May 1, 2014

More Than Two Years Of Frenzied Gains

The News Press reports from Florida. “It’s the sweet spot for single-family-home sales in Southwest Florida: $250,000. Denny Grimes, of Denny Grimes & Co., said homes for sale in the $200,000-$250,000 range have a median time of 30 days listed, compared to 70 to 90 days for the home market as a whole. For a prospective seller of a $250,000 house, he said, ‘Every morning when he wakes up his house is worth a little more. The market is marching to him.’”

The Miami Herald. “A spate of new economic reports shows that a speedier recovery of the national housing market does not appear in the cards this year. South Florida’s housing market has held up better than many other spots around the country, although it too is showing signs of moderating after more than two years of frenzied gains in prices and sales. Inventory has been creeping up, particularly for existing condominiums and townhouses in Miami-Dade and Broward counties, but the availability of single-family homes is still on the tighter side in many neighborhoods.”

“‘It was slower in the first quarter, and everyone was a little concerned,’ said Marta DuPree, broker at Keyes Company Realtors in Broward. ‘Now it’s starting to pick up. As long as supply doesn’t continue to increase and buyers keep coming,’ the market will hold up.”

The Sun Sentinel. “Palm Beach County house prices will keep inching upward this year, but sellers looking for big paydays will have to keep expectations in check, analysts say. Last spring, prices were up by nearly 30 percent from 2012, but the market has softened recently as investors pull back on purchases and more homes hit the market. Dean Ehrlich, an agent in Palm Beach and Broward counties, said the cooling single-family market is fine with buyers. ‘The market is still on the sellers’ side, but it’s starting to shift more toward the middle,’ he said.”

“Letting your lawn or vacant lot grow nearly knee high just won’t cut it anymore for Lee County. A law passed April 1 by county commissioners drops the maximum height from 16 to 12 inches in unincorporated areas of the county. The law was enacted in tandem with another new law, effective Jan. 1, establishing an abandoned property registry for the first time in the county, said Bob Stewart, county chief building official.”

“Stewart said vacant lots and properties with abandoned houses in unincorporated Lee are major offenders, and Lehigh Acres is frequently the location. That’s because Lehigh is not built out and it was one of the areas hit hardest in the housing bust and economic downturn, Stewart said. However, the problem seems to be easing somewhat, because banks are starting to act on the inventory of abandoned houses, he said.”

“In Fort Myers, there were 1,157 residential complaints in 2013. But the city mowed the lots of 3,289 violators. ‘There are a lot of notices no one is responding to,’ said Mike Titmuss, Fort Myers chief code enforcement officer. He believes it’s a result of the area’s foreclosure explosion in 2008. ‘We come across properties the city has cut 50 times and never been paid,’ he said.”

From Highlands Today. “Elliott Moses has lived in Lake Placid since 2001. In 2005 he bought a home, expecting to live in it until he ‘dropped dead.’ He said he put down $40,000 for the $149,000 house, but the timing of his purchase conspired against him like many others in his situation. When Moses closed on the deal, it was the height of the real-estate boom. The real-estate bubble burst a couple of years later, and Moses’ home value plummeted.

“He still owes $94,645.43 on his mortgage, he said, but estimates his home is worth $40,000. He said he tried to renegotiate his loan and bring down his $750 monthly mortgage payment, but hit a brick wall. That’s when he stopped making payments, figuring his lender would be forced to talk to him. Moses’ situation is familiar to many others who either bought a house during the boom time, refinanced their homes for a larger mortgage or got an equity line of credit when their home values ballooned.”

“‘Of course, the market tanked, they lost their jobs and couldn’t service their loans,’ said Steve Fruit, broker associate with RE/MAX Realty Plus II.”

“According to figures provided by the Highlands County Clerk of Courts, several mortgages were recorded between 2004, the beginning of the real-estate boom in Highlands County, and 2007, which many describe as the year of the crash. In 2004, the clerk’s office recorded 7,415 mortgages and 16,834 total deeds. That number went up significantly in 2005, which saw 24,143 total deeds and 11,055 mortgages recorded.”

“In 2006, total deeds recorded dropped to 12,481 and recorded mortgages to 9,354. The 2007 figures were 7,624 deeds, of which there were 6,840 mortgages were recorded. So, there could be several people like Moses out there.”

From Gossip Extra. “Hollywood big-screen legend Burt Reynolds’ property in Hobe Sound has been winding its way through foreclosure in Martin County, and until recently, it was believed that the banks would have until 2015 to reclaim Reynolds’ homestead. It turns out the court decision could make it easier for the banks to extend the traditional five-year limit indefinitely. Reynolds, meanwhile, is in a race against the clock with the banks: The house on the market in an attempt to sell before he loses millions if the foreclosure goes through.”

“Sensing financial troubles, Reynolds first put the property up for sale for $15 million. It went down to $12.9 million in March 2007, $10.5 million 10 months later, then $9.5 million, $8.9 million in 2010 and eventually $4.9 million in 2012. The foreclosure was filed in 2011.”

“Records show the actor quit paying his $1.2 million mortgage in 2010, and Reynolds’ lawyers since have been trying to make the process last as long as possible. But while, in the past, they could’ve hoped for a resolution as the statute limitation would’ve run out next year, the recent court decision extends it practically for ever.”

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Comment by Housing Analyst
2014-05-01 05:20:40

Alexandria, VA Housing Prices Crumble 9%; Inventory Inflates 45% As Buyers Flee

Comment by oxide
2014-05-01 05:39:54

Indulging in gossip here: the Burt Reynolds pictures are scary. He’s clearly had too much work done. Who names a Moorish style house Valhalla? And Burt could use some lessons in staging and decluttering from Amy Hoak. Didn’t see any Cheetos, but there is a garish plaid trash can by the bed.

Comment by Housing Analyst
2014-05-01 09:22:24


The same type of people who draw silly distinctions in architectural theme like the “craftsman” fad that’s going to look horrendous in 2 years.

Comment by toast on the coast
2014-05-01 16:22:08

The “New Alexanders” mid century homes in Palm Springs.
Can’t keep them in stock

Comment by Housing Analyst
2014-05-01 16:25:59

heh…. with housing demand at 20 year lows and inventory at record highs, that seems a stretch.

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Comment by rms
2014-05-01 23:43:23

“Who names a Moorish style house Valhalla?”

The trailer park version of Camelot.

Comment by Housing Analyst
2014-05-01 05:44:40

“Don’t Play With Matches”

That was the repeatedly invoked lie by a paid hack on WBBR this morning.

Topic: Should criminal charges be brought against bank and investment firm management?

Excuse: If criminal charges are even suggested or alluded to, it will bring a cascade of defaults

Execution: Align criminal charges with the end of the world and invoke the catchphrase over and over… don’t play with matches. don’t play with matches.

Now go ahead cowards and communists…. go forth and invoke the lie.

Comment by MacBeth
2014-05-01 05:50:33

““He still owes $94,645.43 on his mortgage, he said, but estimates his home is worth $40,000. He said he tried to renegotiate his loan and bring down his $750 monthly mortgage payment, but hit a brick wall. That’s when he stopped making payments, figuring his lender would be forced to talk to him.”

A prime example of why there are few, if any, “victims” in housing.

The guy pays $150K in 2005. Presumably, he can afford all mortgage and associated costs over the next 30 years.

Then his house plummets in value.

Then he thinks he shouldn’t have to pay what he signed on for in 2005.

Why not? Because he always did view his house as an “investment”.

Now that he realizes that the “investment” didn’t provide or hold the value he thought it would, he cries foul.

Whines like a freaking baby.

Wants the rest of us to pay.


Victim, victim, Everyone’s a victim.

He who whines best wins.

Comment by Hi-Z
2014-05-01 11:02:31

My sentiments exactly.

Comment by Muggy
2014-05-01 15:00:56

Everything is ransomed now.

Comment by Housing Analyst
2014-05-01 05:54:27

Arlington, VA Housing Prices Cave 29% YoY; Excess Housing Inventory Inflates 45%

Comment by Mr. Banker
2014-05-01 05:55:45

“He said he tried to renegotiate his loan and bring down his $750 monthly mortgage payment, but hit a brick wall. That’s when he stopped making payments, figuring his lender would be forced to talk to him.”

Bahahahahahahahahahaha … His binding signature was willingly placed by him on sheet of paper that is now held by the lender but nevertheless he figured that by not making payments his lender “would be forced to talk to him”.


Comment by Housing Analyst
2014-05-01 05:56:39

N.Bethesda, MD Housing Prices Crater 29% YoY On Ballooning Excess Housing Inventory

Comment by Housing Analyst
2014-05-01 05:58:23

Towson, MD Housing Prices Dive 5% YoY On Rising Inventory

Comment by Housing Analyst
2014-05-01 06:09:48

Coral Gables, FL Housing Prices Dive 10% YoY; Inventory Skyrockets 132% On Collapsing Demand

Comment by Housing Analyst
2014-05-01 06:11:01

Hobe Sound, FL Housing Prices Crater 10% YoY; Inventory Balloons 87%

Comment by Whac-A-Bubble™
2014-05-01 06:14:38

“In Fort Myers, there were 1,157 residential complaints in 2013. But the city mowed the lots of 3,289 violators. ‘There are a lot of notices no one is responding to,’ said Mike Titmuss, Fort Myers chief code enforcement officer. He believes it’s a result of the area’s foreclosure explosion in 2008. ‘We come across properties the city has cut 50 times and never been paid,’ he said.”

Given how fabulously rich they are, why can’t the absentee-owner investors be asked to pony up a bit of money for mowing the lawns on all the vacant investor-owned lots in Florida to a height of considerably less than 12 inches?

If absentee owners don’t pony up the maintenance fee, could local municipalities exercise eminent domain rights to the property?

Comment by MacBeth
2014-05-01 06:55:43

Good to see cities and towns - and thus, their citizenry - have to pay for absentee/dead landlords, mortgagees and “investors”.

Perhaps some of these cities and towns should not have been so stupid as to put themselves in the position they now find themselves in.

Perhaps a few cities and towns won’t be so quick to put themselves behind the 8-ball so soon next time.

“Tis a shame the states and the federal government are of little aid in helping towns and cities clear their books of the festering rot.

Comment by Housing Analyst
2014-05-01 06:16:08
Comment by Whac-A-Bubble™
2014-05-01 06:16:49

“Sensing financial troubles, Reynolds first put the property up for sale for $15 million. It went down to $12.9 million in March 2007, $10.5 million 10 months later, then $9.5 million, $8.9 million in 2010 and eventually $4.9 million in 2012. The foreclosure was filed in 2011.”

Why are Hollywood types so fond of selling by Dutch auction?

“Records show the actor quit paying his $1.2 million mortgage in 2010, and Reynolds’ lawyers since have been trying to make the process last as long as possible.”

I’ve got a bright idea: Why not price it to sell at $1.2 million and see where it goes from there?

Comment by oxide
2014-05-01 06:48:50

Greedy Re-al-TOR?

The other day I saw a Virginia license plate with the R logo on it (didn’t know they made them). The plate number was HRDWRK.


Comment by Housing Analyst
2014-05-01 06:28:30

Merritt Island, FL Housing Prices Dive 5% YoY; Inventory Inflates 33%

Comment by LolaLOL
2014-05-01 06:29:38

This Burt Reynolds stuff is all BS. He has a house that is worth multiples of his 1.2 mill mortgage on it is. He is also worth between 12 and 20 million per the internets.

He was also married to Loni Anderson.

He was also in Stroker Ace.

Comment by Housing Analyst
2014-05-01 06:33:37

He was on that car restoration show Fast And Loud. Man oh man has he aged. He could barely walk.

Comment by Salinasron
2014-05-01 11:10:50

Yes, you body is just like your house, your car, your job..they are all depreciating assets!! Just suck it up, life is for those who live it and pull maintenance on what they have.

Comment by Housing Analyst
2014-05-01 14:28:06

What are your losses so far? 150k? 250k? More?

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Comment by Housing Analyst
2014-05-01 06:31:58

Bonita Springs, FL Housing Prices Collapse 25% YoY

Comment by Ben Jones
2014-05-01 07:08:11

‘A Bradenton property investor who went through a well-publicized bankruptcy five years ago has sold 100 condominium apartment units he owned near downtown Bradenton. On Dec. 17, 2013, Paul Sharff sold the units to APG City Walk LLC for $1.418 million, according to Manatee County property records.’

‘The condos are part of the 144-unit City Walk Condominium complex on Fifth Street West in Bradenton. City Walk was previously an apartment complex known as Cedar Tree Village Apartments. The complex is made up of 18 two-story buildings.’

‘The purchase is one of eight APG City Walk has made at City Walk Condominiums. County records show the company bought seven units from various owners in March for a total of $156,000 or an average of $22,285.’

‘Another company managed by Decklever, APG Florida LLC, purchased another 26 units at City Walk beginning in 2011, according to county records. In the latest transaction, the average price paid per unit was $14,180.’

‘That price is not only below the $74,212 average sale price in the fourth quarter of 2013, but also below the average asking price, which was $35,294.’

‘Sharff filed for bankruptcy in July 2009. At the time, he listed more than $22.9 million in liabilities and $53,000 in assets. County records show that he first bought into the City Walk complex in 2001.’

Comment by Ben Jones
2014-05-01 07:14:31

Here’s another reason why Case-Shiller is worthless:

‘South Florida home prices slipped 0.2 percent in February from January, but remained 16 percent higher than the same time in 2013, according to the S&P/Case Shiller Home Price Index released this morning.’

‘Of the 20 metropolitan areas measured by the index, 13 saw lower sale prices in February from January. Economist David Blitzer said the annual increases cooled the most in February that “we’ve seen in some time.”

“Despite continued price gains, most other housing statistics are weak,” said Blitzer, chairman of the index committee at S&P Dow Jones Indices. “Sales of both new and existing homes are flat to down. The recovery in housing starts, now less than one million units at annual rates, is faltering. Moreover, home prices nationally have not made it back to 2005.”

This is the disconnect; the prices were OK in 2005, but it was the loans that were bad. The banks were full of bad guys back then, but the prices were fine. As a matter of fact, house price cannot go high enough; it’s is an economic “good” when house prices go higher, no matter what people earn or can afford. You’re an idiot Dave.

Comment by snake charmer
2014-05-01 12:59:34

Higher asset prices are supposed to substitute for not getting a raise.

Comment by Ben Jones
2014-05-01 08:03:00

‘We are so lucky to live in such a luxurious age of wealth, comfort and refinement. A time when just about everyone gets to live in a luxury home or apartment. Can’t imagine how our grandparents got by in their merely ordinary flats, capes and ranches.’

‘Luxury is the most overused and vapid adjective right now in real estate, plastered on ads for everything from boring suburban rentals to nice, attractive but thoroughly middle-class homes.’

‘I found this $539,000 listing for a modest, four bedroom colonial in West Roxbury under a compilation of “Boston luxury homes” on Zillow.’

On this:

‘how our grandparents got by in their merely ordinary flats, capes and ranches’

It’s the same houses. The only difference is that you grandparents paid $50,000 for the things.

Comment by Bubblemania
2014-05-01 12:18:17

So glad to see you posting or commenting on articles in Florida. I have been reading your blog since i think 2007 regularly, but stopped in the past few years but have since started now that I see a new bubble forming here. Your blog helped me avoid major financial mistakes in 2008 during which time I was actively buying preconstruction and condo-conversions. I really thought I was going to retire early due to price appreciation and all that. Fortunately, I bailed out of most of my investments before it was too late. I wound up breaking even even though, at one point, I had 5 homes either under contract or pending.
Now I see a similar frenzy here in west palm beach.
I believe west palm and all of South Fl will begin to experience a similar fate that other bubble2008 areas like CA and AZ are experiencing now. In S Fla, a “switch” was turned on in Dec. 2013, to quote a realtor client of mine and prices soared 10-20% in good 3/2 subdivisions in a few months. This, after a 10-15% runup in the prior year. Condos and townhomes still flat with maybe a 10-20% runup total appreciation in the same time period.
I believe that S Fl is about 8 months behind the decline we’re having in the West Coast but we will see it soon.
A large % of the homes bought here in the past year are by Canadians and investors.
When prices ease, I think a lot of them will consider liquidating to preserve some yield, which coupled with the fact that there is still a lot of prior owner occupied foreclosed dwellings in the shadows, you will see a return of 2010 pricing soon.
Housing Analyst…keep up with the Fl stats. Even though I think the data is sometimes skewed or erronius from the website you link from, it’s still a good barometer to see trends.
Anyone remember a housing analyst/economist Named Jack Mccabe? Back in the day he was even more vocal than you, Ben, in predicting a housing collapse in Fl and elsewhere. I recently read an article in the S Fl Biz Journal and he is NOW predicting a healthy housing market with price appreciation in the short and long term future here in Fl. I remember back them he stated in a newspaper interview that when the market tanked he would create some kind of hedge fund and buy up a lot of properties once prices tanked. My guess is, now he has a lot of skin in the game, and is cheerleading much like Sean Snaith (Orlando economist for NAR) did in 2008.
Anyway, I am hoping for a correction back to the old lows, because I wouldn’t mind buying down here, but I will eagerly wait…

Comment by Ben Jones
2014-05-01 12:29:02

He has this quote in the Sun Sentinel article:

“It will still be a very good year, but it just will be slower compared to last year,” said Jack McCabe, an analyst in Deerfield Beach. “Last year was artificial.”

He has been very critical of the hedge funds driving up prices in Florida. And I read the other day he is calling a bubble in a couple of places like California. I don’t think he’s said that about Florida. Good to see you post again!

Comment by Bubblemania
2014-05-01 12:53:09

While that quote might be accurate Ben, just see if you can link to this
Here he is touting the viability of REITs

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Comment by Bubblemania
2014-05-01 12:56:31

How can an analyst say on one side that appreciation is artificial and on the other side say REITS are a good investment for 3 plus years.. he definitely has skin in the game and is cheerleading for S Fl.

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Comment by Rental Watch
2014-05-01 14:16:41

REITs are not the same as single-family homes.

BTW, when I think if REITs, I think of commercial property (industrial/retail/office, etc.), NOT the new single family rental REITs, or apartment REITs.

For several years, during the weak economy, there were high vacancy rates for various property types, which drove down rents. And in fact, market rents were so low, and demand was so weak, that construction slowed to a crawl. Very little new supply was built.

As such, the cash flow from the REITs fell, and their stock price fell to reflect these new, lower rents. Most tenants sign up for 3-7 year terms on their leases, so, even if market rents rise, it takes a while for those market rents to make it throughout a REIT portfolio.

The downturn lasted long enough that a high percentage of most REIT’s leases were reset to the new, lower level of market rents.

Fast forward to 2013. Vacancy rates have now fallen in many product types to much lower levels where landlords now have pricing power again, and so landlords are starting to raise rents on tenants when their leases are set to be renewed. However, market rents need to rise a fair bit before they justify new development.

Also, since the value of a leased building is based on the yield it generates, if interest rates and cap rates rise, rents will have to be higher still to support new development.

Because the downturn was so prolonged (a “U” shaped recovery, not a “V”), it will take a long time for the low-rate leases in a REITs portfolio to be reset to higher levels. As such, most people expect there to be a multi-year run upward in REIT income and rent levels.

Key to the multi-year view on higher REIT income is the fact that it takes that long to move their existing tenant base to higher market rents. It is different for apartment REITs, that generally can adjust rent every year–and apartment REITs also benefit from the subsidized debt of Fannie/Freddie, which may not always be around.

Are REIT yields lower than they would be without the Fed intervention? Yes. However, the rent growth could be substantial and more than make up for yields increasing (again, higher yields will result in higher rents, which will help offset the higher yields of REITs).

For SFH, the market can be much more volatile, as changes in sentiment and supply could have a much greater negative impact on prices given that we have “rebubbled” already in many markets. My flashing red light for Florida is the amount of vacancy in the market…an indicator to me that there is simply too large of a supply of shelter relative to bodies that wish to occupy it. As this supply re-enters the market, it will soften the market…only if the supply re-enters over a long enough period of time the softening in prices will be less pronounced (which is certainly a possibility given how long it has taken so far in FL).

Full Disclosure: I was personally long commercial property REITs going into 2014 (that I acquired in 2008-2010), and got even longer specifically with industrial REITs in early 2014. Unless prices go really high really fast, I intended the industrial REIT trade to be a 3-5 year hold, since generally industrial leases are 3-5 years in length (and that will be the length of time it will take for all the leases to move to market).

Comment by Housing Analyst
2014-05-01 14:32:38

Regarding movoto….

Their data is the most recent and relavent data available.

Comment by Bubblemania
2014-05-01 14:40:21

Hi RW. Good insight but I think the REITs I am talking about and
Mccabe was talking about on that Newsmaxx story was mostly for SFH in S Fla and in other states. Not so much commercial. Commercial will usually lag residential, as was evident in the prior bust. My point was how could a reputable economist like McCabe say that REITs in general will perform well for 3-4 years- and outperform the stock-market- when he admittedly says that the run-up in prices is artificial and has been for some time. yields mean nothing if the underlying asset is overpriced imho. Unless you can sell quick

Comment by Bubblemania
2014-05-01 14:52:33

Actually RW, you were right, REITs are predominantly commercial, I think I was mistaken by conflating REITs with hedge funds. I love Wikipedia. Since commercial does lag the RE market, maybe McCabe was right that REITs might be good for a couple years. Think I’ve had too many beers this afternoon and feeling a bit to conspiratorial. There should be a fine for BUI. Blogging Under the Influence!! Anyway cheers.

Comment by Bubblemania
2014-05-01 15:16:09

Housing Analyst–I agree the info is relevant and recent but the picture you paint on a regular daily basis that “inventory is up 50 or 90%” and prices “down by 10 or 20%” on a daily basis is selective and skewed by the fact that the number of homes in the region you are referring to is small, the median is skewed, and the price per sq ft is unchanged in many of your posts. I believe the prices in many bubble areas will crater back to their previous lows but in reality, it’s not happening just yet, but it will. Prices are down in some bubble areas and overall by less than 5 or 10 %. Just so you know, I like your posts and hope you keep it coming, especially in Fl where I think there’s a world of hurt coming for some folks I know and like and feel sorry for, because they got caught up in a frenzy that will result in them overpaying for an asset by 20% because they listen to Jokers like Jim Cramer or CNBC or their realtor “friend”. With friends like that…

Comment by Housing Analyst
2014-05-01 15:50:03

At what point do you stop sampling? Until you get to your desired outcome like our blog liars? Nope. Doesn’t work that way. And youve been following my posts long enough ;) to know how the $/sqft works.

Comment by Bubblemania
2014-05-01 16:41:11

Hey HA, I have not followed your posts in total, so maybe I don’t know how the $/sf works. I’m not an expert, just an educated observer in South Florida. But let me ask you, if you come across data that is contrary to prior data you post, will you post it? Are you selective in your postings? If you find an area of the US in a bubble area that has not had YOY decline in sales price or a stagnant inventory will you post it? Just asking. PS. Not being a jerk here, just saying my mind.

Comment by Housing Analyst
2014-05-01 16:59:32


Comment by jose canusi
2014-05-01 08:33:52

Anecdote from the ground here in this part of Florida: three houses went up for sale in our neck of the woods. One sold, the other two are languishing more or less, rather overpriced for what they are. Last year one homeowner in the nabe got lucky and sold his place for a relatively high price, so now everyone wants to get the same. The thing is, this sort of tells me that the peak was in December 2013. There’s been moderate traffic in and out of these places, and it looked as if one may have sold, but now it seems the deal fell through.

Meanwhile two places across the street have been more or less abandoned to the banks, which send their property preservation folks by every once in a while to check up. Been a year or more. These should have been sold long ago and in another time, they would have been.

Comment by Ben Jones
2014-05-01 08:41:47

Yeah, there’s no shadow inventory. That’s why banks are fighting in court for this:

‘It turns out the court decision could make it easier for the banks to extend the traditional five-year limit indefinitely’

Comment by Housing Analyst
2014-05-01 08:51:32

I know I’m singing to the choir and if I’ve said it once I’ve said it 1000 times but it needs to be stated repeatedly….. The excess empty and defaulted inventory is huge….. Its not going to disappear magically nor has it been sold. As the boomer pig moves thru the python, many more millions of excess housing units will empty.

Comment by Mr. Banker
2014-05-01 08:55:25

“… banks are fighting in court for this …”

The banks are fighting for the children.

Comment by Ben Jones
2014-05-01 09:04:18

How come no one ever asks why?

‘Records show the actor quit paying his $1.2 million mortgage in 2010, and Reynolds’ lawyers since have been trying to make the process last as long as possible. But while, in the past, they could’ve hoped for a resolution as the statute limitation would’ve run out next year’

(First of all, what does statute of limitations have to do with anything?)

The bank only has to file the claim and act on it. They’ve got over a million bucks tied up in this shack, and they don’t follow through for 4 plus years? Why?

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Comment by Bubblemania
2014-05-01 17:37:36

I’m from this area in Hobe Sound and Burt has defaulted on the Jupiter Theatre as well as his “tree house” in Jupiter farms that he bought for Loni Andersen that he divorced years ago, Surprises me none that his “hideaway” in Hobe sound is now defaulted. I’ve been there, as a worker about 10 years ago. A bug sprayer. Nice place, gym, sauna, all the works. Not worth more than 2 mil now-no way

Comment by Rental Watch
2014-05-01 14:27:14

“Yeah, there’s no shadow inventory.”

Florida has about 1/3 of all US zombie foreclosures (empty homes that are going through the foreclosure process);

A rental vacancy rate of about 10% (vs. US average of 8.3%);

A homeowner vacancy rate of about 2.5% (vs. US average of 2.0%); and

A non-current loan rate of 12.9% (including 6.5% of all mortgages that are in the foreclosure process), vs. the US average of 8.2% (of which 2.2% are in the foreclosure process).

Florida is the poster child for “shadow inventory”…there is PLENTY there.

Comment by Housing Analyst
2014-05-01 14:35:17

By volume, California comes in first with 4.4 million excess empty and defaulted houses

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Comment by doom
2014-05-01 15:13:00

Of course CA comes in first, it is ten times bigger then most places?

Comment by Housing Analyst
2014-05-01 15:28:40

10x more poverty maybe.

Comment by Rental Watch
2014-05-01 17:49:09

And the pattern continues…my data from named sources.

RealtyTrac (zombie foreclosures)
Census (vacancy rates)
LPS (non-current loans)

HA’s data from an unnamed source–and is inconsistent with the three sources I note. Yet he won’t say where he gets the data.

Comment by Housing Analyst
2014-05-01 17:56:50

It’s been posted how many times now? You just don’t like it.

Comment by Bubblemania
2014-05-01 17:18:45

uh yeah

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Comment by rms
2014-05-02 00:26:45

“Florida is the poster child for “shadow inventory”…there is PLENTY there.”

The typical 3/2 spec in Florida fetched half of California’s lofty sale price at the bubble’s peak; larger losses for the left coast. And no irrigation water to farms in the Central Valley this year may provide the economic laxative to unclog the shadow inventory in the region as asset values continue their descent.

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Comment by Bubblemania
2014-05-01 14:07:37

I posted about this a few weeks back. My own employee, who has worked for me for 7 years has lived in a 3/2 in Wellington Fl and paid not a dime for the past 5 in mortgage payments. Only HOA. yet across the street from her, there was a bidding war for a similar 4/2 in March. The price runup was over 20k over the asking price. How can this be? I think the final bidder would like to know that right across the street from them is a shadow property. If thew knew, would have there been a bidding war? Duh!

Comment by Ben Jones
2014-05-01 08:51:25

‘Despite the Dow Jones industrial average reaching a new record high, Richard Ross, global technical strategist at Auerbach Grayson, says certain technical indicators are calling for a serious correction. Ross sees a big problem with the S&P 500’s chart—a 20 percent problem to be exact. In 2011, the index corrected by about that much to its 150-week moving average after making moves very similar to its most recent price action.’

“I think that we’re in exactly the same scenario,” said Ross, who notes that a similar decline to the current 150-week moving average would also be roughly 20 percent to around the 1,500 level.’

‘Gina Sanchez, founder of Chantico Global, Sanchez says the recent weakness in housing is sounding the alarm for investors. “If you look at the pillars of the economy that should be holding us up, one of the biggest that’s been doing poorly is housing,” Sanchez said. “If we see further (declines) in housing, that could be very negative.”

Comment by Bubblemania
2014-05-01 15:39:38

TheReal Estate and Equities bubble are interdependent and the FED knows it.

Comment by Ben Jones
2014-05-01 09:14:50

‘U.S. banks are easing credit standards in search of a safe and profitable middle ground after an era of reckless home lending gave way to the stiffest rules in decades, putting a damper on the housing recovery.’

‘Lenders rode a wave of refinancing until a spike in borrowing costs last year gutted demand, forcing the biggest banks to cut more than 25,000 mortgage jobs. Now they’re removing barriers to mortgages for some borrowers in hopes of reviving a shrinking market.’

“We threw the baby out with the bathwater because we had to,” said Rick Soukoulis, chief executive officer of San Jose, California-based lender Western Bancorp. “From there, you start to inch back. If you keep selling only what isn’t selling, you’re just dead.”

Comment by Ben Jones
2014-05-01 09:27:19

‘San Diego County’s new-home prices are escalating faster than in the resale marketplace, causing a slowdown in new homes, said Russ Valone, president and CEO of MarketPointe Realty Advisors. Valone was joined by Alan Nevin, director of economic and market research at the Xpera Group, to present an economic forecast.’

‘The average price of a new, detached home in San Diego County is about $800,000, while a resale detached home averages about $450,000, Valone said. At the end of 2012, the gap between the price of resale and new detached homes was $223,459 — and now that gap has reached the high $300,000s.’

“What’s the impact of that growing gap?” Valone asked. “Well, I’m the guy looking to buy a new home and all of a sudden I’ve gone from a conforming loan to a nonconforming loan. So I’m now getting stuck with a little bit higher interest rate. And interest rates in the last year have gone up almost one point. All of a sudden the affordability index starts to push us, and that’s why we’re starting to see a slowdown in the new-home marketplace.”

‘Resale prices are increasing, causing investors — who fueled the resale housing market in the recent past — to move on.

“Because he can’t make the return on his investment as rapidly as he could do during a time when the market was trending downward, bumping along the bottom or coming back up,” Valone said.’

‘There is an “interesting situation” in the county, Nevin said, where 20 percent of all single-family homes and 43 percent of condominiums are owned by investors.’

“And this year they’re going to start taking their profits, and when they do that, that will open up the inventory a lot more and we’ll have a lot more to sell than we have in the past,” Nevin said.’

‘When the investors start selling properties that are mostly renter occupied, they will push those households into the institutional rental marketplace, Valone said. Nevin agreed, adding that there is are more than 150,000 homes and condos that are investor owned, and when those are sold all of those people will have to find another place to live.’

Comment by Bubblemania
2014-05-01 13:57:52

“At the end of 2012, the gap between the price of resale and new detached homes was $223,459 — and now that gap has reached the high $300,000s.’”
What this is saying is that the “benefit” of owning a new home vs an old home is close to 400k. I guess homes do depreciate after all, at least in San Diego…

Comment by Housing Analyst
2014-05-01 14:39:00

“I guess homes do depreciate after all, at least in San Diego…”

Everywhere and the losses to depreciation are always understated.

Comment by Bubblemania
2014-05-01 15:31:14

Yes HA. “Understated” by all the cheerleaders in the media who gain from home sales and price increases. This includes all media, especially print media that composes “articles” that are really advertisements for builders and local taxing authorities. I’m sick of this crap. If you don’t think the Palm Beach Post here in WPB is in bed with local builders or the property appraisers office, then I have some land to sell you…right down the street!

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Comment by Housing Analyst
2014-05-01 15:59:25

Nothing to be angry about. Just expose the fraud to the public.

Comment by Ben Jones
2014-05-01 09:49:55

‘One out of three Americans now live in a housing market where rent for a three-bedroom home eats up more than 30% of the monthly median income, the traditional threshold for affordability, according to RealtyTrac. And in some cities, residents are doling out a much larger percentage of their paychecks.’

‘In New York City’s borough of the Bronx, the typical household spends nearly 66% of their monthly income to rent a three-bedroom house — by far the highest percentage of any U.S. county, RealtyTrac found.’

‘Renters in Philadelphia, Brooklyn, Baltimore and Miami are paying nearly 50% of their income toward rent, RealtyTrac reported.’

‘Meanwhile, renters have been getting squeezed on another front: Real income — income after inflation is taken into account — has fallen some 14% over the past six years, according to Chris Herbert, the research director at Harvard’s housing studies center.’

‘In a report released in December, the center found that nearly one in four renters were devoting more than 50% of their income toward rent, forcing some to make “dire” cutbacks in spending on food, health care and retirement.’

‘When housing becomes this unaffordable, it starts holding people back, said Laura Bailey, the managing vice president of community development at Capital One. It can prevent a person from taking a lower paying job that offers more opportunity for advancement or from pursuing a degree that will enable them to enter a higher paying profession, she said. It can also inhibit them from saving money for a down payment on a home.’

“When they get affordable housing, their lives can take an entirely different, more productive path,” she said.’

Comment by Bubblemania
2014-05-01 16:27:10

I am a Realtor. I became one back in 2009 after the bust. I thought it’d be a good idea because there were so many realtors exiting the profession that I’d possibly make a few bucks on the side (my real job is a tax accountant CPA self employed for 11 years) . In the first year I sold a home to a tax client and rented a home to an employee’s mother and made a good commish on both deals. Both those people don’t talk to me now. The owner overpaid in 2010 and still hasn’t seen equity in the house and the renter underpaid compared to todays prices, but still wont talk to me because she only got it for 16 months and she was evicted as a renter because the property was short-sold.
So I lost a client and a potential future employee. The point is Realtors are stupid, as am I. I shouldn’t have co-mingled my services with one being reputable and the other…not so much…I am still a realtor but considered “inactive but current” by Florida licensing standards.
When I went to Gold Coast School of Real Estate in 2009 to get my license I had to take a 9 week course followed by an exam that they gave you 120 minutes to take.
It took me 9 minutes to take the test and I got a 99% on it.
The test was so simplistic and all the questions asked were the SAME questions presented in the class and repeated a dozen times…in class. Yet 40% percent fail this exam after spending 2 hours taking it and 9 weeks studying it. I remember fellow students not being able to do rudimentary math and they were in class for the 3rd or 4th time trying to pass!
I dont want to sound like an elitist, I passed the CPA exam and all, but if you can spend 9 weeks studying for a test that a barnyard cat can pass ans try multiple times and still fail 40% of the time…then I think the NAR needs to up its licensing standards.
This is my point.
Realtors are liars
Realtors are stupid
Realtors are smelly and fart a lot
(that last point isn’t true but sounded funny)

Comment by Housing Analyst
2014-05-01 16:43:56

Stick with the fundamentals;

-Grossly inflated housing prices 300% higher than long term trend

-Excess empty housing inventory in the 25 million housing unit range

-Collapsing housing demand to 20 year lows

-Housing and mortgage fraud in all 4 directions.

Comment by Bubblemania
2014-05-01 17:11:40

Stick to the new realities, A FED who will up its quantitative easing at a moments notice to continue this charade, HA . And don’t be fooled by thinking there are no more bullets up the FED”s sleeve. Even though Interest rates are at bubkus, There’s many more “easing” techniques at Yellen’s disposal. This will go on until the dollar vis a vis other currencies plummets. Fortunately for now, other major world currencies are in flux also.

Comment by Housing Analyst
2014-05-01 17:15:29

Got nothing to do with it.

Back to the fundamentals kiddo.

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Comment by Bubblemania
2014-05-01 17:46:16

You put the “mental” in fundamentals kiddo. What did I previously say that is not relevant?
Maybe some more quotes
I guess I need to copy and paste more kiddo.
Get back to original thoughts

Comment by Housing Analyst
2014-05-01 17:55:44

Movoto data enrages you.


-Grossly inflated housing prices 300% higher than long term trend

-Excess empty housing inventory in the 25 million housing unit range

-Collapsing housing demand to 20 year lows

-Housing and mortgage fraud in all 4 directions.

Now go.

Comment by Bubblemania
2014-05-01 18:12:47

It doesn’t engage me HA. It inspires me as well as a lot of other people on this blog. It makes me feel that I am not alone in my thinking that we are in an era of disinformation. and I applaud you for bringing it on!! But you would have more credibility if you would not selectively post stats that support your theorem. Instead post items that are unique to you. Commercial websites like trulia movoco, and zillow and their ilk are in it for a buck. I would presuppose you are in it for logic, reason, and truth.

Comment by Housing Analyst
2014-05-01 18:19:53

You’re enraged by movotos data. Enraged today, meltdown tomorrow.

Comment by Ben Jones
2014-05-01 18:20:00

Movoto’s numbers showed the situation we’re in now many months ago, when all the others were leading people off a cliff. I don’t know what’s different about what they are doing, but all these inventory increases, etc, were well captured by Movoto. Their numbers aren’t very useful in small markets like Flagstaff, BTW.

Comment by Bubblemania
2014-05-01 18:39:13

You think i’m enraged! HAHA. I’m on my 6th beer now. I’m ready for a nap or bedtime. Maybe tomorrow I’ll become enraged if I find out the Red Sox lost, but for now i’m just, sleepy…

Comment by Housing Analyst
2014-05-01 18:59:42

You’ll need it. Tomorrow there will be plenty more movoto data for you to review.

Comment by Bubblemania
2014-05-01 19:40:24

Keep cuttin n pastin

Comment by Housing Analyst
2014-05-01 19:46:26

keep shuckin’ and jivin’.

Comment by pazuzu
2014-05-01 18:18:35

The “profession” of Realtor is ideal for sociopaths for they are able to completely ignore the inherent conflicts of interest and parasitic nature of the pursuit. Sociopaths with some intellect will aspire to other areas of anti-social behavior. Thus with realtors we are left with materialistic dumbshits with no consciences but with enough animal cunning to screw their marks, er I mean clients, for the almighty commish. Anyway, that’s why the test is made so easy, yet still so many fail.

Comment by Bubblemania
2014-05-01 18:49:29

I guess by your definition I’m a sociopath Paz. No, I was an opportunist looking to create wealth at the expense of others. Big difference. I learned then and have confirmed now that the trade is like any other trade that unqualified people can get into and make a living beyond their skill set.

Comment by rms
2014-05-02 00:45:17

“I guess by your definition I’m a sociopath Paz. No, I was an opportunist looking to create wealth at the expense of others.”

… shift wealth at the expense of others.

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Comment by Ben Jones
2014-05-01 16:32:17

‘Flipped homes as a share of overall sales fell 83 percent in New Orleans in the first quarter compared with a year earlier. Other big drops included, Baltimore (down 81 percent), Minneapolis (down 80 percent), Richmond, Virginia(down 80 percent), Detroit (down 76 percent), and Washington, D.C. (down 73 percent).’

‘Other cities seeing big drops in flipping included New York (down 37 percent), Phoenix (down 39 percent), Riverside, California (down 22 percent), Atlanta (down 57 percent), Chicago (down 29 percent) and Las Vegas (down 9 percent).’

“The formula was just buy a house and let appreciation do the rest,” said RealtyTrac vice president Daren Bloomquist. “That’s not a viable strategy for the long term.”

Comment by Muggy
2014-05-01 17:36:34

I want a cheap house.

Comment by Bubblemania
2014-05-01 17:41:00

So do I. Ya got one Mug?

Comment by Bubblemania
2014-05-01 18:31:45

By the way Muggy, I remember you from years past when I used to read this board. You were always someone I would always take the time to read. I think cuz ur from florida too, right? Remember that woman? I forgot her name, she died some years ago, but was also a pleasure to read her posts? She had a way about her that made you believe a person could put their point across yet still be affable? She always made me laugh. What was her name? She posted here daily, if I remember…

Comment by Bill, just South of Irvine, CA
2014-05-01 19:19:57

OlymipiaGal was her name.

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Comment by Bubblemania
2014-05-01 19:41:58

That’s her! She was wonderful. I think from Washington state.

Comment by Mugsy
2014-05-02 03:55:27

I want the “precious” guy and Oil City to do comeback tours right here on the HBB!

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