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

[JimKing]

The Miami Herald. “Tom Murphy Jr. is CEO of Coastal Construction, a general contracting firm in Miami building many of the high-rises going up across South Florida.”

“Q: So you have reduced the number of condos you are doing as it relates to your overall business. Why?”

“A: For condos, five years ago the market was on fire, and we made the decision to try and reduce the amount of condo work we’re doing as a percentage of our business. I think a lot of people built their business on condos because it was easy to get the business.”

“You try to read the future, but you know one thing for sure when a market is so heated up, it won’t last forever.”

“Now, the number of condo developers looking for general contractors has shrunk. It has significantly shrunk. Fallen off a cliff when compared to the last five years.”

“Q: For general contractors that are largely focused on condos is that downturn creating changes in the market?”

“A: We are seeing a lot of movement because guys that only build condos are starting to feel the slowdown that is coming. A lot of these people see what is happening, and they know the company has never built a school or an office building. It’s kind of like rats jumping off a sinking ship for some of them.”

Lee County’s current real estate market.”

“First, the facts: Residential inventory is still near its all time high. Residential sales are roughly equal to the sales rate of 1999. Prices are down, down and down from the high of 2005.”

“Foreclosure filings are up, up and up – by some counts, at six times that of 2006. The property insurance and property tax crises remain unresolved at the time of this writing. The residential downturn is having the expected effect on commercial real estate. The number of people moving into Lee County is down by as much as 30 percent.”

[JimKing]

“The builder’s unsold inventory that is hitting the market at heavy discounts will continue for another year. Foreclosures and short sales will continue beyond that.”

“A Realtor told me his clients were waiting it out. Their investment properties that were purchased pre-construction in 2005 were listed, but at prices that would allow them to break even. However, their prices are above what the developer is offering, and what the market is willing to pay.”

“What his clients fail to realize is that they have already made a bad investment and waiting to sell just makes it that much worse.”

The St Petersburg Times. “If you need a construction-related permit for work in unincorporated Hillsborough County, you may not want to wait until a Friday to request it.”

“The county will be closing its Building Services Division offices every other Friday starting June 15. The closings are a cost-saving measure in response to the sharp downturn in housing construction.”

The Naples News. “In Collier County, commissioners have given the green light to nearly 5,500 affordable housing units since the end of 1999. Fewer than 1,500 of those units have been built, according to county records.”

“‘The houses are just not being built that we approved,’ Collier County Commissioner Fred Coyle said.”

“Coyle wonders whether the delays are market-driven. ‘People are just reluctant to begin building at a time when prices are down and demand is down,’ he said.”

“Several affordable projects that have yet to be built also include market-rate housing, a much tougher sell these days. That may give developers a reason to drag their feet. ‘It is more complicated when the affordable housing is merely a component of a larger housing development because the demand for other types of housing is not as great,’ Coyle said.”

“Phil McCabe, a longtime Naples businessman and developer, believes some of the approved projects won’t get built for ‘many, many years to come’ because of a slower real estate market. ‘I think they’re just frozen in their tracks,’ he said.”

[JimKing]

One more...I can find you hundreds of real life reports:

Reporting from Clearwater Beach, Fl 33767. Don’t believe a word about a silver lining. Things are bad and getting worse. NOTHING on the beaches is selling. The For Sale signs are getting yellow. The Auction signs are getting more numerous. They are now inserting 28-page real estate supplements in the local Beach Bee weekly paper. It is June and the beach is dead quiet. The torn down hotels are now empty lots. I’m thinking of contacting my landlord to reduce my rent. Why not? I’ve got hundreds of rentals to choose from between North Redington and Clearwater Beaches. The buildings Board of Directors just posted that there has been another huge increase in the buildings insurance - $83K a year for 30 units - and to expect a big increase in the monthly fees. Three units have been for sale in this building for the last eight months. Several open houses - but I don’t see anyone coming by to look. Don’t believe a word these real estate shills are spouting. There will be no turn-around until 2010 at the earliest.

[kelly3120]

ahaha! you think I'm a realtor. makes me giggle!
I am a a music professor ...but thanks for making me laugh.

You couldn't pay me enough to be a realtor and I lack patience in selling my home, why would I want to sell others homes?

...but there you go spitting out statsagain, look at your surrounding neighborhood and home sales ...silly billy

gypsychic

good luck in selling. From what I understand, Fall is the slowest of selling times, because people are busy w/ holidays.

....I learned that in my realtor courses ...oppps I mean music courses ....oppps awh, now you all know all I'm a realtor disguised as a musician. ahahaah!
have a good night Larry King ...I mean Jim King!


p.s. open houses are ineffective and always have been. Stats(ohh boy) show that open houses sell 1 % of homes and that's not just in 2007

[gypsychic]

LOL - I ain't no realtor, neither, but I have always bucked the trend and done what I want and came out fine! Like for instance, way back in 1980 when interest rates were about 14 or 15% I moved to Sarasota and managed to buy a 1920's big old Spanish fixer - owner finance - and fixed it up a bit. We sold it two years later for double. And this was in just as bad a market as we got now.

Kelly, for personal reasons, we must wait until late summer, early fall to sell and buy, but I'm not worried. My property will be priced very attractively, and there is not much like it ever for sale in my area.

So, once again, I say people should do what they want and statistics be d*mmed! Just don't get in over your head and you will be fine! If you have any doubts or can't afford to do it, then DON'T! It is really as simple as that.

[kelly3120]

gypsychic!

Yup, Go against the trend!!!! ....just cause everyones doing it doesn't make it right. =)

Hey Good luck w/ house sales!!

[bls5555]

I didn't read all of this but people who say that things are starting to look up in Florida obviously don't know what is going on in most areas.

Some areas yes. Here are the NAR 1st quarter 2007 home prices (the % is 1 yr change)

Sarasota-Bradenton-Venice FL 337.0 -12.0%

Palm Bay-Melbourne-Titusville FL 191.3 -8.0%

Deltona-Daytona Beach-Ormond Beach FL 197.0 -7.3%

Cape Coral-Fort Myers FL 256.9 -3.9%

Tampa-St.Petersburg-Clearwater FL 203.2 -2.0%

Pensacola-Ferry Pass-Brent FL 163.1 -0.2%

Jacksonville FL 197.6 1.0%

Miami-Fort Lauderdale-Miami Beach FL 385.3 2.0%

Orlando FL 267.0 2.5%

Gainesville FL 216.4 3.0%

Ocala FL 167.9 5.1%

so yes some are rising but some are having severe drops. If an area is dropping 13% and 8% in 1 yr, it will not be correcting itself anytime in the near future.

[nychiefsfan]

Does anyone want to make a Fall 2007 prediction? Seeing how the comments are time stamped, it'll be interesting to see how everyones predictions fare out.

I'm especially curious about the predictions of people who say the market is getting better, but all predictions are welcome!!!


1. Will the housing slump see the "bottom" by Fall 2007 or has it not arrived? Predict the "bottom" arrival.

2. How do you think the new home and existing home inventories will fare by the Fall of 2007?

3. Will existing home owners remain firm in their asking prices or will they start dropping their prices a little bit more?

4. Will the economy fare better or will be still be heading toward a recession?

5. Where will the interest rates go? Up, down or remain the same?

[SKB]

I think this thread by far will be the most read thread in the history of this blog.

I think this thread will stay in the top ten well after the fall of 2007.

I have already given my predictions for the crash for this fall and beyond.

[kelly3120]

what a fun game

I don't know enough about some of these questions. so I can't answer some But I'll watch for other predictions.

I think economy is on it's way up, but you never know what's gonna happen in this world so I don't have a answer.

In any market ....after a certain amount of time, prices lower in home selling so werid question. But even with that I think some will stick w/(or around) their prices(usually the nicer homes) and some will give in and lower a great amount.

I perfer existing homes, due to character and less "cookie cutter" neighborhoods ...that's all personal preference. Many people prefer the community pool, HOA and no land compared(which usually is in new home communities) to no HOA, more land and personality. I think most people prefer newer homes ...I prefer the home we just bought which is a 1988 home. I think existing homes were built better. Cinder block holds up well!!!

...that's all I gots! =)