Inventory A ‘Stress Point’ For Florida Home Sales
The Florida realtors have their quarterly numbers out today. “‘Sales of existing single-family homes in Florida behaved like much of the U.S. across the 2006 first quarter,’ says Dr. David Scott, professor at the University of Central Florida. ‘The stress points on unit sales come from two key sources: One, rising inventories of dwellings for sale and two, rising mortgage rates.’”
“In the Tampa Bay area, homes sales fell 23 percent compared with the same period last year. The Sarasota-Bradenton market dropped even more, 44 percent.”
“The number of condo sales in Lee County plummeted 47 percent. In Collier, the number of home sales dropped from 1,358 to 863, a 36 percent decline. Collier’s condo market also was rocky, with sales cut nearly in half from 1,494 to 784.”
“Statewide, sales of single-family existing homes totaled 45,864 during the three-month period, a decrease of 20 percent compared to 57,532 homes sold during the same quarter a year ago.”
“Looking to Florida’s existing condominium market, sales of existing condos also decreased during the quarter, with a total of 15,386 condos sold statewide compared to 19,657 in first quarter 2005 for a 22 percent decline, according to FAR.”
“Orlando and followed the national trend of a slowdown during the first three months of 2006, with sales sales of existing single-family homes declining of 16 percent compared with the year-ago period.”
“Palm Beach County’s housing market continued to cool in the first three months of the year, FAR said. The county’s median home price was $392,900 in the first quarter, down from $415,800 in the fourth quarter of last year and $399,900 in the third quarter.”
“In the Treasure Coast, the first-quarter median was $260,200, down from $262,500 in the fourth quarter and $267,500 in the third quarter. Meanwhile, the number of sales fell, too. Palm Beach County’s first-quarter sales dropped 32 percent from a year ago, while Treasure Coast sales volumes were down 15 percent.”
“Federated National Insurance Company, today reported that the cost of its reinsurance coverage for the upcoming hurricane season is exceeding the amount previously considered in the Company’s budget for this expense.”
“Edward Lawson, CEO, commented, ‘In order to offset these increased costs, the Company is filing for a 49% rate increase in its homeowner line of business, to be effective June 1, 2006. The yearly guidance of $4.00 per share is hereby removed until our earnings picture is clearer.”
“The Company, through its subsidiaries, underwrites standard and non-standard personal automobile insurance, flood insurance, general liability insurance, mobile home insurance and homeowners’ property and casualty insurance in the State of Florida.”
The first link has some tables at the bottom with area breakouts for condos and SFHs. There are some stunners for a few cities.
It’s interesting that after mentioning the inventory, FAR fails to provide any of the numbers. As the Florida press gets into the numbers, I’m sure we’ll see more median price declines like the Palm Beach Post reported.
Orlando condos sales are up 118%????? Pensacola and Fort Walton Beach are cratering. Confusing.
Last summer was the big surge in apartment to condo conversions in Orlando. So we may have to wait as long as the 3rd quarter to see year-over-year condo sales declines. But I promise it will come.
Same exact thing in Gainesville.
http://marketplace.publicradio.org/shows/2006/05/15/PM200605156.html
NPR had an economist on Marketplace this evening that was very bearish on housing and didn’t pull any punches. “The property bubble is bursting, although it’s occurring in slow motion. You can tell by listening to the canary in this once productive goldmine”
I heard that when driving home, almost made me cry with joy
And the guy who introduced the clip was still playing it off as ‘nothing to worry about.. move along…’ but the clip itself was refreshingly damning…
… condo sales in Lee County plummeted 47 percent.
I don’t think anyone understands 47%. This is no pulse dead. The 53% are not normal transactions, these were the last of previous months transactions delayed by reluctant buyers and seller forced closings. There were NO sales as we normally count them only a sweeping up the detrius on the floor.
47% down, and inventory through the roof. I am sure the calculation taking into consideration the increase of inventory would make the sales numbers per available units for sale much worse.
Multiply last years inventory with this years sales numbers = X
Multiply this years inventory with last years sales numbers = Y
Now divide Y into X, and you get a true picture of what is really happening.
looking 4mee…..Based on the inventory ,the prices should of come down more . I think the sellers were holding out thinking a big buying rally would take place . It doesn’t help when the media was down playing the change in buyer demand for the first quarter .
Check out these qtr. over qtr. condo sales declines:
Daytona Beach -49%
Fort Meyers/Cape Coral -47%
Fort Walton Beach -50%
Melbourne/Titusville/Palm Bay -62%
Naples -48%
Punta Gorda -91%
Sarasota/Bradenton -42%
Ouch! You would think a hurricane had hit that market!!
or that one may be coming; it would seem either way the insurance companies are exacting their pound of flesh in any event
look at the bright side. next quarter the q o q will not have those horrible percentages anymore.
I’d guess that at least 25% and probably more of the vacation condo buyers in Pensacola, Panama City Beach, and Ft. Walton Beach/Destin in the first quarter 2005 were out of Louisiana or Mississippi. I’d be really surprised if there were many vacation condo ans second home sales involving people from those areas in 2006, though I’ve heard of a small number of long term or permanent relocations from there to here since Katrina.
So what happens when those sales are behind us? We’ll be down 80? Jeez, for anyone who bought in recently, this must be a little scary
80%, I mean.
That’s how I see it, and “I be here.”
Exploding inventory, Insurance costs doubling record hurricane season predicted, and buyers are nowhere to be found…What else needs to be said?
How about higher property taxes due to higher assessed property valuations?
How about higher interest rates on all of those adjustable rate mortgages? End of 2-year “teaser rates?”
Grim
you forgot the fires !
“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
bless you.
Does anyone know the name of the person that belongs to that quote?
“Does anyone know the name of the person that belongs to that quote?”
In Miami, Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors, predicted that a limited supply of land coupled with demand from baby boomers and foreigners would prolong the boom indefinitely.
”South Florida,” he said, ”is working off of a totally new economic model than any of us have ever experienced in the past.”
– Motoko Rich & David Leonhardt, “Trading Places: Real Estate Instead of Dot-Coms” (New York Times, March 25, 2005)
Yet another thing I love about Ben’s blog — ya better be right, because these folks can find the truth in under ten seconds.
I laugh everytime you post this quote…….
Has anyone forwarded this quote back to the original author with an attachment showing these Florida numbers?
It’s bad grammar too.
Last year when I went to kids birthday parties I would hear parents talk about how much a house across the street from them went for, and it’s not even as nice as their house.
Now I heard how some lady had to forfeit the deposit and get out of a contract because she didn’t sell her house yet.
very luck lady
Let me say i live in a condo in west palm beach and there are 186 units and they are foreclosing every week on units for not paying maintance fees. Now add this together with the fact that the building is 30% occupied and that gives a picture of the market. Also the rents have dropped over 40% percent also.
Hi Robbie ……. That’s interesting that the rents have dropped 40%. What were rents at before ? Apparently you have alot of investor/owners in this complex . Whats it like living in a complex that only 30% occupied ?
What’s this? According to Msn money you can now bet on home prices rising or falling in an investment vehicle. Anyone want to get on board?
Yeah, the CME started trading housing price futures (based on the Case Shiller same price home sales indicies for 10 US cities. Good way for a homeowner to hedge their risk. If you are new to futures do your homework, because getting whipsawed there is a Chapter 11 inducing event rather than just a painful one in NY.
I thought that FL would be the first place to wash into the ocean. But it looks like maybe New England might be it. What will all of the flooding up there do to the housing market/prices, etc. Anyone with a bird’s eye view?
State Farm which controls about 22% of the Homeowers market filed for a +70% statewide average rate increase. This is another severe blow to the FL housing market. The vast majority of people are going to see anywhere from a +50 to +100% rate increase as policies renew over the next 6-12 months.
Mine almost doubled in Orlando.
About one month until hurricane season starts here. State Farm wants almost a double in premiums. Federated wants 50% more, Citizens 50-70% more. The flippers are going to puke when they can’t sell these overprices turds and have to cough up $$$ for the reset mortgage rates, higher taxes, and doubled insurance.
IMHO so what that the median price is $392000? That is for a 1500 sq ft shack in crack town. Knock another 100k of the price of a home and maybe I’ll consider buying vs. renting with no worries of taxes, insurance, and hurricane damage.
Bring on the resets!!!
If the ‘canes don’t get ya then the gators will;
if the gators don’t get ya then the skeeters will;
if the skeeters don’t get ya then the insurance will;
if the insurance don’t get ya then the proppity tax will;
if the tax don’t get ya then the Yankees will.
It won’t be just this year either. When the big re-insurers say jump, even State Farm, Allstate and Nationwide say, ‘How High?’ A catastrophic hurricane to hit Miami or Tampa St. Pete is just a matter of time. Katrina was a wake up call, and homeowner premiums are still too low for the risk presently in Florida. I expect Munich RE and the rest will keep jacking up their rates, which in turn means SF and the others will pass it along to their customers.
About one month until hurricane season starts here. State Farm wants almost a double in premiums. Federated wants 50% more, Citizens 50-70% more. The flippers are going to puke when they can’t sell these overprices turds and have to cough up $$$ for the reset mortgage rates, higher taxes, and doubled insurance.
IMHO so what that the median price is $392000? That is for a 1500 sq ft shack in crack town. Knock another 100k of the price of a home and maybe I’ll consider buying vs. renting with no worries of taxes, insurance, and hurricane damage.
Bring on the resets!!!
Slightly OT, but is the gold bubble already popping, or is it just that my computer screen is fogged up? Hard to say — you be the judge:
http://tinyurl.com/kfsy6
no, gold went down cause the owners in florida had to cash out to cover the insurance hike,
I think that in an earlier post someone mentioned worldwide central bank intervention as a probable cause. I don’t know much about much, but for such a large movement in one day, that answer seems plausible to me.
Goldbugs always blame central bank influences when their yellow metal declines. Sometimes they are right and some times they are wrong. Unfortunatly when the large central banks do act in a unified manner they dwarf pretty much all speculative behavior as noise.
Wouldn’t this statement lead an inquiring mind to ask WHY central banks would try to suppress the price of gold. As a follow on question, is it legal, does this thinking connotate free market beliefs? Also, if they have been suppressing gold, how, for how long and what will be the ramifications should they run out of ammo to do this? Just food for thought. http://www.gata.org
Central banking is a cartel designed to hold up the value of pieces of paper (which benefits all of us if only because we do not have to lug bits of metal around to trade with).
It’s legal because the same folk who write the laws created the central banks :).
In the modern era manipulation has gone on since since Bretton Woods, in reality it has occured since the first savvy goldsmith in Europe figured out that he could write gold promissary notes for more than the amount of gold he had in stock knowing that most of the time people would not come to collect their gold.
They have a ton of ammo (they hold a majority of the reserves). If they were to run out brass, lead, and the right powder will probably be far better investments than precious metals.
From the Economic Times over the weekend:
“NEW DELHI: Worried about the rise in gold prices, the government has decided to track price movements and possibilities of any hoarding of the metal. Finance minister P Chidambaram on Friday held review meetings on the trends in the price of yellow metal with his officials.
The minister is also expected to meet Prime Minister Manmohan Singh over the weekend to take stock of the developments. While the government does not control gold prices, it is concerned that a sustained rise in its prices could become a politically sensitive issue. Several MPs have already given a notice that they will ask the government to respond in Parliament, about the steps it plans to take, to stem the price rise.
India is the largest importer of gold in the world at over 700 tonnes annually. For a large percentage of middle class the metal is also a critical asset. So any change in its price has strong ramifications, said sources. The government has already made a proposal to the RBI to liberalise the import route for gold, by allowing, a larger number of entities including jewellers to import it.
The proposal was made last year, but the RBI had not accepted it so far. To stem the mounting prices of gold, the proposal may be put on the table again. The Centre has also asked for inputs from the commodity exchanges, Sebi and the RBI on whether any asset bubble is building up in the economy in gold. “
Read about India’s manipulation and the price of gold:
http://www.financialsense.com/fsu/editorials/kakani/2006/0514.html
A correction of 3 or 4% is not a popping bubble. Gold at $2000 might be a bubble.
Check this out…
A Weblog by Greg McBride, CFA senior financial analyst, Bankrate.com
Monday May 15
Posted 11:35 a.m. EDT
Putting a different spin on home prices
The National Association of Realtors issued a release this morning on home prices. The first sentence says, “The growth in single-family home prices continued to cool in the first quarter, but many metropolitan areas are still showing double-digit annual gains, according to the latest survey by National Association of Realtors.”
The NAR points out that the median single-family home price increased 10.3 percent versus one year ago. (Bear in mind, this is based on homes sold during a given calendar quarter and does not measure the same houses from one period to the next).
But here is a fact that was not in NAR’s press release — the median single-family home price has declined more than 4 percent in the past six months.
David Lereah, NAR’s chief economist was quoted in the release as saying, “By the time we report second quarter data, I expect most areas will be returning to normal rates of price growth in the single-digit range.”
Don’t bet the house on it. The NAR’s nonseasonally adjusted figures show the median single-family home price in first quarter 2006 at $217,900. But the median in second quarter 2005 was $219,400, so if price growth will indeed be “in the single-digit range” as Lereah asserts once second quarter data are released, we’ll need to see a handsome improvement from the first quarter median of $217,900.
For example, if median home prices were to show a year-over-year increase consistent with the long-term average of 6.5 percent, the median for second quarter would need to come in at $233,600. I don’t think it will come anywhere close to that. In fact, to show just a 3 percent year-over-year advance — which would, by the way, trail the Consumer Price Index — the median for the second quarter would need to be $226,000.
Considering that mortgage rates are rising and the median single-family home price has dropped for two consecutive quarters, I’m not holding my breath. The bloom is off the real estate rose, no matter what spin others want to put on it.
I mentioned this in a nother thread last week but I will post again. A co-worker said her neighbor listed their house at $375k late last year (Bradenton, FL) and they ended up getting one offer at $325k after a couple months. They laughed it off and the house continues to sit. They ended up getting a Realtor who said they had to list under $300k to even get a bite on it. Well, it’s sitting around $280k right now….and they haven’t had a single person look at it. I guess they aren’t laughing at the $325k offer any longer……
Funny but your first offer is usually the best one you’ll get. Seen it over and over again.
Do you know how much your co-worker bought that house for? This is amazing how fast things are turning around but most people are still unware. My friend just bought a house in NoVA with I/O loan despite all my effort to convince him to get the fix rate or just wait..
Not a surprise in the Brandenton market. It’s one of the most overheated in the state.
Good luck with $280k. More like $180k and it will be a good value.
A british economist muses as to why real estate in UK has not tanked as much as he predicted (as yet)
His reasons, to me, are certainly not exhaustive,
http://www.in2perspective.com/nr/2006/05/why-the-uk-housing-market-did-not-crash.jsp
the most important post in months
TX !
NAHB Housing Market Index Lowest Since 1995
wow…look at these charts and figures! HARD LANDING
http://www.haver.com/Default.htm
STUPID QUOTE OF THE DAY..
http://www.sun-sentinel.com/business/local/sfl-zhomesbr16may16,0,157809.story?coll=sfla-business-front
“People are not going to see much relief on insurance. They’re not going to see much relief on their taxes. I don’t see [prices] going much lower,” said Donn Roebke, an agent for Illustrated Properties in Wellington. “This is the best time for someone to go ahead and purchase a home.”
Wow. I passed by an auto repair sign last night that read, “We specialize in foreign AND domestic”. I thought that was the dumbest thing I saw in a while before I read this above quote.
Another incidental story from Tampa. My Mom has a friend who is an interior decorator and is working doing “Color Sessions”(whatever that is), for 4 builders here in the Tampa Bay area. Last week one of the builders came in looking kind of sick. She asked him what was wrong and he said that he just had 17 contracts canceled.