Florida Housing Market Enters ‘No-Mans’ Land’
The Herald Tribune has this update on the Florida housing bubble. “Like many other sellers, Tara Fizer has come to realize what every real estate agent in Southwest Florida now knows: After three glory years, capped by a period in which homes were being bid on like an eBay auction, the residential market has entered a no-mans’ land in which sellers listings are stacking up at prices higher than buyers want to pay.”
“Fizer and her husband now own two new houses in Sarasota. It is one more than they want. When they were moving to the area from Orlando in mid-2004, they signed up for two homes being built near University Parkway, one in Sarasota County, the other in Manatee. The idea was to decide later which one to keep, and sell the other for a sweet profit in a fast-climbing market.”
“‘This could have been a killing,’ Fizer said of the 4-bedroom, 21/2 plus loft house in Manatee that they are now attempting to sell for $389,000. ‘We could have pocketed a lot of money.’”
“Instead, they have the home priced at $7,000 less than the builder’s base price in the same subdivision. ‘We know the market is pretty slow right now, so somebody can get a pretty good deal from us right now. We did a lot of upgrades.”
“It does not help that the media keeps writing about the problem, and it is not just the Sarasota Herald-Tribune. For example, Sarasota was held up as a market in which housing is 43 percent overpriced in a recent article published jointly by BankRate.com and MSN.com. Naples is characterized as being 72 percent overvalued in the survey.”
“This trend reversal from sellers’ market to a virtual standoff is occurring in most Florida metro markets, but it is more pronounced in areas such as Sarasota-Bradenton where prices rose the most, statistics from the first quarter compiled by the Florida Association of Realtors show.”
“In Sarasota-Bradenton, the median price was hanging in there at $331,100, one-third higher than the state average. Conversely, sales had slowed by 44 percent from the year-ago level.” “But medians can be misleading.”
“If a consumer compares what a given home would sell for during the market’s hey-days in 2004 and early 2005 to now, they would likely see declines ranging from 15 percent to 20 percent, and in some cases even more.”
“A broker who specializes in the posh island enclave of Anna Maria provided what is probably an extreme example of real-world pricing. He is sitting on a two-bedroom, two-bath home with all the trimmings, including a dock on a canal with easy access to the Gulf of Mexico.”
“‘You could have paid $800,000 a year ago, and people would have been bidding against you on it. And today that same house would be $550,000-$600,000, and you might have to work to get that,’ he said.”
“The subject of price decline is so touchy that he insists on not having his name attached to this dark appraisal of declining values. ‘It would be bad for business. Somebody would read me being negative on the market, and take their listing to another broker,’ he said.”
“What is bad for sellers is good for buyers, says one (realtor) in the field. ‘It’s an absolutely delightful time to be a buyer,’ said Kathy Scott, as she baby-sat a condominium listing on Longboat Key where she already has gotten the owner to agree to two price reductions. I think sellers are becoming more educated and realistic. I’m hearing a lot of buyers say, ‘I’m just going to wait a little bit longer and see how low it gets.’”
‘A broker who specializes in the posh island enclave of Anna Maria provided what is probably an extreme example of real-world pricing. He is sitting on a two-bedroom, two-bath home with all the trimmings, including a dock on a canal with easy access to the Gulf of Mexico.’
‘You could have paid $800,000 a year ago, and people would have been bidding against you on it. And today that same house would be $550,000-$600,000, and you might have to work to get that,’ he said.’
This is what I see here in northern Arizona, and including where land is some of the most expensive in the state. The biggest unreported aspect of it is, very little is selling. This doesn’t show up in statistics because of the relisting game. It appears a quiet correction has been occurring for the last year or two. I see luxury homes that have been on the market for close to two years now, and in spite of price reductions, the prospects of finding a buyer are slimmer every day.
I WANT to buy there! I would buy there if people would get real. I love it up in Sedona/Flagstaff. I just can’t stomach the prices for the good stuff and won’t even look at that crap being built on the outskirts.
I feel the same way..Went over to Flagstaff, a few years ago.
If I recall it is a town of 30,000(then). But the prices were as if it were in Las Vegas of Phoenix. I may look stupid but we walked away. I figure with a bit of patience I’ll get the poroperty for my price. 17oz of gold.Until then I wait!
I agree Ben. I follow listings fairly closely in my area (S. Oregon)and there are many homes that have not budged since August 05. Some listed continuously, so listed, pulled, and relisted, but the same houses. Interestingly, some of these houses are finally cutting prices, but typically tiny amounts (e.g. $399k to 395k). Still prime season here, but no doubt these sellers are in denial and we have not yet developed a denial index.
Come to think of it that would be fun one for the blog. How about: The weekly “Head in the Sand Award”!
I think November 06 will be their Waterloo.
Ben, you rule. Your blog is great.
Monday, May 29, 2006
BARRON’S COVER
The Big Glut
Trouble in Paradise
By ROBIN GOLDWYN BLUMENTHAL
A Walk on the Wild Side1
IT WOULD SEEM TO HAVE IT ALL: four bedrooms, a guest house, a pool and a rock waterfall. But the vacation home in Naples, Fla., hasn’t been drawing much interest from buyers, so the seller recently threw in that most modern of amenities: the $1 million price cut. That’s brought the asking price down a full 25%. “If you want to sell, you’ve got to go back to ‘04 prices,” says Chip Harris of Coldwell Banker Previews International, which is handling the property.
The market for second homes could use a second wind. After a long string of double-digit annual price increases, a number of second-home meccas across the country are suddenly suffering from plunging sales volume and burgeoning inventories of unsold homes. Result: Naples-style discounting is starting to spread. It hit the town of Pocasset, on Massachusetts’ Cape Cod, just as retired executive Jack Reen was trying to sell his four-acre, six-bedroom beachfront home. He cut the price several times, for a total of 42% off the listing price, before striking a deal at $3.95 million. Reen takes a philosophical view of the experience, noting that the original price was set at the top of the market. “Calling the tops and bottoms is impossible,” he says.
Barnstable, Massachusetts: One of the first meccas with a drop in prices.
Though the official figures on sales prices have yet to reflect the current round of cuts, interviews with real- estate pros and others strongly suggest that the averages are deteriorating in a number of key markets. Just look at green and hilly Litchfield, Conn., about a two-hour drive from New York City. It was a magnet for Wall Streeters during the past five years, and prices climbed accordingly. But in the past 10 months, prices in the lower end of Litchfield’s market — homes of $300,000 to $600,000 — are down 12%-14%, and volume is falling at the next level up, says Stephen Drezen of the local Portfolio Properties Group.
IT’S ALL A BIG CHANGE from the seemingly endless rises in prices. For more than a decade, baby boomers have been flocking to the second-homes market and lifting prices, just as they’d earlier lifted the market for primary residences (See Barron’s “Eden for Sale,” July 3, 1995). The market barreled ahead during the past few years (”Paradise Found2,” May 31, 2004), and the demographics — 75 million boomers — still bode well for long-term growth. But first, the market has some correcting to tend to.
While pundits debate when the bubble might burst in the primary-housing market, the air already is whooshing out of parts of the second-homes market. Naples, on the sun-drenched edge of the Gulf of Mexico in Southwest Florida, is perhaps the most striking example.
Vacationers long have been attracted to Naples’ proximity to water, the Everglades and shopping at the likes of Saks Fifth Avenue. Last year alone, buyers bid up the area’s median price by 30%, to $482,400. Charles Ashby, president of Naples’ VIP Realtors, recalls that one of his sales associates was able to go down to a local bar and sell 26 units in a nearby Fort Myers high-rise the first night contracts were being accepted.
Today, about the most visible activity in that area is the 400 or so daily additions on the multiple listing service — and price reductions by the dozens. In the 35 years that Ashby has been in the business, this is the first downturn he’s seen, even counting recessions. “The mule died,” he says.
With mortgage rates rising and home-price appreciation slowing or vanishing, buyers in Naples have pulled back in a big way. The area’s sales of homes costing less than $1 million declined 45% in unit volume in the first four months of this year. More expensive homes fared somewhat better, falling 34%. But pressures at the higher end clearly are mounting. All along the pricey Gulf shore, builders still are tearing down old ranch houses and replacing them with two-story mansions, pushing the market toward a classic glut.
The Naples experience is being repeated, to one degree or another, in a variety of other vacation hot spots — from Palm Desert, Calif., to Phoenix, Ariz., to Ocean City, N.J. Phoenix in recent years has been overrun by property flippers from California, says Mike Messenger, president of Russ Lyon Realty in Scottsdale. But unit sales now are down by 40%-42%, and the city’s inventory of unsold homes has shot up more than five-fold, to 39,000.
Likewise, the number of homes for sale on the Multiple Listings Service for the Falmouth area of Cape Cod is up about 65% from a year ago, says Lynette Helms of the local Real Estate Associates. With numbers like that, more price cuts can’t be far behind. In fact, the Cape Cod town of Barnstable is among the first of the second-home meccas to show a decline in median prices in the figures tallied by the National Association of Realtors. The price was down 1% in the first quarter, to $385,000.
It’s true that the total second-homes market nationwide has managed to keep posting gains over the past two years. Some 3.34 million second homes were sold in 2005, up 16% from 2004, according to the realty trade group. The median price of a vacation home was up 7.4%, to $204,100, and prices have continued to rise in many markets.
But the Realtors’ chief economist, David Lereah, expects the volume of second-home sales to decline at least somewhat this year. And there’s every reason to think that some markets could be hit hard.
For starters, many second homes have been sold not to serious vacationers but to speculative investors hoping to cash on the national real-estate craze. How else to explain why six out of 10 second-home owners surveyed by the Realtors group own two or more homes in addition to their main residences?
The danger is that if enough of those investors decide the market has peaked, they could trigger a selling frenzy throughout the second-homes market. That, in turn, could add to the pressures in the main housing market. After all, second homes now account for a full 40% of all homes sold in America.
Statistics compiled for Barron’s by The Local Market Monitor, a Wellesley, Mass.-based consulting firm, show just how big a role can be played by investors. In Myrtle Beach, S.C., long a favorite vacation and retirement destination, investors owned a full 58% of properties in 2004, the last year with available data. Though Florida communities accounted for eight of the top 10 investor-owned hot spots, Wilmington, N.C., clocked in at 38%, Las Vegas at 26%, and Honolulu at 23%. The normal level is closer to 14%. (See table nearby.)
Says Ingo Winzer, president of The Local Market Monitor: “This makes me very worried because it implies that the price increases have been driven more by speculators than by people who are going to hold onto these properties, and indicates to me that there’s a speculative boom.”
The price runups of the past several years are reason enough for concern. A report from Cleveland-based National City, a top banking and mortgage concern, points to serious overvaluation in a number of second-home hot spots in Florida, California and elsewhere.
Tucson, Prescott and Phoenix in Arizona are estimated to be as much as 52% overvalued based on income levels, population densities and historical prices. Also high on the list: Bend, Ore., and New Jersey’s Ocean City and Atlantic City, where homes are deemed overvalued by 50% and 60%, respectively. (See table.)
Behind all this is a fervor eerily reminiscent of the late 1990s on Wall Street. Some 65% of second-home owners surveyed by the National Association of Realtors said they considered their second homes better investments than stocks, and 29% said they planned to buy additional properties within two years. An eye-popping 64% of investors with four or more properties planned to buy another property within two years.
Trouble in Paradise — Part II
Cover Story — Part I1
A Walk on the Wild Side
BUT THOSE HIGH ROLLERS COULD LOSE THEIR nerve quickly if prices continue to weaken.
“People don’t believe in the laws of supply and demand anymore,” says Alan Skrainka, chief market strategist at Edward Jones. “We’re not saying it’s a bubble, but we’re saying prices are overstated and will likely correct 20% to 25% over four or five years.”
He rejects a notion advanced by housing bulls that shore communities in Florida and California will be protected because of the limited supply of coastline. “Japanese real estate and land prices went down for 15 years and Japan is an island,” Skrainka says.
SOUTHERN FLORIDA HAS shaped up as the epicenter of the looming glut. In Palm Beach County, inventories of unsold homes have more than tripled in the past three years, to more than 25,000. Some brokers in South Florida are reporting a quadrupling of inventories over the past year. In what some see as a sign of the times, Coldwell Banker Residential Real Estate recently closed four of its 31 offices in the Palm Beach region; the company calls it an anticipated consolidation.
Ocean City, New Jersey: A slave to the whims of financial markets.
There’s little doubt, however, that the market is starting to run out of buyers.
“The homeowner that absolutely has to sell will take a hit,” says Paul Boomsma, executive vice president of Chicago-based Luxury Portfolio Fine Property, a unit of Leading Real Estate Cos. of the World. The problems are worsened, he points out, by the continued acceleration of development in overheated areas.
Investors hoping to sell luxury condos that they bought over the past couple of years could be in for some special trouble. A recent report by San Francisco-based JMP Securities analyzing the Florida condo market estimated that 25%-40% of the of condo units now for sale in Florida belong to such investors. “Flippers are already listing units for sale in buildings that are near completion this year but are not closed yet,” hurting an already weak market, the report says.
Florida condo sales are down 20%-50% year over year in most markets, JMP says. And the report cites estimates of 50,000 new condo units announced for Miami-Dade County alone, adding to the 50,000 either under construction or ready to begin. That compares with the 10,000 total that have been built in the area in the past 10 years.
Some northern parts of Florida are also taking a beating. On a recent drive around Amelia Island, off the coast of Jacksonville, David Hehman of EscapeHomes.com, a resort and second-home marketplace, counted 50 properties for sale on the water or side streets along a three mile stretch.
BEYOND FLORIDA, some second markets are holding up well and others clearly aren’t.
“It’s a very spotty market in all of the U.S.,” says Robert Toll, CEO of luxury homebuilder Toll Brothers. In some of the markets where Toll builds golf-course and lake communities, like Palm Springs, Calif., Delaware and southwest Florida, demand has softened. The company, however, has had to offer incentives in only two resort communities out of the 15 it owns. “If you’ve got the right stuff, people still clamor for it,” says the CEO.
Tucson, Arizona: Could face a 33% decline in home prices.
Mike Messenger, the Scottsdale, Ariz., broker, sounds considerably more glum. He says this is the first time in 16 years that the lower end of the market — always the driver for the area — has weakened. The culprits? Mainly the flippers; Messenger figures investors account for 35% to 40% of the market.
Las Vegas is causing concern, too. It’s “a classic example of an overheated market where there’s too much proposed and the reality of the absorption isn’t such that it could work in the near term,” says David Wasserman, head of Wasserman Real Estate Capital, a developer. But Wasserman, who has luxury condominium projects under development in West Palm Beach, Pasadena, Calif., and Boston, figures that soaring construction prices should help to weed out some of the overzealous builders.
Already, several condo projects in Las Vegas have had to be canceled because they failed to presell enough units to get attractive financing, says Hehman of EscapeHomes.com.
On the East Coast, signs of a glut have been turning up all along the coastline of New Jersey. In an effort to move inventory, brokers in the upscale summer resort of Stone Harbor have been sending out postcards to vacation renters, proclaiming a three-bedroom condo to be “the perfect investment opportunity” at just $739,000. That’s about what many of the would-be buyers might have paid for their first homes.
“The market is definitely in a correcting phase,” says Timothy Richards of Ocean City, N.J., who recently retired as a realty broker and began a second career as a developer. He says buyers are waiting to see what happens with mortgage rates. “Whenever financial markets are in transition, we go into a holding pattern,” he adds.
Real-estate pros in the Hamptons area of Long Island are keeping their fingers crossed. John Halsted of Allan Schneider Associates says he has seen some “price adjustments” — usually around 3% to 5% downward, and usually in the mid-range of the market, of homes priced at $1.5 million to $4 million. He contends that there’s still high demand at the super-high end. That belief will be put to the test by one of his firm’s current listings, a $75 million spread in Bridgehampton with its own golf course.
Some would-be buyers appear to be sitting out this edgy period in the market and renting homes instead. That’s one reason why the rental market in the Hamptons is considered very strong right now. The Halsted firm recently set its own record for a summer rental: $350,000 for a house in Sag Harbor.
Las Vegas, Nevada: Over-developed and getting more so.
Other home buyers, meanwhile, are seeking a measure of stability by venturing away from the traditional hot markets (see story nearby). But plenty of once-tranquil towns already have been discovered. “You’re finding that smaller towns that 10 years ago were thought of as off the beaten track now have the rich and famous buying,” says John McIlwain, a senior fellow for housing at the Urban Land Institute. He points to Rockland, Maine. “Twenty years ago you wouldn’t go there at night because you would have gotten beaten up,” he says. “Now, it’s in international travel guides.”
The tough conditions in the second-home market are no small matter for the people who own the homes. And the so-called mass affluent — folks with investable assets of $100,000 to $1 million — will probably take the brunt of any price declines. Spectrem Group, a Chicago-based consulting firm, says this group has more than one-third of its assets tied up in real estate. In general, these home owners are more vulnerable than the ultra-wealthy, both because they can ill afford to wait out a prolonged downturn and their losses can hurt if they’re forced to sell into a glut.
All the same, many experts are cheering the current shifts in the markets. They call it an essential correction, a step that must be taken before the second-home market resumes its ascent. “In general this is a very good thing, because it got too far on the speculative side,” says broker Ashby in Naples. “It needs to correct. If it didn’t, it would burst.”
Adds Mike McMurray, a broker with VIP on the Florida islands of Sanibel and Captiva. “It’s not that the property is bad, but it’s like Google. The value is there, but it may have gotten ahead of itself.”
There’s certainly hope for the long term. The baby- boom generation continues to amass both inherited and earned wealth. And many a boomer will buy a second home with an eye to eventually retiring to it. With any luck, they will see some nice financial returns. “Vacation homes have turned out to be one of the best housing investments, particularly on the coasts,” says McIlwain.
The trouble is, home owners may have to wait quite some time before that happens again.
——————————————————————————–
A Walk on the Wild Side
THE SECOND-HOMES MARKET CAN BE A JUNGLE, but some savvy buyers think they’ve found the answer — in the real wilderness. The views and the values, they say, are both outstanding.
Take the Methow Valley, in North Central Washington State. It boasts “a million-acre park in your backyard” and breathtaking views of the snowcapped Cascade Mountains, just a few hours’ drive from Seattle. “Once you’re there, you’re in another world,” says one investment manager who recently bought in the valley’s town of Winthrop.
Hundreds of acres of protected marshland, a view of the Atlantic ocean or the Cape Fear River are some of the attractions of Bald Head Island, N.C., where cars are prohibited. It’s a less frenzied version of the always popular Outer Banks.
Philip Thomas, a Charlotte, N.C., builder who also is a partner in a coastal venture called Brinson Thomas Fine Home Building, was so taken with the island that he scooped up for himself a house he had built on spec overlooking the ocean.
part 6 (last part):
The Nevada side of Lake Tahoe, called Incline Village, has breathtaking views of the snow-covered Sierra Nevada mountains and piney forests. Though it has seen double-digit appreciation over the past few years, it is expected to hold its value.
“There’s a very limited supply of privately owned land, and a wonderful consciousness between the environment and the economy,” says Deb Howard, president of an eponymous real estate agency.
The Green Mountains near Stowe, Vt., are attracting second-homeowners from Montreal, Boston and New York. Single family homes in the valley should fetch 11%-13% more this year than last, when they rose more than 20%.
In Alabama, a 320-mile lake whose waters are still drinkable is being developed by a conservationist. The pristine Lake Martin has become a destination for second-home owners not only from Alabama, Georgia and Tennessee but around the country.
“We’re trying to make sure we’re building something you can’t get anywhere else,” says Steven Arnberg, company broker for Russell Lands, of the developer of Lake Martin. The company is using building materials forged from native trees and stone. “It looks like the houses dropped from the sky,” says Arnberg. Lake Martin is still being discovered, so there’s probably upside left, despite 40% jumps in land values.
The salt marshes, sandy beaches, sunset views of the Gulf of Mexico — and still moderately priced homes — in Galveston have become a mecca for both Texans and others who are looking for good value.
A beachfront home in a nice area can still be had for $600,000 or $700,000, though some have doubled in the past few years, says Carolyn Clyburn, proprietor of The House Co., a realty brokerage. With a varied style of homes, proximity to Houston and relative affordability, it should continue to see some gains. Says Clyburn: “Those of us who’ve been here awhile think it’s one of the best kept secrets.”
THANKS!!
With a varied style of homes, proximity to Houston and relative affordability, it should continue to see some gains. Says Clyburn: “Those of us who’ve been here awhile think it’s one of the best kept secrets.”
LMAO!! Would those “secrets” include the stinky, dirty polluted water that is too disgusting to swim in, the hideous crime rate and always popular Cat 5 hurricanes?
I actually like Galveston but it ain’t no “destination” or second home mecca.
I actually like Galveston but it ain’t no “destination” or second home mecca
Ain’t that the truth.
Well, the Methow Valley (pron. “met-how”, btw) is certainly pretty & remote–especially in winter when the North Cascades Hwy is snowed in!
And Incline Village, NV (which is not “the Nevada side of Lake Tahoe,” but only the NE part) is inhabited by ex-California zillionaires who moved across the state line to get away from CA income tax. Nothing there unless you’re a member of the uber-wealthy.
Delurking.
My family is from Wilmington, and the destruction of our greenspace because of these investors has been disgusting. The zoning boards are owned by the developers, and we have had two major sewage overflows in 2005 because they are building without any concern for infastructure.
On top of this, Wilmington is hurricane alley. Any attempt at an environmental study before a project goes up is shot down by the zoning board. But the areas they are building in are important buffer zones for tidal surge (NC hurricanes cause more damage from flooding that wind). May of you are mad at the prospect of government bails out of homeowner defaults. I am mad at the prospect of government bail outs of hurricane damage for areas that should never have been built on in the first place.
““It does not help that the media keeps writing about the problem, and it is not just the Sarasota Herald-Tribune. For example, Sarasota was held up as a market in which housing is 43 percent overpriced in a recent article published jointly by BankRate.com and MSN.com. Naples is characterized as being 72 percent overvalued in the survey.”
The truth hurts. Papers should never publish negative news. Might upset the complacent cows trying to digest all that pap.
Yes, yes, as has been pointed out many times on this blog it was OK to run stories on being priced out forever and panic but on the way down it is suddenly a problem.
This whole thing is also a fascinating study of human psychology.
Fascinating to see even the main stream media quoting brokers worrying about 33% price declines.
And the MSM has really begun taking the bubble seriously in the last month or so. We’ll get to follow this story from the price declines, to the foreclosures, to the bank failures, to the county (perhaps state) bankrupcies, to the congressional hearings.
Get about 5 years of popcorn ready….
“The road to truth is long and lined the entire way with annoying b@st@rds.” Jablakov
“The mule died”. I like that quote. I see signs popping up all over my little town, but prices are still holding. The staying power amazes me. I put a note in the mailbox of the vacant house across the street making an offer. Nobody has even been around for a couple of weeks. My note is still there along with weeks of other mail. Somebody must be paying the mortgage on that dog. Actually, I just want it because of the big garage/shop. The house is slightly below average for the neighborhood. At one time it was listed by a real estate company, but I think that listing may have expired. It’s a FSBO now. Funny, but the little sign in the window says it’s for sale, but there’s no phone number.
This is completely off-topic, but I had to buy some gas this morning. I waited over 15 minutes at the pump behind a Hummer, a Suburban and an F350 pulling a trailer full of jet skis. Is it me or has everything gotton out of whack? The printing presses must still be operating 24/7.
Dead Mules for Everyone!
If banks are lending, we are spending
Both Russia and Iran are selling their oil , but
they will soon only take rubles and euros, not dollars,
so the printing presses are useless. But they will take gold.
“The printing presses must still be operating 24/7.”
I would say so. I just watched a guy fill up a Hummer for $125.00. Out of curiosity I asked when did he think he would have to fill up again. He say if he’s real cautious and doesn’t takes a lot of side trips he can get three days out of a tank of gas.
To think I was bitching because I had just filled up last sunday for a grand total of $60.00.
What are people thinking
That means he spends over a 1000/month on gas. Ouch!
I sold a condo in Naples in 2001 for $85,000 which is now listed at $257,000. This market has a long way to fall.
That Barron’s article is a great read. I’ll tell you that here in my next of the woods (Jupiter, FL in Palm Beach County), we are indeed ground zero for this bust. Inventory is up almost 300% based on my tracking in the area and the house across the street from me has been on the market since December with no takers. As for prices, I’ve kept my eye on this one complex of modest condos built in the mid 80s down from my house. It’s called Chasewood. Mostly (if not all) 2/2s that would make decent starter condos. Anyway, when I first started really paying attention, the lowest unit listing prices were around $210,000 or $215,000. Then I started seeing the occasional $200,000 or $204,900 price. Soon, they fell below $200,000, then $190,000, and now, the lowest listing I’ve seen in the paper or online is $178,000. This is probably in a span of 6-9 months. So long story short, list prices are down more than 15% in less than a year. I don’t know how many SOLD at the peak listing prices … and I don’t have last prices on these listings to know if the raw prices are falling. But clearly, things are sinking fast — and I would add that these listings have been on Realtor.com for months and months and months with no takers.
I know someone in Naples who just dropped his condo price by $135,000. It is still way overpriced compared to what he bought it for two years ago. In other words, he will still make a decent profit if it goes for asking. Which it won’t. Not with hurricane season approaching.
Anectdotals from North Tampa.
A coworker of mine spent a lot of time on the phone yesterday looking for homeowners insurance. Her policy that is being canceled is $1,000 per year. The quote from Citizens is $4,500 per year. (This house is 15 miles inland and not in flood area).
Hillsborough County Commission just raised the impact fee for new home construction from $200 to $4,000.
I was at the bank waiting in line and just picked up a brouchure about their new 30 and 40 year interest-only loans to read while I was in line. A loan officer came running out and engaged me for about 15 minutes extolling the great home loan products they had available.
“A loan officer came running out and engaged me for about 15 minutes extolling the great home loan products they had available.”
Reminds me of a funny thing that happened to me years ago. Was driving down the coast highway in Cali with the wife and we pulled into a motel. I went in to check the rates and this guy wearing a turbin told me the cost and I declined. As I started to get back in my car, the guy came running out yelling at me “Make offer, make offer.”
I wonder if that’s how the housing bubble will wind down. Will the hired sign twirlers be replaced by runners who hide in the house til someone walks by, then they dash outside yelling “Make offer! Make offer!
“This could have been a killing”
But it’s not.
You could have paid $800,000 a year ago, and people would have been bidding against you on it. And today that same house would be $550,000-$600,000, and you might have to work to get that,’ he said”
AND, what does that tell you about the price at $800,000,or even $550,000? Hello??? McFly????
No, It’s gonna be a killing. Just the bodies have changed.
oh man, you guys will love this. read carefully!
May 26, 2006
Living Here
Sand in Our Shoes
As told to AMY GUNDERSON
WHO Jeanette Lawson, 42, a property manager from Charleston, S.C., shown with her husband, Shawn, 43, an advertising salesman for a tourism guide, and their sons, Benjamin, 14, left, and Theodore, 12
WHAT 3-bedroom condominium
WHERE Kiawah Island, S.C.
We used to live on Kiawah Island full time but sold our house in 1999 to move to Charleston. It can be tough to live on Kiawah year round because it’s a long drive to school and work. But we missed the island, so a few years ago we bought our first condo here.
Owning a condo is great. We don’t have to worry about security and we don’t have to worry about a yard. Plus, the rental income nearly covers the mortgage. We’ve since bought several other condos on the island, including this one, which we purchased in January. Kiawah Island is perfect but a lot of the condos are very dated. This one was a 1980’s dog and we’ve spent the last five months renovating it.
This island is not like other beach towns. Even when it’s busy, it’s quiet, and that’s part of what makes it so nice. There are golf courses, but for my family, Kiawah is about the beach and the biking. My two sons love it. They’ll go out and ride their bikes and I have no trouble with them going anywhere on the island. There are 10 miles of pristine beach and you can bike right on the beach because it’s hard-packed sand. There are also 30 miles of bike paths.
Even with renting out our condos we still lose anywhere from $10,000 to $20,000 year, but that is offset by the rising real estate prices. Of course we block out certain times for our own use. It’s just a half hour away from our home in Charleston so we can drive here in about a half hour and have a great vacation. As told to Amy Gunderson.
http://www.nytimes.com/2006/05/26/realestate/26live.html?_r=1&oref=slogin&pagewanted=print
A speculation driven real estate market is alot different than a end user driven real estate market . At the end of the day ,who are you going to sell it to ? If you buy real estate ,think about who you are going to sell it to .
“Tucson, Arizona: Could face a 33% decline in home prices.
Mike Messenger, the Scottsdale, Ariz., broker, sounds considerably more glum. He says this is the first time in 16 years that the lower end of the market — always the driver for the area — has weakened. The culprits? Mainly the flippers; Messenger figures investors account for 35% to 40% of the market”
I’m thinking the RE industry just got plain greedy and without realizing it doomed themselves by selling to flippers and Investors for the quick buck instead of actual homeowners. Now instead of having a business where sales are relatively steady over the years they have instead sold their all future sales all at one time and now face no demand. Working off the excess inventory could take quite a while. Not to mention additional inventory that comes on line as borderline borrowers get forced back to renting.
Right, Mo Money , my thoughts to . The market in these places will be messed up for years .
Tucson is my current location. It’s actually a really cool place that I like a lot and I look forward to being able to steal my rental property in a few years, or failing that, one in Sedona or Flagstaff. For all its problems, Arizona is a quality place if you’re into the outdoors.
Wow!!! you mean I can sell this for $100,00 more than wat I paid? LOL.. Ouch.. a $100,00 haircut on $559.000 = 18%.
$429000 - Make 100,000 in Equity Today
——————————————————————————–
Reply to: hous-162580023@craigslist.org
Date: 2006-05-19, 4:03PM EDT
Buying this hot property today is like making 100,000.
Get Instant Equity. Last year developers sold this property for 100,000 more:
Brand NEW Construction, Never been lived in
1.5 Miles from the beach
.5 Mile to I-95
A rare find in this ultra desirable east Boca Raton neighborhood
Similar homes in the area sell for 700,000
IN THE HOUSE:
-Double stacked granite
-18X18 Tile
-Stainless Steel appliances
-Hurricane impact windows
IN THE COMMUNITY:
- 2 Swimming Pools
- Clubhouse with state of the art exercise equipment
-Tot lot for the kids
ATTENTION INVESTORS:
- Free Property Management for 1 year
-We’ll find you a tenant for free
- Stress free income
ATTENTION PRIMARY RESIDENTS:
No association fees for 1 year
Captiva Model
(3 BR, 3.5BA, 2 Car Garage 2284 sq feet)
was 559.995
now 459.995
Sanabel Model
(3 BR,3.5BA, 2 Car garage, 2285 sq ft)
was 569,990
now 469,990
Paradise
( 3 BR, 3.5BA, 2 Car garage, 1926 sq ft)
(without elevator) was 509,000
now 429,000
with an elevator was 533,00
now 453,000
All square footage is under air (living square footage)
Far and away the best deal in Palm Beach county
This deal is a limited time offer
Act fast
Call Tony DeFalco for this exclusive offer
Century 21 Richards
561.351.6250
this is in or around Boca Raton
no — it’s NOT ok to contact this poster with services or other commercial interests
162580023
“Last year developers sold this property for 100,000 more:”
SO Mr. Realtor Man, can you explain why it is selling for $100K less today ? Is there any reason I shouldn’t worry that it might drop another $100K by this time next year given it’s current stellar performance ? Does that mean by Realtor logic that I will have $200K in equity ? Wow, I hope it drops even more ! And can you also please explain how I’m getting $100K in equity if it is selling for $100K less ? Is that the latest new math ? Can I just have the $100K since you are so generously giving money away ?
Comment by mrincomestream
2006-05-27 10:50:48
“The printing presses must still be operating 24/7.”
I would say so. I just watched a guy fill up a Hummer for $125.00. Out of curiosity I asked when did he think he would have to fill up again. He say if he’s real cautious and doesn’t takes a lot of side trips he can get three days out of a tank of gas.
To think I was bitching because I had just filled up last sunday for a grand total of $60.00.
What are people thinking
Reply to this comment
Comment by realestateblues
2006-05-27 12:56:48
That means he spends over a 1000/month on gas. Ouch!
Oh good lord!
And here I am bitching about filling my Honda up, $30 for a tank of gas (that only cost me $10 to fill the tank up 6 years ago) that lasts me about two weeks. (My job is close to home, if I were really cheap and wanted to brave the Las Vegas heat and sun, I could probably bike to work in about an hour).
Me and my husband’s paid off Hondas are completely dwarfed by our neighbors oversized gas guzzling trucks and SUVs, which they cannot even fit into the garages of their homes. No wonder all our neighbors are selling their houses and moving away because they can no longer afford them…costs for gasoline must be eating them alive!
I’m willing to bet the cost of gasoline for commuting back and forth from work is going to play a major part in the decline of housing prices everywhere in the USA.
That SUV owner pays more for his monthly gas fillups on his vehicle than I do to rent this home I’m currently in!