‘The Great Conversion Reversion Of 2006′ In Florida
Some housing bubble reports from Florida. “Sales of existing homes in the Orlando MSA (Lake, Orange, Osceola, and Seminole counties) overall decreased for the first time since last July. Inventory rose by 1,593 homes in March. There are now 14,559 homes on the market, giving buyers the most choice they have had in years. That is because the number of newly listed homes in March 2006 rose to 7,112, up 126 percent from last March.”
“Manatee’s March figures ‘are finally verifying a softening in median price increases and continue to reflect a major reduction in the number of sales,’ said Dale Friedley of the appraiser’s office. Single-family home sales dropped 46 percent in March compared with the same month last year.”
“Housing experts still believe there is a shortage of apartments in Southwest Florida but the decision to keep apartment complexes is a start to fixing it. Because the housing market is currently falling and many condo conversions are not doing well, complexes that planned on making the switch to condos have decided to stick with leasing apartments.”
“Sandra Friedrich explained that the complex wanted to make the conversion to condos in February, but they have recently decided not to make the switch. ‘At the time there was some interest in doing a condo conversion,’ said Friedrich. ‘With the changing market conditions they’ve decided to go back to leasing.’”
“Six communities with 1,571 units, three in Broward and three in Palm Beach County, have made the switch from condo conversion sales back to rentals. Some are dubbing it ‘the great conversion reversion of 2006.’”
“‘A bank that has made a short-term loan for a converter would want to be sure the rental cash flow would cover the new, longer-term loan’s servicing,’ (banker) James Dockerty said. ‘Many conversions were bought at very high prices at a cap rate to yield 3.5 to 4 percent, and the developers may find themselves ‘upside down,’ with more loan than equity in a changing market.’”
“Clearly, word hasn’t reached Desoto County that the post-Charley real estate boom is over. The bubble burst. Real estate agencies are having weekly retirement parties. It’s over, people.”
“Look around. The ‘for sale’ signs are everywhere. See any ‘Sold’ signs?”
“Still, you’d never know the boom went bust by looking at local real estate guides. You’d think this was an investor’s paradise. Ridiculously inflated prices mean everyone is stuck where they are. Few can afford to buy a house equal to what they already own, much less a better house. On this Florida foyer, need meets greed, and neither yields.”
“Consider some recent real estate guide listings: ‘Words can’t describe,’ the ad begins. If they could, they would describe a dinky mobile home on a half-acre for $144,900. State Road 31 property, the guide says, is ‘HOT’ and you can buy an acre fronting that road for $95,000. Daily dust is free. Sooner or later, sellers are going to have to ‘get real.’”
I think the following U.S. Census State Migration Study released this morning is why land and home prices aren’t going to get too much cheaper up here after the likely coming correction. What the study doesn’t show is that the people who leave are poor and those who come in are generally very affluent - in fact a lot are snowbirds. Many of the Boomer snowbirds flooding in up here don’t even show up in the numbers because their legal residences are places like Florida. Even so, Maine still ranks fifth in the nation for in-migration rate right behind Idaho. Private Idaho, Private Maine.
My main interest in this study is Maine, but it’s obviously got all the states and is quite interesting.
RELEASED: 12:01 A.M. EDT, THURSDAY, APRIL 20, 2006
Domestic Net Migration in the United States: 2000 to 2004 — This report describes recent patterns of population redistribution within the country. Analysis focuses on net migration for different geographic areas, including regions, divisions, states, metropolitan and micropolitan statistical areas and counties. The report focuses on the post-Census 2000 period but also includes data from 1990 to 1999. Internet address: http://www.census.gov/prod/2006pubs/p25-1135.pdf
Main? Huh? The state with one of the highest tax burdens in the country? The state with nine months of snow and three of poor sledding? The state that wasn’t good enough to be part of Massachusetts?
We have a well deserved name for the people from Mass!
Accompanied by New Hampsters and ME- iacs!…yeah, us New Englanders need our slangs.
One thing about Portland that alot of people I know migrated there for (advertising/business bkgd)….affordable ocean side living in a city known to not be so backwoods. They thought it was pretty hip for northern New England. Another place attracting them though obviously not oceanside was Burlington, VT.
And now there’s a commuter train between Portland and Boston. It’s very slow now, but with laptops and cell phones it’s a moving office.
Downeaster ticket sales heats up
The Associated Press
PORTLAND - With gas prices surging upward again, ticket sales are hot for the Portland-to-Boston Downeaster passenger train.
Winter is usually a slow season for the Downeaster, but this year has been an exception, with ridership for the quarter up 35 percent over last year’s figure. Many of the trains are now sold out days in advance.
To accommodate all of the riders, the Northern New England Passenger Rail Authority has added a car to one of its trains during school vacation week. The rail authority says it is now talking to Amtrak about getting an extra car for the tourism season ahead.
Rail service officials say the gain in ridership is due to the high price of gas, shortened trips to Boston and the Downeaster becoming recognized as a dependable way to travel. It rates near the top of Amtrak trains for on-time service.
The Downeaster, which marked its fourth anniversary this week, is no longer considered a novelty and is used regularly by commuters. Transportation officials are looking into extending its Maine runs to Brunswick.
Worries of high gasoline prices this summer were heightened Thursday as oil prices hit a record high of $72.49 following a drop in U.S. gasoline stocks. That has prompted concern that refiners lack an adequate inventory cushion ahead of the peak summer driving season, which could translate into higher prices at the pump.
http://news.mainetoday.com/midday/
Look, the economic impetus that led to folks selling high and moving low (low cost of living) have now evaporated. Unless people can actually get out of their house at a price that allows them to move to Maine with enough cash reserves to survive in that economic wasteland then they will stay put. Wait until mid 07 and check the stats again.
I agree with you, i.e., when the point comes that they can’t get enough money out of their house sale in NY or NJ, it will be less attractive to come to Maine if our prices keep going up. Clearly we don’t have the jobs to support the home prices. We just have the influx of affluent migrants from other markets who feel they have arrived from Krypton with super powers.
We’re getting a ton of Boomers who haven’t quite retired and are instead making a hundred grand a year or so up here working remotely at consulting jobs related to their former industries.It’s not what they made in places like NYC, but the kiddies are out of college, they’ve downsized their homes, they’ve moved to a cheaper market and they’re the ones who have lots of savings and will be collecting relatively large Social Security checks becuaes they always paid in the maximum. More than a few have added gravy to their savings with large severance packages, often under threat of age discrimination lawsuits.
Everything here applies to Vermont.
Trading poor for wealthier, higher tax burdens, out-of-state residents living part year, etc.
Even the 9 months of winter (or whatever it was), as well as the nicknames for Mass residents.
i don’t like to be so negative, but there is something about this evocative description of a certain type of boomer that makes me feel ill…
it’s a very twitchy-feeling and unpleasant combination of envy and contempt.
Can you imagine the poor nursing home employees having to listen to the dementia-induced ramblings of these folks someday?!
i really hope the death-tax is in effect bigtime by then, at like 80%, for the sake of these health aides, so at least they won’t have to endure the visits of their echoboomer heirs, blech…
Saved by the “Body Boom” will you be?
One can only hope!
ok, portland, not to sound too touchy, but:
snowbird-A person who travels south in the winter and returns north in the summer.
Unless Nanook of the North is takin his sled team down to ME, I think you’ve got some other animal there chief.
Helpful guide to identifying wildlife–
snowbird: recognizable by their plumage- straw hat, bermuda shorts, sandals with black nylon over the calf socks. Often has markings on chest –” one tequila, two tequila, three tequila, floor” . Often seen during the day on major streets in Phoenix, etc. Can be spotted when their 40 ft McMansion on wheels makes a left turn without signalling across 4 lanes of traffic during rushhour. When this occurs, another urban ‘bird’ is often seen en masse.
As a side note– don’t forget to wear your license in a visible location. Season is almost over. Remember, daily bag limit is only 150. (doubled if you get a lawer, but ya gotta have a ‘torney tag’. ) Recommended sporting arm– 12 gauge, though a nice M60 will do.
p.s.–snowbirds are the only exception to the ‘eat what you shoot’ rule.
Maine is a big northern nest. They go south in “wintah”.
Lot’s of the wealthy NYers and Jerseyites move to Maine but take off south for winter.
Oh, I thought they only drove the locals nuts in their southern locale.
‘For April Giammarrasi, her complex’s decision to keep the apartments came too late as she had already moved out. ‘It was implied they were going condo the whole time,’ said Giammarrasi. ‘I’m comfortable where I live, but unfortunately I made the decision to leave because I thought they were turning to condos.’
‘Developers may find themselves ‘upside down,’ with more loan than equity in a changing market.’
There’s some poetic justice for displaced Floridians.
I hope the renters were given a nice chunk of change when they were asked to leave .
That would have been nice, but we weren’t given anything but a warm bucket of jack squat. That is, unless you count the certified letter from the developer informing us of the conversion and our legal rights to stay there another 6 to 9 months (depending on how long you’ve been a renter). At least that was my experience (and that of a few co-workers) in Orlando. Maybe other people fared better, but I think that was generally the case.
In my particular apartment complex (now called “The Crest at Waterford Lakes”), the developer didn’t even send us an official letter with a price at which we could buy our own unit (not that I would have bought). But it did piss me off because they were legally (according to something called the Roth Act) supposed to provide every tenant with such a letter. My guess is that they deliberately didn’t sent the letter because the Roth Act goes on to say that if the developer later sells your unit at a price lower than what you were offered, you are legally entitled to the difference.
HEEEEY you got a warm bucket of jack squat? That’s more than I got.
Although we did get the “terrific opportunity” to purchase our 1 BR rental at 244K. As “incentives” they offered 2 years of fees and taxes.
We’ll be moving next month.
Man, you folks live in some godawful landlord-friendly places.
In Chicago the terms of a lease MUST be honored, and most people here are on 1-year leases. The court does not make any exceptions, and this provision cannot be overriden in the lease. Even if the LL sells, the new owner must honor the remaining lease or try to buy the tenant out.
Are y’all month-to-month or something?
No, we were on a 6 month lease and we could have renewed for another 6. People on a 1 year could renew for another 1 year. It’s the law, we chose to move now.
I should clarify by saying, yes, your existing lease terms must be honored in Florida as well. We just happend to only have 3 months or so left on our lease.
Between this and the Roth Act, there are laws in Florida to protect you as a renter. However, if the landlord violates these laws, you have to decide whether you’d rather pay for a lawyer or just suck it up and move (which you’ll have to do eventually anyway).
Hmmmm…. small claims court here goes up to about $2500 or $3000 and you MUST represent yourself. Filing fee is like $60 or $70 and I think you can even recover that if you win. It’s pretty cut and dried here.
Then there’s the time-honored tradition of just not paying your rent, eating your security deposit and riding the three or four month “float” (often longer) it takes before you can get evicted here. Try not to do this more than once in your life.
“I should clarify by saying, yes, your existing lease terms must be honored in Florida as well.”
Hmmm, our existing lease was terminated and we then had the option to, within 45 days, give a 30 days notice, or renew for another whole term. (in our case 6 months.)
This article on The Crest at Waterford Lakes gives a nice peek into Florida condo conversions.
“I saw a hot real estate market at its peak and wanted something pre-built that could start selling right away,” says Podvin, president of Podvin Development Group.
How true, how true. You can calculate his cost per unit from the article. It was $116,000. Their starting selling price was $150,000. Money from thin air!
He’s moving on to greater triumphs. “Now, Podvin has his eye on 10 other possible condo conversion projects, including another east Orlando project he hopes to secure by the end of this year.”
And who is the target market? Rich folks? “Another challenge: The complex’s site, on the corner of Alafaya Road and Lake Underhill Road, was a former apartment complex that catered mainly to University of Central Florida students. Yet, thanks to price tweaking in a slowing sales market and an aggressive pitch to attract working class buyers, today 52 percent of the east Orlando project is sold and more than $16 million worth of business has been achieved. In February, the project had its best month: 25 sales that totaled more than $4 million.”
This opportunity is still available folks, especially for certain occupations. “The Crest at Waterford Lakes is offering a 20 percent sales discount to emergency medical technicians, members of the military, police officers, teachers and nurses. The goal is to attract that segment with the discount, and we expect those numbers to rise,” Podvin says. “And having owners that include police officers and emergency medical technicians is an added bonus for our community.”"
You see, their residents will be prepared for any possible emergency that might arise in the area - even war.
The link to the article didn’t post. It is http://orlando.bizjournals.com/orlando/stories/2006/04/03/story8.html
52%, huh? Six weeks ago when I checked the Orange County Property Assessor’s website, over 80% of the units were still owned by The Crest at Waterford Lakes.
And after driving through the complex last week, I can attest to the fact that the place is a ghost town. Not only that, the grass looks like it hasn’t been mowed in weeks. There are large dead patches of grass, and the palm trees they added to the entrance months ago are dying. My guess is that no one lives there, there are little homeowner’s association dues to pay for maintenance, and the developer is trying to stretch his wallet to cover his loan.
The Crest is tanking. I am an appraiser here and i can tell you that the developers are begging the leftover tenants in these conversions to please sign up for another year. No hard feelins’.
It cracks me up. Freakin’ pompous jerks.
When developers find themselves ‘upside down’, banks find themselves partially uncollateralized. Slowly enthusiasm for this kind of loan fades. Many of these conversions are too far along to stop. Banks are going to end up owning a number of them.
….At which point an apartment managament company swoops in and buys all the remaining units from the bank, then tracks down the few condo owners who bit and offers them 10% over the now-depressed market, which they’re all too willing to sell for because they’re deep underwater and have no neighbors… thus the complex reverts back to apartments and the cycle starts anew.
Maybe it’s just a disturbance in the ether today, but your crystal ball and my crystal ball are showing exactly the same picture.
This is very true. A few years ago, you could buy an apartment project at apartment prices, and make the arbitrage profit by turning them into condos–the developer who took the rehab, mapping and marketing risk got all the profit for doing so. If it didn’t work, the developer could go right on renting as apartments and probably survive–not make a lot, but survive.
Starting about 2-3 years ago, this began to change, already mapped projects, and projects that could be mapped were being sold for much more than apartment prices. Now, nearly all the profit for a conversion is going to the apartment seller. You’re talking about buying apartments for a 3-4% cap rate to convert. There is no alternate exit. You can’t rent out the units to live another day.
CNN reports on people fleeing high price housing areas.
“The movement of Americans from north to south is trending as strong as ever, according to the latest report on net domestic migration released today from the Census Bureau.
And, it seems, housing prices are driving the trend. The net out-migration of residents is from high-priced northeastern and West Coast cities to more affordable housing markets in the Sun Belt.
“Many are surmising that housing values are so different around the country that it’s impacting migration,” says Marc Perry, a demographer with the Census Bureau. “Some people are cashing out housing and moving to cheaper areas. Others who don’t own homes are moving so they can afford to buy one.”
That makes losers out of metro areas like New York, Los Angeles and Chicago, and makes Dallas, Atlanta and Phoenix, where housing has been much more affordable, into big net gainers.”
I agree. I hear how the Boomers will save FL RE. Not gonna happen, at least south of Orlando/Tampa. We still have no state income tax but home prices are high not to mention the taxes and insurance. The “X-Factor” is the current hurricane cycle we are in. Our area relies on those in the NE cashing out at a premium. If the RE market gets bad in the NE (and it will) then we will suffer here. I think the Carolinas, Georgia, the rebuilt Gulf Coast, Tennesse and Texas have a chance to land the Boomers. Only when we get our cost of living straightened out will we be an area of consideration.
How is Florida ever going to get the cost of living straightened out? Florida is a tourist town and that means low wages .
I think DAP is referring to the cost per square foot for housing, the very high property taxes and the relatively high homeowners insurance cost here.
That too.
Exactly. FL is a tourist/service economy which doesn’t historically pay high wages and can’t support nosebleed home prices. Many here in FL don’t get that concept.
i find it so strange at one level that people are making decisions about where they want to live based on where housing is affordable, or how many SF they get for their buck. I mean, I realize that how much housing costs is an important life consideration…i saw suze orman for a second the other night: a caller gave his numbers, and said he’s trying to decide where to buy real estate, FL or TX and she asked for what purpose and he said “to live in”, and she suggested TX because he can afford a lot more there. I just found it so odd that someone would be thinking just about the affordability of granite countertops…doesn’t anybody care about look and feel and landscape anymore? And that owning is so important that people will migrate to whereever they can right now this minute afford a house. I guess they really believe still that if you don’t buy now you’ll be priced out forever, so better call UHAUL and move to a state/climate where you can afford to buy quick before interest rates go up any further!
OT - I got a new post up on my site….thanks for the patience.
Enjoy.
SoCalMtgGuy
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On my street alone, (Village Blvd. in West Palm Beach) I have seen 3 apartment complexes go condo. All of these complexes are within 200 hundred yards of each other, literally a 5 iron distance away. The first 2 started in the $160K’s and the 3rd one now starts at $140K (nothing like undercutting a neighbor). That doesn’t include the other complexes going condo in the surrounding areas. I can’t imagine that these conversions will work and many will be bought for pennies on the dollar and returned to rentals. We probably do have a rental shortage here. Hell, they are still building luxuary towers like mad in downtown WPB. The market is tanking and some of these new towers have just been finished while many have barely dug a hole. The ones that are livable have been virtually empty all winter. I think this shows that Florida has been virtually a speculative market, even more so than I originally thought.
The market is dying here. I had a friend sell her townhome for $40K less(13.3%decline) than the last comp just 4-6 months ago. She was happy for the contract. The funny thing is, there are 6-8 identical units like hers for sale in her neighborhood. She finally took my advice and undercut everybody. Don’t dare tell her RE only goes up.
Wow, I wish I could hit a 5 iron 200 yards!
“The bubble burst. Real estate agencies are having weekly retirement parties. It’s over, people.”
I love coming to this site in the morning and getting my fix of bad news.
Simmssay…
Not for the Anal-Retentive
http://www.AmericanInventorSpot.com
If I was a RE agent worth my salt I would have made a killing in the last 5 years. Now would be a great time for my exit strategy– Retiring to greener pastures and let the newbie RE agents fight over the ashes of the bubble.
Bad news? Last night I was talking with two young couples in a nearby town in northern AZ. I was able to tell them that the local realtors had announced a week ago that the for-sale inventory had hit a record 300 homes. As of yesterday, the number had climbed to 400. They were very happy they may be able to afford a home someday in their hometowns, which have been overrun by Californian speculators.
Damn Notorius, You can hit a 5 iron 200 yards?
But seriously, I lived in some nasty apartments in the early 80s…They were old then. I recently drove by and saw they are for sale as condos. From the 150s in Orlando near the airport. They
are not selling…
If the condos revert back to rentals at least the plus side is the condos got fixed up and they make nicer rentals now .Even if the rental price goes up the area will be more attractive …….I’m assuming that the conversions were on older buildings that needed the overhaul.
Wiz - good point. I saw a really crappy old apartment building in or near Thornton Park (Orl.) that was converted to condos 1+ years ago. The conversion was as slapdash as you can imagine — they didn’t even remove the anti-theft grills that covered the in-wall air conditioners — just painted over them. But it nevertheless looked better after the conversion than before.
Same point with all the condo towers going up. Every one that is built that flops will be good for the people (not those who bought, but good for everyone else). Eventually, after the banks take back the properties, they will unload the units and people will get to buy them for far less than the cost of construction. Without the bubble, these units would have never been built in the first place.
I saw that also. I need a 4 to get me 200 yards. Notorious you need to spend less time on the course and more on this blog. Get that handicap UP!
I was thinking more along the lines of a 3 iron myself. Now I’m depressed.
Maybe he was thinking in the context of a street, not a golf course.
I can hit a five 200 yards, too, if I get a good bounce off pavement. Otherwise I’d be between a four and a three in the fairway, a definite four off the tee of a par-3. OK, sorry, back on topic.
For the record, I am an ex-golf professional so I can hit 5 iron 200 yards. I do have to catch it flush, can’t clunk it. Obviously, it depends on the situation as I could hit a 4 iron. I hit it pretty long but many of the guys on TV airmail it by me. That’s why I’m on this blog and not on tour. I also putt bad. I can’t hit water falling out of a boat. I read braille better than the greens.
Anyway, most of the units going condo in my area are fairly new, at least built since 1992 and up to Hurricane Anrew codes. Nonethless, they are not selling and I suspect many will be apartments again when the projects fail.
WOULD THE LAST ONE OUT OF FLORIDA, PLEASE TURN OUT THE LIGHTS!
I saw that headline in a Seattle paper once . It can happen!
I’m curious as to why there is the feeling that Florida is emptying out when it is actually filling up (see today’s Wall Street Journal–Census numbers show a steady influx into Florida). Is it certain cities that are giving off this feeling of despair while the rest of the state is accomodating a huge influx from the north?
Florida’s not emptying out. What’s dawning on people is that the rate of immigration from other states by snowbirds is expected to decline markedly from earlier predictions, due to high home prices and property taxes, coupled with the likelihood that these people will not realize as much from the sale of their Yankee homes as they had anticipated. The vast number of flipper-owned empty condos gives the illusion, perhaps, that people left. They were never living there in the first place.
While waiting for that migration study to load on my dinosaur dial-up, I looked at price drops in my area.
http://www.cnyhomes.com/Listing/Search/info.cgi?mlnum=140153
Thought some might get a kick of what’s going on in the non-bubble regions. This has got to be in a high crime area to be this low. ($39000) Outside of “chock full of sex offenders/gang activity” city of Syr, this would at least be in low $100s. I know we’re in flyover land, or farm country but the guys who do my husband’s position in bubbleville MA (national employer) get the exact same salary minus the corporate vehicle. The MA office is where housing is 4x as high for same thing. So when people don’t want to consider the less desirable georgraphies to save their financial situations, they do it at a significant price.
uh, did you see the listing agent? Nancy Kerrigan? Free busted kneecaps with every offer.
37k–less than a realtor’s commish in socal. In case you get bored, look at some of the ebay listings in upstate. For those of us in LaLa land, the prices are unbelievable.
crispy&cole, You must have some big guns too…I
need a 3 to get 200.
No, I’m a whimpy 5′10 170lbs. LOL
I need a 3 wood to get 200 yards, but that’s pretty good for a GIRL.
The girl I play golf with that has the house for sale in Cave Creek has now lowered the price twice from 419K to 399K. Told you so!
Upstater - It’s funny (well, not really funny) that upstate is considered less desirable. I grew up in Western N.Y. and think it is a wonderful place. If I could get a job in my choosed profession, I would think of moving back.
I have to admit. I like the area too. **Note, I live in Orange County, CA, Bubble Central**
I did some consulting in the Binghamton Endicott area this last summer. The company started talking about making me an offer until I got one for the company I am working for now. While I was there, I was absolutely flabbergasted that you could get a decent home in a decent area for $150K. You could also actually get on the freeway without risking your life and limb (and people somewhat obeyed speed limits). I also got a chance to do some “small town” things like go to a Binghamton Mets Game, watch the fireworks the city puts on, and go to some cool kids’ events with my wife and daughter. Orange County is so manufactured, you don’t really get those kinds of things that attract “real” people.
One surprising thing though; there were a lot of rednecks. And I mean a lot. I grew up in Iowa, and even I was taken aback. A trip to WalMart left me with a pit in my stomach. Good people, but very very redneck. Maybe I have lived in SoCal too long, but doesn’t anyone else care about their weight and oral hygeine?
orange co. is an exception to the obesity of america…many in the thin regions of the US get fatter portfolios from those rednecks with major spare tires outgrowing their clothes every year and drinking teeth-rotting pop! the processed foods tend to be publicly traded
i hope that the teeth isn’t from the current meth epidemic, which apparently rots teeth. Do they still let you buy sudafed off the shelves out there? In MI now we have to sign off on each box with the pharmacist..hassle for allergic folks like me..
Isn’t that what defines WAL-MART. My wire and I count them when we sop.
S/B “wife” and “Shop”. Speedwriting!
Gold and silver correcting today…I am sure noone is surprised by this.
No one except for yesterday’s panic buyers.
Amazing, and this is just the beginning. As a reminder, all of the mortgage resets have not yet begun. None of this will be over for a few more years. You will know it is time to buy when people are gagging real estate.
1996 - Greenspan warns about irrational exuberance in the stock market
2000 - Greenspan embraces the “productivity miracle” and says there is no stock market bubble.
2001 - Greenspan said bubbles can only be detected in hindsight
2004 - Greenspan says there is no housing bubble
2005 - Greenspan says there is no national housing bubble even though he admits we have “froth”
You forgot the one where Easy Al told everyone to start using adjustables…
I’m glad to see some justice for the renters, even if it’s coming too late in some cases.
What scares me is what the Federal Reserve will do when the economy inevitably sinks back into recession. Will it panic again and cut rates several times back down to 1% ? I keep worrying about the bubble getting reignited, but Japan’s recent economic history shows you can chop all the way down to 0% and that doesn’t necessarily move people to borrow money.
Bernanke has telegraphed what the Fed will do. He will gradually reduce interest rates to zero, just like Japan, but he will do it more quickly. Zero is going to be necessary, because the percent of the population that is committed to real estate is a lot higher than the percent that was committed to dot com stocks. He will pump as if there is no tomorrow, and, in some ways . . . there isn’t.
The Fed will cut rates to under 1%. There will be a run on the dollar forcing long term rates up tanking RE further.
I like the part about “giving buyers the most choice they have had in years.”
I have a friend looking for a house right now (change in marital status). His comment was that there is a lot of inventory, but “it’s just the same overpriced crap”. Inventory may be growing, but it’s not moving, and prices are absurd. He’s tired of looking at the same stuff, he’s about to quit looking. I still think they don’t get it when they call it a buyer’s market.
To be a buyer’s market there should be decent volume and turnover of inventory. If there is no volume it shows that the buyers are not yet happy with what they’re being offered.
Climber — why doesn’t he begin lowballing the places that attract him? While I think it’s way too early to buy, if he’s anxious and needs to buy rather than rent, what does it hurt to make an offer? As someone else posted, re a lowball offer, if you aren’t embarrassed to present it, your offer is too high. I’d take the extra step to research the tax records and start with places where the seller won’t have to bring an extraordinary amount to the table. Inherited property could be a great opportunity, particularly if the inheritors are looking at ARM re-sets themselves. There are a lot of agents out there hungry enough to present whatever offer you put together.
“There are a lot of agents out there hungry enough to present whatever offer you put together.”
My understanding is that an agent is required to present your offer in any event (at least in CA).
That’s true, but a hungry one will be a lot more pleasant to work with.
Zillow.com gives the sales history and tax information on the property .
I literaly spit out my soda when I read this.
http://www.sun-sentinel.com/business/sns-yourmoney-0416spending,0,3250726.story?coll=sfl-yourmoney