[CHEWY12]

Thanks for all of the great research work nychiefsfan. I think it will be at least till 2012 due to huge amount of inventory that needs to be sold off.
There will be a lot of pain till then due to houses being reposesed and dumped back on an already saturated resale market.
As far as nontraditional lending is concerned I feel most people will agree that this idea just did not work out to well. Hence the mess we are all in now.

check out this web blog. thehousingbubbleblog.com

[JimKing]

Originally Posted by HowdyYall

The market will bottom out in 2 years, then in 6 years another building boom will be starting up and we can do this whole mess again.

as i stated before, you can not take a simple formula like "a house should cost 3x gross income" and apply it to a complex market like florida.
You can get a house for 125,000 in the middle of ga, tenn, ala or most other places. If you want to live in a very desirable place like the florida coast, brooklyn, chicago, DC, san fran, seattle, then you have to pay a premium. What do you people find so hard to understand? Your 3x income formula is so incorrect, this is 2007, not 1955 in mayberry NC.

No, 3 times income is very relevant to the vast majority of Florida. All working singles and families should abide by the formula. Banks used to use 36% of gross income as the upper limit of borrowing power for a house. Their loan portfolios had very low foreclosures rates. The exotic loans have fueled this mess.

Florida being desirable is irrelevant to the big picture. The super rich pay a premium for ocean property. The sort of rich might pay a premium to be close to water. But these people represent a tiny fraction of Floridians.

The working people who support the tourism, financial, education and service industries, the middle managers, the vast majority of retirees....they could always get affordable housing. In fact, downright cheap housing. They were the cornerstone that supported the entire Florida lifestyle.

I had my pick of CBS houses when I purchased in Jupiter in 2003. I paid $350,000 for an amazing property 5 miles from the ocean. 2800 square feet, great pool and lot, great house, great schools. Taxes were $3000, insurance $1500. We sold in 2005.

Now it is for sale for $750,000...2006 taxes $11500, insurance
$3500. Same place, same target audience of a younger family....just as desirable a location in 2003 as it would be now. If anything, with higher energy costs, inflation of food, etc, the next family will have less money to put towards housing costs than we did when we bought the house. How on earth could someone afford to pay more than twice what we did for the house, 3 times the taxes, three times the insurance???

And my old house is just one of thousands across Florida on the market with the same increase in costs. Anyone who can not see the insanity in this market is being foolish. Why is that so hard for you to understand?

[tallrick]

I think they don't want to understand because the truth of the matter is too scary. My 50% overvalued rule seems to be correct, and where will the new buyers get the "magic money" to buy overinflated properties when lenders tighten their strings?

[JimKing]

tallrick....I think your 50% over priced rule is right on in almost all of Florida. We are still firmly in the denial phase.

The scary thing is how many people borrowed what they thought was equity to spend on other items, vacations, cars, home improvements that will never pay off. Those are the people who will hold on to the belief that their house is still worth that much and cause prices to be sticky for years.

But this crash is unavoidable....in 2 years, or 5 years, but it will happen.

[jedwardjos]

There are affordable houses for sale right now in Florida. If the median income, as stated previously on this thread, is $42K per year, using the 3X salary gives a house price of $126K. There are 2 bedroom, 2 bath, cinder block construction starter houses available in Port Richey within this price range. Port Richey is on the West Coast in Pasco County and less than a 1 hour commute to Tampa. It is close to area beaches. The crime rate is relatively low.

[ddlove01]

Our first home was only 2 x our salary, but we also had 2 car payments, lots of debt, the kind of stuff a normal 20 year old would have. We were paying out a lot more...

We smartened up and paid off all our debt, no more car payments, and all we have left is our mortgage as a recurring expense.

Our new house is probably going to be closer to 4 X our salary, but I don't care. We are building the house of our dreams and you can always pay down a mortgage by making double payments, which we do anyway. We will be paying out less in taxes and insurance when we move to NC than we are in FL for 3 times the house.

It's all with what you are comfortable with. Our HOI for a 3500 sf house in NC is $468 a year. We are paying $1800 now. Our taxes will be the same because we bought low in FL, but they have doubled since we built our home in 2000. When we started, our taxes were a little over $1000. Our taxes are now up to $1775 and in NC they will be around $1600-$1750.

Trust me, I wish our new mortgage would be less, but we were hoping to sell our home for 2005 prices and not the current market value. We have drastically lowered the price of our home to below appraisal.

We will still make a profit, just not a ridiculous one like the lucky sellers 2 years ago made....should've got out when I had the chance! : (

[lostbuyer]

I think it all depends on how long people can hold on to fantasy land,they do impress me with their "stay the course" mentality.....to many people thinking they were real estate moguls,how can this not end in disaster.....record high number of home buyers,record low number of actual HOME OWNERS....if the equity is YOUR money,how come you gotta pay it back??

[JimKing]

Originally Posted by jedwardjos

There are affordable houses for sale right now in Florida. If the median income, as stated previously on this thread, is $42K per year, using the 3X salary gives a house price of $126K. There are 2 bedroom, 2 bath, cinder block construction starter houses available in Port Richey within this price range. Port Richey is on the West Coast in Pasco County and less than a 1 hour commute to Tampa. It is close to area beaches. The crime rate is relatively low.

$126,000 for a 2-2 in Port Richey? You have got to be kidding.

The median income in Port Richey is around $30,000. That is a 2.5 times income area at the most.

You should be able to get a 2 bedroom house in Port Richey for about $80,000. I bet if you check realtor.com you will find plenty of houses under $100,000. And those are just the asking prices...I bet you could get a decent house for $80,000.

[compelled to reply]

Originally Posted by JimKing

$126,000 for a 2-2 in Port Richey? You have got to be kidding.

The median in Port Richey is around $30,000. That is a 2.5 times income area at the most.

You should be able to get a 2-2 in Port Richey for about $80,000.

That, plus there are like 30 sex offenders to 1 in Port Richey (check out CD)! Thats a really icky area. The crime rate per capita is actually really high. That region of Pasco County just really is not appealing.

[Mike Peterson]

Originally Posted by JimKing

$126,000 for a 2-2 in Port Richey? You have got to be kidding.

The median income in Port Richey is around $30,000. That is a 2.5 times income area at the most.

You should be able to get a 2 bedroom house in Port Richey for about $80,000. I bet if you check realtor.com you will find plenty of houses under $100,000. And those are just the asking prices...I bet you could get a decent house for $80,000.

So I guess that area is in the 3x income range.
I guess we are not in that bad of shape after all.

Not trying to get on you just trying to show that not all areas have gone to the $400,000 home price minimum.