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View Poll Results: When will the housing Bust end in FL?
By the end of this year 21 8.30%
Spring 2008 28 11.07%
Summer 2008 16 6.32%
Fall 2008 17 6.72%
Winter 2008 12 4.74%
Spring 2009 29 11.46%
Summer 2009 18 7.11%
Fall 2009 11 4.35%
Winter 2009 9 3.56%
Sometime in 2010 38 15.02%
Sometime in 2011 13 5.14%
Sometime in 2012 11 4.35%
2013 or later 30 11.86%
Voters: 253. You may not vote on this poll

Closed Thread Start New Thread
 
Old 07-15-2007, 11:42 PM
SKB
 
Location: WPB
900 posts, read 3,160,283 times
Reputation: 321

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How is this for testing the market. I put an ad up on craigslist.
Housing Wanted!!!

Reply to: hous-374788683@craigslist.org
Date: 2007-07-16, 12:44AM EDT


We are a wise, mature couple looking for a long -term (if necessary) rental while the housing market crashes. It took Japan 15 years for their market to finish crashing. We are willing to wait this out for as long as it takes, are you?

We are willing to pay 1,000 to 1300 monthly, first and last and damage deposit (going into Escrow) depending on location and house.


We require a large (2000 sq feet under air) three bedroom + den, two bathroom, pool, screened lanai, security system and with a fenced yard for our pets.

If you do not have a fenced yard, we would be willing to contribute to this by adjusting the rental price and we will contribute towards the fence.

We are responsible people that take tremendous pride in living in a home and taking care of it as if it were our own.

Husband has been working the same job for 14 years and has a 20-year military career behind him and he is still in the reserves.

We are NOT interested in renting from someone facing foreclosure or behind on their mortgage payments or taxes or insurance.

We are relocating from Montreal, Canada on Sept 19, 2007.
We have rented a temporary home in Wellington for sixty days while we entertain your offers to rent.

We have no problem letting you see our bank statements, credit reports and credit scores if you have no problem with the same. We also have a letter of reference from our current landlord of five years.

If you have a home built in 2002 or early 2003 and wish to sell it NOW we have an offer for you.

We are willing to pay you 2002 prices with a 15% appreciation for your property.

We have very large cash down payment, we have excellent credit, and we have no contingencies. We are ready to buy now from a seller that recognizes that the run up from the last five years was based on pure market speculation, investors and easy financing.
Now that the speculators and investors have left the market and the easy credit has dried up, who is left to purchase homes with price tags double from what they were in 2002 when the median income in Florida is 43K, 49K in PSL and 70K in Wellington?

It took Japan 15 years for their market to finish crashing. We are willing to wait this out for as long as it takes, are you?

Look down your street and notice how many homes are for sale and NOT moving!!! Look up how many homes has sold in your area for the last six months to a year.

We are willing to pay you 2002 prices with 15% appreciation (or 50% off peak 2005 prices) to avoid you having your home languish on the market while you slowly chase the market down.
We are looking to spend 150K to 200K (based on area) for a home that matches the description of what we have indicated.

 
Old 07-15-2007, 11:49 PM
 
2,313 posts, read 2,395,532 times
Reputation: 471
Quote:
Originally Posted by SKB View Post
How is this for testing the market. I put an ad up on craigslist.
Housing Wanted!!!

Reply to: hous-374788683@craigslist.org
Date: 2007-07-16, 12:44AM EDT


We are a wise, mature couple looking for a long -term (if necessary) rental while the housing market crashes. It took Japan 15 years for their market to finish crashing. We are willing to wait this out for as long as it takes, are you?

We are willing to pay 1,000 to 1300 monthly, first and last and damage deposit (going into Escrow) depending on location and house.


We require a large (2000 sq feet under air) three bedroom + den, two bathroom, pool, screened lanai, security system and with a fenced yard for our pets.

If you do not have a fenced yard, we would be willing to contribute to this by adjusting the rental price and we will contribute towards the fence.

We are responsible people that take tremendous pride in living in a home and taking care of it as if it were our own.

Husband has been working the same job for 14 years and has a 20-year military career behind him and he is still in the reserves.

We are NOT interested in renting from someone facing foreclosure or behind on their mortgage payments or taxes or insurance.

We are relocating from Montreal, Canada on Sept 19, 2007.
We have rented a temporary home in Wellington for sixty days while we entertain your offers to rent.

We have no problem letting you see our bank statements, credit reports and credit scores if you have no problem with the same. We also have a letter of reference from our current landlord of five years.

If you have a home built in 2002 or early 2003 and wish to sell it NOW we have an offer for you.

We are willing to pay you 2002 prices with a 15% appreciation for your property.

We have very large cash down payment, we have excellent credit, and we have no contingencies. We are ready to buy now from a seller that recognizes that the run up from the last five years was based on pure market speculation, investors and easy financing.
Now that the speculators and investors have left the market and the easy credit has dried up, who is left to purchase homes with price tags double from what they were in 2002 when the median income in Florida is 43K, 49K in PSL and 70K in Wellington?

It took Japan 15 years for their market to finish crashing. We are willing to wait this out for as long as it takes, are you?

Look down your street and notice how many homes are for sale and NOT moving!!! Look up how many homes has sold in your area for the last six months to a year.

We are willing to pay you 2002 prices with 15% appreciation (or 50% off peak 2005 prices) to avoid you having your home languish on the market while you slowly chase the market down.
We are looking to spend 150K to 200K (based on area) for a home that matches the description of what we have indicated.
Why would waste someones time like that?
 
Old 07-16-2007, 12:19 AM
SKB
 
Location: WPB
900 posts, read 3,160,283 times
Reputation: 321
Just explain to me one thing?

How is Florida making it? I mean really, with the salaries being paid?

Just explain to me how the current prices make sense and I will agree that I wasted my time writing that.

Look around you, how do people have expensive luxury cars, 300K+++ houses, paying for utilities, taxes, insurance, car insurance and groceries, etc. etc. etc.?
They are living on credit cards and Home Visa machines.

I sat and crunched numbers today on Quicken, our our personal mandatory expenses food, rent, insurance, gas, etc..we have no personal debt . I never added going out, eating out, clothing, prescription drugs, impulse buying etc....etc....etc...my mandatory expenses (that everyone has) added up to 2620 per month based on a single family rental home of 1,000 monthly.
A thousand dollar monthly rent payment is NOTHING in comparison to what a mortgage, taxes, insurance, and maintenance is or will become when that ARM resets.

The only think propping this up are the ARM's, and interest only....this thing is busting wide open when the trillion dollars of them adjusts.

I work in the cc industry and I can tell you the Americans are in debt up to their eyeballs and sinking fast.

This is going to be the ugliest crash in the history of man kind to go along with the biggest credit bubble of mankind.
I very well may have made my offer to high.

Bash me all you want, just know this, anyone that says anything derogatory with personal attacks will be reported to the moderator of this board.

Last edited by SKB; 07-16-2007 at 12:28 AM..
 
Old 07-16-2007, 05:50 AM
 
Location: Southeast Cape Coral
93 posts, read 260,457 times
Reputation: 17
Quote:
Originally Posted by firemed View Post
Very good move! I know alot of people that did well with the boom and are now losing it all. You can take a loss but only for so long. I did very well in 2005 but I did not put any more money in realestate after that. I went back to the stock market. Now I am pulling out of that also. If all the boomers people think will move to Florida and other southern states does happen, They will have to sell there homes up north or buy with cash on hand, But they will be pulling money from all the 401Ks and thats a fact. I don't think the gen-Xers will make up the difference. People don't get the point that after the boomers, savings in the US will be very low and debt will be very high. Think about 50 year mortgages. Its easy to see what will happen. But I'm a doom and gloomer!
It is easy to see but most won't.
 
Old 07-16-2007, 06:26 AM
 
960 posts, read 1,354,961 times
Reputation: 409
North Port builders see grim future

I posted a link from a newspaper that has economic interest in the local real estate market. The newspaper is in the process of laying off workers, citing diminished revenue from real estate/housing ads. Even they can no longer ignore what is really going on.
 
Old 07-16-2007, 06:38 AM
 
Location: Hernando County, FL
8,488 posts, read 17,903,835 times
Reputation: 5397
Quote:
Originally Posted by SKB View Post
Just explain to me one thing?

How is Florida making it? I mean really, with the salaries being paid?

Just explain to me how the current prices make sense and I will agree that I wasted my time writing that.

Look around you, how do people have expensive luxury cars, 300K+++ houses, paying for utilities, taxes, insurance, car insurance and groceries, etc. etc. etc.?
They are living on credit cards and Home Visa machines.

I sat and crunched numbers today on Quicken, our our personal mandatory expenses food, rent, insurance, gas, etc..we have no personal debt . I never added going out, eating out, clothing, prescription drugs, impulse buying etc....etc....etc...my mandatory expenses (that everyone has) added up to 2620 per month based on a single family rental home of 1,000 monthly.
A thousand dollar monthly rent payment is NOTHING in comparison to what a mortgage, taxes, insurance, and maintenance is or will become when that ARM resets.

The only think propping this up are the ARM's, and interest only....this thing is busting wide open when the trillion dollars of them adjusts.

I work in the cc industry and I can tell you the Americans are in debt up to their eyeballs and sinking fast.

This is going to be the ugliest crash in the history of man kind to go along with the biggest credit bubble of mankind.
I very well may have made my offer to high.

Bash me all you want, just know this, anyone that says anything derogatory with personal attacks will be reported to the moderator of this board.
$1000 a month would cover mortgage, taxes and insurance on a $165,000 home with 20% down. Of course you also get to write alot of that expense off at tax time.
You can get a brand new 3/2/2 home in a gated community under $165,000.
Before anyone even tries, this is not in the ghetto.
So based on the median income of around $40k a year here the current prices make perfect sense.
 
Old 07-16-2007, 08:15 AM
SKB
 
Location: WPB
900 posts, read 3,160,283 times
Reputation: 321
Mike, I can not get the number to fit are you calculating that on a 50 year mortgage?

A forty year mortgage the mortgage payment would be 749.00, what are you calculating for taxes and insurance?

If you borrow 132,000 over 30 years with an interest rate of 6.25%
You are looking at a mortgage only payment of 812.75

Taxes of 2800 which is 233.00 monthly and insurance ?? lets say 1200 yearly 100.00 monthly.

812.75
233.00
100.00
________

1145.75

Ok, find me a home in WPB area that is brand new and well built for 165,000.

Sure, you may be able to find me properties in OTHER areas of Florida, but I am talking about Wellington, Port St Lucie, or Jupiter.

We are moving to WPB so homes in other areas are of no use to me.

The median income for those towns: PSL, 49K, Wellington 75K, Jupiter 55K.

Median home price in PSL: 227,000, Wellington: 328,000, Jupiter: 230,000

Should be PSL (at three times income) 147,000 Wellington 225,000 and Jupiter 165,000.
 
Old 07-16-2007, 10:26 AM
 
Location: Heartland Florida
9,324 posts, read 23,763,988 times
Reputation: 4900
None of south Florida makes sense, period. When you pass Lake Okeechobee your common sense is thrown out the window. The only thing keeping the area afloat is that at least 80% of the people living there bought before the boom.
 
Old 07-16-2007, 10:51 AM
 
Location: Tampa Bay Area
169 posts, read 991,685 times
Reputation: 172
I love this thread and the contributions are wonderful.

NYChiefs, I haven't contributed to the poll yet. You know how I feel about the market!

The thing about the bottom is - by the time you know you're there, it's gone and on the up-take. My thoughts on it are (there may be a false start too) that the bottom will be when:

1. Inventory stops going up or drops for 3 consecutive months AND
2. Monthly closed sales for 3 consecutive months equal an average of property units sold from 1999-2003 (pre-boom but reasonable interest rates).

Inventory came very close to leveling off in June numbers. But closed sales are still down (not there yet by a long shot).

I hate to predict this but price levels will not go down to the pre-boom rates. There are lots of reasons why but it's largely because at any given time there's just not enough property for sale to drive prices to that point. WHAT??? IS SHE CRAZY THERE'S TONS OF HOMES FOR SALE?! Yes, but not necessarily by the people who over paid. Some yes, but really it's a small percent of the people who over paid in 04 and 05. The rest have a lower basis and will lower their prices if they have to... they just don't want to yet. Don't get me wrong, the flippers are hurting and those who bought at the peak. Those are the people you're hearing about but they are just 10% of the total homes for sale... 90% can still take the hit and be ok. They are ticked that they didn't get the peak price but they aren't dying... just mad because they aren't getting what their neighbors got because they missed the timing...

It's a circumstance issue - the % of people who sold (and moved into their homes) in 2005 that HAVE to move at the moment isn't that large. Prices certainly will/are already going down from the 2005 high but they are not going to completely adjust. The 100% gain in 3 years will adjust to about a 15% year over year in the "pop-up" years (45% increase over 2001 prices.)

To answer a couple of posts regarding where people get the money to pay for these homes, you should know in Florida, 1 in 4 homes is purchased in cash. So only 75% of those homes for sale are "qualification" sensitive. There are still plenty of people with decent paying jobs that qualify to buy. Go figure. I do think the jobless rate is under reported. If this is the case, then we could be in worse shape but as long as there are jobs, there's income and there's housing demand.

My favorite line in this - at least we're not in Detroit! Talk about a housing problem. They're bleeding all over there and jobs are not going to save them.

Also, as staggering as it may see with the inventory on the market, in the ordinary (balanced) market only 4% roughly (if varies from area to area) of "homes" (condos and mobiles are included, heck, someone's living there right?) are moving (buying/selling). This market is unusual but (I'll run the math and respost the ratios) I doubt more than 12% of all homes are for sale. - Granted that's 3x the normal market and it really does spike the graph but really 12% isn't devastating, it's just humbling.

Ok, 12% instead of 4% - bad but recoverable.

Let's put supply and demand into perspective - there's only aprox. 63% home ownership in the US and oddly enough that percentage is pretty true in FL too. So that's 37% of households that don't own. Some of them couldn't own, some of them aren't going to be here long enough for it to make sense to them but in any case, at some price those non-owners might consider a move to the ownership side. Low interest rates still make that possible and every day some percentage of the population is getting married, getting a pay raise and look at the graphs for the number of people in the 21-35 range. There they are - potential buyers.

Also, the Florida market is one of the most popular places to own a second home for that small segment of aggregated wealth in the US that has the ability to do so (to some people a second home is a $120K condo in New Port Richey but it's still a second home).

So as most markets go, the Tampa area (that's where I am) market has good jobs for buyers or seller's who's homes have lost their value and just need to sit tight through this trough in the graph.... and plenty of potential purchasers that may just be afraid of jumping into a "bad" market.

But at the end of the day - this is not a post-1986-tax-reform-act level problem. Why? It's housing. Everyone needs housing. Not everyone needs another office building or shopping center - that's evaluated on totally different merits. I worked at a dissolved S&L in Texas - then I went with the portfolio of real estate to the RTC contractor that consolidated about 40 S&L's - I was there from 1990 through 1994. That was brutal and interest rates certainly weren't then what they are now. The real estate (commercial) market didn't recover from the Tax Reform Act of 1986 until 1996 - 10 years. But we're talking about a housing market. Everyone needs housing. It's just not going to have the same level of devistation.

Also, keep in mind, every seller is a potential buyer. So once a single buyer from outside the pool of sellers comes into this market and makes a purchase, they free up a seller to become a buyer. The knot the market is in, once the bottom hits will predictably begin to loosen shortly over a period of about 4-6 months.

Don't just count in the baby boomer's moving to Florida, there's a gen x and gen Y group coming into the pool and we're all living longer. Look at the growing population and you'll see the increased need/demand for housing.

There are definitely aspects of the demand graph in play to absorb the supply... it's just going to take time.

As for the foreclosures - the people getting the boot still have to live somewhere. Sure they probably can't buy a home for the next 2-5 years but guess who now moves in and rents from the investor who bought the property... it's housing.

What won't happen after the recovery is a large price appreciation.

I bought a wonderful old ad for a gulf front home in Clearwater run in 1918 - the home was being marketed for $4,000. I know if you put that same money to work for 91 years at a 7% steady compounding return (tax free - but that's another calculation and you get to deduct the taxes on your home and the interest paid so for simplicity's sake we'll consider it an equal calculation) that $4,000 would be worth $2.31Million. I know this house and let me tell you, if it were for sale today you could not buy it for $2.31 Million (waterfront land alone runs $4M an acre on the Gulf in Clearwater). I'm going to say it would move quickly even in this market at that price. Fair market value would run closer to $3.5M possibly a lot more (there's a home a block away for sale for $10M but it's a land issue and I'm not going to do a BPO on it at the moment).

Historically real estate appreciates. The up tick in the curve has past, the dip is now, the plateau is coming - but it will rise again. I suspect the rise part of the graph is 5 years out. I'll vote 9-18 months for the plateau to hit and it will LAST for another 18-24 months before the graph will begin to climb and that will happen more slowly.

Housing will stabilize in spite of the lending debacle - good incomes, interest rates will stay low for the next 17 months (they have to - it's the only prayer the Republican's have of not totally losing the elections to the Dems) plenty of willing buyers waiting to get in, growing pool of renters for investors, and people don't die off as fast on the back end of the population count.

There is no other "investment" (and I don't counsel home buyers on their place to live as an investment but you can't argue the facts on a home purchase as historically floating with inflation and offering leverage.) that can be made with 75% to 97% leverage that floats with inflation(or better). Real estate competes with all other types of investments for dollars in the investment pool and we're in a buyers market at the moment.

Where's the bottom? You'll know it when it's gone. More importantly if you can find a seller with a low basis and an immediate need to sell due to some family/financial circumstance your going to get a great buy RIGHT NOW on YOUR terms right now. If you can make a property cash flow, buy it. Plan for a minimum 5 year hold and don't look back, just collect the rent and pay the debt. You can still get a fantastic fixed interest rate if you have good credit and as low as 25% down (on investment property).

When the market has "hit bottom" the terms benefit will quickly dry up, there will be less property to choose from and you'll be back to bidding against other buyers.

There's no question, you're in the moment now and we all know it. You can't time the bottom. Personally I've started looking for buys and I'm ready to put my cash back in the market for the right deal. I don't buy forclosures, those aren't going to be the "deals" people think they are going to be. For what it's worth,

I also have a client with $200M and they buy land that's sold to home builders. They bank it with a 5-18 year hold. They are shoppping agressively. They are only buying the steals, but they are buying.

Thanks NYChiefs for all the great links and I love the Dr. Bloggers site too! Good stuff. I hope you're not disappointed that my forcast isn't completely gloomy. I just love a sale and everything is on sale!
 
Old 07-16-2007, 11:34 AM
 
458 posts, read 454,082 times
Reputation: 136
The housing bubble blog has an interesting thread about the pendulum effect and housing bubbles. When you look at all the negative factors converging in Florida, it is quite possible we will see the violent price swing from 1999 up through 2005, go drastically in the other direction.

Once momentum builds over the next few years, the prices in parts of Florida may indeed swing back well below 1999 prices. A price decreases from the peak in the most bubbly markets.... Naples, Port Saint Lucie, North Port, Miami condos, just to name a few, will be astounding.
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