How low will Broward go? (Miami: real estate, foreclosures, lease)

[lukeb321]

Not trying to be super negative or positive, just real.

How much lower will it go?

Another 5%, 10%, 20%, more?

Most reports seem around 10%, with a flat line for awhile.

What do you see in your neck of the woods?

[heydade]

I have been saying this for the past 12 months ( read my posts) Broward County will see another 10% drop in real estate prices by this time next year. About 6 months ago, it would have been another 20%....now it's down to 10% since we have dropped down in prices significantly since 6 months ago.

[Wild Style]

Unless 10% will make the average home price 3 to 3.5 times the average annual income in Broward County you can expect a heck of a lot more than that. You can also expect that drop to speed up as more jobs are lost and the economy worsens (which it will)

[planetsurf]

I don't really disagree, but I wouldn't get TOO caught up on the 3-3.5% rule. In places where people retire too, there will be lots of older couples buying places with very little reported income. Think of the people selling $500-800k homes in the NorthEast and buying $300-500k homes down here without comparative incomes.
We also have a certain % of folks buying weekend condos who don't live here.

Unless you can pull these numbers out of percentages, this helps skew things a LOT in certain places like SE FLa, San Diego or Arizona.

[big mean bear]

Most of the people who stabilize markets have already left Broward or they are in the process of leaving, or they want to leave. I think the 2010 census will prove that the scary people moving North from Miami scared away all the middle class folk. Oh, and don't forget the Romance culture speculators... Gotta love 'em. The small time developers who always go bust but manage to steal from cities and retire on an island...

Whatever, they made their own bed due to successive waves of immigration, creating an indigestible glut of people, now they have to sleep in the bed (or mess) that they made. That's the only reason why Broward grew so much since 1990, it started to share Miami's crown as refugee camp.

OP - much lower. Think 1998.

[Wild Style]

Originally Posted by planetsurf

I don't really disagree, but I wouldn't get TOO caught up on the 3-3.5% rule. In places where people retire too, there will be lots of older couples buying places with very little reported income. Think of the people selling $500-800k homes in the NorthEast and buying $300-500k homes down here without comparative incomes.
We also have a certain % of folks buying weekend condos who don't live here.

Unless you can pull these numbers out of percentages, this helps skew things a LOT in certain places like SE FLa, San Diego or Arizona.

indeed but I have a sneaking suspicion that these retirees don't make up enough of the citizenry in Broward to skew it that much. Also, I have read MANY articles that CLAIM (my emphasis) that a lot of retirees have been returning to where they are from because of family and cost of living. They are moving in with their kids and such. This is how Europe is in many places. You see one or two generations in one home. I think America will start to see that more and more as things start to play out further.

Originally Posted by big mean bear

Most of the people who stabilize markets have already left Broward or they are in the process of leaving, or they want to leave. I think the 2010 census will prove that the scary people moving North from Miami scared away all the middle class folk. Oh, and don't forget the Romance culture speculators... Gotta love 'em. The small time developers who always go bust but manage to steal from cities and retire on an island...

Whatever, they made their own bed due to successive waves of immigration, creating an indigestible glut of people, now they have to sleep in the bed (or mess) that they made. That's the only reason why Broward grew so much since 1990, it started to share Miami's crown as refugee camp.

OP - much lower. Think 1998.

ohhh dag, we actually agree on something!

[Nolefan34]

I love how people think there is some magic number. Housing prices will continue to decline until demand meets supply. Right now, that gap is widening not narrowing. People are losing their jobs in record numbers and increasingly cannot afford to buy new homes. Since loans are no longer available to people with less than stellar credit, that means you actually have to put a 20% down payment on a house. Most people are currently in debt and do not have money in the bank. So where are they going to get the 20% down payment from?

If the average house price is $200,000, and you need a 20% down payment, that means you will need to shell out $40,000. Tell me who has $40,000 laying around these days. If they do have that kind of money then they are not trying to time the market.

Also, housing in Broward is significantly overpriced even today despite the decline in prices over the last 2 years. As much as prices have declined, they are still well above the national average. Additionally, the cost of property taxes and insurance is through the roof. Wages relative to cost of living is out of whack here in south florida.

[Wild Style]

Originally Posted by Nolefan34

I love how people think there is some magic number. Housing prices will continue to decline until demand meets supply. Right now, that gap is widening not narrowing. People are losing their jobs in record numbers and increasingly cannot afford to buy new homes. Since loans are no longer available to people with less than stellar credit, that means you actually have to put a 20% down payment on a house. Most people are currently in debt and do not have money in the bank. So where are they going to get the 20% down payment from?

If the average house price is $200,000, and you need a 20% down payment, that means you will need to shell out $40,000. Tell me who has $40,000 laying around these days. If they do have that kind of money then they are not trying to time the market.

Also, housing in Broward is significantly overpriced even today despite the decline in prices over the last 2 years. As much as prices have declined, they are still well above the national average. Additionally, the cost of property taxes and insurance is through the roof. Wages relative to cost of living is out of whack here in south florida.

in a round and about way you answered the question. wages and living expense hence wages in relation to home prices which historically anywhere from 2.5 (that was back in the 70s) to 3.5 times annual income. Also traditionally it was 10 to 20 percent down. You are right though, even after all this drop it is still WAY over price given real incomes. Also as you have pointed out the debt to income ratio people already have is another wrench in the gears. I am shocked we have not started seeing the lease to own deals yet. I guess disperation by banks have not reached that point yet.

[Nolefan34]

My point is that there are too many additional negative factors right now that are weighing down heavily on the market and nothing to bring it back up. Its like an avalanche; too much downward momentum to stop it. And all of these financial gurus are saying that the market will bottom out late 2009 or early 2010. They are trying to scare you into buying now instead of later because you might miss the bottom of the market. I take it that they are desperate and think that saying that will cause people to go out and buy.

[Broward resident]

Again, "asking prices" versus "sales prices"....of course there continues to be a huge bid-ask spread ...but all I care about is where deals are getting done.
Good, recent comparable transactions are happening at very rational pricing levels.
Stop the foreclosures (eg restrict the supply) and the bottom will happen more quickly than most people think.