U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > U.S. Forums > Florida
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Closed Thread Start New Thread
 
Old 05-20-2007, 10:06 PM
 
Location: Alaska
6 posts, read 14,643 times
Reputation: 12

Advertisements

Okay, After following this site since December when I decided to move back to Largo after a 20 year military career, I figured it's time to jump in and comment on many of the hot topics I've seen posted.

1. Why are real estate prices so high and why aren't homes selling. As if I really have to answer this one.
The prices got high because any investment is actually the purchase of a future value. Folks ran up the prices in relatively short order because they perceived the prices would continue to appreciate at rates of 10 to 14% indefinitely. Lots of this was superficially initiated by Alan with the availability of Cheap Money. Now here we are in 2007. The buyers are still acting on the same premise of buying future value; that has not changed. They are not seeing the future value in the same terms that the sellers saw when they purchased. Sellers are now blaming the tax man and the insurance companies for their inability to sell. This is misplaced blame to some degree. Sure the taxes are high, and the insurance pricey, but if buyers believed their leveraged investment purchase of 300000 would rise to 400000 in 3 years while providing a comfortable place to live for 3 years, they wouldn't bat an eye in paying the insurance and the taxes. They would only see the future value of their investment. Equate that to the stock market. If a given fund was set to rise 25% per year for the next 3 years, but the glitch was that I had to pay a 8% ownership fee per year; so what, I'm still jumping in.

When the market was appreciating, overpriced properties would still sell. The theorey was that todays overpriced property is tomorrows bargain and you will eventually step into the price. In a depreciating market, buyers will still buy, but they will wait for prices to adjust or they will do what the seller believes to be an insult; "Lowball". To sell in a depreciating market one must patiently create the smartest buy in the neighborhood. You have to absoultely present the best perceived value relative to the competition. I see it in Lutz and Wesley Chapel. 4/3/3 2400 sq ft for 38900. I see no Logic here as the market is already "Super Saturated" with virtually identical homes.

The ext step is to blame the realtor; He/she is not marketing my overpriced house. He/She is not showing my house. Blah blah blah. It's nonsense. Lower the price by 30 thousand dollars and see how many qualified buyers will take a look.

All for now; Please comment both positive and negative. Let's get a lively discussion going on here.

Mike

 
Old 05-20-2007, 10:38 PM
 
Location: Heartland Florida
9,324 posts, read 23,821,237 times
Reputation: 4901
I just wish that people would stop thinking of property as an investment. Homes should be worth the cost of the land + the cost of construction. Homes deteriorate and should depreciate unless constantly maintained. Florida has always been the land of dreams and suckers, hopefully the supply of suckers has dried up for a while.
 
Old 05-21-2007, 04:09 AM
 
Location: US
3,092 posts, read 3,455,623 times
Reputation: 1639
My father in law bought 10 acres near the airport 30+ years ago for peanuts, and now has a contract for nearly $2 million. We bought our house in 1996 for $84,000 which is our primary residence, and then I would have thought you were nuts if you would have told me that today the going price in the community for the same house is three times that amount. My father in law also bought 500 acres just a few years ago, and now is receiving unsolicited offers for a lot more than he paid for it. He also owns several homes in Orlando, one of which is on a lake. His return, even at the lowest point, is going to be huge.

I don't think we're suckers. If you think we are, then we are going to smile very nicely at you all the way to the bank.
--------
"I just wish that people would stop thinking of property as an investment. Homes should be worth the cost of the land + the cost of construction. Homes deteriorate and should depreciate unless constantly maintained. Florida has always been the land of dreams and suckers, hopefully the supply of suckers has dried up for a while."
 
Old 05-21-2007, 04:26 AM
 
Location: Lakeland, FL
523 posts, read 2,632,263 times
Reputation: 185
Homes are investment, but Pinellas, Hillsborough, Manatee, Sarasota, and now Pasco have been overpricing the homes for past 5 yr. This is why I moved to Polk County, Lakeland. I got discouraged looking in those counties the prices were almost double what new homes in Lakeland cost.
The builders here last year started raising the prices for first time, I guess because of increasing cost of building supplies. That is what they told me.
But our subdivision is finally finished, and the last 6 houses were given away.
a brand new 2 story 2500, with upgrades went for 202. Which shocked me.
THey sold within one week of being put on market. I was wondering why so many people are in here from NY, NJ. These homes were 171,000 when construction started April 2005. The surrounding builders are at stand still,
except for one builder , who is selling like crazy their lots with home, up the road. starting at 170 for the new homes. So the highpriced builders are not building.
 
Old 05-21-2007, 06:09 AM
 
Location: Central Florida
800 posts, read 2,813,263 times
Reputation: 305
Quote:
Originally Posted by masc243 View Post
Okay, After following this site since December when I decided to move back to Largo after a 20 year military career, I figured it's time to jump in and comment on many of the hot topics I've seen posted.

1. Why are real estate prices so high and why aren't homes selling. As if I really have to answer this one.
The prices got high because any investment is actually the purchase of a future value. Folks ran up the prices in relatively short order because they perceived the prices would continue to appreciate at rates of 10 to 14% indefinitely. Lots of this was superficially initiated by Alan with the availability of Cheap Money. Now here we are in 2007. The buyers are still acting on the same premise of buying future value; that has not changed. They are not seeing the future value in the same terms that the sellers saw when they purchased. Sellers are now blaming the tax man and the insurance companies for their inability to sell. This is misplaced blame to some degree. Sure the taxes are high, and the insurance pricey, but if buyers believed their leveraged investment purchase of 300000 would rise to 400000 in 3 years while providing a comfortable place to live for 3 years, they wouldn't bat an eye in paying the insurance and the taxes. They would only see the future value of their investment. Equate that to the stock market. If a given fund was set to rise 25% per year for the next 3 years, but the glitch was that I had to pay a 8% ownership fee per year; so what, I'm still jumping in.

When the market was appreciating, overpriced properties would still sell. The theorey was that todays overpriced property is tomorrows bargain and you will eventually step into the price. In a depreciating market, buyers will still buy, but they will wait for prices to adjust or they will do what the seller believes to be an insult; "Lowball". To sell in a depreciating market one must patiently create the smartest buy in the neighborhood. You have to absoultely present the best perceived value relative to the competition. I see it in Lutz and Wesley Chapel. 4/3/3 2400 sq ft for 38900. I see no Logic here as the market is already "Super Saturated" with virtually identical homes.

The ext step is to blame the realtor; He/she is not marketing my overpriced house. He/She is not showing my house. Blah blah blah. It's nonsense. Lower the price by 30 thousand dollars and see how many qualified buyers will take a look.

All for now; Please comment both positive and negative. Let's get a lively discussion going on here.

Mike
I just put in an offer on a home for a client yesterday. The home has been on the market for a year at $399,900. They lowered it twice, then on Friday lowered it to $310K. The property had several showings and my client's offer went in yesterday. I might add, the seller bought the home new in 2002 for $179K. If the seller priced the home right a year ago, they'd have sold it sooner and not had to support the property for an entire year.

In my market now, one in ten homes on the market are selling. We are selling about the same number of homes as last year but the difference is that the number of listings is so high. Many of those listings are by seller's who are testing the waters and will sell IF they get thier price. Others are speculators who bought hoping to make a killing and cannot support the property any longer but they want top dollar back. Many are selling because they bought a loan that is nasty and cannot afford the higher ARM rates.

I know someone in foreclosure wanting top dollars but needed the house to sell in 30 days since that was the date the Court gave them to sell. I declined the listing because I cannot sell that home at that price in 30 days and I know it.

It's an interesting market. Those in good financial shape are buying and making good deals since they have so much to choose from.

The bigger issue with the housing market is that the news media speaks doom and gloom in a strong economy. My first home was bought during the Carter administration. My interest rate was 14.75% and that was a prime loan at that time. Many were paying much higher rates on homes in that era. Today, rates are great, unemployment is low, and the stock market is amazing. However, lenders are cracking down on those voodoo loans that have been so popular the past few years.

Lenders are being very cautious about loaning money to compensate for the past few years.

If you have reasonable credit scores and cash to close, you can get a loan. The other day, someone needed preapproved for a loan with a 520 mid score and $420 cash assets and they wanted to purchase a $300K house. It was just not going to work!

If you need to sell, price your home to sell and you should find a buyer in a reasonable time. There are now quick sales unless you price well under market. Buyers have so many homes to choose from and with all those speculators (or would-be investors that just can't fund thier investment), there will be some very good deals out around.
 
Old 05-21-2007, 06:18 AM
 
Location: Southeast Cape Coral
93 posts, read 260,821 times
Reputation: 17
Quote:
Originally Posted by carolac View Post
My father in law bought 10 acres near the airport 30+ years ago for peanuts, and now has a contract for nearly $2 million. We bought our house in 1996 for $84,000 which is our primary residence, and then I would have thought you were nuts if you would have told me that today the going price in the community for the same house is three times that amount. My father in law also bought 500 acres just a few years ago, and now is receiving unsolicited offers for a lot more than he paid for it. He also owns several homes in Orlando, one of which is on a lake. His return, even at the lowest point, is going to be huge.

I don't think we're suckers. If you think we are, then we are going to smile very nicely at you all the way to the bank.
--------
"I just wish that people would stop thinking of property as an investment. Homes should be worth the cost of the land + the cost of construction. Homes deteriorate and should depreciate unless constantly maintained. Florida has always been the land of dreams and suckers, hopefully the supply of suckers has dried up for a while."
Holding land at the cost of today you will be at the bank to pull money for taxes and ins. have someone fall on your land and you will see.
 
Old 05-21-2007, 06:18 AM
 
Location: Central Florida
800 posts, read 2,813,263 times
Reputation: 305
Quote:
Originally Posted by carolac View Post
My father in law bought 10 acres near the airport 30+ years ago for peanuts, and now has a contract for nearly $2 million. We bought our house in 1996 for $84,000 which is our primary residence, and then I would have thought you were nuts if you would have told me that today the going price in the community for the same house is three times that amount. My father in law also bought 500 acres just a few years ago, and now is receiving unsolicited offers for a lot more than he paid for it. He also owns several homes in Orlando, one of which is on a lake. His return, even at the lowest point, is going to be huge.

I don't think we're suckers. If you think we are, then we are going to smile very nicely at you all the way to the bank.
--------
"I just wish that people would stop thinking of property as an investment. Homes should be worth the cost of the land + the cost of construction. Homes deteriorate and should depreciate unless constantly maintained. Florida has always been the land of dreams and suckers, hopefully the supply of suckers has dried up for a while."

Your dad did what investors do. They buy and keep the property for awhile and make it profitable by virtue of appreciation.

Investors that buy depressed property, fix it up are making money too.

Speculators they buy new homes and want to sell while the builder is still building are hurting.

Congratulations to your dad for his investment success!
 
Old 05-21-2007, 07:45 AM
 
Location: US
3,092 posts, read 3,455,623 times
Reputation: 1639
Don't worry - he's got it covered.

Quote:
Originally Posted by floridamove2 View Post
Holding land at the cost of today you will be at the bank to pull money for taxes and ins. have someone fall on your land and you will see.
 
Old 05-21-2007, 08:00 AM
 
58 posts, read 172,741 times
Reputation: 29
Thumbs up Yeap

Quote:
Originally Posted by tallrick View Post
I just wish that people would stop thinking of property as an investment. Homes should be worth the cost of the land + the cost of construction. Homes deteriorate and should depreciate unless constantly maintained. Florida has always been the land of dreams and suckers, hopefully the supply of suckers has dried up for a while.
Makes sense.
 
Old 05-21-2007, 08:15 AM
 
58 posts, read 172,741 times
Reputation: 29
Default "suckers" vrs "investors"

Quote:
Originally Posted by carolac View Post
My father in law bought 10 acres near the airport 30+ years ago for peanuts, and now has a contract for nearly $2 million. We bought our house in 1996 for $84,000 which is our primary residence, and then I would have thought you were nuts if you would have told me that today the going price in the community for the same house is three times that amount. My father in law also bought 500 acres just a few years ago, and now is receiving unsolicited offers for a lot more than he paid for it. He also owns several homes in Orlando, one of which is on a lake. His return, even at the lowest point, is going to be huge.

I don't think we're suckers. If you think we are, then we are going to smile very nicely at you all the way to the bank.
--------
"I just wish that people would stop thinking of property as an investment. Homes should be worth the cost of the land + the cost of construction. Homes deteriorate and should depreciate unless constantly maintained. Florida has always been the land of dreams and suckers, hopefully the supply of suckers has dried up for a while."
If one bought in 1996-2003 with the intent of selling and actually did sell and made 3x their "investment" then they are investors.

If one bought in 2005-2007 thinking that they were going to make a killing, then they are a "fool."
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Closed Thread


Options
X
Data:
Loading data...
Based on 2000-2016 data
Loading data...

123
Hide US histogram

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > U.S. Forums > Florida
Follow City-Data.com founder on our Forum or

All times are GMT -6. The time now is 07:28 PM.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top