Thursday, December 28, 2006
'Maybe it was balmy weather up North, maybe it was lower interest rates, but the country as a whole experienced a mini spike in new home sales in November.
Pity poor Florida: The Sunshine State, and most of the South for that matter, didn't enjoy the rebound.
Nationally, new home sales in November rose 3.4 percent from the previous month to an annual rate of 1.047-million. That exceeded economists' forecasts of a 1.018-million homes.'
Sadly, prices have risen. Again.
'The national median new home price climbed to $251,700 in November 2006 from $237,900 in November 2005.'
Remember, the Commerce Department report does not take into account cancellations - so these numbers tend to be higher than actual.
And for the Tampa Bay region, some reports on the builders.
'Transeastern Homes: The builder of such best-selling neighborhoods as New Tampa's Live Oak Preserve has tried to stave off bankruptcy by laying off more than 100 and dismissing regional president Bob Krieff.
Ryland Homes: Heavily invested in Pasco County, Ryland's southeast division, which includes Florida, saw new home orders tank 64 percent from the third quarter of 2005 to the third quarter of 2006.
Centex Homes: Centex's sales this year have been leaden compared to 2005. In the Southeast region, the number of home contracts plunged 53 percent.
Beazer Homes: In the Atlanta builder's annual report in September, the company said new home orders dropped by a third in Florida. Its stronghold has been southeast Hillsborough County.
Pulte Homes: Based on its latest report, the nation's second-biggest homebuilder sold 29 percent fewer homes in the region that includes Florida. It has trimmed its work force 10 percent. Pulte is active in Clearwater, Seminole, Hudson and Wesley Chapel.'
US Commerce Report - New Home Sales
Friday, December 22, 2006
(And in case you were wondering who the top 2 have been these past 5 years, in every year it's been Arizona and Nevada. Talk about wandering tribes in the desert!)
Note that these figures are from July to July, so the latter half of this year won't show up until the December 2007 release of data.
Though we've dropped to #9 in % ranking, we're still #2 in total population gained (2nd only to Texas), with 321,697 added. That comes to 881 people per day (and we all know that figure is dropping as we speak). So tell your local realtor to stop spouting off the "1,000 people a day" figure that's been quoted ad nauseum during the bubble.
Full Article from US Census Bureau
Oh, and if I don't get a chance to post before next Monday, have a wonderful Christmas Weekend!!!
Wednesday, December 20, 2006
Ambitious building booms in many markets in the past half-decade, combined with mortgage interest rates that have increased about 1 percent in the past year, have resulted in residential real estate stagnation. The gridlock defies conventional wisdom, stubbornly remaining neither a buyer's nor a seller's market.
"We are currently experiencing the worst of the market freeze, which is being exacerbated by the gap between the buyer's desire for bargains and the seller's fantasy of what they once thought their homes would be worth," said Diane Swonk, chief economist for Chicago-based Mesirow Financial, who forecasts a rebound in early 2008. "The good news is that there are some signs of stabilization. The bad news is that a substantial backlog of unsold homes still exists."'
Moody's Economy.com makes an important observation - is this a portentous statistic?
The newest forecast by Moody's Economy.com, a private research firm, projected that the median sales price for an existing home will decline in 2007 by 3.6 percent -- the first decline for an entire year in U.S. home prices since the Great Depression of the 1930s.'
"In order to play this ponzi scheme, the value of the homes had to go up faster than the economy grew and faster than people could service their debt. We've reached that limit," Morci said. "The housing market sustained the economy at a time of very large trade deficits. It's been a false prosperity."'
And what do the forecasters say about our fine state?
Building frenzies in Miami, Orlando and the Caribbean coast resulted in a plethora of for-sale signs. Developers desperate to unload inventory offer free granite countertops, appliances and furniture -- even cars, vacations and mortgage payments for up to six months.
Meanwhile, insurance companies dramatically raised premiums after Hurricane Katrina. Depending on where they live and their policies, Florida home owners may pay as much as 10 times more for flood and wind insurance than last year; premiums can exceed $30,000 per year on mansions. That's caused monthly costs to skyrocket, pinching current owners and making it all but impossible for renters to buy.
Throughout Florida, 12,773 existing single-family homes were sold in October, down 22 percent from a year ago, according to the Florida Association of Realtors. Florida's median price was unchanged at $242,500, but more than half of the urban areas posted declines. Around Fort Myers, the median price plunged 44 percent to $249,200 from October 2005.'
Long-term demographic shifts from the Midwest and New England bode well for the notoriously boom-and-bust state, said Dave Denslow, professor of economics at the University of Florida. Florida, which gained 430,000 new residents in the past year, is a popular destination for Latin American immigrants and retirees from northern states, Canada and western Europe.
What a load of crap.
Tuesday, December 19, 2006
'This time last year the big question was whether the real estate market was going to slow down. Today it's "How bad will it get?"
The numbers tell a confusing story. For existing homes, buyers are trickling back into the market - sales inched upward in October even as the median home price fell by 3.5 percent, the largest year-over-year drop on record. And that comes after price declines in August and September.'
And new homes....?
'On the new-home front, sales in October fell, but the median price crept upward. For homebuilders, cancellations are up and orders down. '
Mark Zandi, from Economy.com, says it best.
'"It's possible that the broader housing market will firm in the next few months, that the worst is over," says Mark Zandi, chief economist at Moody's Economy.com. "But that to me is a dead-cat bounce." In a word, yikes.
So Fortune asked Zandi's group and real estate valuation company Fiserv Lending Solutions to give us their take on what lies ahead for housing in the country's 100 largest metropolitan areas. '
Full Article (with forecasts for all 100 markets)
Friday, December 15, 2006
'Allstate has had second thoughts about its next round of rate hikes.
The state's second-largest private property insurer this week has amended rate filings with the Office of Insurance Regulation to lower the amount of the average premium increases it seeks to 8 percent for Allstate Floridian and nearly 9 percent for Allstate Floridian Indemnity.
It originally sought to raise rates an average of 22.5 percent for Allstate Floridian and 33.2 percent for Allstate Floridian Indemnity — though residents in more than half the company's territories would have seen increases over 70 percent. How the new rate hike breaks down for individual homeowners is not yet available.
Allstate has been negotiating with state regulators over the pending rate hike since September. Chief among the many faults regulators found with the rate hikes was a $259 million charge for reinsurance. Allstate actuaries admitted the company did not buy all of that, but wanted to be compensated as if it did.
Meanwhile, Southern Oak Insurance has filed for an average rate hike of 30.2 percent for home coverage. The Office of Insurance Regulation has set a public hearing on the request for 10 a.m. Friday in Tallahassee.
And if you are with a private insurer, don't forget your little "surchage" to help shore up the largest welfare home insurance program in the United States, our very own Citizen's Insurance.
Thursday, December 14, 2006
'Palm Beach County saw a dip in foreclosures in November, while at the same time, St. Lucie County saw its troubled real estate more than triple.
Analysts are blaming rampant speculation in St. Lucie's new-home market and exorbitant hikes in homeowners' insurance as the cause of its leap to 313 foreclosures from just 94 in November 2005.
The increase is the highest foreclosure level for the high-growth area in nearly two years, according to a new report from RealtyTrac, which documents foreclosures nationwide.
"Tons of new homes have been built in St. Lucie County in the past couple of years, and a big chunk of those were snapped up by speculators," said Mike Larson, an analyst with Weiss Research in Jupiter. "Now, some are finding they can't rent them out for enough to cover their mortgages. Others are likely getting whacked with big increases in insurance rates tied to the active 2004 and 2005 hurricane seasons."
When you add surging property taxes to this dangerous mix, Larson said, "the hardest-luck cases can even be forced out of their homes."'
Okay, this is now - what about the future?
'"The foreclosure train has left the station and is slowly picking up speed," said Jack McCabe, owner of McCabe Research and Consulting in Deerfield Beach. "Expect foreclosures to multiply in 2007 and 2008."
Besides plunging property values that hinder resale and rentals, so-called "creative financing" is a major reason the foreclosure wolf is now knocking on so many doors.
Adjustable-rate mortgages and interest-only loans have taken off since 2004. Indeed, they were the only way more than half of all local buyers could afford to buy a home, McCabe said.
These loans are scheduled for their first adjustments in the next two years, McCabe continued, and many owners will get smacked with 40 percent to 50 percent increases in their monthly payments.'
'Statewide, foreclosures rose 5 percent in November, to 9,362 from 8,872 a year ago.
That's one foreclosure for every 780 households in Florida - a rate that analysts expect will worsen next year.
Larson, the analyst, blames "excess speculation" for driving prices far beyond what fundamental economic forces dictated.
"Now, with prices falling, that irrational exuberance is being wrung out one foreclosure at a time," he said.'
Wednesday, December 13, 2006
Please do not hesitate to post any interesting links that you've come across.
Knowledge is Power.
Nuclear Power in Levy County
Rents Increasing Faster than Incomes
Older Americans Have More Debt than Ever
Mortgage Defaults Continue to Climb
Jacksonville - Maybe Not as Big a Bubble
Retail Sales Boom in November
Monday, December 11, 2006
In Miami-Dade County, they have launched a major petition drive to tell lawmakers in Tallahassee that soaring rates are choking their personal finances and the quality of their lives. In Pembroke Park, mobile-home owners are putting some new ideas on the table. In Brevard and Collier counties, groups of home and business owners have been hard at work crafting their own insurance solutions.
''Next year, I won't have any savings,'' said Zenobia Lopez of Biscayne Gardens, who signed the Miami-Dade petition. ``Where am I supposed to come up with $5,000 again? We need to do something.'''
Some of what the petition seeks: rate relief, tougher statewide building codes and a strong lobbying effort for a national catastrophe fund.'
''If the auto insurers would cover the mobile homes, we could alleviate the burden on Citizens Property Insurance,'' said Michael Sousy, Pembroke Park's code enforcement and community liaison officer, who has helped organize the mobile-home owners.
Last week, Citizens' board of governors decided to table the increase until after the special session. The board is hoping there will be some changes.
So are other groups around the state.
Friday, December 08, 2006
In most cases, however (especially over the past 3 years, when mortgage lenders were giving away money like Halloween candy and houses were selling in weeks), the difference between the amount of work done and the reward of the 3% commission has been a complete joke.
Now, Zillow.com is getting in on the act. From CNN/Money:
'The Web site Zillow.com, most known for its "Zestimate" price valuations for nearly 70 million homes, launched several new services for home sellers Thursday.
Sellers can now post their home for sale at Zillow - free of charge. Sellers can add details to a page that already includes basic details, such as square footage, number of beds and baths and sales history. '
Sounds good. But wait! There's more!
'And there's something else new - and radical - they can do: "We're encouraging homeowners to post 'Make-me-move' prices," says Zillow's CEO, Rich Barton.
He suggests that owners just toying with the idea of selling can enter an extremely high make-me move price. Then, if they get an offer that blows their socks off, they can make a very profitable sale.'
I like the approach, but these guys obviously haven't paid attention to the market. Unless a house is extra-special (in price, location, or both), it could sit on the database for years. Still, the idea of cutting out the middle-man and saving several thousand dollars is a beautiful thing. And then there's this:
'It's almost the flip side of a service launched this summer by another real estate Web site, Reply.com.
There, buyers are encouraged to make unsolicited offers on any houses they want. Buyers pick out a number of homes, 15 or 20 say (just one or two is too few to work), that they would like to make offers on. They decide just how much to bid on each convey the info to Reply.com. For a fee of $24.95, Reply will deliver a package containing the offers to each of the homeowners.
The company catchword for the service is, "Every home in America is up for sale."
Hmmm...will this drive the total inventory numbers up?
Thursday, December 07, 2006
'The state's population will double to 36 million by 2060, and if growth management policies don't change, 7 million of the state's 19.5 million remaining undeveloped acres will go urban.'
Other components of the forecast:
'• Continuous urban development from Ocala on the north to Sebring on the south, and coast to coast from St. Petersburg to Daytona Beach. The corridors of interstates 75 and 4 will be fully developed.
• Full build-out of Pinellas, Hillsborough, Manatee and several other central counties.
• Replacement, or at least fragmentation, of virtually all of the area's natural systems and wildlife habitat corridors.
• The largest percentage of urban land use - 51 percent - of any region in the state. More than a quarter of the region will be transformed to urban status in the next generation.'
What does all this forecast growth mean?
'Unchecked growth presents several threats to the state, according to the study. Crowded schools, traffic congestion, inadequate disaster preparedness and infringement on natural habitat and land that has cultural, environmental or historical significance can deteriorate the quality of life of residents. It could put the brakes on the state's phenomenal job growth, particularly with the "creative class" so highly sought.
"This piece of work is saying, 'We can see the future, and it's not what we hope it will be,'" said Tim Jackson, 1000 Friends' vice president. "Let's rethink this and start by doing a real plan for the long-term future."
Some potential solutions?
'• Expansion of the Florida Forever land acquisition program, to the tune of $1 billion a year from the $300 million now budgeted for conservation.
• New policies on the conversion of rural land to urban use, requiring more preservation, open space and agriculture.
• A 100-year legacy plan, a sort of statewide comprehensive plan laying out what areas are appropriate for development and redevelopment.
• Identification of leaders to organize and advocate for statewide growth management.
Officials from 1000 Friends said they will convene state leaders next year on long-term state planning. The group also is working on a 2060 scenario if projected growth and development patterns follow principles of smart growth.'
But, ney, the DEVELOPERS (and their paid-for lackeys who "represent" us in Tallahassee) have other ideas (that will ensure their pockets are lined for decades to come). Remember! Construction is the #2 industry in Florida. If we don't stop building, we die. Ha!
'The Legislature may not be quick to embrace the recommendations.
An extensive growth management package passed in 2005 now requires concurrency from developers, or pay-as-you-go for infrastructure needs such as roads and schools. The legislation also committed billions of dollars in state money toward road projects and other transportation needs.
And the Florida Forever program - successor to the original Preservation 2000 program - does not expire until 2010.
Lawmakers on Wednesday suggested it might be premature to tinker with growth management policies.
"I commend 1000 Friends of Florida for being visionary and getting out in front and talking about the next program," said state Rep. Stan Mayfield, R-Vero Beach, head of his chamber's Agriculture and Environment Appropriations Committee. "But it's important to take stock and realize where we are in our overall conservation efforts."
Mayfield's compatriot on the Senate side, Republican Dan Webster of Orlando, said he wants to examine the progress of the 2005 legislation before digging in again. "We're not done with what we started," he said. However, "We haven't stopped evaluating what we did. We're not closed to ideas that would say, 'Here's a better way to do it.'"'
So, maybe all this overpriced housing is a good thing? Maybe the "tax thy new neighbor" policy is a good thing? Maybe the insurance crisis is a good thing? Maybe...?
Wednesday, December 06, 2006
'The slide in Lee County's home-building industry continued in November as the number of permits for single-family homes fell to levels not seen in almost four years.
Builders in Cape Coral pulled 152 permits, the fewest since 81 in December 2002. In unincorporated Lee County, which includes Bonita Springs and Fort Myers Beach, 357 permits were issued — the fewest since 299 in March 2003, according to figures released Monday.'
Have they (like the rest of Florida)(and the United States) overbuilt?
'They're pretty much in a situation of just waiting because there's so much inventory, and you don't want to add inventory" with almost 14,000 existing homes already on the market, he said.
That situation won't change until the inventory of houses starts to shrink, he said.
"They don't want to add more fuel to the fire," Timmerman said.'
And now a story about a guy who's now going to travel 90 miles to live in an affordable house in Lehigh. 90 miles round trip to Naples?!!! That is so sad.
(note: I once had a 77-mile one way commute for 2 years - it was misery, squared)
'About 77 percent of the single-family home permits were for work in Lehigh Acres, valued at about $63.4 million. That's up from October's 74 percent.
The market has stayed relatively strong in Lehigh Acres because prices there are still the lowest in the county, said John McWilliams, a real estate broker with Coldwell Banker Preferred Properties.
"Lehigh still remains the last bastion of affordability," McWilliams said.
Even in Lehigh, he said, "builders are seeking ways to tweak their home/lot packages below $200,000 because they know that's what has to happen for their building careers to continue."
Jack Bowles, 57, and his wife, Ranae, recently closed a deal with America's First Homes on a three-bedroom, two-bath house in Lehigh for $240,000. They'll move from Naples, where he works at Home Depot and they were renting a house.
Bowles said he probably got twice the home for his money than in Collier County. "In Naples, I wasn't able to buy a home for less than about $300,000 or $350,000," he said. "We spent a whole lot less than that and got a brand new home with a whole lot of amenities."
Now, he said, he has a 90-mile commute but the lower price for his house will more than offset higher gas prices.'
Monday, December 04, 2006
'Ask Nancy Bagley about the relationship between the housing slowdown and her net worth, and the Delray Beach homeowner is emphatic.
"Absolutely, I feel less wealthy," says Bagley, who works as a business consultant.
It's a sentiment shared by many homeowners in Palm Beach County and the Treasure Coast as the once-sizzling real estate market cools.
The median price of a single-family home in Palm Beach County fell 12 percent from October 2005 to October 2006, the Florida Association of Realtors said last week, while national home prices dropped a record 3.5 percent for the year. An increasing number of home sellers are getting less than they paid for houses bought last year or earlier this year, according to Palm Beach County property records.'
And for the US...
'As the U.S. economy enters the crucial holiday spending season, retailers and economists are struggling to make sense of how the end of the historic housing boom will affect the annual buying binge.
The consensus: The housing slump won't help holiday spending, but Americans will continue to consume as they always do.
"We should see some effect, but not a big one," says Christopher Carroll, an economist at Johns Hopkins University.
Carroll is one of the few economists to put a number on how changes in home equity affect spending. In a recent study, Carroll and two other economists conclude that for each $1,000 of increase in a home's value, the owner will spend an extra $20 in the short term and $90 over several years.
And as home prices decline, consumers will cut spending by the same amounts. So big drops in housing wealth would "substantially" hurt consumer spending, Carroll says.'
And what about our big retaillers?
'A week into the holiday shopping season, the signals are mixed. Stores were slammed on Thanksgiving weekend, although 5 million fewer Americans braved long lines and crowded parking lots this year than last, according to the National Retail Federation.
Wal-Mart Stores Inc. spooked investors when it reported November sales were worse than expected, and Gap Inc. and Abercrombie & Fitch also reported sales declines for the month. But Target Corp., Costco Wholesale Corp. and Federated Department Stores Inc. all posted healthy sales gains for November.
Mixed signals aside, economists agree that retailers can expect another year of frenzied holiday shopping, although some warn that the housing slowdown will eat into consumers' ability to spend.'
Personally, I continue to wonder how the "concrete-feet" effect of screwed sellers and amateur spec-u-vestors is having on the shopping season. I know of several "For Sale" properties in my area that are owned by persons who really can't afford the carrying costs, and are barely getting by. As such, I will be keeping tabs on the final sales numbers for the 2006 holiday season, because it should be a very good barometer for the 2007 economy.
'But now that home values are slipping, is there a reverse wealth effect that threatens to silence cash registers? Tough to tell, says Bill Hampel, chief economist at the Credit Union National Association.
"We've asked consumers that numerous times, and we don't really get much," Hampel says. "I'm not a big believer that these fringe items (such as the wealth effect) have much of a role in holiday spending."
Yet Hampel says the housing slump means homeowners will have to start saving the old-fashioned way, rather than continuing to spend more than they earn.
"Our houses have been doing our saving for us for most of this decade, and that is ending," he says. "But most people's net worth is so far above what they expected it to be that they don't feel they have to start saving. It's sort of like easy come, easy go."'
Wednesday, November 29, 2006
Please post and share (Crazy G and Lizziebeth - we all enjoy your posts and links). Here are my latest, submitted for your interest....
Monday, November 27, 2006
From RealtyTrac (a foreclosure information tracking service) and Money/CNN, the new numbers are out.
For October, 2006:
- We're now #5 in the country, with one foreclosure for every 640 households.
- We're #2 in total foreclosures, with 11,413 filed last month.
- Our total is now 49.6% ahead of this time last year, which (interestingly enough) puts us at mid-pack in relation to % increases in other states.
Full Article with All States Ranked
Wednesday, November 22, 2006
'There's a growing consensus among economic and financial experts on the rate at which the real estate bubble will deflate. It will be a slow leak, they say. But the reality is far more chilling.
Last month, former Fed Chairman Alan Greenspan said, "The worst may well be over." But the "worst" is a frightening picture: Median prices for home sales have fallen sharply year-over-year, for two straight months, according to NATIONAL ASSOCIATION OF REALTORS.
"In addition to being the largest price drops in at least 38 years," The Wall Street Journal reported, "the back-to-back declines are the first time median home prices have fallen since 1995." And the decline is hardly over.'
And how about those exotic mortgages that everyone has been using the past 3 years? How are they going to affect things?
'Those who have interest-only, or "teaser-rate," mortgages could see their monthly payments more than double.
"Interest rates will rise on about $300 billion in adjustable-rate mortgages this year alone," he said. "That figure is projected to skyrocket to more than $1 trillion in each of the next two years."'
And, we have to ask: What states will be affected the worst?
'Arizona, Nevada, Florida and California will be hit particularly hard, he said, and homeowners in these states may not see a 5% decline, as experts predict, "but could fall two or three times that number."'
Friday, November 17, 2006
Bottom line: from October 2005 to October 2006, the state lost more than 2000 students. In the past 50 years, this has never happened.
Note that the state is also attempting to show an actual gain, by comparing the current figures to the end of the school year of 2005 - that's not "apples to apples" because it doesn't take into account the number of dropouts during the year. Nice try, though! I wonder: did the persons trying to push this fictitious "gain" have previous employment at Enron?
"A loss would be historic in a state that has added 34,845 to 65,187 more students in kindergarten through 12th grade annually for the most recent three academic years. A slight gain would still be a dramatic slide.
Either way, the shrinking student enrollment in a state that officially counted 2,641,598 students in mid-October means a $204 million loss to school districts this year, The Associated Press reported Thursday. The implications for the economy may be far greater.
To put it another way, the state fell short of its projections for new students by 48,375.
"A whole school district is not showing up," said Bruce Tonjes, Polk County schools' associate superintendent. "It's scary, isn't it?" "
And we all have to wonder: why did this happen? Could it be.....HIGH housing costs?
"The dramatic drop was evident in August when districts of massive growth, such as Hillsborough County, showed dramatic declines. By early September, soaring housing costs and insurance rates and last year's spate of hurricanes were blamed for keeping working families with children from moving to Florida.
No one has come up with any better reasons as the state tallies numbers from its official October statewide count. The focus is now on just how great the loss is and what it means in dollars.
"No one in a hundred years is ever going to expect this state to be down," said Jim Hamilton, Hillsborough's chief officer for district compliance. "
With this in mind:
Has the word got out about how expensive housing (prices, taxes on those prices, and insurance) is down here?
- Or - (in a derivative of the science fiction that has been quoted by the realtors for the past 5 years):
Is it that everybody still wants to move to Florida, it's just that now they can't sell their previous house?
Tuesday, November 14, 2006
From Marketwatch, some predictions about housing prices in 2007.
Home prices will fall 10% on average in 2007 and it will likely take three years to clear out the huge inventory of empty unsold homes currently in the market, according to a UBS report released Monday.
We are now overbuilt to the tune of 900,000 houses. Wonderful!
UBS analyst Margaret Whelan estimated that the industry overbuilt to the tune of 900,000 homes between 2003 and the first half of 2006. "Most of those homes are vacant," which means they'll rely more heavily on price discounting to get sold than if they were homes with people living in them, she said, during a conference call Monday.
"It will take about three years to shift all of that excess inventory," said Whelan. As a result, she expects housing starts to fall 15% in 2007 from 2006 levels.
Whelan said there is currently a five-month supply of existing homes up for sale and a six-month supply of new homes on the market, based on current sales trends.
In past cycles, when inventory levels have reached four or five-months' supply, "you've had a dropoff in real house prices," said UBS chief economist Maury Harris.
Harris is predicting median home prices will fall 10% over the next year, and housing starts will fall by 180,000 units to 1.55 million in 2007 from 2006. He trimmed projected GDP growth to 2% from 2.2%.
Now, my fellow Floridians, I ask you this:
With lower than median incomes in this state, much higher than median prices, and much, much higher inventories (ahem...Sarasota/Bradenton and West Palm Beach...), what do you think will happen to our median prices in 2007?
Thursday, November 09, 2006
This week, I would like to hear from you regarding what you're seeing locally, in regards to homes for sale, homes that are selling (or more likely, not selling), and stories you may have.
Here's my report in Northwest Tampa:
- Current neighborhood (about 70 homes) has had 3 homes for sale since the summer. Every one is priced nearly double the value from 4 years ago. Open houses were being held just about every weekend, but now they've stopped. Also, 2 other houses are up for rent - no takers.
- Got serious about making a purchase back in June - looked at 9 houses that were in the right locale, but all were seriously overpriced. Finally got interested in 2 homes, both listed for $400K. One was nearly new, but definitely not worth that price. The other was 10 years old, had been bought out of foreclosure by a local flipper, who had the house repainted, the yard re-sodded, and new cabinets installed. Made a bid of $350K on the first house, and did not think the 2nd house was worth anything more than $300K, so didn't bid on it (as much as I loath flippers, I'm not going to slap someone in the face). Result on the first house: knowing that we had made a bid, another realtor convinced his/her buyer to make a FULL PRICE offer. They closed in September. Result on the 2nd house: owner kept lowering his price, first to $389, then $379, then $374 for a looooong time. Then 2 weeks ago, lowered the price to $355. It is no longer listed, so I am assuming that it either sold or got taken off the market. Result on the other 7 houses: every single one of them is still on the market.
- Overall, I am still seeing a large disconnect between the sellers and the market. Nothing is selling, yet prices are still not coming down. As per the theory that has been presented on the Bubble Blog, this area is slightly above the median income, so folks can hang on to money-losing properties a LOT longer in this area. Talk about a drag on the economy.
Tuesday, November 07, 2006
I find it pretty depressing when they are now considering handing out grants to provide housing assistance for people who make 130% of the median income. Buddy, could you spare a dime?
Middle Class Housing Assistance - Palm Beach
And don't forget, 2 years ago, in the statetwide and national elections in Florida, EVERY SINGLE incumbent won reelection. That's right. Every congressman, every state house rep, and every state senator who was ran for re-election won the race (and many did not even face an opponent). Over 100 different office holders did such a GREAT job that none were voted out. How's that for gerrymandering and the decline of democracy? Of course, this was also in the midst of the real estate boom, so perhaps everyone was so happy that their house was worth double that they didn't care who was actually running the state.
Please take this into account when you go to vote today.
Thursday, November 02, 2006
"Recent buyers in Florida’s housing market are learning hard lessons, come tax time.
The year after a home qualifies for a homestead exemption, it is shielded from the double- or triple-digit assessment hikes that have been the norm in the sellers’ market of the past few years. That shield comes courtesy of a Save Our Homes cap that limits such increases to a maximum 3 percent a year.
But before that kicks in, the reassessments that take place when property is sold can yield astounding changes in taxable value.
For Jamie Tingen, the surprise came with this year’s tax bill. A Florida resident for a half-century, she traded up from a two-bedroom to a three-bedroom townhouse on the same street.
Her tax bill more than tripled."
People are absolutely clueless about this. They see what the current owner has been paying for taxes, and the realtors (being the soul-less wonders that they are) make no attempt to inform the buyer that, the following year after the purchase, their home will be re-assessed at CURRENT market value, which can often mean a several-thousand dollar increase per year. For current homeowners who want to move up, it'll bite you good.
"Just last year, Tingen, as a longtime owner of a homesteaded property, was on the enviable side of the street of Florida’s property tax system. Her smaller townhouse, which she bought in 1980, had an assessed value last year of $45,305 – held down for the past decade by the Save Our Homes cap.
Its market value was far more. She sold it for $137,000. The tax bill for the new owners leaped to $2,200 from the $500 Tingen paid last year.
She says such disparities are unfair: “Everybody seems to be in the same boat, and nobody seems to be doing anything about it.” "
People from out of state are being stunned by their predicament.
"Aldegonda Caris and her husband, Glenn Smith, moved from Long Island, N.Y., to Tampa last year after Smith accepted a job as an assistant professor at USF’s College of Education. They heard the cost of living in Florida was lower. Then they bought a house.
“We have a smaller house and pay more taxes,” said Caris, who said their property taxes on a larger home in New York stayed at about $5,500 a year. “The taxes increased gradually, while in Florida, every time the house is sold, it goes up significantly.”
Between last year and this year, the tax bill on their Tampa Palms home nearly doubled to $6,300.
Caris was shocked to see neighbors in a similar home pay $2,500.
“We get the same benefits. Why would we need to pay so much more?” Caris said. “I don’t see what the goal for Florida is. Why do they give a higher burden to newcomers? Maybe they want to chase them away. I definitely think they should do something about it.”
Welcome to the "Greed State", Mr. Caris. Believe me, I care about the issue, but the vast majority of people in this state do not. Another recent immigrant, John Sarver, has the same tale.
"The civilian strategic planner at U.S. Central Command moved to Brandon late last year from Colorado Springs. That recent arrival earned him the not-so-enviable position on the block as the man with the highest property tax bill.
He’ll pay almost $9,000 this year in property taxes. That’s more than he paid for both property taxes and state income taxes in Colorado. Most of his neighbors pay a third or half of that, even though their homes are about the same size as his – or larger.
“I look across the street,” said Sarver, who bought his home for $475,000 at the height of the market late last year. “I know my neighbors have enjoyed all this equity they’ve gained from ’03 to ’05, but I feel like I subsidize their property.”
Let's face it - Pandora's box has been opened, and nobody can close it. People who've lived here for 3 or more years are paying next to nothing, and every new homebuyer since then is subsidizing their lifestyle. Because of this, outside investors won't invest and persons considering a move here won't. I've said it before, and I'll keep saying it until everyone understands:
If you buy now in Florida, you'll pay more in taxes than the majority of wealthier homeowners in this state. And until they move or die, you always will.
Do you think this will help or hinder the real estate values? Ken Wilkinson must be very proud of himself.
Wednesday, November 01, 2006
Sure, the houses are overpriced and likely to devalue over the next several years.
Sure, the insurance situation is a complete mess.
Sure, the SOH system ensures new homeowners on average will pay more than a hundred thousand dollars more in property taxes over the life of the exact same house than wealthier existing homeowners.
But, look! It appears there will soon be an ALL NEW benefit to buying a home in the Sunshine State. Get'er done!
What a Great Idea!
Monday, October 30, 2006
A recent poll conducted by the St. Pete Times shows that nearly 1 in 3 residents of the Sunshine State have seriously considered moving out of the state, due to high insurance costs and property taxes.
I find this interesting, but what about the highest cost of all: the cost of purchasing a home, particularly one that is declining in value? My feeling is that the amount of money you could lose/overspend on the actual purchase price far outweighs the variability in taxes and insurance.
Topic for discussion: Do you know of anyone who has moved recently or is planning on moving out of Florida? If so, please provide details on their housing situation here.
Full link to Article: 1 in 3 Seriously Considering a Move out of Florida
Friday, October 27, 2006
With the latest reports from the various realtor organizations around the state, we now have record inventory. Here now the numbers for the major markets, with months supply of inventory:
Tallahassee - 9 months
Jacksonville - 10 months
Orlando - 10 months
Palm Beach/Boca - 11 months
Tampa/St. Pete/Clearwater - 15 months
Miami-Dade - 18 months
Sarasota/Bradenton - 23 months
(Months supply is calculated by dividing current supply by the latest (Sept 2006) sales. It represents how many months it would take to sell all the current inventory. Statistically, an average home would take half this time to sell.)
So, my fellow citizens, with these figures in mind:
- Do you see a continuing increase or decrease for 2007?
- Is this record inventory due to spec-u-vestors bailing out, or simply too high of prices?
- Do the sellers get fed up and take their homes off the market (hoping for a return in demand)?
- If it does get worse, how much worse? When do we hit bottom?
Wednesday, October 25, 2006
In a world full of greed, let us now travel to the land of the Magic Kingdom, where you too can live in an overpriced shack with a price that is unimaginably unjustified - yes, it's a dream come true! This box of junk can be yours, for a paltry sum of $275,000. Features include:
- Postage-stamp sized lot (6600 square feet).
- Built in 1949 - that's right, kids! You can own a "pre-Korean War" POS!
- 2 bedrooms and 1 bath - share with your friends!
- All these features packed in a "comfy" 1173 square feet of living space!
- Sold for $47K in 2003 (that's $50K in today's dollars).
- Remember, prices only go up, and they're not building any more land in Florida, so hurry!
Monday, October 23, 2006
Friday, October 20, 2006
'Florida Insurance Commissioner Kevin McCarty said Wednesday he plans to reject an average 71.5 percent statewide homeowners insurance rate increase proposed by Nationwide Insurance Co. of Florida.
In a notice to Nationwide, regulators said the insurer has failed to provide sufficient data to justify the planned Nov. 10 increase and its intended 15 percent profit.
Supporting data are necessary, especially in a period when Florida residents are feeling the pinch of rising insurance rates, McCarty said in a statement. '
Wow - somebody in Tallahassee standing up for consumers? What alternate universe have we travelled to?
'"In such an environment, insurers must redouble efforts to fully and completely support all requests for increased rates, and that has absolutely not been done in this case," McCarty said.
"The filing contains proposed hurricane rate hikes in excess of 300 and 400 percent for some territories, which are entirely unsustainable."'
Oh, but suddenly, it all becomes clear - we're in an ELECTION year. AND, guess what the #1 issue with voters in Florida this year? Yep, the insurance crisis.
So, back to the story of our friends at Nationwide. With this slap in the face, now what are they going to do?
'It's unclear whether Nationwide will further withdraw from the troubled Florida insurance market because of the state's rejection.
Citing major hurricane losses, Nationwide announced in August 2005 that it was shedding 35,000 homeowners policyholders and its entire book of more than 1,000 condominium associations, and that it will not write any new homeowners or condo insurance policies in Florida. '
Nice guys, huh?
Full Article: Nationwide Rejected
Wednesday, October 18, 2006
This week's candidate:
- Built in 1956 (50 years old this year!)
- 1 car garage, 3 bedroom/2 bath, 1416 total square feet.
- Listed at $325,000.
- Purchased for $264,000 a year ago, and assessed at $185,340! You (and your bank) only pay extra for "Goodwill"!
- You may think it's an old shack, but get this: it has Marble Floors. Oooooooooh!
- An absolute steal (or should I say, theft) at over $200/square foot.
Hurry, because deals (absolute jokes) like this are not going to last!
Florida Bubble Property of the Week, #3 - Miami edition
Monday, October 16, 2006
8 Considerations On Moving to Florida
1. After tourism, the #2 industry in Florida is construction. So remember, the only way this state continues to grow is to mow down the trees and EXPAND.
2. So, please, please, please move here! We need your money to keep our contractors employed and this economic engine running at full speed.
3. Florida is a cheep place to live. Okay, not really - houses actually cost much more here than advertised. The FAR (FL Ass. of Realtors) has reported the median price for the following towns, and in every case they have under-reported. The Actual median prices for these towns are shown in bold RED.
Tampa-St. Pete-Clearwater - $237K, Actual: $295K
Orlando - $261K, Actual: $289K
Melborne - $220K, Actual: $250K
Miami - $379K, Actual: $399K
Jacksonville - $202K, Actual: $252K
Tallahassee - $175K, Actual: $216K
4. Okay, so the houses are more expensive than ever - big deal. Please, please, please move here! Our developers need to keep current on their payments for their jet skis, extra-large SUVs, and waterfront homes.
5. You get to pay more in taxes than everyone else. The "Save Our Homes" tax has set in place a system whereby the existing home-owners pay for less than the actual value of their residence. You, however, as the latest Florida purchaser, get to pay the FULL amount. Result: you will pay more in taxes than the majority of wealthier people who have lived here longer. And until they die or move, you always will.
-> For example, you can expect to pay around $5G/yr for a 3 bedroom home in any of the major metro areas, $6G for a 4 bedroom.
6. Okay, so you have to pay more in taxes than the rest of us who already live here. So what? Please, please, please move here! We need your tax money so we can keep ours.
7. And remember, like any "pass the buck to the new guy" tax scheme, if people keep moving here, eventually the newer people will pay more in taxes than you! Isn't that great? Just wait your turn - it might be awhile.
8. Home insurance might be a tad more expensive than what you're used to - if you can get it, that is. 2 years of record hurricanes (2004-05) has left the welfare version of homeowners insurance, Citizen's, as the #1 policy holder in the Sunshine State. By law, Citizen's has to charge the highest rates in order to not compete with commercial insurance companies. By the way, after 2 years Citizen's is already awash in red ink - they will cover their costs by adding a surcharge to all other policy holders in the state.
-> Expect to pay upwards of $1-$2G/yr for most homes.
8. Okay, enough said. Housing costs are higher than advertised, your taxes will be higher than everyone else on your street (unless you live in a brand-new subdivision), and your insurance costs will be much higher than where you currently reside. But hey, it's a "quality of life" issue. We haven't mentioned traffic, pollution, sub-standard schools, geezers constantly screaming for more state subsidies, OR the red tide - but should we have to? Please, please, please move here! We need your money. Seriously.
Friday, October 13, 2006
'Gloria N. Ellinwood thinks insurance companies should be barred from creating spinoffs that serve only Florida. Ginny Stevans doesn't like how insurers can buy reinsurance from their parent company. Debby Zolobkowski says it's unfair that her premium can be tied to her credit rating.'
'Of those at the meeting - business people, retirees, politicians, and the committee members - no one denied Florida's insurance situation needs fixing. But few could agree on the best way to repair it.'
'When committee member Frank Kowalski said homeowners can't expect to qualify for certain coverage if they don't replace their roof every 10 years or so, Lt. Gov. Toni Jennings replied, "The roof is supposed to last as long as the house."'
'"For retirees earning $13,000 to $20,000, mitigation won't work." said Ginny Stevans from "Home-owners Against Citizens".'
'Snowbirds and residents of manufactured or mobile homes complained that the My Safe Florida Home program is a raw deal. The program, which kicked off in August, offers matching grants up to $5,000 for improvements that strengthen a house against storms. But the grants are available only to site-built homes with homestead exemptions.'
'Steve Burgess, the state's insurance consumer advocate, questioned the potential conflicts of interest posed by his office's position under the authority of the chief financial officer. He said his office might function better under the Cabinet, "although that perhaps would generate its own set of criticisms," he acknowledged.'
'"It's pretty easy to go out and say, 'Hey, this rate's too high, don't allow it,' " said state Sen. J.D. Alexander. But doing that, he said, will chase insurers out of Florida.'
'Three hours into the meeting, committee member Barbara Weese didn't seem convinced problems were being solved. The point of the committee, said the retired schoolteacher, isn't just to make insurers more accountable, but to make insurance more affordable. "The point we're missing," she said, "is something has to be done to get insurance to the people."'
Full Article: No Magic Formula
Wednesday, October 11, 2006
"The report said that Florida has approximately 28,000 properties in some form of foreclosure, accounting for 27 percent of the nation's total. With one new foreclosure filing for every 254 households, the state's foreclosure rate was more than four times the national average. '
Think about that - in addition to the 10+ month inventory of unsold homes in our state, there are now 20,000 more that will be coming on the market, all at below (or far below) market value.
'"Florida and the western states are known for their predominance of negative amortization loans in which mortgage holders pay only interest, not equity, on their properties..." '
Flippers and unsavvy buyers are now atoning for their greed.
'Industry forecasters recently estimated that more than $200 billion worth of adjustable rate mortgages will "reset" at higher rates in 2006 and more than $1 trillion will reset in 2007...'
That figure says it all - 5x more ARMs will reset next year than did this year. This is only going to compound the numbers of foreclosures.Florida #1 in Foreclosures
Many thanks to one of our anonymous posters for this reference. In a related note to all our readers and posters: feel free to make up a screen name - this site is setup so that there is no login required to post your thoughts.
Tuesday, October 10, 2006
- 1241 of living space!
- A fabulous one-car garage!
- Sub-standard schools!
- Owners paid $157K in 2004, but worth so much more!
- Notice the car parked in front lawn - what a great neighborhood!
And it can be had for a paltry $275,000. Congrats, you have won the FLORIDA BUBBLE P.O.S. of the WEEK!
Monday, October 09, 2006
Real Estate Agents - Too Many, Too Late
'"You've got a lot of people who got into the business in the last two to three years who never really had to do the hardest work of an agent, people who were basically picking low-hanging fruit..."'
Palm Beach - 7-Year Ditch
'"There isn't much positive to highlight," said Mike Larson, an analyst with Weiss Research in Jupiter. "And all that occurred despite a recent downtick in interest rates and a general lack of serious hurricane activity, though we did have an Ernesto scare at the end of the month."'
FSBO Listings Becoming Realtor Listings
'That means there's nothing to push prices higher or perhaps even maintain their current levels. Many sellers, however, refuse to accept that. "They are still holding out for 2005 prices in the 2006 market," said Beverly Pindling, president of the Orlando Regional Realtor Association.'
Florida Home Prices Heading Further South
'Housing prices are getting more attention these days than the Iraq war, Florida Republican Rep. Mark Foley’s follies and, heaven forbid, even Bucs QB Chris Simms’ spleen.'
Friday, September 29, 2006
Palm Coast - Maronda Homes
Thursday, September 28, 2006
Ergo, our new series, "Florida Bubble P.O.S. of The Week"!
Each week, I will be posting a "canary in the coalmine" property from around the Sunshine State, one that is clearly not worth anything close to the asking price. A simple and elegant symbol of the mass psychosis that has gripped the greedy denizens of the realty trade here in Florida.
And here now, our first contestant! Features of this charming house:
- 1215 sq. feet of living space.
- 1-car garage.
- Sits on a microscopic .09 acre lot.
- Located in a failing school zone.
- Originally sold for $50K in 1990.
- Last sold for $135K in 2005.
- A virtual steal at the current asking price of $200K!
Won't you please buy it and keep the bubble afloat?
Tampa - P.O.S #1
Any other Florida Bubble P.O.S.'s out there? Please post and give us all a good guffaw!
Tuesday, September 26, 2006
Amongst her gems:
"She sees the current slump as more of a breather, as well as a chance for buyers and sellers to “reposition” themselves to take advantage of the long-term upward trend in housing prices.
In other words, she contends there is money to be made in real estate even if prices head south for a while."
Translation: "I have no idea where the market is heading. The only money to be made in a down market is by REALTORS, who get a commission as long as there is a sale."
"“In the normal market people are still buying and selling homes,” she said. “The market is not crashing; the fundamentals and incentives are still extremely good for everyone else.” "
Translation: "I have not read nor watched any media reports on the crash, so therefore it's not happening. In fact, I have my ear's covered right now - LA LA LA LA (can't hear anything - no crash happening!) LA LA LA LA!"
"Even if there is a prolonged recession in the housing market, she thinks it will be relatively mild on a national level.
“One reason for all the pessimism is that the financial press often assume that whatever is happening on the coasts is happening to the rest of the country,” she said. “But the Midwest, for example, may not experience the highs and lows of the coastal cities.”"
Translation: "Everybody now - move to the Midwest! No matter that you can't sell your house where you live now, you're upside down in payments, and the job market out there is crappy. There's REAL ESTATE money to made out in the flatlands!"
"Her advice: Don’t sell unless you have to. "
Translation: "I own lots of investment properties that I can't unload. So please don't put your P.O.S. property on the market and compete with me. But if you're a BUYER, please buy, buy, buy!!! After all, it's a great time to invest!"
Whew, I think I need to take a "breather" (as she so calmly refers to the market) from all the wretching I've been doing while reading her propaganda. I get sick just thinking about the poor souls who will actually take her advice as fact.
Really Bad Advice Concerning Realty
Friday, September 22, 2006
Reexamine the Property Tax Structure?
"Here and across Florida residents find themselves whipsawed by soaring property values and skyrocketing insurance premiums. Worse, surging construction costs caused by hurricane rebuilding from the tip of Florida to Louisiana mean homeowners can pay a lot more for less house than they could get just few years ago. Add on tougher building codes, and sticker shock is rampant.
People used to move to this area because of the low property taxes; today, people are talking about leaving because they are getting so high."
Insurance Woes Abound
"Mike and Terry Thompson were ready to call it quits and sell their mortgage-free Navy Point home.They've never made a hurricane claim in the 31 years they've owned their home, located about eight blocks north of Bayou Grande.
Yet their hurricane insurance premium jumped this year, from $945 to $5,143.
"I thought it was a joke or something," Mike Thompson, 55, a retired Pensacola police officer, said of his reaction when he opened his insurance statement."
Escrow Bomb is Ticking
"Unless you've been under a rock, you know Florida is in a property insurance cost crisis. That cost now has to be paid.
If you are not putting 20 or 40 or 50 percent more money away to cover insurance costs, you will sometime in the next few months receive a letter from your mortgage company."
Angry Tax Payers Confront County Commssion
"The board cut a little more than $10 million from the 2007 budget to save taxpayers about $60 per $100,000 of taxable property value.
"That's nothing. That's not enough," shouted some of the more than 100 people attending the public hearing at the Fred B. Karl County Center. ""
Many thanks to Lizziebeth from Orlando for the links.
Thursday, September 21, 2006
'“David Lereah, NAR’s chief economist, said the fundamental factors for housing remain positive. “With a general background of growing population and favorable affordability conditions, home sales are staying at very healthy levels,” he said. “Housing inventory improved in August but remains tight, and we have some way to go before we get into a range of balance between home buyers and sellers. As a result, we’ll continue to see above-normal home price appreciation for the foreseeable future.”'
Now, a year later, and this is what's coming out of the same "guru's" mouth:
'“The housing boom ended more than a year ago, but sellers are having a tough time accepting that fact, says David Lereah, chief economist at the National Association of Realtors. The result has been tumbling sales as buyers stay on the sidelines.”
“This correction is different from any others because it wasn’t triggered by a recession, high financing costs or job losses. With unemployment below 5 percent, mortgage rates still below 7 percent and a growing economy, "all you need is a price correction, a price adjustment, to bring the market back."
This is starting to sound like a spiel from a used-car salesman. Here in Florida, we now have nearly a year's supply of houses sitting on the market, and the numbers are growing by the week. David, who is going to move into all of these empty houses, and where are these buyer's going to come from? Remember, there is now a housing surplus in every major state.
So I ask again: Where are these buyers going to come from? Mexico? Canada? Russia?
The sad and pathetic thing about the reports from the NAR, FAR and others under the NAR umbrella is that there is absolutely NO REGULATION on their reports to the media, and the media never questions the authenticity of their numbers. And when I say, "Never", I mean it - 100% and unequivocally. With the exception of a few independent websites (such as yours truly) who track their reports and compare what they are saying with what is actually happening, there is no external oversight on what they report.
Latest NAR Report
Friday, September 15, 2006
- It goes without saying that the main reason for most of these towns having cheap housing is that the local economy is correspondingly in the doldrums as well. Flint, MI would be the poster-child for this concept.
- 5 years ago, you'd find a multitude of cities from Florida on this list. Now, nothing.
- Interesting that only TX and OK have towns on the list that are west of the Mississippi.
- With the aforementioned crappy economies in a lot of these towns, even at these prices, you could very well "catch a falling knife" and lose even more value over the coming years. But then again, as the saying goes, "When you're at the South Pole, you can go nowhere but up!"
And by the way, where the hell is "Pharr, Texas"?