True Last Week, Also True Last Decade
The Orlando Sentinel reports from Florida. “Orlando-area home prices dropped in January from a month earlier and the inventory of listings increased, edging the area closer to becoming a buyer’s market. The median sales price during January for homes in the core Orlando market, which includes mostly Orange and Seminole counties, was $149,950 – down from $160,000 in December, according to a report by Orlando Regional Realtor Association. A year ago, median prices for the Orlando market were $127,000.”
“Sales were down from a year earlier too. In January, members of the association closed on 1,800 sales – an 11 percent decrease from a year earlier. The market had a 5.5-month inventory of listings during January – the highest level since February 2011.”
The Tampa Tribune. “It may feel like the region’s once-hot housing market has hit the brakes, but an economist for the state’s leading Realtors group insists a recent month-to-month drop in existing-home sales isn’t cause for alarm. Realtors are feeling the effects from a slowdown in buying by the likes of Blackstone Group’s Invitation Homes. They slowed their buying dramatically recently, though, because housing prices rose so much that the investors couldn’t get the financial returns they wanted. ‘I think what you’re seeing there is investors retreating from this market,’ said Florida Realtors chief economist John Tuccillo.”
“Short sales — sales in which the home sells for less than what’s owed on the mortgage — also were down by 46 percent statewide in January when compared with this time last year. They’re dropping in tandem with the overall rising prices for houses, Tuccillo said. Tampa Realtor Mary Diaz wonders if many of the short sales never went through and the banks took the houses back. She said she’s noticing more bank-owned properties hit the market in Brandon, especially.”
“An early report card on how rental-home powerhouse Invitation Homes from Morningstar gives some clues on how some of Invitation Homes’ rental homes are performing. The company started with a pool of 3,207 homes in October, all of which were occupied and generated monthly rental payments of $4.2 million. By January the company had 252 vacancies and its monthly rent collections had fallen to $3.9 million, Morningstar’s report says. That’s a vacancy rate of 7.9 percent.”
“Morningstar had expected a vacancy rate of 8 percent all along, but the issuer of the bonds, technically called Invitation Homes 2013-SFR1 Trust, expected a lower vacancy rate of 6 percent, Morningstar said.”
The Tampa Tribune. “As development hot spots such as Miami overheat, market watchers say foreign investors are increasingly spending their yen, yuan and loonies in Tampa Bay — even as the source of their spending remains largely hidden from view. One in four foreign buyers of American homes, townhomes or condos last year chose Florida, spending more than $6 billion, Realtors’ data show. About $370 million of that was spent in Tampa Bay.”
“Realtors here have done everything from hosting social outings for Russian prospects to chartering tour buses for Chinese buyers hoping to scout out suburban homes. It’s hard to quantify just how much money flies into local development or transactions from spenders outside our borders. Investment advisers here say foreign money is typically tucked inside shell companies or equity funds. ‘Foreign capital is oftentimes very secretive,’ said John Stone, the director of multifamily housing and foreign investment for commercial real estate brokerage Colliers International. ‘They don’t trust easily.’”
“Brokers say that spending has boosted South Florida’s skyline, fueled a new boom for waterfront condo skyscrapers — and led prices there to soar. By last month in South Florida, developers had proposed or begun building more than 25,000 condos across 187 towers from Jupiter to Key Biscayne.”
The Buenos Aires Herald. “Economically speaking, over the last 20 years, when the kettle has started to whistle in Argentina, fast-talking Miami salesmen have flocked to Buenos Aires to draw in real estate investors. The pattern is repeating itself now, but profits are often exaggerated. Even if people manage to licitly send money abroad to buy and let out an apartment, long-distance investors usually have to face management costs and are obliged to front maintenance expenses, which chip away at profits.”
“A high-end apartment in central Miami goes for about US$700,000, while in the suburbs, an average one sells at US$400,000. Mcafka developer Fernando Levy Hara says that for a two-bedroom apartment in the booming central Miami, maintenance and tax expenses rise to between US$200-400 per month each, meaning that from rent of ‘US$1,800 per month, you are left with an income of US$1,000, or between four and five percent of the initial investment.’ When administration fees are deducted, the figure drops to US$880 a month — not a mouthwatering number.”
“Such returns are chipped away further by the commission charged by local banks to receive money from abroad, which is obviously exchanged at the official rate. All this assumes business is conducted in adherence to Argentine law. When asked if Mcafka offers guidance to potential investors seeking to send money to Miami for real estate projects, Levy Hara said that developers don’t look into the source of cash.”
“Those who already have offshore, often undeclared bank accounts, are the target clients for real estate development and investment companies such as Key International for their Brickel 1010 luxury tower development, although some do have rent transferred directly to Argentina. Asked how relevant Argentine clients were to the company, Sales and Marketing Director Liliana Paez told the Herald: ‘They’re very important; people from countries that are having problems are some of our biggest clients, they’re in the top 10 buyers, for the world.’”
“Levy Hara said the US tributary system ‘makes no distinction between foreigners and locals’ when it comes to real estate except for the inheritance tax, ‘which is fairly high.’ ‘There are zero restrictions for foreigners, it’s an open market,’ Key International Vice-President Inigo Ardid agreed.”
The Palm Beach Post. “Federal mortgage backer Freddie Mac issued its monthly housing market outlook yesterday and it’s not looking good for homebuyers in South Florida. According to the report, homes in Palm Beach, Broward and Miami-Dade counties are ‘not affordable’ for most families under current underwriting standards. ‘We’ve gone from talking about how cheap housing was to how expensive it is in a very short period of time,’ said Jack McCabe, chief executive of McCabe Consulting and Research in Deerfield Beach. ‘Flat incomes, no job creation and higher housing costs are the elements that break markets.’”
The News Press. “Home prices were rising, credit was easing, speculators were losing their fear of failure and greed was just starting to be fashionable again. Yes, all that was true last week, but it was also true last decade: 2004 fits the bill just about as well as the present. Now presenters at The News-Press Market Watch are wrestling with what to say about the year just gone by and what’s coming next — and thinking about how things turned out last time around.”
“‘In 2004 and 2005 there was optimism, and I have to admit that I joined with everyone else and drank the Kool-Aid and thought and hoped the increase in the market at 50 and 60 percent a year would never stop,’ said Randy Thibaut, who handles sales and development of large tracts of land. ‘But I realized, deep down, that it couldn’t last forever.’ Now, he said, ‘It’s starting to feel a little like déjà vu all over again. The difference is this time I’m not drinking the Kool-Aid.’”
“Residential real estate broker Denny Grimes said one difference between then and now is the increased availability of market data that would show the risk of a bust. But in the end that likely won’t be enough because the lure of easy money is just too hard for some to resist, he said. ‘Not long ago there was a helicopter picture of a black SUV going down the highway throwing money out the window,’ Grimes said. ‘You can yell at the people on the road, ‘Don’t take it’ all you want. They’re going to take it. But when the music stops, you better have a chair.’”
“The median sales price during January for homes in the core Orlando market, which includes mostly Orange and Seminole counties, was $149,950 – down from $160,000 in December, according to a report by Orlando Regional Realtor Association.”
Annualized one-month rate of decline:
((149,950/160,000)^12-1)*100% = -54%.
The median home value in Orlando (not “Core” Orlando, but I am just making a point) is $126,000. Orlando home values have gone up 22.0% over the past year and Zillow predicts they will rise 10.9% within the next year. The median list price per square foot in Orlando is $108, which is higher than the Orlando Metro average of $101. The median price of homes currently listed in Orlando is $165,000 while the median price of homes that sold is $151,400. The median rent price in Orlando is $1,000, which is lower than the Orlando Metro median of $1,195.
________
There are lots of data intersects Whac, but carrying out a 1 month statistic to a 12 month “trend analysis” is a bit disingenuous.
Yeah, it could start falling a lot faster
The median home value in Orlando (not “Core” Orlando, but I am just making a point) is $126,000. Orlando home values have gone up 22.0%
“Value”? Are you always about phony metrics?
over the past year and Zillow predicts they will rise 10.9% within the next year.
Do they “predict” the sun will rise in the west too?
The median list price per square foot in Orlando is $108, which is higher than the Orlando Metro average of $101.
And why do you think it is that the median list for a 20 year old resale house is 96% higher than reproduction cost(lot, labor, materials and profit)?
The median price of homes currently listed in Orlando is $165,000 while the median price of homes that sold is $151,400. The median rent price in Orlando is $1,000, which is lower than the Orlando Metro median of $1,195.
Once PITI and depreciation are calculated, rental rates are a fraction of the cost of buying. Do you think it’s wise to pay nearly double contstruction costs and dramatically increase your monthly carrying costs over monthly rent by buying a house at current grossly inflated asking prices?
And your claim to be a “general contractor”… lets hear more about it.
You said it is a “trend analysis,” which is incorrect. I used the correct terminology, which indicates that I computed a one-month change at an annualized rate.
“As development hot spots such as Miami overheat, market watchers say foreign investors are increasingly spending their yen, yuan and loonies in Tampa Bay — even as the source of their spending remains largely hidden from view. One in four foreign buyers of American homes, townhomes or condos last year chose Florida, spending more than $6 billion, Realtors’ data show. About $370 million of that was spent in Tampa Bay.”
What a bunch of loonies.
“‘Foreign capital is oftentimes very secretive,’ said John Stone, the director of multifamily housing and foreign investment for commercial real estate brokerage Colliers International. ‘They don’t trust easily.’”
If I were a foreign gangster absconding with money to park it in Florida real estate, I most certainly would be very secretive.
‘Foreign capital is oftentimes very secretive,’ said John Stone, the director of multifamily housing and foreign investment for commercial real estate brokerage Colliers International.
_____________________________/
That’s because it’s often criminal in origin you dumb mother #&@*)^*.
The absence of any kind of critical judgment is a staple of most real-estate reporting and analysis. When it comes to assets, there’s only one good outcome, and that is a rise in price, however that result might be accomplished.
For all intents and purposes, in this culture, residential housing might as well be gold bars or shares of stock. How long before we start treating food like this?
If you read the article, the way they refer to it, pretty much everyone knows it’s money laundering.
pretty much everyone knows it’s money laundering
I’m sure a lot of it is the real-deal, dishonest, criminal money laundering but it’s more complicated than that when dealing with Latin-American tax, bribe and regulation structures. I heard of businessmen in a certain South American country who say it is impossible, and I mean impossible in certain businesses to comply with every tax, fee, bribe, payoff and regulation and stay in business.
Now these people work their tails off in legit businesses to provide for their families and I guess some of them might “hide” or “launder” some of their money into America in order to reap any fruits of their labor. I’m not saying it’s right. I’m just saying it’s a fact.
They could get higher returns buying local RE, according to the article.
Let me guess: the certain country is Paraguay or Venezuela.
I totally can understand why Argentines would want to get their money out of the country and into dollars or some other hard currency. At any given time their peso savings could be subject to a devaluation or rendered substantially worthless by inflation. I know someone who lived there during an earlier hyperinflationary episode, and she said that prices for groceries changed on a daily basis — she would leave for the corner store to buy bread and milk, and upon arrival would discover that she had nowhere near enough cash. When I visited I would see ads for bank CDs in which the interest was 6%. Per month.
I flew from Buenos Aires to Montevideo during the bubble and was amused to see numerous ads for Miami condos in the PLUNA in-flight magazine.
They could get higher returns buying local RE, according to the article.
Certain governments might inquire about the source.
“I am not so much concerned with the return on capital as I am with the return of capital.” Will Rogers
“I hate this damn 3rd world prison” Some broke Latin dude
“Residential real estate broker Denny Grimes said one difference between then and now is the increased availability of market data that would show the risk of a bust. But in the end that likely won’t be enough because the lure of easy money is just too hard for some to resist, he said. ‘Not long ago there was a helicopter picture of a black SUV going down the highway throwing money out the window,’ Grimes said. ‘You can yell at the people on the road, ‘Don’t take it’ all you want. They’re going to take it. But when the music stops, you better have a chair.’”
Lesson learned from The Housing Bubble and subsequent crash:
There is a virtually limitless supply of high-risk gamblers in the world who are willing to borrow any amount of easy money lending the Fed makes available at super-low interest rates and recklessly spend it on foolish investments, in the hopes of riding the bubble wave to its peak and jumping off before the inevitable crash.
“Lesson learned from The Housing Bubble”
With some of the flat out distortions posted by some long term residents here, I confidently say no lessons have been learned.
The lesson is that we’re not going to change voluntarily. We doubled down once and we’re going to try to do it again and again.
Another lesson is that our political class and institutions have been captured. And its not just ours. Now that democratic values worldwide have been subordinated to the needs of finance, anything and everything is on the table.
Doing the same thing hoping for a different outcome - I think over half of america is mentally ill…
LOL
‘It’s starting to feel a little like déjà vu all over again. The difference is this time I’m not drinking the Kool-Aid.’
And as luck would have it, this time will probably turn out different, as real estate really will always go up from now on, trees will grow to the sky, and those who don’t buy will be priced out forever and never enjoy the feeling of owning and living in a real home.
‘Q: In May 2005, I bought a condo in Miami for $385,000, with $140,000 down and the rest on a 6 percent, 30-year fixed-rate mortgage. Then I went through a lengthy divorce and ended up with title to the condo. Suffice it to say, I bought at the very top of the market there.’
may 05 was the peak of peaks
we are 8% off that in taxpayer funded 22151
‘Consumers are doing better at keeping their mortgages current, but Floridians are still struggling more than most Americans. The mortgage delinquency rate — borrowers 60 days or more delinquent on their loans — dropped below 4 percent at the end of 2013 for the first time in five years, Trans-Union reported.’
‘The U.S. rate ended the year at 3.85 percent. But the percentage in Florida was more than double the national rate at 8.18 percent, the highest in the country. New Jersey was second, at 6.86 percent.’
“It’s encouraging to see the mortgage delinquency rate drop for two consecutive years but, at the same time, mortgage delinquencies continue to be twice as high as levels observed prior to the housing bubble,” said Steve Chaouki, head of financial services for TransUnion.’
“The housing market also still shows some volatility, with both housing prices and originations dropping in the latter part of 2013 after experiencing improvements in the first part of the year,” he said.’
‘The credit information company recorded 52.84 million mortgage accounts as of the fourth-quarter 2013, down from 53.85 million one year earlier. Mortgage accounts have dropped by more than 10 million since 2008.’
“New account originations have declined significantly in recent quarters,” Chaouki said.’
“This is primarily related to recent spikes in interest rates, particularly in the refinance market. Additionally, continuing tight lending standards remain a factor in some sectors of the market.”
“Realtors here have done everything from hosting social outings for Russian prospects to chartering tour buses for Chinese buyers hoping to scout out suburban homes.
Not to mention lying through their crooked teeth in every media outlet.
I remember back in 2005 when a particular apartment complex near me was sold and the tenants booted out for a condo conversion. A reporter asked an executive of the new owner if the prices were not just a tad bit high for Tampa. He was blythe and unconcerned and said that the company would have buyers from “England, Russia, whatever.”
And I twice have seen cars occupied by older Asian women slowly cruising my neighborhood looking at the houses. If they are legal residents whose families live and work in this community, great. If not, their buying activities upset me. For the record, I would have the same views if they were Argentine.
“I would have the same views if they were Argentine.”
Is there a difference between chinese, argentine or american bowling pins?
The central banks have created so much money, it’s sloshing around the globe, distorting prices for all sorts of things:
‘Facebook Massively Overpaid for WhatsApp’
A comment:
‘It’s infinitely easier to buy vs. build when you’re playing with Monopoly money.’
‘It’s infinitely easier to buy vs. build when you’re playing with Monopoly money ??
Yep….The guy started it in 2009….
None. But my comments lately have focused on the massive distortions emanating from China. The price an American pays for a house shouldn’t have anything to do with Chinese corruption. Or any corruption.
This is true however the massive distortion is here in the US too. And I wager that the US distortion is far larger than that of Chinas.
remember bussing to Phliy
wake me up when condo hotels are back
in my hood houses are selling in 2 weeks max
‘Adding to concerns over the market, the official Shanghai Securities Journal said on Monday that China’s Industrial Bank Co Ltd had suspended some types of property-related loans, although several other banks have kept property loan policies unchanged.’
‘Shares in property developer China Vanke Co Ltd fell 6.6 percent on Monday after the report, while China Resources Land Ltd ended down 6 percent. Separately, local media reported that some property developers in the eastern city of Hangzhou have started to cut home prices as some of them are in urgent need of cash.’
‘However, developers in Shanghai reached by NEWS.GNOM.ES on Monday said they had no plan to cut prices and were not concerned about the talk of bank lending curbs.’
“The rumors will not influence us. Lingang is very popular now and the price will only go up,” said a salesman at a Shanghai-based property firm, referring to a property development in the city’s Pudong district.’
“The rumors will not influence us. Lingang is very popular now and the price will only go up,” said a salesman at a Shanghai-based property firm, referring to a property development in the city’s Pudong district.’
FYI Pudong is where they built their own made-from-scratch-in-a-swamp Manhattan across the river from the old part of Shanghai a few years back. They forced their banks to move their HQs there in an attempt to create a build-it-and-they-will come world class financial center. People say it’s working. To me it still looks like the world’s largest cargo cult creation. Heck of a sight to see, though.
I guess it’s nice that Canada is going to help Brazil build some houses with Canadian’s retirement money.
Canada pension board opens Brazil office, eyes real estate, infrastructure
http://ca.reuters.com/article/businessNews/idCABREA1407U20140205?pageNumber=2&virtualBrandChannel=0
TORONTO (Reuters) - Canada Pension Plan Investment Board said on Wednesday it will open an office in Sao Paulo in April, intent on boosting real estate and infrastructure investments in the region…..the region has a massive infrastructure deficit and growing need for real estate development, including in both retail and residential housing, and in logistics as its growing middle class demands more services.
like anything gov
late and stupid
For instance housing price supports maybe?
‘Housing prices hit their highest start-of-year peak in four years in Manatee County in January, riding a 26-month statewide trend. That trend has also put more buyers and sellers into the market, as both sides try to get their best price.’
‘But inventories have been increasing since hitting a four-year low last May. Peter Crowley, a broker and owner with Sarasota-based ReMax Alliance Group, said the small inventory bump has his agency at a point where it is getting more listings each month than sales.’
‘The higher prices at the start of the year could frustrate buyers whose households are at the county’s average income, about $48,000 according to the U.S. Census Bureau. Crowley said while it’s “somewhat of a challenge” to find lower-priced homes, institutional investors are moving out of the market and leaving those properties for owner occupants.’
‘South Florida house prices increased in January — and so, too, did listings as more sellers showed confidence in the revitalized market. Palm Beach County had 7,218 homes on the market at the end of last month, up 7 percent from a year earlier, Broward’s inventory of active listings shot up 18 percent, to 5,338 from 4,514.’
‘Palm Beach County had 1,014 home sales last month, up 5 percent from January 2013. Broward’s sales softened, dropping 4 percent to 989.’
‘While January prices were higher than they were a year ago, values are leveling off on a monthly basis. Many analysts say that isn’t a cause for concern. They said the large price increases were unsustainable.’
Tampa Housing Inventory Up 61%; Price Reductions Up 74%
http://www.movoto.com/tampa-fl/market-trends/
<San Diego Housing Inventory Up 77%; DOM Up 19%
http://www.movoto.com/san-diego-ca/market-trends/
like a midwest city- build-able land in every direction
‘Anatomy of an economic debacle: How the Fed proposed bailing out Mexico to pass NAFTA ‘
Check out the photo of who was there when Clinton signed it.
Which begets the question; What was their motive?
Syron, Angell and Greenspan…. the same shifty characters.
Ford, Carter, Dole, Gore, Bush and Clinton.
And I see Foley and that other denture wearing goofball from Maine.
Check out the photo of who was there when Clinton signed it.
A club that we’re not in.
Mortgage Broker to Serve a Decade in Prison for $30 Million Mortgage Fraud Scheme
http://www.loansafe.org/finleyville-broker-sentenced-for-fraud
“Fraudulent appraisals were also part of McCloskey’s conspiracy. Most of the fraudulent appraisals were prepared by co-conspirator Kenneth Cowden, who was not licensed to prepared appraisals. His appraisals also drastically overstated the values of the properties serving as collateral for the loans.”
Obama’s Housing Rescue Effort
http://1.bp.blogspot.com/-Iv4cxDw8ABk/UUr_HC6rQbI/AAAAAAAABO0/JWnd1jKQHLw/s1600/land-fails+%252814%2529.jpg
Detroit: A fugitive mortgage kingpin who disappeared in June after being sentenced to 13 years in prison for his role in one of the country’s largest fraud scams was arrested Monday and then allegedly assaulted a federal prosecutor.
Ronnie Duke, 46, was apprehended near Saline MI early Monday, more than eight months after failing to surrender to federal prison officials.
Duke was convicted for his role in a scheme that used fake documents to secure hundreds of loans on homes throughout Metro Detroit from 2003 to 2007, triggering nearly $95 million in losses as it bankrolled a lavish lifestyle for Duke and his co-conspirators.
In addition to Duke, 15 others were convicted and two of his top lieutenants got 10-year sentences.
They used the proceeds from the loans to pay for luxury vacations, boats, cars, and a nightclub. Duke used some of his money to buy hot-rod cars.
Duke, who had been convicted of numerous crimes since his teenage years, created fake title companies, hired former strippers to process loans and worked with hand-picked appraisers and others to run a ring that secured more than 450 loans across Metro Detroit.
he Tampa Tribune. “It may feel like the region’s once-hot housing market has hit the brakes, but an economist for the state’s leading Realtors group insists a recent month-to-month drop in existing-home sales isn’t cause
since no one goes to FL in the winter.
Being an economist for a Realtors’ group must be like spitting in your own face.
905 of economists are either .edu or gov
socialists at heart- why keynes bs is still touted