7360 NW 14TH ST, Plantation, FL 33313
- 4 bedroom, 2 bath SFH
- Bought in May 2005 for $390,000
- On the MLS for $244,900
- Days on the MLS: 32 Days
- Loss before the Realtor® commission: $145,100
- Loss after the Realtor® commission: $159,794
Thursday, November 29, 2007
Today's F@cked Buyer (Plantation)
I think homes will eventually sell for less than $110 per square foot in better West Broward neighborhoods. At $137 per square foot, this home is getting closer. It's also being sold $41,000 below its 2004 purchase price and 37% below its 2005 purchase price.
7360 NW 14TH ST, Plantation, FL 33313
7360 NW 14TH ST, Plantation, FL 33313
Home Prices are Up in Broward County!
At least that is what the Mainstream Media and the Florida Association of Realtors® (FAR) would like you to believe.
I started this site mainly because of my frustration with my local paper, the Sun-Sentinel, and its primary real estate reporter, Paul Owers. Today’s article on Broward home prices illustrates that frustration where Owers writes:
“The median price of an existing home sold in Broward last month inched up 1 percent to $354,000 from $349,400 a year ago, the Florida Realtors group said Wednesday. The county's prices have been up and down in recent months, but analysts say prices are trending downward across the region.”
“Existing-home sales dropped 28 percent in October, to 428 from 591 a year ago.”
“Broward's median price has slipped nearly 10 percent since peaking at $391,100 in November 2005. One analyst said area prices could drop another 10 percent in the coming year, with some neighborhoods experiencing more severe declines.”
Once again, Owers uses the ridiculous statistic provided by the FAR, "Median Home Price," to describe the direction of home prices. As explained in a previous post on this subject, this statistic is actually the median price of homes actually sold. When using the statistic, Owers and other media should properly describe it as the "Median Price of Homes Sold." Instead, he never bothers to describe the statistic. As a result, the typically uniformed, naïve reader would read this article and believe that homes prices are actually going up modestly in Broward County.
Anyone who follows our local market or reads this site knows that nothing could be further from the truth. It isn't that prices are going up; the statistic is still increasing because high-end homes are still being sold in our market albeit slowly. On the other hand, sales in low-end market have slowed to a trickle. So, the statistic is skewed by continued activity on the high-end and miniscule activity on the low-end.
If Owers wanted to present a realistic account of our current real estate market, he would at least counter FAR’s statistic with a much more representative statistic, the "Median Listing Price." This statistic looks at all homes listed on the market (on the MLS) and determines its median price. When we look at this statistic, it tells a much different story. As I reported on Tuesday, the Median Listing Price is now down 11.46% since last year -- a much different picture than the 1% increase that Owers and FAR are trying to dupe people into believing.
Another ploy by media is to ignore the severity of the slowdown in sales. Back when the market was healthy, nearly five times the number of homes sold in Broward County. For instance, in June 2005, 2,477 homes sold in Broward County. Right now, there are 17,407 single-family homes for sale in Broward County. In other words, we currently have nearly 41 months of inventory on the market (a healthy market normally has less than six months of inventory).
I started this site mainly because of my frustration with my local paper, the Sun-Sentinel, and its primary real estate reporter, Paul Owers. Today’s article on Broward home prices illustrates that frustration where Owers writes:
“The median price of an existing home sold in Broward last month inched up 1 percent to $354,000 from $349,400 a year ago, the Florida Realtors group said Wednesday. The county's prices have been up and down in recent months, but analysts say prices are trending downward across the region.”
“Existing-home sales dropped 28 percent in October, to 428 from 591 a year ago.”
“Broward's median price has slipped nearly 10 percent since peaking at $391,100 in November 2005. One analyst said area prices could drop another 10 percent in the coming year, with some neighborhoods experiencing more severe declines.”
Once again, Owers uses the ridiculous statistic provided by the FAR, "Median Home Price," to describe the direction of home prices. As explained in a previous post on this subject, this statistic is actually the median price of homes actually sold. When using the statistic, Owers and other media should properly describe it as the "Median Price of Homes Sold." Instead, he never bothers to describe the statistic. As a result, the typically uniformed, naïve reader would read this article and believe that homes prices are actually going up modestly in Broward County.
Anyone who follows our local market or reads this site knows that nothing could be further from the truth. It isn't that prices are going up; the statistic is still increasing because high-end homes are still being sold in our market albeit slowly. On the other hand, sales in low-end market have slowed to a trickle. So, the statistic is skewed by continued activity on the high-end and miniscule activity on the low-end.
If Owers wanted to present a realistic account of our current real estate market, he would at least counter FAR’s statistic with a much more representative statistic, the "Median Listing Price." This statistic looks at all homes listed on the market (on the MLS) and determines its median price. When we look at this statistic, it tells a much different story. As I reported on Tuesday, the Median Listing Price is now down 11.46% since last year -- a much different picture than the 1% increase that Owers and FAR are trying to dupe people into believing.
Another ploy by media is to ignore the severity of the slowdown in sales. Back when the market was healthy, nearly five times the number of homes sold in Broward County. For instance, in June 2005, 2,477 homes sold in Broward County. Right now, there are 17,407 single-family homes for sale in Broward County. In other words, we currently have nearly 41 months of inventory on the market (a healthy market normally has less than six months of inventory).
Wednesday, November 28, 2007
Today's F@cked Buyer (Coral Gables)
This property has languished on the market for over a year. It was originally listed for $745,000 and have dropped the price 12 times since. How low can they go? They're already 39% off its 2005 purchase price.
1559 TREVINO AV, Coral Gables, FL 33134
1559 TREVINO AV, Coral Gables, FL 33134
- 3 bedroom, 2 bath SFH
- Bought in December 2005 for $675,000
- On the MLS for $414,900
- Days on the MLS: 386 Days
- Loss before the Realtor® commission: $260,100
- Loss after the Realtor® commission: $284,994
Today's Local Real Estate News: "The best thing for government to do is just what any savvy shopper would: buy, buy, buy."
The U.S. Conference of Mayors assembled to discuss the impending foreclosure crisis. The Sun-Sentinel reports:
“A mortgage industry group agreed Tuesday to help the nation's mayors raise public awareness about ways to avoid falling into foreclosure as part of an effort to address the nation's housing crisis.”
“The agreement was announced following a meeting in Detroit organized by the U.S. Conference of Mayors and attended by mayors from across the country. The Mortgage Bankers Association also plans to help cities get access to information on homes in foreclosure to ensure those properties don't blight neighborhoods.”
“‘The foreclosure crisis has the potential to break the backbone of our economy,’ Douglas Palmer, mayor of Trenton, N.J., and president of the mayors group, said after the meeting at the MGM Grand Detroit hotel.”
“Meanwhile, mortgage foreclosures remained a major concern for South Florida homeowners in October. There were 2,122 Broward County residents last month who were behind on their mortgages and face losing their homes to lenders, almost triple the 732 a year ago, according to Realestat.com of Plantation. Broward had 710 foreclosure sales last month, more than double the 344 a year ago.”
“In Palm Beach County, 1,291 residents in October were behind on their home loans and face foreclosure, up from 478 a year ago. The county's foreclosure sales were up 69 percent over the same period, from 166 to 281.”
The Palm Beach Post expanded on this story:
“Home foreclosures from West Palm Beach to Miami will reduce the region's economic growth by nearly $2.1 billion next year, according to a report released Tuesday by the U.S. Conference of Mayors.”
“Meanwhile, more bad housing news came from Standard & Poor's Case-Shiller Home Price Indices, a closely watched survey that showed home prices in 20 major markets declining 4.9 percent in September from a year ago.”
“That study showed the largest declines over the past year were in Tampa, where prices fell 11.1 percent compared with last year, and in the Miami metropolitan area, including Palm Beach County, where prices dropped 10 percent.”
“‘There is no real positive news’ in the statistics, economist Robert Shiller said in a statement. ‘Most of the metro areas continue to show declining or decelerating returns on both an annual and monthly basis.’”
“The mayors' report was based on economists' assumption that another 1.4 million homeowners will face foreclosure next year, forcing them to walk away from houses worth a total of $316 billion.”
“The resulting turmoil in the housing sector will reduce economic growth by $166 billion nationwide, according to the study, conducted for the mayors by forecasting firm Global Insight Inc.”
“‘The foreclosure crisis has the potential to break the back of our economy, as well as the backs of millions of American families, if we don't do something soon,’ Trenton, N.J., Mayor Douglas Palmer said in statement on the report, released at a meeting in Detroit of mayors, mortgage industry officials and community advocacy groups. Palmer is president of the mayors group.”
The Miami Herald reports on how the foreclosures will affect the local economy:
“In the ranking of regions by projected amount of economic growth lost, Florida's cities hold up relatively well, probably because strong performances in tourism and international trade are helping offset the housing slump. The state's tourism agency said Monday that visitors to the Sunshine State this summer increased nearly 5 percent over last year.”
“Miami-Dade and Broward counties ranked 111th on the list of 361 areas, and the two counties' combined economy is expected to grow by 2.2 percent next year -- down from the recent boom years but above the national average of 1.9 percent forecast. The report did not disclose its methodology.”
“The mayors, who begin meeting Tuesday in Detroit, hope to call attention to the cascading problems arising from falling home prices, an expected 1.4 million foreclosures and the pending reset of millions of adjustable-rate mortgages.”
“Lauderhill Mayor Richard J. Kaplan, who is in Detroit for the meeting, said city governments could help soften the blow out of the real estate market in several ways.”
“Options the mayors will discuss include changing state laws to allow cities to better maintain abandoned homes and working with lenders to help keep borrowers out of foreclosure.”
“‘Florida law limits us significantly in trying to prevent one house from destroying an entire neighborhood,'' Kaplan said. In many cases cities have no authority to repair windows or pick up trash strewn across the lawns of unoccupied property, Kaplan said.”
“Miami Mayor Manny Diaz pointed out that the city of Miami had already implemented a number of foreclosure prevention programs. He said nation's mayors had the bully pulpit and would use it to further enlist the participation of lenders, and the U.S. Congress, to help homeowners to work their way out of mortgage problems.”
“‘It was the lending industry, the mortgage industry and financial institutions that created this situation; they should come to the table to offer solutions. And Congress needs to step up and regulate and make sure this kind of thing doesn't happen again,’ Diaz said.”
The Miami Herald reports on housing price declines in South Florida:
“Home prices in Miami fell 10 percent in the past year, the second most in the nation, according to data released Tuesday.”
“Nationwide, home prices fell 4.5 percent in the third quarter from a year earlier, the sharpest drop since Standard & Poor's began its nationwide housing index in 1987 and another sign that the housing slump is far from over, the research group said Tuesday.”
“Tampa and Miami led the index with the lowest year-over-year declines at 11.1 percent and 10 percent, respectively. It also showed drops in San Diego of 9.6 percent; Detroit, 9.6 percent; Las Vegas, 9 percent; Phoenix, 8.8 percent; and Los Angeles, 7 percent.”
“The S&P's 10-area index decreased 5.5 percent in September from the previous year.”
Last week, the National Association of Realtors said that sales of existing homes fell in 46 states in the third quarter. However, the trade group said home prices rose in 93 of the 150 metropolitan areas surveyed.”
In the face of all this, Miami-Dade Commission, Marc Sarnoff came up with an absolutely ridiculous proposal, which is really just a thinly-veiled attempt to bail out troubled developers and under-water flippers. The Miami Herald reports:
“Miami's former building boom -- nowadays beset by sluggish condo sales, panicked investors and worries that market conditions may get worse before they get better -- has become Miami's building bargain, one city commissioner says.”
“And Commissioner Marc Sarnoff says the best thing for government to do is just what any savvy shopper would: buy, buy, buy.”
“The commissioner says if prices dip as low as $175 per square foot, government should purchase condo units and partially subsidize them for teachers, police officers and the like.”
“Sarnoff says a wide range of condo units are currently available in the $225 to $250 per square foot range, and he expects prices to drop in coming months.”
“Under Sarnoff's plan, condo buyers who qualify for government incentives -- likely workers earning between roughly $28,000 and $65,000 -- could receive down payment assistance or help with paying their condo maintenance fees.”
“‘If the marketplace presents an opportunity -- the city, the county, the state should react to that opportunity,’ Sarnoff said.”
The Sun-Sentinel reports on bankruptcy proceedings with Levitt & Sons:
“Levitt and Sons of Fort Lauderdale, the iconic builder of suburban homes, is on the verge of ending its 78-year run.”
“A bankruptcy judge on Tuesday allowed the builder to hand back property and unfinished homes to two of its lenders, which are also among its biggest creditors, a sign that Levitt and Sons is winding down its operations.”
“Negotiations continue with other lenders, and that could permit the company to complete construction in some communities. Levitt and Sons halted building in October.”
“Angelo and Paula Palermo are renting an apartment in Pembroke Pines while waiting for their $380,000 house in Port St. Lucie to be finished. They said they haven't heard a word about their $38,000 deposit or the status of their home.”
“‘I can't stand living out of these boxes,’ Paula Palermo said Tuesday. ‘I don't know what to do. I have no answers.’”
“Bob Oblas of New York was scheduled to close on his Port St. Lucie retirement home at the end of October. But he wrote a letter to the builder, demanding his money back.”
“‘I find this horrific,’ Oblas said. ‘I can't see closing at this point.’”
The Sun-Sentinel printed the following opinion advocating Save our Homes portability:
“I am a Realtor and, therefore, I do have a bias. However, my customers are both permanent residents and snowbirds and I worked as a commercial broker, so I might have at least some perspective.”
“The proposed portability of the Save Our Homes provision will unleash a desperately needed floodgate of prospects into a stagnant housing market. Growing families will be able to buy a larger home without an impossibly disproportional increase in their property taxes, and empty nesters will be able to downsize to lower their housing costs without seeing much of the needed savings wiped out by an actual tax increase.”
“How does that help solve the problem for other disadvantaged groups? Each sale of property generates large taxes in the form of documentary stamps and the intangible property tax. Sale of homes will increase because of the large pent-up demand of those previously thwarted in their desire to move. Since the sick housing market has been waiting for a "bottom," this increased activity will kick start home sales, further generating more closings tax revenue.”
“The bleeding in the home construction industry and all the other professions adversely affected by the housing slump will abate. The loss of jobs will subside and, in time, be reversed.”
“Voila! With the sharply increased tax revenue from the closing of home sales, the Legislature will have the funds to do something for the snowbirds, business property owners and first-time home buyers. If the lawmakers could just figure out a way to keep local governments (and themselves) from overspending!”
But, all is not lost. If homebuilding slows during this housing slump, there are always other alternatives. The Palm Beach Post reports:
“A small Port St. Lucie home builder appears to be at the center of an investigation into a ring of marijuana grow houses that sprawled across St. Lucie County, where authorities on Tuesday raided 18 homes and seized 420 pounds of pot, officials said.”
“Authorities said they arrested 10 people, including the owner of Global Home Builders of the Treasure Coast, and uncovered 10 indoor marijuana farms during pre-dawn raids.”
“Although authorities said Global Home Builders and some of its employees had an interest in several of the homes raided Tuesday morning, they would not elaborate on the involvement.”
“‘People connected to (Global Homes Builders of the Treasure Coast) have been brought into custody,’ said St. Lucie sheriff's Chief Deputy Garry Wilson; he declined to say more.”
“Global Home Builders' Web site boasts of doing more than 40 years of business on the Treasure Coast and in South Florida.”
“The company obtained permits to build six single-family homes in 2006, the first year it received a city permit, Port St. Lucie building officials said. This year, the company received three permits.”
“A mortgage industry group agreed Tuesday to help the nation's mayors raise public awareness about ways to avoid falling into foreclosure as part of an effort to address the nation's housing crisis.”
“The agreement was announced following a meeting in Detroit organized by the U.S. Conference of Mayors and attended by mayors from across the country. The Mortgage Bankers Association also plans to help cities get access to information on homes in foreclosure to ensure those properties don't blight neighborhoods.”
“‘The foreclosure crisis has the potential to break the backbone of our economy,’ Douglas Palmer, mayor of Trenton, N.J., and president of the mayors group, said after the meeting at the MGM Grand Detroit hotel.”
“Meanwhile, mortgage foreclosures remained a major concern for South Florida homeowners in October. There were 2,122 Broward County residents last month who were behind on their mortgages and face losing their homes to lenders, almost triple the 732 a year ago, according to Realestat.com of Plantation. Broward had 710 foreclosure sales last month, more than double the 344 a year ago.”
“In Palm Beach County, 1,291 residents in October were behind on their home loans and face foreclosure, up from 478 a year ago. The county's foreclosure sales were up 69 percent over the same period, from 166 to 281.”
The Palm Beach Post expanded on this story:
“Home foreclosures from West Palm Beach to Miami will reduce the region's economic growth by nearly $2.1 billion next year, according to a report released Tuesday by the U.S. Conference of Mayors.”
“Meanwhile, more bad housing news came from Standard & Poor's Case-Shiller Home Price Indices, a closely watched survey that showed home prices in 20 major markets declining 4.9 percent in September from a year ago.”
“That study showed the largest declines over the past year were in Tampa, where prices fell 11.1 percent compared with last year, and in the Miami metropolitan area, including Palm Beach County, where prices dropped 10 percent.”
“‘There is no real positive news’ in the statistics, economist Robert Shiller said in a statement. ‘Most of the metro areas continue to show declining or decelerating returns on both an annual and monthly basis.’”
“The mayors' report was based on economists' assumption that another 1.4 million homeowners will face foreclosure next year, forcing them to walk away from houses worth a total of $316 billion.”
“The resulting turmoil in the housing sector will reduce economic growth by $166 billion nationwide, according to the study, conducted for the mayors by forecasting firm Global Insight Inc.”
“‘The foreclosure crisis has the potential to break the back of our economy, as well as the backs of millions of American families, if we don't do something soon,’ Trenton, N.J., Mayor Douglas Palmer said in statement on the report, released at a meeting in Detroit of mayors, mortgage industry officials and community advocacy groups. Palmer is president of the mayors group.”
The Miami Herald reports on how the foreclosures will affect the local economy:
“In the ranking of regions by projected amount of economic growth lost, Florida's cities hold up relatively well, probably because strong performances in tourism and international trade are helping offset the housing slump. The state's tourism agency said Monday that visitors to the Sunshine State this summer increased nearly 5 percent over last year.”
“Miami-Dade and Broward counties ranked 111th on the list of 361 areas, and the two counties' combined economy is expected to grow by 2.2 percent next year -- down from the recent boom years but above the national average of 1.9 percent forecast. The report did not disclose its methodology.”
“The mayors, who begin meeting Tuesday in Detroit, hope to call attention to the cascading problems arising from falling home prices, an expected 1.4 million foreclosures and the pending reset of millions of adjustable-rate mortgages.”
“Lauderhill Mayor Richard J. Kaplan, who is in Detroit for the meeting, said city governments could help soften the blow out of the real estate market in several ways.”
“Options the mayors will discuss include changing state laws to allow cities to better maintain abandoned homes and working with lenders to help keep borrowers out of foreclosure.”
“‘Florida law limits us significantly in trying to prevent one house from destroying an entire neighborhood,'' Kaplan said. In many cases cities have no authority to repair windows or pick up trash strewn across the lawns of unoccupied property, Kaplan said.”
“Miami Mayor Manny Diaz pointed out that the city of Miami had already implemented a number of foreclosure prevention programs. He said nation's mayors had the bully pulpit and would use it to further enlist the participation of lenders, and the U.S. Congress, to help homeowners to work their way out of mortgage problems.”
“‘It was the lending industry, the mortgage industry and financial institutions that created this situation; they should come to the table to offer solutions. And Congress needs to step up and regulate and make sure this kind of thing doesn't happen again,’ Diaz said.”
The Miami Herald reports on housing price declines in South Florida:
“Home prices in Miami fell 10 percent in the past year, the second most in the nation, according to data released Tuesday.”
“Nationwide, home prices fell 4.5 percent in the third quarter from a year earlier, the sharpest drop since Standard & Poor's began its nationwide housing index in 1987 and another sign that the housing slump is far from over, the research group said Tuesday.”
“Tampa and Miami led the index with the lowest year-over-year declines at 11.1 percent and 10 percent, respectively. It also showed drops in San Diego of 9.6 percent; Detroit, 9.6 percent; Las Vegas, 9 percent; Phoenix, 8.8 percent; and Los Angeles, 7 percent.”
“The S&P's 10-area index decreased 5.5 percent in September from the previous year.”
Last week, the National Association of Realtors said that sales of existing homes fell in 46 states in the third quarter. However, the trade group said home prices rose in 93 of the 150 metropolitan areas surveyed.”
In the face of all this, Miami-Dade Commission, Marc Sarnoff came up with an absolutely ridiculous proposal, which is really just a thinly-veiled attempt to bail out troubled developers and under-water flippers. The Miami Herald reports:
“Miami's former building boom -- nowadays beset by sluggish condo sales, panicked investors and worries that market conditions may get worse before they get better -- has become Miami's building bargain, one city commissioner says.”
“And Commissioner Marc Sarnoff says the best thing for government to do is just what any savvy shopper would: buy, buy, buy.”
“The commissioner says if prices dip as low as $175 per square foot, government should purchase condo units and partially subsidize them for teachers, police officers and the like.”
“Sarnoff says a wide range of condo units are currently available in the $225 to $250 per square foot range, and he expects prices to drop in coming months.”
“Under Sarnoff's plan, condo buyers who qualify for government incentives -- likely workers earning between roughly $28,000 and $65,000 -- could receive down payment assistance or help with paying their condo maintenance fees.”
“‘If the marketplace presents an opportunity -- the city, the county, the state should react to that opportunity,’ Sarnoff said.”
The Sun-Sentinel reports on bankruptcy proceedings with Levitt & Sons:
“Levitt and Sons of Fort Lauderdale, the iconic builder of suburban homes, is on the verge of ending its 78-year run.”
“A bankruptcy judge on Tuesday allowed the builder to hand back property and unfinished homes to two of its lenders, which are also among its biggest creditors, a sign that Levitt and Sons is winding down its operations.”
“Negotiations continue with other lenders, and that could permit the company to complete construction in some communities. Levitt and Sons halted building in October.”
“Angelo and Paula Palermo are renting an apartment in Pembroke Pines while waiting for their $380,000 house in Port St. Lucie to be finished. They said they haven't heard a word about their $38,000 deposit or the status of their home.”
“‘I can't stand living out of these boxes,’ Paula Palermo said Tuesday. ‘I don't know what to do. I have no answers.’”
“Bob Oblas of New York was scheduled to close on his Port St. Lucie retirement home at the end of October. But he wrote a letter to the builder, demanding his money back.”
“‘I find this horrific,’ Oblas said. ‘I can't see closing at this point.’”
The Sun-Sentinel printed the following opinion advocating Save our Homes portability:
“I am a Realtor and, therefore, I do have a bias. However, my customers are both permanent residents and snowbirds and I worked as a commercial broker, so I might have at least some perspective.”
“The proposed portability of the Save Our Homes provision will unleash a desperately needed floodgate of prospects into a stagnant housing market. Growing families will be able to buy a larger home without an impossibly disproportional increase in their property taxes, and empty nesters will be able to downsize to lower their housing costs without seeing much of the needed savings wiped out by an actual tax increase.”
“How does that help solve the problem for other disadvantaged groups? Each sale of property generates large taxes in the form of documentary stamps and the intangible property tax. Sale of homes will increase because of the large pent-up demand of those previously thwarted in their desire to move. Since the sick housing market has been waiting for a "bottom," this increased activity will kick start home sales, further generating more closings tax revenue.”
“The bleeding in the home construction industry and all the other professions adversely affected by the housing slump will abate. The loss of jobs will subside and, in time, be reversed.”
“Voila! With the sharply increased tax revenue from the closing of home sales, the Legislature will have the funds to do something for the snowbirds, business property owners and first-time home buyers. If the lawmakers could just figure out a way to keep local governments (and themselves) from overspending!”
But, all is not lost. If homebuilding slows during this housing slump, there are always other alternatives. The Palm Beach Post reports:
“A small Port St. Lucie home builder appears to be at the center of an investigation into a ring of marijuana grow houses that sprawled across St. Lucie County, where authorities on Tuesday raided 18 homes and seized 420 pounds of pot, officials said.”
“Authorities said they arrested 10 people, including the owner of Global Home Builders of the Treasure Coast, and uncovered 10 indoor marijuana farms during pre-dawn raids.”
“Although authorities said Global Home Builders and some of its employees had an interest in several of the homes raided Tuesday morning, they would not elaborate on the involvement.”
“‘People connected to (Global Homes Builders of the Treasure Coast) have been brought into custody,’ said St. Lucie sheriff's Chief Deputy Garry Wilson; he declined to say more.”
“Global Home Builders' Web site boasts of doing more than 40 years of business on the Treasure Coast and in South Florida.”
“The company obtained permits to build six single-family homes in 2006, the first year it received a city permit, Port St. Lucie building officials said. This year, the company received three permits.”
Tuesday, November 27, 2007
Today's F@cked Buyer (Parkland)
Thank you to a reader who sent me this Parkland foreclosure. During its 83 days on the market, the Bank of New York has dropped this home's price five times from its original listing price of $921,900. Now it's priced 43% below its purchase price only 20 months ago.
6502 NW 66TH WY, Parkland, FL 33067
- 4 bedroom, 4 bath SFH
- Bought in February 2006 for $1,334,000
- On the MLS for $758,900
- Days on the MLS: 83 Days
- Loss before the Realtor® commission: $575,100
- Loss after the Realtor® commission: $620,634
Update: Once again, inventories continue to increase while prices continue to drop
Towards the end of each month, I update the trends in South Florida housing inventory and the Median Listing Price (read this previous post that explains why I use Median Listing Price instead of Median Sales Price). Just as with every month since I started reporting on these statistics, the trends continue.
Median Listing Price was down 1.62% since last month (from $315,000 to $309,900). This one-month decrease is the largest one-month decrease since Housingtracker.net (my source) started tracking the data in April 2006. The Median Listing Price is now down 11.46% since last year and down 18.44% since April 2006.
Last month, I reported that the inventory trends seem to be slowing. Well, this month it has picked back up again with a 1.57% month-to-month increase. The inventory trend has now resumed its normal growth track. They are now up 19.34% since this time last year and an amazing 52.38% since April 2006.
The following graphs show the trends since April 2006:
Median Listing Price was down 1.62% since last month (from $315,000 to $309,900). This one-month decrease is the largest one-month decrease since Housingtracker.net (my source) started tracking the data in April 2006. The Median Listing Price is now down 11.46% since last year and down 18.44% since April 2006.
Last month, I reported that the inventory trends seem to be slowing. Well, this month it has picked back up again with a 1.57% month-to-month increase. The inventory trend has now resumed its normal growth track. They are now up 19.34% since this time last year and an amazing 52.38% since April 2006.
The following graphs show the trends since April 2006:
Monday, November 26, 2007
Today's F@cked Buyer (Miami Beach)
It's simply amazing to me that someone actually paid $195,000 for a studio apartment at one point. Are their still fools around that will pay over $100,000 now that the market crashed?
1100 11 ST # 207, Miami Beach, FL 33139
- 1 Bath Studio
- Bought in June 2006 for $195,000
- On the MLS for $109,900
- Days on the MLS: 56 Days
- Loss before the Realtor® commission: $85,100
- Loss after the Realtor® commission: $91,694
Sunday, November 25, 2007
Today's F@cked Buyer (Liberty City)
Someone once paid nearly $140,000 for this shack in Liberty City. Yet, there are still people out there that claim there was never a bubble. It's being offered at a 48% discount from its 2005 purchase price.
1220 NW 68 ST, Miami, FL 33147
1220 NW 68 ST, Miami, FL 33147
- 2 bedroom, 1 bath SFH
- Bought in April 2005 for $139,700
- On the MLS for $72,900
- Days on the MLS: 72 Days
- Loss before the Realtor® commission: $66,800
- Loss after the Realtor® commission: $71,174
Video: Peter Schiff on Fox News
This video is interesting because it shows that there are still real estate cheerleaders out there. In the coming months, I think we are going to see more and more of them. They will grab any piece of "good" statistical data and turn it into an absolute barometer of the market's bottom.
In this piece, Peter Schiff, who has been deadly accurate in his predictions on housing, debates cheerleader, Danielle Babb:
CLICK HERE TO WATCH THE VIDEO
In this piece, Peter Schiff, who has been deadly accurate in his predictions on housing, debates cheerleader, Danielle Babb:
CLICK HERE TO WATCH THE VIDEO
Saturday, November 24, 2007
Today's F@cked Buyer (Boca Raton)
Seven months after providing 100% financing to the F@cked Buyer, the lender was forced to file a foreclosure lien against the property. Now, just ten months after its purchase, this property is being sold as a short sale, 39% below its January purchase price.
22984 SANDALFOOT BL, Boca Raton, FL
22984 SANDALFOOT BL, Boca Raton, FL
- 3 Bed, 2 Bath SFH
- Bought in January 2007 for $320,000
- On the MLS for $195,900
- Days on the Market: 29
- Loss before the Realtor® commission: $124,100
- Loss after the Realtor® commission: $135,854
Today's Local Real Estate News: "We're nowhere close to the end of the collapse."
The Sun-Sentinel printed one of its most forthright articles on the mortgage crisis:
“When Domenico Colombo saw that his monthly mortgage payment was about to balloon by 30 percent, he had a clear picture of how bad it could get.”
“His payment was scheduled to surge by an extra $1,500 in December. With his daughter headed to college next fall and tuition to be paid, he feared ending up like so many neighbors in Broward County who defaulted on their mortgages and whose homes are now in foreclosure and sporting ‘For Sale’ signs.”
“Colombo did manage to renegotiate a new fixed interest rate loan with his bank, and now believes he'll be OK — but the future is less certain for the rest of us.”
“In the months ahead, millions of other adjustable-rate mortgages like Colombo's will reset, giving them a higher interest rate as required by the loan agreements and leaving many homeowners unable to make their payments. Soaring mortgage default rates this year already have shaken major financial institutions and the fallout from more of them, some experts say, could spread from those already battered banks into the general economy.”
“When home prices kept rising, these were lucrative assets to own. But the ongoing collapse in housing prices has set off a chain reaction: Lenders are tightening their standards, borrowers are having a harder time refinancing loans and the securities that underpin them are in jeopardy.”
“This has resulted in more than $500 billion of potentially worthless paper on the balance sheets of the biggest global banks — losses that could spill into the huge pension and mutual funds that also invest in these securities and that the average worker or investor expects to depend on.”
“There's more pain left for Wall Street: ‘We're nowhere close to the end of the collapse,’ said Mark Patterson, chairman and co-founder of MatlinPatterson Global Advisors, a hedge fund that specializes in distressed funds.”
The Palm Beach Post ran an editorial discussing the housing bubble (of course they included the myth of the rich foreign investors coming to the rescue):
“There's little doubt that, outside of the high-end market, this area is in a real-estate recession. There's also little doubt that few in the industry raised warnings as the housing bubble got bigger and bigger. Too many people were making lots of money. Those Realtors who blame The Post and other news organizations for reporting the current bad news didn't object when The Post ran its ‘Mapping the Boom’ series.”
“If rising prices fueled the boom, however, falling prices will fuel the recovery. And a look back shows that prices aren't collapsing; they're settling back to traditional levels.”
“From its peak of $400,000 in 2005, the median home price in Palm Beach County is down to about $355,000. In the Treasure Coast, the median price is at $214,200 from a high of $269,400 two years ago. But for Palm Beach County, that still is 40 percent higher than the median home price in 2003. If home prices had risen by a steady 10 percent over those four years, most people would have been happy. Between August 2000 and August 2001, home prices went up just 3 percent. In the Treasure Coast, prices remain about 35 percent higher than in 2003.”
“Lower prices in South Florida will make more homes affordable. Lower prices might help bring down the cost of insurance and taxes. A tax system that doesn't penalize first-time home buyers also would help. The lower dollar will continue to attract foreign buyers. Florida will recover. But the going up won't have been worth the coming down.”
RisMedia discusses mortgage fraud in South Florida:
“In his article ‘Miami condo at ground zero in mortgage fraud,’ Tom Brown highlights the fact that foreclosures follow fast on the heals of mortgage and real estate fraud. As he points out, “fraud accounts for a sizable share of the bad bets on mortgages,” which often result in foreclosures. Lenders get stuck holding the bag, but as we have seen recently, problems in the mortgage industry affect the entire national economy and can even destabilize the global economy.”
“Brown focuses his article on a 643-unit condo known as the Club at Brickell in Miami’s international banking district. Con artists and other opportunists used this building as a vehicle to commit rampant fraud in what are commonly known as cash-back-at-closing deals. With cash back at closing, buyers, sellers, appraisers, real estate agents, and other real estate professionals often conspire to inflate the value of a property to fool a lender into approving a loan that grossly exceeds the true market value of the property.”
“The buyer receives the excess proceeds, the sellers are able to sell their property for close to their asking price, the real estate agent receives a higher commission based on the inflated price tag, and the appraiser is rewarded with another satisfied customer.”
“These cash back at closing schemes have become very popular during the latest housing boom, because they seem like “everybody wins” deals. On the surface, even the lender seems to win-loaning more money and earning more interest over the life of the loan. Unfortunately, however, when the housing bubble bursts, someone gets stuck holding the bag-the lender. And when enough lenders get stuck holding the bag, they simply pass the costs on to investors, homeowners, and taxpayers. The only winners are the con artists who rake in the cash at the closing table.”
The St. Petersburg Time questions how the housing downturn will affect the holiday season’s retail sales:
“Whether Friday's discount-induced buying binge will last remains the big question as merchants fret a weakening economy will slow down their tepid forecast for a 3 percent retail sales gain in Florida.”
“‘We've all got our fingers crossed,’ said Rick McAllister, president of the Florida Retail Federation. His worry? That the housing slump, deteriorating dollar and subprime mortgage crisis will keep the Sunshine State from doing even as well as the national forecast of a modest 4 percent gain in general merchandise sales to $474.5-billion. That would be the worst holiday season nationally in five years.”
“There was little sign shoppers were holding back Friday. In fact, Black Friday - so named for the first day retailers typically become profitable for whole year - is rarely the biggest shopping day of the year. But some experts predict it may be this year, because Hanukkah comes early and Christmas lands on a Tuesday. That means the big finish will be spread over four days.”
“When Domenico Colombo saw that his monthly mortgage payment was about to balloon by 30 percent, he had a clear picture of how bad it could get.”
“His payment was scheduled to surge by an extra $1,500 in December. With his daughter headed to college next fall and tuition to be paid, he feared ending up like so many neighbors in Broward County who defaulted on their mortgages and whose homes are now in foreclosure and sporting ‘For Sale’ signs.”
“Colombo did manage to renegotiate a new fixed interest rate loan with his bank, and now believes he'll be OK — but the future is less certain for the rest of us.”
“In the months ahead, millions of other adjustable-rate mortgages like Colombo's will reset, giving them a higher interest rate as required by the loan agreements and leaving many homeowners unable to make their payments. Soaring mortgage default rates this year already have shaken major financial institutions and the fallout from more of them, some experts say, could spread from those already battered banks into the general economy.”
“When home prices kept rising, these were lucrative assets to own. But the ongoing collapse in housing prices has set off a chain reaction: Lenders are tightening their standards, borrowers are having a harder time refinancing loans and the securities that underpin them are in jeopardy.”
“This has resulted in more than $500 billion of potentially worthless paper on the balance sheets of the biggest global banks — losses that could spill into the huge pension and mutual funds that also invest in these securities and that the average worker or investor expects to depend on.”
“There's more pain left for Wall Street: ‘We're nowhere close to the end of the collapse,’ said Mark Patterson, chairman and co-founder of MatlinPatterson Global Advisors, a hedge fund that specializes in distressed funds.”
The Palm Beach Post ran an editorial discussing the housing bubble (of course they included the myth of the rich foreign investors coming to the rescue):
“There's little doubt that, outside of the high-end market, this area is in a real-estate recession. There's also little doubt that few in the industry raised warnings as the housing bubble got bigger and bigger. Too many people were making lots of money. Those Realtors who blame The Post and other news organizations for reporting the current bad news didn't object when The Post ran its ‘Mapping the Boom’ series.”
“If rising prices fueled the boom, however, falling prices will fuel the recovery. And a look back shows that prices aren't collapsing; they're settling back to traditional levels.”
“From its peak of $400,000 in 2005, the median home price in Palm Beach County is down to about $355,000. In the Treasure Coast, the median price is at $214,200 from a high of $269,400 two years ago. But for Palm Beach County, that still is 40 percent higher than the median home price in 2003. If home prices had risen by a steady 10 percent over those four years, most people would have been happy. Between August 2000 and August 2001, home prices went up just 3 percent. In the Treasure Coast, prices remain about 35 percent higher than in 2003.”
“Lower prices in South Florida will make more homes affordable. Lower prices might help bring down the cost of insurance and taxes. A tax system that doesn't penalize first-time home buyers also would help. The lower dollar will continue to attract foreign buyers. Florida will recover. But the going up won't have been worth the coming down.”
RisMedia discusses mortgage fraud in South Florida:
“In his article ‘Miami condo at ground zero in mortgage fraud,’ Tom Brown highlights the fact that foreclosures follow fast on the heals of mortgage and real estate fraud. As he points out, “fraud accounts for a sizable share of the bad bets on mortgages,” which often result in foreclosures. Lenders get stuck holding the bag, but as we have seen recently, problems in the mortgage industry affect the entire national economy and can even destabilize the global economy.”
“Brown focuses his article on a 643-unit condo known as the Club at Brickell in Miami’s international banking district. Con artists and other opportunists used this building as a vehicle to commit rampant fraud in what are commonly known as cash-back-at-closing deals. With cash back at closing, buyers, sellers, appraisers, real estate agents, and other real estate professionals often conspire to inflate the value of a property to fool a lender into approving a loan that grossly exceeds the true market value of the property.”
“The buyer receives the excess proceeds, the sellers are able to sell their property for close to their asking price, the real estate agent receives a higher commission based on the inflated price tag, and the appraiser is rewarded with another satisfied customer.”
“These cash back at closing schemes have become very popular during the latest housing boom, because they seem like “everybody wins” deals. On the surface, even the lender seems to win-loaning more money and earning more interest over the life of the loan. Unfortunately, however, when the housing bubble bursts, someone gets stuck holding the bag-the lender. And when enough lenders get stuck holding the bag, they simply pass the costs on to investors, homeowners, and taxpayers. The only winners are the con artists who rake in the cash at the closing table.”
The St. Petersburg Time questions how the housing downturn will affect the holiday season’s retail sales:
“Whether Friday's discount-induced buying binge will last remains the big question as merchants fret a weakening economy will slow down their tepid forecast for a 3 percent retail sales gain in Florida.”
“‘We've all got our fingers crossed,’ said Rick McAllister, president of the Florida Retail Federation. His worry? That the housing slump, deteriorating dollar and subprime mortgage crisis will keep the Sunshine State from doing even as well as the national forecast of a modest 4 percent gain in general merchandise sales to $474.5-billion. That would be the worst holiday season nationally in five years.”
“There was little sign shoppers were holding back Friday. In fact, Black Friday - so named for the first day retailers typically become profitable for whole year - is rarely the biggest shopping day of the year. But some experts predict it may be this year, because Hanukkah comes early and Christmas lands on a Tuesday. That means the big finish will be spread over four days.”
Friday, November 23, 2007
Today's F@cked Buyer (SW Miami)
While the losses on this unit are not huge, it does show how prices are now dropping below 2004 prices. This particular unit is listed 9% below its 2004 purchase price.
13936 SW 172 TE, Miami, FL 33177
13936 SW 172 TE, Miami, FL 33177
- 3 Bed, 2.5 Bath Townhouse
- Bought in December 2004 for $185,000
- On the MLS for $169,000
- Days on the MLS: 45 Days
- Loss before the Realtor® commission: $16,000
- Loss after the Realtor® commission: $26,140
Thursday, November 22, 2007
Today's F@cked Buyer (Weston)
Ten months after its purchase, this pre-foreclosure is listed for a price that is 15% lower.
1769 HARBOR POINTE CR, Weston, FL 33327
1769 HARBOR POINTE CR, Weston, FL 33327
- 6 Bed, 4 Bath SFH
- Bought in January 2007 for $1,050,000
- On the MLS for $895,000
- Days on the Market: 31
- Loss before the Realtor® commission: $155,000
- Loss after the Realtor® commission: $208,700
Today's Local Real Estate News: "Trapped, unable to move because they can't sell unless they significantly drop their price."
The Chicago Tribune hints at why the Mainstream Media has been so biased in their reporting of the housing bubble:
“Real estate is the newspaper industry's largest source of classified ads, accounting for $5.16 billion, or 11 percent, of publishers' total ad revenue last year, according to the Newspaper Association of America. The real estate industry spent $2.05 billion advertising online at sites such as Realtor.com and Zillow.com in 2006, Borrell said.”
“Newspapers' print real estate advertising will drop to $3.19 billion a year by 2011, said Borrell, which advises the publishing industry. Newspaper Web sites brought in about $380 million in real estate ads last year, the firm said.”
“‘If the newspapers' share of online advertising remains static or declines, the net loss will be huge, over $860 million in lost advertising from this category alone,’ the report said. Every $1 of lost advertising translates into a 75-cent drop in profit, Martin said.”
“Newspapers believe they will regain much of the real estate advertising they lost this year when the housing market improves, said Charlie Diederich, marketing director for the newspaper association, based in Arlington, Va.”
Forbes explains how the parent company of the Miami Herald relies on real estate advertising:
“The downturn in the housing market is likely to threaten ad sales at newspaper publisher McClatchy, an analyst warned Wednesday.”
“Shares of McClatchy (nyse: MNI - news - people ) fell 21 cents, or 1.4%, to $14.53 at the close, after Bear Stearns analyst Alexia S. Quadrani initiated coverage of the company with an ‘underperform’ rating. Quadrani pointed to strains from the downturn in the U.S. housing market.”
“‘McClatchy’s relatively high concentration in markets that are most exposed to the housing downturn will likely continue to depress overall results and deliver another year of industry-leading declines in newspaper advertising growth," said Quadrani.”
“Home sales have drastically slowed in many regions. Demand has waned as access to mortgages tightens. This hurts McClatchy because home sales are often advertised in local papers.”
“Over a third of McClatchy's advertising revenue comes from Florida and California. The real estate markets in both states have seen a particularly sharp downturn.”
“McClatchy is headquartered in Sacramento. The company is the third-largest newspaper publisher by circulation. Its papers include the Miami Herald and the Sacramento Bee.”
Florida Today reveals how even biased statistics like median sale price are manipulated by the Florida Association of Realtors®:
“Brevard County had the largest percentage drop in housing prices in the last quarter of any major market in the United States, the National Association of Realtors reported Wednesday.”
“In what some experts are calling the nation's worst housing slump in decades, the quarterly sales report showed housing values fell in many of the 156 major markets around the nation, but none by more than the 12.4 percent drop on the Space Coast.”
“The median resale price of single-family homes in Brevard fell to $182,400 in the third quarter, down from $208,200 in the third quarter last year, according to the report.”
“Meanwhile, the Florida Association of Realtors, which uses a different method of compiling sales data, reported Wednesday the median home resale price in Brevard fell 9 percent in the third quarter to $196,500, down from $215,400 in the third quarter of 2006.”
“Some market observers thought the local market would have been stronger by now.”
“‘I'm surprised that it's still continuing. You keep thinking it's going to turn around,’ Space Coast Association of Realtors President Lance Vandeberg said, referring to about slumping sales and prices”
In more interesting spin, the Orlando Sentinel tries to boast their horrible real estate market by showing that it still not as bad as South Florida’s. It also shows the silliness of the median price statistic by claiming that Miami’s market did not see a decline:
“Sales in Orlando's four-county metro area were still down 39 percent from a year ago, when the market was cooling but still far hotter than it is now, the Florida Association of Realtors reported. But the 4,005 homes sold by Realtors in Metro Orlando bested all other metro areas except Tampa-St. Petersburg, which recorded 5,913 resales of single-family homes.”
“Miami-Dade County, the state's largest metro area, has nearly twice as many people as Metro Orlando, yet Orlando Realtors sold more than three times as many single-family homes as their Miami counterparts. Miami's third-quarter total -- 1,250 -- was down 42 percent from the same period a year earlier, the biggest percentage decline of any of the state's large metro areas.”
“Statewide, 31,910 single-family homes were sold through Realtors, down 29 percent from the third quarter of 2006. Homes sold by individuals are not counted in the report, but they constitute a much smaller share of the overall market.”
“The state's median sales price continued to slip in the third quarter from a year earlier, down 6 percent to $232,100.”
“Every metro market posted a price decline except Miami, which was essentially flat with a 1 percent increase to $380,400. Orlando's price dip matched the state average of 6 percent, but the $247,700 figure was still 7 percent higher than the statewide median.”
The Palm Beach post details dropping median sales prices in Palm Beach County:
“Palm Beach County single-family home prices in the third quarter declined 4 percent compared with the same quarter of 2006, and in the Treasure Coast prices fell 13 percent compared with the year-ago period, FAR said.”
“The region's housing market slump is clearly worsening. And frustrated home sellers arguably are feeling most of the sting.”
“According to FAR, the median price of a Palm Beach County existing single-family home was $365,400, down from $380,900 in the third quarter of last year. Meanwhile, in the Treasure Coast - which includes Martin and St. Lucie counties - the median price fell to $218,300, FAR said. The median is the midpoint where half the homes sold for more and half sold for less.”
“While the third-quarter figures offer few surprises, experts say they are a sobering reminder of the ongoing hangover from the region's real estate boom. Home prices in Palm Beach County reached a high of $421,500 in November of 2005, FAR records show. As of September, area prices have declined for 16 straight months.”
“Both the state and national Realtors associations release their October sales reports next week, and more disappointing news is expected.”
“‘What goes unexplained is how so many people got caught up in this real estate fantasy after losing money in the tech-wreck bear market of 2000-2002,’ said John Pankauski of the Pankauski Law Firm in West Palm Beach. ‘It seems that as history repeats itself, it costs more each time.’”
The Sun-Sentinel reports on seniors that are “trapped” in their homes because they refuse to lower their prices:
“Alice Gordon was getting ready to put her villa up for sale in Palm Isles, but she's decided to wait.”
“After two falls, she uses a walker, and an aide helps her and does the grocery shopping. She wants to move into independent living, but Alice is putting her move on hold because of the flat real estate market.”
“How long was she told it would take to sell her place? ‘Forever,’ she said, laughing.”
“Alice's scenario is played out across the swath of retirement communities, especially in western Delray Beach, where people bought condos decades ago. Now many of them are trapped, unable to move because they can't sell unless they significantly drop their price. ‘The real estate market is making it extremely difficult for residents who want to go into assisted living or go up to be by their children,’ said Bob Schulbaum, longtime president of the Alliance of Delray Residential Associations, which has 65 members in the city and western suburbs that he estimates house about 70,000 people. ‘They're tapping their savings to bring in aides.’”
“Real estate is the newspaper industry's largest source of classified ads, accounting for $5.16 billion, or 11 percent, of publishers' total ad revenue last year, according to the Newspaper Association of America. The real estate industry spent $2.05 billion advertising online at sites such as Realtor.com and Zillow.com in 2006, Borrell said.”
“Newspapers' print real estate advertising will drop to $3.19 billion a year by 2011, said Borrell, which advises the publishing industry. Newspaper Web sites brought in about $380 million in real estate ads last year, the firm said.”
“‘If the newspapers' share of online advertising remains static or declines, the net loss will be huge, over $860 million in lost advertising from this category alone,’ the report said. Every $1 of lost advertising translates into a 75-cent drop in profit, Martin said.”
“Newspapers believe they will regain much of the real estate advertising they lost this year when the housing market improves, said Charlie Diederich, marketing director for the newspaper association, based in Arlington, Va.”
Forbes explains how the parent company of the Miami Herald relies on real estate advertising:
“The downturn in the housing market is likely to threaten ad sales at newspaper publisher McClatchy, an analyst warned Wednesday.”
“Shares of McClatchy (nyse: MNI - news - people ) fell 21 cents, or 1.4%, to $14.53 at the close, after Bear Stearns analyst Alexia S. Quadrani initiated coverage of the company with an ‘underperform’ rating. Quadrani pointed to strains from the downturn in the U.S. housing market.”
“‘McClatchy’s relatively high concentration in markets that are most exposed to the housing downturn will likely continue to depress overall results and deliver another year of industry-leading declines in newspaper advertising growth," said Quadrani.”
“Home sales have drastically slowed in many regions. Demand has waned as access to mortgages tightens. This hurts McClatchy because home sales are often advertised in local papers.”
“Over a third of McClatchy's advertising revenue comes from Florida and California. The real estate markets in both states have seen a particularly sharp downturn.”
“McClatchy is headquartered in Sacramento. The company is the third-largest newspaper publisher by circulation. Its papers include the Miami Herald and the Sacramento Bee.”
Florida Today reveals how even biased statistics like median sale price are manipulated by the Florida Association of Realtors®:
“Brevard County had the largest percentage drop in housing prices in the last quarter of any major market in the United States, the National Association of Realtors reported Wednesday.”
“In what some experts are calling the nation's worst housing slump in decades, the quarterly sales report showed housing values fell in many of the 156 major markets around the nation, but none by more than the 12.4 percent drop on the Space Coast.”
“The median resale price of single-family homes in Brevard fell to $182,400 in the third quarter, down from $208,200 in the third quarter last year, according to the report.”
“Meanwhile, the Florida Association of Realtors, which uses a different method of compiling sales data, reported Wednesday the median home resale price in Brevard fell 9 percent in the third quarter to $196,500, down from $215,400 in the third quarter of 2006.”
“Some market observers thought the local market would have been stronger by now.”
“‘I'm surprised that it's still continuing. You keep thinking it's going to turn around,’ Space Coast Association of Realtors President Lance Vandeberg said, referring to about slumping sales and prices”
In more interesting spin, the Orlando Sentinel tries to boast their horrible real estate market by showing that it still not as bad as South Florida’s. It also shows the silliness of the median price statistic by claiming that Miami’s market did not see a decline:
“Sales in Orlando's four-county metro area were still down 39 percent from a year ago, when the market was cooling but still far hotter than it is now, the Florida Association of Realtors reported. But the 4,005 homes sold by Realtors in Metro Orlando bested all other metro areas except Tampa-St. Petersburg, which recorded 5,913 resales of single-family homes.”
“Miami-Dade County, the state's largest metro area, has nearly twice as many people as Metro Orlando, yet Orlando Realtors sold more than three times as many single-family homes as their Miami counterparts. Miami's third-quarter total -- 1,250 -- was down 42 percent from the same period a year earlier, the biggest percentage decline of any of the state's large metro areas.”
“Statewide, 31,910 single-family homes were sold through Realtors, down 29 percent from the third quarter of 2006. Homes sold by individuals are not counted in the report, but they constitute a much smaller share of the overall market.”
“The state's median sales price continued to slip in the third quarter from a year earlier, down 6 percent to $232,100.”
“Every metro market posted a price decline except Miami, which was essentially flat with a 1 percent increase to $380,400. Orlando's price dip matched the state average of 6 percent, but the $247,700 figure was still 7 percent higher than the statewide median.”
The Palm Beach post details dropping median sales prices in Palm Beach County:
“Palm Beach County single-family home prices in the third quarter declined 4 percent compared with the same quarter of 2006, and in the Treasure Coast prices fell 13 percent compared with the year-ago period, FAR said.”
“The region's housing market slump is clearly worsening. And frustrated home sellers arguably are feeling most of the sting.”
“According to FAR, the median price of a Palm Beach County existing single-family home was $365,400, down from $380,900 in the third quarter of last year. Meanwhile, in the Treasure Coast - which includes Martin and St. Lucie counties - the median price fell to $218,300, FAR said. The median is the midpoint where half the homes sold for more and half sold for less.”
“While the third-quarter figures offer few surprises, experts say they are a sobering reminder of the ongoing hangover from the region's real estate boom. Home prices in Palm Beach County reached a high of $421,500 in November of 2005, FAR records show. As of September, area prices have declined for 16 straight months.”
“Both the state and national Realtors associations release their October sales reports next week, and more disappointing news is expected.”
“‘What goes unexplained is how so many people got caught up in this real estate fantasy after losing money in the tech-wreck bear market of 2000-2002,’ said John Pankauski of the Pankauski Law Firm in West Palm Beach. ‘It seems that as history repeats itself, it costs more each time.’”
The Sun-Sentinel reports on seniors that are “trapped” in their homes because they refuse to lower their prices:
“Alice Gordon was getting ready to put her villa up for sale in Palm Isles, but she's decided to wait.”
“After two falls, she uses a walker, and an aide helps her and does the grocery shopping. She wants to move into independent living, but Alice is putting her move on hold because of the flat real estate market.”
“How long was she told it would take to sell her place? ‘Forever,’ she said, laughing.”
“Alice's scenario is played out across the swath of retirement communities, especially in western Delray Beach, where people bought condos decades ago. Now many of them are trapped, unable to move because they can't sell unless they significantly drop their price. ‘The real estate market is making it extremely difficult for residents who want to go into assisted living or go up to be by their children,’ said Bob Schulbaum, longtime president of the Alliance of Delray Residential Associations, which has 65 members in the city and western suburbs that he estimates house about 70,000 people. ‘They're tapping their savings to bring in aides.’”
Wednesday, November 21, 2007
Today's F@cked Buyer (Homestead)
According to the Florida Association of Realtors®, Miami-Dade home prices are up 1% since last year. According to this home (and all the other daily F@cked Buyer posts), the prices are down significantly. This one is listed 36% below its purchase price 18 months ago.
1499 YELLOWTHROAT ST # 1499, Homestead, FL 33035
1499 YELLOWTHROAT ST # 1499, Homestead, FL 33035
- 3 Bed, 2 Bath Townhouse
- Bought in May 2006 for $186,000
- On the MLS for $119,900
- Days on the Market: 52
- Loss before the Realtor® commission: $66,100
- Loss after the Realtor® commission: $73,294
Today's Local Real Estate News: "This housing market is killing, killing small business in Florida and California."
The Sun-Sentinel reports on slowing new residential construction:
“Construction of single-family homes in October skidded to the lowest level in 16 years, although the slide was cushioned somewhat by a rebound in apartment building.”
“The Commerce Department reported Tuesday that total housing construction rose by 3 percent in October to a seasonally adjusted annual rate of 1.229 million units. But all the strength occurred in a hefty rebound in apartment construction, which is extremely volatile.”
“The bigger single-family sector actually fell by 7.3 percent to an annual rate of 884,000 units, the slowest pace since October 1991, when housing was going through another steep downturn. In another worrisome sign, applications for building permits fell for a fifth consecutive month.”
“The housing slump is expected to worsen in 2008. Builders are cutting jobs, selling land and slashing prices to weather the downturn. Bonita Springs-based WCI Communities Inc., which builds in South Florida, recently cut 575 jobs. Meanwhile, Fort Lauderdale-based builder Levitt and Sons filed for Chapter 11 bankruptcy this month after defaulting on more than $300 million in loans. In the past two months, the builder laid off most of its 412 workers and stopped construction of homes.”
“Hollywood-based builder TOUSA Inc. also is considering bankruptcy and said it has serious doubts about whether it can remain in business.”
In very troubling national news that shows that the credit crisis is not limited to subprime, Freddie Mac announced ballooning losses:
“The mortgage crisis intensified Tuesday as Freddie Mac, the nation's No. 2 buyer and guarantor of home loans, posted its largest quarterly loss ever and warned that it may need to curtail its business unless it can raise fresh capital.”
“Freddie Mac lost $2 billion in the third quarter, much more than Wall Street was expecting, primarily because it needed to set aside $1.2 billion to account for bad home loans. Freddie Mac also said it may slice in half its quarterly dividend of 50 cents per share — which would be its first dividend cut since becoming a public company in 1989.”
“That double dose of bad news sent Freddie Mac's shares skidding 28.7 percent, the largest decline in the two decades its shares have traded in public markets.”
The Sun-Sentinel reports on development in Plantation:
“When the city decided to redevelop 860 acres in the Midtown district five years ago, officials estimated it would take until 2025 to complete the job.”
“Builders, eager to profit from the housing boom, drew up elaborate plans for large buildings that would combine retail and residences, flanked by fountains and lush parks. But the housing slump threatens to delay the project's completion by five years, City Councilwoman Diane Veltri Bendekovic said.”
“Already, a growing number of jittery buyers are looking to bail out of their condominium contracts, and some major developers are slowing plans for new housing. The convergence of these factors may mean the city's tax base will suffer, forcing cuts to staff or services to make up the difference as operating costs continue to rise, City Councilman Jerry Fadgen said.”
Local office supply giant, Office Depot, announced reduced earning due to the housing slump:
“Office Depot Inc., the world's second-largest office supply retailer, unveiled a turnaround strategy Tuesday after announcing that its third-quarter profit dropped about 9 percent compared with the same period last year.”
“Third-quarter 2007 net earnings were $117 million compared with $129 million in the same period last year. Revenue increased 2 percent to $3.9 billion. Sales at North American stores open at least one year were down 5 percent.”
“Company officials pegged North American sales declines to a soft housing market in Florida and California, where consumers and small businesses have curtailed spending and face a credit crunch. About 25 percent of Office Depot's retail business and 30 percent of its business sales are concentrated in Florida and California.”
“‘This [housing market] is killing, killing small business in Florida and California,’ Odland said.”
Not that we should trust their data at all, Zillow reports that many homeowners in the past year now have negative equity. In their report, they rank the major Metropolitan Statistical Areas (MSAs). The Miami-Ft. Lauderdale MSA ranks second worst only behind Los Angeles with 30% of all homeowner who purchase in the past year with negative equity:
“Home values nationwide declined for the fourth consecutive quarter, down 5.7 percent year-over-year -- the largest year-over-year decline in more than a decade, according to Zillow's Q3 2007 Home Value Report (1) released today. This brings the U.S. Zindex(R) home value indicator (2) to $244,000, down 2.8 percent from the second quarter. The Zindex is the median Zestimate(R) valuation and measures all homes in an area, not just those that have sold during the quarter.”
“For many homeowners who bought during the last two years when most local markets reached their peak, subsequent declines in value have left them with negative home equity, owing more than the home is currently worth. As of September 30, nearly 16 percent (15.6%) of homeowners nationwide who bought in the last year (3) and 17.5 percent of those who purchased two years ago have current home values that are less than the original mortgage amount. By comparison, less than 2 percent (1.8%) of those who purchased a home five years ago have seen their equity slide into the negative.”
“Not surprisingly, markets with the greatest proportion of homes with negative equity were those hit hardest by declining values. For example, people who purchased homes in California's Central Valley, parts of Florida and Las Vegas during the past year have seen double-digit depreciation and negative equity rates reach up to five times the national median.”
“Construction of single-family homes in October skidded to the lowest level in 16 years, although the slide was cushioned somewhat by a rebound in apartment building.”
“The Commerce Department reported Tuesday that total housing construction rose by 3 percent in October to a seasonally adjusted annual rate of 1.229 million units. But all the strength occurred in a hefty rebound in apartment construction, which is extremely volatile.”
“The bigger single-family sector actually fell by 7.3 percent to an annual rate of 884,000 units, the slowest pace since October 1991, when housing was going through another steep downturn. In another worrisome sign, applications for building permits fell for a fifth consecutive month.”
“The housing slump is expected to worsen in 2008. Builders are cutting jobs, selling land and slashing prices to weather the downturn. Bonita Springs-based WCI Communities Inc., which builds in South Florida, recently cut 575 jobs. Meanwhile, Fort Lauderdale-based builder Levitt and Sons filed for Chapter 11 bankruptcy this month after defaulting on more than $300 million in loans. In the past two months, the builder laid off most of its 412 workers and stopped construction of homes.”
“Hollywood-based builder TOUSA Inc. also is considering bankruptcy and said it has serious doubts about whether it can remain in business.”
In very troubling national news that shows that the credit crisis is not limited to subprime, Freddie Mac announced ballooning losses:
“The mortgage crisis intensified Tuesday as Freddie Mac, the nation's No. 2 buyer and guarantor of home loans, posted its largest quarterly loss ever and warned that it may need to curtail its business unless it can raise fresh capital.”
“Freddie Mac lost $2 billion in the third quarter, much more than Wall Street was expecting, primarily because it needed to set aside $1.2 billion to account for bad home loans. Freddie Mac also said it may slice in half its quarterly dividend of 50 cents per share — which would be its first dividend cut since becoming a public company in 1989.”
“That double dose of bad news sent Freddie Mac's shares skidding 28.7 percent, the largest decline in the two decades its shares have traded in public markets.”
The Sun-Sentinel reports on development in Plantation:
“When the city decided to redevelop 860 acres in the Midtown district five years ago, officials estimated it would take until 2025 to complete the job.”
“Builders, eager to profit from the housing boom, drew up elaborate plans for large buildings that would combine retail and residences, flanked by fountains and lush parks. But the housing slump threatens to delay the project's completion by five years, City Councilwoman Diane Veltri Bendekovic said.”
“Already, a growing number of jittery buyers are looking to bail out of their condominium contracts, and some major developers are slowing plans for new housing. The convergence of these factors may mean the city's tax base will suffer, forcing cuts to staff or services to make up the difference as operating costs continue to rise, City Councilman Jerry Fadgen said.”
Local office supply giant, Office Depot, announced reduced earning due to the housing slump:
“Office Depot Inc., the world's second-largest office supply retailer, unveiled a turnaround strategy Tuesday after announcing that its third-quarter profit dropped about 9 percent compared with the same period last year.”
“Third-quarter 2007 net earnings were $117 million compared with $129 million in the same period last year. Revenue increased 2 percent to $3.9 billion. Sales at North American stores open at least one year were down 5 percent.”
“Company officials pegged North American sales declines to a soft housing market in Florida and California, where consumers and small businesses have curtailed spending and face a credit crunch. About 25 percent of Office Depot's retail business and 30 percent of its business sales are concentrated in Florida and California.”
“‘This [housing market] is killing, killing small business in Florida and California,’ Odland said.”
Not that we should trust their data at all, Zillow reports that many homeowners in the past year now have negative equity. In their report, they rank the major Metropolitan Statistical Areas (MSAs). The Miami-Ft. Lauderdale MSA ranks second worst only behind Los Angeles with 30% of all homeowner who purchase in the past year with negative equity:
“Home values nationwide declined for the fourth consecutive quarter, down 5.7 percent year-over-year -- the largest year-over-year decline in more than a decade, according to Zillow's Q3 2007 Home Value Report (1) released today. This brings the U.S. Zindex(R) home value indicator (2) to $244,000, down 2.8 percent from the second quarter. The Zindex is the median Zestimate(R) valuation and measures all homes in an area, not just those that have sold during the quarter.”
“For many homeowners who bought during the last two years when most local markets reached their peak, subsequent declines in value have left them with negative home equity, owing more than the home is currently worth. As of September 30, nearly 16 percent (15.6%) of homeowners nationwide who bought in the last year (3) and 17.5 percent of those who purchased two years ago have current home values that are less than the original mortgage amount. By comparison, less than 2 percent (1.8%) of those who purchased a home five years ago have seen their equity slide into the negative.”
“Not surprisingly, markets with the greatest proportion of homes with negative equity were those hit hardest by declining values. For example, people who purchased homes in California's Central Valley, parts of Florida and Las Vegas during the past year have seen double-digit depreciation and negative equity rates reach up to five times the national median.”
Tuesday, November 20, 2007
Today's F@cked Buyer (SW Miami)
This F@cked Buyer paid 39% more than the current asking price on this property just seven months ago.
8888 SW 229 ST, Miami, FL 33190
8888 SW 229 ST, Miami, FL 33190
- 4 Bed, 2.5 Bath SFH
- Bought in February 2007 for $347,080
- On the MLS for $250,000
- Days on the MLS: 50 Days
- Loss before the Realtor® commission: $97,080
- Loss after the Realtor® commission: $112,080
Monday, November 19, 2007
Today's F@cked Buyer (SW Miami)
Thank you to "The Drunken Duck" for providing us this F@cked Buyer. This house was originally listed at $900,000 just 15 days ago. Three days after listing the house, they dropped the price by $200,000. Is this some new silly ploy by the listing agent to make it appear that the seller is making huge price drops?
13705 SW 110 CT, Miami, FL 33176
13705 SW 110 CT, Miami, FL 33176
- 5 Bed, 3 Bath SFH
- Bought in June 2006 for $880,000
- On the MLS for $700,000
- Days on the MLS: 15 Days
- Loss before the Realtor® commission: $180,000
- Loss after the Realtor® commission: $222,000
Today's Local Real Estate News: "The renters are collateral damage in the mortgage crisis."
The Miami Herald reports on problem that will only get worse in 2008, tax deliquencies:
"The property-tax bill was the final blow for Astride Hercule -- $5,400 due April 1, on top of mortgage payments that were set to soar on her Miami duplex."
'''I absolutely could not pay it,' said Hercule, a mental-health technician at North Shore Medical Center."
"So, she didn't."
"Unpaid property taxes in Miami-Dade and Broward counties reached new highs this year, as thousands of homeowners tumbled into foreclosure, shrugged off bills on investment properties they couldn't unload, or, like Hercule, found it impossible to make lump-sum tax payments that their boom-era mortgages didn't require them to put in escrow. Total unpaid amount: $365 million."
"In Miami-Dade County, 41,544 residential property owners -- one of every 16 households -- failed to pay their 2006 property-tax bills. That's an increase of 41 percent from the year before, according to an analysis of county tax data. In Broward, the number grew 54 percent to 29,962 -- about one per 21 households."
"In both counties, roughly 65 percent of unpaid accounts were from investors, second-home owners, and others with no homestead exemption, the analysis showed."
The Palm Beach Post reports on a study of ARM resets:
“First American CoreLogic of Santa Ana, Calif., says this question is ‘probably the most important issue in the analysis of real estate today.’”
“Christopher Cagan, the company's director of research and analytics, wrote the report.”
“It looked at 26 million first mortgages throughout the country originated between 2004 and 2006 - and worth nearly $5.4 trillion in debt.”
“The study focuses on the 8.37 million adjustable-rate mortgages due to reset in the next five to seven years.”
“(Obviously, the mortgage meltdown mess is not going to be over anytime soon.)”
“‘Mortgage payment reset is expected to have its impact into the early years of the next decade," the report says.”
“The study predicts an estimated 1.1 million mortgage foreclosures spread out over the next seven years - about 13 percent of the ARMs originated through purchase or refinance from 2004 to 2006, representing $326 billion of debt.”
“‘After foreclosure and resale, it is projected that about $112 billion will be lost to remaining equity, lenders and investors over several years," the report says.”
The Sun-Sentinel reports on North Lauderdale’s efforts to avert foreclosures:
“With so many homes in North Lauderdale in foreclosure, city leaders are seeking to help financially troubled homeowners.”
“They plan to create a new staff position, Neighborhood Improvement Coordinator, who will advise residents how to avoid foreclosure, guide those about to lose their homes and deal with the rash of abandoned properties in the city.”
“‘If we take a proactive approach, we might be able to head it off at the pass,’ said Jesus Valdes, assistant director of community development.”
“Lenders have repossessed at least 57 homes, the owners of 90 foreclosed homes are trying to sell them and at least 325 additional homeowners are in danger of losing their homes, he said.”
Miramar is taking similar steps to assist troubled borrowers according to the Sun-Sentinel:
“The city is seeing an increase in homeowners applying for help with late mortgage payments through its foreclosure prevention program.”
“In September 2006, Miramar joined a growing number of cities setting aside state housing funds to help residents get caught up on their house payments.”
“Under the program, the city offers some homeowners a deferred loan of up to $10,000 to get current on their mortgages and cover interest, taxes and insurance fees.”
“But funding is limited. So far, 24 homeowners have applied for assistance, said Gus Zambrano, the city's director of economic development and revitalization. Of those, one was granted a $10,000 loan, the maximum allowed, and four applications are pending.”
“But Zambrano said not all homeowners will qualify for assistance. Zambrano said homeowners have to be able to show that with the assistance they would be able to afford their mortgage.”
“‘We find that there are a lot of bad loans that people could never really afford,’ he said. ‘We can't help those people because they can't pay the loan back. With our program you have to be able to get out of your situation. It has to be temporary.’”
The Herald Tribune reports on how foreclosures are affecting some renters:
“There are no exact figures for how many renters have been evicted because of foreclosures, but a survey taken this year by the Mortgage Bankers Association found that one in eight foreclosures was non-owner-occupied. This figure probably underestimates the problem, according to the association, because buildings receive tax benefits if they are registered as owner-occupied. More than one million properties are expected to enter foreclosure this year.”
“Many renters say they never even knew their buildings were heading for foreclosure.”
“‘This is an explosion,’ said Judith Liben, a lawyer at the Massachusetts Law Reform Institute. ‘This isn’t business as usual. These are investors that overleveraged themselves, and the renters are collateral damage in the mortgage crisis.’”
“Foreclosing lenders typically evict tenants in order to sell the property, said Vicki Vidal, senior director of loan administration and government affairs at the Mortgage Bankers Association.”
“Banks don’t want to be landlords,” Ms. Vidal said. “They’re in the business of making mortgages. You need to recoup the money to keep the process moving.’”
“Unlike owners who lose their houses, renters do not stand to forfeit years of equity. And many can find comparable rentals.”
"The property-tax bill was the final blow for Astride Hercule -- $5,400 due April 1, on top of mortgage payments that were set to soar on her Miami duplex."
'''I absolutely could not pay it,' said Hercule, a mental-health technician at North Shore Medical Center."
"So, she didn't."
"Unpaid property taxes in Miami-Dade and Broward counties reached new highs this year, as thousands of homeowners tumbled into foreclosure, shrugged off bills on investment properties they couldn't unload, or, like Hercule, found it impossible to make lump-sum tax payments that their boom-era mortgages didn't require them to put in escrow. Total unpaid amount: $365 million."
"In Miami-Dade County, 41,544 residential property owners -- one of every 16 households -- failed to pay their 2006 property-tax bills. That's an increase of 41 percent from the year before, according to an analysis of county tax data. In Broward, the number grew 54 percent to 29,962 -- about one per 21 households."
"In both counties, roughly 65 percent of unpaid accounts were from investors, second-home owners, and others with no homestead exemption, the analysis showed."
The Palm Beach Post reports on a study of ARM resets:
“First American CoreLogic of Santa Ana, Calif., says this question is ‘probably the most important issue in the analysis of real estate today.’”
“Christopher Cagan, the company's director of research and analytics, wrote the report.”
“It looked at 26 million first mortgages throughout the country originated between 2004 and 2006 - and worth nearly $5.4 trillion in debt.”
“The study focuses on the 8.37 million adjustable-rate mortgages due to reset in the next five to seven years.”
“(Obviously, the mortgage meltdown mess is not going to be over anytime soon.)”
“‘Mortgage payment reset is expected to have its impact into the early years of the next decade," the report says.”
“The study predicts an estimated 1.1 million mortgage foreclosures spread out over the next seven years - about 13 percent of the ARMs originated through purchase or refinance from 2004 to 2006, representing $326 billion of debt.”
“‘After foreclosure and resale, it is projected that about $112 billion will be lost to remaining equity, lenders and investors over several years," the report says.”
The Sun-Sentinel reports on North Lauderdale’s efforts to avert foreclosures:
“With so many homes in North Lauderdale in foreclosure, city leaders are seeking to help financially troubled homeowners.”
“They plan to create a new staff position, Neighborhood Improvement Coordinator, who will advise residents how to avoid foreclosure, guide those about to lose their homes and deal with the rash of abandoned properties in the city.”
“‘If we take a proactive approach, we might be able to head it off at the pass,’ said Jesus Valdes, assistant director of community development.”
“Lenders have repossessed at least 57 homes, the owners of 90 foreclosed homes are trying to sell them and at least 325 additional homeowners are in danger of losing their homes, he said.”
Miramar is taking similar steps to assist troubled borrowers according to the Sun-Sentinel:
“The city is seeing an increase in homeowners applying for help with late mortgage payments through its foreclosure prevention program.”
“In September 2006, Miramar joined a growing number of cities setting aside state housing funds to help residents get caught up on their house payments.”
“Under the program, the city offers some homeowners a deferred loan of up to $10,000 to get current on their mortgages and cover interest, taxes and insurance fees.”
“But funding is limited. So far, 24 homeowners have applied for assistance, said Gus Zambrano, the city's director of economic development and revitalization. Of those, one was granted a $10,000 loan, the maximum allowed, and four applications are pending.”
“But Zambrano said not all homeowners will qualify for assistance. Zambrano said homeowners have to be able to show that with the assistance they would be able to afford their mortgage.”
“‘We find that there are a lot of bad loans that people could never really afford,’ he said. ‘We can't help those people because they can't pay the loan back. With our program you have to be able to get out of your situation. It has to be temporary.’”
The Herald Tribune reports on how foreclosures are affecting some renters:
“There are no exact figures for how many renters have been evicted because of foreclosures, but a survey taken this year by the Mortgage Bankers Association found that one in eight foreclosures was non-owner-occupied. This figure probably underestimates the problem, according to the association, because buildings receive tax benefits if they are registered as owner-occupied. More than one million properties are expected to enter foreclosure this year.”
“Many renters say they never even knew their buildings were heading for foreclosure.”
“‘This is an explosion,’ said Judith Liben, a lawyer at the Massachusetts Law Reform Institute. ‘This isn’t business as usual. These are investors that overleveraged themselves, and the renters are collateral damage in the mortgage crisis.’”
“Foreclosing lenders typically evict tenants in order to sell the property, said Vicki Vidal, senior director of loan administration and government affairs at the Mortgage Bankers Association.”
“Banks don’t want to be landlords,” Ms. Vidal said. “They’re in the business of making mortgages. You need to recoup the money to keep the process moving.’”
“Unlike owners who lose their houses, renters do not stand to forfeit years of equity. And many can find comparable rentals.”
Sunday, November 18, 2007
Today's F@cked Buyer (Boca Raton)
Despite a price that is 24% below its purchase price just one year ago, this property has languished on the market for three months.
23380 CAROLWOOD LN # 3309, Boca Raton, FL 33342
23380 CAROLWOOD LN # 3309, Boca Raton, FL 33342
- 2 Bed, 2 Bath Condo
- Bought in October 2006 for $210,900
- On the MLS for $160,000
- Days on the MLS: 89 Days
- Loss before the Realtor® commission: $50,900
- Loss after the Realtor® commission: $60,500
Saturday, November 17, 2007
Today's F@cked Buyer (Boca Raton)
This home is price 35% below its purchase price just 14 months ago.
22397 CERVANTES Lane, Boca Raton, FL 33428
22397 CERVANTES Lane, Boca Raton, FL 33428
- 2 Bed, 2 Bath SFH
- Bought in August 2006 for $230,000
- On the MLS for $149,000
- Days on the MLS: 24 Days
- Loss before the Realtor® commission: $81,000
- Loss after the Realtor® commission: $89,940
Friday, November 16, 2007
Today's F@cked Buyer (Aventura)
Here is more evidence of Deutsche Bank getting clobbered in South Florida. The bank claims they have little exposure to the U.S. subprime market. However, unless they bought a batch of subprime CDOs that were isolated in the South Florida market, they may be downplaying their risk. On the other hand, it is possible that Deutsche Bank is simply the smart ones that are liquidating their bad loans as fast as possible and selling off the underlying assets before the real foreclosure diluge hits.
This Deutsche Bank-owned foreclosure is priced 40% off its early 2006 selling prices.
20379 W COUNTRY CLUB DR # 1232, Aventura, FL 33180
This Deutsche Bank-owned foreclosure is priced 40% off its early 2006 selling prices.
20379 W COUNTRY CLUB DR # 1232, Aventura, FL 33180
- 2 Bed, 2 Bath Condo
- Bought in January 2006 for $310,000
- On the MLS for $184,500
- Days on the MLS: 17 Days
- Loss before the Realtor® commission: $125,500
- Loss after the Realtor® commission: $136,570
Thursday, November 15, 2007
Today's F@cked Buyer (Ft. Lauderdale)
Thank you to "2l" for providing today's listing, our first multi-family listing. This is currently selling for 6% below its 2004 price (makes the FIU professor in Today's News look silly). What's really interesting is the massive difference between the listing price and the County's assessed value ($517,190).
426 SW 4Th Av, Fort Lauderdale, FL 33315
426 SW 4Th Av, Fort Lauderdale, FL 33315
- Multi-family: 3 units, each with 1 Bed and 1 Bath
- Bought in May 2004 for $265,000
- On the MLS for $247,900
- Loss before the Realtor® commission: $17,100
- Loss after the Realtor® commission: $31,974
Today's Local Real Estate News: "I think you will find Canadians who want to buy now are going to be looking elsewhere."
The Miami Herald reports that the state budget shortfall is accelerating:
“Florida's economy, which forced a $1 billion cut in the state budget just weeks ago, is sputtering so badly economists gave lawmakers more grim news Wednesday: Prepare to lose another $2.5 billion over the next 18 months.”
“For Gov. Charlie Crist and the Republican-controlled Legislature, the forecast promises a financial and political headache as they figure out painful new spending cuts in a crucial election year.”
“The economic prediction marks the first time since Florida began keeping close track of tax collections in the early 1970s that the state will record two consecutive years of declining income.”
“Economists blame the continuing downturn on a weak housing market, slowing population growth, rising fuel prices and consumers holding off on big-ticket purchases.”
At the same time, the State recently disclosed that the have significant exposure to subprime investments. Bloomberg.com reports:
“The Florida agency that manages about $50 billion of short-term investments for the state, school districts and local governments holds $2.2 billion of debt that was cut below investment grade.”
“The downgrades affect more than 4 percent of what the Florida State Board of Administration has purchased for the funds, according to a report by the agency's director, Coleman Stipanovich, that was delivered at a cabinet meeting of Republican Governor Charlie Crist today. Some $3.6 billion, or 7.3 percent, of the securities may be downgraded by credit- rating companies, according to the document, provided to Bloomberg by the state board.”
“The disclosure, which follows a month of inquiries by Bloomberg News to Florida officials brings the subprime crisis that has afflicted banks, hedge funds and chief executive officers to the public finances of the fourth-largest U.S. state.”
“Florida's state funds were affected by bad investments in asset-backed commercial paper, short-term debt sold by financial institutions that is secured by collateral such as mortgage securities and credit-card receivables. As the value of that collateral dropped, investors were unwilling to reinvest their money when the short-term debt matured, creating a liquidity crisis for the financial institutions.”
“‘It's really disgraceful,’' Levitt said. ‘I think what's really bad about this is that the state has called for investments to be prudent and careful but clearly the custodians of this fund were reaching, they were trying to get maximum yield.’”
The Sun-Sentinel reports on the continued woes faced by homebuilders:
“Home builders such as WCI Communities Inc. and Pulte Homes Inc. aim to survive an industrywide unraveling by selling houses at bargain prices, slashing jobs and scrapping growth plans.”
“Bonita Springs-based WCI, which builds in South Florida, recently cut 575 jobs. Pulte of Bloomfield Hills, Mich., also has been reducing payroll by laying off more than 300 workers this year from its DiVosta Building Corp. of Palm Beach Gardens.”
“As the housing downturn worsens, experts say at least a few major U.S. home builders may end up bankrupt.”
“On Friday, Fort Lauderdale-based Levitt and Sons became the largest builder to file for Chapter 11 bankruptcy protection from its creditors. In the past two months, the company defaulted on more than $300 million in loans, laid off most of its 412 workers and stopped building houses.”
“Developers are reeling from sharp increases in loan defaults, which force lenders to be far more cautious about new mortgages. The result: sinking home prices, surpluses of unsold homes and a spike in canceled orders.”
“Even speculators who snatched up new homes during the bubble years hoping to turn a quick profit can't sell, meaning more properties compete for a limited pool of buyers.”
Jeff Ostrowski, a real estate writer for the Palm Beach Post, has been a typical Mainstream-Media (MSM) cheerleader for Realtors®. Perhaps, he’s starting to see the light because his tone has started to change lately. Here’s an example:
“Gotta love those spinmeisters at the National Association of Realtors. They put out a release yesterday touting 2007 as ‘the fifth-best year on record.’”
“That’s based on national home sales of 5.5 million units, which, while way off from the boom of 2004 and 2005, are about equal to 2002 sales.”
“‘All real estate is local - conditions vary greatly from one city to the next,’ says NAR Chief Economist Lawrence Yun.”
“So you can imagine that Yun didn’t mention Palm Beach County as an example of a market where everything is just fine. You have to go back to the early ’90s to find a similarly moribund year here.”
“Based on the 5,595 sales of existing single-family homes through the first nine months of 2007, we’ll be lucky to hit 7,500 sales this year. The Florida Association of Realtors’ online database of housing stats goes back to only 1993, a year when Realtors sold 8,123 homes in Palm Beach County and the slowest year from 1993 through 2006.”
Similarly, Pat Beall, also of the Palm Beach Post, seems to reject the Realtor® claim that droves of rich foreigners are going to save the market:
“It's more than ruffled feathers: Canadian snowbirds are rethinking Florida.”
“‘I haven't met one person this year that wants to stay in Florida,’ said Boynton Beach resident Dory Kilburn, who heads the Boynton Intracoastal Group, a Canadian advocacy organization. ‘They all say they are getting out.’”
“Lopsided property taxes favoring year-round residents are a major culprit, and proposed property tax cuts are getting a cool reception north of the border. Still, talk of leaving might be saber rattling - except that it comes as Arizona, the Carolinas and other states are stepping up efforts to lure the flock.”
“The most powerful marketing tool of all is turning out to be free: Florida's two-tiered property tax system. In his Arizona Real Estate Notebook, blogger and broker John Wake sums up the message: ‘Arizona property taxes don't discriminate. Canadian owners are charged the same very low property tax as their American neighbors.’”
“‘I think you will find Canadians who want to buy now are going to be looking elsewhere,’ Benedek said. ‘I certainly don't encourage anyone to buy.’ He said his neighbors in Canada recently bought a home in Costa Rica.”
Still, not all the MSM are questioning Realtor® propaganda. Instead of reporting on the woes faced by the droves of homeowners facing foreclosure, Channel 10 News is trying to spin the foreclosure crisis into a buying opportunity (or course with the help of a Realtor®):
“There are more than double the amounts of foreclosed properties than this time last year. While the crisis is painful to many, foreclosures can hold the prospect of profit for others. Experts advise caution, however, because foreclosures draw a fine line between big bucks and a big bus”t.
“‘You really have to know what you're doing,’ said David Dabby, a South Florida real estate analyst.”
“To find a foreclosure, buyers should contact banks or realtors. There are also foreclosure auctions, Summers reported.”
“Experts said it's no longer necessary to purchase a foreclosure list because there are plenty of ways to find distressed properties for free”.
“Buyers should also consider hiring a reputable realtor to assist in the purchase of a foreclosure. For a buyer the services of a realtor are free.”
“‘The buyer doesn't pay a cent. The seller, or in the case of foreclosure, the bank, is paying the commission,’ said realtor Dan Kelley”
Likewise, the New York Post quotes a real estate professor that thinks that prices are not going to drop below 2004 levels (our daily F@cked Buyer post already proves him dead wrong on this issue):
“Miami's once-sizzling realestate market has certainly cooled off, but perhaps not by as much as redicted. In a city oozing with the vested interests of owners, renters, potential buyers, investors, brokers and developers, it's diffi cult to get an honest assessment of the market. Brokers and developers want to sell, so most play the “Florida-has-sunand- sand-and-thus-is-immune-to-thereal- estate-bubble" card. Would-be buyers want a deal, so they're hoping media sensationalism coupled with reality - a lot of new product - will bring prices crumbling down to pre-2000 levels. The truth seems to lie somewhere in the middle.”
“‘I think that you'll see prices coming down to the 2004 level, but not much below that,’ says Dr. William Hardin, a real-estate professor at Miami's Florida International University. ‘We're going to have to forget 2006 and part of 2005. I would try to make a transaction at 2004 or 2005 price points - they would be a good starting point for negotiations.’”
“Florida's economy, which forced a $1 billion cut in the state budget just weeks ago, is sputtering so badly economists gave lawmakers more grim news Wednesday: Prepare to lose another $2.5 billion over the next 18 months.”
“For Gov. Charlie Crist and the Republican-controlled Legislature, the forecast promises a financial and political headache as they figure out painful new spending cuts in a crucial election year.”
“The economic prediction marks the first time since Florida began keeping close track of tax collections in the early 1970s that the state will record two consecutive years of declining income.”
“Economists blame the continuing downturn on a weak housing market, slowing population growth, rising fuel prices and consumers holding off on big-ticket purchases.”
At the same time, the State recently disclosed that the have significant exposure to subprime investments. Bloomberg.com reports:
“The Florida agency that manages about $50 billion of short-term investments for the state, school districts and local governments holds $2.2 billion of debt that was cut below investment grade.”
“The downgrades affect more than 4 percent of what the Florida State Board of Administration has purchased for the funds, according to a report by the agency's director, Coleman Stipanovich, that was delivered at a cabinet meeting of Republican Governor Charlie Crist today. Some $3.6 billion, or 7.3 percent, of the securities may be downgraded by credit- rating companies, according to the document, provided to Bloomberg by the state board.”
“The disclosure, which follows a month of inquiries by Bloomberg News to Florida officials brings the subprime crisis that has afflicted banks, hedge funds and chief executive officers to the public finances of the fourth-largest U.S. state.”
“Florida's state funds were affected by bad investments in asset-backed commercial paper, short-term debt sold by financial institutions that is secured by collateral such as mortgage securities and credit-card receivables. As the value of that collateral dropped, investors were unwilling to reinvest their money when the short-term debt matured, creating a liquidity crisis for the financial institutions.”
“‘It's really disgraceful,’' Levitt said. ‘I think what's really bad about this is that the state has called for investments to be prudent and careful but clearly the custodians of this fund were reaching, they were trying to get maximum yield.’”
The Sun-Sentinel reports on the continued woes faced by homebuilders:
“Home builders such as WCI Communities Inc. and Pulte Homes Inc. aim to survive an industrywide unraveling by selling houses at bargain prices, slashing jobs and scrapping growth plans.”
“Bonita Springs-based WCI, which builds in South Florida, recently cut 575 jobs. Pulte of Bloomfield Hills, Mich., also has been reducing payroll by laying off more than 300 workers this year from its DiVosta Building Corp. of Palm Beach Gardens.”
“As the housing downturn worsens, experts say at least a few major U.S. home builders may end up bankrupt.”
“On Friday, Fort Lauderdale-based Levitt and Sons became the largest builder to file for Chapter 11 bankruptcy protection from its creditors. In the past two months, the company defaulted on more than $300 million in loans, laid off most of its 412 workers and stopped building houses.”
“Developers are reeling from sharp increases in loan defaults, which force lenders to be far more cautious about new mortgages. The result: sinking home prices, surpluses of unsold homes and a spike in canceled orders.”
“Even speculators who snatched up new homes during the bubble years hoping to turn a quick profit can't sell, meaning more properties compete for a limited pool of buyers.”
Jeff Ostrowski, a real estate writer for the Palm Beach Post, has been a typical Mainstream-Media (MSM) cheerleader for Realtors®. Perhaps, he’s starting to see the light because his tone has started to change lately. Here’s an example:
“Gotta love those spinmeisters at the National Association of Realtors. They put out a release yesterday touting 2007 as ‘the fifth-best year on record.’”
“That’s based on national home sales of 5.5 million units, which, while way off from the boom of 2004 and 2005, are about equal to 2002 sales.”
“‘All real estate is local - conditions vary greatly from one city to the next,’ says NAR Chief Economist Lawrence Yun.”
“So you can imagine that Yun didn’t mention Palm Beach County as an example of a market where everything is just fine. You have to go back to the early ’90s to find a similarly moribund year here.”
“Based on the 5,595 sales of existing single-family homes through the first nine months of 2007, we’ll be lucky to hit 7,500 sales this year. The Florida Association of Realtors’ online database of housing stats goes back to only 1993, a year when Realtors sold 8,123 homes in Palm Beach County and the slowest year from 1993 through 2006.”
Similarly, Pat Beall, also of the Palm Beach Post, seems to reject the Realtor® claim that droves of rich foreigners are going to save the market:
“It's more than ruffled feathers: Canadian snowbirds are rethinking Florida.”
“‘I haven't met one person this year that wants to stay in Florida,’ said Boynton Beach resident Dory Kilburn, who heads the Boynton Intracoastal Group, a Canadian advocacy organization. ‘They all say they are getting out.’”
“Lopsided property taxes favoring year-round residents are a major culprit, and proposed property tax cuts are getting a cool reception north of the border. Still, talk of leaving might be saber rattling - except that it comes as Arizona, the Carolinas and other states are stepping up efforts to lure the flock.”
“The most powerful marketing tool of all is turning out to be free: Florida's two-tiered property tax system. In his Arizona Real Estate Notebook, blogger and broker John Wake sums up the message: ‘Arizona property taxes don't discriminate. Canadian owners are charged the same very low property tax as their American neighbors.’”
“‘I think you will find Canadians who want to buy now are going to be looking elsewhere,’ Benedek said. ‘I certainly don't encourage anyone to buy.’ He said his neighbors in Canada recently bought a home in Costa Rica.”
Still, not all the MSM are questioning Realtor® propaganda. Instead of reporting on the woes faced by the droves of homeowners facing foreclosure, Channel 10 News is trying to spin the foreclosure crisis into a buying opportunity (or course with the help of a Realtor®):
“There are more than double the amounts of foreclosed properties than this time last year. While the crisis is painful to many, foreclosures can hold the prospect of profit for others. Experts advise caution, however, because foreclosures draw a fine line between big bucks and a big bus”t.
“‘You really have to know what you're doing,’ said David Dabby, a South Florida real estate analyst.”
“To find a foreclosure, buyers should contact banks or realtors. There are also foreclosure auctions, Summers reported.”
“Experts said it's no longer necessary to purchase a foreclosure list because there are plenty of ways to find distressed properties for free”.
“Buyers should also consider hiring a reputable realtor to assist in the purchase of a foreclosure. For a buyer the services of a realtor are free.”
“‘The buyer doesn't pay a cent. The seller, or in the case of foreclosure, the bank, is paying the commission,’ said realtor Dan Kelley”
Likewise, the New York Post quotes a real estate professor that thinks that prices are not going to drop below 2004 levels (our daily F@cked Buyer post already proves him dead wrong on this issue):
“Miami's once-sizzling realestate market has certainly cooled off, but perhaps not by as much as redicted. In a city oozing with the vested interests of owners, renters, potential buyers, investors, brokers and developers, it's diffi cult to get an honest assessment of the market. Brokers and developers want to sell, so most play the “Florida-has-sunand- sand-and-thus-is-immune-to-thereal- estate-bubble" card. Would-be buyers want a deal, so they're hoping media sensationalism coupled with reality - a lot of new product - will bring prices crumbling down to pre-2000 levels. The truth seems to lie somewhere in the middle.”
“‘I think that you'll see prices coming down to the 2004 level, but not much below that,’ says Dr. William Hardin, a real-estate professor at Miami's Florida International University. ‘We're going to have to forget 2006 and part of 2005. I would try to make a transaction at 2004 or 2005 price points - they would be a good starting point for negotiations.’”
Wednesday, November 14, 2007
Today's F@cked Buyer (Brickell)
It's simply amazing how many REOs I've been seeing from Deutsche Bank. Either they're getting clobbered by the South Florida market or they're simply quicker at getting their repossessed properties listed (maybe it's both). This Deutsche Bank-owned foreclosure is being offered for 49% off its 2005 purchase price. If this sounds like a bargain, keep in mind the monthly HOA fees on this property is a stunning $1,360 per month.
2025 BRICKELL AV # 306, Miami, FL 33129
2025 BRICKELL AV # 306, Miami, FL 33129
- 4 Bed, 4 Bath Condo
- Bought in August 2005 for $1,000,000
- On the MLS for $509,900
- Days on the Market: 43
- Loss before the Realtor® commission: $490,100
- Loss after the Realtor® commission: $520,694
Today's Local Real Estate News: "These foreclosures are wiping out wealth that people often took a lifetime to build."
Reuters reports that Miami is ground zero for mortgage fraud:
“America's subprime mortgage crisis is partly due to predatory, or aggressive, lenders, hard-sell tactics by mortgage brokers and an easing of underwriting standards in the $10 trillion home-loan industry.”
“But fraud accounts for a sizable share of the bad bets on mortgages, according to many industry experts, and lenders may have been victimized as much as anyone else.”
“‘The lenders are holding the bag now, that's what we're finding out,’ said Glenn Theobald, head of a mortgage fraud task force formed in south Florida's Miami-Dade County in September.”
“Florida leads the nation when it comes to mortgage fraud, according to the Virginia-based Mortgage Asset Research Institute, a group that works closely with the U.S. Mortgage Bankers Association.”
“Ken Thomas, a Miami-based banking expert and lecturer at the Wharton School at the University of Pennsylvania in Philadelphia, said there was little surprise Florida led the country in mortgage fraud.”
“It stems, at least in part, in the way lenders plowed ‘easy money’ into the local condo market before Florida's recent housing boom turned to bust, Thomas told Reuters.
“‘We're going to see a lot more of this fraud being exposed, especially as these units go into foreclosure,’ Thomas said.”
“‘We were the poster child of the housing bubble ... maybe we should have expected more of this.’”
Based on this article, it is not surprising that our local markets are being swamped by foreclosures. The Miami Herald reports on foreclosures in South Florida:
“A wave of foreclosures in South Florida among borrowers with shaky credit will cause the property values of nearly 1.7 million homeowners to sink an average $13,000 in Miami-Dade County, and $6,400 in Broward, a new report says.”
“The report released Tuesday by the Center for Responsible Lending estimates the two counties will lose more than $17.2 billion in their tax base in the coming years resulting from some 35,000 expected foreclosures among subprime borrowers.”
“The state of Florida could lose $23.5 billion from its tax base, the economic spillover of an expected 98,000 foreclosures coming from subprime mortgages made in 2005 and 2006. Most of those loans came with adjustable interest rates that are now resetting, accelerating foreclosures, the center said.”
“Fort Lauderdale and Miami ranked fourth and eighth, respectively, among the metropolitan areas with the highest foreclosure rates in the nation, according to a separate report Tuesday by RealtyTrac, a foreclosure tracking firm.”
“One of every 48 homes in Broward and one of every 60 homes in Miami-Dade were in some stage of foreclosure on Sept. 30, the report said. The Center for Responsible Lending's property value analysis was based on academic research indicating that a foreclosure lowers the price of properties within an eight of a mile by 0.9 percent on average.”
“‘These foreclosures are wiping out wealth that people often took a lifetime to build,’ said Martin Eakes, the Center's chief executive. ‘Many families will never achieve homeownership again.’”
The Palm Beach Post added the following:
“Faced with adjustable mortgage payments resetting at double and sometimes triple the original percentage rate, local homeowners threw away their keys three times faster in October than they did in the same month last year, studies released Tuesday show.”
“A deluge of factors working against cash-strapped homeowners in Palm Beach County and the Treasure Coast came together last month as the worst housing crisis in nearly two decades continued to wreak havoc on U.S. homeowners.”
“The factors are becoming well known: falling home sales, rising inventories, tightened lending standards, a high percentage of homes owned by investors and adjustable rate mortgages resetting. Combined, they took their toll on area homeowners, who saw triple the number of mortgages sink into default as in October 2006, according to the clerks' offices in Palm Beach, Martin and St. Lucie counties.”
“In Palm Beach County, 1,620 homeowners received mortgage default notices, according to the clerk's office, compared with 541 in October 2006, a rise of 199 percent year over year and triple the tally a year ago.”
“In Martin County, there were 95 foreclosures last month, up 217 percent from October 2006, when there were only 30.”
“And in St. Lucie County, where the sound of hammers all day long signified one of the hottest real estate markets in the nation, until the bubble burst, 610 homeowners could not afford their mortgage payments. That compared with 193 foreclosures a year ago, an increase of 216 percent.”
“‘These figures are a stark reminder of just how much the Florida real estate market has soured in the last two years,’ said Mike Larson, an analyst with Weiss Group. ‘Foreclosures are surging because the housing market is still struggling to find a bottom. Home prices are slumping and lending standards are tightening - a nasty one-two punch for borrowers who are having trouble paying their mortgages. We'll be coping with a high level’ of adjustable-rate mortgages until the end of 2008.”
With all this foreclosures and fraud, the National Association of Realtors® aren’t worried. If fact, they saying we’re at a bottom and could be saved shortly by droves of rich foreign investors. The Palm Beach Post provides the details:
“The market for existing homes is ‘hitting the low right now’ and heading for a ‘modest recovery’ next year, the chief economist for the National Association of Realtors said at the group's annual convention Tuesday.”
“Existing home sales will be ‘much softer’ this quarter compared with the same period last year, the economist, Lawrence Yun, said at a news conference. He said that for all of 2007, sales nationwide would fall to 5.67 million, compared to 6.48 million in 2006.”
“NAR expects the national median price of existing homes to decline 1.7 percent to $218,200 for this year, and hold steady at about that level in 2008.”
“The number of sales will rise to 5.69 million next year, Yun said. But the housing recovery will be very uneven, with some markets bouncing back more quickly than others, Yun predicted.”
“But Miami may rebound faster because foreign investors like the city, especially now that the U.S. dollar is so weak, he said.”
“‘There is a big incentive for foreign buyers’ to come into Miami, he said.”
“At the moment, the housing market is stalled because those would-be buyers are holding out for lower prices, while sellers are waiting for prices to rebound. ‘This is a battle between buyers and sellers,’ he said.”
“If buyers blink first, ‘it is possible for even higher home sales activity than we're forecasting,’ he said.”
“America's subprime mortgage crisis is partly due to predatory, or aggressive, lenders, hard-sell tactics by mortgage brokers and an easing of underwriting standards in the $10 trillion home-loan industry.”
“But fraud accounts for a sizable share of the bad bets on mortgages, according to many industry experts, and lenders may have been victimized as much as anyone else.”
“‘The lenders are holding the bag now, that's what we're finding out,’ said Glenn Theobald, head of a mortgage fraud task force formed in south Florida's Miami-Dade County in September.”
“Florida leads the nation when it comes to mortgage fraud, according to the Virginia-based Mortgage Asset Research Institute, a group that works closely with the U.S. Mortgage Bankers Association.”
“Ken Thomas, a Miami-based banking expert and lecturer at the Wharton School at the University of Pennsylvania in Philadelphia, said there was little surprise Florida led the country in mortgage fraud.”
“It stems, at least in part, in the way lenders plowed ‘easy money’ into the local condo market before Florida's recent housing boom turned to bust, Thomas told Reuters.
“‘We're going to see a lot more of this fraud being exposed, especially as these units go into foreclosure,’ Thomas said.”
“‘We were the poster child of the housing bubble ... maybe we should have expected more of this.’”
Based on this article, it is not surprising that our local markets are being swamped by foreclosures. The Miami Herald reports on foreclosures in South Florida:
“A wave of foreclosures in South Florida among borrowers with shaky credit will cause the property values of nearly 1.7 million homeowners to sink an average $13,000 in Miami-Dade County, and $6,400 in Broward, a new report says.”
“The report released Tuesday by the Center for Responsible Lending estimates the two counties will lose more than $17.2 billion in their tax base in the coming years resulting from some 35,000 expected foreclosures among subprime borrowers.”
“The state of Florida could lose $23.5 billion from its tax base, the economic spillover of an expected 98,000 foreclosures coming from subprime mortgages made in 2005 and 2006. Most of those loans came with adjustable interest rates that are now resetting, accelerating foreclosures, the center said.”
“Fort Lauderdale and Miami ranked fourth and eighth, respectively, among the metropolitan areas with the highest foreclosure rates in the nation, according to a separate report Tuesday by RealtyTrac, a foreclosure tracking firm.”
“One of every 48 homes in Broward and one of every 60 homes in Miami-Dade were in some stage of foreclosure on Sept. 30, the report said. The Center for Responsible Lending's property value analysis was based on academic research indicating that a foreclosure lowers the price of properties within an eight of a mile by 0.9 percent on average.”
“‘These foreclosures are wiping out wealth that people often took a lifetime to build,’ said Martin Eakes, the Center's chief executive. ‘Many families will never achieve homeownership again.’”
The Palm Beach Post added the following:
“Faced with adjustable mortgage payments resetting at double and sometimes triple the original percentage rate, local homeowners threw away their keys three times faster in October than they did in the same month last year, studies released Tuesday show.”
“A deluge of factors working against cash-strapped homeowners in Palm Beach County and the Treasure Coast came together last month as the worst housing crisis in nearly two decades continued to wreak havoc on U.S. homeowners.”
“The factors are becoming well known: falling home sales, rising inventories, tightened lending standards, a high percentage of homes owned by investors and adjustable rate mortgages resetting. Combined, they took their toll on area homeowners, who saw triple the number of mortgages sink into default as in October 2006, according to the clerks' offices in Palm Beach, Martin and St. Lucie counties.”
“In Palm Beach County, 1,620 homeowners received mortgage default notices, according to the clerk's office, compared with 541 in October 2006, a rise of 199 percent year over year and triple the tally a year ago.”
“In Martin County, there were 95 foreclosures last month, up 217 percent from October 2006, when there were only 30.”
“And in St. Lucie County, where the sound of hammers all day long signified one of the hottest real estate markets in the nation, until the bubble burst, 610 homeowners could not afford their mortgage payments. That compared with 193 foreclosures a year ago, an increase of 216 percent.”
“‘These figures are a stark reminder of just how much the Florida real estate market has soured in the last two years,’ said Mike Larson, an analyst with Weiss Group. ‘Foreclosures are surging because the housing market is still struggling to find a bottom. Home prices are slumping and lending standards are tightening - a nasty one-two punch for borrowers who are having trouble paying their mortgages. We'll be coping with a high level’ of adjustable-rate mortgages until the end of 2008.”
With all this foreclosures and fraud, the National Association of Realtors® aren’t worried. If fact, they saying we’re at a bottom and could be saved shortly by droves of rich foreign investors. The Palm Beach Post provides the details:
“The market for existing homes is ‘hitting the low right now’ and heading for a ‘modest recovery’ next year, the chief economist for the National Association of Realtors said at the group's annual convention Tuesday.”
“Existing home sales will be ‘much softer’ this quarter compared with the same period last year, the economist, Lawrence Yun, said at a news conference. He said that for all of 2007, sales nationwide would fall to 5.67 million, compared to 6.48 million in 2006.”
“NAR expects the national median price of existing homes to decline 1.7 percent to $218,200 for this year, and hold steady at about that level in 2008.”
“The number of sales will rise to 5.69 million next year, Yun said. But the housing recovery will be very uneven, with some markets bouncing back more quickly than others, Yun predicted.”
“But Miami may rebound faster because foreign investors like the city, especially now that the U.S. dollar is so weak, he said.”
“‘There is a big incentive for foreign buyers’ to come into Miami, he said.”
“At the moment, the housing market is stalled because those would-be buyers are holding out for lower prices, while sellers are waiting for prices to rebound. ‘This is a battle between buyers and sellers,’ he said.”
“If buyers blink first, ‘it is possible for even higher home sales activity than we're forecasting,’ he said.”
Tuesday, November 13, 2007
Today's F@cked Buyer (Miami)
They're dropping the price on this one very quickly. It has only been listed for 26 days and they have dropped the price three times from $350,000.
22977 SW 109 AV, Miami, FL 33170
22977 SW 109 AV, Miami, FL 33170
- 3 Bed, 2 Bath SFH
- Bought in May 2006 for $313,424
- On the MLS for $209,000
- Days on the Market: 26
- Loss before the Realtor® commission: $104,424
- Loss after the Realtor® commission: $116,964
We’re Number 2!
Housingtracker.net has new trend statistic, Real Estate Owned (REOs) trends. The site explains their statistics:
“REO (Real Estate Owned) is property that institutions are forced to hold when a loan that they either issued, purchased, or became legally responsible for was foreclosed on. Generally speaking, an increasing REO inventory indicates increasing foreclosure activity. The list of institutions here is far from complete and is meant to represent only the REO and foreclosure inventory trend for a metropolitan area, not the absolute REO or foreclosure inventory in a market. To accomodate additions and deletions of institutions, an inventory index is computed (the index was set to 100 on 4/6/2007). This inventory index — not the total inventory — should be used when inferring trends. More detail can be found by clicking on a city below.”
Currently, the areas that have shown the most increase in REOs since their April 2007 starting point are:
While Honolulu is technically number one on this trend, their statistical sample started with one REOs in April 2007 and has increase by 9 properties since then. On the other hand, the Fort Lauderdale area started their index with 38 units and has added 167 since then.
It will be interesting to how the Miami market changes over the coming months. I suspect they will eventually end up with the most significant increase.
“REO (Real Estate Owned) is property that institutions are forced to hold when a loan that they either issued, purchased, or became legally responsible for was foreclosed on. Generally speaking, an increasing REO inventory indicates increasing foreclosure activity. The list of institutions here is far from complete and is meant to represent only the REO and foreclosure inventory trend for a metropolitan area, not the absolute REO or foreclosure inventory in a market. To accomodate additions and deletions of institutions, an inventory index is computed (the index was set to 100 on 4/6/2007). This inventory index — not the total inventory — should be used when inferring trends. More detail can be found by clicking on a city below.”
Currently, the areas that have shown the most increase in REOs since their April 2007 starting point are:
While Honolulu is technically number one on this trend, their statistical sample started with one REOs in April 2007 and has increase by 9 properties since then. On the other hand, the Fort Lauderdale area started their index with 38 units and has added 167 since then.
It will be interesting to how the Miami market changes over the coming months. I suspect they will eventually end up with the most significant increase.
Monday, November 12, 2007
Today's F@cked Buyer (Lighthouse Point & Pompano Beach)
Thanks to "140 dollars per sq foot" for providing today's F@cked Buyer who is currently stuck with two investment homes. This buyer seems to be a typical investor, who did quite well during the boom. I saw two homes that this buyer sold during the boom that had sizeable profits. However, he didn't know when to get out and could end up losing much of those profits he made during the boom.
Home #1: 2171 NE 44Th St, Lighthouse Point, FL 33064
Home #1: 2171 NE 44Th St, Lighthouse Point, FL 33064
- 3 Bed, 2 Bath SFH
- Bought in March 2007 for $900,000
- On the MLS for $850,000
- Days on the MLS: 70 Days
- Loss before the Realtor® commission: $50,000
- Loss after the Realtor® commission: $101,000
Home #2: 150 SE 12TH ST, Pompano Beach, FL 33060
- 2 Bed, 1.5 Bath SFH
- Bought in March 2007 for $750,000
- On the MLS for $680,000
- Days on the MLS: 61 Days
- Loss before the Realtor® commission: $70,000
- Loss after the Realtor® commission: $110,800
Today's Local Real Estate News: "Strap yourselves in, everyone, the short sales and foreclosures are coming like a freight train."
In an effort to spin a more optimistic view, Nancy Dahlberg, the Miami Herald business editor, will start searching for South Florida’s next “economic wave:”
“My hope is that Business Monday is more than just a collection of stories, that woven through it is local context and community voices about the economy that you can't find anywhere else. We've written a lot about the current housing slump's effects on various industries, and we will continue to do that. But sometimes we also need to step back and look at this slowdown in the context of past ups and downs, and find out what some of the best minds in South Florida are thinking will be South Florida's next wave.”
“Although this downturn is already taking victims -- Fort Lauderdale homebuilder Levitt and Sons filed for Chapter 11 Friday afternoon -- it is mild compared to the past, at least so far. ‘The scary thing about the downturn of the early '90s was how broad-based it was,’ says Gregg Fields, who covered the economy for nearly 20 years for The Herald and wrote today's cover story. ‘Airlines, banks, construction, tourism (because of crime scares) -- all of our core industries were imploding. And the Fed was scared to death of inflation, so it kept interest rates high, meaning hardly anyone could borrow to expand businesses, even if they wanted to.’”
But after each wave of the past, South Florida ultimately emerged a little bit stronger. Are we better prepared this time? And what will be our future wave to catch?
The Miami Herald starts this week with the following:
“There's no doubt South Florida, especially Miami, has become a national poster child for real estate foibles, most notably a budding condo glut, softening home values and increasing strife related to the subprime lending mess.”
“Looking forward, the region could face steep job losses from slowing construction -- indeed, on Friday, Fort Lauderdale homebuilder Levitt and Sons filed for bankruptcy protection. Other economic hurdles could include an inability to resolve the twin headaches of high property taxes and windstorm insurance and, possibly, sharply reduced population growth.”
“Against that context, some believe the current negative sentiment is overblown. The truth is that South Florida has long had one of the most resilient regional economies in the country. The last bona fide recession here was in the early 1990s. Though the region, like the rest of the country, wobbled immediately after 9/11, it absorbed the Internet bust and resultant stock market plunge much better than most.”
“Few corners of the world attracted capital better than South Florida in the past 15 years, with rivers of money flowing into glistening office towers, upscale hotels and virtual forests of high-rise condos.”
In some promising news, the Palm Beach Post reports that Save our Homes portability amendment does not yet have the required 60% support:
“A majority of Florida voters support the property tax amendment on the Jan. 29 ballot, but not enough to approve the changes, according to a new Palm Beach Post poll.”
“Although 53 percent of those polled said they support the proposed amendment, 60 percent approval is needed to amend the state constitution.”
“But the poll also shows that 20 percent of voters remain undecided, which means that, among voters who have made up their minds, 66 percent of voters support the amendment.”
“Support for ballot questions often declines as election day approaches - and less than three months remain until this vote - but one of the survey's pollsters said this amendment has the advantage of Gov. Charlie Crist's promising to "campaign like the dickens" on its behalf.”
The lack of support comes even before groups have started to fight against the amendment. The Sun-Sentinel reports:
“Florida's property-tax overhaul was packaged to win voter approval — with Gov. Charlie Crist and state legislators careful to include only items popular with homeowners and businesses.”
“But the proposed constitutional amendment is drawing more enemies than allies, fueling doubts about the prospects of the $12.4 billion package gaining the necessary 60 percent approval from voters Jan. 29.”
“Labor groups are gearing up to fight the measure, and their money and manpower could out-muscle the middling support coming so far from business organizations.”
“‘This is the wrong place, wrong time for this kind of thing,’ said Bob Carver, president of the Florida Professional Firefighters Association, whose 22,500 members are pledging $500,000 toward a campaign against the measure.”
“‘You look at the kind of money people are going to get back, and it's not worth the cuts in services they'll face,’ he added.”
Victoria Fournier explained her opposition to the new amendment in a recent letter to the Sun-Sentinel editor:
“Taxes for the tuxes," classism and clubism at its best.”
“So much for real tax relief. The ‘tuxes’ — that club of lucky buyers (those who bought pre-2001, already receiving grossly disproportionate homestead protection from the run-up in taxes/property values in recent years) — get yet another bonus: $25,000 more in deductions and portability.”
“We common folk — unlucky buyers (those who bought post-2001 and are shouldering an outrageously disproportionate share of the homesteaded property taxes) — continue to get no consideration.”
“I bought in 2005, and am drowning in property taxes; and the Legislature just threw me the equivalent of a teething ring in the middle of the ocean.”
“Strap yourselves in, everyone, the short sales and foreclosures are coming like a freight train to your neighborhood, too; and we all will have equal opportunity to continue to lose property value as a result of the disgraceful failure on the part of our Legislature to propose real tax relief.”
“My hope is that Business Monday is more than just a collection of stories, that woven through it is local context and community voices about the economy that you can't find anywhere else. We've written a lot about the current housing slump's effects on various industries, and we will continue to do that. But sometimes we also need to step back and look at this slowdown in the context of past ups and downs, and find out what some of the best minds in South Florida are thinking will be South Florida's next wave.”
“Although this downturn is already taking victims -- Fort Lauderdale homebuilder Levitt and Sons filed for Chapter 11 Friday afternoon -- it is mild compared to the past, at least so far. ‘The scary thing about the downturn of the early '90s was how broad-based it was,’ says Gregg Fields, who covered the economy for nearly 20 years for The Herald and wrote today's cover story. ‘Airlines, banks, construction, tourism (because of crime scares) -- all of our core industries were imploding. And the Fed was scared to death of inflation, so it kept interest rates high, meaning hardly anyone could borrow to expand businesses, even if they wanted to.’”
But after each wave of the past, South Florida ultimately emerged a little bit stronger. Are we better prepared this time? And what will be our future wave to catch?
The Miami Herald starts this week with the following:
“There's no doubt South Florida, especially Miami, has become a national poster child for real estate foibles, most notably a budding condo glut, softening home values and increasing strife related to the subprime lending mess.”
“Looking forward, the region could face steep job losses from slowing construction -- indeed, on Friday, Fort Lauderdale homebuilder Levitt and Sons filed for bankruptcy protection. Other economic hurdles could include an inability to resolve the twin headaches of high property taxes and windstorm insurance and, possibly, sharply reduced population growth.”
“Against that context, some believe the current negative sentiment is overblown. The truth is that South Florida has long had one of the most resilient regional economies in the country. The last bona fide recession here was in the early 1990s. Though the region, like the rest of the country, wobbled immediately after 9/11, it absorbed the Internet bust and resultant stock market plunge much better than most.”
“Few corners of the world attracted capital better than South Florida in the past 15 years, with rivers of money flowing into glistening office towers, upscale hotels and virtual forests of high-rise condos.”
In some promising news, the Palm Beach Post reports that Save our Homes portability amendment does not yet have the required 60% support:
“A majority of Florida voters support the property tax amendment on the Jan. 29 ballot, but not enough to approve the changes, according to a new Palm Beach Post poll.”
“Although 53 percent of those polled said they support the proposed amendment, 60 percent approval is needed to amend the state constitution.”
“But the poll also shows that 20 percent of voters remain undecided, which means that, among voters who have made up their minds, 66 percent of voters support the amendment.”
“Support for ballot questions often declines as election day approaches - and less than three months remain until this vote - but one of the survey's pollsters said this amendment has the advantage of Gov. Charlie Crist's promising to "campaign like the dickens" on its behalf.”
The lack of support comes even before groups have started to fight against the amendment. The Sun-Sentinel reports:
“Florida's property-tax overhaul was packaged to win voter approval — with Gov. Charlie Crist and state legislators careful to include only items popular with homeowners and businesses.”
“But the proposed constitutional amendment is drawing more enemies than allies, fueling doubts about the prospects of the $12.4 billion package gaining the necessary 60 percent approval from voters Jan. 29.”
“Labor groups are gearing up to fight the measure, and their money and manpower could out-muscle the middling support coming so far from business organizations.”
“‘This is the wrong place, wrong time for this kind of thing,’ said Bob Carver, president of the Florida Professional Firefighters Association, whose 22,500 members are pledging $500,000 toward a campaign against the measure.”
“‘You look at the kind of money people are going to get back, and it's not worth the cuts in services they'll face,’ he added.”
Victoria Fournier explained her opposition to the new amendment in a recent letter to the Sun-Sentinel editor:
“Taxes for the tuxes," classism and clubism at its best.”
“So much for real tax relief. The ‘tuxes’ — that club of lucky buyers (those who bought pre-2001, already receiving grossly disproportionate homestead protection from the run-up in taxes/property values in recent years) — get yet another bonus: $25,000 more in deductions and portability.”
“We common folk — unlucky buyers (those who bought post-2001 and are shouldering an outrageously disproportionate share of the homesteaded property taxes) — continue to get no consideration.”
“I bought in 2005, and am drowning in property taxes; and the Legislature just threw me the equivalent of a teething ring in the middle of the ocean.”
“Strap yourselves in, everyone, the short sales and foreclosures are coming like a freight train to your neighborhood, too; and we all will have equal opportunity to continue to lose property value as a result of the disgraceful failure on the part of our Legislature to propose real tax relief.”
Sunday, November 11, 2007
Video: Roy Oppenheim's Presentation on Florida Real Estate
This is an good presentation by Weston-based real estate attorney, Roy Oppenheim. As an owner of title company, his bias definitely comes through. As a result, he significantly underestimated the severity of housing downturn. Still, his presentation is definitely worth watching nonetheless. It is presented in three parts:
CLICK HERE TO WATCH PART 1
CLICK HERE TO WATCH PART 2
CLICK HERE TO WATCH PART 3
CLICK HERE TO WATCH PART 1
CLICK HERE TO WATCH PART 2
CLICK HERE TO WATCH PART 3
Today's F@cked Buyer (West Palm Beach)
A little over a year ago, this property sold for 29% more than its current asking price. This is like so many others we see on these daily posts. The buyer "pruchased" this home with 100% financing and then defaulted just six month later. Now, it's owned by the bank that will take more than a $300,000 loss after paying for court costs.
545 EDGEBROOK, West Palm Beach, FL 33411
545 EDGEBROOK, West Palm Beach, FL 33411
- 4 Bed, 4.5 Bath SFH
- Bought in September 2006 for $900,000
- On the MLS for $699,900
- Days on the Market: 65
- Loss before the Realtor® commission: $200,100
- Loss after the Realtor® commission: $242,094
Today's Local Real Estate News: "Don't lowball. It gets the process off to a bad start."
In one of the most ridiculous fluff pieces on record, Paul Owers, the real estate “reporter” for the Sun-Sentinel interviewed a homebuilder who gives some horrible, but self-serving advice to potential buyers:
“‘During the boom, you were developing strategies to manage demand,’ said Jill DiDonna, a vice president of Sunrise-based GL Homes. ‘Now your whole modus operandi is trying to stimulate demand. It's come 180 degrees.’”
“‘People are still moving to Florida to retire, and retirees don't have time to wait on the sidelines,’ said DiDonna, 37, in her 14th year at GL.”
“Q What tactics should buyers avoid?”
“A: Don't lowball. It gets the process off to a bad start, and builders won't take you seriously. Don't expect the builder to rebuild the house for you to include some unusual feature. Don't blow the deal over $10,000 or $15,000 when you've already negotiated significant savings. Finally, don't expect that a home will be there when you're ready. Unique properties at the right price will sell quickly.”
Likewise, Georgia Tasker, a reporters at the Miami Herald, seems completely clueless. In a recent article, the Tasker tries to pass $225,000 for a home in Liberty City as “affordable.” According the City of Miami, the median household income in their city is $36,564. Someone needs to explain to Tasker that a home that is more than six times the median income is not “affordable.”
Here are the highlights of the article:
“Tangelia Sands watched Ario Lundy build affordable houses in her Liberty City neighborhood for several years, admiring them from afar. Next month, she and her four children finally will move into one of those homes.”
“Not only will it be affordable, it will be the first affordable ‘green’ house in Miami-Dade County.”
“Sands, who arises every morning at 3:15 to begin driving her Metrobus at 4, recently visited her under-construction home with two of her children to see exactly what they will be getting -- completely by chance, as Sands chose the site and not the house. They met with the architect, the builder, Opal Jones of the Miami-Dade Housing Foundation and Patricia Braynon of the Housing Finance Authority.”
“The construction cost of the home will be between $165,000 and $180,000, estimates Lundy. (Sands is paying $225,000, a standard price for an affordable home, according to Braynon).”
The Palm Beach Post reports on efforts to assist trouble borrowers:
“A coalition of mortgage-servicing companies, counselors and trade organizations have banded together to provide much-needed help to homeowners in trouble due to rising interest rates.”
“The formation of the group, Hope Now, was announced by U.S. Treasury Secretary Henry Paulson.”
“‘Eleven of the largest mortgage servicers, representing 60 percent of all the mortgages in America - along with several of the leading mortgage counselors, investors and large trade organizations - have come together and formed a partnership to help more Americans keep their homes,’ Paulson said.”
“The primary goal of the new coalition is to contact troubled borrowers before they become so delinquent in their payments that foreclosure is almost unavoidable.”
“Hope Now will provide at-risk borrowers with information and resources that might allow them to keep their home by restructuring the terms of their mortgage or by pursuing other options available.”
The Sun-Sentinel reports on slowing development in Lauderhill:
“Nigel Alfred's three-story townhouse isn't supposed to overlook Central Broward Regional Park.”
“His current view of the county park that opened Friday will be blocked one day, if, as expected, construction resumes on 150 more townhomes at the year-old subdivision where he lives, Georgetown Homes.”
“But for now, the 10-acre lot where those new residences are supposed to be built lies vacant, a reminder that plans for revitalizing the southeastern end of Lauderhill have slowed. Developers blame a soft housing market. They also say banks implementing stricter loan guidelines have made it more difficult for them to open businesses.”
“St. James Luxury Town Homes, another housing development planned just west of Georgetown, was canceled earlier this year.”
“‘I knew that the housing market would slow,’ said Alfred, who moved from North Lauderdale to Georgetown in August. ‘Right now, I'm enjoying the view of the park.’”
“‘During the boom, you were developing strategies to manage demand,’ said Jill DiDonna, a vice president of Sunrise-based GL Homes. ‘Now your whole modus operandi is trying to stimulate demand. It's come 180 degrees.’”
“‘People are still moving to Florida to retire, and retirees don't have time to wait on the sidelines,’ said DiDonna, 37, in her 14th year at GL.”
“Q What tactics should buyers avoid?”
“A: Don't lowball. It gets the process off to a bad start, and builders won't take you seriously. Don't expect the builder to rebuild the house for you to include some unusual feature. Don't blow the deal over $10,000 or $15,000 when you've already negotiated significant savings. Finally, don't expect that a home will be there when you're ready. Unique properties at the right price will sell quickly.”
Likewise, Georgia Tasker, a reporters at the Miami Herald, seems completely clueless. In a recent article, the Tasker tries to pass $225,000 for a home in Liberty City as “affordable.” According the City of Miami, the median household income in their city is $36,564. Someone needs to explain to Tasker that a home that is more than six times the median income is not “affordable.”
Here are the highlights of the article:
“Tangelia Sands watched Ario Lundy build affordable houses in her Liberty City neighborhood for several years, admiring them from afar. Next month, she and her four children finally will move into one of those homes.”
“Not only will it be affordable, it will be the first affordable ‘green’ house in Miami-Dade County.”
“Sands, who arises every morning at 3:15 to begin driving her Metrobus at 4, recently visited her under-construction home with two of her children to see exactly what they will be getting -- completely by chance, as Sands chose the site and not the house. They met with the architect, the builder, Opal Jones of the Miami-Dade Housing Foundation and Patricia Braynon of the Housing Finance Authority.”
“The construction cost of the home will be between $165,000 and $180,000, estimates Lundy. (Sands is paying $225,000, a standard price for an affordable home, according to Braynon).”
The Palm Beach Post reports on efforts to assist trouble borrowers:
“A coalition of mortgage-servicing companies, counselors and trade organizations have banded together to provide much-needed help to homeowners in trouble due to rising interest rates.”
“The formation of the group, Hope Now, was announced by U.S. Treasury Secretary Henry Paulson.”
“‘Eleven of the largest mortgage servicers, representing 60 percent of all the mortgages in America - along with several of the leading mortgage counselors, investors and large trade organizations - have come together and formed a partnership to help more Americans keep their homes,’ Paulson said.”
“The primary goal of the new coalition is to contact troubled borrowers before they become so delinquent in their payments that foreclosure is almost unavoidable.”
“Hope Now will provide at-risk borrowers with information and resources that might allow them to keep their home by restructuring the terms of their mortgage or by pursuing other options available.”
The Sun-Sentinel reports on slowing development in Lauderhill:
“Nigel Alfred's three-story townhouse isn't supposed to overlook Central Broward Regional Park.”
“His current view of the county park that opened Friday will be blocked one day, if, as expected, construction resumes on 150 more townhomes at the year-old subdivision where he lives, Georgetown Homes.”
“But for now, the 10-acre lot where those new residences are supposed to be built lies vacant, a reminder that plans for revitalizing the southeastern end of Lauderhill have slowed. Developers blame a soft housing market. They also say banks implementing stricter loan guidelines have made it more difficult for them to open businesses.”
“St. James Luxury Town Homes, another housing development planned just west of Georgetown, was canceled earlier this year.”
“‘I knew that the housing market would slow,’ said Alfred, who moved from North Lauderdale to Georgetown in August. ‘Right now, I'm enjoying the view of the park.’”
Saturday, November 10, 2007
Today's F@cked Buyer (West Palm Beach)
Wait… I thought that Baby-Boomers were moving here in droves (along with millions of wealthy foreign investors). Then, why is this Century Village property being offered for 55% off its 2005 purchase price?
184 SUSSEX J 184 # 184, West Palm Beach, FL 33417
184 SUSSEX J 184 # 184, West Palm Beach, FL 33417
- 2 Bed, 1.5 Bath Condo
- Bought in September 2005 for $100,000
- On the MLS for $44,900
- Days on the Market: 16
- Loss before the Realtor® commission: $55,100
- Loss after the Realtor® commission: $57,794
Today's Local Real Estate News: "The condo-conversions sales market has absolutely fallen off the table."
In not so surprising news, the Sun-Sentinel reports that local-builder, Levitt and Sons, has filed Chapter 11:
“Levitt and Sons of Fort Lauderdale on Friday became the nation's largest builder to file for bankruptcy as the housing market continues to crumble.”
“The storied company filed for Chapter 11 protection from its creditors in U.S. Bankruptcy Court in Broward County. It lists assets of less than $1 million and debts of more than $100 million.”
“The bankruptcy came after the company defaulted on more than $300 million in loans from Wachovia Bank and KeyBank, according to a Securities and Exchange Commission filing.”
“‘The Levitt name carries a lot of weight in the home-building industry,’ said Mike Larson, a housing analyst with Weiss Research in Jupiter. ‘To see them file for bankruptcy, it's a testament that this downturn is going to claim victims.’”
In a related story, Wachovia has warned of loan losses (including those from Levitt and Sons):
“Wachovia Corp., a banking leader in South Florida, on Friday became the latest major financial institution to warn of mounting losses in the credit markets, saying the value of securities it owns that are backed by loans sank by about $1.1 billion in October.”
“The nation's fourth-largest banking company also said it plans to boost its allowance for loan losses in the fourth quarter due to expected credit deterioration in the housing market in certain regions. The provision is pegged at $500 million to $600 million in excess of charge-offs in the quarter.”
“‘The most challenging markets of course are in several pockets in California,’ said Wachovia Chief Risk Officer Don Truslow during a banking conference in Boston. ‘We are also watching on our books several pockets in Florida, as well.’”
“At the time, Wachovia Chairman and Chief Executive Ken Thompson said, ‘Trends in mortgage credit are deteriorating faster than we would have expected.’”
The Sun-Sentinel reports on the condo reversions reversion trend:
“Just a short time ago, investing in the condo-conversion craze seemed like a good bet.”
“Stephen Mahaffee became one of those new buyers. He had been renting a one-bedroom apartment at Cypress Club at Woodmont in Tamarac for about 10 years when he got word the building was being converted to condos.”
“So in January he made his move and paid $199,900 for a two-bedroom unit. Less than a year later, he's one of only 18 owners in the 164-unit complex that Bankers Holding Group reluctantly decided to turn back into a mostly rental property.”
“The emerging trend of going from rentals to condos and — when the units don't sell — back to rentals again is what South Florida real estate experts are calling ‘conversion reversions.’ Since 2006, about 6,059 units that were once for sale in Broward and Palm Beach counties have been switched back to rentals, according to Jack McCabe, a Deerfield Beach real estate analyst.”
“‘The condo-conversions sales market has absolutely fallen off the table,’ said McCabe. “Prices have gotten so high that the vast majority of people they were geared toward can no longer afford them. We are just seeing the beginning of the reversion trend.”
“Mahaffee, the former renter who is now an owner, is left with mixed feelings about the deal and whether he stands to lose money on his property.”
“‘The market just dropped,’ he said. ‘Until I go to sell, then I won't know if it might be a problem. I hope not.’”
Despite these reversions, the Miami Herald explains that many low-income renters are being priced out of the market:
“Low-income renters in Miami face one of the most burdensome markets in the country, with spiraling housing costs and stagnant wages pricing them out of their homes at a ‘worrisome’ pace, concludes a study released Friday by Florida International University.”
“Once they are priced out of gentrifying Miami neighborhoods, low-income renters have ‘virtually nowhere to go’ to find more affordable housing because there is a dire lack of lower-cost apartments throughout Miami-Dade and Broward counties, the study says.”
“‘We've known there is an affordability crisis, but what this study is now pointing to is displacement and replacement,’ said Marco Feldman, a research associate at FIU's Research Institute for Social and Economic Policy and the study's author.”
“‘We're seeing an influx of wealthier people into Miami and a sharp reduction in the number of affordable apartments,’ he said.”
“The Miami-Fort Lauderdale-Miami Beach metropolitan area leads the nation in the percentage of renters who pay more than 30 percent of their income for housing and those who pay more than 50 percent of their income for housing.”
And despite all the bad news, the real estate industry is still making ridiculous claims about all the rich foreign investors that will be arriving shortly to save the market. The Associated Press reports:
“The weakening dollar has caused many problems for consumers, but it may also be providing the fuel for one unintended — and very welcome — benefit: a rally in the struggling housing market driven by foreign investors.”
“For an individual or developer trying to sell a home, interested buyers are just as likely to already have a place in London or Paris as they are to be first-timers new to the market.”
“‘European investment is likely to pick up,’ said Mark Vitner, chief economist for Charlotte, N.C.-based Wachovia Corp. "Now is the time to come over and take advantage.’” [Note the Wachovia connection again!]
“The theory goes that foreign investors step in and replace first-time home buyers who have been squeezed out of the housing market during the recent downturn. These new investors in turn allow current homeowners to sell and trade up to larger homes.”
“But New York and Chicago are not the only locations likely to provide popular options for foreign investors. Places like Florida and California are likely to see a surge in foreign investment.”
“‘In a market with great turmoil, (the weak dollar) is one factor supporting some key markets,’ Wachter said of the weakening dollar.”
“Wachter said markets like Miami and San Francisco, which are under pressure from the U.S. slowdown, are increasingly being supported by foreign investors.”
“Levitt and Sons of Fort Lauderdale on Friday became the nation's largest builder to file for bankruptcy as the housing market continues to crumble.”
“The storied company filed for Chapter 11 protection from its creditors in U.S. Bankruptcy Court in Broward County. It lists assets of less than $1 million and debts of more than $100 million.”
“The bankruptcy came after the company defaulted on more than $300 million in loans from Wachovia Bank and KeyBank, according to a Securities and Exchange Commission filing.”
“‘The Levitt name carries a lot of weight in the home-building industry,’ said Mike Larson, a housing analyst with Weiss Research in Jupiter. ‘To see them file for bankruptcy, it's a testament that this downturn is going to claim victims.’”
In a related story, Wachovia has warned of loan losses (including those from Levitt and Sons):
“Wachovia Corp., a banking leader in South Florida, on Friday became the latest major financial institution to warn of mounting losses in the credit markets, saying the value of securities it owns that are backed by loans sank by about $1.1 billion in October.”
“The nation's fourth-largest banking company also said it plans to boost its allowance for loan losses in the fourth quarter due to expected credit deterioration in the housing market in certain regions. The provision is pegged at $500 million to $600 million in excess of charge-offs in the quarter.”
“‘The most challenging markets of course are in several pockets in California,’ said Wachovia Chief Risk Officer Don Truslow during a banking conference in Boston. ‘We are also watching on our books several pockets in Florida, as well.’”
“At the time, Wachovia Chairman and Chief Executive Ken Thompson said, ‘Trends in mortgage credit are deteriorating faster than we would have expected.’”
The Sun-Sentinel reports on the condo reversions reversion trend:
“Just a short time ago, investing in the condo-conversion craze seemed like a good bet.”
“Stephen Mahaffee became one of those new buyers. He had been renting a one-bedroom apartment at Cypress Club at Woodmont in Tamarac for about 10 years when he got word the building was being converted to condos.”
“So in January he made his move and paid $199,900 for a two-bedroom unit. Less than a year later, he's one of only 18 owners in the 164-unit complex that Bankers Holding Group reluctantly decided to turn back into a mostly rental property.”
“The emerging trend of going from rentals to condos and — when the units don't sell — back to rentals again is what South Florida real estate experts are calling ‘conversion reversions.’ Since 2006, about 6,059 units that were once for sale in Broward and Palm Beach counties have been switched back to rentals, according to Jack McCabe, a Deerfield Beach real estate analyst.”
“‘The condo-conversions sales market has absolutely fallen off the table,’ said McCabe. “Prices have gotten so high that the vast majority of people they were geared toward can no longer afford them. We are just seeing the beginning of the reversion trend.”
“Mahaffee, the former renter who is now an owner, is left with mixed feelings about the deal and whether he stands to lose money on his property.”
“‘The market just dropped,’ he said. ‘Until I go to sell, then I won't know if it might be a problem. I hope not.’”
Despite these reversions, the Miami Herald explains that many low-income renters are being priced out of the market:
“Low-income renters in Miami face one of the most burdensome markets in the country, with spiraling housing costs and stagnant wages pricing them out of their homes at a ‘worrisome’ pace, concludes a study released Friday by Florida International University.”
“Once they are priced out of gentrifying Miami neighborhoods, low-income renters have ‘virtually nowhere to go’ to find more affordable housing because there is a dire lack of lower-cost apartments throughout Miami-Dade and Broward counties, the study says.”
“‘We've known there is an affordability crisis, but what this study is now pointing to is displacement and replacement,’ said Marco Feldman, a research associate at FIU's Research Institute for Social and Economic Policy and the study's author.”
“‘We're seeing an influx of wealthier people into Miami and a sharp reduction in the number of affordable apartments,’ he said.”
“The Miami-Fort Lauderdale-Miami Beach metropolitan area leads the nation in the percentage of renters who pay more than 30 percent of their income for housing and those who pay more than 50 percent of their income for housing.”
And despite all the bad news, the real estate industry is still making ridiculous claims about all the rich foreign investors that will be arriving shortly to save the market. The Associated Press reports:
“The weakening dollar has caused many problems for consumers, but it may also be providing the fuel for one unintended — and very welcome — benefit: a rally in the struggling housing market driven by foreign investors.”
“For an individual or developer trying to sell a home, interested buyers are just as likely to already have a place in London or Paris as they are to be first-timers new to the market.”
“‘European investment is likely to pick up,’ said Mark Vitner, chief economist for Charlotte, N.C.-based Wachovia Corp. "Now is the time to come over and take advantage.’” [Note the Wachovia connection again!]
“The theory goes that foreign investors step in and replace first-time home buyers who have been squeezed out of the housing market during the recent downturn. These new investors in turn allow current homeowners to sell and trade up to larger homes.”
“But New York and Chicago are not the only locations likely to provide popular options for foreign investors. Places like Florida and California are likely to see a surge in foreign investment.”
“‘In a market with great turmoil, (the weak dollar) is one factor supporting some key markets,’ Wachter said of the weakening dollar.”
“Wachter said markets like Miami and San Francisco, which are under pressure from the U.S. slowdown, are increasingly being supported by foreign investors.”
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