Wednesday, August 23, 2006

Finally, A Change in Florida

Our "good friends" at the FAR (Florida Association of Realtors) are loath to admit it, but they have released their official numbers for July, and they are not so great. Here now the synopsis:

July, Year over Year, 2006 compared to 2005:

Statewide
# of Homes Sold: 21,691 (down 33%)
Median Price: $250,800 (up 1%)

Major Cities --------- # of Homes Sold --------- Median Price
Tampa/SP/Clear---------2,629 (down 45%)------------- $237K (up 9%)*
Jacksonville------------- 1,374 (down 17%) -------------$204K (up 7%)
Miami ------------------- 673 (down 38%) -------------$382K (up 5%)
West Palm/Boca----------714 (down 44%) -------------$390K (even)
Tallahassee-------------- 467 (down 7%)--------------- $173K (down 2%)
Fort Myers/CC---------- 694 (down 32%) -------------$290K (down 8%)

* Note that this #, in my studied opinion, is serious fudge. The number is actually around $300K. (Please see previous posting here titled "Something Smells in Tampa Bay...." for an analysis as to why and how the numbers are so skewed from reality.)

More commentary on this report to follow. Until then, get your fill of half truth at: July FAR Report

...and remember - unless you have overwhelming reasons for buying a house in Florida right now, DON'T DO IT!!!

To employ a Florida metaphor, we are presently at the very top of the "Kamikazee" water slide at Wet-N-Wild. We've got a lot of air between us and the bottom.

15 comments:

dutch_master said...

So, the big question is: are we turning the corner, or (per the NAR) "just flattening out"?....

My money is on the former.

Anonymous said...

These shills should have their pee-pees whacked for all the cheerleading they've been doing for the past 5 years.

Now the bill has come due, and they still won't admit that we're just jumping out of the airplane now, and the backup chute just failed.

Can't wait to read these numbskull reports over the next 3-5 years - should be hilarious!

davenjax said...

Hey, c'mon now! These "future used car salesmen" need to learn how to smile and lie at the same time.

This is great training for them.

Slow and Low said...

Its interesting, the bigger the city (# of sales-wise), the less of a hit in sales price.

Seems to me that they are better able to fudge the numbers when there is a bigger pot to piss in.

Anonymous said...

By golly, I think "Slow and Low" is on to something!

But really, realtors never lie!

And they never fudge numbers!

And they always look out for your best interest!

;^)

DR Horton-Seuss said...

How now, brown cow?

Just got the sad news my boss is in the middle of getting his house built. Yikes - I guess he's planning on staying here for a few years (or decades..hee hee!)....

cocoa beach said...

The median price number is meaningless whether it's manipulated or not. In Brevard County (and probably elsewhere), recently tightened density limits have forced developers to build bigger and more expensive units. When these very expensive units close, they drag the median price upward, so, even if sales slow tremendously, the median can continue to rise. Also, don't forget that many of the closings being reported now were contracted before the downturn in prices.

The depth of the ugliness is yet to be revealed.

zippo said...

Yep - funny how the FAR will use median price in one report, then average price in the next.

funny...yea real funny...

Anonymous said...

My job transferred me to Tampa 2 months ago. After selling my house up north in June of 2006, I decided to rent a house in Tampa with a very short term lease until I could figure out what was going on with the “bubble.” I’ve been looking at the figures for the “South Tampa (which includes Davis Island)” area because that is where I want to buy a home when I see prices come down significantly- perhaps 30-35% off the current listing prices. Everyone thinks that is crazy- but looking at the numbers, my goal might be very realistic. The results for South Tampa are SHOCKING:

According to Greater Tampa Association of Realtors (www.gtar.org), in July of 2005, there were 179 sales in South Tampa. In July of 2006, there were only 65 sales in South Tampa. That is a drop of 63.7%, which is higher than any drop I’ve seen in any other area. Only 65 sales last month for all of South Tampa! Right now in that area, by my calculations on MLS for all of South Tampa (including Davis Island) - there are currently 2,482 homes for sale. That means last month only 2.5% of the listings sold. South Tampa is the most expensive part of Tampa, and it appears clear from these numbers that NO ONE IS BUYING MUCH OF ANYTHING. If you have a house for sale in South Tampa, your chance of going under contract in any given month at this rate is only about 2.5%. If you can’t figure out why your house isn’t getting any interest from buyers- you are not alone.

I’ve heard a lot of people, including real estate agents say that prices in Tampa, and particularly the highly desirable areas of South Tampa- won’t go down very much. But with this kind of inventory, and very few buyers- prices will have to start dropping significantly, particularly in South Tampa. The hotter the area was in the last few years, the bigger the drop in the price will be over the next few years.

If you are looking for a house in South Tampa, you would be crazy to buy at this time, unless the owner of the house was coming down at least 30% off current listing prices (which they are probably not willing to do at this point).

Waiting is the only rational thing to do at this point. But who in the world is buying now????

I'm happy to be renting!

Jimmy's Buffet said...

Great story.

Waiting for these numbskulls to price their properties in line with reality (i.e.; no buyers) can become quite tiresome. Just remember, in the past, every big dump in the RE market always started with a mass of overpriced inventory. That's where we are right now, my friend. The crash gathers momentum when foreclosures start rising, comps start dropping, and the bottom finally hits another 12-18 months later. Lots of pauses and "dead cat bounces" in between.

Keep your eyes peeled, and be ready to low-ball any property that's been sitting for > 6 months.

That's my story and I'm sticking to it!

Anonymous said...

So how do you know when things are close to the bottom? Clearly as long as the inventory for existing homes for sale continues to rise we can't be at the bottom. Median prices have not started to drop but I can attribute that to the fact that the few people who are buying are cherry picking the best properties. And from looking at what has actually sold over the past 60 days, there are still a few daring fools paying a lot more than I would pay. I'm hoping it won't take 18 months or longer. But I guess I can sit on my cash and rent.

Any one have any tips for timing the bottom?

Anonymous said...

where is orlando? i just bought a condo downtown @ 20% BELOW APPRAISED VALUE.

jimmy's buffet said...

Timing the bottom is a futile effort - just be sure to get the price that you feel comfortable with. I am still AMAZED at what people are listing their houses for - especially when you check the tax records to see what they actually paid for the place a few years back.

Example: 1800 sq ft house 3/3/2, decent neighborhood - Listed $349K. Purchased in 2000 for $145K.

Does that make any sense? Maybe in 2005, but not in 2006 (nor 2007, 2008, 2009......)

synthetik said...

you don't have to "time" the bottom. You don't even need to be that close to make a heap of money.

We are 2-3 years from the bottom, easily.

1. New home permits are at multi year lows
2. BK are at multi year highs, foreclosures
3. Very few buyers or sellers
4. Just about everyone you talk to think RE is a bad investment

it's really not that hard........ just be patient.

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