The Great Housing Hangover Throbs On In Florida
The Great Housing Hangover Throbs On In Florida
http://thehousingbubbleblog.com
The News Press reports from Florida. “Last year, Jonathan Kline decided to take a risk and build two houses in Lehigh Acres. Kline, a Maryland resident and financial consultant, discovered Southwest Florida’s sliding housing market after they were completed in April. Like thousands of other houses across the county, Kline’s homes sit vacant while he tries to sell them.”
“‘I bought these houses, but I sure as heck didn’t do my homework,’ Kline said. ‘They never told me how bad it could get.’”
“Since 2000, the county has added 95,000 housing units. The number of vacant houses for sale has more than doubled to 9,723.”
“Kline’s houses have been vacant for five months. Although one should be sold soon, he said he’s still going to lose almost $250,000. ‘That’s a pretty crushing blow. It’s a heck of a lesson,’ he said. ‘I shouldn’t have been speculating in an arena I had no knowledge of.’”
“About 35 percent of the houses on the market were built in 2005 or more recently, said Michael Polly, VP of a Fort Myers real estate brokerage. ‘They’re new homes that people bought two or three of that they’re trying to flip,’ he said. ‘Most of them have not been occupied.’”
“Residences being completed now were issued permits 18 to 24 months ago, he said. That means the recent slowdown in permits will not be seen until almost two years from now, he said.”
“The number of houses adds up to about 27 months of inventory; normal inventory is between 5-10 months. ‘If nothing else came in the market, it would take 27 months to sell,’ Polly said. ‘It’s the most I’ve ever seen.’”
The Washington Post. “The Sun Belt city of Fort Myers, Florida, saw real estate and construction grow to dominate its economy, accounting in recent years for nearly one out of every four jobs.”
“‘We are in a real estate recession,’ said Laurance Baer, manager of the Fort Myers-based Baer’s Furniture chain, where sales are plummeting. ‘And we have an economy that’s much more tied to real estate than anyone realized.’”
“During the boom year of 2005, the take-home pay of Dawn Shevlin’s family reached $350,000. That year, she and her husband bought two pickup trucks and a boat, and started building a custom home on a handsome beachfront lot.”
“This year, Shevlin, a real estate agent, sold hardly any homes. Her husband’s carpentry business is ‘dead in the water.’ They have been unable to sell a second home they own.”
“Every night, she said, ‘we fight over every dollar.’ With their income below $60,000, they have more bills than they can pay and have ruled out any big purchases. Even dinner at a modest restaurant is too great an extravagance.”
“‘I feel like I should be going to a higher place in my career,’ she said. ‘Instead I’m taking 20 steps back.’”
“‘You could make a lot of mistakes and still make money,’ said said William P. Valenti, a longtime banker. ‘People thought it would always be that way.’”
The St Petersburg Times. “In the wild real estate market of 19 months ago, Elmo Bench’s deal to buy a house in Brooksville made a weird kind of sense. The price, $170,000, was the going rate for a three-bedroom house, which was barely big enough for Bench, his girlfriend and their three children.”
“The monthly mortgage payment, $1,240, seemed high, considering he clears only $1,400 a month. But the lender, the now-defunct Homefield Financial told him he could refinance at a lower rate once he built up equity in the house. And, if he got in a bind, he figured he could always sell it for more than he paid.”
“Now, he wonders what he and Homefield were thinking. ‘I just wish they had never given me that loan,’ said Bench, who has been swept up in the wave of foreclosures sweeping the county, the state and the nation.”
“Through the middle of last week, lenders had filed 1,114 foreclosure cases in Hernando County during 2007 - 174 just in August. That compares to 728 during all of last year and 528 the year before that.”
“Bench owed $167,634 on a house that, according to the Hernando County Property Appraiser’s Office, has a market value of $131,000. At one foreclosure auction last week at the county government center, not a single buyer entered a bid.”
“‘There’s just no equity on these houses,’ said Jack Gavish, a Brooksville Realtor.”
The Miami Herald. “Broward County Property Appraiser Lori Parrish has fielded the question ‘values are dropping this year, so why did my assessment go up?’ from property owners so often that she’s posted an explanation at the top of her homepage.”
“Some South Florida property owners will be paying taxes based on valuations that they could only dream of selling their properties for amid the current housing slump. ‘As of Jan. 1, it’s accurate, but it may not reflect the resale value today,’ says Marcus Saiz de la Mora, the acting Miami-Dade Property Appraiser.”
“Stanley Jacobs, who owns four Miami-Dade rental properties, is fuming after seeing his property assessments climb — in one case by $38,000, or 24 percent — despite the weak housing market. ‘I want answers why if the market is declining I was charged more,’ says Jacobs.”
“‘It’s going to be more pronounced next year,’ as this year’s decline in property values are reflected in 2008 tax calculations, says Robert L. Wolfe, Jr., a media and government relations officer at the Broward Property Appraiser.”
“Robert O’Leary, a Coconut Grove resident who owns four rental properties in Miami-Dade County, says he’s steaming that his assessments have risen sharply despite the housing slump, including one Coconut Grove property that jumped 37 percent in market value to $882,492 from $645,698.”
“‘Everyone who has a brain knows the housing market went bust in 2005,’ says O’Leary, who is appealing the county’s assessments to the VAB.”
The News Journal. “The great housing hangover throbs on. Three years after Hurricane Ivan supercharged an already hot local housing market, the good old days of soaring prices, easy money and fly-by-night flippers are long gone.”
“What’s left is an anemic Escambia-Santa Rosa County housing market, glutted with some 10,000 homes for sale, and beset with a stagnant number of transactions.”
“Add to that painful mix runaway insurance costs, crushing property taxes and a clampdown by banks on sub-prime mortgages and it’s a perfect storm of negatives stonewalling any significant near-term housing recovery.”
“‘Fallout from the end of the housing party is now showing up clearly, and this will inevitably affect consumer spending,’ said Rick Harper, director of an economic think tank based at the University of West Florida. ‘The housing market is not yet in recovery.’”
“‘Locally … home prices have grown much more rapidly than wages,’ said. ‘For most of the two decades prior to 2000, median home prices were about 3.2 times median annual household income. They are now about 4.5 times median household income.’”
The Herald Tribune. “Not long ago, carpenter Kristopher Phillips could not keep up with the orders for moulding in the hundreds of homes being built in North Port.”
“In August, North Port issued permits for 12 new homes — the lowest monthly total in five years. The city issued more than that in a day back in 2005 and 2006, when North Port led the region in new home construction.”
“‘We were doing 15 homes a week,’ said Phillips. ‘Now I get maybe one a month. Maybe.’”
“North Port’s August building permit numbers are down 89 percent compared with the same month a year ago. ‘I believe that that this is the bottom,’ said Ron Hill, president of the Charlotte/Desoto Building Industry Association. ‘If anybody is interested in getting a deal on a new house, there’s no better time than right now.’”
“‘You knew that something was going to give because of the speculators in the market,’ said Tammy Lynch, president of the Home Builders Association of Manatee County.”
“Centex Homes pulled two of the 12 permits issued last month. ‘We’re not even halfway built out,’ said Megan Zoller, sales consultant, of the company’s two neighborhoods going up on Toledo Blade Boulevard. Centex plans 1,257 homes along the roadway that connects North Port to Interstate 75.”
The Palm Beach Post. “Palm Beach County and the Treasure Coast - where boom-time home sales sizzled and prices went through the roof - remain ’stubbornly overvalued’ even though the party’s over.”
“That’s the conclusion of a report by economic research giant Global Insight, which studied second-quarter single-family home prices in 330 metropolitan areas around the country. Home prices in Port St. Lucie, which had a median price of $226,400, were overvalued by 40 percent, according to the study.”
“Despite steady price declines documented by the oversight office, the market was still 28 percent overvalued in the second quarter, the study reports.”
“‘The price that the model is generating, the one that market fundamentals would support, is $216,500,’ said Jennifer Cataldi, senior economist and Global Insight’s manager of real estate service. ‘That’s where the market should be at, based on the fundamentals that we are looking at.’”
“In all, 80 of 330 markets nationwide had price declines while 51 were ‘extremely overvalued,’ the report said. Florida and its coastal areas, plus the corridor from Washington to Boston, accounted for most of the metros with ‘extreme overvaluation.’”
“Global Insight defines extreme overvaluation as a variation of at least 33 percent between what a sale price is and what it should be.”
“Richard Langhorne is trying to make lemonade out of a lemon of a real estate deal. The CB Richard Ellis exec is working to find a buyer willing to pay a steep price for the failed Villa Mare condo conversion in Boca Raton.”
“Villa Mare is the subject of a $50 million foreclosure lawsuit, the largest foreclosure action in Palm Beach County. Villa Mare’s owner recently hired CB to find a buyer and rescue it from this disastrous deal.”
“It seems the property might have greater value as something other than a condo or apartment. (Hotel or condo-hotel, anyone?)”
“It was only in April 2006 that Ocean bank loaned NRW Development LLC $59.6 million to buy the former Oceanview/Lakeview apartments for the Villa Mare project. Plans were to turn the aging apartments into a luxury condo beach club, with individual units costing up to $1.2 million each.”
“But NRW’s plans washed out. Analysts say NRW overpaid for the apartments. And NRW launched Villa Mare just as it was patently clear the market for converting apartments to condos had come and gone. Some $50 million remains unpaid on the loan, prompting Ocean Bank’s June foreclosure lawsuit against NRW and its principals.”
“If Ocean Bank couldn’t see this deal going south, it seems NRW officials could. Two investors say NRW reps were trying to get out of the deal only months after getting into it.”
“If a potential buyer is even thinking of condos, Pickett suggests they think again. ‘Condos are radioactive right now,’ said HABS Capital’s John Pickett. ‘I’d be shocked if they get $50 million in this market.’”
Posted By: Ben Jones @ 6:44 am Comments (148)
“‘You could make a lot of mistakes and still make money,’ said said William P. Valenti, a longtime banker. ‘People thought it would always be that way.’”
Little did they know that you and your slimy co-bankers were planning an economic coup - pump up the prices, then pull out the rug.
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"Money" has no value - people do.
The cool thing is that central bankers never lose, since they never lend or risk any money. When you take out a mortgage, the central bankers open an empty account and start collecting the principle plus interest from you. If you default, they get your house.
Since money is a measure of human energy, you dump your energy into their hands. They use your energy to do everything from building mansions for themselves to slaughtering Arabs.
In exchange for this slavery, you get their promise that they will rape you.
And since they are kind and virtuous people, they always keep their promise.
The cool thing is that central bankers never lose, since they never lend or risk any money. When you take out a mortgage, the central bankers open an empty account and start collecting the principle plus interest from you. If you default, they get your house.
Since money is a measure of human energy, you dump your energy into their hands. They use your energy to do everything from building mansions for themselves to slaughtering Arabs.
In exchange for this slavery, you get their promise that they will rape you.
And since they are kind and virtuous people, they always keep their promise.
thx1138 | Mon, 2007-09-17 06:47
______________________________
You have a 'gift' of words, or rather the ability to communicate directly and honestly.
;)
I especially like the ending quote:
"And since they are kind and virtuous people, they always keep their promise."