Trouble In The ‘Land Of Milk And Honey’
A housing bubble report from the Treasure Coast. “It could well be the inevitable result of the recent housing boom. Many Treasure Coast homebuyers caught up in the go-go, building-buying frenzy have binged on a smorgasbord of interest-only and adjustable-rate mortgages. With interest rates rising, their payments are increasing and some are winding up in foreclosure.”
“A total of 139 homes in Martin, St. Lucie and Indian River counties entered some form of foreclosure in March. said, ‘Some people took out $60,000 home equity loans as a speculative buyer to buy a condo,’ said (Economist) Stanley Geberer. ‘The market for condos has softened and people are willing to just walk away, even if they lose money.’”
“Patrice Yamato, president elect of the Florida Association of Mortgage Brokers, said she wasn’t overly concerned about the local and statewide foreclosure figures. ‘Considering that we have 3,000 people move into the state every day, it doesn’t look as bad as it seems,’ Yamato said. ‘Florida is like the land of milk and honey right now, and people will continue moving here. So I don’t think this is a reflection of an economy in danger.’”
“Those who work with land-rich, cash-poor homeowners see the situation differently. ‘We knew this was coming at some point,’ said Jessica Cecere, president of the Treasure Coast and Palm Beach division of Consumer Credit Counseling Services.”
“Cecere said her office has seen an increase in local residents seeking help with mounting debt. ‘It’s really unfortunate but a lot more people have come to us with problems,’ Cecere said. ‘So many people have overextended themselves and they don’t realize it until those adjustable rates go up.’”
“Brad Hunter, who follows housing trends on the Treasure Coast and South Florida for Metrostudy, warns that that the March’s foreclosure report may just be the tip of the iceberg. ‘Unfortunately, it’s going to get worse before it gets better,’ Hunter said. ‘The first shock was probably their new tax bill, then their insurance bill.’”
“Hunter said some foreclosures may be a result of novice investors who bought spec homes with adjustable rates and then watched the market slow. ‘They bought hoping to turn around and sell quickly,’ Hunter said. ‘Now they’re holding on to properties that they can’t afford.’”
‘A total of 139 homes in Martin, St. Lucie and Indian River counties entered some form of foreclosure in March. ‘Considering that we have 3,000 people move into the state every day, it doesn’t look as bad as it seems,’ Yamato said.’
This number seems to grow by the day.
3000 x 365 = 1 095 000 people a year. Shes probably never worked that out despite hte fact that she parrots this number every day.
What I never see factored in is the fact that many of these newcomers to FL are retirees and that is their “final” move. Consequently the death rate is much higher.
Even with this, the 3,000/day number is baloney, by any means.
Between 2000 and 2004 the number of people moving to Florida outnumbered those who left the state by a yearly average of 190,894.
And a quality bunch they are.
The resort destinations are very transitory in their populations, and they swell during season, only to be culled during the summer.
So the 1000 people a day story doesn’t hold water.
But if a person were to look at the obnoxiously high number of rentals and houses for sale, that would be very apparent.
Sigh, I knew this was going to happen. All of the benficiaries of my grandmother’s will are reluctant to sell her 1950’s home for what they consider “below market.” They are asking $280,000 for a house that has not been updated since 1967, and turned down a “lowball” offer of $220,000. I wanted to jump on that, but got outvoted. Oh well, I don’t mind if we never sell the house and keep it in the family for vacations.
The factors that made Florida attractive, no longer exist. So the trend will no longer persist.
The ultimate ‘Bling’ gone bad….
“Unfortunately, it’s going to get worse before it gets better,’ Hunter said. ‘The first shock was probably their new tax bill, then their insurance bill.’”
Followed by their gas bill, heating bill, electricity bill, mortage increase…
Simmssays…
http://www.AmericanInventorSpot.com
“Analysts say several forces are driving Florida homeowners into foreclosure:
• Energy and gas prices are soaring.
• Home insurance premiums are spiking.
• Interest rates are rising, putting payments on some interest-only and adjustable-rate mortgages beyond the reach of some budgets.
• Homebuyers are paying much higher property taxes because properties have jumped in value over the past several years.
• Consumers are taking on bigger debt loads. ”
Talk about a perfect storm - Hurricane Alan?
dept of helping suckers
wow, the taxpayers will be the ultimate bag holders
One writer’s take on the effect of gas on housing prices. I’m sure this is not what everyone wants to hear:
“Another reason this time differs from the ’70s experience is that the current financial milieu is more conducive toward acceptance of the rising oil price trend since Americans as a whole feel “richer” today than they did 30 years ago. This is due mainly to the opening up of the liquidity flood gates and easy access to bank lending at much lower interest rates than prevailed back then. This then is another reason the oligopoly is likely to succeed with their current campaign of rising oil/gas prices.
With the Fed being very cognizant of the potentially adverse effects that high fuel prices could have on the economy, including the all-important housing market, it will do everything in its power to work with the oligopoly to keep the rising oil price trend from having negative repercussions in the financial markets. That means that the housing market won’t be allowed to collapse, high fuel price notwithstanding, and neither will the stock market. Stock prices will be allowed to continue their upward path over the next couple of years as a means of giving the Baby Boomers a temporary escape mechanism from the effects of the high oil and related costs on their retirement savings and lifestyle until the fateful 2009-2010 time frame.”
A New Age of Perpetually High Oil/Gas Prices?
fxstreet ^ | April 24, 2006 | Clif Droke
LOL. There is no government strong enough to get in the way of a financial stampede. The government may try to shift or delay the collapse, but IMHO there is to much dissension within the government to form an effective position.
Tinfoil hat conspiracist dreck. Everybody is Nostradomus on the internet.
$5 fine to Robert for using the newly banned “Tinfoil Hat” cliche to brush off a fellow poster.
It is hard to credit the govt conspiracy theory when the resident in the White House is not paying attention. Ive not seen any movement in the administration (that’s outside the Fed, natch) that suggests that they anticipate what is coming.
I think they know very well what is coming; thanks to their oil stocks etc. most of the guys and girls in government receive hefty profits every day thanks to the inflation policies of the FED and their own reckless, selfish international policies.
Sorry, the boys in the White House are paying close attention as thier oil profits roll in. BTW Halliburton stock is up 800% since they took office. Cheny is now a billionaire “mission Accomplished”
I love the comment on what todo “What to do if foreclosure is threatened”. #2) “2. Keep current on home payments.” They wouldn’t be in foreclosure if they could pay their mortgage.
Lots of “Bubble Hushing” here in Central Florida. The main steam media continues to trumpet and cheerlead the sheeple. The sheeple are still following the bandwagon right towards the cliff.
Plenty of new homes and condos for rent/FSBO here in the Four Corners area of Polk County all the way to St. Lucie.
The smart money left the “Land of Milk and Honey” down here about six months ago…..
“Hush The Bubble”
If it’s true that 1M people move to FL per year then that should ease the surplus of houses. Of course they might not have enough money to buy at old prices as their real estate has lost value too.
It speaks to a greater problem of mass overpopulation. 5% growth PER YEAR?
I think I’ve read like 1000 people a day, which would mean 365,000 moving in per year.
Yep and 995 of them moved here cause they heard real estate is “BOOMIN”. PS-most don’t speak english.
and no one ever moves out…
“Hunter said some foreclosures may be a result of novice investors who bought spec homes with adjustable rates and then watched the market slow. ‘
Yeh, SOME may be…..Try 70%
…. but but but….. how could this happen?? Real estate always go up. Suzanne sez so.
I hear that 800-1,000 people a day move to FL. Seeing that the entire state is for sale, these people should be able to find places to live. The problem is affordability. How many of these people can truly afford homes here? My guess is very few. People who make $50K a year can’t afford $300K-$400K houses. While I don’t doubt people will continue to move here, I do think the pace will slow a bit as the housing bubble continues to bust. Hurricane activity will continue to be a variable. We are supposedly in for another active season.
1000 move in each day, and 2000 move out to avoid the coming hurricanes
Census numbers say Florida gets about 1900 people moving into the state, and 100 more births than deaths minus 900 people leaving the state, for a daily gain of about 1100 people.
Sheer madness!
” Census numbers say Florida gets about 1900 people moving into the state, and 100 more births than deaths minus 900 people leaving the state, for a daily gain of about 1100 people. ”
When was the last census 2000? I would say the Fla. outflow has increased exponentially in the last year…. I have two relatives who
retired down there several years ago ,and now moving to Alabama due to Ins. ,and Taxes in Fl……
Yup- I hear many are headed 1/2 way back to where they came from. I think they call them 1/2 backs.
I agree. I currently live in South Broward. I hate to bring race into this, but pratically every caucasion or even 2nd/3rd generation Hispanics that moved here years ago from the north (N.J. / N.Y.) that I talke to doesn’t like what is happening in South Florida. They all want to move up to Georgia, the Carolinas, or Tenessee (just like you said, 1/2 way back).
I’m in South Broward also, and it is the same with most of my family. 30+% of my childhood friends have already left.
The 1100 gain/day estimate is as of summer 2005, so it covers the 2004 hurricane season, but not any additional jitters from Katrina.
I’m still pretty bullish about Florida in the long term. Job growth remains good, and the insurance situation is going to straighten itself out. All it really needs is compliance with the new building codes, and a 30% reduction in housing costs in high price coastal areas to keep the place middle class friendly.
Palm beach county usually received 5,000 kids per her into the school system for the past 8-10 years. 2005-2006 they only had around 500 after predicting 5K and in 2006-2007 they are expecting a decline in enrollment. The first decline in upwards of 10+ years.
“That means that the housing market won’t be allowed to collapse,”
And the sun won’t be allowed to rise tomorrow, etc.
south carolina. yup, that’s what they’re buzzing about this morning over on the sd board. “let’s get in before the californians hear about it.”
Slightly OT, but Fleckenstein has officially pronounced that the bubble has “popped”:
http://moneycentral.msn.com/content/P149596.asp
Woohoo! Treasure Coast condos for everyone at $25K each!
Slightly more on topic (”Are we there yet?”):
The Florida Real Estate Craze
When: 1926
Where: Florida
In 1920, Florida became the popular US destination/residence for people who don’t like the cold. The population was growing steadily and housing couldn’t match the demand, causing prices to double and triple in some cases, which was not exactly unjustified at this point. But, news of anything doubling and tripling in price always attracts speculators. So, once people began pumping huge amounts of money into the real estate market it took off. Soon everyone in Florida was either a real estate investor or a real estate agent.
Unfortunately, the rules are the same whether you pay too much for a stock or for a piece of land: you have to make that much more to claim a profit. This did happen for awhile, and land prices quadrupled in less than a year. Eventually, however, there were no “greater fools” to buy the disgustingly overpriced land, and prices began to adjust ever so subtly. Speculators realized there was a limit to the boom, and began to sell their properties to solidify their profits while they could.
Then everybody simultaneously saw the writing on the wall, and panic selling ensued. With thousands of sellers and very few buyers, prices came down with a sickening thud, twitched a bit, and then crawled down even lower.
http://www.investopedia.com/features/crashes/crashes4.asp
GS, I don’t understand what happened. Suzanne’s great great grandmother researched this!
This Yamato bitch is totally clueless. President elect my arse!
‘Florida is like the land of milk and honey right now, and people will continue moving here.
Man, when I was in Niceville doin’ sub-contract disaster inspection work for FEMA, Pensa-cola and surrounding environms sure wasn’t
lookin’ lookin’ like the promised land.
Realtor.Com gives the following results for all sfm/condos/townhomes offered in Miami:
17,359 residential properties as of February 1, 2006
19,194 residential properties as of February 21, 2006 (10%)
20,207 residential properties as of March 13, 2006 (16%)
21,387 residential properties as of April 3, 2006 (23%)
22,254 residential properties as of April 24, 2006 (28%)
What makes the dramatic climb all the more stunning is the fact that Miami has more than 10,000 condominiums nearing completion. Inventory should easily top 30,000 by September.
Imagine 30,000 units with the drapes hanging out the balcony where there used to be glass. It could happen.