December 30, 2013

A Window Of Opportunity For Sellers

WGCU reports on Florida. “According to the latest Market Trends statistical report from the Fort Myers-based real estate company Land Solutions, Inc., home permits up 61% in Lee, Collier and Charlotte Counties. ‘Where we’re at right now is ‘Wow,’ to put it in one word, it’s been an incredible year.’ said Land Solutions CEO Randy Thibaut. According to Thibaut, its all part of a positive trend, but that there’s also concern and confusion about the market as we look toward 2014. ‘While we’re experiencing these great results and everyone’s getting back to work and permits are being pulled and homebuyers are buyer, we also have to look at, ‘Is it too good to be true?’ The main question that we get is ‘Is this sustainable? Are we in another run up?’”

From Miami Today. “Brickell’s development business is back, and it’s booming. Whereas last decade saw empty condo towers standing tall as skeletal reminders of a recession past, 2013 saw the continued construction of the Brickell CityCentre, as well as the sale and groundbreaking on numerous other projects from developers like Related Group and Rilea Group.”

“‘Construction has come back really fast, a lot faster than everyone thought,’ said Diego Ojeda, VP of the Rilea Group, which broke ground last week on its 1080 Brickell Ave. condominium project, the Bond. The 43-story residential building offers 328 planned units, averaging around $500,000 a unit, Mr. Ojeda said. Looking forward, however, this boom in construction not just in Brickell but across Miami may be hampered by construction costs.”

“‘Construction costs have already escalated a lot, mainly in cement and metals. You’re seeing an increase by the month,’ Mr. Ojeda says. Because cement and metals aren’t simply finishing materials for interiors, a delay of a month in planning will result in a jump in construction costs, he said. So build now, and build fast.”

The Miami Herald. “While home and condo prices in Miami-Dade and Broward counties continue to post double-digit gains from 2012 levels, real-estate experts broadly agree that price increases will slow during 2014, just as sales are doing. ‘There are definite, definite signs the market is shifting [from a seller’s market] to a more balanced one,’ said Mark Zilbert, CEO of Miami Beach-based Zilbert International Realty, who has watched prices for beachfront and Brickell-area condos cool modestly from their summer peaks.”

“With prices up sharply, more inventory is coming up for sale. The selection of Miami-Dade existing homes and condos listed for sale continued to increase in November, with a 14 percent gain in single-family inventory from a year earlier and a 23.5 percent jump year over year in condos on the market. More unit owners have been listing their condos for sale, sensing that now is the time to sell — before a host of new projects under construction are completed. ‘Sellers are finding more competition [from the increase in available inventory], and sellers aggressively pricing their condos are going to find they’re not going to move,’ said Zilbert.”

“Meanwhile, cash-rich investors are seeing fewer bargains in South Florida. ‘As home prices have increased, it’s starting to cool off a lot of investors and hedge funds,’ said Stephen McWilliam, past president of the Greater Fort Lauderdale Realtors.”

The Tampa Tribune. “A conspicuous drop in condominium and townhome sales in the Tampa Bay area last month may have been caused by the perception of unaffordable flood insurance rates, if not the reality, real estate agents say. Most agree that stories of skyrocketing flood insurance premiums on older properties scared away many buyers.”

“The problem is the federal flood insurance reforms mostly don’t affect condominiums, at least not yet. ‘For a lot of people, buying on the water in Florida is psychological,’ said Cliff Roe, who runs Roe Realty in Seminole. ‘I think what it boils down to is everybody is confused about flood insurance and people just aren’t buying.’”

The Tampa Bay Times. “Tampa Bay home sales slid 10 percent last month compared to a year ago, as short sellers and cash buyers continued to exit the market, new MLS data show. About 2,500 existing single-family homes sold locally in November, down from about 2,800 the year before, the largest year-over-year drop in three years. Recovering prices have squeezed out investors, with cash deals dropping last month to 40 percent of total sales, the lowest point since early 2012.”

“Low inventories of good homes for sale — because sellers are asking too much, or are waiting for prices to keep climbing — are stalling potential buyers. And Realtors in Pinellas said ‘we can’t deny’ the effect of substantial flood insurance increases on slowing potential home sales.”

The Sun Sentinel. “2014 might be the year the market finally takes a breath. Analysts predict prices will stop rising at a breakneck pace, bringing moderation to the market and making homes a more stable and predictable investment. On an annual basis, the median single-family home price in Broward County has increased by more than 20 percent for 12 consecutive months, the Greater Fort Lauderdale Realtors said recently. Palm Beach County’s median has jumped by double digits for 13 months in a row, according to the Realtors Association of the Palm Beaches. Historically, home values increase at about 4 percent a year.”

“‘What I’m seeing is the rate of growth will be slower — but that’s a positive thing,’ said Jonathan Gelman, a real estate lawyer for the Greenberg Traurig firm in Fort Lauderdale. ‘A slower rate of growth will help us avoid the frothiness or a bubble in the market.’”

“A leveling of prices in 2014 will make conditions less favorable for sellers, experts say. Sellers will face more competition and won’t be able to dictate terms as they did in 2013. ‘There is a window of opportunity,’ said Douglas Rill, broker for Century 21 America’s Choice in West Palm Beach. ‘But it’s really important that if a seller has something, they should get it on the market quickly.’”

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Comment by Muggy
2013-12-30 04:55:30

Flood insurance for the house I rent (3/2 1,300 sq ft) is expected to be $15k/yr.

I wonder what flood will cost for this:

Comment by Common sense?
2013-12-30 06:09:33

I think the bigger question is: how do they expect to sell at 350% more than what they bought for 4 years ago.

Comment by JingleMale
2013-12-30 06:47:37

That payment seems quite excessive. What is your rent?

Comment by Housing Analyst
2013-12-30 07:34:42

“What is your rent?”

Roughly half the cost of a mortgage payment.

Comment by JingleMale
2013-12-30 09:06:09

I wish you would make sense just once……I was asking relative to flood insurance of $15k/yr. You don’t know what the loan payment is Burdbrain.

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Comment by Housing Analyst
2013-12-31 06:23:06

We know the SuckerDebtPayment is double+ rental rates. Just like yours.

Comment by Muggy
2013-12-30 15:32:52

“What is your rent?”

Just a over a G a month.

The owners are frozen, and we are frozen. There is no way we could afford to buy this place with a mortgage, and pay that much in insurance. The owners would have to sell to a cash buyer, and I don’t think they’d be willing to take that kind of hit.

They own outright, and could rent this thing for… forever.

Comment by Overtaxed
2013-12-30 07:24:44

15K/yr? From who? I’m in a flood zone, one of the worst rated, and my flood insurance is about 500/yr. Yeah, it’s federally subsidized, thank you everyone for making it so that I can live 1 foot above sea level. ;)

Comment by Muggy
2013-12-30 10:23:19

You might want to call your agent and ask how much your renewal will be with “Biggert-Waters Act” in effect.

Comment by Mugsy
2013-12-31 03:43:58

Wow, didn’t know about this. The Keys must be a complete flood zone! Wouldn’t want to have put down a bunch of money to live there :(

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Comment by Muggy
2013-12-30 05:00:51

“Flood-insurance hikes ravage Tampa Bay neighborhood home sales”

ST. PETERSBURG — Frank and Shirley Davis are desperate.

The Shore Acres homeowners, in their late 70s and in failing health, are eager to move to Philadelphia and into their daughter’s care.

But just weeks after they listed their quaint brick rancher for $175,000, dramatic flood-insurance changes kicked in. Anyone who bought the home would have to pay nearly $4,000 in annual premiums, if not more.

Comment by NH Hick
2013-12-30 07:09:11

I wonder if it is any “coincidence” that HGTV ran a marathon called Beachfront Bargains, this weekend. The shows focused on “bargains” on or near the ocean in Clearwater, Myrtle Beach, Virginia, “The Hamptons”, North Carolina etc.,etc. All were in the $250K-$350K asking price range. One would assume the Realtwhores are trying to drum up more business because of the flood insurance changes. All of the suckers featured bought in the early to mid 2012 time frame. One stupid woman bought a small beach house in Kitty Hawk NC, about 200ft. from the ocean, knowing that if a storm took away more than 50% of the structure that it couldn’t be rebuilt. She paid $280K for it.

There’s a whole lot of stupid going on out there.

Comment by jose canusi
2013-12-30 05:56:06

Miami’s booming, Tampa not so much. A tale of two Floridas. Like Cali, Florida is really two states.

Comment by snake charmer
2013-12-30 09:43:39

I’ve heard it argued that it is as many as nine different states. I was up in north-central Florida over the Christmas holiday and it’s tough to see any opportunity up there whatsoever, other than correctional jobs or the same healthcare-education nexus that everyone is choosing to hang their hats on. Maybe we can build some more military bases.

Comment by Mr. Smithers
2013-12-30 10:57:09

“I was up in north-central Florida over the Christmas holiday and it’s tough to see any opportunity up there whatsoever, ”

Of course. If it’s not within 25 miles of NYC or SF or Seattle, it’s a wasteland. We know.

Comment by snake charmer
2013-12-30 13:14:20

When we decided to dismantle our manufacturing sector, we committed ourselves to a very destructive geographical pattern of economic determinism. I don’t like it, but that’s where we are. Twitter will not be relocating to Ocala.

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Comment by Mr. Smithers
2013-12-30 10:14:32

It’s really 5 distinct areas within the state with its own economy, culture, demographics, voting patterns

Miami / Ft Laud / Palm Beach
Tampa / St Pete / Clearwater
Orlando / Daytona / Sanford

And the Keys I suppose, but population wise it’s so small, it doesn’t really count.

Read over the weekend that FL will surpass NY as the 3rd most populous state this year.

Which means real estate will plummet in the state of course.

Comment by Mr. Smithers
2013-12-30 10:16:07

Tampa does have one of the vest steak houses in the country. Bern’s. If you’re in the area go there. You won’t regret it.

Comment by snake charmer
2013-12-30 10:35:10

I agree with that.

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Comment by Housing Analyst
2013-12-30 10:27:00

Grossly inflated housing prices will plummet irrespective of migration.

Comment by jose canusi
2013-12-30 05:58:53

“Low inventories of good homes for sale — because sellers are asking too much, or are waiting for prices to keep climbing — are stalling potential buyers.”

They are definitely waiting for the “market to come back” to where their homes are no longer underwater. And they’re pretty sure it will. I’ve spoken to a number of folks with this attitude.

Comment by azdude02
2013-12-30 07:01:19

homes appreciate when the banks are in the hole.

Comment by Mr. Banker
2013-12-30 07:20:08


Comment by JimO
2013-12-30 07:23:25

40% all cash deals still is high. That’s enough to move the needles up on price. Investors haven’t stopped buying. Muppets and wannabe muppets are still chasing the trend.

Comment by Whac-A-Bubble™
2013-12-30 07:48:10

It’s higher now than it was before the Housing Bubble’s initial leg down.

Anything which cannot continue forever will stop.

– Herbert Stein’s Law

Comment by Ben Jones
2013-12-30 07:26:08

‘he palace once called Tampa Bay’s most expensive estate will soon be taken over by the bank, after its foreclosure auction Wednesday closed with only one lowball bid.’

‘Bank of America set the lowest price it would let former gold dealer Mark Yaffe’s megamansion go for at about $6.5 million — a steal, considering the home modeled after a royal palace was once for sale at $25 million.’

‘But the only bid, from a Tampa home flipping firm, came in at $258,000 — about 2 percent of the $10.5 million the bank says the Yaffes still owe in loan principal, taxes and interest.’

Comment by snake charmer
2013-12-30 09:47:56

That place is hiliarious. It has fourteen fireplaces, in an part of this state where you might light a fire three times a year. It looks like something Saddam Hussein would have favored. I don’t get what compels people to build or live in a place like that, other than megalomania, but there’s a lot I don’t get, more all the time.

Comment by Housing Analyst
2013-12-30 09:55:15

Why would you have a fireplace in FL? It makes no sense.

Comment by Ben Jones
2013-12-30 10:01:25

You can find fireplaces in Phoenix and Tucson. Considering what they cost to build and the inefficiency, it doesn’t make much sense.

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Comment by you'll know it's me
2013-12-30 10:23:08

Tucson is pretty cold in the mornings, so a fireplace in a house 75 years old wood(haha) be expected.
Cords are $400+ there. That’s a lot of money up in smoke.for.romanticism.

We have a ventless propane fireplace with catalytic logs.

Maybe 40 cords worth of bark beetle and old dead cedar on the coconino place, I still won’t use wood.

Comment by Housing Analyst
2013-12-30 10:23:18

Desert gets quite cool at nite (no?) which makes sense but a fire place in the sub-tropics/tropics?

You’re right on the efficiency though. I’ve never seen one worth a nickel including my own. It’s expensive accent on Christmas eve and thanksgiving.

Comment by Housing Analyst
2013-12-30 10:25:41

“We have a ventless propane fireplace”


Efficiencies of them approach gas condensing boilers and not far from electric.

How frequently do you run it? Durations? Any headaches? Combustion air from outside building?

Comment by Mr. Smithers
2013-12-30 10:22:45

It gets down to the 40s in winter in FL.

In N. FL, it will get into the 30s as well.

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Comment by JimO
2013-12-30 07:28:49

I was looking at properties in Lima recently. On a comparative basis Miami is cheap. I’m sure that’s true for most major S. American cities. That has created another big pool of muppets for Miami properties.

Comment by Housing Analyst
2013-12-30 07:38:44

Gettin’ set up like bowling pins.

Comment by snake charmer
2013-12-30 09:57:42

In Bogota as well. Reading the in-flight magazine of a foreign airline is always a good clue as to where money is flowing.

Where in Lima did you look?

Comment by Ben Jones
2013-12-30 09:08:08

‘Max Ganik has no doubts that Twitter’s stock — up 145 percent since it first began trading on Nov. 7 — is firmly in bubble territory. “But that doesn’t mean it’s going to stop going up,” said Mr. Ganik, 16, a junior at a high school in Scarsdale, N.Y., who doubled his money by lunchtime on Thursday trading Twitter stock options, and planned to dive back in on Monday. “Traders are going to drive up the price. The valuation doesn’t actually matter at this point.”

Heck of a job Bernanke.

Comment by Neuromance
2013-12-30 09:40:33

Heck of a job Bernanke.

No matter the happy talk, Bernanke’s policies never fail in enriching Wall Street. This lays a very good foundation for him personally.

Comment by snake charmer
2013-12-30 09:59:37

You’ve got to be kidding me.

Comment by Rick O'Shay
2013-12-30 12:59:00

Crocs (CROX) –yes–the footware compay, is up 20% today.


Comment by Muggy
2013-12-30 15:29:37

Smithers, were in Georgia should I look to relocate?

On the short list:


Comment by Charles Goldstein
2014-01-03 23:02:21

Homes in Miami are very expensive. Probably out of reach even from the the normal earning people.

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