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I'm a BUYER, and this is the best thread I've read.
I'm one of those 55+ Baby Boomers from the rust belt looking for a bargain somewhere near Disney (Leesburg/Davenport/Clermont).
My thoughts are that the market went up way too fast, now is relaxing a bit, but will take off again in 2008. So take the loss if you need to sell now, or wait a year and be reasonable. Good luck all.
Back in January I posted that we should be closing soon..well it didn't happen. I have since had three more contracts; two did not qualify and one simply got out of the contract the day before closing. To say the least I have got rid of our realtor and am advertising on several web sites and a sign in my lawn FOR SALE BY OWNER. With the new criterias for loans it is very hard to get financing. Mostly because many sublenders have gone belly up and banks are not financing as easy as before. Meanwhile Im willing to give my home up at 300k and it appraised at 347k. I cant lower any more mostly because of principal, we have our hard earned money invested in this home. Things are becomming dificult for us to survive financially in this home. I just sit and wait and pray that it gets sold soon. Oh, house for sale in my area (immediate subdivision) run from 340-375K.
I am (sadly) not surprised. The Florida market I suffering from "bloating", which basically means prices were artificially inflated by real estate speculators and predatory lending institution that were granting $300,000 mortgages to a couple who make like $30,000/year combined.
The fact is that regardless of what your home was appraised at, it is not realistically worth all that. That is the inflated (bloated) price whoch the central florida market is still holding out at.
The ONLY reason it is holding at the current prices (when it is not going down) is because most people CANNOT go down, because when they pruchased during the 2003 - 2006 real estate 'rally', they paid too much for the house and financed 100%.
What does that mean? Well, it means that most people paid overinflated prices, financed 100% and now that the market has retracted in prices some (and it will retract even more, trust me), the people cannot sell their houses because they cannot sell for less than they owe.
You also need to factor in:
a) # of current and past foreclsoures.
b) % of upcoming forclosures where the 'initial teaser rates' of let's say 1% are going to mushroom to 14% and payments will go up from $1,000/mo to $2,000. No one makes that much money to cover for such a rate hike.
c) how hard it is to get a loan these days.
d) the cost of insurance, HOA, and property taxes make monthly payments swell from just a mortgage to a butt-kicking $1,000 extra every montyh (in the low end).
e) even with the reduction, home prices in Central Floridas are un-attainable, meaning the buying force of America, the Midlle class, cannot afoord these homes.
f) upcoming Hurricane season has insurers on edge and it will drive up insurance costs. That is scaring prospective buyers too.
g) the HUGE inventory available (not selling well).
h) The # of foreclosures that are lowering the overall value of homes (that is called 'comparable sales').
You need to speak to a financial advisor. There is one on the building I work at in Maitland, FL. I am not sure if I can out their contact info here, as it would be 'advertising', so look for one on the Phone Book.
From what I hear on the elevators and cafeteria, they seem to all say: sell your house in FL and RUN to either rent or get out of the state!
I am (sadly) not surprised. The Florida market I suffering from "bloating", which basically means prices were artificially inflated by real estate speculators and predatory lending institution that were granting $300,000 mortgages to a couple who make like $30,000/year combined.
The fact is that regardless of what your home was appraised at, it is not realistically worth all that. That is the inflated (bloated) price whoch the central florida market is still holding out at.
The ONLY reason it is holding at the current prices (when it is not going down) is because most people CANNOT go down, because when they pruchased during the 2003 - 2006 real estate 'rally', they paid too much for the house and financed 100%.
What does that mean? Well, it means that most people paid overinflated prices, financed 100% and now that the market has retracted in prices some (and it will retract even more, trust me), the people cannot sell their houses because they cannot sell for less than they owe.
You also need to factor in:
a) # of current and past foreclsoures.
b) % of upcoming forclosures where the 'initial teaser rates' of let's say 1% are going to mushroom to 14% and payments will go up from $1,000/mo to $2,000. No one makes that much money to cover for such a rate hike.
c) how hard it is to get a loan these days.
d) the cost of insurance, HOA, and property taxes make monthly payments swell from just a mortgage to a butt-kicking $1,000 extra every montyh (in the low end).
e) even with the reduction, home prices in Central Floridas are un-attainable, meaning the buying force of America, the Midlle class, cannot afoord these homes.
f) upcoming Hurricane season has insurers on edge and it will drive up insurance costs. That is scaring prospective buyers too.
g) the HUGE inventory available (not selling well).
h) The # of foreclosures that are lowering the overall value of homes (that is called 'comparable sales').
You need to speak to a financial advisor. There is one on the building I work at in Maitland, FL. I am not sure if I can out their contact info here, as it would be 'advertising', so look for one on the Phone Book.
From what I hear on the elevators and cafeteria, they seem to all say: sell your house in FL and RUN to either rent or get out of the state!
This poster summed things up very nicely, people in denial over this wake up already.
My advice for sellers who really need to sell is not to be in denial and follow the market down. Too many people gradually lower the price for their homes when they don't sell. Before you know it 6 months, 9 months, or more have passed and the market has lowered below their latest price cut.
And I highly doubt the trend in Florida real estate will be anything but down or at best flat for years and years. Even if they stay flat, your carrying costs and inflation eat away at your profits.
Set a realistic price....you will know it is realistic when you start getting counter offers within 5-7% of your asking price. If you are not getting good offers, your price is to high,....despite what Zillow or a realtor or appraiser tells you.
Your house is only worth what a legitimate buyer will give you for it. It really is that simple.
Sales and price declines keep coming every month yet I have heard some realtors telling me "it has hit the bottom already, housing will improve from now on". Well every month for the last 6 months I hear the same song and every month prices and sales are comign down. Feb 07 numbers are out and housing is literally tanking. More importantly the devastating effect of imploding subprime mortage market has yet to be seen. That will only make it worse. Those poeple who were able to buy homes with 100% financing with little to no regard to the real value of the homes are partly responsible of this housing bubble and now they cannot get mortagages anymore because Wall Street just shut down their mortgage line.
Now the buyers who are really willing to live in the homes and planning to pay the mortage back are out there for a change. Days of the flippers are long gone.
Most economists, even the ones who denied this housing bubble bust for a long time, now started admitting the scale of this problem and warning everyone to hold of on buying houses for at least another 6 months. The full recovery of housing market will take long but the hardest hit is about to come very soon according to all sales figures. Wishing otherwise does not make it so.
If you are a seller and still think you can get what people got for their homes in 2005, think hard one more time. I am sure there are still buyers out there but those buyers are very picky and are looking for reasonable prices. IF you price your home right and sell now you will probably be better off than wait and reduce your price even lower later this year.
I was in North Port two days ago. Although plentiful, there are about half of " For Sale " signs as what there was 6 mos ago. Basically the sellers have reduced prices as far as they are going to, and are digging in their heels or just waiting for the turn around. Recent sales in the Port Charlotte/North Port MLS are basically flat we have reached the "The Mexican Standoff" point. As bad as the forclosure issue is perceived to be, a recent WSJ article pointed out that Florida is among the least affected states from it. A few other factors will soon have additional impact on the market.
The Ins rebate checks will start going out in a few weeks. Even Citizens is reducing rates.
The State Legislature has to have their property tax relief plan done by June in order for it to be on the ballot in November.
Effective Jan 1, 2008 the City of North Port impact fees will go up to $18,000 well and septic is running 12K to 15K lots can be had for 25K You will then be starting at 55k before site work or building is started. This should effectively end the days of new houses for under 200K. Low end home builders have been dumping inventory and still making money by building garbage ( even my tenants are aware of the crap out there) giving the house away and making their profit on the appreciated value of the lots. Many of them "banked" building lots when they were selling for well under 10K now they are paying current prices, not good for builders, but good for stabilizing the market. Info is from one of my tenants who is a supervisor for a builder down here.
The assessments for 2007 are done and sent to Tallahasse for verification, my guess, the assessed valuations will be about 20% below 2006 and that is before you start appealing them. Lower assessed valuations = lower taxes. County governments are already screeming.
The local rag will start complaining about the property tax relief plan in June and that should be the turning point. Once the general population realizes that Ins has gone down, prop taxes are being reduced, interest rates are still at or below 6%.......the turn around should slowly start by mid summer and 2008 should be a decent year. My guess is that you will not see 2005 values until 2010.
Another interesting point..... most of the boomers up North are highly aware of money and taxes. Many have homes that have appreciated more than 500K since they were purchased. My former neighbors house is a perfect example, Built in 1959 for 23K today it is worth between 650K and 700K probably more. 2008 is the last year of the Bush tax cuts. Capital gains rates will vary from 0% for adjusted gross income under 33K (think retired/retiring folks) Then progressively to 5% then 10% then to a 15% max rate. The democrats have already stated that they will not renew the Bush tax cuts. Capital gains tax rates will go to a minimum of 20% with a cap of about 30% BTW depending on value, we will probably sell houses in 2008. 250K in 2008 will net more than 300K in 2009.
There are quite a few sub currents in this market, all swirling and moving about, they will come together soon enough and it will be very profitable for those who are able to ride it out.
I think the problem is real estate taxes. The latest two "fixes" will not pass the voters and the governor is not in favor of any real reduction of money for the local or state. 71 billion dollar budget..does anyone think real propety tax reform will happen?. With that said..I would think real estate will continue to fall for another 4 years....then the market will be around homes in the 75k - 150k..anything above that will be "slow movers"...
My house was put on the market January 20.... just got an offer 5k below asking that I accepted yesterday.... the contract is now "pending" for finance, WDO reports ..... I too am crossing my fingers that everything pans out with this buyer getting approved for financing, etc. during thie period and hope to close April 30th!
If everything goes as planned, it took 2 months and 7 days and a helluva lot of hardwork and aggravation and sleepless nights to sell, but it sold. (Again, knock on wood!)
I plan on writing about the experience as well when the sale is finalized!!!!
I love Florida! my husband and I visit friends in Lake Worth. We are looking for a house to buy and rent untill we can leave nyc. Recent crime in the neighborhood including car theft and house robbery have us conserned. Does anyone know whats going on in Lake Worth? Thanks
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Here is a reality check.
