‘Let Go Of What Was And Get Used To What Is’ In Florida
The Florida press is reporting on that states housing bubble. “A deluge of homes for sale is hampering South Florida’s housing market, causing sales to slow considerably and prices to retreat from last fall’s record high. With November’s $391,100 peak a distant memory in Broward County, some analysts expect year-over-year median-price declines during the next few months.”
“More than 20,300 single-family houses, condominiums and town homes now are listed for sale in Broward. That’s a 321 percent increase over April 2005. ‘People have to let go of what was and get used to what is,’ (agent) Cathy Prenner said. ‘Any sellers who have their wits about them are adjusting prices. Fifty percent of the properties out there are still overpriced.’”
“(Broker) Douglas Rill in West Palm Beach, remains pessimistic. ‘I’d love to say it’s getting better, but I don’t think the market has hit bottom yet,’ Rill said. He points to an Acreage home for sale where the buyer recently slashed the asking price from $399,000 to $299,000 and still hasn’t received an offer.”
“Some warn that rising interest rates and a glut of homes for sale mean this slowdown could take several years to shake out. ‘This has been a housing market bubble for the last three years,’ said Gregory Miller, chief economist at SunTrust Banks. ‘Housing bubbles don’t dissipate or correct spontaneously.’”
“Sales of existing single-family homes in Volusia and Flagler counties dropped a whopping 31 percent in March. Winifred Grimshaw’s three-bedroom/three-bath condo has been on the market for several months now. She dropped the asking price Tuesday, for the second time, from $825,000 to $789,000. ‘There are so many (condos) on the market,’ said Grimshaw.”
“In Miami-Dade, the number of homes for sale has almost tripled in the past nine months. Pat Dahne, chair of the Realtor Association of Greater Miami and the Beaches, said sellers are now offering to pay association fees and even financing costs for buyers. Some sellers are now offering buyers, and agents who bring in buyers, all sorts of incentives, including Cadillacs, cruises, airline tickets and money.”
“Real estate brokers sold 45 percent fewer single-family homes in the Sarasota-Bradenton area during March than they did a year ago, the highest in the state. ‘Vacant lot sales slipped further into a deep freeze,’ Hofer said, noting that only 14 of Charlotte County-North Port’s 6,300 listings went under contract last month.”
“‘At that pace we have a 400-year supply of lots to sell, assuming no new listings,’ (agent) Dave Hofer said.”
“As of mid-April, Sarasota brokers were faced with 7,057 active listings, a level four times the 1,626 listings of early July, said (agent) Steve DuToit. At the current rate of sales, 85 per week, it would take 83 weeks to clear the decks of listings, if no new ones were started.”
“He recently started tracking a new number that provides a valuable clue that prices will go down more before they go up: 20 percent of the many homes on the market are vacant. Just those 1,471 vacant homes represent almost the total number of active listings in July.”
“‘Those folks have to make a decision. They are making mortgage payments, paying taxes, paying association fees, paying for lawn care, paying for utilities. They need to decide what to do to get that property sold or rented,’ he said.”
“The market looks very soft to (realtor) George Huhn in Venice. ‘I can tell you that the builders and developers that I know are getting extremely anxious,’ he said. ‘The resale residential market is just horrible. One gal I know has 35 listings. She had one showing last weekend. The whole weekend.’”
“There are four houses for sale within 200 yards of where I live,’ Huhn said. He is now seeing the early signs of what he describes as ‘distress selling,’ where owners who already have shaved 10 to 20 percent off their asking price are now looking at offers 10 to 20 percent below that reduced level.”
Thanks to the many readers who sent in a raft of articles on Florida this morning. Three related bits:
‘To buy her one-bedroom condominium in Hialeah, fifth-grade teacher Loliette Araluce had to do without everything else. Her mortgage, taxes and association dues total about $1,300 a month, she said, and the rest of her $34,371 salary goes mainly to groceries and utilities.’
‘I’m a woman; I want to buy makeup and girl stuff, but I cannot because I decided to get property,’ said Araluce, 27. ‘I can afford it, but I cannot buy anything else but the things that are really necessary for me.’
‘ A West Palm Beach developer struggling financially to finish two condominium projects is taking on yet another. Jackie Badome, a Boca Raton real estate agent who is buying a condo at Eden, said she’s ‘furious’ that Ceebraid is going after other deals without first completing Eden and Brazilian Court. ‘How can you go into something new when you don’t have the money to finish something old?’ she said. ‘Their attention isn’t even on [Eden] anymore. It keeps getting worse.’
‘With the 2006 hurricane season starting in just five weeks, many home insurers from Texas to Florida to New York are canceling policies along the coast or refusing to sell new ones out of fear of another catastrophic storm.’
Speaking of insurance, my homeowners insurance company here in FL is going under. Poe Financial has three different related companies, all of which are now being put into receivership due to losses from the past hurricanes in 2005 and 2004. We’ll get absorbed by citizens, the state insurer, but this is another example of just how hard it is to get any coverage but very expensive state insurance. What a disaster. Link…
http://www.palmbeachpost.com/business/content/business/epaper/2006/04/26/w1a_POE_0426.html
Poe Financial?
Quoth the insurer, “Nevermore!”
LMAO - good one!
Funny. Good catch.
“‘At that pace we have a 400-year supply of lots to sell, assuming no new listings,’
_____________________
This is a balanced market. If it was 1000 years of inventory we would have a problem!
This is the greatest quote I’ve seen in years. I am LMFAO . . . bring it on!
They’re not making any more land, you know! (And that’s a good thing.)
But Suzanne researched this. She said this lot is special. Come on you fat lazy husband, buy, buy, buy! FL land is the best investment ever.
Never forget about Suzanne - or that look on the guy’s wife’s face when she exclaimed, “What?!”
I think he meant 400-months. 6300/(14/month) = 450 months = 37.5 years.
Probably right. That makes it soooooo much better!
>400-year supply of lots to sell
Spring selling season will take care of that…
“He recently started tracking a new number that provides a valuable clue that prices will go down more before they go up: 20 percent of the many homes on the market are vacant.”
There are 3000 new residents that move in every day. Suzanne researched this.
If this keeps up, ‘ol Suzanne will wind up on a number of t-shirts or bumper stickers.
Last one out of FL, turn out the lights.
Last one out of California, turn out the lights.
Last one out of California, turn out the lights.
Last one out of Las Vegas, Phoenix, Boston, and New York, TURN OUT THE LIGHTS.
wait a second…that’s my line.
Break out the bulldozers to tear down the abandoned houses - OH, the next hurricane will take care of that. Just leave, and quickly.
Florida is going to be “Ground Zero” with much respect to Las Vegas, Phoenix and the San Diego/DC condo markets. It is getting ugly here fast, much faster than I would have thought. The 400 year supply of lots throws the “we’re not making anymore land” crap out the window. I can’t wait for the real fireworks to start when ARMs reset and hurrican season is in full force. Ha Ha Ha Ha Ha!!!!!!!!
Although the weather that really tends to hammer us usually doesn’t begin until August, I wonder if in fact the spectre of storms and the insurance cancellations, factors not faced big-time, to my knowledge, by other states, is causing Florida to be the first domino.
Finally, the chickens have come home to roast. I bet all those RE agents and real estate cheerleaders are sweating!
spelling should have been roost. But, roast is a good term also.
Bad/good news for a realtor friend of mine in the Keys. Bad in the way she will not be earning much of a living this year. Good because it will finally give her the incentive to move away from that hurricane magnet.
Lotsa lights going out…lol
Where is Suzanne? She needs to help them out in Florida.
Being the nice guy I am here is help for Florida et all. And to think I have an account at one of these banks.
http://www.hsh.com/cc-showcase.html
A shrewd renter could get quite a bargain down their in Florida! Maybe in exchange for free rent while the flipper tries to sell the house, offer to cut the lawn and make the place look lived in!
seriously, that is something some chick here in Ann Arbor does for high-end homes that sit and sit. She keeps the place well decorated, look lived in, etc. Doubt that she cuts the grass, that’s likely farmed out, but maybe she dusts and vacuums. She gets free rent but has to leave when/if they sell. I wonder what her current rate of move-out is! Might be similar to a regular leasing period these days…
If someone can do this in plain vanilla midwest, I’m shocked its not already a cottage industry in FL. Hot chicks living rent-free in highend flipper condo complexes, participating in selling the whole place by appearing at the pools, open houses, leaving their undies strewn on the carefully placed and pillowed furniture. Sounds like a good new HGTV show, no?
I like that “Flip This B*tch” - YeeHah
These florida folks might want to consider lashing some banana trees together, catching the gulf current and pray they can make Havana before the hurricane season.
Maybe a few of them could start up a couple of Mortgage companies and bring the contagion with them! Viva-la-Revolution! Teach those commies how to borrow and spend!
Now there’s a job for the coming RE and construction lay-offees in Florida.
They can be domestics in Cuba!
Elian Gonzalez needs a gardner?
That won’t work. The gulf current flows north, away from Havana. I’m just going to dig a hole.
time for the obligatory:
“South Florida,” he said, ”is working off of a totally new economic model than any of us have ever experienced in the past” according to a realtor who predicted that a land shortage will support higher prices indefinitely.”
- New York Times, Trading Places: Real Estate Instead of Dot-Coms, 3/25/05
You beat me to it - LOL
I was waiting for that to get posted. Thanks John Law.
bwhahaha- thank you Mr. Law — maybe it’s time to compile a “greatest hits” collection of RE quotes from the past coupla years..
I have saved a few links of the idiot variety.
Still, he said, his friends keep urging him to buy. Some who bought homes several years ago are hundreds of thousands of dollars richer than they were as renters. They say the Washington area market is different than that in other parts of the country because there is so much job growth here and because so many jobs pay well. They tell him the population is growing faster than the number of houses being built, and that prices always reflect supply and demand. They talk about the tax advantages they are enjoying.
And, he said, they tell him, “You’re throwing your money away.”
http://www.washingtonpost.com/wp-dyn/content/article/2006/03/24/AR2006032400802_2.html?referrer=emailarticle
“California real estate has proven the experts wrong over and over and over,” said Larry Spiteri, president of the Contra Costa Association of Realtors. “We live in the most desirable state, and in the most desirable area of the most desirable state. And we’re resilient.”
and
But Han believes the Hamptons have a few unique qualities that make its market more durable than in other areas of the country.
“We remain very optimistic about our market. In general, I think it would be not correct to equate what’s happening in the national market and predict that that’s what’s going to happen in the Hamptons’ market,” he said.
and
“Perkins said that despite what might go on elsewhere, the local housing bubble is bullet proof.”
Bueatiful….
But hey, the NAR says home sales are UP year over year! Gee, what will it be like when transaction volume goes DOWN?
“As of mid-April, Sarasota brokers were faced with 7,057 active listings, a level four times the 1,626 listings of early July, said (agent) Steve DuToit. At the current rate of sales, 85 per week, it would take 83 weeks to clear the decks of listings, if no new ones were started.”
“He recently started tracking a new number that provides a valuable clue that prices will go down more before they go up: 20 percent of the many homes on the market are vacant. Just those 1,471 vacant homes represent almost the total number of active listings in July.”
This shows just how out of control the speculation was here in Florida. That is only in the Sarasota area and doesn’t include the rest of the state. I’d like to see what the percentage of vacant homes on the market are on a statewide level. If it is anywhere near 20% this will be a complete meltdown.
20% vacant doesn’t include cashflow negative rentals.
These. people. are. screwed.
Drove through a new home community in Bradenton today and counted 42 For Sale signs out of 91 completed houses. I’d say most of them were vacant. Still a lot that were being built and I can only assume most don’t have buyers. Even the illegal immigrant construction workers looked surprised when they saw me driving slowly looking at the houses.
“There are four houses for sale within 200 yards of where I live,’ Huhn said. He is now seeing the early signs of what he describes as ‘distress selling,’ where owners who already have shaved 10 to 20 percent off their asking price are now looking at offers 10 to 20 percent below that reduced level.”
20% off asking price + eventual sale of 20% below that = 40% below asking price.
… and that’s “early signs” of distress selling.
Oh goody.
Well, to be a dork about it, 20% off 20% is 36% off total, not 40%.
Another way of seeing it, from the final sales price, it is 56% overpriced TODAY!
(0.8) * (0.8x) = 0.64x = 36% discount. Sorry, couldn’t resist
Winifred Grimshaw’s three-bedroom/three-bath condo has been on the market for several months now. She dropped the asking price Tuesday, for the second time, from $825,000 to $789,000.
$800,000 is an absurd amount of money to pay for a Florida condo. My guess is the price will have to come down much further.
Hey, can I be the first to put this out there? See the Leara**hole quote in this article, they could call me for his quote, it’s so tired.
” “This is additional evidence that we’re experiencing a soft landing,” said David Lereah, chief economist for the national Realtors. “The market clearly is stabilizing.” ”
http://www.orlandosentinel.com/business/orl-homesales2606apr26,0,695664.story?coll=orl-business-headlines
OT - The Fed Beige Book #’s
“Some regions including Cleveland, Richmond and Dallas, cited high energy prices as the culprit behind weaker than expected tourism, auto sales or retail sales — especially involving lower-income consumers, the survey said.
It said this had the effect of “constraining consumers’ driving and, indirectly, by reducing the income available for purchases after paying for home fuel and transportation fuel.”
IMHO if they are having difficulty paying energy costs and Walmart lowered its income estimate based on the rising price of fuel. They certainly cannot pay real estate taxes, property insurance, hurricane insurance let alone mortgages.
Fifty percent of the properties out there are still overpriced.
No, one hundred percent are overpriced if they’re still on the market!
As a Floridian who is about to get married and leave his small rented apartment to rent some slightly larger space, possibly from an “investor,” I have a question for the board: what situations should I definitely avoid? Can I, or should I, demand a lease that allows me to stay for the duration of the lease agreement if the owner sells?
I have looked at what local property management companies have to offer, and all of them seem to have added their management fee to the announced rent, because the rents are way out of line with the neighborhoods. Either that or the FB owner has decreed that the rent has to cover his/her mortgage.
I just thank God my fiancee and I are on the same page on housing matters. I will not be getting a “Suzanne researched this” anytime soon.
Be familiar with the leasing laws (state and local) wherever you’re moving to before you sign a lease. Usually state laws cannot be overriden by clauses in leases. It may also help to find out how tenant-friendly the courts are.
Usually if you are in a one-year lease, the leasehold must be honored for its entire length regardless of changes in ownership. I mean, that’s why you do a lease in the first place, right? You agree to pay the rent and they agree to rent it to you for that long.
Then when the landlord tries to screw you over, you can say, “state law says you must do X” or “state law entitles me to Y” and have the comfort of being right. It takes a few months to evict tenants in most places, so once LLs think you will quit paying rent they tend to listen to you more.
How much the LL’s mortgage payment is isn’t your problem.
This is true. Even if the unit is foreclosed, the new owner will have to take you to court to get you out. If you have been paying the rent, then a judge will likely be very lenient with you, ie., give you four months to move out, or let you stay for the duration of the lease if there is less than six months left in the leasehold.
Call the Florida Bar Association and ask if there is any free brochures or hotlines you can call. The Florida Attorney General’s office might have some publications about tenant rights that would inform you of your rights. There are often useful regulations that landlords and tenants are unaware of.
Legal trivia: the protection of a tenant’s rights when there is a change of property ownership is a process call Attornment. In most jurisdictions a commercial tenant is protected only when the right to attornment is spelled out in the lease itself, or in a separate agreement recorded publicly. Most states have statutes or caselaw that automatically attorns residential tenants.
Preserving and controlings these rights was the original role that real estate lawyers were expected to play when property was conveyed in post-conquest England, and it the origin of the term “attorney.”
Snake charmer said, “I have looked at what local property management companies have to offer, and all of them seem to have added their management fee to the announced rent, because the rents are way out of line with the neighborhoods. Either that or the FB owner has decreed that the rent has to cover his/her mortgage.”
Not sure I understand what you mean, but it appears that you think rents are too high. In east central Florida, it’s my experience that rents are declining, at least for condos, because more are coming onto the market. Generally, this should be true throughout the state, as more and more flippers who can’t sell at their price, and who won’t admit defeat, choose to rent out until “things get better.”
Where are you in Florida?
I live in Tampa. I’m telling you, the number of rents I saw in the $2,000+ per month range for two-bedroom or three-bedroom places made me scratch my head. I’ve just started looking, though, and maybe I’m not looking in the right places.
I’m pretty sure (but not 100%, so please verify) that in the state of Florida, your rights as a renter are protected such that someone who buys the property (residential, at least) must assume the terms of lease. But one question I have is this: What happens if the bank forecloses on the property while you are leasing it? Anyone know?
A smart bank REO department would be VERY keen to come to a mutually beneficial arrangement with a sitting tenant. The bank would gain a lot more than a few months rent simply by having the place occupied and not trashed on departure.
The problem might be that the bank comes under big pressure to get the property off their books fast.
Check out these sale and inventory numbers from Destin, FL… Posted on realtytimes.com
http://realtytimes.com/rtmcrcond/Florida~Destin~mikehenderson
Destin Real Estate last 30 Days 04/15/06
Active Homes for Sale: 571
Number of Homes sold: 22
Average Sold Price: $819,561
Active Condos for Sale: 4847
Number of Condos sold: 128
Average Sold Price: $518,321
Active Lots for Sale: 219
Number of Lots sold: 1
Average Sold Price: $900,000
—————————————————————————
26 months supply of homes
38 months supply of condos
219 months supply of lots
haha.. to funny… thanks mike the realtor
Here’s an interesting tidbit from right down the road from you…
Panama City Beach Condos on the MLS
May 2005 - 1,262
April 2006 - 2,320
…and they’re still building like crazy!
The Florida Association of Realtors said 21 were sold in Jan, 25 in Feb, and 201 in March. Funny, I didn’t notice a drop at all - much less by 201 - as I tracked the inventory.
Some warn that rising interest rates and a glut of homes for sale mean this slowdown could take several years to shake out. ‘This has been a housing market bubble for the last three years,’ said Gregory Miller, chief economist at SunTrust Banks. ‘Housing bubbles don’t dissipate or correct spontaneously.’”
Now we’re talking reality…
Just talking reality but a few months too late for most people who are now trapped.
Simmsays…
http://www.AmericanInventorSpot.com