Florida Home Sellers ‘Go For Quicker Results’
The News Press reports on auctions in Florida. “Dan Mahaney estimates he got three calls from Florida residents last year. Now, he’s getting at least 15 calls a week from people desperate to sell their Sunshine State real estate. ‘Fort Myers is really picking up,’ he said, as is the rest of the state.”
“Mahaney is an operating partner and works as an auctioneer and broker. ‘It’s an accelerated way of selling real estate,’ Mahaney said. ‘As you see the market slow, people are forced to go for quicker results.”
“‘People are looking for the quickest way out,’ he said. One investor recently sold a home in Fort Myers for less than he bought it for. ‘He just wanted to get rid of it and stop the bleeding,’ he said. In addition to lots of interest from Southwest Florida home sellers, he’s gotten a lot of calls from people in the Tampa Bay area as well as the Panhandle and Miami. He said he expects to double the number of Florida homes auctioned soon.”
The Herald Tribune. “Home builders nationwide are ‘taking a page from Detroit’s playbook,’ offering cash equivalents to ‘move merchandise,’ said (economist) Paul Kasriel. Nowhere is that more evident right at this moment than with Miami-based Lennar/US Home, which has..discounts ranging from $20,000 to $157,000 for homes in developments stretching from northern Manatee County to North Port.”
“Take the four-bedroom, two-bath near the Manatee River: it is offered at $120,000 off the $499,900 house, more than a 24 percent cut in the price. Or the Chatham in North Port, with $157,000 off the $656,900 four-bedroom, three-bath house, likewise a 24 percent drop.”
“The price-cutting gives consumers an unusual look at the kind of profits some builders have enjoyed. Many of the high-end custom builders are finding sales off 50 percent, but are riding it out with backlog orders and the profits they made during the recent record market.”
“But inventory builders like Lennar/US Home, particularly those that answer to public stockholders, need to keep homes moving to keep cash flowing. Discounting is normal, says Michael Carliner, an economist with the National Association of Home Builders, ‘but in Florida what we’re seeing is beyond normal.’”
“In some markets, but not in Southwest Florida yet, Lennar/US Home is offering new buyers some assurance that their price is protected, meaning if the company sells a similar home nearby for a considerable discount, it would compensate that new buyer for the difference in prices. ‘It’s definitely a sign of distress in the home building sector,’ Kasriel said.”
“The fear of a sudden ‘paper loss’ has caused some buyers to try to wait out the market until it gives back some of the margin to entice buyers to take the plunge.”
“‘NO DOWN PAYMENT! NO CLOSING COSTS! NO KIDDING!!’ goes the pitch from Morrison Homes, which is trying to move new houses in Manatee and Sarasota counties. Tammy Lynch, Morrison’s Sarasota division president, says that some buyers with credit scores as low as 580 can get financing. Besides the financing package, Morrison is throwing in at least $25,000 more in savings on a $350,000 home.”
“To Kasriel, the seller is saying, effectively, ‘You can rent this house with an option to buy’ for $1 and if it does not work out, ‘Give the keys to the lender on your way out.’”
Ironically enough a friend of mine who I worked with years ago at a bank and I were having another discussion about topics relating to this article early last week at lunch. We agreed this is the tip of the iceberg as there is a ridiuclous amount of new home inventory and they are still building to complete existing orders. Still not a good time to buy even if they are cutting their prices by 24%. I wonder how long it will take for them to reduce further as we are only at the end of the 2nd quarter. This is going to be a bloodbath for the “mom and pop” buildersas well. Also I particularly enjoyed the comment about insight into builder profits and I think this will open some buyers eyes about buying new construction at this point in Florida.
I am betting on some dismal numbers on 6/27 from FAR on the existing sales from May.
Still renting and my wife and I are still thinking mid to late 2007 before we even consider a buy.
Did I get the 1st post?
Looks like it. Time to have a Pee-Wee Herman “word-of-the-day” moment.
I agree with your inventory comment. I think the last week or so the market has just sort of taken a deep breath, and come post-July 4th, we’ll really start to see an inventory funhouse.
absolutamente.
Young people are leaving california in droves. They realize they will never own here so why hang around and rent forever. They want a home to raise families and the dream is hard to realize in cali. I was born here and I’m disgusted with what has happened here. Would much rather buy in other state that is affordable.
I get upset with that too at times.
However, I try to talk myself down off the ledge.
This is how the cycle plays out. CA gov’t knows it. CA businesses knows it. And if you want to own a home in CA you have got to know it and be patient enough to play the cycle.
It isn’t young people, it is productive people and asset fat people that are leaving in droves to be replaced by 3 unproductive assetless people with massive public service demands. Amgen announced yesterday that it is “expanding” “portions” of its corporate functions not in Thousand Oaks but Colorado. Ever wonder why so few corporations are located in California? Business hostile, productivity hostile, success hositle is understatement.
I think it is also young people who want a better life who are bailing out of california. There is a better life elsewhere. California is running business out of the state. Companies are looking for places where employees can afford to buy homes.The red tape is just ridiculous out here.
Unproductive young people seem to be staying. Some on the 7 year community collge plan for instance. Here’s a real youth drain: http://tinyurl.com/z66b8
Upstate New York is staggering from an accelerating exodus of young adults, new census results show. The migration is turning many communities grayer, threatening the long-term viability of ailing cities and raising concerns about the state’s future tax base.
From 1990 to 2004, the number of 25-to-34-year-old residents in the 52 counties north of Rockland and Putnam declined by more than 25 percent.
Don’t forget less than 50% White since 1998, and still dropping. Last one to leave, take down the U.S. Flag.
That would be less than 50% Caucasian non-Hispanic.
With the high rate of foreclosures in Colorado, Amgen’s CA relocation department should see their task as light duty.
Los Angeles existing home sales seem to headed in that direction. Inventory has increased 50% since January. Pace of sales has slowed considerably. Prices are coming down.
“Kevin Gill, a mortgage broker in Bradenton, is optimistic that the future rate of foreclosures won’t increase. ‘People want to move here. People want to live here. There’s never going to be a housing bubble in Florida or California because the demand here is too great.’”
FIRST!
“South Florida,” he said, ”is working off of a totally new economic model than any of us have ever experienced in the past” according to a realtor who predicted that a land shortage will support higher prices indefinitely.”
- New York Times, Trading Places: Real Estate Instead of Dot-Coms, 3/25/05
buy the saturday palm beach post. over 130 listing of housing developments from boca to vero. and prices are dropping, just not fast enough or affordable. if half of the population makes less than 50,000 and the banks are not giving people adj or exotic loans? can you say 50% decrease in housing!
http://www.gold-eagle.com/editorials_01/seymour062001.html
There truly is nothing new under the sun. Here are some quotes from pompous (and horribly wrong) “experts” from the 1927 - 1933 era. Sound familiar?
It’s funny how quickly it does happen. I went through a phase (summer 2004) when I thought RE was way past the popping point and was going to fall quickly, like the last bust. When that didn’t happen, I thought maybe it just deflates like Japan over 1.5 decades. Now, I’m thinking that the first guess was accurate. I love seeing these Florida articles, since Florida is another megastate with mostly awesome weather, and therefore compares well to California, where I rent.
‘He just wanted to get rid of it and stop the bleeding,’ he said.
Smart man, smart move. He gets it, now we need the other 99.99% to say GMTFO!
Simmssayss…enema bag as jewelry?
http://www.americaninventorspot.com
SOrry for the off-topic, but I have a fate worse than death: Relocating to San Jose from Phx for work. Needless to say, I shall rent. Can somebody suggest best website in that area to locate a condo for rent?
azhousing.com has some rentals in the area.
Sorry for the off-topic: I have the pleasant (not) task of relocating to San Jose from Phoenix for work. Can anyone suggest a good website for locating condo rentals? Thanks
http://sfbay.craigslist.org/sby/apa/
OT (sorry), but I wanted to comment that I’m seeing homes go under contract quicker than I have been seeing since the beginning of the year (at least the homes I’ve been watching). Question: is June a common month for people to quickly snatch up homes (maybe to ensure their kids can be settled in time for the upcoming school season)?
Yep
I wonder if the realtors are including the builder discounts in the numbers they have been reporting on prices ? If the realtors reported the incentive kickbacks the price cuts would reflect a much lower figure also .I think the incentives could amount to 10% given back in the last five months in California ,etc. making the true figures at a minus year to date from 2005 peak .
The point is ,if the seller gets 10% less in his pocket at closing because of all the incentives and kickbacks thats a price reduction .
I want incentives reflected in the NAR reports and I think its fraud not to report it as a loss to seller appreciation gains .
It isn’t young people, it is productive people and asset fat people that are leaving in droves to be replaced by 3 unproductive assetless people with massive public service demands.
Robert, AMEN to your statement. I agree with this 100%. My wife and I are two of the productive people (master’s degrees with professional jobs) that left because housing was too expensive. Now live elsewhere. Many more like us have left. I am sure a few welfare folks have replaced our headcount there.
It isn’t young people, it is productive people and asset fat people that are leaving in droves to be replaced by 3 unproductive assetless people with massive public service demands.
Robert, AMEN to your statement. I agree with this 100%. My wife and I are two of the productive people (master’s degrees with professional jobs) that left because housing was too expensive. Now live elsewhere. Many more like us have left. I am sure a few welfare folks have replaced our headcount there.
I mean no disrespect to you or your wife when I say that some of the worst parasites of my acquaintance have higher degrees and “professional” private sector jobs/businesses.
it would be nice to get good numbers from someone,i have been relying on dqnews,which shows a may median in sonoma county ca of $532k…however our local paper today reported a may median of $603k,”information provided by rick laws of coldwell banker in santa rosa” mr laws is a realtor and a licensed real estate broker…..mr laws appears to have made a material misrepresentation of the facts…does anyone out there know if this is actionable,or if it could subject mr laws to discipline by the california DRE or the ethics board of the CAR or NAR…i keep hearing ads about how ethical realtors are…..and think it would be amusing to see how they react when a complaint is filed,and publicized.
Tom,
A couple quick thoughts:
1) Napoleon is purported to have said, “Never ascribe malice to what can be explained by incompetence”. I think we can all agree that many RE “professionals” are innumerate based on their comments. The truth may be that they can’t calculate a median.
2) We don’t know if they are using the same dataset. If it’s different, and the dataset is small, a single data point or two could substantially move the median.
3) Can we ALL stop focusing on the median price, please? As a case in point, I was driving around the mid-Peninsula area today and saw numerous open house and for sale signs on typical family houses — and very few sold signs. In Hillsborough (one of the most expensive areas in the entire country) I saw many sold signs and few for sale signs. Those few solds will move the median — but the underlying (and important) fact is that much housing is sitting.
Back from a business trip in Dallas. I think they are definitely running out of land in Texas - so prices should continue to go up indefintely (according to local Texans, realtors, etc…).
I have a condo in Jax Bch in a 40 unit complex. There are currently 6 units for sales and all 6 have been on the market for 3-5 months without any traffic. People held there prices for the entire way until this past few weeks. Now 2 units have lowered their prices 20K (now 279,000 from 299). Both families that are selling the units and lowered their prices already bought another home. Maybe people will be more careful about buying before selling going forward.
It seems to me many have hit the tipping point and are now starting to panic or worry more and more. I don’t think we are at the panic stage yet but it is coming soon. Hopefully BB will not fold like a deck of cards and pause.
The Herald Tribune. “Home builders nationwide are ‘taking a page from Detroit’s playbook,’ offering cash equivalents to ‘move merchandise,’ said (economist) Paul Kasriel. Nowhere is that more evident right at this moment than with Miami-based Lennar/US Home, which has..discounts ranging from $20,000 to $157,000 for homes in developments stretching from northern Manatee County to North Port.”
ANYONE considering buying a Lennar home needs to read the articles on Mish’s site concerning Mike Morgan andf Lennar. To make a long stroy short, Martin County is considering an order STOPPING Lennar from building any more homes until they address the complaints brought by exisiting homeowners.
http://www.hobb.org/index.php
Here’s more on Martin county’s moves against Lennar Homes, as well as more information on shoddy new-home construction horror stories.
“Take the four-bedroom, two-bath near the Manatee River: it is offered at $120,000 off the $499,900 house, more than a 24 percent cut in the price. Or the Chatham in North Port, with $157,000 off the $656,900 four-bedroom, three-bath house, likewise a 24 percent drop.”
http://www.flickr.com/photos/ulrichp/1362599/
“Oh, the huge manatee!”