Sarasota is the 6th most overvalued housing market in FL (days on market, insurance)

[Trying941]

Originally Posted by MOforthewin

Not many mention though, but part of the housing problem across the entire country is large corporations, I mean large firms buying up houses all over the place and renting them out for $$$ or flipping them for $$.

They buy a lot of them here in FL and jack the rent up a lot.

The Chinese firms have also been buying a lot of investment real estate in recent years. San Fran, Dallas, Miami are examples.

Blackstone is one firm responsible for a lot of the out of whack prices

There are many factors. I could list a dozen. But it is interesting you mention Chinese firms. The large firms like CITIC tend to buy, build and manage condominium units. They are not visible to the ordinary individual as they use American companies to front for them. I know from personal knowledge. Cannot say they are or are not active in single family homes. I dont know. But they would buy in bulk, not in one offs. I can say of personal knowledge that individual Chinese investors are buying in LWR and then renting or holding for both appreciation and to own US currency backed assets. This is a new trend in scale as Chinese real estate is becoming a more volatile commodity.

[MOforthewin]

Originally Posted by Trying941

There are many factors. I could list a dozen. But it is interesting you mention Chinese firms. The large firms like CITIC tend to buy, build and manage condominium units. They are not visible to the ordinary individual as they use American companies to front for them. I know from personal knowledge. Cannot say they are or are not active in single family homes. I dont know. But they would buy in bulk, not in one offs. I can say of personal knowledge that individual Chinese investors are buying in LWR and then renting or holding for both appreciation and to own US currency backed assets. This is a new trend in scale as Chinese real estate is becoming a more volatile commodity.

Not shocking at all what you mentioned.

China basically has the west by the b*lls and hence why with Covid you didn't see much in the way of retaliation by the federal government from Trump or Biden with heavy sanctions and such. If Trump would have then China could really have put the hurt on the US economically.

China has so much ownership of the US they could cause the US to go into a depression.

Just one example if that happened and China really wanted to wreck our economy they could sell off their assets at way below market value and cause property values to once again tank. Wouldn't even need to start a war. They could cause a depression if they want to.

IMO they hold a lot more properties than people think.

With all the things China has been buying up in the US and other countries I really have to wonder if they're thinking of something.

[Marinkra77]

Originally Posted by AaronDavidSchultz

I guess my Wall Street trading career is showing...


The housing market in this area, is, factually overpriced based on too many metrics to examine here with a bunch of lay, arm-chair "experts".


Believe what you wish. If you want to buy one of these overpriced houses, then go ahead. That's your business. People justify bad decisions (financial) on a daily basis, because their emotions rule them, they become giddy and self-congratulatory. Fine. Knock yourself out. Be happy.



I know better. It's a seller's market...period...full stop. Stevie Wonder could see that, and you don't have to be a Bond Trader like me.


You think a 500k house is worth 1mm in less than 18 months? fine, strap it on ! The air gets thin at that altitude.


People love to whistle through the graveyard, it makes them feel secure and smart.


Oil is up 92.00. Inflation is real, not transitory. Printing more money is happening with the bone-headed program touted by Mr. Biden. American Rescue Plan...LOL



Politicians, all of them, are lying to you. The Fed is lying to you.



The Bond Market will tell you what is happening...not the Equity Market. Watch the Bond Market, and specifically the 10 year.


Can you say "stagflation"? Can't say when, but it looks like it might be around the corner


No markets go up in a straight line...but wait until Oil hits 100....lol


Don't believe ANY hype...Sell the rumor.


Again, most any fool .can see it's a seller's market - a very good one....then sit on the sidelines.


You want to buy?? knock yourself silly. Freedom. I know this: you never go broke taking a profit...period.

For me, I wouldn't touch this LOCAL market....sell? damn right.

I agree with you 100%.

[Jensen440]

Correct ^^^^

[joshan]

[Jensen440]

Institutional Investors generally speaking ....about single-family houses (and big time multi units) are less price sensitive in local/specific markets.


Why? easy peasy. They simply use the real property as underlying collateral for various crazy structures of asset-backed securities and/or mortgage-backed securities.


Some ofthe structures of the fixed-income/bond securities can be quite exotic (read manipulated) for example into various tranches that throw off cash flow, thus yield, say on the front end in the early years of the longer term security).


Mathematically they can increase the interest-rate coupon that can offer over-market current rates, then they SELL the securities to sometimes stupid pension funds, endowments, other banks, county/city treasurers, school systems, Sovereign funds (esp in the Middle East, China).


They can also use the collateral to go to the Fed window to borrow even MORE cheap money at rates even you can't get.


It's a sophisticated circle-jerk that is constantly done by wall street crooks, aided by smart back-office (many foreign, like Indians, Pakistanis, Russians - Harvard/Wharton grads lol) to configure various 'new and fresh investment products' (not just limited to REITs).


A lay person would not understand these kinds of products and who has an appetite for this crap, which is sold with a LOT of 'assumptions' of the underlying collateral and its 'pricing schemes'. Some of this manipulated crap is almost illegal and how it gets the nod from Agencies and FASB, you don't want to know.


FNMA, FHLMC, SBA, GNMA and private issuers are part of the circle-jerk and musical chairs of securities issuance.


These institutional big boys, need not sell the houses! why? they are making money by the boatload on the backside by selling the securities back to others, just in another form...i.e. not the 'whole loan'.


They can re-circulate the money until the cows come home! if the market 'takes them out' by more price appreciation, then fine, if the market collapses a bit? no problem!! they just hope to sell out the various 'issues' to other chumps thereby SHIFTING the risk.


Yeah, most people don't get it. They don't care about local house prices that much, they care more about raking off the top, and shifting market and price risk as fast as humanly possible.


If you read some of these prospectus, you wouldn't understand 20% of it most times.


Some of it ought to be illegal, but the wolves are guarding the henhouse, the regulators can't keep up with the tactics and methodologies - and EVERYONE is getting paid.


Keep buyin' em up, pool the collateral, print the issue, sell it in pieces to the 'investor class' and leave......and make sure you pay some fool at Moody's or S&P to get it at least 'A-rated'....but if it's reeeally good, get Moody's to label it TRIPLE-A.


Deal Done! whew! Now I get to buy a million dollar condo in Sarasota or Naples.

[AaronDavidSchultz]

Originally Posted by Trying941

Overvalued and overpriced are over used terms in real estate. They suggest that transactions are taking place among buyers and sellers at above some mythical "true" or "intrinsic" value. In fact, the true value in a liquid and free market is whatever the agreed upon price was without undue influence or external factors. In other words, the free market does not lie. It tells you today's value.

IMHO, I would assert that it does NOT tell you about "today's value". I submit it singularly tells you about today's PRICE.


I never, ever conflate value and price. I would be a bonehead if I did that in most cases.

[Jensen440]

Another facet of the scam:




Many of these huge buyers of SF houses just LOVE taking product off the market, why? the prices go up - comps go up, appraisals increase dramatically - thereby the underlying collateral implied price/value increases so they actually borrow even more money (esp from the FED) and again allegedly increasing the value of their portfolios, and leverage!


Higher prices on what they already hold = the cheaper they can borrow against the collateral (then on to another quasi scam cheaply funded like never before).

[Hbcapital]

Originally Posted by Trying941

I am going to give potential home buyers here my current bell-weather for market conditions. It is the asking price by a large local builder, Neal Homes, in Grand Park for the Kiawah model. Over time it is as follows:

576990 5/11/21
578990 5/15/21
605990 5/25/21
625990 8/5/21
635990 8/17/21
655990 8/30/21
661990 9/13/21
666990 9/30/21
682990 11/3/21
684990 11/30/21
694990 12/22/21
704990 1/5/23
719990 1/13/23
729990 2/3/22

When you see the price increases stop, slow, or the price decline, you will know what this one builder with skin in the game is seeing on the ground in the real world of real estate where price matters, and not the opinion of self proclaimed Internet experts. It is just one indicator I use, but a damn good one.

The Kiawah model at Grand Palm, another Neal community, went up another 10,000 today to 739k base price.

[MOforthewin]

Originally Posted by Hbcapital

The Kiawah model at Grand Palm, another Neal community, went up another 10,000 today to 739k base price.

What's the build quality for this overpriced thing? Is it the usual FL standard with cheap materials and craftsmanship yet charge a premium? meaning it's 739k for a house that should be more like 500k quality wise.