February 7, 2012

The Train Came Back Around

The News Journal reports from Florida. “Deltona, the largest city in Volusia County, also has its biggest foreclosure issue. The city’s eastern part, 32738, holds the Volusia-Flagler area’s second-worse foreclosure filing ratio, the 63rd worst ZIP code in the state. The western area, 32725, is fourth worse in Volusia-Flagler but doesn’t crack the top 100 in the state. ‘32725 is the older part of Deltona,’ said Karen Christopher, a West Volusia-focused real estate agent with Adams, Cameron & Co. ‘That was more established when the boom hit.’”

“The eastern part of the city had gobs of vacant land prior to the housing boom. Before the boom, some lots were selling for $9,000 or $10,000, she said. ‘During the spike builders were going crazy building all these homes,’ she said. ‘Lot prices went up to $75,000 for a regular building lot in Deltona. It was outrageous.’”

“Stephen Braun, a DeLand attorney who works with many foreclosed homeowners in West Volusia, acknowledges that Deltona is the epicenter of foreclosures in Volusia County. But most of his clients trying to save their homes aren’t in Deltona. ‘My experience is those in Deltona have pretty much given up,’ he said. ‘The values have gone so low. I think they’re more likely to walk away.’”

The Sun Sentinel. “Finding a bank-owned home for sale these days is hard enough. Actually buying one is an even bigger problem. Last year the supply of bargain-basement, foreclosure homes shrank, as banks temporarily stopped trying to repossess properties to review possible paperwork errors. In parts of South Florida, including eastern Broward County, it’s a seller’s market for single-family homes $500,000 or less, real estate agents say.”

“‘If I was a purchaser, I definitely wouldn’t go in [offering] less than the asking price,’ said Summer Greene, a Fort Lauderdale real estate manager and the 2012 president of the Florida Realtors trade group.”

Florida Today. “Realtor Jan Alwine hasn’t forgotten the mid-1970s, when the Apollo program ended abruptly. Some residents just left their homes to be reclaimed by the banks. She’s seeing that now. Her job as a Realtor has become harder. She constantly meets bargain hunters from the Northeast who don’t feel prices are low enough. Completing a short sale can be exasperating. ‘I worked on selling a $28,000 condo for a year and a half,’ she said. ‘What do you think I’m going to make on that?’”

“The $28,000 condo originally sold for more than $150,000, and Alwine represents several properties that should be worth $1 million but cannot draw a buyer when listed for half that. ‘Buyers don’t think much of the area,’ Alwine said. ‘Consequently, they sometimes come in and make ridiculous offers.’”

“Alwine believes the real estate market will come back because Titusville is a nice place to live. And she holds the line against buyers who think they can buy prime real estate for a song. ‘They think we’re on the end of the world,’ she said. ‘But this is a haven.’”

The Tampa Tribune. “The excess supply of housing inventory is dwindling in the Tampa-St. Petersburg-Clearwater area, and it now costs about the same to buy as it does to rent a home here, said Chris Lafakis, who follows Florida for Moody’s Economy.com. Miami, for example, hasn’t reached this point: Buying a home there is still 20 percent more expensive than renting one. ‘We finally have good news for Tampa,’ Lafakis said. ‘Housing prices are too cheap compared to the income people have.’”

“So why aren’t more people buying? The answer boils down to fear, Lafakis said. ‘Many consumers experienced very traumatic house price declines, so it’s understandable that many would be apprehensive to buy a home,’ he said.”

“Also, many who might want to buy still are trapped in ‘underwater’ homes. Nearly half of Tampa Bay’s homeowners with mortgages owe more than their homes are worth. President Obama has announced a plan designed to help underwater owners refinance. Shawn Miller, a Tampa mortgage broker, calls it a win-win. The money homeowners save will go back into the fragile economy, Miller said, and these buyers will be less likely to abandon their underwater homes to foreclosure.”

“‘They’re going to be more inclined to stay in the home longer, take better care of it,’ Miller said. ‘At least they won’t be upside down and at a higher rate. They’ll just be upside down.’”

“After months of noisy protests and public-space encampments, South Florida’s Occupy movement has quietly shifted its focus to ‘occupying’ houses to support homeowners caught in the foreclosure crisis. ‘The only thing that works is public outrage and media exposure of bad practices by banks,’ said Lisa Epstein, who became an activist after almost losing her own West Palm Beach home to what she calls fraudulent foreclosure practices.”

The Ledger. “Are we there yet? It’s been a nagging question for years as Polk County’s housing market struggles to find a bottom and begin its recovery in earnest. ‘I think the most interesting story is nothing seems to be changing — how stubbornly resistant the real estate market is to recovery at this point,’ said Peter Murphy, a real estate consultant and president of Tampa-based Home Encounter. ‘Every month we see small pickups in sales but we also see declines in prices. From the looks of things, that shouldn’t change that much this year.’”

“Steve Holland once bought an investment home on Spinnaker Drive in Lakeland with the intent of fixing it up for a resell. That was about eight years ago. By the time the house was renovated, Polk’s housing market had started to sputter and Holland opted to rent the property instead. He finally put the yellow, three-bedroom house on the market about two years ago for roughly $120,000, and has since dropped it to $103,000. Still, no bites.”

“‘I had mixed emotions about trying to sell it with the housing market being so depressed around here,’ said Holland. ‘We were going to wait for things to level out, but that may be 18 months, two years … who knows?’”

“‘Right now I think prices are being driven more by foreclosures than market rate transactions,’ said Tim Becker, director of the Bergstrom Center for Real Estate Studies at the University of Florida. ‘As we start growing jobs — and high-quality jobs — we’ll have an impact on prices. But I think we all have to be realistic that when we get back to increasing prices, it’s not going to be what we saw in 2005 and 2006.’”

“A longtime building contractor and trim carpenter, Al Brock, decided to get out of the business a couple of years ago and now works as a home inspector. He recalls working 80-hour weeks and foregoing weekends during the height of the building boom, but says he knew it wouldn’t last as home prices reached unsustainable highs. ‘Personally I don’t want to ever see it that way again. But I would like to see it busy — people getting back to work and making money,’ Brock said.”

“‘You’re seeing general conditions in the overall economy improving, and that helps,’ said Gordon Kettle, an economics professor at Polk State College. ‘People are getting back to work, but job growth is occurring at a very slow pace. Price corrections are making homes a lot more affordable,’ which in turn helps to reduce Polk’s housing inventory, Kettle said.”

The Herald Tribune. “When it comes to stories in the media about real estate, readers have developed a level of mistrust. This is understandable, particularly when the people quoted in those articles are real estate brokers or economists employed by the National Association of Realtors, the National Association of Home Builders or companies that make money from the transfer of real property from one party to another.”

“Exhibit ‘A’ is the ‘Time2Buy’ launched by the Sarasota Association of Realtors. That was in 2007. As it turned out, it was the time to not buy.”

“Now it is 2012, six years after real estate went into the tank hereabouts, and I am hearing encouraging reports from brokers and other realty pros about market activity, if not home values. Last week’s column, ‘Agents say buyers are pouring in’, brought nods of agreement from real estate agents. ‘Insanity’ is how a real estate exec described the market last week. ‘We are in the eye of the storm,’ said another agent.”

“But it also generated howls of derision from some readers, who thought I was announcing the start of a new property ‘boom,’ a word that was not used in the column. ‘You, sir, are a disgrace to your profession,’ one reader, claiming than my sources were ‘friends,’ wrote in an email. ‘Everyone in real estate knows there is no boom, and that 95 percent of agents are struggling.’”

“Will this last? Were those agents lying about market activity now? We shall find out in April, when the the property appraiser’s website will have the March transaction number for sales contracts being written as we speak. Is the market ‘good’? It is what it is, and that appears to be ‘busier,’ even for the agents — 95 percent or otherwise — who have been struggling.”

News 4 Jax. “Two of the nation’s top 50 best-selling neighborhoods are in the Jacksonville area. One year ago at this time, we reported that new home sales were at a 10-year low in Northeast Florida, now they’re on the way back up. Realtor Howard Flaschem is noticing a steady upswing in home construction. The first real up-tick since the housing market unraveled. Two of the countries top selling neighborhoods, are right in our backyard, Nocatee and Durbin Crossing.”

“‘Prices are back to before bubble prices, a lot of people thought they’d missed the train but the train came back around, and now people can get into a new home and community with a lot of amenities,’ Flaschem said.”




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40 Comments »

Comment by jeff saturday
2012-02-07 07:29:45

“So why aren’t more people buying? The answer boils down to fear, Lafakis said.”

Actually for me it boils down to the banks, the Fed, Fannie and Freddie, the Federal Government, the National Association of Realtors and local Property Appraisers Offices lying about the shadow inventory and artificially inflated house prices. But hey that`s just me.

Comment by Realtors Are Liars®
2012-02-07 09:03:19

BINGO!

When will the Housing Crime Syndicate ever stop lying to the public?

 
Comment by Real Estate Refugee
2012-02-07 09:51:54

Also, home ownership is still at all time highs, scarcity of good paying jobs, and a lot of people lack down payment money.

Oh, was watching Orman this past Saturday night and she read the riot act to some woman who had only saved a 3.5% down payment and nothing else. Say what you want about Orman - she does great rants.

Comment by Realtors Are Liars®
2012-02-07 09:55:20

I watched it. It was good. She stopped just short of calling the dumbass caller a dumbass.

 
Comment by BetterRenter
2012-02-07 19:10:37

The real problem remains that the woman who had only saved a 3.5% down payment, can still land a mortgage through some federal program. That bullsh## needs to STOP.

 
 
 
Comment by Arizona Slim
2012-02-07 08:56:51

“Realtor Jan Alwine hasn’t forgotten the mid-1970s, when the Apollo program ended abruptly. Some residents just left their homes to be reclaimed by the banks. She’s seeing that now. Her job as a Realtor has become harder. She constantly meets bargain hunters from the Northeast who don’t feel prices are low enough. Completing a short sale can be exasperating. ‘I worked on selling a $28,000 condo for a year and a half,’ she said. ‘What do you think I’m going to make on that?’”

Let’s see… Six percent of $28k is $1,680. Over a period of 18 months, that’s a whopping $93.33 a month. Which means that it’s time for Jan to find another career field.

Comment by Ben Jones
2012-02-07 09:01:53

From the News Journal piece:

‘We are a community that builds houses, that sells real estate — that’s what we do for a living around here, said Flagler County property appraiser Jay Gardner. ‘And that stopped. So all those people, everybody in that game, had their place. What were they supposed to do? They didn’t work in a factory or anything. They worked in real estate.’

Comment by Carl Morris
2012-02-07 09:25:38

As long as they didn’t blow all that money they made during the bubble they should be OK for quite a while, right?

Comment by In Colorado
2012-02-07 11:53:29

Those Escalade leases aren’t cheap!

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Comment by Posers
2012-02-07 13:54:19

$350K houses aren’t cheap, either. Nor is a $70K down payment on a $350K house.

Before you start slamming Escalade owners, perhaps you ought to re-examine your own spending practices.

Holier than thou you ain’t.

 
Comment by Realtors Are Liars®
2012-02-07 18:47:55

Before you start defending SLOBurban owners, perhaps you ought to re=examine your own motives.

Self-righteous arrogance you are.

 
 
Comment by BetterRenter
2012-02-07 19:14:20

“blow all that money”

You sick little monkey! Of course they spent it all! That was the point! If you didn’t spend everything you made, plus, then you were categorized as some financial Luddite and were locked out of the social system that allowed you to continue seeing such an income.

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Comment by Lenderoflastresort
2012-02-07 22:43:13

I think the bottom is here in NY metro area.

Comment by Realtors Are Liars®
2012-02-08 05:31:56

NY metro has barely started correcting.

Nice try though.

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Comment by Robin
2012-02-07 18:04:35

Agree with the conclusion, but your math may be off.

In CA, the (up to) 6% commission is split four ways:

1.5% to the listing broker

1.5% to the listing agent

1.5% to the buyer’s broker

1.5% to the buyer’s agent

It is rare to have one person be more than one of the players in a single transaction.

It does, however, sometimes happen, and with happy consequences. When I bought my home I used the listing agent as my agent. I requested and received a substantial $$$ rebate into escrow.

RAL: I used Suzanne!!!

Comment by Robin
2012-02-07 18:07:19

Reply is to Slim’s conclusion.

 
 
 
Comment by Arizona Slim
2012-02-07 08:59:58

“Steve Holland once bought an investment home on Spinnaker Drive in Lakeland with the intent of fixing it up for a resell. That was about eight years ago. By the time the house was renovated, Polk’s housing market had started to sputter and Holland opted to rent the property instead. He finally put the yellow, three-bedroom house on the market about two years ago for roughly $120,000, and has since dropped it to $103,000. Still, no bites.”

Methinks that the above scenario will happen to a lot of accidental landlords. The appreciation fairy didn’t smile upon them, the joys of dealing with tenants were elusive, and then they wind up with a house they can’t sell for anything near what they paid for it.

Sounds like real estate investing isn’t as easy as those weekend seminar promoters said it would be.

 
Comment by Montana
2012-02-07 09:39:38

‘We are in the eye of the storm,’ said another agent.”

Wait, doesn’t that mean it’s actually quiet & slow?

Comment by Realtors Are Liars®
2012-02-07 09:42:39

Cut’em some slack. Most realtors drop out before making it to 8th grade earth science.

 
Comment by Diogenes (Tampa, Fl)
2012-02-07 09:43:01

Yes, it does. But the maelstrom of massive buying and multiple bids and O’er the asking price bidding, is just a wee little ways away. The BOOM is coming. Batten down the hatches.

Comment by Robin
2012-02-07 18:09:00

Feed the squirrels! - :)

 
 
Comment by Arizona Slim
2012-02-07 10:45:46

If they’re in the eye of the storm, doesn’t that mean that the storm will soon return?

 
 
Comment by Diogenes (Tampa, Fl)
2012-02-07 09:40:14

Reading through the series of articles, and commentary from the papers, I get the same sense of optimism, or feel-good sentiment being foisted on the public. It’s rooted in the concept that we are going back to selling houses on the scale of the 2000-2006 Bubble model. Like it’s on the verge of a new “boom”.
I get the feeling that among most of the brokers/agents/sellers that this is “normal”. In other words, pricing levels should be around 1998-2000 levels and stay that way until inflation (which the FED says is zero) takes them back up with wage increases, but they think pricing should be around 2005 levels or higher.
I sense they are waiting for the market sales to regain traction, and then, in just a year or 2, prices will be back to the magical 2006 levels and continuing higher, showing “growth” in the marketplace.
Is this just me, or do other people here see this the way I see it? I can’t conceive of another “boom” anytime soon. It simply defies reality.
I can’t even conceive of high volume of sales. There are NO bargains.
The foreclosures are what I consider the “normal price”. Anything else is inflated, unless Ben B. and the Jets (FED) can party with our money like it’s 1999 and get some real heavy inflation going strong.
If that happens(doubtful), we’re all doomed anyway, so who would care what the price of housing is? No one could afford the price of just trying to get by.

Comment by Realtors Are Liars®
2012-02-07 09:59:06

Ya know….. they can get their wish of 2005 sales volume. It’s going to require dramatically lower prices.

It’s your choice Lying Realtors. It’s your choice. Either starve, or eat. What’s it gonna be?

Comment by Arizona Slim
2012-02-07 10:49:30

Here in Tucson, the year 2005 was the turning point for the housing bubble.

Late that spring, our leading local fishwrap reported a Mexican standoff between buyers and sellers. The bad guys in this scenario were the appraisers, who were no longer going along with the prices for the houses offered for sale.

So, the sellers would either have to lower their prices or the buyers would have to come up with more money. Long story short: A lot of deals fell through.

During the summer, I noticed quite the proliferation of “for sale” signs. It was as if the monsoon season rains had germinated them. And some of those signs stayed up for years.

 
 
Comment by Bad Andy
2012-02-07 11:58:44

The articles also clearly point out that inventory is artificially low for the time being but recovery is right around the corner. We have bidding wars!

 
Comment by Posers
2012-02-07 13:57:45

“It’s rooted in the concept that we are going back to selling houses on the scale of the 2000-2006 Bubble model.”

No, it’s not. It’s rooted in the fact that this is an election year, and the MSM will do whatever it can to help its candidate win.

Comment by AmazingRuss
2012-02-08 16:53:33

That wily Barak Hezbolla Obama, is there nothing he can’t destroy?

 
 
 
Comment by EnglishmaninNJ
2012-02-07 11:40:52

Slim:

How are things in Oro Valley? Not your immediate area I know, but I was wondering if you have heard anything. Prices falling? FSBO bargains?

We are still looking to come out and visit the area when my girls are a bit older. Seriously considering moving there. You know, it’s a great time to buy in Oro Valley, I’m sure.

Thoughts on OV? Thanks.

Comment by Arizona Slim
2012-02-07 12:28:38

I haven’t been out to the Tucson suburb of Oro Valley in, oh, about six years.

Much of this has non-visitation has to do with the two friends I had out there. Both of them died within a year of each other. They were a husband and wife. Husband died of cancer in the spring of 2008 and the grief-stricken wife died on Thanksgiving of that year.

What I do know is that their $750k-ish house was sold two or three years ago to an all-cash buyer. ISTR that the price was $500k.

In town, in the high-end areas, I’m noticing a lot properties that are just sitting there. Methinks that, like other cities, the Tucson move-up market is pretty dead.

 
 
Comment by j6p
2012-02-07 12:52:33

I live in Winter Haven (Btw Tampa and Orlando) and just recently looked for affordable home ins.

I live in a 3/2 and Zillow has me listed currently at $48K.

Zillow had me listed at $163K at the top of the ‘Boom’.

Anyhoo, talked to 3 home ins. co.’s and they all have a scam going where
they say that they have to insure the home to include a complete tear down and rebuild price.

So, guess what? The complete tear down and rebuild price I have to insure for is $163K ARO.

So, I think I will play their ‘lil game and say “OK. How much is it with a $50k deductible?”

And they say “Sorry, the most we can allow is a 10k deductible.”.

I’m in the middle of the state and have had 3 hurricane eyes pass within 15 miles of my home in years past and the worst that happened is I lost maybe 3 shingles.

They got you coming and going.

j6p

Comment by Prime_Is_Contained
2012-02-07 16:53:04

Can you just self-insure?

Comment by j6p
2012-02-07 17:29:08

How do I do that?

Comment by Prime_Is_Contained
2012-02-07 17:34:29

Don’t buy any insurance, and be able and willing to pay for any damages yourself in the event of a storm.

In other words, is there anything requiring you to buy insurance?

Large companies self-insure all the time… For individuals, it’s a lot less common because they don’t necessarily have the means to deal with the losses.

But if your home is well-built and you expect it to fare well in future storms, and the insurance is not reasonably-priced, that might be one option.

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Comment by Muggy
2012-02-07 17:50:58

Pay cash / not have a mortgage.

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Comment by BetterRenter
2012-02-07 19:28:19

BINGO! Property insurance in my particular case was cost prohibitive, so I don’t insure it at all, and I also pay particular attention to how I store flammables and to the condition of my electric wiring. I wish that I could just pull the main breaker every time I left the place, but that would kill my security lights. Darn it.

 
 
Comment by Real Estate Refugee
2012-02-07 18:48:36

It takes discipline, but what you do is put the money you would have paid to the insurance company into a separate account which you would only tap if something were to happen to the house. Paying into the account as if you were paying the yearly premium.

The only thing I’d look into would be a liability only type policy in case someone gets injured on your property.

If nothing happens by the time you go to sell your house, you win.

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Comment by Muggy
2012-02-07 19:09:49

Somebody help me out here… maybe it’s different in Florida, but if you have a loan you need insurance, yeah?

BTW, I love eating at the Denny’s in Winter Haven after taking my kids to Legoland. It’s a time warp (in a good way). It reminds me of where my grandparents used to live.

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Comment by Muggy
2012-02-07 19:38:33

BEN! I need the barf .gif now!!!

“APOLLO BEACH — Bulldozers have started pushing dirt again at Waterset, a huge development in southern Hillsborough County that ultimately could boast 6,700 homes.”

http://www.tampabay.com/news/business/realestate/article1214399.ece

Comment by Ben Jones
2012-02-07 19:49:32

Yeah, this is something that doesn’t get much attention. Florida is a big state, and as I discovered in 2010, it’s not densely built out at all. I’ve read they already have many hundreds of thousands of housing units approved.

 
 
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