The Housing Bubble

The Associated Press reports on Florida. “To motivate a classroom packed with 87 aspiring real estate agents, instructor Keith Grandy started off his one-week, intensive course with the promise of big money: With hard work, fresh licensees in the Miami metro area could make $100,000 a year if they complete at least two transactions per month, according to current property prices and commissions. The workforce in this field tends to expand and contract violently, mirroring the booms and busts that shock the housing market and the economy as a whole.”

“Gold Coast Schools of Real Estate saw its enrollment fall 70 percent during the housing collapse, director John Greer said. But enrollment was up 20 percent last year, driven by students dazzled by the chance at fat commissions. ‘The income is going to be great and I’m going to have my own schedule,’ said Katherine Sanchez, a 34-year-old nutritionist and a student in Grandy’s class.”

The Sun Sentinel. “Some buyers are solving their house-searching woes through prose. They’re writing notes to sellers, telling them how happy they’d be to buy their homes. The simple gesture is paying off in today’s ultra-competitive market, where inventory is tight and bidding wars are typical. Writing a letter probably is one of the easiest things buyers have to do to land a home these days, said Samantha DeBianchi, a Fort Lauderdale real estate agent. Sometimes even pets are part of the deal. One of DeBianchi’s clients had to adopt the seller’s cat as part of the purchase. The client was a dog owner, but she agreed to the deal. ‘This is just how it is,’ DeBianchi said. ‘Sellers are completely in control.’”

From Reuters. “As construction cranes crowd the coastline and developers strive to lure wealthy international buyers with brand name towers and lavish amenities, there are signs Miami’s latest condo boom has begun to slow and a possible oversupply could temper record prices. In downtown Miami, 90 percent of sales were international, primarily to investors, according to Integra Realty Resources and the city’s downtown promotion agency. However, the investor glut, slowing condo sales and plans for thousands of new units have combined to raise analysts’ concerns.”

“‘Because there are so many renters, foreign owners and new towers going up, rents are likely to fall, and that could prompt some (investors) to take their money off the table,’ said real estate analyst Peter Zalewski of CondoVultures. ‘This effect could be the beginning potentially of a sell-off.’”

From WMFE-FM. “Nationwide foreclosure activity is declining to rates not seen since before the housing collapse began in 2006. But in Central Florida rates continue to rank among the nation’s worst. The problem extends from Orlando to Melbourne, Daytona Beach, Ocala and Lakeland. Paul Kellogg is a civil engineer who was designing subdivisions when he lost his job in 2009. A year later the bank foreclosed on the Sanford home where the family had lived for 15 years.”

“Judie Kellogg’s lowest point came while she was on the phone one day inquiring about food stamps. She was in her car, and it was pouring rain. ‘The lady goes, Well, are you homeless? And I said, Excuse me? And she said, Well, let me give you the definition of homeless. You don’t own anything. You don’t have a permanent residence.’ That’s when it hit her. ‘And I said, Well, I guess I’m homeless. I’m sitting in my car with pretty much everything I own, and I don’t know how long I’m going to be able to stay where I’m at. So yes, I’m homeless.’”

The Palm Beach Post. “Hundreds of South Florida residents are facing new foreclosure ramifications as banks seek to collect on the unpaid mortgage debt from homes that were lost years before. In a month-long period beginning June 1, about 110 so-called deficiency judgments were filed against Palm Beach County homeowners by a Texas-based debt collection company called Dyck O’Neal. The same firm filed more than 300 cases in Broward County and nearly 200 in Miami-Dade County.”

“After seeing nearly no deficiency judgments since the housing crisis began, South Florida foreclosure defense attorney Roy Oppenheim said he’s been contacted in the past two months by about 50 people served summonses by Dyck O’Neal. ‘To me, these people are vultures,’ said Miami resident Chris Ossman, who was served this summer with a deficiency judgment lawsuit seeking about $84,000. ‘I imagine they are looking for people getting back on their feet who they think they can get some money from.’”

The South Florida Business Journal. “Peter Zalewski, the man widely known as the Condo Vulture for his website chronicling how to capitalized on South Florida’s real estate crash, now knows what it’s like to be on the wrong end of a foreclosure. Zalewsk called the foreclosure of his Miami Beach condominium unit a ‘business decision.’”

“Zalewski paid $265,900 for the 943-square-foot unit in 2004 and obtained a $212,700 mortgage, plus a $52,800 second mortgage. Zalewski said he’s been quietly marketing the condo and kept it off the MLS to avoid publicity and get a better deal. He’s confident that the unit will sell for more than its mortgage. The county property appraiser valued the condo at $264,630, and he believes its true value is more than that.”

“So why not pay the mortgage until the unit is sold? ‘As part of the sales process, I’m making a business decision and, ultimately, I’ll deal with it in a business way,’ Zalewski said. ‘If I sell this condo, and I will, this all goes away …. I will still have black eye from it, but it will all play out.’”