[info please]

new housing was up due to prices being lowered . I looked at a house yesterday it was 399.000 now 349.000 it's new offer by the builder. also when the rates go up that will change things.

[swfl]

Unfortunately, a lot of people refinanced to the hilt at 2005 values or bought their homes at 80-100 percent financing...so they can't drop their prices much without incurring a substantial loss. They are "stuck" basically because buyers know that the prices will be and are dropping. Only the developers have pricing power...they can drop their prices on new homes without a loss....with a smaller profit margin though. They can undercut all those speculators who bought within the very same developments at much higher prices.

[nychiefsfan]

Originally Posted by info please

new housing was up due to prices being lowered . I looked at a house yesterday it was 399.000 now 349.000 it's new offer by the builder. also when the rates go up that will change things.

And new housing was actually down 10.9% from last April. The Census Bureau forgot to mention that number!!!

The National Association of Home Builders housing market index that rates builders confidence in the new home sales market fell three points to 30 on May 15th. That reading matched the figure for last September, which was the lowest since February 1991.

Now, the Census Bureau is trying to tell us that home sales "jumped 16%". It's amazing that they can "jump" so much with the low confidence of the people building the homes.

Some of these organizations must think we're fools!!!

[Obrero]

We were at a realtors yesterday in Sarasota and he told us flat out that Sarasota has reached the bottom and started it's slow climb back up. He said March of '07 was much better than March of '06. Things still look extremly over priced to me. Still, this is from a local Sarasota real estate magazine:

BEST LOCAL REAL ESTATE MARKET SINCE MAY 2006
The Sarasota Real Estate market rebounded in March 2007, with the best sales figures in 10 months, reinforcing recent expectations that the market is in recovery from a decline that bottomed out in the fall of 2006.
Total combined sales of single family homes and condominiums rose to 653 in March 2007, compared to February 2007, climbing by 51 percent. Pending sales also show a brighter furture ahead for the Sarasota market. There were 383 pending sales in January 2007, 565 pending sales in February 2007,and 705 pending sales in March 2007. Closed transactions increased in each of those months. This information was obtained from the Sarasota Realtor Magazine.

[pslOldTimer]

Originally Posted by nychiefsfan

Here's an example of what's posted on the Hillsborough County Property Appraiser's page:

Value Summary
Building Value $251,090
Extra Feature Value $27,440
Land Value (Market) $83,104
Land Value (Agriculture) $0
Just (Market) Value $361,634
Assessed Value (A10) $257,153
Exempt Amount $25,000
Taxable Value $232,153


Sales HistoryOff. Record Date TypeInst Qualified or Unqualified Vacant or Improved Sales Price
Book Page Month Year
XXXXX YYYY 2003 WD Qualified Improved $160,200

I figured that was where you were getting your numbers. That's why I added the information that this number has no relationship to real market value.

Originally Posted by nychiefsfan

The assessed value, just market value and tax value are all different numbers.

Yes, there are. The reason is simple. The property is appraised based on a combination of values -- land value and building value and "extra features" value. These numbers are added together to get Just value. As I stated before, these numbers are minus commissions and selling costs -- that in itself can add as much as 10% to the actual selling price. Further, the land is appraised based on averages for the land in the area -- without taking into account desirable features like a view or negative features like proximity to a railroad track. The building value is based on a cost per square foot basis without regard for style or desirable features or marketability -- much like an insurance agent arrives at replacement cost. The building value is then depreciated by age, something that may not apply in the real market. Finally, the "extra features" are items like a swimming pool.

The result has no relationship to what the actual market will or wll not pay for a property. All you have to do is attend some hearing where folks are appealing their assessments. Back when prices were stagnant, you'd hear things like, "If you think it's worth that much, I'll sell it to you for that." The assessment board would then patiently explain that the market value they assessed had no relationship to the real market. It is more a number that is used to establish relative values between properties for purposes of taxation.


The assessed value is different than the Just value because of the Save Our Homes legislation and the 3% cap on increases in assessment. The difference between the Just value and the assessed value is a good indication of how much the owners are getting away with because they have lived there for a while. In your example, it is more than $100,000 that should be taxes, but is not because of Save Our Homes. The taxes on other homes in the neighborhood are higher because they have to make up this difference.

Finally, the taxable value is the assessed value after subtracting the Homestead Exemption, another welfare giveaway for people who have no other qualification other than they have established residency.

If you examine a house owned by a landlord for rental, your Just value and assessed value will be much closer together because there is no SOH cap on rental properties, and the assessed value and taxable value will be the same because there is no Homestead exemption on rental properties.

So, back to your original question -- the reason why sales prices are different than Just Market Value is because Just Market Value has absolutely nothing to do with everyday, real market value. It's just a number used by the property assessor.

By the way, my son is a certified real estate appraiser and a regional manager of appraisers for a major national bank. This is a common question he gets from homeowners.

[JimMe]

The wild card in all these projections of the housing market is the retirement of the baby boomers. House prices are governed by the law of supply and demand. Right now demand has dried up and so prices are declining. But when the boomers retire (beginning next year) and they head to Florida we can expect them to start bidding up the prices. If that happens, it may be that the real estate bust will be short-lived.

[nychiefsfan]

Originally Posted by pslOldTimer

back to your original question -- the reason why sales prices are different than Just Market Value is because Just Market Value has absolutely nothing to do with everyday, real market value. It's just a number used by the property assessor.

Good answer, even though you sound like a realtor! It still boils down to over-pricing. What you're saying is there's a reason why people are asking so much for their homes and it has nothing to do with "Just Market Value".

Here's the reason: GREED!

The Hillsborough County Property Appraiser's website defines "Just Market Value" as "the most probable sales price your property would bring in a competative and open market."

Why would it have that as a definition if it wasn't applicable? Does your son use the same definition?

In my opinion, everyday, real market value is dropping. Just Market Value, at least, gives you somewhat of a baseline to work with in a competative market, which it isn't. The competative market was 3 years ago. The prices should reflect a buyers market, which they're not.

The values that you mentioned, like property, swimming pool, etc, have appreciated over 100% in 3-5 years. That's insane!!!

What's your opinion of what a house is valued compared to it's selling price? Of course, I realize there's a ton on intangibles such as location, the quality of schooling in that area, extras like a spa or pool, but in general, are the selling prices justified in FL?

[nychiefsfan]

Originally Posted by UKOK

We were at a realtors yesterday in Sarasota and he told us flat out that Sarasota has reached the bottom and started it's slow climb back up. He said March of '07 was much better than March of '06. Things still look extremly over priced to me. Still, this is from a local Sarasota real estate magazine:

BEST LOCAL REAL ESTATE MARKET SINCE MAY 2006
The Sarasota Real Estate market rebounded in March 2007, with the best sales figures in 10 months, reinforcing recent expectations that the market is in recovery from a decline that bottomed out in the fall of 2006.
Total combined sales of single family homes and condominiums rose to 653 in March 2007, compared to February 2007, climbing by 51 percent. Pending sales also show a brighter furture ahead for the Sarasota market. There were 383 pending sales in January 2007, 565 pending sales in February 2007,and 705 pending sales in March 2007. Closed transactions increased in each of those months. This information was obtained from the Sarasota Realtor Magazine.

There's a few really good realtors out there but most that I've met keep justifying why now is the time to buy (for 2 reasons: 1. So they can make a higher commission while the prices are still high. and 2. They have sales quotas they need to meet).

I also read that the Sarasota area was doing well in regard to home sales. I don't think it can sustain itself. We're going to see small regional spikes in demand, especially in the next few months of summer, but the overall outlook doesn't look promising if you're a realtor or home builder. That's why they want you to buy NOW.

[Obrero]

Originally Posted by nychiefsfan

I also read that the Sarasota area was doing well in regard to home sales. I don't think it can sustain itself. We're going to see small regional spikes in demand, especially in the next few months of summer, but the overall outlook doesn't look promising if you're a realtor or home builder. That's why they want you to buy NOW.

I totally agree. I should add that I first contacted a realtor (a different one) a year ago and he told me then it was a great time to buy and he thought we had already hit bottom. Yeah ok whatever. I will be interested to see how the next few months play out in Sarasota in terms of YOY inventory and sales. I think this increase in sales is a spike that will not be sustained. As we say in NJ - even a dead cat bounces!

[rxt]

It's interesting reading all of the articles about how much prices have dropped, because it's very misleading. In our city, the percentages are very different from one zipcode to another and even within our zipcode, there are substantial differences between subdivisions (some are more desirable and in more demand than others). Just in our subdivision, one house has dropped it's priced $150k and hasn't sold, while several other homes have only dropped their prices $10-$20k and have sold. People prefer one house style to another or one lot location vs another. The price of a house is based on supply and demand. Some houses will sell quicker and at a better price because they've been fixed up, in a better location, etc while other homes will need to be discounted if they're on a less desired lot or haven't been updated.

I read how people say they're not going to buy a home unless the market drops 25 or 50%. That's great, but what happens if the market only drops 15% and then rebounds... are you going to rent for the rest of your life? Or what happens if home prices do drop 25%, but interest rates spike to 9 or 10%? You now might not be able to qualify for that home. I'm not a realtor, but I think people need to look at the big picture. Nobody can accurately predict long term what is going to happen with home prices, interest rates, etc. If you can find your dream home now for a good NEGOTIATED price and lock in at around a 6% 30 yr fixed rate mortgage and you can afford your monthly mortgage payments.... why gamble on your housing future..... unless you like living in an apartment and not having any tax deductions.