Dip Suggests Price Spikes May Slow Down
The Sun Sentinel reports from Florida. “Palm Beach County home prices increased in September from a year ago, but the most recent six-month trend shows the single-family market clearly is cooling, analysts say. The county’s median price for existing homes last month was $250,000, up 11 percent from a year earlier, the Realtors Association of the Palm Beaches said Monday. But the median as far back as March was $248,894, practically unchanged today. Last month, there were 2,189 new single-family listings, up 32 percent from a year ago.”
“Broward County’s median home price of $270,000 jumped 32 percent in September from a year ago, the Greater Fort Lauderdale Realtors said Monday. The large annual increase continued a recent trend. Broward’s median now has risen year over year by more than 20 percent for 10 consecutive months. But since hitting $275,000 in July, its highest point this year, Broward’s median has dipped in August and September, suggesting the recent price spikes may start to slow down. Another encouraging sign: more homes are hitting the market.”
The Tampa Bay Times. “Flipping has slipped out of fashion in the Tampa Bay area, new RealtyTrac data show. Flippers here grabbed and quickly resold 575 homes between July and September, about half as many as during the same time period last year. It marked the fourth straight quarter of declining local flips, and the period of lowest activity since early 2012, RealtyTrac said. Other flipping hot spots, including Phoenix and Orlando, have also seen flips fall off since last year.”
“After an $800 million binge on Tampa Bay homes, big investors are finally catching their breath, pulling back on buying due to rising prices and market doubts, a Tampa Bay Times analysis has found. The seven biggest investment groups buying homes here spent half as much cash in August as they did in March or April, when their shopping sprees peaked at about 500 homes a month. As buying ramped up, rising home prices carved into investors’ expected yields. When Blackstone made its first deals here in August 2012, it paid an average of $125,000 per home, the Times analysis found. Within eight months, that jumped to $175,000.”
“At the peak of their buying, investors weren’t above overspending to get what they wanted. Invitation Homes, for instance, bought a $205,000 New Port Richey home in March for nearly double what it had sold for two months earlier, property records show. And Progress Residential, which owns more than 400 local homes, bought a Lutz home in April for $72,000 more than it sold for just two weeks earlier.”
“The slowdown after months of frenzied buys has not gone unnoticed. Local investors who compete with the firms for homes say investors have become less cavalier with their spending during foreclosure auctions and bidding wars. Some local investors suggest the big seven firms have grown wiser to the dangers that lurk in the volatile market. Investor agents, they said, have been burned by overpaying at auctions or by snatching up troublesome homes sight unseen.”
The Tampa Tribune. “RealtyTrac estimates that 83,238 homes in Florida currently are classified as ‘real estate owned,’ which means they’ve been returned to the lender’s possession. That’s up from roughly 73,000 homes a year ago and about 62,000 homes in September 2011. RealtyTrac estimates lenders own 9,214 homes in the Tampa Bay area. Two years ago, they owned about 5,100, the company said.”
“Realtors say there are many reasons for the continued climb in bank-owned homes, including that people are still defaulting on their loans and many banks are unwilling to dump their homes for a steep loss. The fact that lenders aren’t rushing to sell off all their homes isn’t such a bad thing, said John Lum, a Tampa developer who owns a south Tampa new homes gallery. ‘It’s helping to not flood the market with excess inventory,’ Lum said.”
“RealtyTrac estimates that the previous owners still live in 46 percent of bank-repossessed properties in the Tampa Bay area.”
My Suncoast. “A vampire foreclosure is a home that has gone through foreclosure, but one from which the bank has not evicted the former owner, perhaps on purpose. ‘One of the reasons is they can see a home being maintained, not falling into a state of disrepair,’ says David Hicks, a foreclosure attorney in Sarasota. ‘It’s clear from the numbers and the people we speak to on a regular basis that there’s a lot of people, in our state especially, that are still in trouble.’”
“Roughly 40% of people who carry mortgages owe more than the homes are worth. Three-hundred thousand homeowners who have stopped paying their mortgages have not even heard from their lenders yet. Never mind reports that foreclosures have declined in the wake of the state’s new foreclosure law. ‘Somebody would see that and they’d say, ‘well, things must be getting better,’ Hicks says. ‘That’s not the case at all. The banks and their attorneys still don’t understand the new law, so they pull back on filings.’”
The South Florida Business Journal. “The owner of the W South Beach is trying to refinancing its debt to resolve a recent foreclosure lawsuit. The 216 unsold condo hotel units and the common areas of the 20-story hotel are targeted by a foreclosure lawsuit brought on Oct. 11 . The developer sold 207 units from mid-2009 to January 2013, but it hasn’t recorded a sale since.”
“‘W South Beach is among the most successful W’s in the world,’ said W South Beach developer David Edelstein. ‘Recent residential sales at the hotel have been in excess of $3,000 per square foot and the plan remains to, over time, take advantage of the extraordinarily strong residential market by optimizing pricing in a strategic way.’”
“Miami-based Condo Vultures reports that the average price per square foot for closed units in the W South Beach was $1,832.”
The News Press. “Habitat for Humanity homes in Lee sell for the appraised value, meaning many of the people who donated 250 hours of labor, saved up a $1,200 deposit, and attended hours of homeownership classes in order to qualify, ended up getting a home with a purchase price of as much as $250,000. And in many cases, those people lost their homes when Habitat for Humanity foreclosed.”
“Although the mortgage payments were only 30 percent of the buyers income, because the home value appraised at the sale price, the taxes and insurance increased the first year of home ownership, sometimes increasing mortgage payments by 50 percent.”
“Habitat sold Neila D’Amico a four-bedroom, two-bath house in North Fort Myers for $171,300 in 2006. She paid $550 a month on the first mortgage of $150,877 and paid nothing on the $20,348 second mortgage. D’Amico knew the house was overpriced. But, she said, ‘They get you with, ‘It’s yours.’”
“Now it’s not hers. D’Amico is sad about losing her home but resigned to having made a prudent financial move. ‘I didn’t need the debt,’ she said. ‘The house wasn’t worth it.’”
“It was not. Habitat won a $126,790.15 judgment against D’Amico in October 2012. The property was put up for auction and Habitat got it back in January. The group put on a new roof, replaced the air conditioning system and in September Habitat sold it for $80,000.”
The Palm Beach Post. “John Lebeau of North Palm Beach doesn’t mince words in a distressing YouTube video he posted over the weekend about his pending eviction. The story is a stark reminder that Florida’s foreclosure crisis is not yet over. Nearly 300,000 foreclosures are still in the court system, and, like Lebeau, those families may also find themselves with eviction notices as the courts work to clear their dockets.”
“Lebeau, a father of two, lost his banking job during the mortgage meltdown and quickly fell into foreclosure. But in trying to do the right thing and work with the bank on a loan modification or other foreclosure alternative, he said his loan was transferred from servicer to servicer with one approving a loan modification and the next rejecting him on the very same paperwork he got approved with initially. Documents were lost. Calls went unanswered and ignored.”
“An investor, likely unaware of Lebeau’s foreclosure fight or situation, has since purchased his home and offered to rent it out to him. But Lebeau can’t afford the rental price, which he said included legal fees. Lebeau said the eviction notice was posted Tuesday. ‘It could literally happen at any minute,’ Lebeau said.”
With 25 MILLION excess empty houses just sitting, idling and ready to move, the price correction is going to be breathtaking.
‘The house wasn’t worth it.’”
It’s odd this comment comes after these fools make the tragic financial error of paying a grossly inflated price for what is always a depreciating asset… in this case, a house.
As painful as the truth might be, if you paid much more than $35/sq ft for a house, you got ripped off. If you financed it? You’re screwed.
“$35/sq ft for a house”
Good Morning HA.
If the cost of a home is $35 sf, then it’s in an area I don’t want to live in. In 1984 we paid $111 sf for new construction in a nice PUD. Both coasts are an expensive place to live.
Checked out apts on the lower eastside and so forth last night (just for kicks) and rents in a highrise building went for $2,900 and up. A 2+2,iirc. The east coast is really expensive. I guess Brooklyn is for want to be Manhattans and the Bronx is a ghetto. Anyone been to NY and want to fill me in?
The cost of living blew me away.
You’re just another one that got ripped off.
I bought in the east village for $60K, sold for $530K ten years later. The people who bought my place sold last year for $800K. We’re talking about a 750 sq foot tenement apartment.
I bought a nice, 1-bed on the lower east side two years ago for 375K. My place would probably sell now for 420K.
Ghetto parts of Brooklyn cost more than parts of Manhattan now. Brooklyn isn’t really a wannabe Manhattan, it’s its own thing, and people pay top dollar to be there. I prefer Manhattan.
The Bronx is still ghetto, but there are parts that will gentrify if the trend keeps going the way it has for the past 20 years. Condos are going up everywhere, and NYC is still getting nicer every year. Crime is lower than it’s been in 50 years, it’s one of the safest cities in the US now.
‘I prefer Manhattan’
New York is where I’d rather stay.
I get allergic smelling hay.
I just adore a penthouse view.
Dah-ling I love you but give me Park Avenue.
Ben
lol
1960’s tee vee at its finest. Surreal, Eva Gabor (knockout in her day)and quirky writing. I watched it for Lisa’s fashion sense.
The Beverly Hillbillies
So in other words, NYC has a very long way to fall….
Psssst… here’s a secret…. NYC is already falling apart.
Ben
The Beverly Hillbillies was watched for Eli May’s hot body. My husband was smitten. He said she had a nice set of lungs. lol
1960’s tee vee was very creative.
I guess it just hit my funny bone. I loved all the double entendre that arose from the contrast of rich hicks with the big city movie stars. Granny’s confederate bent, her doctorin’, moonshining. The time she berated Jed for his ‘fancy store-bought truck.’ The banker who was always terrified he’d lose Jed’s deposit. It ran a few seasons too long, but that happens.
Ben
The BH did run too long, but the theme song was great and the concept was original. The Green Acres idea and theme song was a hoot as well. The originality of many of the 60’s sitcoms was impressive.
I took a TV comedy writing class at UCLA many years ago, and it was a great exercise in thinking funny and different.
HA said “As painful as the truth might be, if you paid much more than $35/sq ft for a house, you got ripped off. If you financed it? You’re screwed.”
While that may be true, land and location also attribute to the sq ft price.
It may be true?
No no…. it’s true.
And materials are the same price irrespective of “location”.
Nice try though.
knockwurst
Thanks. I am dying to visit NY. Parts of the family are in the advertising field and LOVE it there, coming from the boring So Ca burbs. Great insight and info on Brooklyn, thanks.
You’re dying? Or lying?
Housing Analyst: how much does it cost to build a 20 story high rise? They seem to be selling units for $1800/SF.
You’re the expert JingleBalls. Regale us with more of your BS.
I would guess a high rise condo project might cost $300-400/SF all in, with a 20% load factor. The final cost may be $360-480/SF for the sale of a unit. If they are selling at $1800/SF, it sounds like they developer is making money, depending on interest rate, holding period and transactions costs.
That right….. You “guess”.
And get suckered.
David Hicks, a foreclosure attorney in Sarasota says, ‘It’s clear from the numbers and the people we speak to on a regular basis that there’s a lot of people, in our state especially, that are still in trouble.’”
If you think there are underwater, indebted and defaulted debt-junkies in FL, you might want to focus your attention on CA, NY, MA, WA, OR, DC, TX, AZ and NV.
Any wagers on where the epicenter of the coming housing collapse will start?
Hint; “Everyone wants to live there!
No slowdown here. Looser renters should have bought when they had the chance.
Mass. single-family home sales have best September since 2005, the Warren Group says.
The median price of single-family homes rose nearly 16 percent to $323,625 on a year-to-year comparison basis, said the Warren Group, a Boston firm that tracks local real estate activity and the publisher of Banker & Tradesman.
“Despite rising interest rates, home sales have remained high this year, particularly booming in the third quarter”
http://www.boston.com/business/news/2013/10/22/mass-single-family-home-sales-have-best-september-since-the-warren-group-says/S7XT3IwA1aQEJYqPyqwbjO/story.html
‘The Boston Business Journal analyzed data from The Warren Group and published a list of 27 Eastern Massachusetts communities where median prices for the first nine months of 2013 exceeded those for 2005.’
Boston 2005: $1,351,250
Boston 2013: $2,203,500
What could possibly go wrong?
in zip 22151 bama fed funded we are 8% off 2005 levels
Condotels are back! With a vengeance. In South Floriduh, lol.
I was waiting to invest- tx
“Even in the absence of the excess empty housing inventory estimated in the tens of millions, historically housing prices fall. Why? Because houses depreciate. ALWAYS.”
Are realtors the genesis of this lie that houses are “investments” and that they “appreciate”?
“Dip Suggests Price Spikes May Slow Down”
Is now a good time to buy the dip?
Well, you know what they always say, they’re not making any more land.
“A vampire foreclosure is a home that has gone through foreclosure, but one from which the bank has not evicted the former owner, perhaps on purpose.
…
Three-hundred thousand homeowners who have stopped paying their mortgages have not even heard from their lenders yet. Never mind reports that foreclosures have declined in the wake of the state’s new foreclosure law. ‘Somebody would see that and they’d say, ‘well, things must be getting better,’ Hicks says. ‘That’s not the case at all. The banks and their attorneys still don’t understand the new law, so they pull back on filings.’”
Any thoughts on how long from now the banks will start driving stakes through the hearts of the millions of vampires who eternally live on in homes with defaulted mortgages?
As long as the bank keeps picking up the tab for the taxes, the squatters are in essence being paid to stay there…
The tipping point will be when some bright bulb at the bankster headquarters looks to see how much money they’re feeding back to municipalities. HOA’s don’t scare them, but local governments can sell the properties out from under them at tax sales. I wonder how much time and energy it takes to keep track of all the towns’ and cities’ tax bills that come due. Must be staggering for a Wells Fargo megabanktype.
The guy at work living in a vampire for the last 4 years just went to court about a week ago and got another 4 month reprieve to try to short-sell the house.
Three-hundred thousand homeowners who have stopped paying their mortgages have not even heard from their lenders yet.
Of possible interest here, somebody I know personally in the PNW who stopped paying way back about 5 years ago finally had their house auctioned over the weekend. They assume they’ll be moving out very soon.
Exact same w/my BIL in Hawaii. Stopped paying on a condo in ‘08, still no bank action.
I have neighbors who were foreclosed and are now living in the same home as renters. They’re among the more dysfunctional families around here. I hear that they’re hoarders and that the house is such a mess that the new landlord doesn’t want the cleanup job. So he lets them stay there.
“A vampire foreclosure is a home that has gone through foreclosure, but one from which the bank has not evicted, perhaps on purpose. ‘One of the reasons is they can see the home being maintained, not falling into a state of disrepair.’”
Bingo! And when the time is right for the bank the occupants and their belonging will be tossed out into the street.
Allow the occupant to believe - to hope - that someday, somehow he will end up owning the home he is currently living in and you, the bank - the true owner - will have at your disposal a caretaker of your property that will work on your behalf for free.
No FB dollar shall escape.
I assume they aren’t paying the mortgage. So it seems a pretty good deal to stay in the house and do the basic maintenance. Am I missing something? I’m thinking if something major came up they would just move out.
“Am I missing something?”
They may have made years of mortgage payments under the mistaken belief that they would somehow end up with a paid-off house, despite having spent all their accumulated equity through Alan Greenspan’s home equity ATM financing.
At the end of the day, they will discover their large living came at the cost of having rented a home they thought they owned at a very high rental rate which included all the components of PITI plus capital losses.
“At the peak of their buying, investors weren’t above overspending to get what they wanted. Invitation Homes, for instance, bought a $205,000 New Port Richey home in March for nearly double what it had sold for two months earlier, property records show. And Progress Residential, which owns more than 400 local homes, bought a Lutz home in April for $72,000 more than it sold for just two weeks earlier.”
Hey, Look!! The Smartest Guys In The Room are back in business! What could POSSIBLY go wrong with a business run by geniuses like this?!?
They could receive another massive government bailout at any moment! The fools!
why work?
bama phone
stmaps
wic
free SFH
A vampire foreclosure is a home that has gone through foreclosure, but one from which the bank has not evicted the former owner,
tampa area = 2002 pricing
the rest is bs
This reminds me of 2006, when the month over month numbers were falling and the media trumpeted the YOY numbers.
Here’s the UHS report in WARNING, PDF’s.
http://media.floridarealtors.org/wp-content/uploads/2013/10/Sept-2013-Fla-single-family-data-detail.pdf
In general, prices are falling, inventory is rising, sales are dropping, cash purchases are down.
Here is some metro YOY data:
http://media.floridarealtors.org/wp-content/uploads/2013/10/Sept-2013-Fla-MSA-summary.pdf
Yeah its definitely a replay.
And its driven by fraud.
‘Large hedge funds, which have boosted Southwest Florida’s housing market since last fall, have been less aggressive in pursuing distressed properties and Realtor listings alike in recent months, according to a Herald-Tribune review of tax deeds.’
‘These investors have really dropped off,” said Drew Peterson, a foreclosure specialist with Re/Max Alliance in Sarasota. “The prices they can get for rent have to make sense with what the home (acquisition) prices are. These funds are one of the reasons prices have gone up so much, and they sort of priced themselves out of their own model.’
‘Institutional firms have picked up dozens of new homes in the area this summer. But the idea that new homes will appreciate over the next three years is risky, said Shannon Moore, broker and owner of Green Lion Realty, which works with smaller real estate investors in North Port.’
“They’re paying too much, and they won’t get those returns back,” Moore said. “Some of them went in thinking they could get a certain amount of rent, and they paid more than they should have. Now they have all of these houses, and I think they’re reassessing the situation.”
‘Analysts fear, too, that the likes of Blackstone and Colony will ultimately hurt the long-term health of Southwest Florida’s housing market. That is because the well-heeled investors have overpaid in some cases, and forced some buyers to the sidelines.’
‘Blackstone paid $265,000 in May, for instance, for a five-bedroom Sarasota home that is more than 30 years old. That same house changed hands just two months earlier for $185,000 — a 43 percent markup in less than 60 days, according to the Sarasota County Property Appraiser.’
‘Those types of purchases have stirred fears that housing prices will subsequently climb to a level that is unsustainable and unaffordable for many.’
Fed proxies using fed ink to buy depreciating assets as a result of distorted fed policy.
Catching on yet folks?
Flipping has slipped out of fashion in the Tampa Bay area, new RealtyTrac data show.
No worries—it will be back in fashion as soon as the next leg down has been taken.
‘Tampa Bay’s heated housing market is finally starting to cool, as fewer sales and tempered prices signal a shift from the summer boom. Last month’s sales slipped 12 percent from August to their lowest point in seven months. Median single-family home prices have fallen about $10,000 since the July peak.’
‘Realtors say prices are settling down as big investors slow their home-buying binges. For the ninth month in a row, fewer local homes were bought with cash than the month before.’
“I can see those red arrows (of sales prices) pointing down from the listing price,” said Armando Ruiz, a Re/Max Realtor covering eastern Hillsborough County. “That wasn’t the case earlier this year.”
I can see those red arrows pointing down…Sounds like a country song.
and the FOR SALE signs hardly ever have
” REDUCED ” but instead proclaim
” NEW PRICE ” !
ohhhh brother.
Realtor Mind Games = always keep it chirpy cheerful positive. no negativity.
‘Debbie Roth, broker-associate with ReMax Alliance in Bradenton, said existing home sales are not rising as fast — new home construction and million-dollar sales are pushing year-over-year sales numbers. When you take those out, she said, we’re still seeing modest appreciation like 3 percent year-over-year. What’s fooling buyers is the new home construction where most homes are listed at $200,000 and above and the sales of luxury homes, which have been on the rise, she said.’
‘The good news is inventory is beginning to loosen up a little, she said. “We are putting a lot of stuff on the market all of a sudden,” Roth said.’
‘She said homeowners should not look to sell at 2004 prices and those who borrowed heavily against their houses are still probably underwater, “The stuff that was short a year ago is still short,” she said. “The ATM housing market is still hurting us.”
Is inventory starting to loosen up the way my lower GI tract did this morn? (My fault. Took too much magnesium in the past couple of days.)
‘Bank of America Corp.’s Countrywide unit defrauded Fannie Mae and Freddie Mac by selling them thousands of loans known to be defective, an attorney for the U.S. said in closing arguments in a lawsuit against the lender.’
‘Government-sponsored entities such as Fannie Mae and Freddie Mac bought single-family mortgages from lenders. The U.S. alleges that to maintain revenue in a “cratering” market for subprime mortgages, a division of Countrywide initiated a loan program called “High Speed Swim Lane,” or “HSSL,” in August 2007.’
‘O’Donnell testified during the trial that he warned other Countrywide executives about the failure rate of HSSL loans.’
Let’s see, the GSE’s had been broke for a couple of years by then. Countrywide was a known joke, and yet the GSE’s buy subprime loans with the name High Speed Swim Lane?
Which begets the question;
How many millions of excess empty houses is Phoney and Fraudie holding?
Usually at this time of year here in the Midwest the rental houses available For Rent have dwindled in number considerably. Not this year. And there are so many in the $1500 - $2200 range, it’s silly. It’s like they think this is California or something. It appears that most (all?) of those high priced rentals are realtwhore owned or big company investor owned. They sit because, it seems to me, very few people have the income to afford them. Try $800, then maybe.
There’s a bumper crop of rentals here in Tucson.
There’s a bumper crop of rentals here in Fresno / Clovis, CA also… (most priced below the cost of smaller apartments.)
There was a time when the price of houses was not expected to soar and plunge like the price of pork bellies.
‘the September jobs report was released, showing just 148,000 people found work last month. “I think it is an absolute disaster,” says Brian Sozzi, chief equity strategist at Belus Capital Advisors. ‘I’m thinking, when I saw this number cross the tape, ‘Is this the creepy peak in the jobs numbers? Can it get worse? Are we looking at a sub-100 print for the next couple months?’” Sozzi says. “Work week unchanged. No wage growth. That’s not good.”
“Of course, the stock market is just fine with all of this, at least for the time being, as it pins the Fed to stay right where it is for the foreseeable future. But even there, Sozzi calls out the shortcomings of the market’s clear cut biased for bad news.”
“Do we have to root for continued Fed stimulus? Is that what the economy has become?” he asks.’
That and house prices. Wonderful strategy Mr Bernanke and Mr Obama.
Lets not give Obama credit for something he doesn’t understand. Bernanke was Bush’s pick so we will have to wait to see if Yellen lives down to your expectations.
’something he doesn’t understand’
‘By late 2009, it was becoming apparent that HAMP would never come close to its stated goals. The program was designed poorly, and Treasury refused to hold the banks accountable for the abuses to which they subjected homeowners in the program. In one meeting I attended, after Secretary Geithner was pressed about the flaws in the HAMP program, he justified Treasury’s actions by explaining that the program would “foam the runway” for the banks by extending out the foreclosure crisis over time.’
‘In other words, Treasury was far more concerned with using HAMP to soften the blow of the housing crisis for the banks than with helping millions of struggling homeowners. Now, three years later, with a tightening presidential election and a Democratic base disillusioned by the government’s abandonment of its promise to help homeowners (less than 8 percent of the funds originally allocated in TARP for foreclosure relief has actually been spent), Geithner and the administration would like to present themselves as having undergone a conversion.’
‘Let’s be very clear about what is going on here. This is not a conversion – it is a political convenience.’
Thanks for proving Obama is clueless and does a good job of doing what he’s told to do, but we all knew that.
Now how about having that nation wide general strike?
Your vote means nothing, your tax dollars line the pockets of the well connected and America is the world’s biggest terrorist.
The only power we have is our voice and legs. Use it or loose it.
As Robert Shiller’s housing price history back to the late 1890s clearly demonstrates, U.S. housing prices didn’t start to go berserk until 1997 or so.
And sixteen years later, the Fed is still pretending that nothing much out of the ordinary has occurred to housing prices over the subsequent period.