“Speculators Face The Music” In Florida
The Herald Tribune reports from Florida. “Sarasota-Bradenton home sellers are cutting prices so aggressively that the median sales price was 18 percent lower this November than last, the biggest drop in the state. The median sales price for Sarasota-Bradenton fell from $343,600 in November 2005 to $281,900 last month.”
“After asking $549,000 for their Venice home starting in June, Cindy Gerber said she and her husband did a discount MLS listing of their own at $397,000. They really needed to sell, since they have purchased an English Tudor near Johnson City, Tenn.”
“‘We needed to move on, and we said, ‘The only way to do it is to take a loss and go,’ she said.”
“The Charlotte County market has so frustrated Dave Bonham that he moved his family to Idaho. He has been trying to sell his house since August 2005, and so far all he has to show for it are four price reductions and one failed deal. ‘We just had a little bit of poor timing there,’ said Bonham. He got it appraised for $285,000 and listed it for $279,000. Two expired listings and an attempted auction later, his price is $219,000.”
“‘Nothing has really changed as far as people moving here,’ said Bonham. ‘The difference, is where each buyer had three houses to choose from, suddenly each buyer has 30 houses to choose from.’”
The Miami Herald. “South Florida home sellers dropped prices last month to combat a buyer’s market that has taken firm hold of the real estate industry this year. ‘If you look at the skyline, a lot of those buildings have not been finished,’ real estate analyst Jack Winston said. ‘We know 70 to 80 percent of those buyers were speculators. They’re going to have to face the music.’”
“Broker Andy Weiser recently closed a deal for a condominium in Fort Lauderdale’s upscale Victoria Park neighborhood that sat on the market for eight months with a $319,000 price tag. When the seller agreed to drop the asking price down to $295,000, the two-bedroom unit sold within two weeks for $290,000.”
“‘If sellers aren’t repositioning their property to reflect current conditions, they’re out of their minds,’ said Weiser. ‘I’m pricing things approximately 10 percent less than I was pricing things last year, which doesn’t make everyone happy — especially if you bought last year.’”
The Ledger. “Polk County’s existing home sales have: dropped, declined, slumped, plummeted, fallen and tanked. How ever you want to describe it, the sales figures have done it for the sixth consecutive month. ‘It’s obvious we have a lot of inventory,’ said Meg Loftheim, a Realtor in Lakeland. ‘We have buyers out there, but I get the feeling that they are waiting for something to go lower.’”
From Florida Today. “The median sales price for an existing single-family house in Brevard County was down 18 percent from $248,700 in August 2005, when local housing prices peaked, statistics show.”
“In many cases, people ‘have to realize they can’t sell their house for what properties have been selling for in 2004 and 2005,’ said Betty McCluskey, broker in Suntree. ‘They have to be realistic, and bring prices down to attract buyers, because there’s a vast inventory of houses and so much competition.’”
The Sun Sentinel. “Broward County existing home sales and median prices kept declining last month. The county’s median price was $362,000 last month, down $29,100, or 7 percent, from a record $391,100 in November 2005. As the inventory of homes piles up, many sellers are getting nervous and slashing prices to attract buyers.”
“‘Sellers are in a place where they haven’t been for a number of years — over a barrel,’ analyst Mike Larson said.”
“Marilynn Obrig, an agent in Fort Lauderdale, said she sees real estate speculators putting their homes back on the market, which is affecting inventory. ‘Buyers seem to be waiting to see when the bottom’s going to be,’ she said.”
The Palm Beach Post. “The median price for an existing single-family home sold in November in Palm Beach County was $370,400, down 12 percent from the November 2005 peak of $421,500. The number of homes sold plunged 45 percent in Palm Beach County, with 525 sales last month compared with 952 in November 2005. In central and northern Palm Beach County, more than 22,000 houses and condos were on the market in November, double the number in November 2005, said Bob Graeve, an agent in Palm Beach Gardens.”
“‘We still have a bunch of inventory, and until it’s absorbed prices are going to be soft,’ Graeve said.”
“(Broker) Douglas Rill in West Palm Beach, sees trouble in the glut of listings. About 31,000 homes and condos are for sale in all of Palm Beach County, dramatically more than the 7,000 homes on the market in late 2004. Sales aren’t keeping pace with the growing number of for-sale signs. ‘It’s still very, very quiet,’ Rill said.”
The Orlando Sentinel. “The weakest metro area was Naples, with a 45 percent plunge in sales and the median falling 13 percent to $415,200. ‘It’s difficult to sell an existing home because of all the competition from new home builders,’ said Dean Palombi, a broker in east Orlando. Palombi said the area he specializes in, Stoneybrook, Eastwood, Waterford Lakes and Avalon, probably has at least 1,000 homes for sale within five miles. But most sellers, he said, either will not or cannot slash their prices.”
“‘Part of the reason is that a lot of people went in and financed at 90 percent and they can’t just give it away for 20 percent less,’ he said.”
The News Press. “The number of existing homes sold in November in Lee County was 637, down from 1,084 in December 2005. ‘They’re continuing to wait to see how low this market will go,’ said agent David Drabik. ‘They’ll go out and look and want to make an offer and they’ll go home and say, ‘I’ll think about it.’ They’re waiting to hit the absolute market bottom.’”
“Although prices have fallen, analyst Jack McCabe said, ‘it’s a much better time to rent. You can rent a property for 55 to 70 percent of the ownership costs would be, even factoring in your federal income tax deduction.’”
“Besides, he said, ‘there’s a huge credit bubble out there right now’ with about $2 trillion worth of adjustable-rate mortgages that will have to be adjusted to current market rates in the next two years. That could trigger a wave of foreclosures as people have to give up houses they no longer can afford, McCabe said.”
I remember early in the year we speculated on which markets were the most bubbly and sitting on the creakiest foundations. I remember that S. Florida was number 1 on my list based on my personal experience with a very close friend in that market. That one will be the biggest train wreck ultimately as they aspired to California pricing without the concomitant income/ job base and wealth.
actually you are very wrong about the reasoning. yes south florida will take a beating, but not because of a job base and aspiring to be like California. our job base is pretty solid. most fortune 500 companies have their latin american division HQs here and this will not change. also, we have no land left to build on (unlike Phoenix, Vegas, Sacremento, Orlando,etc)
the reason S.Florida (and most of Florida) will suffer is that we were one of the hot spots for speculative RE ivesting the past 5 years. we simply have too many investors that will need to get out and when they do they will have to cut prices to do it and lower the prices across the board.
Actually both of you are right. Florida (along with AZ and LV) probably lead the nation in speculation. In South FL, it has been estimated that 70-80% of condo sales were speculators. Home prices will take a big hit as the spec premium vanishes in the coming years. While some companies do have big offices in Florida, the bulk of the economy is still tourism and service industry based, which historically speaking, have never been high paying jobs. In my opinion, the real back-breaker will be the taxes and homeowners insurance. Rumor has it Citizens wants to hike their rates 56% on March 1st. Add all of this to the resetting of ARMs and Florida will be a bloodbath for years to come. I am trying to get out of here ASAP which is easier when you rent.
I briefly investigated the job market there and found that someone with my experience, etc. both in the legal and financial fields would get a higher salary offer in Texas. That’s pathetic.
The saying is that we get paid in sunshine. I’m sure you could get a mortgage loan here if you put that down under “income.”
Unless you work for yourself, I suggest you not look for a job in Florida. You are correct, it is pathetic here.
My daughter worked for The Comedy club at City place for a while and had to be escorted to her car every night due to high crime rate….finally convinced her to get out of there. Such a high end place to have so many problems with crime……
Taxes (2 tier taxation) and insurance (risk pool assignment) are definately going to help FL lead the charge to the bottom. Condos are a total bloodbath, and will be for years to come. Especially the “urban renisance” condos (CityPlace, Town Centre, Downtown at The Gardens, Boca…whatever it’s called). These were totally manufacutred, and can be recreated at 1/2 to 1/3 the cost right down the road.
For those who don’t know, every city in FL (at least S. FL) has undergone an urban renewal in the past 5 years or so. They have genetrified their downtown areas, built 1000’s of condos on top of them, and then put in stores that no reasonable person can even consider shopping in. Add in an insanely overpriced bar/club, volia, you just quadrupled the RE values! (actually, probabaly more, because they always do this in a VERY sketchy neighborhood). These were initially targeted at Yuppies (hence the bars/clubs/trendy stores), but once developers realized that no one but rich retirees could afford the prices they were asking; suddenly decided they were for older people.
I am sure that my parents want to reitre to WPB to hang out at Resort and Blue Martini. Yeah, that’s it.
Anyway, now all these areas are having major problems, the rent for stores is massive, and many, many are leaving. Foot traffic is nowhere near projections (suprise idiots, when you have 1000s of condos owned by flippers, they don’t tend to bring much foot traffic to the area) and I predict many of these “master planned” downtowns are going to be slums once again.
Sorry for the wordy description, I just realized many people probably have never seen these areas. They are truly something to behold, that’s for sure.
I can echo Michael’s sentiment as I have lived in West Palm Beach since 1998. I saw first hand the meteroic rise in prices. Downtown WPB is littered with high-end spec condos and more are being built. City Place is filled with high end shoppes that see little traffic. Some of the businesses have turned-over. The area has a yuppie/young professional feel with trust fund baby prices. No retiree would want to live there, plus it really isn’t that safe. Purses would be stolen (or worse) at alarming rates.
Michael, I like Blue Martini. They have a “cosmetically gifted” wait staff. If I am going to buy overpriced drinks, I want it served to me by the hottest woman around!!
In an aside from my normal negative attidude:
DAP is correct, although I would not center it just on Blue. The women who work in higher end bars/resturants down here are just out of this world. The strip bars are insane (Spr Rhino DAP?). Its like someone vomited all the hottest, fakest, more shallow women in the world on S. FL.
I work out occasionally with a bartender at Blue. She is… Well, cosmetically gifted is not even the word for it. Stunning. And, frankly, I see better looking women every single day just driving around/working.
That’s the part that really burns my azz about this area. I love it here! It’s so much fun, a great area to live, and really geared up for a younger crowd to have a great time (25-50). However, the prices are just out of control (not just for housing). People are living on the edge of disaster every day. I have friends who make 1/2 to 1/3 of what I make and think nothing of walking into Blue or Resort and dropping 500 bucks on an evening. It’s the debt driving/image society down here in the extreme. I am all for the tanned, beautiful bodies; caring about how you look and all that. But, at the same time, I really hate the “live on the credit card” mentality that is so pervasive down here.
CityPlace in particular is in serious trouble. I used to work for the City of WPB, and I can tell you, they are really having problems with CityPlace. Notice all the cops out there every night? Crime is a big issue, as well as the fact that so much of it sits vacant (both retail and residential). It’s not a good situation.
DAP, we should get together sometime, my GF (girlfriend, not greater fool, although sometimes I wonder) would be thrilled to have me talk to someone other then her about the housing issues down here!
I’ve seen some very neat condos in both Ft. Lauderdale/ Pompano and WPB. Things I’d really like to buy but just cannot stomach the prices. Really, I don’t see much difference between WPB and L.A. in terms of what people think these things are “worth.”
Mike: you ever go to Haulover? That’s a fun place sometimes if you’re in the right mood.
Haulover? Never heard of that one TX..
Google it. You might want to try it.
http://www.foxnews.com/story/0,2933,239737,00.html
In about 100 years Florida will just be a memory.
Florida…watch out!!
>>>
St. Paul Travelers Cos. Inc., Louisiana’s largest commercial insurance provider, plans to cancel all its commercial property policies in the New Orleans area next year, sparking fears that other insurers will follow and slow the region’s economic recovery.
While the St. Paul, Minn., company refused to say how many commercial policies will be affected or specify where the cuts will be in South Louisiana, two insurance brokers who were briefed by the company this week say Travelers will not renew any property insurance for businesses in Orleans, Jefferson, Plaquemines, St. Bernard and eastern St. Tammany parishes. Cuts will also affect individual businesses in other parts of South Louisiana, including St. Charles and St. John the Baptist parishes.
SNIP
State Insurance Commissioner Jim Donelon, who was tipped off about Travelers’ plans Wednesday night by the Business Council of New Orleans and the River Region, said he was stunned by the news. When he met with Travelers on Thursday, he was equally stunned by the stated reason for the company’s retrenchment.
“They cited the state of the rebuilding of our levee system as the primary reason for their decision,” Donelon said.
SNIP
On Monday, Travelers found out it could face additional legal liability for levee breach flooding when U.S. District Court Judge Stanwood Duval ruled that the flood-exclusion language in the policy forms of Travelers and a number of other insurance companies was vague, opening the door for the insurers to be held responsible for flood damage. Since insurance companies write the contracts people sign, lawyers said, any finding of ambiguity in an exclusion is generally a win for the policyholder.
Wislocki said there is “no connection at all” between the timing of the court decision and Travelers’ decision against renewing commercial property policies.
SNIP
Shock wave’
Donelon, commercial insurance agents and business leaders said they worry that Travelers’ retreat will inspire others to follow, deepening a crisis in the limited availability and rising cost of commercial insurance.
“This is sending a shock wave through the business community,” said Mark Drennen, president and chief executive officer of Greater New Orleans Inc., a public-private partnership that seeks to promote economic development in the area. “If one company has come to that conclusion, you would anticipate that others would come to that conclusion. Without insurance, we have a calamity. We cannot exist as a business community without insurance.”
SNIP
Other pullouts feared
Marc Eagan, president of Eagan Insurance Agency Inc. in Metairie, said Travelers’ pullout is a devastating blow to the region, and he worries that other companies will follow in March after a special emergency rule expires that had artificially held insurance coverage in place after Katrina and Rita.
“This is going to be a blood bath,” said Eagan, who added that Hanover Insurance Group, Lafayette Insurance Co. and possibly Zurich North America have indicated that they are likely to not renew some commercial policies. (all emphasis mine)
http://www.first-draft.com/modules.php?name=News&file=article&sid=7917&mode=thread&order=0&thold=0#home
That’s one of the aspects about these urban condo projects that never made sense–thousands of square feet devoted to “retail.” Unless the developers plan to lease the space to a Dollar General Store or a Wal-Mart, it is nothing more than a place for trendoid hipsters to go broke occasionally, because most Floridians can’t afford to shop there. Someday these places may be occupied, but not in the manner originally intended.
All those luxury condos will become Section 8 housing projects in a few years when HUD picks them up from auctions and RTC II. The retail shops will be pawnshops and payday loan fronts.
Don’t forget the tatoo dudes.
reply to: triple t
I disagree with you about So Fla. jobs…..with the exception of home building, the rest is just service industry….people pushing pieces of paper around, and servicing retires….
For the last 20 years, I’ve been gauging the help wanted section of the Palm Beach Post, and on most Sundays, you may see 6-8 pages of job listings…for a county of 1.5 million people this is NOTHING….I was in Milwaukee recently, a city/county of 1+ million people, and they had 65 pages of jobs…..
The jobs are for service people who provide services to other people…..
This is what I call smoke & mirrors…when the smoke clears, there will be NO jobs….because the people down there don’t manufacture anything, but pieces of PAPER…..
That’s all the New York economy is - paper - I don’t see anything wrong with paper economy except that you have to have economies of scale to deal with the place you are doing business.
Fla is good place to outsource desk jobs (like mine) only if the cost of living is at a certain level. Compared to what I was doing in NYC I am living pretty large.
NO land left to build on? How about the huge Varvus Ranch project in Palm Beach Gardens? What about the the huge project in the former orange groves on Seminole Pratt Whitney Road in Loxahatchee? How about the plan to convert the mining operation near 20 mile bend into 1000 homesites? As long as developer funded elected officials are in office, they will find a way to open more land for development. Just look at Lyons Road from the Boca line to Lantana Road. Five years ago it was nursery farms, now it’s cleared for development. Remember the ag reserve you voted for? What’s it look like now?
Miami-Dade? Take the turnpike south toward Homestead. Plenty of land there, and slowly but surely being developed. Then they’ll be looking west of Homestead next.
The “running out of land argument” just doesn’t work.
Yes, and most of this new development was driven by investor demand. I personally know two people that pretty much bought at the peak in FL…one recently sold his condo in Miami and claimed he “doubled his deposit” (which means got out by the skin of his teeth) the other I haven’t talked to in awhile but she/hubby bought a condo in Naples for a “long-term investment” but it will be interesting to see how long they hold on to it now that this “investment” is worth substantially less.
How about everything in the 85 miles from Ft. Myers to Ft. Lauderdale and from Naples to the Georgia border. That entire state is practically empty. Everything is on the coast. And the truth is, if they want to develop it enough, they will. How do you think Naples, Marco, Miami, Lauderdale etc… got there. They were all swamps before. Not only that, there’s huge swaths of undedeveloped land but laid out with grids of a thousand miles or more of roads that would take 60 years to fill. They’re no shortage of land down there.
I live in the center of cape coral. Cape coral is the second largest city next to jacksonville in actual land area.Less than 30% of the property her is developed. We have enough property here to build for 60 years. My street has mor empty lots than built. All with for sale signs.
Cape Coral also has 150,000 people. Making it the size of a small to medium-sized city. And it’s still growing. It’s three times the pop. of neighboring Fort Myers. But the thing is, there are no jobs there. Most everyone still works in Fort Myers or Naples…not in Cape Coral. It’s mostly all housing…very few other things like parks, businesses for a city that size.
i was referring to Dade and Broward counties (South Florida) WPB has available land and will suffer worse then the other 2 counties mentioned. the rest of the state will suffer as well. Broward, Dade and Pinellas are the only 3 counties in Florida who truly have no land left to build upon.
Triple,
No land? We have acres of land, some of it in “great” locations. Go to the Publix in CityPlace WPB, there is a full city block of GRASS across the street from it. That’s probably one of the most desireable neighborhoods in the entire city (at least for condos/townhomes). Walk up Fern street, one block west of Sapodilla, and your in a total ghetto (actually, don’t do this, you may be killed). That’s about 5 blocks from 1M+ condos.
Land is not an issue in S. FL, with the exception of waterfront or on the barrier islands. Once west of Rt1 there are acres of land in almost every major city. West of the Turnpike? There is so much land that if you were dropped there, you might die before you found a home with water and AC.
For people who don’t live here, RT1 is typically less then 1/2 a mile from the intercostal waterway (and 1 mile from the ocean). The Turnpike is about 10 miles from the ocean in most S. FL locations, although it does vary a bit.
Anyone who thinks we are out of land needs to fly over the state in a small private plane. It’s amazing, we have about 1-2 miles of development along the water, and then pockets of development beyond that. More green then brown the instant you cross 95 (until you get to Miami).
Land is not the problem. Crazy home prices are the problem.
when everyone refers to land, they are referring to lots large enough for builders to buy and build neighborhoods. we don’t have that anymore in Broward. the only land you see from an airplane is parks, non-zoned, or small pockets. there will not be a large community built from here on out. no more Westons, Silverlakes, …etc
I have to say this statement is used way to much “we have no land left to build on” I live in miami and moved down from Boston in 7/05 after selling all my property in Boston and I still rent in Miami. I admit i did flip in boston and stated to do forclosures in miami-dade September 06. I’ve just did one since then as i will only pay dirt cheap to sell cheap and have sold the one i purchased in 2 days. What i have been able to observe is many vacant lots in good and bad areas so to say we have no land is not correct as no one is running to purchase the vacant lots.
—AL
Triple T,
You are wrong. TxChick is right. California wages are far higher than wages in Florida. There is no comparison.
I havent seen you post before, but let me say one thing here : Dont mess with TxChick as she is one of the most savvy posters here. She knows her stuff backwards and forwards from up to down.
California wages, taxes, restrictions, etc. are some of the reasons why companies are leaving the state. Nissan’s move from LA to Nashville is just one example…
boston
I forget who posted the link to this eBook on 1920’s http://xroads.virginia.edu/~hyper/Allen/Contents.html but thanks. I suggest y’all take a read of this to see how much of it is rhyming. It will take a good few hours to read it all but the section called “Home, Sweet Florida” is a great read.
The similarities between W Bush and Harding are incredible.
Good call! I seems the only ones who did not recoginize the disparity was the builders and the lenders,
suckers who are still buying must contend w/ 4% insurance+property tax every year..many forget.
Its 4% total (typically), but that’s still a ton.
500K home, 20K a year in insurance and taxes.
You can probably (maybe) rent that home for about 24K a year (and that’s not going to be easy, because you have a TON of competition right now).
Great investment opportunity. You will make a killing. Oh, don’t forget HOA! That will take you (in a good community) to right around 22-26K per year. Crap. Now your underwater. And then that pesky 500K morgage, those stupid renters who don’t pay on time, or the periods the house sits empty. And finally, just as a finishing touch, you get to pay tax increases far higher then those who can “SOH” their residence. Oh, one more thing! Median home prices are down at least 10% since you purchased! And your transaction costs are at least 3% to get out of the asset.
Wow, where do I sign up to get on that gravy train.
Michael,
Email me at david_parker75@hotmail.com and we’ll meet up for cocktails soon.
DAP
Are you the Lanier David Parker?
Nope. I am the former baseball player Dave Parker. I played for the Pirates, Reds, and A’s in the 70’s and 80’s.
wow I have never seen a celeb post their email in a public place. I used to love those funny hats the Pirates wore
Just kidding on being a celeb and those hats were awful.
Hey Dave,
Ive met you in the locker room at pirate city when I was a kid. Just to verify it is you I know the answers to the following questions that you told me about personally.
If this is you you’ll have no trouble answering them.
1. What religious symbol did you used to have on your gold chain on your neck. You always said, I’m David and I’m a ….
2. What title did harding peterson hold when you got sent back to the minors after having a good spring training.
3. Growing up who was your favorite player when you were a peanut vendor.
4.What field were you a peanut vendor at?
5. What is the name of the pirate trainer during most of your career.
6. Did you use a pro-H glove or a pro-B glove in 1979? Was your glove a rawlings or a wilson.
7. When you won your gold glove award you tore off one of the two golden balls. You gave the ball to someone as a way of saying thank you. Who was that someone you gave the ball to?
8.what mets catcher were the guys constantly razzing you about, and putting his baseball card over your locker.
9. Why did you wear a hockey mask and a football helmet piece over your batting helmet.
Sorry Dave if its you these will be super easy questions. Thanks.
I can answer 8, 9, 5, 1, 3, and 4.
Number 9 is a direct result of number 8. It was Phil Garner who put the baseball card on Parker’s locker.
1. he wore the star of David
2. not sure what job he held when Parker was a minor, but ultimately “Pete” Peterson was the Pirates GM
3. Frank Robinson
4. Crosley Field
5. Tony Bartirome
6. not sure, I had a Mike Schmidt Rawlings model
7. I know I’ve heard this one but I forgot it, I’ll say mom
8. John Stearns
9. Stearns was catcher at a home plate collision that broke Parker’s jaw in 1978, Parker came back that season wearing a football helmet facemask to win MVP honors I believe
Parker was probably the best player in baseball from 1976 to 1980, it’s too bad he didn’t take better care of himself because he had Hall of Fame talent
I am afraid this is just the beginning, I will be watching inventory and prices very closely this spring, people down here won’t even discuss the market now.
Yeah, I can definately see that. I used to fight with people non-stop about the housing market, and now I just keep my mouth shut. You can almost see the pain in people’s eyes right now when they think about how f**ked they are.
I am working with my old landlord on the return of my security deposit. Its on 500 bucks, and I did have 2 small screw holes in the wall he had to patch. I really feel bad fighting him to get it back, but hell.. What are you going to do. Its not my fault he is in WAY over his head on a property.
I am going to ask for 1/2 of it, try to keep him from going off the deepend.
“The Charlotte County market has so frustrated Dave Bonham that he moved his family to Idaho” (He’s been trying to sell since August 2005)
DAVE! Good buddy! Wait a minute! Where you going?
It appears Dave somehow believes that “things will be better” in ID? Folks, this is the Rolling Bubble in all it’s glory! I guess he’d heard that they are still knocking down major bubble bucks there! How have we become so RE-centric that we’re willing to uproot our families in the middle of the school year in an effort to chase easy money? This is truly sick.
In reading through this blog over the last year the number of people who just up and move cross-country on a whim is amazing.
Big time Waahoo. How do these people earn a living? Job security? Uprooting kids from familiar environs and extended family?
I don’t get it.
I don’t either. By the time you’re done it’s gotta cost 10-15k to move.
Grapes of Wrath?
shadash,
The Equity Dust Bowl Years!
waaahoo is exactly right. The sheer number of stories we’ve been subjected to where wandering equity locusts pontificate about their “next big score” is just incredible to me. I grew up in Chicago and stayed out west after I got out of the service. We had some family in OR and settled here almost 20 years ago. I don’t rec. it for ANYONE. Recessions elsewhere spell depression here. Any time things boil down to doing business with a “so-so” guy that’s a native and a true professional….. the native gets the business every time! It’s insulting but it’s how we do things up here! It’s taken YEARS to assert myself and I can’t imagine it’s all that different in places locusts ponder like NC or ID? If you like starting over every 2 years I admire your energy. I simply don’t have it any more.
Pondered a job offer in Portland Or a number of years back, went up and looked the area over. Came to the conclusion that they don’t want you to make waves for the first decade or so.
ed in Texas,
LOL! Oh you are SO right! That and it’s not easy to make friends or business contacts here. Everyone has their little “gig” and for right now, it’s paying the bills. The LAST thing they want or need is some bull in the china shop! I’m willing to bet your life would have turned out very differently had you taken that position!
It’s not always the chase of easy money. Come live in the Central Valley of California for awhile and even Detroit starts looking good.
We have moved across country many times for job relocations. It’s one thing when your company pays for everything! Here’s a great example of people moving not necessarily for jobs:
neighbor moved from Boston to get out of money problems from living on credit from the .com. As they told us, one day they were worth millions on paper, and then the rug was pulled out from under them. They moved down and live the high life. Of course, the money is running out, it always does. Did I mention they are building a million dollar spec home to flip. Easy come, Easy go!
Many of these “mobile” money seekers also have jobs that allow them to work from home, or anywhere. I would imagine when you are so deep in debt, you’d be willing to uproot your family to seek a way out!
lizziebeth,
You make so many good points I hardly know where to start!
Mobility is one of the things that makes America great. Wether you’re an abused spouse, or an abused employee you don’t just have to stand there and take it (in many cases). The westward movement is one of the great success stories in an otherwise bleak human history. What we’re seeing today though is nothing short of maniacal! Some of these people aren’t even in one place long enough to have given it an honest shot let alone made a difference in other people’s lives! There was this guy in a dead end job at coffee broker house in NY. When he approached his boss with the idea of selling coffee at a retail level his boss laughed at him. Howard Schultz now runs a little company you may have heard of?
He truly LOVES what he does and travels the globe in search of new opportunities (and he worked 70 hours a week) to make his dream a reality! A lot of these “equity locusts” can’t be bothered to do anything until it’s time to “take profits”. It’s just incredible how fantastic their expectations are given their lack of vision or commitment.
Mobility is one of the things that makes America great.
Agreed, and it’s going to be one of the bigger problems of the housing bust. A majority of those that doesn’t own their house free & clear will be underwater, unable to sell and thus unable to move.
Hi there lizziebeth!
Haven’t been on here for a while but am moved in our new house in Pasco & love Fla. so far.
Ryland is still selling pretty strongly here but almost all the flipper homes that were sitting since last fall are… still sitting. It really makes me wonder how much staying power some of these flippers have. They just cannot compete with Ryland who can sell new homes for less than the resells. One of them put a home up for auction at 280K - no one came to the auction. Then they re-listed it at 310K - still sitting. I don’t understand the mentality, but i’m sure some will dig their heels in and grind it out for the long haul. There are at least 2-3 dozen flipper properties here.
Everyone here seems to have moved from another state with equity from home sale there. Some other telecommuters like myself & some who just relocated, some who retired. Very nice people mostly - none of them looks like a locust (wink wink!)
None of my model home has sold for less than what I chiseled Ryland down to, however, they have come down on prices & given lots of incentives to make sales happen. I have spoken to many who bought during the hype and paid 100K more than I did & some of them are pretty steamed & hope the market comes back, but I just tell them that you better be prepared to wait 5 years because these builders have to build and they will beat your price all day long.
Jeez…Buy hi sell low. I bought in Colorado in 1989 when Denver was crahing and in Irvine when Orange County declared bankruptcy, now back to Colorado for another cycle…Guess I’m doing the wrong thing afterall.
I followed Mr. Weiser’s web site for the past six months and wonder why the paper didn’t ask him about his front page headline….”Why condos prices won’t fall in Fort Lauderdale”. He talked at length about how the city properly managed permits to make sure the market was balanced. I guess it is NOT different in Fort L after all.
BTW, he’s changed his web site and his tune………
The Palm Beach Post. “The median price for an existing single-family home sold in November in Palm Beach County was $370,400, down 12 percent from the November 2005 peak of $421,500.”
Of course, that is not what the headline read. The PBP spun the month-to-month figures to show that housing inched up slightly (a 1% increase from October). It’s “pick your favorite statistic” week.
How confident can you be in pricing when you consinder that sales have fallen 45% year-over-year, to around 550 homes, and the inventory of unsold homes in Palm Beach County is 22K homes (see this link). That’s only 2.5% of the unsold inventory.
I would not bash the PB Post, they are usually like the “porn” for bubble sitters. Yes, these stats are cooked, but they publish plenty of articles on the other side of the fence as well.
I never tire of seeing those numbers. 550 sold, 22K to go. Is the rate of absorbtion even high enough right now to actually move that inventory down? I don’t think so; even though are numbers are down, I never saw sales high enough to move it that way. Homes are either off the market for the holidays, or rented out.
the other point made on the forum of the Sun Sentinel real estate board is that last year at this time everyone was cleaning up from Wilma, so if sales numbers are down so drastically YOY from that point, things are even worse than they appear.
>“I’m not saying the bottom’s arrived,” said Trae Zipperer, an agent with RE/MAX Realty Group in Fort Myers who specializes in waterfront homes. “Nobody can ever know that. I’m saying there are some great deals out there. I’ve got the bug right now — I’m itching to buy something for myself.”>
Customers, however, are not rushing to buy just yet.
The number of existing homes sold in November in Lee County was 637, down from 686 in October and 1,084 in December 2005.
“They’re continuing to wait to see how low this market will go,” said David Drabik, an agent with RE/MAX. “They’ll go out and look and want to make an offer and they’ll go home and say, ‘I’ll think about it.’ They’re waiting to hit the absolute market bottom.”
Procrastinators may soon find themselves too late, Drabik said. “If you’re waiting for the bottom, you’ve only got about two months.”
It looks like we have a contender for RE shill quote of the year.
italics off test
Procrastinators may soon find themselves too late, Drabik said. “If you’re waiting for the bottom, you’ve only got about two months.”
It looks like we have a contender for RE shill quote of the year.
Amen to that. Florida’s market won’t turn around until 2010-2011. Too much inventory at too high of prices. Anyone with 2 functioning brain cells knows we are a long way from the bottom here.
Isn’t gonna be no 2010. Take a look at those numbers for Palm Beach County– first, one says 22000 for sale, while the other is 31000. And 525 sales for Nov. Gives you 5 friggin YEARS of inventory. That alone puts us into 2012.
Maybe global warming & sea rise will help em out.
It looks like we have a contender for RE shill quote of the year.
yes he snuck in just before the 12/31 deadline!
What Mr. Drabik will be saying in April 2007:
The bottom I predicted two months ago isn’t really the absolute bottom…it was the almost but not really bottom. The for sure it’s in the bag bottom will be…umm wait I have to see what my Magic 8-Ball says.
Here are the 2nd and 3rd paragraphs from the Herald Tribune article, following paragraph one about the 18% median decline, which was the worst in the state.
“Consequently, it seems, Sarasota-Bradenton home sales were up by 2 percent from a year ago, the best gain in the state.
“Real estate pros said the numbers indicate the market is responding to price reductions. Stubborn sellers are budging, even if it means taking a financial hit. And buyers are deciding to buy rather than bet that prices will fall even more.”
Buyers should wait. But I believe the end of the decline is near. A final, convulsive decline will come early next year, as specuvestors and FBs are forced to unload or give back the keys. 2007 will mark the bottom, even though the use of YOY indicators will mask that fact until sometime in 2008.
I don’t agree Bill, I think we have at least 2 years to find bottom. We have 4+ years of inventory on the market right now in PBC, where is all of it going to go?
If your idea of a final decline is a 30% whack off of prices all at once, I might agree. Otherwise the affordability, and rent/price ratios are still just nuts, and show no signs of improving (rents are dropping because of the massive influx of speuvestor owned flops that they are not unable to sell).
I see no bottom in sight for S. FL, but would like to hear why you think we are heading for one.. I might be missing something.
I don’t know nothing ’bout Florida, but, the historical model for an unwinding bubble is orderly price declines that at some point induce panic selling. It is impossible, of course, to know when this will occur or what the decline will be in percentage terms.
It plays out a little differently every time, but there is plenty of historical precedent for Bill in Carolina’s theory. No harm in waiting, watching the market action and remembering the grade-school arithmetic that should always overrule emotion.
I think the one thing that most everyone can all agree upon:
Prices (or values for that matter) aren’t going up for AT LEAST the next 12 months in S. Florida.
And that is the biggest problem for S. Florida.
What drives the market is first time homebuyers. The biggest issue for FL, and every market for that matter, is that the main reason first timers bought over the past 2-3 years was appreciation–none of the other reasons make any financial sense given the differential between renting and owning. Without the expectation of appreciation, prices need to come WAY down before buyers come back at levels significant enough to make a dent in the inventory.
The only thing keeping the market from a complete meltdown right now are the shills throwing out hope for improvement in the spring, which has kept supply lower than it should be during the fall/winter months. But, when that demand doesn’t materialize, because would-be sellers kept their prices high (even with massive supply increases) in the spring, there will be even fewer buyers in 2007 than there were in 2006, and it will be a race to the bottom when people leave their homes on the market during fall/winter of 2007/2008.
I’m glad I have my 20%+ down payment already waiting. It might be at 30-40% by the time I’m ready to purchase.
A lot of the would be sellers pulled their inventory off the market during the holidays. Then the rush will be back on to list.
Does anyone have a prediction on when the realtwhores
will advise their clients to put stuff on the market again? Late January or February?
Amidst all your doom and gloom links, why don’t you link to the St. Petersburg Times story today that shows prices are actually GOING UP in Tampa Bay?
I didn’t see that, but you say it like its a good thing. The problem is affordability. What are rents and income versus prices? What is the sales volume? Anybody can apply common sense to see if an area is over-valued.
Rents are still OK as a percentage of income. Prices vs. income might be another matter. The Tampa area isn’t flush with well-to-do people, and I suspect anecdotally that the high 200s and very low 300s are as high as the average familty can go unless they have a huge down payment. The property taxes are tough to swallow: $5,000 - $6,000 on a $300,000 house in eastern Hillsborough County.
I make $70K/yr and I wouldn’t feel safe buying anything over $200K
And the median income in Tampa bay is about $45k~$50k, which means the median home should be $135k~$150k for the fundamentals to take over.
Heres the data from FAR…
SFH data
Nov 06 sales - 2182
Nov 05 sales - 3799
Change… -43%
Nov 05 Median - $229,000
Nov 06 Median - $229,900
Change… To show how dumb realtors are… they say 3%…
True number—- .3%
Bunch of idiots…
Oops wrong data on Median… maybe I am the dumb one
Nov 05 Median - $222,900
Nov 06 Median - $229,000
Change of 2.7%
Can you edit comments in this blog???
“Can you edit comments in this blog???”
Nope (which is OK by me). Fun to see what you wrote after you’ve had a few toddies.
Keep in mind the peak looks to be in June of 06… at $239,600
So you may be up yoy still… but you are working down from the peak and it doesnt look like that will change with all the inventory and the abysmal sales numbers in the area…
Amidst all your doom and gloom links, why don’t you link to the St. Petersburg Times story today that shows prices are actually GOING UP in Tampa Bay?
Go down to about the middle of the this page
http://www.sptimes.com/2006/10/09/Columns/Home_values_on_the_wa.shtml
Uh duh that is history - October 9. What does that have to do with todays article?
Prices going up are a bad thing — David Lereah said so in today’s media soundbite. It is slightly lower prices that are needed to get the soft landing underway.
Is that one of those went down for 8 months in a row for a total of 15%, then went up one month 1% (still down 14% overall) types of PRICES ARE GOING UP? I suspect so.
“Homes are still pretty darn unaffordable for the average buyer,” he said. “I think we’re in for another weak year for our market in 2007.”
AMEN to that.
Neil-
You talked about prices already reverting to 2003 - here it is:
“In many cases, people ‘have to realize they can’t sell their house for what properties have been selling for in 2004 and 2005,’ said Betty McCluskey, broker in Suntree. ‘They have to be realistic, and bring prices down to attract buyers, because there’s a vast inventory of houses and so much competition.’”
Wouldn’t 2003 prices be a haircut by 40% to 50% because Florida went up the most in 2004 and 2005 ?
Yup. Not sure that’s exactly what she intended, but it is what is necessary and it won’t stop there, IMO. Suntree/Viera prices should revert to 1999 and add back 3.5%/yr. from then. Take advantage of the overshoot first, if possible.
Chip
Right on the money. But as long as people remain in denail… this will be a slow recovery.
Popcorn anyone?
Neil
You two are in denial if you think it’ll stop there.
When I saw that quote I chuckled.
To think we don’t really have any inventory… yet. Oh, we have inventory, but come spring we’ll have INVENTORY.
“‘Sellers are in a place where they haven’t been for a number of years — over a barrel,’ analyst Mike Larson said.”
Its a crude way of stating the truth. Yet sellers haven’t even realized how much too far we went this time.
Interesting times ahead.
Neil
Sorry OT back to the Left Coast
Lansner blog: Risk watcher Rother eyeballs O.C. housing ‘07
http://tinyurl.com/lzgbg
“Us: How’d you get those numbers?
Charles: To forecast future home price changes, American Strategic Capital uses an econometric model. In other words, we measure past relationships between home price changes and important economic variables including employment growth, short and long-term interest rates, housing affordability measurements, building permits and housing inventory measurements. The relationships are combined into a mathematical equation. The resulting projections represent forecasted home price changes. Currently, the expected home price change is minus-5 percent. The probabilities presented represent the historical distribution around a minu-5 percent home price change”.
How does this model handle the large number of toxic loans?
Is there anyway to track empty/available rentals on a month to month basis? I would be very interested in seeing those numbers.
I have done so for my area… Includes Ft Walton Beach, Destin, Niceville, Crestview, Navarre, and surrounding areas…
8/22/06 - 683
9/22/06 - 780
10/22/06- 837
11/22/06- 877
12/22/06- 845
Not a long set of data… but can definately see the increase from housing that arent selling be put on rental…
We moved rentals in Oct of this year and the RE company we went through said the rental department is seeing a huge uptick in rental units for just that reason… All the investors cant sell, and so they put it on rental market… and of course they put it on at a high price, flood the market, then have to lower their monthly rent… ours was lowered 15% before we agreed…
The rates we are paying are about 1/2 of the carry costs if we were to buy same unit…
Thank you, that is helpful, we moved here in the spring, and just judging by listings rentals here are way up.
I think rental vacancies are up just about everywhere in Florida. What’s even more impressive is that it used to be, from October through January vacancies declined as snowbird renters filled up condos. My sense is that there are fewer snowbirds, double-compounding the increase in inventory that Destin’s numbers sho month-to-month.
“After asking $549,000 for their Venice home starting in June, Cindy Gerber said she and her husband did a discount MLS listing of their own at $397,000. They really needed to sell, since they have purchased an English Tudor near Johnson City, Tenn.”
That is a 28% price reduction off the origional wishing price. It makes you wonder about the officially reported 18% YOY drop…
origionaloriginal
not to mention the incentives, cars, boats, I saw one listing for taxes and HOA to be covered for TWO years…
Hope this wasn’t posted.
KB drops project near New Orleans
http://tinyurl.com/yzukp6
good one. Love the last one about surprises– “historic defaults w/o a recession”. From what I see on RealtyTrac, it aint a surprise anymore.
“After asking $549,000 for their Venice home starting in June, Cindy Gerber said she and her husband did a discount MLS listing of their own at $397,000. They really needed to sell, since they have purchased an English Tudor near Johnson City, Tenn.”
It wouldn’t surprise me in the least if it was a flipper who purchased the home. Don’t tell me flippers have left the market because I know for a fact they have not. Here in the Tampa area beaches flippers are still playing games buying properties on the way down and trying to sell for a profit.
The joke will be on them because I am paying attention, and as these flippers buy these properties at discounted prices on the way down the reaction of other sellers is to lower their prices. Consequently, these flippers can’t compete selling with the people competing with them when they purchased.
Anyway, some flippers have actually purchased properties in the last few months and added them to the rental pool. WHAT AM I MISSING? The Kool-Aid is strong down here…
WHAT AM I MISSING?
You never attended the Wacky-Pack School of Real Estate Investing Seminar, like those very astute flippers have.
“WHAT AM I MISSING?”
You don’t watch enough late-night cable TV.
Making easy/quick/big money can be quite intoxicating!!
“After asking $549,000 for their Venice home starting in June, Cindy Gerber said she and her husband did a discount MLS listing of their own at $397,000. They really needed to sell, since they have purchased an English Tudor near Johnson City, Tenn.”
Wait, they haven’t actually sold their house for $397,000 (28% price reduction).
This is going to be the biggest train wreck ever! Imagine the poor buyer in the Palm Beach area who did it the right way. They used a 30 year fixed rate mortgage with 10% down and bought a house for 420k. Now his job moves to another city - how does he sell his house without bringing thousands to the table?
This is going to spiral down, down ,down and many people who did it the right way will be hurt because of the toxic loans!
Agreed. I don’t believe even the REIC experts who deliberately mislead through truthy media soundbites actually grasp the problem wrought by the subprime explosion in recent years. It will take a few more years for this to sink in.
How about how builders sold out entire condo projects to speculators with their special lenders who sold that F paper to the secondary market .When are people going to see that the Builders and their Lenders were hoodwinking the secondary market with this marketing scheme .We already know alot of builders made it a requirement that the buyer go to their “special lenders .”
I contend that the builders didn’t want alot of regular lenders getting into their tracts because of the sh-t they were pulling . In other words , prudent lenders would of seen that the borrower was a speculator and required more down/higher rate and the deal could of been blown .
Not quite the same as condo deals, but Ryland offers all their special deals through their finance arm - which sells them right away to Countrywide. Don’t know how many subprime deals going down here in my development however, as most people I’ve spoken to seem pretty sane & on decent financial footing (except one neighbor doing the “bought the new house haven’t sold the old one” dance).
Ryland *has* changed all their contracts to root out speculators however.
Prudent anybody (lenders, appraisers and buyers) were pretty much left out of the game for a few years now…
You followed me to Texas, you followed me to Utah,
We didn’t find it there so we moved on.
Then you went with me to A-la-bam’,
“The Charlotte County market has so frustrated Dave Bonham that he moved his family to Idaho.”
———————————————————————-
Things looked good in Birmingham,
We didn’t find it there so we moved on.
I know you’re tired of fol-low-ing
My elusive dreams and schemes
For they’re only fleeting things,
My elusive dreams.
oops, this looks better:
“The Charlotte County market has so frustrated Dave Bonham that he moved his family to Idaho.”
——————————————————————
You followed me to Texas, you followed me to Utah,
We didn’t find it there so we moved on.
Then you went with me to A-la-bam’,
Things looked good in Birmingham,
We didn’t find it there so we moved on.
I know you’re tired of fol-low-ing
My elusive dreams and schemes
For they’re only fleeting things,
My elusive dreams.
We bought high in Austin in the late 90’s and sold in late 2001 for $83K in profit. In our opinion, our sale was on a ‘dead cat bounce’ even at that early time. We relocated to a small TX town and rented while we looked for an affordable house. We negotiated hard with the bank and owners and closed on a modest house with over 20% down and a $500.00 mortgage. At closing, the bank brought over $10K to the table in order to get out from the deal. The closing cost was 47% below the original list in one of the firmest RE markets around.
That was over five years ago! Since then we have worked on limiting our risk by reducing debt and our operating expenses.
Our efforts were widely mocked by friends and family as over reacting to a softening market. We have watched as these same people have sweated selling McMansions that are no longer appreciating just to get out from huge notes and rapidly increasing taxes.
At this point, our self financed DIY upgrades have significantly raised the value of our home. In theory, we could still cash out with $100K, but our early work establishing a rational sales price now pays off by keeping our taxes lower and the devaluation simply lowers the offical appraisal to a real value. In other words, don’t buy the hype!
I posted this here because I grew up in Florida during the sixties and seventies, about thirty years after the first big RE boom. Condo projects sat empty on the beach from 1970 to the early nineties and I suspect FL owners should get ready for another twenty year downward spiral.
I got FULL PRICE for my house i Palm Beach County — a foreign buyer who came along and didn’t know the market paid me a WAD of cash in a down market. That’s the only thing that’s goingto save the South Florida market — uninformed foreign buyers who don’t understand the tax and insurance situation. Two weeks after we closed, a house in our neighborhood was auctioned for $65,000 LESS than we got. The guy who bought out house said he’s going to flip the house. But, with a $3,000 a month payment and a declining market, the house is GOING TO FLIP HIM!!!
There aren’t enough FGFs (foreign greater fools) in the world to safe SF.
…But most sellers, he said, either will not or cannot slash their prices.”
“‘Part of the reason is that a lot of people went in and financed at 90 percent and they can’t just give it away for 20 percent less,’ he said.”
——————
Oh, they CAN give it away. Back to the bank.
““The Charlotte County market has so frustrated Dave Bonham that he moved his family to Idaho. He has been trying to sell his house since August 2005, and so far all he has to show for it are four price reductions and one failed deal. ‘We just had a little bit of poor timing there,’ said Bonham. He got it appraised for $285,000 and listed it for $279,000. Two expired listings and an attempted auction later, his price is $219,000.”
I don’t understand the declared cause and effect in the first sentence. He wasn’t priced out in Charlotte County because he already owned a house there. If he had a job he needed to get to in Utah, then that is what motivated him to move, not frustration with the Florida market.
What really gets me about these linked articles, and other recent ones, is how MANY Florida residents are selling to move away, with no mention of job relocation or other pressing need. In my more than a half-century in central Florida, I’ve never seen that before.
These people will do anthing to avoid eating that crow pie, better to move to somewhere you are not known than be the laughing stock in your community.Try to keep them in the USA as we already have enough of them here. Please be nice to them .
http://www.nytimes.com/2006/12/29/realestate/greathomes/29rent.html?_r=1&oref=slogin