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Thread summary:

Home buying advice in Florida, pre-hurricane Andrew real estate prices, Florida housing market recession, escalating property taxes, sky rocketing home prices

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Old 09-30-2006, 10:35 AM
 
Location: Florida
2,209 posts, read 7,631,240 times
Reputation: 638

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I've been in Fla a long time. Since 1979 in fact. Started way back then in Ft Lauderdale. Many years later after Hurricane Andrew resulted in a huge influx of people arriving from Dade Cnty, I got OUT and moved to West Boca Raton. Well as nice as that area is/was, I sold that house in 1997 and bought a place in Paddock Park I, Wellington. Paid 350K the day before it was scheduled to go to court for foreclosure. Spent a lot of money ( 200 K ) fixing it up too. In the middle of 2000 I decided to move full time to SE Asia and put that house on the market. Started at 599K ( a 50K profit if sold for that net ) and kept dropping the price down down down without ever getting so much as an offer! FINALLY in late August 2001 I received an offer of 452K which represented a 100K loss not to mention the expenses over the few years I owned it and I sold it. Done. Bye bye. Do you all remember what interest rates were during that time frame and the cost of energy?

Came back to the USA in middle 2003 and that house in Wellington, a year after that I saw was "valued" at over a million bucks. Now this is really something. I couldn't even get an offer and the realtors are saying that the "market" is valuing the house at over a mil ? ( it was never put up for sale again ).

I moved to Port Charlotte Fla. It seems like such a deal in comparison to out yonder on the east coast.

Anyway I did some snooping at tax rates and on that house in Wellington, the property taxes show 15,000 a year now. Wow! I wonder what the homeowners insurance is. I would also venture to guestimate that even if a buyer could be found ( where oh where can they be? Shanghai maybe? ) there's no way that house could get an offer TOO much above where it sold in 2001 could it? ( Your opinions? )

To make a long story short, we are witnessing what just may be the beginnings of the greatest beat market in Florida real estate history. Many newly licensed real estate agents will be OUT of the sales profession, and we may even see a complete economic meltdown, nationwide. Think this is bad now? This could become a depression some economists are warning. The country's debt ( which the government sells to the likes of the communist Chihnese) is heading into junk bond status in a few years. Real estate prices here are falling and by no means is it a mild correction. It's already a double digit correction and STILL no significant buying is happening.

So whereas I wanted to leave the state after Charley blew us away, and spent months and more than 20,000.00 traveling to western NC, Georgia, the Poconos, etc, we actually looked at a few houses right here in the last couple of weeks. A lot of people are obviously still in denial. Many aren't and are dropping their prices accordingly. We just looked at one that was at 400K a year ago and is now in the mid 200's. I asked the realtor yesterday, "what was this house worth in 2001"? I think she caught my drift.

Anyway, we are meeting a contractor at that house in about an hour. I would want to build an addition and do some renovations if we were to buy that house. Once I have an idea of costs, we will consider making an offer and the offer would probably be 20% less than the present asking price. The realtor told us this would be the only offer in almost 9 months.

Whattaya think? Are we crazy to make such a high offer? Think this place is going back to pre-1989 levels??? Pre-79? ( )

 
Old 09-30-2006, 11:08 AM
 
944 posts, read 3,837,466 times
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That's one that I am trying to answer myself. People forget that real estate is cyclical. Since we just had the greatest nationwide run-up in the history of, well, the nation itself, one may not sound so crazy saying we are at the brink of a long slow down, if not crash.

I happen to think this will fall somewhere between a hard landing and a crash (for some areas).

I am stealing advice from someone on another board, but here it is: buy when YOU get maximum utility.

There are some townhouses in Pinellas County that I would be willing to buy at around $100k. They are currently NOT selling at $140k. Five years ago they were selling for $70-$80k. I would not buy now, but would if the price dropped about 30-40%. This would then be about the price of renting a unit there. That is where my utility occurs.

Right now, St. Pete Beach is one of those absurdly upside down areas. I am renting for $650 what would cost me $2k+/mo. to own. Not much utility in that split...
 
Old 09-30-2006, 11:12 AM
 
Location: Florida
2,209 posts, read 7,631,240 times
Reputation: 638
Good info Muggy. Another thing that concerns me is that over 1 trillion bucks in ARM's are supposed to reset in 2007. Just over 300 billion did so in 2006.
 
Old 09-30-2006, 12:05 PM
 
944 posts, read 3,837,466 times
Reputation: 607
I forgot to add that for many people utility varies wildly, and even though prices may tumble, I may still be "priced out (I HATE this term)" of a 3/2 in Pinellas County.

For example, a $200k 3/2 in St. Petersburg would cost $5-10k/yr. apart from the mortgage to carry. That is simply not within my means. Even if the same house tumbled to $150k I still would not buy because of the associated carrying costs. There are a lot of people who would, however.

I think the biggest problem facing Florida, aside from inventory and speculation, is carrying costs. Some people's insurance alone costs the same as my rent and we live on the same street!!!

It's insane.

And despite what many believe, not every boomer from the Northeast is looking to buy at any price in Florida. The reason: carrying costs.

My father is on the brink of retirement and so are many of his co-workers. Five years ago they were all considering Florida. Exactly ZERO are considering Florida now.

Despite all of this the fact remains: if you want it and can afford it, go for it.

I happen to think that at the current moment, buying in Florida is like trying to jump off a slowing train because you're not sure if it's stopping in your town or not.
 
Old 09-30-2006, 12:39 PM
 
Location: in the southwest
13,396 posts, read 44,908,300 times
Reputation: 13599
For us, it really depends on what happens with my husband's job search.
But we may well be looking to buy in Florida. (We're renting in northwest Florida now.)
In August, we closed on the sale of our house in Denver.
And for the first time in 20-odd years, we no longer have to consider the schools wherever it is we settle.
We just don't know where it will be--which is part of the reason I have been haunting these boards.
 
Old 09-30-2006, 01:09 PM
 
Location: ♥State of the heart♥
1,118 posts, read 4,746,466 times
Reputation: 865
We have good friends that bought here at the Jersey shore about five years ago. If they could pack up and move to Florida today (Gulf coast) they would do it in a heartbeat. Due to family issues, they have been held here.

I have never seen two more frustrated people in my life. They have managed to spend three winter months in FL until last winter where they had to forfeit that trip because of the family issue. (A son with alcohol problems, and job/marriage/kids issues that stem from that). I think once their son is back on his feet, the sale sign goes on the front lawn and they are house hunting in Florida.

Residential real estate is slow all over right now, but historically it is similar to the late 1980's/early 1990's. We've been in real estate for a long time, have seen the highs and the lows. In fact, the only thing that you can count on in real estate is that the pendulum will swing. Something else to keep in mind is that commercial real estate is strong, especially in urban areas, which is not only a good indicator for the general economy, but the job market.

Don't be scared into becoming "chicken little." The sky is not falling.

If anyone remembers the late 1970's (energy "shortage"), and as I mentioned the real estate screeching halt of the late '80's and early '90's AFTER the real estate craziness of the early to mid 1980's - you will note that all this runs in cycles.

This is another cycle, and a NECESSARY one at that. There is too much credit money out there, people are overextended, and the valuations were over inflated for many areas.

Prices are adjusting, people are getting their heads out of the clouds, and there are some tremendous opportunities out there. People who bought real estate at the high$ have to either hold on for awhile until the values go up (good real estate investments are a result of location, price and time), or get what they can get. Sometimes cutting your losses is the thing to do.

Anyway - Low interest rates (6% anyone?) and flexible sellers = buyer's market. The old adage is true: "Buy when people are selling, and sell when people are buying." Anyway, hang in there and we'll all get through this.
 
Old 09-30-2006, 04:07 PM
 
Location: Fort Mill, SC
269 posts, read 1,054,463 times
Reputation: 77
Well, just to provide a bit of insight into what's going on now in the Tampa Bay market.... I am a new home sales consultant for a major national builder. After six months of having more cancellations than sales (Investors backing out, and families getting scared by the real estate bubble talk)..August was huge for us and September was nearly as good. The bottom line as far as new sales are concerned was that we raised prices every month becuase people were still willing to pay the higher prices for about 2 years. Now things have slowed, there is more inventory on the market...so our prices have come down again. In my community, a minimum of 90k up to 180k on inventory. (We now start at about 450) We have hit the bottom in pricing, and savvy investors are realizing that and starting to buy again.

I think that, at least in this market, we've hit bottom...we'll stay at this level until more of the inventory is off the market and then things will begin to pick up again.

FWIW
 
Old 09-30-2006, 04:11 PM
 
Location: Florida
2,209 posts, read 7,631,240 times
Reputation: 638
I think that, at least in this market, we've hit bottom...we'll stay at this level until more of the inventory is off the market and then things will begin to pick up again.

FWIW[/quote]

Think so huh? With more than a trillion dollars in ARM's resetting in 2007?

My bet is we're a year away from even seeing a bottom.
 
Old 10-01-2006, 01:18 AM
 
Location: FL
1,316 posts, read 5,777,467 times
Reputation: 988
I agree with the posters that think this pretty much IS the "bottom".
People tend to freak out at the drop of a dime! People were making OUTRAGEOUS profits and now they're correcting. Hey - it's STILL location, location, location! And there are just more & more people (even if they are mostly illegals ) who want/need houses. So yes, it's now a buyers market. And then it will be a "normal" market. People will sell, & people will buy. And NO ONE will lose money in real estate unless they were the people who got caught up in the boom & did the ARM or interest only thing. Those people, well...But regular folk of all classes will be fine! Places that are expensive were always expensive! Please - can someone tell me when NYC was CHEAP?! Places that people want to live - NY, CA, FL, AZ, Vegas, etc will always be expensive. So everyone - take a deeeeep breath... It's gonna be ok! (As for the REAL problem of illegals... )
 
Old 10-01-2006, 03:08 PM
 
Location: WPB, FL. Dreaming of Oil city, PA
2,909 posts, read 14,053,564 times
Reputation: 1033
Quote:
Originally Posted by MrTudo View Post
Whattaya think? Are we crazy to make such a high offer? Think this place is going back to pre-1989 levels??? Pre-79? ( )

Not a chance. For one, inflation has to be adjusted for. If we went back to 1980 prices, my dad would buy like ten houses because they will be as cheap as mobile homes adjusting for inflation. He would rent them all out, make big profit then flip them when values go back up. Just about everyone would buy several houses at 1980 prices because they would be as cheap as mobile homes adjusting for inflation as ive said. The demand alone will prevent this from ever happening. Second, the cost of building a house would never allow modern houses to drop below $70 a square foot for newly built house+lot and thats factoring the lot being almost worthless. The costs of building material and labor has gone up. You will be hard pressed to find a newly built house anywhere for much below $100 a square foot. If prices dropped too low, developers will just stop building as it wouldnt be profitable and if demand went back up, so will prices and more houses built. In some cheap rural areas, there hasnt been a house built in the last 50 years because it would be a big loss! In fact most houses were built in the early 1900s!

The experts stand correct in predicting a correction of anywhere from 10% to 30% in the next few years depending where. We may see a correction of 30% in south Florida because of hurricanes and the insane insurance. In areas of cheap insurance, prices wont drop as much because more house can be afforded by not paying insane insurance. We may not even see a drop in areas that arent overpriced like Texas(I can get a house there for $50k and a nice one for $100k!)



Quote:
Originally Posted by Adream View Post
Don't be scared into becoming "chicken little." The sky is not falling.

If anyone remembers the late 1970's (energy "shortage"), and as I mentioned the real estate screeching halt of the late '80's and early '90's AFTER the real estate craziness of the early to mid 1980's - you will note that all this runs in cycles.

This is another cycle, and a NECESSARY one at that. There is too much credit money out there, people are overextended, and the valuations were over inflated for many areas.

He is right. As long as we dont enter a depression, as long as people keep their jobs, we wont have a crash landing, just some well needed price corrections. I remember the market being slow in the early 1990s but prices didnt fall, they just stayed flat. The experts predict a 10-30% correction then a leveling off prices till inflation catches up then prices will rise 5% which is healthy.



Quote:
Originally Posted by elfyum View Post
I agree with the posters that think this pretty much IS the "bottom".
People tend to freak out at the drop of a dime! People were making OUTRAGEOUS profits and now they're correcting. Hey - it's STILL location, location, location! And there are just more & more people (even if they are mostly illegals ) who want/need houses. So yes, it's now a buyers market. And then it will be a "normal" market. People will sell, & people will buy. And NO ONE will lose money in real estate unless they were the people who got caught up in the boom & did the ARM or interest only thing. Those people, well...But regular folk of all classes will be fine! Places that are expensive were always expensive! Please - can someone tell me when NYC was CHEAP?! Places that people want to live - NY, CA, FL, AZ, Vegas, etc will always be expensive. So everyone - take a deeeeep breath... It's gonna be ok! (As for the REAL problem of illegals... )

Alot of people are freaking over house prices going down. I freaked out when my parents house went down, I told them to sell it at the peak and buy a house a few years later! They would have saved many, many thousands if they had listened! Its too late now, houses arent selling and the price we would get wont be worth selling. Location of course will always matter.
It doesnt matter if people want/need houses, most cant afford one and instead get a mobile house or rent. I refuse to rent(its like throwing money away) and I can get a nice house for the same price as a mobile home here in south Florida so I am outta here to a "cheaper" less "desirable" location.
South Florida will always be expensive, but less expensive than it is now. I probably will never live in south Florida again, but will go there to visit family and vacation.
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