Housing Bubble Popped but why aren't the prices reflecting it? (Boynton Beach: real estate, rental)

[Mike Peterson]

Originally Posted by UKOK

Funny line Mike.

Calm down. I didn't accuse you of anything. I merely made an observation, nothing more, nothing less.

You said

"Yes, I noticed you ignored the fact that, in many cases, high end houses are cheaper to rent than buy."


You accused me of ignoring something you were talking about when in fact I was replying to someone else about something completely different.

Don't feel left out if I reply to someone else. If I feel you posted something else worthy of a reply you will know.

[UKOK]

Originally Posted by Mike Peterson

You said

"Yes, I noticed you ignored the fact that, in many cases, high end houses are cheaper to rent than buy."


You accused me of ignoring something you were talking about when in fact I was replying to someone else about something completely different.

Don't feel left out if I reply to someone else. If I feel you posted something else worthy of a reply you will know.

Yes and that is called an observation. You can tell by the way I said "I noticed" in my original post.

Like I said before, calm down. Nobody accused you of anything.

Oh, and you just replied to me, so my post must be worthy.

[lostbuyer]

Originally Posted by Mike Peterson

You are completely off the mark though.
Homes, such as the one that we are discussing, will not be affected by the subprime lending breakdown or tightened standards anywhere near as much, if at all, compared to homes in the median price range.

I dont think they will be hit as hard as cheaper homes, but still nowhere near safe...I said it before I will say it again if west l.a. has foreclosures what makes people think anywhere in florida is safe... look at this....... “Condominium sales in Hillsborough County are down 49 percent, reports the Greater Tampa Association of Realtor’s May 2007 year-to-date statistics. Recent new home sales statistics for the Tampa Bay area were not available, but existing home sales were down 42 percent in May compared to a year ago.”

“Venetian Isles has long been known as one of the most attractive waterfront communities in southern Pinellas County. In three cases, though, the homeowners association is having a hard time finding the owners.”

“‘A lot of you have been calling to question what is going on with the home on Overlook Drive with the overgrown lawn, and a few other properties,’ president Jim Pelletier wrote in the current newsletter. ‘Believe me, we are very aware of them and involved with them.’”

“The association is dealing with an increasingly familiar problem in the Tampa Bay area as the housing bubble deflates. Many expensive homes were financed for 100 percent of the purchase price and are now falling into foreclosure and disrepair because the absentee owners can’t - or won’t - make the hefty mortgage payments.”

“In Venetian Isles, concern first arose over a house on Carolina Drive whose ‘owners,’ say their signature was forged without their knowledge on $930,000 in loans. The lawn is nearly dead and the house, now vacant, is in foreclosure proceedings.”

“The association has sued the owner of another house, this one on Overlook Drive, the main entrance to the 533-home subdivision on Tampa Bay. Last week, the grass was knee-high and the house was vacant, as it has been intermittently for months.”

“Public records show that the home was purchased in November for $1,050,000, almost $275, 000 more than for comparable sales during the peak of the real estate boom in 2004-2005. The property was financed for the full amount by Virgil Dennard, who showed a California driver’s license as identification.”

“Dennard does not live in the house, and mail sent there was returned as ‘undeliverable,’ according to the association’s law firm. Nor does Dennard live in another house he bought about the same time on Boca Ciega Bay in the South Pasadena area. He financed that for $1.275-million, $25,000 more than the publicly recorded sales price.”

“The sellers of both houses mortgaged in Dennard’s name say the person they dealt with was not Dennard, but a man named Tommy Watts. ‘He called himself an investor,’ said Robert Learned, one of the sellers. ‘He was kind of vague, he didn’t seem to want to talk about what he did.’”

“It’s such a dilemma when we have these absentee owners who are in violation and we have more than 500 other owners who just don’t understand,’ says Linda Testa, head of the deed restrictions committee. ‘There’s nothing we can do but contact the owner, but when we can’t find the owner, it’s a real problem.’

[tallrick]

Originally Posted by Mike Peterson

You do amuse me sometimes.
I understand everyone has their personal likes and dislikes but to call that home a shack is interesting to say the least.
The lots in there are selling for over $300,000 so to say $300,000 is a stretch is ridiculous.

It's cheaper and nicer. Not my price range, but more desireable I think. There's just no justification for those overpriced tract homes, period. In fact I know where there's a distressed home on 2.5 acres that could be picked up for around 400K, but who wants to pay 8,000 or more in taxes every year? I can understand oceanfront, bayfront or canalfront with ocean access being expensive. But to pay big money to live inland in a place with HOA and homes packed close to each other is just insane.

[Mike Peterson]

Originally Posted by lostbuyer

I dont think they will be hit as hard as cheaper homes, but still nowhere near safe...I said it before I will say it again if west l.a. has foreclosures what makes people think anywhere in florida is safe... look at this....... “Condominium sales in Hillsborough County are down 49 percent, reports the Greater Tampa Association of Realtor’s May 2007 year-to-date statistics. Recent new home sales statistics for the Tampa Bay area were not available, but existing home sales were down 42 percent in May compared to a year ago.”

“Venetian Isles has long been known as one of the most attractive waterfront communities in southern Pinellas County. In three cases, though, the homeowners association is having a hard time finding the owners.”

“‘A lot of you have been calling to question what is going on with the home on Overlook Drive with the overgrown lawn, and a few other properties,’ president Jim Pelletier wrote in the current newsletter. ‘Believe me, we are very aware of them and involved with them.’”

“The association is dealing with an increasingly familiar problem in the Tampa Bay area as the housing bubble deflates. Many expensive homes were financed for 100 percent of the purchase price and are now falling into foreclosure and disrepair because the absentee owners can’t - or won’t - make the hefty mortgage payments.”

“In Venetian Isles, concern first arose over a house on Carolina Drive whose ‘owners,’ say their signature was forged without their knowledge on $930,000 in loans. The lawn is nearly dead and the house, now vacant, is in foreclosure proceedings.”

“The association has sued the owner of another house, this one on Overlook Drive, the main entrance to the 533-home subdivision on Tampa Bay. Last week, the grass was knee-high and the house was vacant, as it has been intermittently for months.”

“Public records show that the home was purchased in November for $1,050,000, almost $275, 000 more than for comparable sales during the peak of the real estate boom in 2004-2005. The property was financed for the full amount by Virgil Dennard, who showed a California driver’s license as identification.”

“Dennard does not live in the house, and mail sent there was returned as ‘undeliverable,’ according to the association’s law firm. Nor does Dennard live in another house he bought about the same time on Boca Ciega Bay in the South Pasadena area. He financed that for $1.275-million, $25,000 more than the publicly recorded sales price.”

“The sellers of both houses mortgaged in Dennard’s name say the person they dealt with was not Dennard, but a man named Tommy Watts. ‘He called himself an investor,’ said Robert Learned, one of the sellers. ‘He was kind of vague, he didn’t seem to want to talk about what he did.’”

“It’s such a dilemma when we have these absentee owners who are in violation and we have more than 500 other owners who just don’t understand,’ says Linda Testa, head of the deed restrictions committee. ‘There’s nothing we can do but contact the owner, but when we can’t find the owner, it’s a real problem.’

I understand your point but keep in mind the 3 instances above were more than likely all cases of mortgage fraud rather than someone buying them to live in and then not able to afford them.

I still think the very upper end communities will not have too much of a problem from subprime fallout.

We all know sales are down and subprimes are a big issue. We just differ on the impact there will be overall.

[JimKing]

I agree that the top priced homes, over $1 million won't be affected as much. But this bubble and sub-primes will go up and touch the market up to $1 mil or so.

I remember reading many stories of people who started in a $200,000 house which 'doubled' in value, they traded up and up using the so called 'equity' they had. Many ended up with houses 'valued' at $750,000-$900,000.

Some may have lied on their mortgage apps. Others were just going along with the inflated appraisals and the real estate agents who said homes would keep going up 20% or more per year.

I see a ton of houses priced at $300-400,000 that should be priced at $200,000. And a lot of houses priced at $750-850,000 that just won't sell ever...unless they are eventually purchased for 40% of asking in a foreclosure auction.

This is a far reaching and long term mess.

[Mike Peterson]

Originally Posted by tallrick

It's cheaper and nicer. Not my price range, but more desireable I think. There's just no justification for those overpriced tract homes, period. In fact I know where there's a distressed home on 2.5 acres that could be picked up for around 400K, but who wants to pay 8,000 or more in taxes every year? I can understand oceanfront, bayfront or canalfront with ocean access being expensive. But to pay big money to live inland in a place with HOA and homes packed close to each other is just insane.

I would not buy the house we were talking about earlier either. I like my space, that is why I am not in a master planned community or on a postage stamp size lot. There are some that do want that though.

Then again I personally don't like the looks of the house in the picture either.

[Mike Peterson]

Originally Posted by JimKing

I agree that the top priced homes, over $1 million won't be affected as much. But this bubble and sub-primes will go up and touch the market up to $1 mil or so.

I remember reading many stories of people who started in a $200,000 house which 'doubled' in value, they traded up and up using the so called 'equity' they had. Many ended up with houses 'valued' at $750,000-$900,000.

Some may have lied on their mortgage apps. Others were just going along with the inflated appraisals and the real estate agents who said homes would keep going up 20% or more per year.

I see a ton of houses priced at $300-400,000 that should be priced at $200,000. And a lot of houses priced at $750-850,000 that just won't sell ever...unless they are eventually purchased for 40% of asking in a foreclosure auction.

This is a far reaching and long term mess.

One thing to keep in mind though is that there are quite a few areas that even though they did shoot up in price still have homes that are reasonable in price.
To give some examples. Last week I was showing some homes, 2 bed, 2 bath updated roof, a/c in the $90k-$110k range in decent neighborhoods. There are 3/2/2 homes out there for $150,000. Now these are not new homes in master planned communities but for a young family or first time home buyer they are decent homes in decent areas.
You can also find brand new 3/2/2's in the $190k-$210k range. Of course there are more expensive ones but not every area is all $400,000 homes.

[jorobda]

I am looking for someone's opinion. I live in Lake Worth. I saw a house I want in Boynton Beach (Sun Valley) for $359,000. Needs a lot of work, but does have a nice pool. Is it crazy to offer $200,000? I need a bigger home, but cannot afford the prices and taxes. I don't know what to do and was hoping to get real opinions. Thank you.

[Mike Peterson]

Originally Posted by jorobda

I am looking for someone's opinion. I live in Lake Worth. I saw a house I want in Boynton Beach (Sun Valley) for $359,000. Needs a lot of work, but does have a nice pool. Is it crazy to offer $200,000? I need a bigger home, but cannot afford the prices and taxes. I don't know what to do and was hoping to get real opinions. Thank you.

One thing to remember as a buyer is you can always go up but you cant go down.
But you really need to get some comparable sales to see where it should be priced and see how far your offer of $200,000 would be from that figure.
You never know unless you make the offer though.
Be prepared though. Sometimes sellers take it personally and may not even take further offers from you if they feel you were trying to insult them.
I know this does not make sense to take it so personally but sellers do.

Make the offer and see what happens.