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Nearly 20% of Florida homes are vacant (http://finance.yahoo.com/news/Nearly-20-of-Florida-homes-cnnm-2507768369.html - broken link)
I'm very pro-Florida, but thought to share this article to see what everyone on here thinks of the numbers/opinions within. Two excerpts were particularly interesting:
"In Florida, the worst-hit county is Collier -- home of Naples -- with a whopping 32% of homes empty. In Sarasota County, 23% of the housing stock sits vacant, while Lee County (Cape Coral) has a 30% vacancy rate. And Miami-Dade County has a vacancy rate of about 12%."
23% of homes vacant in SRQ County? SoFLGal, does this sound accurate to you? Anyone else care to chime in?
"Celia Chen, a housing market analyst for Moody's Analytics, is also downbeat in her forecasts for Florida. Not only will prices fall another 11%, she said, but the bottom won't hit until mid-2012, about a year later than the nation as a whole. Some metro areas won't get back to their pre-recession peaks until long after the present owners are old and gray.
She doesn't expect Naples, for example, to come all the way back until the late 2030s. Other Florida metro areas with a 20-year wait or longer include Punta Gorda, Palm Bay and North Port."
Now granted, this last quote is talking about a full recovery ... I'm interpreting what she is predicting refers to a return to peak bubble prices (say 2006), which was so far off the long term trend line for housing prices, it was the space shuttle on nitrous ... 20 years might not be that ridiculous of a "recovery" time for North Port, etc.
HHH-it's a bit hard to say exact figures but here's what I did. I took North Port, which I would say is one of the harder hit areas around with foreclosure. There are currently 745 active properties. Of those 745 properties there are 67 bank owned properties for sale. I would venture to say there are another 150 or so properties that are sitting there waiting to make there way through the courts. So, yes I would say 20-25% vacant properties wouldn't be to much of a stretch.
Now, you have to keep in mind areas. I'm sure it's around 5-10% on Siesta Key. I think it really is specific to areas but if you averaged all of vacant properties in Sarasota it wouldn't surprise me if that number is accurate.
I'll go read the article now. I didn't want it to sway my opinion before I commented.
SoFLGal when places like this mentioned in the article have upwards of 32 percent vacant properties wouldn't you think this would drive away prospective home buyers? I guess I'm asking for your opinion and basically aiming this question squarely with the focus on Naples. I mean Naples of all places, I really was unaware that they were in such competition with Cape Coral for this dubious distinction! Shows how much you miss from living in the north like I do!
HHH-it's a bit hard to say exact figures but here's what I did. I took North Port, which I would say is one of the harder hit areas around with foreclosure. There are currently 745 active properties. Of those 745 properties there are 67 bank owned properties for sale. I would venture to say there are another 150 or so properties that are sitting there waiting to make there way through the courts. So, yes I would say 20-25% vacant properties wouldn't be to much of a stretch.
Now, you have to keep in mind areas. I'm sure it's around 5-10% on Siesta Key. I think it really is specific to areas but if you averaged all of vacant properties in Sarasota it wouldn't surprise me if that number is accurate.
I'll go read the article now. I didn't want it to sway my opinion before I commented.
Thanks for taking the time to answer / read. I forget how small a market North Port really is, compared to all of Sarasota County.
I was speaking to someone the other day about rental vacancy rates, and he quoted me a rate of 5.4% (and falling), which sounds unlikely. His point was that at 5%, landlords tend to raise rents. Personally, I don't see this market bearing any such thing until 2013 or beyond.
which shows the recent trend a steep increase in vacancies ... too bad there's no more recent data. Date 2005 2006 2007 2008 2009 Value 10.1 10.7 13.7 16.9 17.8
Of course I would imagine our slice of the Gulf Coast may buck the rental vacancy trend a bit overall. But 5%? Whew.
Location: Sarasota/ Bradenton - University Pkwy area
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I read the CNN story about the vacant home percentages. Have you heard the phrase, all real estate is local? By looking at the big, overall picture you can see trends for an area. To understand what is happening in your particular town or county, you have to break the numbers down further, to individual neighborhoods and price ranges.
They quoted Sarasota county as having 23% of the homes being vacant. Any place where you had a large number of homes being built between the years of 2001 and 2006 will have a much larger percentage of homes sitting vacant as a majority of people that bought during that time period were buying with 100% financing or very little money down while prices were climbing to their highest peak. Investors were getting 80% 1st mortgages & 20% 2nd mortgages and buying multiple homes to "flip." Many of those got caught by the "bust" and walked away from their mortgages and abandoned the properties. I've heard of a couple of neighborhoods that turned into ghost towns for a couple of years, there were so many vacant homes in foreclosure. So some neighborhoods will be hitting 40% or more vacancy rates and others will be closer to normal numbers. Places such as North Port, Parrish, Ellenton will see higher vacancy rates than Sarasota because more newer construction homes are in foreclosure in those areas.
Other factors are causing homes to sit longer. Short sales can take months from contract to approval of the sale by the seller's lender(s). I had one that took 10 months. Most take at least 3 to 4 months to close. Many of those homes are vacant as the owners have already moved to rentals, so they add to the numbers mentioned in the article.
Foreclosures are also taking longer to process thanks to foreclosure mill law firms such as the now closed David Stern law firm, which has been accused of improper paperwork and processing procedures on hundreds of foreclosures in FL. Wells Fargo and Bank of America are now sorting through many of their files, leaving many vacant homes and condos in limbo. Lawyers on behalf of homeowners are now challenging the validity of mortgages transferred via MERS (Mortgage Electronic Recording System), a system set up by large banks to avoid recording assignment of mortgages with the various county clerks. Several courts in the northeast have now ruled against the banks and MERS. 60% of all loans originated during the real estate "boom" period were sold and transferred via MERS. Wrap your head around that statistic. It could take many months to sort through all of those issues.
Supply and demand also play a factor. Decent condition 3 bedroom/ 2 bath homes that were built in the 1980's or 1990's and priced under $150,000 are going under contract fairly quickly. I track several neighborhoods in this price range closely and have noticed that the sales prices of homes in these particular neighborhoods has actually increased by about 3 to 4% over the past 3 months. Under $100,000 will find you competing for decent properties. If the home qualifies for FHA financing, there are bidding wars taking place on homes in some neighborhoods. Investors paying cash are grabbing many of the homes in the $50,000 to $100,000 price range in the more popular neighborhoods to use as rentals. I'm seeing more multiple bids on these types of properties lately.
How long it takes for a community to recover from the real estate bust will also be influenced by outside factors such as the national and global economies, the stock market, interest rates, etc. As Japan has recently proved, nature can also suddenly and strongly impact an area.
I read every article I can find about the Florida real estate markets and overall market trends and can tell you that their predictions are like snowflakes -- no 2 are exactly alike. If you read the Business Weekly of the local paper you will notice, however, that some rather large, well funded investors are buying up multiple properties in our area. Apparently not everyone thinks our local real estate is all doom and gloom.....
I did an interesting stat pull a few days ago for The Herald Tribune blog. I did get some flack for it from the residents of North Port saying I was bashing North Port (even though I live here). The figures basically showed that Sarasota's prices/figures overall were improving but North Port's figures were continuing to drop, thus pulling all of Sarasota county's stats down. If the stats (in North Port) continue to drop then you're going to see higher than normal vacancy rates.
One the other hand, it seems as though rentals are flying off the shelf. I have people contact me all the time concerned that it's very difficult to find a rental (this in all price ranges). I don't personally handle rentals but the guy I send my clients to says that he has a waiting list for rentals no matter where they are.
In talking with the many banks I deal with on a daily basis, they tell me that there are many more regulations and "hoops to jump through" now in light of the David Stearns debacle. This is slowing the foreclosure process down. We have seen a huge decline in foreclosures. Short sales are another piece of the puzzle. Since my partner and I are certified to handle short sales, many banks are approaching us to help them "clear their books" prior to their properties going into foreclosure. The banks seem much more willing to push these deals through then in prior months. This will help alleviate some of the back log.
In reference to the homes under $150k going under contract quickly, I would say-it depends. Here's what I am finding. If they are totally trashed, they go quickly, because the bank wants to dump the property and the investors or potential homeowners can see there is a possibility they may snag a deal. On the other side of the coin, the homes that are rehabbed or well taken care of are flying off the shelves. Now, the homes that have the stained carpet and need some painting usually sit there for quite a while. They're not fixed up enough to be "move in ready" and they're not trashed enough for someone to think they're going to get a real deal.
It's also interesting to look at the income producing property (duplexes, triplexes, etc). Those properties are getting snapped up as soon as they hit the market (in the lower ranges). This tells me the long term investors are back in the game.
Here's how North Port, Parrish, Ellenton, parts of Bradenton got into trouble... back in the "boom days", investors would sign up to buy 5-6-7-8 homes and only be required to put a $500 deposit. When things started to go south the investors walked on their deposits and left the builders holding the bag. Many of the builders could not handle the amount of homes that were defaulting and coming back to them and it caused a good number of them to shut their doors. When this happened many of the construction workers in town lost their jobs and stopped paying their mortgages. This created a domino effect. Now many of these homes are the new foreclosures. So, you have a combination of the new builder default homes, the homes owned by the many in the construction trades and then the others who lost their jobs in town or got into mortgages that they couldn't afford.
Right now, in all areas the stats look like a yo-yo. One month they're up and one month they're down. My prediction is that we're going to see prices start to rise, even if it's just for the short term, here's why. For the last month or so the pending sales have been higher then what is coming on the market. I'll take yesterday for an example, 80 new homes on the market and 99 pending sales (in the area that I track). Then you have the foreclosure market, many of those homes are getting snagged off by investors before they even hit the MLS. Now you have less homes coming out on the MLS. I have many clients who are ready to buy but can't find exactly what they're looking for on the MLS. I think we'll get a better picture of what's happening once the snowbirds go back and we're into the slower months.
Back to the rental rate question. I'll use my own rentals as an example. Last year I was getting $500 or maybe $550 for rent for a certain property. This year I'm getting $600+ for the same property. It seems as though rental rates are creeping up ever so slightly right now. I think we need to stay tuned to see if things will stick or continue the yo-yo effect.
My street is 60% vacant, though it seems there are at least people looking at the homes now.
One did get moved into last month but they are snowbirds so it will still be empty half the year.
which shows the recent trend a steep increase in vacancies ... too bad there's no more recent data. Date 2005 2006 2007 2008 2009 Value 10.1 10.7 13.7 16.9 17.8
Of course I would imagine our slice of the Gulf Coast may buck the rental vacancy trend a bit overall. But 5%? Whew.
Notice another trend from that graph was the steep rise in vacancy rates from 1995-2001 when the market was actually tightening and prices rising? Today rents are up quite dramatically from 2009 so take all these stats with a grain of salt.
I recall in 2005 the sheep were projecting home prices up double digits each year far into the future because of the wave of retiring boomer's decending into Florida...Get in before it is too late turned into something quite the opposite after the crash even as prices are now stable, values in most cases way below replacement cost and own vs rent ratio's have never been better.
I read the CNN story about the vacant home percentages. Have you heard the phrase, all real estate is local? By looking at the big, overall picture you can see trends for an area. To understand what is happening in your particular town or county, you have to break the numbers down further, to individual neighborhoods and price ranges.
They quoted Sarasota county as having 23% of the homes being vacant. Any place where you had a large number of homes being built between the years of 2001 and 2006 will have a much larger percentage of homes sitting vacant as a majority of people that bought during that time period were buying with 100% financing or very little money down while prices were climbing to their highest peak. Investors were getting 80% 1st mortgages & 20% 2nd mortgages and buying multiple homes to "flip." Many of those got caught by the "bust" and walked away from their mortgages and abandoned the properties. I've heard of a couple of neighborhoods that turned into ghost towns for a couple of years, there were so many vacant homes in foreclosure. So some neighborhoods will be hitting 40% or more vacancy rates and others will be closer to normal numbers. Places such as North Port, Parrish, Ellenton will see higher vacancy rates than Sarasota because more newer construction homes are in foreclosure in those areas.
Other factors are causing homes to sit longer. Short sales can take months from contract to approval of the sale by the seller's lender(s). I had one that took 10 months. Most take at least 3 to 4 months to close. Many of those homes are vacant as the owners have already moved to rentals, so they add to the numbers mentioned in the article.
Foreclosures are also taking longer to process thanks to foreclosure mill law firms such as the now closed David Stern law firm, which has been accused of improper paperwork and processing procedures on hundreds of foreclosures in FL. Wells Fargo and Bank of America are now sorting through many of their files, leaving many vacant homes and condos in limbo. Lawyers on behalf of homeowners are now challenging the validity of mortgages transferred via MERS (Mortgage Electronic Recording System), a system set up by large banks to avoid recording assignment of mortgages with the various county clerks. Several courts in the northeast have now ruled against the banks and MERS. 60% of all loans originated during the real estate "boom" period were sold and transferred via MERS. Wrap your head around that statistic. It could take many months to sort through all of those issues.
Supply and demand also play a factor. Decent condition 3 bedroom/ 2 bath homes that were built in the 1980's or 1990's and priced under $150,000 are going under contract fairly quickly. I track several neighborhoods in this price range closely and have noticed that the sales prices of homes in these particular neighborhoods has actually increased by about 3 to 4% over the past 3 months. Under $100,000 will find you competing for decent properties. If the home qualifies for FHA financing, there are bidding wars taking place on homes in some neighborhoods. Investors paying cash are grabbing many of the homes in the $50,000 to $100,000 price range in the more popular neighborhoods to use as rentals. I'm seeing more multiple bids on these types of properties lately.
How long it takes for a community to recover from the real estate bust will also be influenced by outside factors such as the national and global economies, the stock market, interest rates, etc. As Japan has recently proved, nature can also suddenly and strongly impact an area.
I read every article I can find about the Florida real estate markets and overall market trends and can tell you that their predictions are like snowflakes -- no 2 are exactly alike. If you read the Business Weekly of the local paper you will notice, however, that some rather large, well funded investors are buying up multiple properties in our area. Apparently not everyone thinks our local real estate is all doom and gloom.....
Great points. The hit was much worse in the fastest growng communities with the most speculation in 2004-06. From much of Lehigh Acres to all those condo conversions most everybody got in at the top with an exotic mortgage on a new home or refurbished condo they eventually walked away from as prices plunged 60-80%.
FHA has been a stabilizer in areas with a pool of buyers looking for that type loan actually has created bidding wars as all the short sale and REO on the market is not eligible.
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It could take many months to sort through all of those issues.
