Predicted 24.4% Decline in Ft Lauderdale? (Fort Lauderdale, Hollywood: short sales, real estate, apartment)

[Elvi03]

Money magazine real estate: Home price forecasts and housing data for Fort Lauderdale - Money Magazine on CNNMoney.com

I just found this piece on CNN Money that predicts that the Ft Lauderdale market may come down an additional 24% over the next year. Since values have come down so much already, 24% seemed pretty aggressive.

I'm exclusively considering the Weston area, but I welcome your general thoughts.

I've gathered a few of things so far:
1. Homes under $500k in Weston seem to be moving.
2. Homes in the higher price brackets (call it over 700k) - though they've come down from their outrageous original listing prices are not quite down to reality yet and the sellers seem to be unwilling to lower more. I wonder what will happen to these people.

Would you say those statements are accurate - What have you seen locally?

Where is the Weston/Ft Lauderdale market going over the next year?

Have you seen/heard of an increase in RE activity sparked by the lower rates & prices?

thanks, E-

[acegolfer]

Originally Posted by Elvi03

I've gathered a few of things so far:
1. Homes under $500k in Weston seem to be moving.
2. Homes in the higher price brackets (call it over 700k) - though they've come down from their outrageous original listing prices are not quite down to reality yet and the sellers seem to be unwilling to lower more. I wonder what will happen to these people.

Would you say those statements are accurate - What have you seen locally?

Where is the Weston/Ft Lauderdale market going over the next year?

Have you seen/heard of an increase in RE activity sparked by the lower rates & prices?

thanks, E-

1. Homes in the lower price range generally move more than upper range. So you are correct in your observation.
2. I think the reason why the price hasn't dropped for 700k market is because there are less distressed sellers in this upper range. The lower range market has so many short sales/foreclosures, which drives the price down. See below.

Price in Weston keeps falling. This is primarily due to a lot of short sales in the market. My estimate says more than half of listings are short sales in 300k-450k price range. A friend of mine who is house hunting told me that the regular sale home prices, on the other hand, have not fallen that much from last year.

Nobody knows when the market will hit the bottom. I think it's not a good idea to time the market. If you want to buy, keep searching till you find a perfect home. If you try to time the market instead, you may get a good deal but you may not find a perfect home.

[Wild Style]

Originally Posted by acegolfer

1. Homes in the lower price range generally move more than upper range. So you are correct in your observation.
2. I think the reason why the price hasn't dropped for 700k market is because there are less distressed sellers in this upper range. The lower range market has so many short sales/foreclosures, which drives the price down. See below.

Price in Weston keeps falling. This is primarily due to a lot of short sales in the market. My estimate says more than half of listings are short sales in 300k-450k price range. A friend of mine who is house hunting told me that the regular sale home prices, on the other hand, have not fallen that much from last year.

Nobody knows when the market will hit the bottom. I think it's not a good idea to time the market. If you want to buy, keep searching till you find a perfect home. If you try to time the market instead, you may get a good deal but you may not find a perfect home.

You just wait until those Alt A prime and near prime jumbo loans start going up in smokes (yes these are the BULK of the variable rate mortgages NOT subprime). That is when the real fun will begin.

[cuba libre]

The areas where prices inflated the most will also be the ones with the biggest slide. Broward Co. was definitely an inflator.

[midnight_runner]

I get the Money mag in the mail every month and if its the same article I read they predict South Florida to be one of the last areas in the US to recoup some of the real estate values.

They suggested somewhere in the 2010-11 range before it bottoms out, and even then they said it would not be a V-type increase, but more like an U-type where prices remain steady for several years.

[Thatguywho]

I would say these things....

1) there is activity as people think this is the time to buy. Sad to see it happen.

2) Prices will either be foreclosure prices (which are still at about a real market value or more) or a delusional home owner looking for someone crazy enough to over pay for the property.

3) to get a sense of what the prices should come close to leveling to, go to the bcpa.net and look up homes in certain areas. Look for 1999-2001 sale prices.

In a normal market you could add 1 to 2% per year and get a good estimate. But in a severe buyers market you should then subtract 20% off that number for a price I would be happy buying at.

Anything else is way over priced. This includes many foreclosures.
After each major Real Estate bust there is a long period of stagnation.

There should be a boom in REOs once the banks pounce on them (they have been holding back), but that little bump will not last more than 6 months (I believe) and then they will just keep dropping.

I would seriously stress.....STRESS....that you wait it out. You lose nothing by waiting it out, nothing at all. Buy now and you could be upside down in 3 months....severely upside down in 12 months. Is it worth the risk? No.

If you wait it out, til the final rumbles of the crash happen, then I would look for a decent foreclosure to get a good price. There will be lots of them.

Remember, a boom starts with the most desirable properties (3/2 garage, pool) and spreads out from there as they get out of reach. Last to go up are condos and vacant land.... the crash is an opposite of the boom. First to go are the undesirables...

Condos are still crashing hard, as is land. Therefore the bottom cannot be here yet. After condos will be villas and townhomes (which are really falling too).
Also the poorer areas will drop and drop and drop too. Eventually the bust hits the most desirable, the 3/2 with a garage.

It is those 3/2s that people use as the 'ooh, prices look good' media kool aid. They will hold their value longest in a bust...but you have to wait for the bust to finalize or you will buy too high.

Just my point of view, and you should take others too before you make a decision.
Also, be aware of your neighborhood and how many foreclosures...might not be pretty to live there.
Also, Lori Parrish, the appraiser is not bringing down those values as far as taxes. It is called 'over taxing' and I would wait until that is settled in court. Should not be long before we all get upset and someone sues for that kind of junk.

If you are renting now, which I imagine you are, might want to check out the owner on the broward county public records just to make sure they are not in trouble...

Just be cautious and take your time buying and you should be fine.

[Wild Style]

friend of mine who is a real estate agent just put up a foreclosure for a bank. The home for 500,000 at the height was just put on the chopping block for 150,000.

midnight_runner

I approve your message!

Basically home prices need to be between 2.5 to 3.5 times annual income. As you pointed out that puts us around 1998 or so levels. People hate to hear that but it is what it is. But I also think some neighborhoods are not going to make it back from this one. There is just way to much over building and some places are losing population (like broward). I saw a entire block in Hollywood Florida boarded up with a chain link fence around the homes from one end of the block to the other. Not to mention people who have perfectly normal mortgages will be getting foreclosures on as they lose jobs. This is a fine and ugly mess we got ourselves in to.

[The Ice Man]

There are many of us COLD Canadians who are very interested in these Fort Lauderdale stats. We were ready to buy this month( going down to Fort L for the easter weekend) but now we don'y know what to do- wait or try to convince the sellers of what's to come!! Funny, the agents NEVER seem to see these stats!!!

[Wild Style]

Originally Posted by The Ice Man

There are many of us COLD Canadians who are very interested in these Fort Lauderdale stats. We were ready to buy this month( going down to Fort L for the easter weekend) but now we don'y know what to do- wait or try to convince the sellers of what's to come!! Funny, the agents NEVER seem to see these stats!!!

The agents have a agenda right? If you wait that means no sale for them which means they can't cover their mortgage. As for the sellers you have to remember something. Regardless of how much prices are supposed to drop they are in a circular loop. They purchased early at the prices prevelant at the height. If they drop the price down to what it is relaly worth right now, they will still be on the hook to the banks for the rest of the money owed. Unless it is life or death, I would just wait. You still have a LONG way to go before things are were they need to be. I called this one place to see about leasing a apartment downtown fort lauderdale. This goof ball gives me some outrageous price and then tells me this is the leasing season and that I need to hurry up. Never mind this building is 100% EMPTY and no one is living in it. Never mind when you go online EVERY unit is marked as "available for rent". But noooo they want to ask for outrageous prices which are not inline with incomes here in Broward. But then again I understand, because the builders are on the hook for a LOT of money. Guess I will wait until the builder gets foreclosed on then I iwll lease it from the bank for FAR less. There are places in other parts of Broward like this, where the bank came in and is leasing or renting for amazing prices.

[Nolefan34]

At this point, why would you consider buying a house based on when you think prices will go up or down? Why not buy a house because its the right time for you, or because you need a place to start a family, or because you can afford it? This is not 2003 anymore, you aren't going to be flipping houses and making $100K overnight. The housing bubble is over, and there will not be another one for years. Prices will not bounce back overnight, they will slowly recover over a decade or so. And chances are they'll go much lower before they rise again.

You should buy a house that you'll want to live in for the long term regardless of short-term price fluctuations. Don't try to time the market. Eventually over time the market will climb back and you'll be happy that you invested your hard earned money into an appreciating asset. Before buying, just take a look at your own personal situation and decide if now is the right time for you to buy a house period. Buy a house that you can reasonably afford and do not stretch yourself.