‘Prices Not Dropping That Rapidly’ In Florida
An editorialist is changing his forecast in Orlando, Florida. “Back in February I said your house would not be worth any more by the end of the year. I am updating that to say it may be worth less. Our economy and job market is booming. These are not conditions conducive to a real-estate meltdown. There, feel better? If so, stop reading now.”
“Our hot market attracted speculators. They bought up homes, bid up prices and created huge demand. Now they have reversed course and are selling. This means fewer buyers, more sellers and a glut of inventory.”
The Pensacola News Journal. “With a record 6,150 houses on the market, and prices falling in many neighborhoods, the once red-hot Pensacola Bay Area housing market is trying to fight its way out of a worrisome slump. For every 400 houses that sell, another 800 go on the market.”
“As a result, a preliminary estimate of the Pensacola Association of Realtors’ April inventory of homes for sale shows an approximate 350 percent surge over April 2005 numbers, and by a similar amount over the 2004 figure.”
“‘It’s a buyers’ market,’ Auby Smith, president of the Pensacola Association of Realtors notes. ‘The good news is there are a lot more houses to choose from, and prices are not dropping that rapidly.’”
“The condominium market is a separate concern. ‘The condo market is where we’re really seeing a slowdown,’ Al Mueller said. ‘One month we’re seeing 150 sales, and the next month 10. The condo market is going to be very interesting to watch.’”
“Sam Rogers, a veteran Realtor, notes that of the approximately 6,150 dwellings that were on the Pensacola area market in April, some 1,700 are condominiums. (Realtor) Joe Endry said the current condo market ‘has really slowed down for the spec buyer.’”
“But he believes the condo market, like single-family homes, will bounce back. ‘I’ve been in the beach market for 34 years,’ Endry said. ‘And I’ve seen all kinds of downturns, during the ’70s, the ’80s and after the 1986 tax reforms.”
“Perhaps the biggest factor holding back the condo market is the weather, and the threat of future hurricanes. ‘If we have another direct hit, I think we’ll see a lot of people move north,’ Endry said.”
“And that prospect is clearly affecting sales of waterfront homes and condos. ‘Anything near the water is slow right now,’ Rogers said. But he is quick to add that the good thing about real estate is, ‘if you hold on long enough it will always come back.’”
‘of the approximately 6,150 dwellings that were on the Pensacola area market in April, some 1,700 are condominiums.’
The FAR printout for March 2006 shows 76 condos sold at a median price that was 9% less than year ago levels.
In the Orlando Sentinel article, Mike Thomas, who gives wekly opinions on anything and everything, said ” So would I buy now? If I found a good home in a good neighborhood for a good price, you betcha.”
Good home in a good neighborhood? Can do. But it’s that last little escape clause that voids any positive note to his assessment, IMO: “…for a good price.” Sure thing, Mike. A good price to me is 50-60% of the Spetember 2006 price — does that work for you?
Every body on this blog is always asking “at what price will a home be fairly priced for me to buy.” I recently read the book “Sell Now” by Talbott and he feels strongly that RE will revert to the 1997 price x1.21(to allow for inflation during that period-of course as time goes on this 1.21 number will increase slightly), maybe this is a good target. I know if it does go down to that level in alot of areas it will be pretty dire for many people.
I recently was putting together some rough numbers for what houses in a nearby, over-built development could be rented for. I figure rents support a price of around $80k. The houses are on the market for over $300k. The big problem is the cost of the dirt.
No when to hold em, no when to fold em! Inventory in sacramento is at or near all time high. Story in business section today about the high amounts of properties for sale. We are definitely on the downhill side for prices. I hope the newest round of greater fools love their new homes.
I recently read the book “Sell Now” by Talbott and he feels strongly that RE will revert to the 1997 price x1.21(to allow for inflation during that period-of course as time goes on this 1.21 number will increase slightly), maybe this is a good target.
Rather than allowing for inflation, probably better to inflate 1997 prices by rises in incomes. RE markets more likely to follow rises in incomes than prices of goods and services.
At 1997 prices plus 21% I would be a buyer.
At 1997 prices plus 21% I would be a buyer.
At that level, you might never be a buyer.
Chip- Mike is a friend of mine. I sent him your comment. His response to me is as follows.
Smart guy….notice how I didn’t define “good price?” Good call fella.
All right, so then why is he using codespeak? Afraid of cold stares at the office?
OT- An interesting article came out the other day from FTW, stating that the waters in the Gulf of Mexico are much warmer this year then they were last year at this time. We all know what happened last year. Anyone who buys a home on the Florida panhandle is taking a big gamble.
I can attest to the unusual weather. We have already seen the high 90s and 100+ degree weather in Dallas and not on only one day.
The editorial tide is shifting from pacification to a realization that to remain relevant editors and reporters must at least appear to be informed.
Absolutely true, although not everywhere yet. This hasn’t hit Seattle, most of the articles you see up here are still cheer leading. But you cite an important trend that will make its way to the NWest.
Interesting as Florida was an area pointed out by Buffett as a place where the excesses and slowdown were obvious.
Simmsays…
Gifts to NEVER Get Mom
http://www.AmericanInventorSpot.com
Yesterday, Lennar Homes was running radio spots every 15 minutes here in Orlando for “Up to $70,0000 off the purchase of your new Lennar Home in select Orlando areas”. The jingle was sung by little kids to the tune of ‘Old McDonald’ and they pointed out that the “E-I, E-I…” stood for “everything included”. I was very moved. If you won’t buy a home for yourself, won’t you do it for the children?!?
E-I, E-I-O, or owe!
Just remember to chain the little tykes down so the hurricane won’t blow them away….
real funny I actually did do that
If you won’t buy a home for yourself, won’t you do it for the children?!? BOY IS THAT LOW LEVEL MARKETING!!! Use the kids… What will they think of next.
” The kids are one and three !!!! That house is near good schools !!! WHAT !?!?!?…….SUZANNE RESEARCHED THIS !!!!”
The Washington Post has a front page article on how costs are rising everywhere. The article lumps rising rents, housing prices, etc. together. That’s misleading. According to the government rents increased in Urban areas 3.7% last year. I have never heard anyone complain about rising rents only rising costs of ownership.
Consumers are feeling the pain of rising costs, but don’t lump rent together with the rising cost of owning a house.
Percent changes in CPI for All Urban Consumers
Housing 3.7
http://www.bls.gov/news.release/cpi.nr0.htm
The year-over-year increase in owners equivalent rent (OER) fell to 1.9 percent in January and February, the smallest rise since the BLS went to a rental equivalency measure in 1983. Home prices, as measured by the Office of Federal Housing Enterprise Oversight’s Home Price Index, rose 7.7 percent in the first quarter from a year earlier, in line with the gains for the last four years.
The entire explained last August by Caroline Baum here:
http://quote.bloomberg.com/apps/news?pid=10000039&sid=aa49I53YXUPw&refer=columnist_baum
Remember the NASDAQ took 3 years to hit bottom - and we’re still way off the top. Bubbles are bubbles.
http://money.cnn.com/quote/chart/chart.html?symb=nasdaq&sid=3291&time=all&Submit1=Refresh
“Orgies tend to be wildest toward the end.” - Warren Buffett
Real Estate vs. Equities
http://bigpicture.typepad.com/./photos/uncategorized/2assets.jpg
Those bubbles are out of phase!
Brilliant - they’ve discovered the answer to the high cost of housing in SW Florida - Get a Roomate. But, make sure you do a criminal background check on the stranger you’re inviting into your luxury condo.
http://tinyurl.com/rk93f
“‘It’s a buyers’ market,’ Auby Smith, president of the Pensacola Association of Realtors notes. ‘The good news is there are a lot more houses to choose from, and prices are not dropping that rapidly.’”
Thanks Auby for the good news - prices still too high and falling - sounds like the perfect “buyers’ market.” I wonder how many investment properties this bozo is trying to unload.
I think David at bubblemeter said it best: It’s a renters market.
I have noticed that RE people are complaining that the market is so slow, but prices really have not come down at all yet. What will you think of next, a real estate bust with out falling prices.
“if you hold on long enough it will always come back.’”
As long as your job is not moved the India, or your IO/ARM mortgage doesn’t go up 50%, or, or or, you’ll be fine.
Also, what good is holding on 20 years for it to come back and now with inflation it is only worth half any way and you are no better off, any way you look at it this bubble was a bad idea, BUT you really have to look, not just buy!
“I am updating that to say it may be worth less.”
Editorial suggestion:
“I am updating that to say it may be worthless.”
“And that prospect is clearly affecting sales of waterfront homes and condos. ‘Anything near the water is slow right now,’ Rogers said. But he is quick to add that the good thing about real estate is, ‘if you hold on long enough it will always come back.’”
Just wait until hurricane season when lots of those places are in the water. Then we will find out how slow is slow.
People are funny, they will only worry if there is another hurricane, every one knows another one is coming. Thats like waiting till you get a bad cavity to go to the dentist.
Hey, there is an old saying nothing is a problem until it is.
I’m surprised that the Pensacola paper would print something like this–even though it’s still generally optimistic, it does acknowledge that there might maybe possibly be a teentsy-weentsy little bitty problem. That’s because everything in Florida revolves around keeping the development interests happy.
Things are much worse here in Panama City–we are a smaller place than Pensacola but have over 8,300 properties on the MLS, not to mention the stuff for sale by the condo hustlers, local builders, and the St. Joe Co. It’s gotten bad enough that some of the many condo projects are now on hold. One, belonging to a very wealthy developer here in town, got so far as the foundation work before quitting. They just piled sand up on the work that had already been done.
But there’s not been a word of this in the local paper. The only reason I know about the project shutdowns is that someone here posted a link to an article in the Gulfport paper. As far as our own paper is concerned, all is for the best in this best of all possible worlds.
Florida will be fine the boomers are coming , Baby boomer households have median financial assets of only $50,700, not enough for a comfortable retirement. They think, however, that ever rising home values will bail them out. Just ask any wealthy developer with price tags over 500,000 per unit,
‘if you hold on long enough it will always come back.’”
Exactly, just ask the Japanese…. 18 years and counting ,and are about to break even after their crash. Dow is about to touch the old record
with the last fools piling in there…the greater fools still have some fleece that needs shearing it seems. The big boys will bail now that the suckers fell for the pump….
Actually, its wait 18 years and FINALLY prices are no longer dropping!
Today’s Miami Herald cover story is “Sketches of a catastrophe-’http://tinyurl.com/qnpt3.
All about when not if a hurricane destroys our area.
Enough info there to ruin many newcomers breakfast.
http://www.floridahistory.org/floridians/1920’s.htm The Great Florida Land Boom ,This is like the movie ground hog day, Storm surge is why the land or sand bars as we know it were never built on. a storm will hit but when, cat 5 storms were far and few in the past but now its the norm, odds are not good for waterfront investments, can you handle the loss, at the top of the bull and still greater fools show up, easy come and easy go , Hurricane codes dont help much, I see moble homes with rollsafe shutters on them, Florida is a great place to visit but 7 months out of the year it sucks, I cashed out in Nov, the land and home I sold are still on the market priced less then what I sold them for, Common sense R.I.P
it’s nonsense to suggest that a market in which prices are falling is a “buyers’ market”. Only those who are oblivious or those who are happy to burn big piles of dollar bills will be buyers.