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I don't think I could say houses will drop X%. I do think they could go back to 2002-03 prices. Some areas will fare better than others as they were always more desirable (Palm Beach, Destin, Sarasota, etc.).
A lot of people will say that the prices have plateaued and will be going up any day now. I think that is overly optimistic. The worst of the foreclosures haven't kicked in yet. The ARMs are just now starting to reset and most foreclosures in FL take 120 days. I think the first half of next year will be worse. The inventories are huge and few are buying. The only way those inventories will thin is if people lower prices.
In 2002 it was perfectly normal to buy a middle class 1800 sq. ft., 3 bed, 2 bath house in most of FL for 125,000. Normal appreciation would be 3-5% per year. That would mean that house should be worth 147,000 - 163,000 today.
I agree with this assessment. But 2002-2003 prices would mean a near 60% drop? This is from rough calculations from numbers from zillow.
Just eyeballing the graph, prices really seem to take off starting 2004. If prices would drop to 2004, that would still mean 40-50%.
I think there are plenty of buyers, just the price isn't right. Just looking at the current data from the poll, I speculate that 40% would buy if prices fall 20%, 60% if prices fall 30%, etc. Of course this is just speculation which is really what everyone, even the "experts" are doing
There is no down side to low property prices. Property tax percantages are limited by state law, and if your value drops below 25,000 you pay no ad valorem taxes, nothing wrong with that! With less money to mismanage, government is forced to become more efficient. The only ones who suffer are flippers, investors, and those who have to sell and move to a more expensive area. Property prices can never be too low!
There is no down side to low property prices. Property tax percantages are limited by state law, and if your value drops below 25,000 you pay no ad valorem taxes, nothing wrong with that! With less money to mismanage, government is forced to become more efficient. The only ones who suffer are flippers, investors, and those who have to sell and move to a more expensive area. Property prices can never be too low!
Great post. Fast acceleration of real estate prices is all bad. It leads to the speculation we saw in FL.
Residential real estate should be a place to live, it should appreciate on par with inflation, paying down the mortgage should be a form of long term savings. And the next generation should be able to get affordable housing and slowly ride the same elevator up over their lifetime.
Every community needs affordable housing for the working folks and recent grads who are vital.
Market forces continue to bleed value from homes that ran up during the recent housing boom, and nowhere was that more evident during July than in Southwest Florida.
Charlotte County-North Port's median price was 21 percent below July 2006; Sarasota-Bradenton's was 12 percent below the comparable month last year.
The two figures marked the biggest declines statewide among Florida's 20 largest markets
I think that the return to common sense loan underwriting will bring prices down in the coming months. 20% down and 2.5 to 3.0 x's income should work just as it did in the past. It's time that houses once again become homes and not a commodity or hot stock to be traded for the quick buck.
I just finished a good book that has a lot of parallels to what is going on right now in the housing markets.
Origins of the Crash by Roger Lowenstein. It's a quick read at 226 pgs.
For those that have the time or inclination to read it you will get your eyes opened.
Florida has a major problem impeding a reversal in real estate prices ...
Florida especially in the south, LACKS JOBS especially jobs that pay anything decent
On a national scale, the manufacturing and high tech jobs are going to china, india and eastern europe and won't never come back
the youth in florida are being trained to work at walmarts and other near minum wage jobs
even the workers at the auto companies will get downsized to 12 dollars an hour
the groups controlling the USA conspired to create a housing bubble intentionally with loose standards for borrowing. they even planned to make the USA a low wage region like most of the world
on a side note, america will be integrated with canada and mexico and eventually with the other america's in this hemisphere essentially obliterating what is the USA
the florida real estate will need to come in line with real world incomes
someone mentioned that a CD got 5%
someone else put inflation at 3 to 5 percent
someone mentioned that the markets (that are rigged by the govt) went up
please note these two things
realize that the dollar since 2001 devalued by at least one third and will likely fall by another third
the govt has lied about it's economic statistics for decades especially inflation and unemployment
they even did away with M3 so people wouldn't see how fast they inflated the money supply
you need the multiply the governments figures by 2 to 3 times to get accurate figures
when you add in the real inflation and devaluation, your losses have been enormous
the government has rigged the cost index since the late 1980s in order to downsize wages and inflate away the money paid to social security recipients
The St Petersburg Times reports from Florida. “Liz Seither deftly juggles the two phones that never stop ringing in her kitchen. The Clearwater Realtor’s eyes are puffy below unkempt flaming orange hair. Seither invested in Clearwater property at the peak of the recent boom. Lenders are after her for millions of dollars in debts.”
“After juggling 15 calls from debtors, creditors and clients, Seither lays the phones aside and delivers a pep talk to herself. ‘I’m not a real estate bum,’ the president of Executive Preferred Properties announces. ‘I wear diamonds, Rolexes and necklaces. I’m a classy Realtor.’”
“The Tampa Tribune from Florida. “Two years ago, when SkyPoint condominium was just a pile of dirt and a sophisticated plastic concept model, Ann Blank stood in line for hours to buy a one-bedroom unit for $241,000.”
“Blank made the decision based on what city planners and developers said downtown would become. By the time SkyPoint was finished, the city was supposed to be filling up with entertainment and services that haven’t materialized. Blank thought it would make a fine rental apartment for a few years, then she’d sell for a profit.”
“‘It was going to be great,’ said Blank, who is a real estate agent.”
“SkyPoint’s developers forged ahead and already plan two more developments, one of which is under construction. But the market tanked, and now Blank, who is asking $1,500 a month in rent for her approximately 800-square-foot condo, can’t find any takers. She blames the lack of services downtown.”
“Part of the reason for Blank’s trouble may be that many buyers had the same idea. There are 286 condominiums in 15 buildings in downtown Tampa listed for sale on the MLS. An additional 127 downtown condos are advertised for rent on craigslist.”
“Of three projects that are substantially complete, plus Trump Tower Tampa, which hasn’t broken ground, 180 of 1,046 units, or 17 percent, are listed for sale or rent.”
“Some buyers are bailing because they no longer can afford their investments. Blank said another agent in her office represented a buyer who walked away from two downtown condominiums he had contracts to purchase. He lost about $100,000 in down payments rather than risk foreclosure or bankruptcy, she said.”
“‘People are losing big money,’ she said. ‘It’s almost like a crash.’”
A little more on that former top producing realtor from the St. Pete Times:
It's a no makeup day for Liz Seither at her home on Island Estates, a barrier island washed by Clearwater Harbor. She's still in slippers, but a diamond anklet dangles from her leg. That and the diamond crucifix around her neck bespeak better times when she prided herself as a "Multi-Million $$$ Producer."
She dials a prospect, a movie theater owner from Alabama who's been hunting for beach deals. His voice mail picks up. Seither leaves a message:
"Hey you bottom feeder you. Call Liz. Call Liz. I'm still your best Florida friend!"
She hangs up the phone and deflates. It's not been her lucky year. Banks threaten to repossess six of seven investment properties. She slashed millions off prices, but still no buyers. Of her 40 home listings, no sales are pending.
She rented her private residence to a guy who fell $15,000 behind in rent. The guy arranged to pay Seither. But when she arrived he had vamoosed with her high-end washer, dryer and refrigerator.
One a recent day Seither took her dog for a walk and a neighbor flagged her down.
"Don't worry, Liz, you're the only one making money," the woman reassured her. Seither hated to disappoint her.
"My heart was beating 100 miles per hour," Seither recalls. "It was hard to tell her I'm suffering like everyone else."
Seither's agency is a shell of its former self. The 10 agents she once employed are mostly gone. She survives by managing rentals, 150 properties at last count. Rentals: It's a growth market.
At the end of another hectic 12-hour day, she's heading off to dinner. It won't be seafood on the beach, but $7 all-you-can-eat meatloaf next to Kmart.
She laughs a rare laugh before heading off to the feast: "We're economizing these days."
A little more on that former top producing realtor from the St. Pete Times:
It's a no makeup day for Liz Seither at her home on Island Estates, a barrier island washed by Clearwater Harbor. She's still in slippers, but a diamond anklet dangles from her leg. That and the diamond crucifix around her neck bespeak better times when she prided herself as a "Multi-Million $$$ Producer."
She dials a prospect, a movie theater owner from Alabama who's been hunting for beach deals. His voice mail picks up. Seither leaves a message:
"Hey you bottom feeder you. Call Liz. Call Liz. I'm still your best Florida friend!"
She hangs up the phone and deflates. It's not been her lucky year. Banks threaten to repossess six of seven investment properties. She slashed millions off prices, but still no buyers. Of her 40 home listings, no sales are pending.
She rented her private residence to a guy who fell $15,000 behind in rent. The guy arranged to pay Seither. But when she arrived he had vamoosed with her high-end washer, dryer and refrigerator.
One a recent day Seither took her dog for a walk and a neighbor flagged her down.
"Don't worry, Liz, you're the only one making money," the woman reassured her. Seither hated to disappoint her.
"My heart was beating 100 miles per hour," Seither recalls. "It was hard to tell her I'm suffering like everyone else."
Seither's agency is a shell of its former self. The 10 agents she once employed are mostly gone. She survives by managing rentals, 150 properties at last count. Rentals: It's a growth market.
At the end of another hectic 12-hour day, she's heading off to dinner. It won't be seafood on the beach, but $7 all-you-can-eat meatloaf next to Kmart.
She laughs a rare laugh before heading off to the feast: "We're economizing these days."
What a heart breaking story....
Thank you for posting the story. It shows how the newspapers, and other media, are really full of propaganda.
I wonder if the newspaper has or is printing stories about all the newlyweds and young families who only 5 years ago could have afforded their own home, but now have to pay exorbitant prices to rent or even worse... live with their families just to stay in Florida.
I truly believe in what goes around comes around. May this woman and her fellow carpetbaggers, who stripped the American Dream of owning a home from decent hard-working citizens... may they all get their just desserts.
Their are a lot of quiet potential buyers, who are looking forward to making these people squirm.
Last edited by Carbondated; 08-29-2007 at 01:17 PM..
Great example. Sold for 201,000 in 2005. Now listing at $114,000.
I can't wait to see what it sells for. $60,000-75,000?
That listing had dropped to under $100k. Now it is off the market..Not sure if it actually closed as it did need a ton of work. There are many listings in Cape Coral in the $100k range for newer 3/2/2 starter homes. Very close to 2002 prices again and at least 50% off the top. I'm seeing the same things now in other places like North Port, Port St Lucie and Palm Bay..much worse than any NAR stats would ever admit..
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