Housing Bubble Popped but why aren't the prices reflecting it? (Sarasota: real estate, condo)

[SKB]

It reminds me of the story of the Emperor's New Clothes. Its going to take someone removed from this, to finally point out the the market is experiencing a hard crash after all. The problem left is there is no one to do it.
I really do not trust anyone anymore. Realtors, banks, the NAR all have to much skin in this.

[nitroae23]

One item that hasn't really been touched on is what I call the "perfect storm",slowing economy,rising interest rates,and most of all the ARM resets that will begin in 7 months and last for the next 3 years for people who bought into the "hot" market of '04-05 with 3/1 and 5/1's,the latter factor will be the biggest determiner of price declines,will banks forgive increases and allow them to balloon at selling to keep lid on expanding foreclosures or will they take homes and get into the property management business?I also believe in SW Florida ground zero for a possible meltdown will be Cape Coral,as on top of everything else,theres a sewer improvement thats going to hit H/O's with an additional 18K bill,yikes,they neede to put infrastructure in BEFORE they built the houses!

[JimKing]

Please ignore anyone on here that says there will be no further decreases, etc. They are either realtors or someone trying to unload a house. Florida has barely begun to drop and will go way, way down.

The Palm Beach Post reports from Florida. “April’s existing-home sales report released Friday dashed all hope that the spring selling season would pull the local real estate market out of its post-boom doldrums. The inventory of unsold homes from Boca Raton to Hobe Sound soared to a stunning 43-month supply in April, according to Illustrated Properties Real Estate.”

Similiar inventory levels are present in all of developed Florida. Almost a 4 year supply....and growing. This is going to be very ugly for the next decade.

[hiknapster]

Cape Coral. Ground zero. I do believe Forbes, or somebody, predicted that about a year ago. Worse depreciation in the nation.

Those of us who live or lived there knew that. A economy propped up on service jobs, part-time retirees, lacking any cultural offerings, originally built on a land-selling scheme in the 60s. The Rosen brothers knocked down every tree, created 400 miles of canals and streets, most of which went to nowhere.

Hurricane Charley ran through it and the last of the real estate speculators did their last stand where it really all began. At that point, those that lived there got out or stuck it out. Anyone that bought after that did not do their homework.

I bet it is ground zero.

[dreamofmonterey]

wow. Everyone here has done their homework. A few months before we put our house on the market I worked at a finance company- A young man (age 25 ) B.S. and MBA degree from New Jersey, had just bought some land and was asking me about Palm Beach County.

He was mystified. He said I drove through there- looking to see what business there was. He took US1 all through to Palm Beach. Beautiful beach, mangroves and empty condos. Take a drive along there now- (Before Mar-a Lago) US 1 reflects a European paradise- either you live in John Lennon's 40 million dollar mansion, or the other side of US1 besieged with drug issues. There is no in-between. That is the new economy- parts of S Florida simply reflect this tragedy.

[MrTudo]

People will surrender to 40 and 50 year mortgages thereby putting the final nail into "private property ownership" as only a tiny percentage of new buyers will ever own the land they live on.

Eventually they'll forget what private property meant to the entire society, and within a generation they won't even know how to define it. ( ownership)

That's definitely not a problem restricted to Fla . It's nationwide.

[verobeach]

[quote=SKB;779755]Its going to take someone removed from this, to finally point out the the market is experiencing a hard crash after all. The problem left is there is no one to do it.
QUOTE]


The market itself will dictate where prices will go.

[nychiefsfan]

Originally Posted by JimKing

Please ignore anyone on here that says there will be no further decreases, etc. They are either realtors or someone trying to unload a house. Florida has barely begun to drop and will go way, way down.
This is going to be very ugly for the next decade.

It all boils down to greed. Here's something I just read this morning:

When asked to rate the importance of several factors that might affect their decisions to buy or not to buy a home, survey respondents put the home's price at the top of the list, with 80 percent citing its significance.

That was followed by: the potential for the new home to appreciate in value, 71 percent; the prospect of selling their current home at a fair price, 70 percent; the level of mortgage interest rates, 69 percent; and personal life changes, such as a new job or an addition to the family, 60 percent.

On a list of eight items, news stories on real-estate-market conditions ranked second from the bottom, with 28 percent saying that it was an important factor in their decisions to buy.
Potential home buyers are motivated by price, loan rates and needs - Orlando Sentinel : Home & Garden Potential home buyers are motivated by price, loan rates and needs - Orlando Sentinel : Home & Garden

The remaining buyers who didn't buy at the end of the housing boom are too smart to buy an over-priced house, especially now that it's a supposed "buyer's market".

It's only a buyer's market, due to the amount of available homes to choose from. From a monetary point-of-view, the prices still reflect what people paid for their houses at the end of the boom. What fool is willing to pay that amount, knowing that the law of supply and demand will eventually lower the prices to (or near) 2002 prices?

The bottom line is price. That's why there's the current stalemate between existing homeowners and potential home buyers. Fortunately, new home builders have recently slashed their prices while offering upgrades and warranties, which will force existing home owners to try to match such an attractive deal. Some won't be in a financial position to lower their asking price much more than what it's listed at, but the ones who bought before 2003 have the ability to do that and will be the first to lower their expectations.

This is going to get really interesting. The supposed "bottom" of the market is no where in sight.

[info please]

I am happy to be a renter now I will be leaving the state end of this year .Looking forward to a fresh start . As far as the homes here in FL.I feel way overpriced. I feel if you over pay .How you gonna sell down the road .What will happen when the intrest RATES rise .

[Hondax]

Everything talked about makes sense, in that we have a long way to go before housing prices bottom. I'll be ready to buy in a year or two and the best advice I've heard is RENT FIRST , then watch and wait. At least in the Jupiter and PBC area I noticed that condo's and town homes are selling lots better than single family homes. Single family home inventories are near record highs and just aren't selling, despite a 10 to 15% decrease in price.

As mentioned by someone here, if we experience a recession caused by any number of factors, Florida will be in dire straights. Unemployment will rise, foreclosures will rise. What will the future hold........

Good stuff here,....thank you!