC: 0007 RESIDENTIAL- CONDOMINIUM
Beds/Baths: 2/2
Floors: 0
Living Units: 1
Adj Sq Footage: 1,242
Lot Size: 0 SQ FT
Year Built: 2007
Legal Description:
0.58755% INT IN COMMON ELEMENTS OFF REC 
Sale Information:
Sale O/R:
Sale Date: 0/0
Sale Amount: $0
Assessment Information:
Year: 2008
Land Value: $0
Building Value: $0
Market Value: $329,060
Assessed Value: $329,060
2008
cdave,
2009-01-08 15:44:57
“Muir…Am I reading that correctly ?? $7500. per year in taxes and $9,000. per year in HOA ?? If so, I am not sure I have seen anything like that before Fixed cost vs. Rent”
—
This is COMMON in SF
Kirisdad,
Property Information:
Primary Zone: 6100 RESTRICTED COMMERCIAL
CLUC: 0007 RESIDENTIAL- CONDOMINIUM
Beds/Baths: 2/2
Floors: 0
Living Units: 1
Adj Sq Footage: 1,242
Lot Size: 0 SQ FT
Year Built: 2007
Legal Description: _________________UNDIV 0.58755% INT IN COMMON ELEMENTS OFF ____________________
Sale Information:
Sale O/R:
Sale Date: 0/0
Sale Amount: $0
Assessment Information:
Year: 2008
Land Value: $0
Building Value: $0
Market Value: $329,060
Assessed Value: $329,060
2008
Absolutely not, not for a condo! Especially not in WPB, where there’s about 10X the needed condo inventory already standing.
I’d start to be somewhat interested in the buildings at 80/sq/ft. Anything above that, it’s just asking to get burned. I used to rent in one of the best condos in WPB (The Courtyards) for location; it was ~$1/sq/ft, and I am sure I was overpaying (I leased near the peak of the market).
The overbuilding in WPB and Palm Beach Gardens is something you need to see to believe. And while your hear, looking at 1200 sq/ft condos for 300K, remember that our median household income is ~55K. That should put it in perspective how badly these markets are going to fare over the next few years.
Agree. The scariest thing of buying any new condo would be carrying the condo fees not only for your own property, but also for two or three hundred others where the owner has stopped paying.
is that HOA figure of $750 a month correct? not a typo ?!
As in Seven Hundred fiddy dollars a MONTH just for the HOA fees ?!?!
dayum. I mean, just, well . . . damn!!
aqius,
Not a typo.
Hope the other posts show up.
“In November he bought a three-bedroom house for $25,000 in Longwood, Florida, and hopes to rent it for $900 a month, about six times his $150 mortgage payment.”
Sounds as if some tenant ought be able to get it for $300 per month.
Ya gotta point there, WT. Especially if that tenant knows how to do that “100-120x the monthly rent equals the purchase price” math. Add this to the ability to look up the house purchase price in the local tax records and you’ve got one hard driving tenant.
For every prospective tenant smart enough to look up the records and smart enough to do the math, there are at least two who aren’t. The LL may just have to wait a bit longer to find one of those other two. Or he lowers the rent to $750.
Here in Tucson, the local media is abuzz with stories about how apartment rents are going down. Add to that all the SFRs that are for rent (there are a lot of failed flip attempts here), and you have quite a buyer’s market for renters.
“As the U.S housing recession enters it’s fourth year”
Gosh, has it BEEN ‘that’ long? Seems like just yesterday realtors were saying it’s a great time to buy. Wait a minute! They were… saying that just yesterday!
Well yeah, now that speculation in a handful of markets has managed to tank their lenders, developers, anyone that could lay carpet and the American economy at large, sure, you can say the downturn started 4 years ago.
I kind of felt it started around September of 2007…At least around here…
Started 3Q05 in Sarasota area. The number of completed sales began to decline at that time, although prices held firm until the first part of 2006.
What inning are we in now?
Rained out ??
Washed Out ??
Wiped Out ??
My point exactly guys. Depending on where you are ( SoCal, the Carolinas ) and a whole lot of country in between, you’re pinnacle was bound to be different.
In OR there were still infestors making bank on flips through 2007!
That’s what I was thinking.
“As the U.S. housing recession enters its fourth year,”
My how time flies when you stop arguing whether we’re in a recession and start backdating things…
Backdating? Already done and documented. See Orwell, George.
Four years? No, I would say 2.5 years at most. It’s a three-part recession:
1. End of the 2006 selling season. That was the ultimate peak, when we physically ran out of buyers, and we began seeing news reports of “nothing is moving” and “we’re not going to give it away.”
2. Mid 2007. Short-term subprimes adjust and begin to default. Alt-A (who weren’t going to give it away), began to adjust. Market sees Alt-A and panics. Ben sends the choppers to chop interest rates. Calm reigns for one more year.
3. Subprimes totally wiped out, Alt-A teetering, somebody tells Dodd that the banks are too big to fail, but the debt is too big for banks to survive. Somebody else looks at the second hump of the Credit Suisse adjustment grapsh. HeliBen and Hanky Panky get on TV. All hell breaks loose.
From the Bloomberg article:
“Neighborhoods devastated by foreclosures are at a tipping point,” said Mark McDermott, of Columbia, Maryland-based Enterprise Community Partners. “Getting these properties into the hands of community groups, instead of speculators, will go a long way toward stopping the downward spiral.”
Wouldn’t it be ironic if NYC residents started buying foreclosures in the suburbs for slumlording purposes, the way suburbanites did in NYC in the 1960s and 1970s? Double up in this massive (by your standards) home, and your kids get to go to actual schools! Affordable housing, private-sector style!
Long Island (and many suburban areas) are populated by the descendents of those who fled urban areas when poor people moved nearby. Those who were not inclined to flee never left the suburbs.
This could get interesting.
A lot of older inner ring suburbs are on the ropes already, so your theory makes sense. Studying the historical origins of America’s suburbs is most interesting. NIMBYism played a huge role, as did tax “evasion”, and sidestepping costly city building codes. Later, trains and the auto of course fueled their growth.
The result is that most urban areas have a patchwork of suburbs that vary significantly in overall quality. Adminstratively isolated, those that don’t have competitive locations and good management will very likely become worse off than the inner cities of yesteryear.
Minorities who suffered most from the economic terrorism of the last 28 years played the largest ever role.
“the economic terrorism of the last 28 years” ?
What?
some kind of institutional slavery?
What is that//?
“Adminstratively isolated, those that don’t have competitive locations and good management will very likely become worse off than the inner cities of yesteryear.”
Here in NY State, New York City, which was the worst run government 30 years ago is now the best. I think all the corrupt pols who wrecked the city and decamped (and their offspring) subsequently did the same to the suburbs. Instead of going on welfare, everyone in the rest of the state gets government jobs. They’re sucking NYC dry, but the real damage is more localized.
The diversity might save them, however. The whole of NYC — five counties — was trashed in the 1970s. If you have a well run town, in contrast, you might escape the damage from the poorly run town nearby.
Yes, but the bad areas will be super concentrated badness.
If your suburb is one of the good ones - no problem. But given a choice between a down on its luck suburb and a down on its luck large city - the latter is the lesser of two evils. The large city will at least have the population and gov’t representation to get some Federal goodies.
When I was Back East (visiting family outside of Philadelphia), the *New York Times* ran an article about the future of real estate. IIRC, it was in the Sunday *Times* that appeared on December 28.
The fellow interviewed in the article was a developer, and he said that the halcyon days of building SFRs in good suburban school districts are coming to a close. Reason: In 1985, 50% of American households had children living at home. The current percentage is around 27% and headed down to 25% before too long.
He added that much of the future homebuyer market will consist of empty nest Baby Boomers without need for one of those aforementioned SFRs, along with singles and couples without children. Which means that areas with good schools won’t be a huge priority.
The developer predicted that we’d see suburban SFRs languishing on the market by 2025.
Finally somebody associated with real estate who is using his or her brain to cast a thoughtful look at the future.
Which means that areas with good schools won’t be a huge priority.
Good schools are a leading indicator of value, which is important regardless of whether you have kids or not.
+1
“‘We now have affordable homes again. I know people experienced what they think is a loss in value. But we really had gotten beyond the means of most of the people wanting to buy in the area,’ said Wes Brodersen, a broker with Exit Gulder Real Estate on Bonita Beach Road.”
Funny how, during the peak bubble years, anyone who said that house prices had gotten too high and a fall in prices is necessary to return to historic affordability was dismissed by most of those in the real estate profession as an insane pessimist.
…in South Florida we’re seeing prices back to the 2003 levels at times.
I’ll say it again, 2003 was after several years of appreciation driven by declining interest rates, but before some MASSIVE overconstruction. So prices won’t stop there, even though interest rates are lower. The huge oversupply of housing will drive price below the cost of replacement in large parts of CA, FL, and NV IMHO.
Amnesty will chew off a chunk of oversupply.
What is the cost of replacement? The true cost should be almost half what it was pre 2009. Virtually all materials are cheaper. Labor should be a lot less.
Don’t leave AZ off the list!!!!!
WASHINGTON (AP) — Democratic lawmakers have reached a deal with Citigroup Inc. on a plan to let bankruptcy judges alter home loans in an effort to prevent foreclosures and said they expected other lenders to follow.
Peggy Joseph lives!
Does this mean that the judges can modify the balances due in a downward direction?
Does this mean Citigroup is taking bailout billions and saving the people in the Victims of Angelo program? Fwankwy I am shocked.
It will definitely mean an increase in risk for future bond holders who should then expect higher interest rates which will make loan rates go up.
But who knows with all this government manipulation and the death of the free market, seems like now whenever you want to join the debt society.. the government will just print up a few million dollars for you.
To get around “Thou shall not kill”, do it when many others are doing it too, then it’s not called killing - it’s called being a good soldier.
To get around honoring thy debt, do it when many others are doing it too, then it’s not called
being a bad debtor - it’s called being a poor victim.
“‘As I told my wife, I’m one of the only ones stupid enough to publish my predictions,’ he said. ‘I failed to anticipate the financial panic. I’m not trying to make excuses, but I think it’s a failure of my profession.’”
_______________________________
No, what Fishkind and his alleged expertise failed to anticipate was that Florida housing prices, being speculator-driven and a bubble, would collapse just like a previous speculative land bubble did in this very state eighty years ago. This guy can’t even fall on his sword properly, and he’s still publishing an annual eponymous report. Cue the seal.
“‘You don’t have it in strong hands, you have flippers,’ said Shiller. ‘These speculators are preventing the market from crashing now, and when they get out it could fall again.’”
Debt cat bounce time. Enjoy riding that falling knife down to the ground, flippers!
Here’s what gets me:
“‘Most of the houses I buy are junkers, but with a little work they become cash cows,’ Arnold said.”
How much moolah that cows may (just may) throw off into Arnold’s hands was actually once the property of working taxpayers? One works, dutifully sends a share to Washington, D.C., and it’s injected helter-skelter into economy-supporting programs, ostensibly for the public benefit. Some for the banks, some for insurance companies, some for people in incentive zones, for free legal services, some for the brokerage companies and so forth.
If he is investing his own time and sweat and calculated risk-reward scheming into his business, more power to him.
It’s getting harder to tell what’s private and public.
And it’s not even Jan. 20.
Blecho.
I hate shaking hands with someone who gives you the limp flipper.
cookie test.
Mmmmmmmmmmmmmm…..Cookies………
I went out with Chris Thornburg last night. What a dreamboat! And he didn’t even try anything — not that I’d let him. He took me to Fiddlesticks. he ordered the fiddle; I ordered the sticks. Only problem is: Thorny said to me that he wants to double-date with Larry Yun and his girlfriend. I’m so conflicted.
Luv,
Jen
Don’t tease me so! I’ve decided that I simply adore Christopher Thornberg. My post yesterday, announcing the creation of a Christ Thornberg fan club, and a subsequent call for the requisite giggling Japanese school-girls was not in jest, but was in fact a long term and sincere work-path.
(But first tell us, Jen, is he a good kisser?!?!)
I’m surprised there weren’t any “Fiddlesticks” comments until this late in the thread.
From CBS 4. “President of Watermark Valuation Services which offers property appraisals, said in South Florida we’re seeing prices back to the 2003 levels at times. Biber pointed to a nearly complete 6 thousand square foot mini-mansion on the water in Lighthouse Point as an example. The builder bought the lot for $800 thousand and the original asking price was nearly 3 million. Now it’s being offered for $1.3 million and Biber said a buyer could probably negotiate that down to $800 - $900 thousand.”
He says “nearly complete.” You or I would say “half finished” or call it an abandoned project.
And who would buy a house that has been not fully built and abandoned? Think of all the headaches involved completing that project, esp. when there are other homes around ready to move into.
I think the ultimate selling price of that property will end up being less than if it were just an empty lot! A half finished house, no matter how grand, is a liability, not an asset.
And the state is going to tax you at the multi million dollar amount!
For which, we can thank the FBs, flippers, realtwhores, scam artists, etc. Really, in the final analysis, it’s your so-called friends and neighbors who wouldn’t listen, who felt it was their right to indulge in stupidity, who are largely to blame, if blame there be. More people could have said no.
Idiocracy, indeed.
This is why I think employers should seek out people who were “dabbling in Real Estate” when compiling lay-off lists, and shouldn’t hire any former realtor/mortgage broker/houseflipper when hiring.
If the government can’t contain this, maybe Business can
I grew up in Florida from the late 1960’s left in 1980 and returned in 2000 and now live only the winter in Sarasota…and I can tell you that Florida is no longer the paradise it once was… just wait until the next hurricane slams the state (and one or more will) and insurance (including auto) will skyrocket… manageable utility bills?? ha! try 300 to 400 dollars in the summer for an average 2000sq ft home… also swfl has one of the highest cost of living expenses in the country…scores of blighted neighborhoods with people walking around as the walking dead…no REAL economy except for selling cars and houses to each other and filling hotel rooms…Florida is in bad very bad shape
Mike..you are so right! Sorry but you can keep Florida just from dealing it the insurance companies who have every angle to try and get out of NOT paying a claim. Learned that lesson well with Wilma. Blue tarps were the in thing for about 2 years, even longer if you lived in a condo!
Told hubby after 2005 season, that I had nightmares of being 88 years old with my house half destroyed by a hurricane and a FEMA trailer parked in my driveway! Knew it was time to go. Happy I left but I do enjoy visiting..no place has great Hispanic food like SFL..
P.S. been keeping an eye on my old house that has been up for sale for a year plus(owner underwater by about 400k)… owner just did a quit claim deed tranferring from wife to him…heard people in SFL are doing that to delay foreclosure….
Paulson Bailout Didn’t Give Taxpayers What Goldman Gave Buffett
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By Mark Pittman
Jan. 9 (Bloomberg) — Henry Paulson may be the most powerful manager of money in the world and he still couldn’t do for taxpayers with the $700 billion bailout of American banks what Warren Buffett did for his shareholders in investing in Goldman Sachs Group Inc.
The Treasury secretary has made 174 purchases of banks’ preferred shares that include certificates to buy stock at a later date. He invested $10 billion in Goldman Sachs in October, twice as much as Buffett did the month before, yet gained warrants worth one-fourth as much as the billionaire, according to data compiled by Bloomberg. The Goldman Sachs terms were repeated in most of the other bank bailouts.
Let’s keep track of Mr. Pualson after he leaves office, I’m guessing there will be a very high paying job in his future. Somepeople would call this a kickback.
I live and work overseas and almost convinced my self to purchase a home in SW Florida recently. I am backpedaling now. While house prices have come down quite a bit, they are still high for the following reasons: home insurance costs and taxes are going up. The true price of a home is seriously driven upward by home owners insurance, flood insurance, hurricane insurance, and also rising property taxes to fill the coffers of the State government. But the real kicker will come next year when interest rates go up to at least 8 or percent, which is quite reasonable. That will take a real whack at home prices all over America next year. Don’t kid yourselves, 5 percent mortgage rates are unrealistic and unreasonable. This housing bubble should never have been spurred on by our government because the aftermath is going to devastate so many more families. America will be nothing special — just another third world country where most of its people live under the poverty line and have no health care or retirement security (for those of you who don’t know, over 70 percent of Americans are already working poor). So Forget about Maddof. The real bandits where the real estate agents, insurance companies, and the pocket politicians. They are the ones that should be tried and jailed.