What is up with the real estate market?!!!!! (Jupiter: rentals, HOA fees)

[Galan]

Originally Posted by jgreco5

For a bubble to form you need to have an overabundance of buyers which there are not. I am also seeing what I consider to be "fairly priced" homes sitting on the market for months. The homes with premium lots, good layouts and don't need updating are the ones that are selling in days.

The foreclosures and short sales that I've seen are no longer bargains. I think it also depends on the neighborhood. There are some neighborhoods that came through this fairly unscathed with maybe a handful of properties being a distressed home.

I respectfully disagree with some of what you say. We do indeed have an overabundance of buyers. The only reason prices are so high is because the investors bought up all the foreclosures and now they're listing them on the market at high prices so they can make as much money as they can as quickly as they can. Most of the people buying them are transplants who are looking for a second home. Nothing wrong with profit the investors are trying to make, but home prices have already gone up more than 8% this past year and that's way too high to be sustainable. Stats don't lie. It was going up between 8-12% per year during the boom years and we all know what happened. Unemployment is still sky high and the economy retracted last month which makes this "recovery" a total myth. This is fast money at work here and it's all smoke and mirrors. Lending standards have not been as dramatically safeguarded as people think. They're giving home loans out like water again and you only have to have 3.5% down. That's insane!

Almost all those homes you're talking about that you think are still the market are not on the market - they're all under contract. Nothing good lasts more than 30-45 days these days - nothing. A lot of what you see are homes selling for cash only, or the home itself requires a $30k-$40k mandatory golf club membership which no one wants, so the homes don't sell.

I think you can still get a bargain on some of the foreclosures and short sales, but only if you get there first and the bank takes the first offer they get, and only if you're willing to do all the repair work yourself. However, banks seem to be letting the short sales linger so they can get as many offers as they can, which makes it harder and harder to get a short sale for a rock bottom price. You can't even bid on a short sale with the expectation of coming away with the property unless you're willing to place an offer that's at least $10k above the asking price, and even then you have to come in with cash or at least 20% down from what I've seen. I'm not claiming to be an expert, but I've been shopping for a place for a few months now, and this is what I've been seeing.

[veggienut]

I respectfully disagree with some of what you say. We do indeed have an overabundance of buyers. The only reason prices are so high is because the investors bought up all the foreclosures and now they're listing them on the market at high prices so they can make as much money as they can as quickly as they can. Most of the people buying them are transplants who are looking for a second home. Nothing wrong with profit the investors are trying to make, but home prices have already gone up more than 8% this past year and that's way too high to be sustainable. Stats don't lie. It was going up between 8-12% per year during the boom years and we all know what happened. Unemployment is still sky high and the economy retracted last month which makes this "recovery" a total myth. This is fast money at work here and it's all smoke and mirrors. Lending standards have not been as dramatically safeguarded as people think. They're giving home loans out like water again and you only have to have 3.5% down. That's insane!

And why is it that when your looking for a place, you can't find anything reasonable in costs like you hear~? All the RE people want to sell you the high priced places~?

Almost all those homes you're talking about that you think are still the market are not on the market - they're all under contract. Nothing good lasts more than 30-45 days these days - nothing. A lot of what you see are homes selling for cash only, or the home itself requires a $30k-$40k mandatory golf club membership which no one wants, so the homes don't sell.

Definitely true~! I know someone in a country club and they are trying to sell their place.

I think you can still get a bargain on some of the foreclosures and short sales, but only if you get there first and the bank takes the first offer they get, and only if you're willing to do all the repair work yourself. However, banks seem to be letting the short sales linger so they can get as many offers as they can, which makes it harder and harder to get a short sale for a rock bottom price. You can't even bid on a short sale with the expectation of coming away with the property unless you're willing to place an offer that's at least $10k above the asking price, and even then you have to come in with cash or at least 20% down from what I've seen. I'm not claiming to be an expert, but I've been shopping for a place for a few months now, and this is what I've been seeing.

Are foreclosures better to look at than short sales~? Doesn't foreclosures need a lot of work~? Or are their some that are in decent shape~? Or paying cash the way to go~?

[gardenpearl]

I looked around in PBG last month, and some of the country club communities like BallenIsle had reasonable home prices but very high fees - I was quoted something like $900 per month from Mirasol or BallenIsle just for a tennis membership (no golf) in addition to a high upfront fee of $45K or more. I very quickly lost interest during the phone call so can't even remember the exact cost.

I also heard a lot of complaints about the HOA's from friends of mine who live in various communities in PBG. When 4 different people are all saying the same thing, I start to listen.

[MiamiLIFE]

Originally Posted by chickendoc53

Moving from CT to WPB - focused on Jupiter and PBG - put a full price offer in on a home in Mirabella with the only contingency being my mortgage and appraisal and lost it. Fair market value based on comps was 40K less than my offer. I admit it was a premium lot but 40K is a lot to give for a premium lot. Most homes that I have interest in are gone before I can even get down there to look at them. If this another bubble for WPB or will it sustain?

It's a lack of inventory. There are three types of deals out there: (1) foreclosed/lender deals that are in horrible physical shape, (2) underwater sellers that are holding out for ridiculous asking prices because they are so far upside down, and (3) good quality deals with truely motivated sellers. The market is largely made up of (1) and (2) so when (3) comes along it gets bid up and in many instances a cash buyer snatches the deal right away. There is so much pent-up demand and so few of the (3) deals available that prices are rising quickly in this segment.

I disagree that it is a bubble. South FL values are still down quite a bit from the peak. And the last bubble was caused by easy financing. That's not the case this time. The prices are being driven by a supply and demand problem. More buyers trolling South FL than willing sellers.

Finally, since the market is currently recovering all the sale comps are going to be trailing market value. A deal done three months ago isn't the price today. All that being said, interest rates are beginning to rise so some of the momentum will begin to stall so if you're patient you may be able to get back in the game in another year.

[mcleanexec]

I have been looking at buying two more properties in WPB. Both had contracts within a two weeks. Neither was a great deal. My realtor tells me that foreign investors are buying up alot of properties on spec.

[gardenpearl]

The only way around it seems to be to buy new construction. However, I'm afraid that if I buy a new home in the mid to high $300's, for example, in a gated community which is predominantly young families who rely on a decent job market, in a few years some who are overextended financially may have to walk away (history repeating itself) and the community may not hold its value.

[071402]

There did not seem to be many areas at all (here) when we looked (and which were very nice) which are NOT GATED w . hoa fees.

Fwiw, I really liked the looks and the location of frenchmans landing. Lower hoas and a nice spot. HOWEVER, they have no community pool or anything that brings people together.

[071402]

Originally Posted by mcleanexec

I have been looking at buying two more properties in WPB. Both had contracts within a two weeks. Neither was a great deal. My realtor tells me that foreign investors are buying up alot of properties on spec.

ITA. Last home we looked at in PB GARDENS last month had two Asian executives waiting outside for broker and keys. Home (evergrene) was gone / going to contract when we called on it a week later.

[jgreco5]

Originally Posted by 071402

ITA. Last home we looked at in PB GARDENS last month had two Asian executives waiting outside for broker and keys. Home (evergrene) was gone / going to contract when we called on it a week later.

With Evergrene HOA at almost $600 per month, I wonder how the values will hold up in there. Seems people will always be put off by the high fees when there are many other nice communities with reasonable fees.
Granted the clubhouse is VERY NICE, I'd need to use it A LOT to feel like I got my money's worth. Those HOA fees are monies you will never recoup.

I'd rather not have such high HOA fees, skip the over the top amenities and swim in my own pool. But I do understand there are people whom really enjoy the social aspect of the community clubhouse and its worth it for them.

[gardenpearl]

Having lived in a few condos and gated communities, my experience is that the social aspect is usually not as great as one hopes or expects. I think it's unpredictable and the luck of the draw. I have always made a few close friends, but the clubhouse has never been Party Central, at least not in my experience.

Still, I keep looking around at different communities, probably with false hope.