[riveree]

Originally Posted by tallrick

Please explain to me how anyone can think that home prices can remain above 3X income? The reality is that homes will sell for what people can pay, period! How can a retiree on a fixed income justify paying 300,000 for a small home and pay 10,000 per year for taxes and insurance, even if they sell their California or New Jersey bubble home and pay cash? You are prohibited by law from ever owning a property outright, once you start leasing from the Government you never get a reduction, regardless of how broke you are. Unless Florida scraps residential property tax, values will continue to fall.

Remember, there was a time when homes in New York and New Jersey were affordable. A house on the outskirts of NYC that sells today for $700k costs $50k in the 70's. People living in that region of the country watched the prices go up all around them and they got caught in it too. Plenty of people have had to buy these expensive homes so they could stay in the area whether it was due to their career, family, whatever. People do what they have to do. I think the reality is that location trumps all and if people want to be in Florida they will buy.

[riveree]

Originally Posted by JimKing

It is undeniable, much of Florida is on the edge of a very steep residential real estate crash. And as Tallrick said, in the long run low housing prices are better.

Here are a few more examples for those that doubt 50-70% haircuts off peak pricing won't eventually happen in some areas:

30,000-plus properties on the market in Palm Beach County.

“It is a very bleak market out there for sellers,” says Peter Just, a Keller Williams agent in Lake Worth. He points to a couple of examples of sellers in his neighborhood drastically scaling back their expectations:

After being listed as high as $750,000, 534 S. Palmway just sold for $436,050.

After being listed as high as $799,900, 1610 S. Palmway recently sold for $450,000.

Then there’s the house at 304 Columbia Drive in Lake Worth. The owner paid $360,000 for it in 2004. Now it’s on the market for $337,000.

I'm not in South Florida, and these numbers certainly do sound awful, but it's just not that way all over Florida.

In NEFL, the biggest hits are to the formerly rural areas that now contain NOTHING BUT new housing developments - there is little stability in these areas because the developers have had total control over the pricing. So the outer fringes of Jacksonville - the surrounding counties - are getting hit hard in spots, but the more densely built up parts of the city where there is a mix of housing ages are showing more stability. Sure, prices have dropped some overall and the houses are sitting on the market longer, but there are no fire sales in these areas.

[riveree]

Originally Posted by nytoflorida

My parents and I are having misgivings about a house that we want to buy right now. The seller is asking 189, and we want to pay more like 160, but the seller bought it last Nov. for 165, and put a lot into it. So for them to even break even they would have to get 179. I'm thinking if we wait awhile we can get them to be realistic and take a loss if they really want to get out. You see, we're buying for the long term, not looking to make a profit in a few years. We'll own it for at least 10 years if not longer. So we don't want to overpay in a bad market where potentially better deals can be had, but we would rather buy this house than any of the others we've seen. Tough decision.

If the seller is asking $189k, an offer of $160k is quite a deep discount, regardless of what they paid. On a $400k house, asking for nearly $30k off is a big enough discount, but asking for nearly $30k off on a $189k house is asking for a lot, I think. To put it another way, if it was a $400k house you'd be asking for a 7% discount, but apply that same dollar amount ($29k) to the $189k house and now you're asking for a 15% discount .

Since you're in it for the long haul anyway and you love the house and don't want to lose it, why not offer them $178k? You'll feel like you're getting a bargain and they'll come close to breaking even (remember, they still have a commission to pay and some closing costs). If they don't get a fair offer, they might pull the house off the market entirely - it happens often enough.

[riveree]

Originally Posted by backtofla

does that mean we, as homeowners should be trying to sell??? i mean, if it's doom and gloom for the next 10 yrs, and since we live in florida, where many ppl move in and out of the state within 5 yrs anyway, shouldnt we be selling??? especially if you are trying to sell in the next 2-3 yrs anyway???

Backtofla,

If you do not have enough of an equity cushion and your intention is to sell in 2-3 years, then you might indeed want to sell sooner rather than later. This could be a long correction period/bottom.

If you have plenty of equity, then I wouldn't worry about it.

[tallrick]

Originally Posted by riveree

Remember, there was a time when homes in New York and New Jersey were affordable. A house on the outskirts of NYC that sells today for $700k costs $50k in the 70's. People living in that region of the country watched the prices go up all around them and they got caught in it too. Plenty of people have had to buy these expensive homes so they could stay in the area whether it was due to their career, family, whatever. People do what they have to do. I think the reality is that location trumps all and if people want to be in Florida they will buy.

I tend to think that the comming mortgage meltdown will take away some of the jobs from New York City as well. Expect their property values to fall in the future.

[jbcorbin]

Gosh, you guys are great. Sparking my mind.
Okay, comments.
.
Tallrick:
The folks I hang around have no problem with the $300k prices, they have $500k houses now that they have paid off after 30 years and have saved their money.

Dave_n_Tenn:
There will be a time when the prices will bottom. I was just looking for a location that could be a reference.

JimKing:
You are golden and I thank you for your mature advice. You are right about me needing to do more research. I will as soon as my wife let’s me stop the landscaping and sit here at the PC longer. And that DOES have something to do with the bubble: after all of our divorces, we ran into each other and fulfilled the harsh standards. We look at things differently than others. The $250,000-700,000 houses will come down, the saving of the people I know may stay the same. My son and all of the folks in the 30-50 age groups will keep having disposable income. The sale prices are coming down and I see counties lowering the tax values. The credit situation will settle and we will all calm a bit.
My wife and I always say that if we could have seen the future, we would have bought this lot 10 years ago when it was offered for $10k and maybe the other 6 lots next to it. We did not because our crystal-ball was cloudy. I just want to be able to alert my friends of when the best time to buy would be.

Riveree: I think you may have summed it up. If you feel like you need to be here, you will show up.

[riveree]

Originally Posted by tallrick

I tend to think that the comming mortgage meltdown will take away some of the jobs from New York City as well. Expect their property values to fall in the future.

You're right - it's happening already. Upstate New York, about 2 hours north of Manhattan, has been dropping in value for a couple of years now. There are smaller corrections in the immediate areas around NYC/Manahttan.

It will be a long time before people leave NY in droves, but for those still trying to hang on to the dream and commuting 2 hours each way in to work every day, yeah, we'll probably continue to see those people leave.

I have a friend who was in a unique position to be able to choose where to live for their job and Jax was on the table. They choose upstate New York and made a horrible choice. They are bored out of their minds, couldn't sell if they wanted to - they're stuck. Had they chosen Jax they would have been able to buy an incredible house for the same amount of money, no income tax, lower property taxes and would have had plenty to do in comparison (and an Ocean to boot - they're beach lovers). Hard to believe some people don't take my advice - these 2 didn't .

[backtofla]

the thing is, riveree, i dont know how much equity i got anymore. i am not sure it's worth what it was a yr ago. but based on what they were selling for in the good times, i got about 100k equity in it. but, i am afraid i am losing that every month that rolls by.

[riveree]

Originally Posted by backtofla

the thing is, riveree, i dont know how much equity i got anymore. i am not sure it's worth what it was a yr ago. but based on what they were selling for in the good times, i got about 100k equity in it. but, i am afraid i am losing that every month that rolls by.

If you're roughly $100k ahead, then you have plenty of wiggle room. To lose all $100k of equity would be unlikely, I think.

People still want to move to Orlando. They may not be people you like, but their money is green.

I'd focus on making your house as attractive as possible to the masses over the next 2 years or so. Impeccable landscaping, neutral interior (beige, beige, beige!), clutter-free, etc. In your case, I'd work from the outside in - be the Jones you want your neighbors to keep up with. Landscaping is fairly cheap and all the neighbors can see it and you'd be amazed how quickly they'll follow your lead .

[firemed]

As I was reading this I could not come up with anything to say. "I wear diamonds, Rolexes and necklaces. I'm a classy Realtor." Did I read this wrong? or could she just sell the bling and pay her debtors. How can you feel sorry for this realtor? Yes the prices have come down.

http://www.sptimes.com/2007/08/26/ne..._out___I.shtml