The Palm Beach Post reports on falling real estate sales in Florida (of course, they include a obligatory “now is a great time to buy” quote from a Realtor®):
“Out of 20 single-family housing markets in Florida, 18 posted declining existing-home sales in the April-to-June period, according to a Florida Association of Realtors report released Wednesday.”
“Palm Beach County and the Treasure Coast were among those markets. Miami saw the biggest decline, followed by the Treasure Coast, which tied Orlando for No. 2 with a 40 percent year-over-year sales slump.”
“In Palm Beach County, buyers closed on 21 percent fewer single-family homes in the second quarter - 2,170 sales compared with 2,733 in the same period a year ago, the report shows. The Treasure Coast's drop represents 921 sales in the April-to-June quarter this year, compared with 1,523 in the same period last year.”
“‘I tell buyers to buy when people aren't buying,’ said Douglas Rill, president of Century 21 America's Choice, which has four offices in Palm Beach County.”
Meanwhile, the credit markets are becoming even tighter for South Floridians. The Miami Herald reports that Option One, the mortgage arm of H&R Block, is abandoning the Florida condo market:
“In a blow to an already weak housing market, Option One Mortgage will no longer provide mortgages to buy Florida condos, a decision industry watchers warn other lenders could copy.”
“Option One's move comes as the once-hot market for condominiums in Florida has become glutted with thousands of unsold units, threatening the prospects of developers like WCI Communities that are under pressure to round up scarce buyers. Compounding the problems for mortgage lenders, investors are refusing to fund loans they think look risky, producing a credit crunch that has roiled the housing market and forced dozens of lenders out of business.”
“Option One wouldn't discuss what led to the move in Florida, which in the first four months of the year was its second-largest source of mortgage originations. Mortgage brokers in the state say they expect other lenders to follow suit.”
“Warned Alex Barron, an analyst with Agency Trading Group: ‘It's got a pretty broad implication. If other lenders follow, you're going to find a lot of very desperate buyers' who won't be able to close even if they wanted to.’”
Expanding on the credit crunch, the Miami Herald reports:
“Mortgage broker Ed Smith Jr. has been arranging home loans for 24 years and it's never been tougher for him to close a deal than during the past few weeks of turmoil.”
“As more lenders collapse, the skittish survivors are raising their rates and changing the rules for getting a loan every few hours as they scramble to stay alive. The upheaval has made it virtually impossible to secure financing for scores of borrowers who would have easily qualified for mortgages just a few months ago, creating a lending drought likely to deepen the housing slump.”
“The fallout figures to be especially hard on homeowners facing dramatically higher payments on exotic mortgages that they obtained two or three years ago. These mortgages began with bargain-basement, or "teaser," interest rates that offered extremely low payments so borrowers could buy a home and refinance later.”
“But falling home prices and stricter lending criteria have chained these borrowers to their current mortgages, lumping them with higher payments that they can no longer afford.”
The Miami Herald provides more evidence that the housing downturn is affecting our overall economy:
“State and some local July unemployment figures rose to their highest levels in two years Friday, and the housing slowdown is to blame.”
“The real-estate downturn also weighed on job growth, with Florida's recent standard of outperformance now looking a lot more like the national average.”
“The slowdown is causing construction to limp along. But it has spread further into the economy, to industries such as retail sales, as Floridians are extracting less equity -- their spending money -- from their homes.”
“The slowdown is causing construction to limp along. But it has spread further into the economy, to industries such as retail sales, as Floridians are extracting less equity -- their spending money -- from their homes.”
The Palm Beach Post also reports on unemployment, which seems to be affecting the northern counties even more:
“Its once-booming housing market at a near-halt, St. Lucie County showed a dramatic spike in unemployment in July, state officials said Friday.”
“Unemployment rose to 6.6 percent from 5.6 percent in June, giving St. Lucie the dubious distinction of having the state's second-highest rate, trailing only Hendry County's 9.9 percent. Indian River County also had 6.6 percent unemployment.”
“Slower construction activity has rippled through St. Lucie County's service-heavy economy, said David Skiles, president of First Peoples Bank in Port St. Lucie.”
“‘We're so dependent on housing,’ Skiles said. ‘It's one of the big drivers, and that has slowed considerably.”
“Martin County saw a more modest rise in unemployment. Its jobless rate jumped to 4.7 percent from 4.1 percent in June, the Florida Agency for Workforce Innovation said. Palm Beach County's jobless rate also jumped to 4.7 percent from 4.1 percent.”
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It's getting ugly out there for people in the real estate business. Our office is currently hiring for some administrative positions and we're absolutely flooded with resumes from former realtors and mortgage brokers. We're tossing most of them since we doubt they'll be able to adjust to a regular 9 to 5 job. After spending the last few years at a prestigious job that required them to post their Glamour Shots photo on bus benches and on magnetic signs for the sides of their leased Mercedes, they're going to have a hard time dealing with filing paperwork.
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