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well at least Fla. won't run out of water, unlike the other two places you mention
Quote:
Originally Posted by soothsayer1234
I could say so much here, but I'll keep it short. South Florida gave into the real estate hype more than any other area of the country, outside of Vegas and Phoenix. Phoenix will survive, as the home values were high, but not sky high. Vegas went sky high, but still has a strong job market, and always paid more than south florida. South Fla. has an unaffordable,foreclosure-inducing RE market, AND very low, pay-em-in-sunshine wage rates. Outside of RE-realted jobs, there really are no well-paying jobs or union-type work. Only professionals, particularly bankruptcy attorneys(hey, I had to inject SOME humor in this!) will survive. My heart truly goes out to all of you folks.....hang in there......BTW, I think you folks can pretty much toss those Fla RE licenses in the circular file!
I could say so much here, but I'll keep it short. South Florida gave into the real estate hype more than any other area of the country, outside of Vegas and Phoenix. Phoenix will survive, as the home values were high, but not sky high. Vegas went sky high, but still has a strong job market, and always paid more than south florida. South Fla. has an unaffordable,foreclosure-inducing RE market, AND very low, pay-em-in-sunshine wage rates. Outside of RE-realted jobs, there really are no well-paying jobs or union-type work. Only professionals, particularly bankruptcy attorneys(hey, I had to inject SOME humor in this!) will survive. My heart truly goes out to all of you folks.....hang in there......BTW, I think you folks can pretty much toss those Fla RE licenses in the circular file!
Depending on the area of Florida, jobs are not the issue. Florida never was famous for it's jobs even back in 2005 when everyone was flocking here. This said, however, I live in a 500,000 - 600,000 area and all my neighbors are gainfully employed. There is no shortage of ways to make money if you're in sales, medicine, or law.
I agree 2000 price levels will not be seen again and the more likely scenario is a stagnation in prices at some point.
In the meantime the biggest reason home prices are falling right now is not because of risky mortgage and foreclosures (how many of the millions of homes out there are in foreclosure and changed hands during the "boom"? less than 1% I'd say). The biggest factor was the over building that went on that was supported for a short time by investors and second home buyers. There is simply an overwhelming Glut of inventory. As soon as this inventory is widdled down prices will firm. Depending on how high inventory levels and sales pace is in your area will determine when prices stop dropping.
I always thought the theoretical bottom price of a home correlated with how much rent was. If one can buy a home with 5-10% down and have mortgage taxes, and insurance equal to or less than that of renting, it would bring in A LOT of buyers. Rents so far have been relatively stable and have not dropped by any significant margin in the past few years.
As soon as inventory is whittled down should be qualified. First, it could take years. Insurance isn't coming down. Mortgage standards will not go back to what they once were. I don't think its a simple case of supply and demand, because the demand is there, but buyers can't swing the payments. Sellers still will continue to want to sell, but if it slows much more, they will just decide to take their homes off the market. Again, buyers want to buy, and sellers want to sell, but the macro financials aren't being kind at this point
It doesn't surprise me that people are talking about a recession in Florida. I've been looking for work off and on in Oviedo, Florida, with no luck. I can go a few miles down the road and see empty houses and undeveloped subdivisions. Across the street in the smaller houses area there are several houses with "For Sale" signs and nobody is buying them.
I'm glad I have some parents to take care of me but over the long term it is doom and gloom.
Housing prices will fall, no doubt about it. Maybe in real dollars if not inflated dollars.
You also have consider Peak Oil, something I believe the evidence is strong for. Right now many Peak Oil analysts say the supply of oil is on a flat path until 2009-2010, and the demand keeps going up. At 3 dollars per gallon, alot of this housing back inventory will look less-and-less appealing. Those empty subdivisions I was telling you about? They are further and further out from major roads. What happens when gas hits 4 or 5 dollars a gallon? Surely it wil cripple outward growth in the Orlando area. My parents have a fuel efficient car (Jetta diesel) and I have a few motorcycles and scooters, so we are largely immune from transportation costs, but it will affect everybody else, plus the costs of every product and service. Orlando, and Florida in general will take hits on tourism, already the price of fuel is a bigger cost than labor in your airline ticket.
Mag, i'm still waiting for the gas tipping point, when gas becomes so expensive that people stop driving SUV's, like they got rid of their "boat" type american gas guzzlers in the late 70's. I'm older, and I remember when, almost overnight, about 1980, people started driving little cars all over. It only took the american big three about 2-3 years to completely stop making the 'boats'. Gas almost doubled in price from 76 to 81, and people generally freaked. I remember some friends of mine in college just stopped driving. They had cars, but couldn't afford to drive them, believe it or not. I would say the gas tipping point would be about 4 bucks a gallon. anything over that and you can expect people to get rid of/stop driving SUV's, along with avoiding long road trips, or, as you say. commuting long distances to work per housing affordability. can you imagine how it will effect people living far from their jobs for same reason in California?
Depending on the area of Florida, jobs are not the issue. Florida never was famous for it's jobs even back in 2005 when everyone was flocking here. This said, however, I live in a 500,000 - 600,000 area and all my neighbors are gainfully employed. There is no shortage of ways to make money if you're in sales, medicine, or law.
First, I would construe sales in Fla to be housing related. If that indeed is the case, we can remove that from the three you mentioned. Per Doctors and Lawyers, sure, they are doing fine, and always will. Florida relies heavily on construction and housing related employment, and many people will be displaced from that industry that cannot realistically expect to make that money in any industry. There have been posts on here of folks sighting former agents stocking groceries at Publix and the like. I don't think Florida is unique in this respect, but prob indeed has the biggest wage disparity between working-class folks and the imported well-off from out-of-state and country, and the few professionals. If you took away all the money and homes circulating with snowbird and foreign money, it would be far more noticeable than it is now, perhaps like Louisiana. They have created an almost irreconcilable situation in Florida now per housing, and hard to say when or if it will work itself out. I have no malice towards Florida, and truly hope for the best for them.
What I'm saying is you can't just lump all of Florida into one big pot and put a label on it. There are some areas that are doing just fine and will continue to do just fine.
Prices will fall, but not in nominal dollar terms. What's more likely is prices will stagnate for 7-10 years while inflation erodes the value of said prices. Rather like California 1987-1996.
This is a very interesting point: Since this entire debacle is the work of the Greenspan Fed, and since Bernake is caught up in the rate-cut/phoney "stimulation" problem himself, we're going to see FL real estate caught in two primary problems.
The first is price correction, the second is inflation. Prices will likely never hit former, pre-boom levels, but neither will the dollar's value. At some point an adjusted dollar, the kind with a value based on printing it on thin air, will drop in value so far that it'll "meet" falling RE prices and the latter will stop falling.
Oil is approaching $100 with some pundits calling for it to yet double. Gold is on its way to $900. So what does the Fed do? It cuts rates, further deflating the dollar, the same mistake that got us into this problem! Cutting rates is shorthand for relaxing the money "supply" which is shorthand for simply printing more of it. It's gotten so bad people are finally questioning the wisdom of an unbacked currency. At least one presidential candidate is doing so, as are central US bankers. Even Greenspan did so a few times...before printing more paper.
The only good news is that the falling US dollar will eventually reintroduce American manufacturing as the country seeks a more common level, one equitable with overseas manufacturing. Of course it's not over yet and some say it's only beginning, which I'd tend to agree with. It'll be over when the dollar regains its footing by way of our finally balancing international trade.
And that's another way to say what so many here have for so long: Housing costs simply must return to a level where working America can afford them. Probably that'll mean no more McMansions, but at least we'll be housed again and still be able to balance the family budget.
This is a very interesting point: Since this entire debacle is the work of the Greenspan Fed, and since Bernake is caught up in the rate-cut/phoney "stimulation" problem himself, we're going to see FL real estate caught in two primary problems.
The first is price correction, the second is inflation. Prices will likely never hit former, pre-boom levels, but neither will the dollar's value. At some point an adjusted dollar, the kind with a value based on printing it on thin air, will drop in value so far that it'll "meet" falling RE prices and the latter will stop falling.
Oil is approaching $100 with some pundits calling for it to yet double. Gold is on its way to $900. So what does the Fed do? It cuts rates, further deflating the dollar, the same mistake that got us into this problem! Cutting rates is shorthand for relaxing the money "supply" which is shorthand for simply printing more of it. It's gotten so bad people are finally questioning the wisdom of an unbacked currency. At least one presidential candidate is doing so, as are central US bankers. Even Greenspan did so a few times...before printing more paper.
The only good news is that the falling US dollar will eventually reintroduce American manufacturing as the country seeks a more common level, one equitable with overseas manufacturing. Of course it's not over yet and some say it's only beginning, which I'd tend to agree with. It'll be over when the dollar regains its footing by way of our finally balancing international trade.
And that's another way to say what so many here have for so long: Housing costs simply must return to a level where working America can afford them. Probably that'll mean no more McMansions, but at least we'll be housed again and still be able to balance the family budget.
Many good points made here. It's not a florida problem, its a national thing. Florida just happens to be hit the hardest, but the entire national housing market will be dealing with this soon if they haven't already. Per the mention of Mcmansions, did anyone think that the generation X just reaching its McMansion buying years(early 40's) is much smaller than the age groups in the boomer group? That means far fewer gen X families will be buying Mcmansions, as opposed to the Boomers that will be selling them as they downsize and empty nest next 5-8 years. Add that to the RE problems, and it may be as hard to sell a Mcmansion as it will be to get rid of an SUV in the near future.
Per Mcmansions, we may look back on 1993-2005 as the "Supersize Era", when everything from personal vehicles, to houses, even fast food, was "supersized". I think it will seem as silly in retrospect as the disco era in the late 70's. I don't think, but KNOW, that the US culture will be going through a profound change in the near future, as we get back to not only normal-sized consumer items, but a drastic change in mindset, far less wasteful, more compact, and, gasp, possibly even, FRUGAL!
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