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What makes it harder for the average seller is the builders who are trying to sell there own inventory. They are afford to go much lower on their prices, where many sellers don't have that option. They also throw in upgrades, the mortgage payed up for a year, closing costs covered-anything that will entice a buyer over a regular seller's house. And to make it worse, they're offering real estate agents large commissions to sell their homes. How can we compete against all that? The media reports that building permits are down. That's great news! That will help to reduce some of the inventory. I live in Spring Hill and that are lots of great homes at great prices that have just been sitting there. As another post mentioned, it comes down to supply and demand. If the media reported tomorrow that there was a housing shortage, people would start buying in a heartbeat. If I sell, great! But I'm not going to try to be the lowest priced house in the neighborhood and lose money just to sell. My home is an investment and I'll wait, if I have to, for things to improve. I can't change the market-it is what it is-but I'm going to do what's in my best interest.
I think you need to do some more research. It has nothing to do with the media. People can not afford these houses. Houses should be priced at 2.5-3 times income. They need to drop 30-70%, depending on the area.
And to say if the 'media' said there was a housing shortage people would buy??? Wouldn't people see all those for sale signs and for rent signs on every street? Wouldn't lenders tell them of the new strict lending guidelines? Wouldn't they be able to read any Housing Blog and see all the foreclosures and mortgage resets coming? Wouldn't they check to see how high their property taxes and insurance would be before they purchased the house?
Spring Hill is in for a long, long pricing crash. There are 3500 properties on realtor . com and probably many more for sale by owner or for rent. That market will be a total mess in another year or two. The lowest priced house in the neighborhood will get lower and lower. Nothing about Spring Hill supports anything other than very low priced homes. Just about nothing in that area should be over $120,000.
But the most glaring problem is that you think a house is an investment. No it is not. It is a depreciating asset that becomes used as time goes on. An investment is something that returns a positive cash flow to you. A CD is an investment. Some rental properties have positive cash flow and are thus investments. A house is a place to live, which may sell at a profit or a loss, depending on market forces.
Do a little math and see the 'return' on that "investment". Take into account inflation, upkeep, what you would pay to rent a comparable place, and what your money would earn in a CD instead of a house. You may be surprised at how low the return is on that "investment".
I think you need to do some more research. It has nothing to do with the media. People can not afford these houses. Houses should be priced at 2.5-3 times income. They need to drop 30-70%, depending on the area.
And to say if the 'media' said there was a housing shortage people would buy??? Wouldn't people see all those for sale signs and for rent signs on every street? Wouldn't lenders tell them of the new strict lending guidelines? Wouldn't they be able to read any Housing Blog and see all the foreclosures and mortgage resets coming? Wouldn't they check to see how high their property taxes and insurance would be before they purchased the house?
Spring Hill is in for a long, long pricing crash. There are 3500 properties on realtor . com and probably many more for sale by owner or for rent. That market will be a total mess in another year or two. The lowest priced house in the neighborhood will get lower and lower. Nothing about Spring Hill supports anything other than very low priced homes. Just about nothing in that area should be over $120,000.
But the most glaring problem is that you think a house is an investment. No it is not. It is a depreciating asset that becomes used as time goes on. An investment is something that returns a positive cash flow to you. A CD is an investment. Some rental properties have positive cash flow and are thus investments. A house is a place to live, which may sell at a profit or a loss, depending on market forces.
Do a little math and see the 'return' on that "investment". Take into account inflation, upkeep, what you would pay to rent a comparable place, and what your money would earn in a CD instead of a house. You may be surprised at how low the return is on that "investment".
Jim,
Your posts are always intelligent, well documented, and insightful. Thank you for your balanced outlook.
Yes--when all else fails, we do still have the beaches. Good luck on your move to Florida. Evolution is occurring here--Florida won't be the same in two years when you get here as it is now or has been.
Quote:
Originally Posted by Retiredcoach
I have visited Florida countless times through my adult years. My family has progressed from going to see Mickey Mouse to savoring Florida's many beautiful beaches. I have family that reside in both Fort Lauderdale and West Palm, but are now very old senior citizens. My hope was to eventually relocate to Florida when I retire (now about 2 years away) while I was still young enough to enjoy the natural beauty (I'm not much into Disney or the amusement park scene).
I have done a ton of research on the Florida economy, and the current prognosis is not good. Greed, mismanagement, and bad luck have taken a pronounced toll. I am hoping that the citizenry and government wake up soon to deal with the genuinely dire straits facing your state. I am afraid that only the select few have the state's future at heart... just trying to survive will soon be the mantra for many. I am looking for that glimmer of hope that will allow me to realize the final part of my dream...
What makes it harder for the average seller is the builders who are trying to sell there own inventory. They are afford to go much lower on their prices, where many sellers don't have that option. They also throw in upgrades, the mortgage payed up for a year, closing costs covered-anything that will entice a buyer over a regular seller's house. And to make it worse, they're offering real estate agents large commissions to sell their homes. How can we compete against all that? The media reports that building permits are down. That's great news! That will help to reduce some of the inventory. I live in Spring Hill and that are lots of great homes at great prices that have just been sitting there. As another post mentioned, it comes down to supply and demand. If the media reported tomorrow that there was a housing shortage, people would start buying in a heartbeat. If I sell, great! But I'm not going to try to be the lowest priced house in the neighborhood and lose money just to sell. My home is an investment and I'll wait, if I have to, for things to improve. I can't change the market-it is what it is-but I'm going to do what's in my best interest.
ITA re: builders' inventories - we just purchased in Fl, and it made no sense to purchase a resale when we could get a new home for less - incl a multi-yr warranty, paid closing costs, compliance with the latest building standards, etc. We purchased in a gated community, so already fully landscaped, etc.
A number of builders are really, really pushing to significantly reduce their existing inventories (select homes were going for half their original prices!), but once they are done I suspect it will get a little easier for resales. I know we are going in with the worst-case assumption that we will be unable to sell for the next 5-10 yrs, so both product and price must suit our needs for that time period at least. Of course, coming from North Jersey the home we are purchasing is approx half what a comparable home would be here and sufficiently less than the home we are selling, so it is not as much a gamble for us as for many others. If (when?) the price of the home we are purchasing falls, we still will have purchased a home that suits our wants and needs.
Your posts are always intelligent, well documented, and insightful. Thank you for your balanced outlook.
Thanks coach. I just want the next generation to have the chance at affordable housing. When some of these young people talk about spending $350,000-700,000 in Florida right now, I think they need to do a lot of research first.
I just read through all of the posts in this thread and was impressed at how candid and informative most of them were.
My parents and I were thinking of buying, but are now having second thoughts because of what's going on with not only the housing market, but the economy in general. And it does seem that Florida has it bad right now, and not just because of the taxes. It's the insurance that's a killer. And every one of those companies (except citizen's) has everyone by the you-know-whats. Who wants to move there and then see their house insurance skyrocket. That alone can push a person into a financial corner and force them to move.
Our situation was/is this - my parents would buy their future retirement house now, I would live in it for the next three years or so, and take advantage of the very low college tuitions for FL residents. Then they would move down in 5-8 years after selling their house on Long Island. It seems like a workable scenario, but I don't think I can afford to live there by myself, paying exhorbitant insurance and taxes, and I'm also worried about finding a decent job. I work in hotels, and I found that every hotel job down there pays literally half of what they do in NYC. I don't think I could afford to live on $8-$10 an hour. And I really want to focus on school and not worry about how I'm going to pay the big bills making such low wages.
We found a great house in Vero Beach that we're interested in, however, we told the realtor we just don't want to make the leap right now. Plus we were interested in making an offer by letter, and she wanted to do a contract. We don't want to go that far yet without seeing exactly what the seller is (realistically) looking to get for the place. We want to pay about 20% less than asking, and the seller would have to take a loss at that, which the realtor didn't feel the seller would do. So, the house sits. We're in no rush and we would rather wait for a really good deal. And like I said, as nice as Vero is, and as much as I'd like to get the ball rolling on going to a low priced college, I'm worried about moving there right now with all that is going on.
I just read through all of the posts in this thread and was impressed at how candid and informative most of them were.
My parents and I were thinking of buying, but are now having second thoughts because of what's going on with not only the housing market, but the economy in general. And it does seem that Florida has it bad right now, and not just because of the taxes. It's the insurance that's a killer. And every one of those companies (except citizen's) has everyone by the you-know-whats. Who wants to move there and then see their house insurance skyrocket. That alone can push a person into a financial corner and force them to move.
Our situation was/is this - my parents would buy their future retirement house now, I would live in it for the next three years or so, and take advantage of the very low college tuitions for FL residents. Then they would move down in 5-8 years after selling their house on Long Island. It seems like a workable scenario, but I don't think I can afford to live there by myself, paying exhorbitant insurance and taxes, and I'm also worried about finding a decent job. I work in hotels, and I found that every hotel job down there pays literally half of what they do in NYC. I don't think I could afford to live on $8-$10 an hour. And I really want to focus on school and not worry about how I'm going to pay the big bills making such low wages.
We found a great house in Vero Beach that we're interested in, however, we told the realtor we just don't want to make the leap right now. Plus we were interested in making an offer by letter, and she wanted to do a contract. We don't want to go that far yet without seeing exactly what the seller is (realistically) looking to get for the place. We want to pay about 20% less than asking, and the seller would have to take a loss at that, which the realtor didn't feel the seller would do. So, the house sits. We're in no rush and we would rather wait for a really good deal. And like I said, as nice as Vero is, and as much as I'd like to get the ball rolling on going to a low priced college, I'm worried about moving there right now with all that is going on.
I'm curious - what is the difference making an offer by letter? I've never heard of making an offer by letter instead of contract - how would that work?
We just didn't want to take that step yet. We wanted to get an idea of what the seller (who lives out of state) was looking to get. We also felt that the broker was pushing us a bit much. Of course she is pushing us to buy, and we don't want to rush into it. Discussing price before a contract is drawn up seems perfectly reasonable to us.
You missed the point I was making. The point I was saying about the media was that how they report the news will affect how people act and react. I have talked to many real estate agents who also feel this way. They also state that the media often compare the market with 2005, which was a very unusual year. They state that there is a large inventory, so it's much more competive to sell. Yes, the high insurance rates haven't helped. People in Florida have been used to a much cheaper lifestyle than most other places. Nobody is happy with what's going on. But you can still get a very good deal on a house down here, especially now. I wish I could buy a home for $120,000 up North. In spite of what's going on now, a house is still a good investment. I think anyone in the real estate or financial field would back that up. Things are bad now, but they will change again. I am very confused on your opinion about the housing in Spring Hill. You don't think there are any homes worth more than $120,000 and that they are 30-70 percent overpriced?!!! Where in Spring Hill have you been??? There are many beautiful neighborhoods in this town. There are many new homes here, so you don't see the rundown areas like you do in other parts. And you also have much larger yards and many of them with manicured lawns and landscaping. It appears many people in this town take pride in their property, whether its a 1200 sq ft home or a 3200 sq ft home. Sorry, I totally disagree. I moved from Tampa where housing is priced higher, and Spring Hill has alot more to offer. I also love the rolling hills. So, I based my research on not only what I've read, but also on what I see and what I hear from others. I keep an open mind. It doesn't pay to have a "gloom and doom" attitude. It will just keep you angry. I'll just try to make the best of a bad situation.
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so hold on kids the ride is just starting !
