The Florida Room - Week of Oct 30-Nov 5, 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

Florida Inventory - Plenty to Choose From

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?

Florida Bubble "Greed Poster Child" of the Week - #4 - Orlando Edition!

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!

Florida Bubble "Greed Poster Child of the Week" - #4, Orlando

The Florida Room - Week of October 23-29, 2006

Got an excellent suggestion from lizziebeth from Orlando to create an open-air forum to post anything Florida-related here. Great idea, and so here it is - "The Florida Room". This is a great area to post any links, opinions, or articles you might have that would be good for discussion and/or future posts. Also, if you find any real moronic or greed-motivated quotes, this is an ideal place for them.

Nationwide Smacked in Tallahassee

Maybe I'm going a little old-school with this reference, but it appears that the man from Nationwide is indeed, NOT on your side. Like other insurers used to a free-pass from their shills in the state capital, Nationwide is looking for some more revenue and wants to increase rates. This time, they took it to whole other ballfield: they approached the state insurance commission with a request for 71.5% increase. Oops.

'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

Overpriced Florida Bubble Property of the Week

This week, we head down to the land of cigarette boats and pastel colors - the original Florida boomtown - Miami. It took no time to find yet another poster-child for the collective greed in our state

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

Considering a Move to Florida?

For those of you who are "on the fence" on your decision as to making the big move to the Sunshine State, I've compiled a list of highly compelling reasons for taking the risk and moving here. After reading this, I'm quite certain that you'll come to the right conclusion: Florida is going to be your NEW home state! So come on down!!!!

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.

Insurance Gone Wild!

Yesterday, an all-day meeting of the "Property and Casualty Insurance Reform Committee" was held in Largo. Lots and lots and lots of suggestions, but absolutely no answers. From the St. Pete Times...

'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

Florida - #1 in Foreclosures (and Increasing Our Lead!)

Again, I don't know why this hasn't been reported in the main-stream media. This is pretty important stuff.

"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.

Florida Bubble P.O.S. of the Week - Palm Beach

Wow, a real overpriced beauty in lovely Palm Beach, FLORIDA! All inclusive:

• 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!

Florida Bubble P.O.S. #2 - Palm Beach

Florida Bubble News - October 2006

Latest and greatest news from around the state and around the country.

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.'