A Renter’s Paradise In Florida
The News Press reports from Florida. “Lee County’s burgeoning skyscraper condominium market is a renter’s paradise, but a landlord’s hell. Experts say as increasing numbers of condo units pour into an already overflowing supply of residential real estate, renters can almost name their price for even the costliest luxury units.”
“Jim Simon, for example, recently moved into a condo in downtown Fort Myers, where the owners of its 105 units typically paid as much as $600,000 for the convenient riverfront location. But Simon, a commercial real-estate broker, is paying only $1,350 a month, barely enough to cover the taxes and condo association fees.”
“‘It’s like living in the Ritz-Carlton,’ Simon said. ‘It’s got great amenities, it’s clean, it’s safe, it’s got a beautiful view.’”
“With only about 20 people living there, he practically has the place to himself, and with a number of similar projects under construction around downtown, he expects the good times for renters to last for awhile.”
“The median condo resale price maxed out in February 2006 at $353,900, and by April 2007 the price had fallen to $244,100, down 31 percent, according to Florida Association of Realtors statistics.”
“As prices have fallen, so have rents. In late 2006 the average rent for a two-bedroom house was $940, down from an all-time high of $1,041 a year earlier, according to rental information service RealFacts.”
“In Lee County and around the country, home builders say the picture looks bleak for the next six months. The National Association of Home Builders/ Wells Fargo index of sentiment in the industry fell to 28 in June, the lowest since February 1991, the association reported Monday.”
“In Lee County, statistics show that ‘there have been dramatic layoffs,’ said Michael Reitmann, executive VP of the Lee Building Industry Association. ‘It’s finally being reflected in the unemployment figures. I think it’s a response to the actual market conditions.’”
“The home construction business locally is a shadow of what it was in the boom years of 2004 and 2005. Since December 2005, when the median price of an existing, single-family home resale reached an all-time high of $322,300 according to the Florida Association of Realtors, both the number of sales and the pace of construction have dropped sharply.”
“The median price was $283,200 in April, off 12 percent from the peak. Meanwhile, the number of single-family permits pulled by developers countywide fell from 1,422 in December 2005 to 424 in May, down 70 percent from December 2005.”
The Orlando Sentinel. “A statewide survey of real-estate experts released Monday showed that appraisers, brokers and other professionals are decidedly more pessimistic than they were earlier this year.”
“The second-quarter survey by the University of Florida’s Bergstrom Center for Real Estate Studies reversed a slightly positive trend noted in the center’s first-quarter outlook. Wayne Archer, the center’s director, said ‘the mood has grown more somber since January,’ with few signs of improvement in Florida’s real-estate markets overall.”
“‘The outlook for condo development remains poor, and weakening,’ the report concluded. For apartments, the survey respondents generally offered a mixed outlook, with stable occupancy rates and with rents keeping pace with inflation, except for rents at condos converted to apartments.”
The University of Florida. “Archer said he could be positive only about the prospects for buying newly built homes. The outlook for existing single-family housing is more pessimistic, and things look even worse for condos, according to the latest survey conducted in April of 306 experts in the field.”
“‘Perhaps the implications of the subprime ‘meltdown’ are creating a disquieting haze; perhaps anxiety over property taxes and high insurance rates are shrouding Florida’s otherwise sunny outlook. In any case, there are few signs of improvement,’ said Archer.”
“‘There is strong opinion among many thoughtful people that with existing homes many sellers are still expecting the kind of premium that they saw happen between 2003 and 2005 and they haven’t come to terms with the fact that price increases have cooled off,’ he said. ‘So you may find people asking for more than their houses are worth.’”
“Prices are shakiest for condominiums, which are in the worst shape, Archer said. ‘Condominiums have always been the most volatile component of the housing market,’ he said. ‘They’re the play things of the amateur investors and they seem to invite misjudgments and high-risk behavior.’”
The Sun Sentinel. “A large inventory of overpriced homes for sale is contributing mightily to Florida’s housing doldrums, according to the UF survey of 306 industry professionals conducted in April.”
“‘Things have gotten a little more sober,’ said Archer. ‘People are overly optimistic about the prices they can get and have not come to terms with the fact that we’re not having these huge leaps in price that we had in the past.’”
“Analysts and real estate agents were hoping for a market rebound once Florida legislators addressed the state’s property-tax crunch. While the new tax plan offers some immediate relief, many agents say it won’t be enough of a long-term fix to rekindle interest in buying homes.”
“‘I felt very positive that the lawmakers were going to do something constructive,’ said Sharon Castrillon-Harrington, an agent in Wellington. ‘But they let us down.’”
The Herald Tribune. “Grant Thrall was so convinced that state legislators understood the importance of real estate and home building to Florida’s economy that he predicted they would pass meaningful tax and insurance reform. Never happened, at least in Thrall’s view.”
“Most real estate agents and homeowners contacted by the Herald-Tribune agreed with Thrall’s analysis. Homesteaded homeowners are not likely to give up their protections under Save Our Homes legislation. That means they will stay right where they are and do nothing to stimulate the real estate market.”
“At the same time, snowbirds, landlords and small business owners on barrier islands may get so angry about being ignored by lawmakers that they will put their homes, rental properties and businesses up for sale, further contributing to the glut of inventory choking the Southwest Florida market.”
“Some, including Sarasota landlord Geraldine Holmes, believe the failure to provide relief to the groups most affected by rising taxes during the boom will send Florida’s already weakened economy into a tailspin.”
“‘I don’t know what they were thinking,’ Holmes said. ‘We’re already at the beginning of a recession, and this is going to push us in deeper.’”
“Peter Feuerstein, an Anna Maria Island real estate agent who caters to German buyers, said taxes already are causing his compatriots to sell their houses and head home. One of his clients just sold his Anna Maria house for $455,000 because he was paying $11,0000 in taxes and another $10,000 for insurance and maintenance.”
“‘He told me that for $20,000, he can travel all over the world,’ Feuerstein said.”
“‘This legislation is a joke,’ said Al Noyes, a Massachusetts snowbird who also owns two rental properties in Bradenton Beach. ‘I can’t keep rents high enough to pay insurance and taxes. So I lose money every year.’”
“Noyes, who has seen annual taxes on his two rentals triple to $23,500, said he would need rents of $1,000 per month to break even, but he can only get $800 per month. He is now trying to sell the properties, which were once valued at $1.2 million, for half that amount.”
“‘The problem is that no one wants to buy them because the taxes are too high,’ Noyes said.”
“‘Cheerleaders at the National Association of Realtors say we’re just a few months from the market turning around,’ said Scott Corbridge, who owns three rental property and manages 150 more. ‘But I think it’s going to take much longer. Landlords, who are getting the worst of it, will be bailing out and selling, which will further increase inventory and depress prices.’”
“What legislators should have done is roll back taxes to the pre-bubble years of 2002 or 2003, said real estate agent John Allaman. ‘Local governments should not be allowed to be greedy and keep the money that they raised during the bubble,’ Allaman maintains. ‘It is not their money, and they don’t deserve to keep benefiting when everyone else is suffering.’”
The Bradenton Herald. “Legislators had an opportunity to breathe new life into a sluggish real estate market with tax reforms but didn’t take advantage of that, according to local experts.”
“‘Insurance and taxes used to be incidentals, they never used to be deal makers or breakers,” said broker associate Patrick McGuire.”
“Rollbacks in taxes coupled with the rollbacks in housing prices may give the market more hope. ‘Prices have rolled back about 20 percent from the height of the boom, and lower prices roll back the tax amount and even the insurance amount,’ McGuire said.”
An early look at Broward County’s May numbers:
http://www.ewm.com/trendx/report.asp
Keep in mind that ewm.com’s data only refects MLS data. Therefore it skews the data significantly. Inventory is significantly under-reported because the MLS does not include new construction and FSBOs. Sales are over-reported because it reports a sale when it goes to contract, not when it goes to closing. A friend who is in the RE business told me that less only around half of the contracts he sees actually makes it to close. Days on the market is also under-reported because Realtors® frequently take listings off the MLS and then re-list them as new listings a few days later.
Still, despite all the terrible skewed data, the trends are horrible. The bubble has bursts.
Just for fun though, everyone should read the two essays on the site (they’re loaded with classic Realtor® cliches):
http://www.ewm.com/company/articles/normalmarket/
http://www.ewm.com/company/articles/bubbletalk/
“Just about everyone agrees that thousands of newcomers will continue to purchase homes in Florida, either as permanent or part-time residences. As the demand increases for homes and the supply of developable land decreases, South Florida values are going to rise. It’s that simple.
It’s not a question of, “if we build it, will they come?” They’re already here… hence the growing demand for first, second and even third homes. It’s a great time to be living and working in South Florida. Spread the word……..”
“The Pygmalion effect is where we get our concept of the self-fulfilling prophecy. In Greek mythology, Pygmalion was the king of Cyprus. He decided that he would carve an ivory statue of what he deemed to be the perfect woman. In the mythology, we learn that his belief and his desire were so strong that it actually (with a little help from the goddess Venus) brought the statue to life, hence the concept of what we know today as the self-fulfilling prophecy.
A self-fulfilling prophecy can be extremely positive, or extremely negative. Believe in something strongly enough, and we can certainly affect its growth or its descent. A more contemporary concept says that “perception is greater than reality”. If enough of the world’s population believe that South Florida’s values will continue to strengthen . . . it will happen. Most agree that South Florida is still an under-valued real estate market in comparison to other world centers, so I believe that that ‘perception’ will continue to lead us.”
and then came wilma! what a laugh. i guess these people dont realize that money dont grow on trees or not everyone is rich. and, prices dont go up forever.
classics quotes all the way!
What a load of happy horse crap they are still spewing. Cattle drivers. HaaaHaa.
You don’t need anymore land in Miami-Dade. No one want to live there anymore.
‘UF officials said sales of existing homes have faded in recent months’
Did the media give these guys a pass or what?
Did they ever. I seem to remember from this blog that Archer and UF issued a serenely optimistic report less than twelve months ago. I’m still waiting for Florida’s alleged uber-economist Hank Fishkind to backtrack. No doubt it will come in the form of his “surprise” at recent developments.
Yes, being a Florida grad, I was extremely embarressed about the article they wrote, so I fired off a nasty gram to them.
On a side note, I dont know what I am going to do with all the money I am going to get back…Wow, $174.00…That is a chunk of change now.
Maybe you should invest it in real estate?
With that much money for a down payment, you could purchase a million dollar property!
Or he could stock up on
Hummer cologne products so his fragrance can match his manly ride:
This is the new product same like to feel the Droive the Hummer Car like that and it smeel is very fine
(from the testimonials)
here in w. colo and e. utah, where people actually use the 4×4 on their cars, hummers are now passe and not cool. hard to sell, you can get one pretty cheap
Phillygal, I already use brute….You smell good and It keeps the mosquitos away.
Add me to the list of embarassed UF alums.
All is not lost though; at least there are a bunch of us reading and contributing to this blog.
The difference is that Wayne (a long time Florida RE professor), surveyed only qualified real estate professionals, many of them former students of his like me. So his data is looking forward. Everybody else are using historical data, or looking backwards. I also suspect that the screwed up property tax situation has everybody spooked.
“‘Cheerleaders at the National Association of Realtors say we’re just a few months from the market turning around”
Obviously the cheerleaders haven’t seen the mortgage re-set chart.
The truth is, we’re just a few months from the major bloodbath that will bury, once and for all, the bubble.
“Obviously the cheerleaders haven’t seen the mortgage re-set chart.
The truth is, we’re just a few months from the major bloodbath that will bury, once and for all, the bubble”
Yes, see it already in the suburbs around my town, grass is a yard high in front of abandoned homes…..multiply that by about ten fold by 2009 and it will give you a picture of the future….already seeing boats, large trucks, even limos on people’s lawns around here….money is drying up.
“already seeing boats, large trucks, even limos on people’s lawns around here….money is drying up.”
You could always see this sort of thing in the less populated, backwoods areas of Florida. I guess it is now becoming “mainstream”. I can’t even imagine what Cape Coral looks like now. I remember going there on business a lot in 2001-2002. Del Prado Boulevard just freaked me out.
Everyone is trying to sell boats and pickup trucks (unneeded) at the time when fuel is $3/gal. Looks like a perfect storm brewing; not only can the folks not sell their houses, they also can’t sell the discretionary goods they own in order to save their house.
The truth is, we’re just a few months from the major bloodbath that will bury, once and for all, the bubble.
Look at the brighter side of Florida, once the bloodbath takes place, Florida will have a new tourist attraction…..Ghost Towns!
“Look at the brighter side of Florida, once the bloodbath takes place, Florida will have a new tourist attraction…..Ghost Towns!”
New Disney attraction: Tombstone Territory
I am getting so anxious for that moment already Palmetto.
We are 90 days out from moving to WPB. I am anxious to see for my self first hand the mass amounts of homes on the market.
I am so sick of still the nay sayers that continue to say the market will turn around and that we are crazy to believe we will see early 2003 prices again.
I am looking for a temporary (90 days) furnished rental, does anyone know someone good that can help me with this?
If anyone does please e mail me at sunkissedbeach@yahoo.com
Thanks.
SKB, I’d like to help you out, but I’m over on the other side of the state. You can try Craigslist for the WPB area, they have a section under real estate for temp rentals. I don’t know where Bad Andy or the WPB posters are today, but they could give you some good advice as to where and where not to rent in the WPB area. Also, much as I hate to plug realtors on this blog, when I needed a temporary furnished rental, it was a realtor who found one for me, so you can also go to the realtor.com website and search under the rental tab for WPB.
The next quote:
“Landlords, who are getting the worst of it, will be bailing out and selling, which will further increase inventory and depress prices.”
—————————–
Wait a minute… I thought that when people couldn’t sell, instead of lowering prices their plan was to just rent the places out.
But we can’t lower prices, we don’t have the equity.
But we can’t lower rent, taxes are too high.
Back to the retirement fund to pay the mortgage, so sad.
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Real estate only ever appreciates…
“‘It’s like living in the Ritz-Carlton,’ Simon said. ‘It’s got great amenities, it’s clean, it’s safe, it’s got a beautiful view.’”
It might be that way now, while they’re still trying to sell units, but once reality sets in, what do you want to bet that the amenities dry up, cleanliness turns to trash and dinginess, and safety and security disappear. He’ll be enjoying that great view along with squatting crackheads.
Not to mention his landlord may just be pocketing his rent payments until the bank forecloses.
Wonderful things are happening in Florida. Go home, snowbirds. Give up your dream of owning everything and making people pay tribute to you. Put all those money losing investment properties on the market and we’ll get what the state really needs - cheap housing for people who live there and make low Florida wages.
Not to mention his landlord may just be pocketing his rent payments until the bank forecloses.
My thoughts exactly. Even if the landlord is trying to feed the alligator, there will certainly be stability issues.
There is no free lunch, not even for renters on discount!
Go home, snowbirds. Give up your dream of owning everything and making people pay tribute to you. Put all those money losing investment properties on the market and we’ll get what the state really needs - cheap housing for people who live there and make low Florida wages.
I’ll give you one guess as to what will happen to the low Florida wages if all the snowbirds go home.
I just sold and moved from Fl and what I find amusing is that everyone keeps talking about snowbirds..well FYI.. for the last two years the out of state and Canada plates have dwindled significantly..even traffic was much lighter during the winter months..so to get the message out..”THE SNOWBIRDS HAVE MIGRATED TO OTHER STATES…WAKE UP FL”
..”THE SNOWBIRDS HAVE MIGRATED TO OTHER STATES…WAKE UP FL”
No, they stayed in Canada because they are having problems getting passports to come into the USA. Spend a long cold winter up north and you will want to come to Florida!
Go home, snowbirds
Yeah these weather transients are a real PITA.
They all flock back to the Northeast in May screw it all up here.
You can see traffic volumes double and there are lines up the wazoo in all the understaffed businesses.
I’d tax the fook outta second homes.
“‘I felt very positive that the lawmakers were going to do something constructive,’ said Sharon Castrillon-Harrington, an agent in Wellington. ‘But they let us down.’”
Tsk-tsk. Sharon, don’t you realize that Tallahassee politicos are elected specifically for the purpose of letting people down?
and making sure that tax revenues NEVER go down. Got to keep the guvmint gravy train chuggin along. meaningful tax reform means less for them to waste
I love the fact that a commercial real estate broker is renting, loving it, and bragging about it!
Yep, and guess who is going to be having trouble making his rent next year when commercial RE goes tits up?
“What legislators should have done is roll back taxes to the pre-bubble years of 2002 or 2003, said real estate agent John Allaman. ‘Local governments should not be allowed to be greedy and keep the money that they raised during the bubble,’ Allaman maintains. ‘It is not their money, and they don’t deserve to keep benefiting when everyone else is suffering.’”
Speaking of contradictory RE agents. John buddy, psssst, keep your voice down……there IS NO BUBBLE. DL told me time and time again.
Oh by the way, when you said ‘its not their money’ did you mean the government, or the FBs?
I vote both.
“What legislators should have done is roll back taxes to the pre-bubble years of 2002 or 2003, said real estate agent John Allaman. ‘Local governments should not be allowed to be greedy and keep the money that they raised during the bubble,’ Allaman maintains. ‘It is not their money, and they don’t deserve to keep benefiting when everyone else is suffering.’”
Do ya think Mr. Allaman would consider giving back the money he made on commissions? Does he deserve to benefit from his greed when everyone else is sufferring?
good point. Last night, the local NBC affiliate interviewed gov’t folks up in Citrus County (outer edge of Tampa Bay viewing area). They actually did give money back to taxpayers a while back and are now a little nervous about what’s going to happen.
If I were them, I wouldn’t be nervous, the “stupor-exemption” will get voted down. Nothing will happen except that the property values will plummet and taxes will fall accordingly. I really don’t think local gov’t will mess with millage rates. At some point, when foreclosures mount up and taxpaying public moves away or just can’t pay, reality will set in. On the way to that realization, there will be some major pain, though.
Sigh. Hillsborough County will probably lose its excellent public health program. I’ll be sad to see it go. So will all the illegals and their birthright babies. They’ll move on to greener pastures. Get ready, northeast US.
Then he’ll move to another rental unit.
Analysts and real estate agents were hoping for a market rebound once Florida legislators addressed the state’s property-tax crunch. While the new tax plan offers some immediate relief, many agents say it won’t be enough of a long-term fix to rekindle interest in buying homes
I bet the FL Legislature could completely eliminate taxes and make insurance voluntary (not required, but if something happens - tough $hit) and it wouldn’t be enough to ’stimulate’ this housing issue. The prices got too high, and such party isn’t going to continue.
This legislation is a joke,’ said Al Noyes, a Massachusetts snowbird who also owns two rental properties in Bradenton Beach. ‘I can’t keep rents high enough to pay insurance and taxes. So I lose money every year.’”
Yes, Mr. Noyes - the legislation is a joke. And so is your thinking you can pass along your cost in a glutted market. FL is in trouble, and only a big cut in prices will do something to ’stimulate’ the housing.
I agree about the prices. Triple what something is worth and then wonder why the taxes are high. Taxes a based on prices.
‘“Grant Thrall was so convinced that state legislators understood the importance of real estate and home building to Florida’s economy that he predicted they would pass meaningful tax and insurance reform. Never happened, at least in Thrall’s view.”
Grants excitement is dumbfounding. The delusion runs so deep that any straw of hope is grasped at desperately. This is a sign that the disaster is going to destroy those hanging only to hope.
“Homesteaded homeowners are not likely to give up their protections under Save Our Homes legislation. That means they will stay right where they are and do nothing to stimulate the real estate market.”
What an idiot. Why would homeowners want to bail out speculators and real estate agents? If he wants to stimulate the real estate market this guy should work for free.
If he wants to stimulate the real estate market this guy should work for free.
Actually, he should quit.
“I can’t keep rents high enough to pay insurance and taxes. So I lose money every year.”
And I care because…?
“This legislation is a joke,’ said Al Noyes, a Massachusetts snowbird who also owns two rental properties in Bradenton Beach. ‘I can’t keep rents high enough to pay insurance and taxes. So I lose money every year”
Do I detect a hint of owner bitterness Al?
So now who’s throwing money away, the renter or the landlord?
Heh, and now the world’s smallest violin will delight you with a rendition of “STFU, snowbird FB”.
And with 12 months of rent barely covering the cost of insurance and taxes who exactly valued the ‘investment’ at 1.2M ??
And now you’re trying to sell it for half that…..which yields…the same question again. It goes back to the formula:
((50%delusion *40%hope)-(10% judgement^2 much risk))/0 common sense = 100% stupidity.
And yes, you can devide by zero. It always equals 100% stupidity
Actually, it equals infinite stupidity.
100% = full, complete, i.e infinity
“‘I don’t know what they were thinking,’ Holmes said. ‘We’re already at the beginning of a recession, and this is going to push us in deeper.’”
“‘The problem is that no one wants to buy them because the taxes are too high,’ Noyes said.”
Welcome to landlord hell.
“‘I felt very positive that the lawmakers were going to do something constructive,’ said Sharon Castrillon-Harrington, an agent in Wellington. ‘But they let us down.’”
The lawmakers did not let you down Sharon Castrillon-Harrington, it was the greedy mortgage brokers, realtors and Wall Street bankers that are letting the entire industry down! Go back to your former job in the fast food industry.
In the long run, the bust will be very good for Florida, despite the major pain that will happen in the interim. As people flee the state, traffic will ease and the strain on water resources will lessen.
Perhaps, in the future, some plan for population consolidation will be worked out. For example, you’ve got two half empty, deteriorating developments side by side. Shift the homeowners from one development into the other. Vaporize the empty one, plant natural indigenous vegetation and let it return to its natural state.
especially if you’re on a pension
otherwise not so much fun
There’s an initiative in the midwest now called “Shrinking Cities” that’s helping places like Youngstown plan for declining population - more greenspace, parks, urban gardens, etc. Encouraging folks to abandon some neighborhoods and relocate is part of the program. Some interesting ideas…
all gov programs fail
they reward failure
All Govt programs fail….IRAQ
“…all gov programs fail…”
Oh, come on now. Shooting the indians and taking their land was highly successful…
gsinbe, good ideas often come from what seems to be adversity. I saw a program on Youngstown, it was very interesting. I was shocked to see how much potential green space Miami had when I was taking my elevated rides through the area and how many nice old neighborhoods there were.
Youngstown has been trying to get on it’s feet since the day I was born 59 years ago. The rejuvenate areas and then they fall into decay, because 90% of the people that live there are on welfare of substandard wages. The parks will be weeded lots to sell drugs in about 5 years from now. We live one county away and avoid Youngstown at all costs.
As people flee the state, traffic will ease and the strain on water resources will lessen.
6 years ago I went to a housing seminar conducted by some national figure/expert whose name now escapes me.
Ya take so many goddamn government required cont. ed courses
they all seem to run together.
Interestingly, he said-stay the fook away from FL.
Said the whole place was an ecological time bomb.
Too bad the message didn’t get out to the lemmings.
“Interestingly, he said-stay the fook away from FL.
Said the whole place was an ecological time bomb.”
Actually, I think the housing bubble’s bust might pull us back from that brink. Time will tell. It’s like that riff about boiling frogs. They turned the heat up too fast. The sheer volume of the mess will make many people sit up and take notice and there will be a knee-jerk reaction to all of this. The pendulum will no doubt swing too far in the other direction for a time.
When the next hurricane comes through, the aftermath will be more like Katrina instead of the massive re-building effort that has taken place in most of Florida in recent years. Florida’s population is being culled. Until recent years, there’s really no excuse for living subsidized in Florida. You can make it on the cheap under normal Florida circumstances. I’m happy to relocate people who need subsidies (except for vets) to the Northeast, where there are subsidies galore for everyone.
I’m happy to relocate people who need subsidies (except for vets) to the Northeast, where there are subsidies galore for everyone.
LMAO, Palmetto…I wish FL would keep these loser weather transients year round.
I always been one who’s never minded cold weather, so I stay in my place, but quality of life here in New England (as compromised as it already is) sure goes in the crapper when these legions of migrants return.
OT - did anyone find out how the numbers HousingTracker supplies got screwed up a week or two ago? This week Baltimore shows a 16.8% decline… and I sincerely doubt 2000+ homes were suddenly sold last week.
Last week DC-metro showed a 20% decline. This weeks it shows an 11% increase.
In contrast my own mining of 3 NoVA zip codes in ZipRealty has shown a steady to slight (
Thanks in part to the housing market, a two-legged market downturn (huge) is imminent. Good luck.
Curious about this - are you thinking that the first leg is finished, or we’re still in the first leg?
I’ve noticed that median prices and sales have leveled off in many areas - e.g Bradenton/Sarasota (where I’d like to buy some day), for about 4-6 months now. I’m sure there’s another leg to come (2nd leg), but it will be much longer time-wise (first leg was only 1 year), and very likely to be deeper (first leg was about 15-20%).
Across the state though, according to FAR anyhow, it’s still in the first leg - i.e. medians are still going down, though perhaps with a brief blip in March & April. I view 1-3 month blips as just noise though, and not true pauses between legs.
In my opinion, and take it for what it’s worth, we haven’t even gotten to the first leg of a correction, but we’re getting very close. Like I said, I wouldn’t be surprised to see a 10 percent correction or more. The timing is unknown, unfortunately, but it appears to be much closer.
I’m talking about the stock market right now.
I have family in both Bradenton and Sarasota. Personally, I think their pricing has a long way down yet to go. With the sole exception of a specific non-RE-related event (such as announcement of a new automobile plant), I think the safest way to look at pricing prospects for most any area in the country is the tried-and-true one long espoused by many here: pick a pre-bubble year, depending on your level of pessimism (I like 1999) and look up what prices were then. That is the most I would offer for a house and I’m not sure I would offer that much for a condo. You might be more comfortable with 2000 or 2001, if you’re anxious to buy.
There are a large number of “formulas” to choose from, but on this blog they all are in the direction of lower prices than you see today, IMO.
Chip - do you live inland or on/near the coast? What’s your thoughts with regards to how this is affecting the coastal areas vs. inland areas - so far, and how it will affect long-term?
Thanks.
I’m in the Sarasota-Bradenton area (Lakewood Ranch) and we have a long way to go here. The ‘Sixpercenters’ think we’ve hit bottom due to the sales uptick compared to last year but we fell the fastest and we were one of the first areas to take a hit. The rest of the state is catching up and the inventory here locally is still astronomical. There are TONS of For Sale/For Rent signs everywhere you go and we’re still at a historically high inventory level. Inventory has increased more y/o/y than the sales have so we are fundamentally in worse shape than last year. Houses in my community that are selling are going about 30% off peak right now and the rest are just sitting because people cannot afford to lower the price. The house 2 houses down from me is vacant and the weeds are waist high. A real shame since it’s a nice little neighborhood….luckily I’m renting.
Wayne Archer, the center’s director, said ‘the mood has grown more somber since January,’
Somber, like in funeral?
of Geraldine Holmes Homes Fame
“Some, including Sarasota landlord Geraldine Holmes, believe the failure to provide relief to the groups most affected by rising taxes during the boom will send Florida’s already weakened economy into a tailspin.”
” you mean it matters ?
wow
they nonetheless appeared concerned about the Commerce Department report showing construction of new homes and apartments dropped by 2.1 percent last month.
where are LIErahs FL properties
tell me he bought when he told others to buy in late 05=sweet revenge
He didn’t, the only people who were truthful was the execs at the large home builders. They spoke volumes when they started selling off billions of their personal shares in their companies last year, always remember to follow the money in all things and there you will find the truth in all things. Interestingly enough they have stayed pretty truthful about the conditions and climate for home sales….a far cry from NAR and RA propaganda.
The Orlando Sentinel. “A statewide survey of real-estate experts released Monday showed that appraisers, brokers and other professionals are decidedly more pessimistic than they were earlier this year.”
Shows ya what a bunch of hacks and losers the appraisal profession has become.
These moron’s JOB is be ahead of the curve, not behind it.
Then again-all the legit appraiser’s got run out of the profession in 1998.
Garbage in-garbage out.
What Florida should do, is do away with the “Save our Homes” homestead exemption. Everyone should pay the same, it should not matter that you purchased your house 20 years ago. Why should the young couple who just got married and moved into an identical house as to the one next door that the older couple purchased 20 years ago pay three or four times as much in RE taxes just because they paid more for the house. Both houses are worth about the same. Both houses receive the same city services. It make totally no sense, young people have no chance of getting ahead, they are being forced to move out of state.
Here in Maryland everyone pays about the same thing for the same house in a neighborhood. Taxes are paid based on assessed value, not when you were lucky enough to buy.
Florida’s new triple play “High taxes, High insurance, High Supply” what a recipe for disaster.
“What Florida should do, is do away with the “Save our Homes” homestead exemption.”
Only if they do away with bubbles. And government.
Unfortunately those homeowners also constitute the majority of voters. They’re not gonna end their own gravy train.
I read that South Carolina recently passed a tax cap similar to Florida’s SOH program. Give it a decade or so for the inequities to build, and they’ll be in the same boat.
What Florida should do, is do away with the “Save our Homes” homestead exemption. Everyone should pay the same, it should not matter that you purchased your house 20 years ago. Why should the young couple who just got married and moved into an identical house as to the one next door that the older couple purchased 20 years ago pay three or four times as much in RE taxes just because they paid more for the house. Both houses are worth about the same. Both houses receive the same city services. It make totally no sense, young people have no chance of getting ahead, they are being forced to move out of state.
Here in Maryland everyone pays about the same thing for the same house in a neighborhood. Taxes are paid based on assessed value, not when you were lucky enough to buy.
Florida’s new triple play “High taxes, High insurance, High Supply” what a recipe for disaster.
God I love SOH. I can only hope that everyone in the NE feels the same way.
That’s why they should…”SMELL THE RECESSION COOKING..its was brewing before but now is getting ready to boil and spill over!”
Why should the young couple who just got married and moved into an identical house as to the one next door that the older couple purchased 20 years ago pay three or four times as much in RE taxes just because they paid more for the house.
Why? Because Florida hates young people.
Florida is god’s waiting room.
Roidy
“At the same time, snowbirds, landlords and small business owners on barrier islands may get so angry about being ignored by lawmakers that they will put their homes, rental properties and businesses up for sale, further contributing to the glut of inventory choking the Southwest Florida market.”
“Peter Feuerstein, an Anna Maria Island real estate agent who caters to German buyers, said taxes already are causing his compatriots to sell their houses and head home. One of his clients just sold his Anna Maria house for $455,000 because he was paying $11,0000 in taxes and another $10,000 for insurance and maintenance.”
“‘He told me that for $20,000, he can travel all over the world,’ Feuerstein said.”
So much for the argument that snowbirds and foreigners will keep flocking to Florida and keep property prices high (i.e., it’s different here).
So much for the argument that snowbirds and foreigners will keep flocking to Florida and keep property prices high (i.e., it’s different here).
Apparently, they’ve learned math.
I have a feeling after their Spanish home losses that the German buyer market is toast for five to seven years…
Got popcorn?
Neil
Ive said this before…Taxes are a symptom…The real problem…Government spending…I recently saw an article about the City of Wintersprings(town near Orlando)…They are having the same problem…Not enough in the coffers…The mayor recently put a team of citizens together to go thru the budget and cut some fat.
What a concept…I would like to see this at the federal level.
Then vote for Ron Paul
I already did…When he was the libertarian candidate!!
Ditto.
People can’t seem to make the proper connection between “voting the way we always have” (straight Democrat or Republican) and the abysmal leadership we’re saddled with at the local, state, and national level.
Winter Springs is a very nice part of the Orlando area. I wouldn’t want to live the and work in downtown Orlando, given the commute time, but it is clean and well-maintained, with some of the nicer boulevards and streets in the area. I agree with you that encouraging the citizens to suggests places to cut the budget is a good start. The downside is that county taxes are unaffected by this effort, but it is all the city officials can do, unilaterally.
Chip……don’t you mean “Winter Park”….I mean Winter Springs is OK but it is more like Clermont than Orlando…..kind of an exurb of Orlando….nice…..but cookie cutter.
Economist, those who support SOH, Prop 13, etc never understand the problem. (That saying about never understand that which is in your best interest not to understand thrown around here about the RE industry can be applied to these folks as well.)
Cap the budget growth. Problem solved.
Simon says rent
“Jim Simon, for example, recently moved into a condo in downtown Fort Myers, where the owners of its 105 units typically paid as much as $600,000 for the convenient riverfront location. But Simon, a commercial real-estate broker, is paying only $1,350 a month, barely enough to cover the taxes and condo association fees.”
Jim Simon, for example, recently moved into a condo in downtown Fort Myers, where the owners of its 105 units typically paid as much as $600,000 for the convenient riverfront location. But Simon, a commercial real-estate broker, is paying only $1,350 a month, barely enough to cover the taxes and condo association fees.”
This is exactly what will happen to south florida..so potential buyers have a huge opportunity to rent an urban living at a huge discount///downtown miami /brickell itself will have thousands of rentable units.
These jokers looking for tax breaks crack me up … One of the consequences for a doubling of property value is a doubling of property taxes. Can you imagine how bad the real estate bubble would have been without high property taxes?
There is no better illustration of the effect of tax breaks on housing prices than the tax breaks offered on condo conversions in “historic” buildings. Typically, developers sell these for a premium above the market price, and not surprisingly, that premium is precisely the amount of the annual tax break multiplied by the number of years of that tax break. All the tax break does is provide an incentive for the developer (which can be a good thing, depending on the project), but it does absolutely nothing for the owner. The owner just ends up paying more interest on an artificially inflated sales price. Frankly, I’d rather pay taxes than pay interest.
“One of the consequences for a doubling of property value is a doubling of property taxes.”
Only because the county govts chose to be greedy. They could have lowered the millage rate to keep everyone’s tax bill roughly the same, but the chosey to take the windfall instead.
Florida homeowners have been screwed by the people they elected.
“Only because the county govts chose to be greedy. They could have lowered the millage rate to keep everyone’s tax bill roughly the same, but the chosey to take the windfall instead”
Testify. This is the ONE TRUE POINT that nobody wants to acknowledge in the whole confused debate. They act like a bunch of drug addicts being told their supply is going to be reduced. So they threaten a freak-out public withdrawal.
The point wasn’t that the government could do with less. Everyone could do with less, but we all take as much as we can. Government is no exception, especially if you try to run government like a business.
The point was that property taxes act as a negative feedback mechanism for price increases. When twice the price leads to twice the taxes, it tends to slow huge oscillations in price. With a capped tax rate, like you suggested, I would expect prices to be less stable, and bubbles to get much bigger before they pop.
Could be, but in areas of high new development they also could have proactively been thinking about how they were going to afford new schools, etc.
As a former Florida resident from the 70’s/80’s/90’s I watch developments with mixed feelings:
Part of me appreciates & loves the beauty of the natural resources, especially Cocoa Beach - Sat. Beach area. Still have my old Ron Jon t-shirts.
On the other hand the rampant corruption and collusion between government officials & bidness has led to the present situation.
Commenting on the back-slapping back room good-ol-boy deals over the years to friends just got me a puzzled “they don’t still do that now do they?”
look in response.
Florida Legislature will ALWAYS and I mean ALWAYS be bought n paid for by bidness men … ie; insurance, real estate,bankers, agriculture, utilities,etc, and they will ALWAYS have open season for law enforcement to supress the average citizen who doesnt have more than 2 shekels to bribe … er
I mean “contribute” to a judge/local & state lawmakers fund.
been there / lived thru it in-person. sad state of affairs for a once glorious state.
(I am paranoid about not leaving my left-turn signal on)
Cocoa Beach is a unique story. Because of the geographic limitations, Banana River to the west and Atlantic Ocean to the east, the tiny piece of land was pretty much completely developed 20 years ago. All construction in the last 15 years was preceded by a tear-down. Thanks to our forward-looking city commissioners, we have strict density and height limitations (4 story max). The character of the city of 12,000 residents has remained pretty much as it was with the high rises going up to the north and south but only smaller 4 story structures in our city limits. People call me by name at the local coffee shop and the golf course and I walk to the beach from my office. Prices have plummeted and are continuing down, especially for high-end condos, but the charm that was Cocoa Beach is still here. My home may be worth 1/3 less than it was at the peak but I’m still surfing the same consistent waves, cruising the Thousand Islands in my kayak and catching big fish offshore when conditions permit. For those of us who happen to live in one of the special places and who aren’t in trouble with “investment” properties or mortgages, the bursting bubble means little.
I love Cocoa Beach…I spent many saturdays at coconuts…I think it was turtles before that.
Everything you say here is true. It’s a minor point, but with regard to “Thanks to our forward-looking city commissioners, we have strict density and height limitations (4 story max),” the present mayor fought hard against those restrictions. It was the previous administration that fought and fought against the developers until the limits were confirmed as part of the city’s charter.
As predicted, Florida is heading deep into the abyss.
Boys at Implode O Meter are up to 84….
Couple more every week…be a hundred by end of August.
It’ll be intersting to see if there are any ‘duplicates’ yet given that several of the now defunct lenders have tried to restart under a different name. Someone should do a CEO/CFO/Founder search on all of the dead lenders and see if we have a double loser yet.
There is a simple solution to the tax problems in Florida, which I have expressed to my legislators. Freeze the millage rate and do real time property tax assessments. Using similar models that they use to estimate yearly tax revenues,which are very close to what they actually collect. They can do the same with property tax assessments, to reflect the true value of a house at the time the homeowner receives their tax bill.
Real property values in Florida are down 20% from the peak, and will probably be down 35% by November when property owners get their new tax bill. By implementing my plan, property owners would save 35% off their total previous years tax bill, and would help bring back Florida’s RE market.
I actually don’t want them to do anything, because I would prefer to see the whole market go up in flames, as it is doing now. There has been too much greed for too long. I also know that the legislators would not actually implement my plan, because their heads would explode, if they had 35% less money to spend on their pet projects and their builder buddies. Too bad Florida is burnt toast otherwise.
Buddy of mine is making payments on at least one Condo in Miami. It’s on some waterfront. He is renting it out. He does not tell me how long the lease is of course. With such a glut of rentals and more coming on the market in Miami, I’m expecting when the lease is up he will either have to lower the rent to keep his tenant or have an unoccupied condo. I figure that is when he will stop bragging that his tenants are paying his mortgage. I know he’s obsessed with Real Estate. He thinks being a landlord is the best way to get rich and talks about buying more RE in a few years. He has high BP and I think his worries about his material possessions are part of the reason. For me, there are no worries as a long term dollar cost averager into stock mutual funds. I don’t get much sleep, but it’s only because of my four legged pest - my cat - being active.
I know he’s obsessed with Real Estate. He thinks being a landlord is the best way to get rich
Ugh…anyone smale scale who wants to deal with the liability factors the and rights of tenants today need to have their head examined.
I’ve seen a landlord ordered by the court in hearings to give a deadbeat tenant extended “free” occupancy because she was “pregnant” and didn’t feel like working.
He needs to book a session with Dr. Melfi.
Prices will correct taxes as soon as the brain dead sellers get it in their heads that prices have to go back to 2003 prices. You can’t have it both ways. High RE values and low taxes and insurance. Everyone in FL should pay taxes on the value of their property and forget the exclusions. Pretty soon no one will live there unless they are under the exclusions. Wake up. You have no industry except snowbirds and tourists. Chase them out and many more hotels and restaurants will close, leaving many more people without jobs, and many of these are permanent FL residents. All you people who hate tourists and snowbirds will be living in ghost towns as more and more of your permanent residents leave also. You have no other means of support.
I think prices need to revert to 1998 or earlier; the bubble started here in Florida and then spread outward in later years. Three cheers for Carlton Sheets and his army of suckers, and his Florida-based infomercials going back at least a decade.
The tax rates here are too high, and without a cap, would drive most long-term residents out. In Santa Fe, New Mexico, a beauty spot, taxes are 2% of 1/3 the selling price of a property, so even expensive homes have relatively low property taxes compared to here.
If Palmetto see this: Do you remember when the Crosstown was young and one could drive it without encountering another car? That wasn’t that long ago. Now it’s two levels, and packed from end-to-end. Given this level of population increase in Hillsborough County, there should be enough tax revenues to provide free medical care to everyone, with cash to spare.
I remember that time, and it wasn’t that long ago. I also know one old-time cracker who lived here when I-4 was completed. He said he drove from Tampa to Daytona and saw only a handful of cars the entire way.
I remember that time, and it wasn’t that long ago.
Hi Snake Charmer,
I remember being in the only car on the Interstate coming back from Brooksville, and waiting when our tire went flat for somebody to show up and help. Eventually a State Trooper did (after an hour or two).
I blame Disney World for everything after that.
i remember this growing up. maybe 10 years ago. nobody on the crosstown. i thought to myself, wow, what a waste, completely empty. why would anyone pay a toll for this slightly better commute? now the thing is packed. kinda surreal
I wouldn’t disagree that real estate is in trouble, but blanket statements like yours are just not true. In my South Florida neighborhood, I can’t think of anyone who works in anything related to snowbirds or tourism, unless you count the health care people that take care of them while they are here. Most of the people in my neighborhood work in high tech, and our quality of life would only improve if all the snowbirds never came back.
I’d argue that a full-time resident, working and contributing to the economy, is worth 4 snowbirds:
- most importantly, they produce something and add to the state GDP. What does a snowbird build, or make, or supply to the rest of the residents except cash? Isn’t it better to have someone that provides something, AND spends money?
- residents support the stores and restaurants 12 months a year, not just 4 months. Think how much easier it would be to run a restaurant with a steady, 12 month business.
- they put a much lower strain on health care facilities
- they help clean up after a hurricane!
- I’d argue that we’d be better off with 1/2 the snowbirds and a few more permanent residents.
I wouldn’t disagree that real estate is in trouble, but blanket statements like yours are just not true. In my South Florida neighborhood, I can’t think of anyone who works in anything related to snowbirds or tourism, unless you count the health care people that take care of them while they are here. Most of the people in my neighborhood work in high tech.
I’d argue that a full-time resident, working and contributing to the economy, is worth 4 snowbirds:
- most importantly, they produce something and add to the state GDP. What does a snowbird build, or make, or supply to the rest of the residents except cash? Isn’t it better to have someone that provides something, AND spends money?
- residents support the stores and restaurants 12 months a year, not just 4 months.
- they put a much lower strain on health care facilities
- they help clean up after a hurricane!
- I’d argue that we’d be better off with 1/2 the snowbirds and a few more permanent residents.
““‘There is strong opinion among many thoughtful people that with existing homes many sellers are still expecting the kind of premium that they saw happen between 2003 and 2005 and they haven’t come to terms with the fact that price increases have cooled off,’ he said. ‘So you may find people asking for more than their houses are worth.’”
I left the room and the English language changed. How does the phrase “…price increases have cooled off…” relate in any way to flat or declining prices. We are not, and have not in a long time, been in a tempering-of-increases phase in Florida.
“‘Things have gotten a little more sober,’ said Archer. ‘People are overly optimistic about the prices they can get and have not come to terms with the fact that we’re not having these huge leaps in price that we had in the past.’”
Here again, twisted phrasing (wimpified): “…have not come to terms with the fact that we’re not having these huge leaps in price that we had in the past.’”
Correctly written, it would have been “…have not come to terms with the fact that the huge leaps in price that we had during the housing bubble are long, long gone and are not coming back. They should instead expect declining prices for the foreseeable future.”
“In Lee County and around the country, home builders say the picture looks bleak for the next six months…”
How come they never explain to us what will happen in six months to cahnge things????
Ah, the joys of being a landlord. I tried it once, and in retrospect I feel I was fortunate that it did not work out. I had great tenants that always paid on time, didn’t trash the property, and in some cases even improved the property themselves.
I bought properties in a city with very a very restrictive growth policy, governement offices and a large university. At the time of purchase, the rents covered PITI plus HOA dues on a conservative fixed-rate conventional loan. I was paying for repairs out of pocket, but figured that after a few years the rents should increase enough that I’d be able to stop doing that. What could go wrong?
Well, rents dropped and vacancy rates skyrocketed when the regional job market went in the toilet. Units that had quickly (like in one weekend) rented for $1000/mo dropped to $850-$900, plus the renters expected a free month, plus it would take at least a month to get the place rented. So, my gross dropped 25%+ in just one year. Of course, at the same time the property taxes and HOA fees just kept climbing.
Rather than suffer negative cash flow for an undetermined amount of time, I unloaded them for a bit more than I’d originally paid, although overall I had a small loss because of transaction costs. Selling those units was the best move I ever made. Now, several years later, the rents still haven’t recovered and the HOA dues have nearly doubled.
Never buy rental property without a large income margin.
Bill
But Simon, a commercial real-estate broker, is paying only $1,350 a month, barely enough to cover the taxes and condo association fees.”
Like I posted a couple of days ago. I said the rent would only cover taxes and fees with nothing left for a mortgage payment. Therefore, this item proves my point that FL condos are worthless.
Maybe you would be better off in FL with a state income tax. Our property is worth about $220,000 in the midwest and we pay $2012 a year property taxes and $2268 state income tax on an $86,000 salary. It sounds like your property taxes alone are almost double what we pay. Am I right? Our insurance is about $495 a yr for full replacement. We don’t have hurricanes, but we do have tornados. One last week just north of us. I’m not sure how to contain the insurance, but your taxes are outrageous. If you live in Ohio, even for part of the year, you have to pay partial year state income tax. That way everyone pays their way, including retirees. Social security is excluded, but not pensions.
FL elites have been trying to change to an income tax for years. way back when Lawton Chiles was Gov, an income tax was one of his ideas. Kept getting rejected because people knew that there would be an income tax on top of the high prop tax not in lieu of. Politicians never give money back, they just collect more. As a rsult, prop tax are out of control just llike gov’t spending.
I love this one…I know this mortgage broker who just cannot face the reality that the boom is done. He swears that the tax reform voters are going to vote for in Jan is going to make the market go crazy again…what a dreamer…