By Mike

May 24, 2006 04:08 PM | Link to this

Trying to get some information. I am a buyer, I want to buy a place in Boca, have a pre approval on a mort. and am ready to go. Happy to hear that there is some weakness in the market and that I am buying at the right time. Can you all please share with me any advise you may have for someone in my position. How can I find out what the last home sold for and when? What is the best way to get a lowball offer accepted? I am looking for a place to live for the next 10 or so years and I am not looking to steal something, but I do want a great deal. What do you alll think?

By

May 24, 2006 04:31 PM | Link to this

Simple. Get a good realtor and tell him or her to show you only homes that have had their asking prices reduced several times since listing. 50% of those will be lunatics who started out with ridiculous asking prices to begin with. Ignore those. The other half will be desperate sellers who either need to move because of relocation, or who got caught by exotic financing when the rates started back up.

When you find a place you can stomach, make a low offer. Don’t lowball because few will bite.

Just keep making low offers on properties with multiple price reductions.

One of them will stick!

By

May 24, 2006 05:00 PM | Link to this

Is there any way you can rent for a little while longer? This is just the beginning of the pending housing bubble implosion. Real estate is cyclical and the road to the bottom is just beginning. Ignore all the greedy snobs on here, they are in denial.

By

May 24, 2006 05:58 PM | Link to this

I don’t pretend to be an expert when it comes to real estate, but how can you justify saying that this is the beginning of the “housing bubble implosion”? Are you an expert? Do you know of some reason why So. Florida won’t continue to attract residents as it has for the last 50+ years? Is there a bit of over-supply right now? Sure. Have values cooled off? Yes. Does this mean that if homes don’t continue to appreciate at 30% a year as they have over the last 5 years that there is a “housing implosion”? Be realistic. Just because you can’t sell a home in 3 days anymore doesn’t mean that there is an implosion coming. And real estate is cyclical? Show me the last 3 down markets in history where across the board values have gone down. I am not talking regional downturns, but the entire US housing market. I’ll be patient and wait as you search in vain. Real estate has been and will continue to be the best investment you can make. I am not a greedy snob, I can just recognize a small market correction when I see one. To the original poster, don’t expect people to accept “lowball offers” they may be in a pinch, but not stupid. Make a fair offer, close on it, and enjoy your new home. If you plan on living there for 10 years, does it really make sense to pick a home based on the deal you get versus one that you actually like and would enjoy living in?

Best Regards.

By dg

May 24, 2006 07:26 PM | Link to this

i could not agree more. pbc is not going to crash. correct yes, crash no. the condo market might be overbuilt, but projects being cancelled, conversion stopped, all will correct itself. it may take sometime.

i guess the 1000 people a day who move to fla, will live in thier cars. the market might be soft, investors might be getting hurt, but the word “investor” is over used. how about “amatures” with no real estate experience. who shouldn’t have “invested” in the first place.

i think buying a single family home to occupy as your residence, or purchasing a condo that actually has a positive cash flow if rented is something that has always been a good investment.

people who put 10% down on pre-construction condos that listed for $450k, and had carring costs of $3500 a month, but would only rent for $2000 a month, did not do any homework.

sound like investing in a company that has no product, or real service, $150mm in an IPO, and a burn rate of $10mm a month. do the math.

tax benefits, tangible assests, and a roof over your head is always a good thing.

By

May 25, 2006 12:30 AM | Link to this

To Every idiot who says real estate is the best investment, if they had any idea what they were talking abou they would know that the Stock Market has gained a little over 10% since 1934 and Real estate has returned basically inflation rates of 3 and 4% . So if you think that Palm beach county along with Miami and Broward county will continue to go up then go ahead and buy something. But don’t forget the High crime rates, Miami 3rd Highest in the country out of big cities, Palm beach county is right up there with crime. West palm beach is one of the most dangerous places to live. Add to that the 2% taxes on your property and see who will want your home when you sell it. Also remember, This year is the first in 30 years they are preparing for a loss in students in overall attendance. I guess the 1000 people a day is reversing. Good luck with your search and be careful the price on a home in South Florida is not a real price just an inflated imaginary one.

By

May 25, 2006 03:11 AM | Link to this

To the above poster, who obviously has issues. Why do you assume that comparing rates of return dictates what is and what isn’t a good investment? Have your stocks CONSISTENTLY returned 10% in the past 10 years? Has your home ONLY appreciated 3-4% in the last decade? You throw out these numbers as if they somehow support your belief that the stock market is a better investment. If owning a home is for “idiots” then why is homeownership in America up to 69%? Man, that is alot of idiots! We sure are dumb. Us “idiots” got to write off our mortgage interest on our taxes this year. Did you get to write off anything this year? How about your Enron stocks? Delphi or GM? Gimme a break.

And to throw in that West Palm Beach is one of the most dangerous places to live? Seriously, show us the article that your “facts” come from, and post them here. By the way, your aren’t allowed to be the author of whatever article you decide to point out.

The issue over this being the first year of declining student numbers has nothing to do with “reversing” 1000 people a day coming to FL. Those people for the most part consist of empty-nesters, retirees, and 2nd home owners, non of which have school-aged children. The tax rate of 2% has been standard for awhile right? Did it stop anyone from moving to PBC in the last few years? Do you think that for the people moving from the East Coast (NY, NJ, Conn, etc.) 2% is bad? That is probably a bargain for them, and they are the ones buying our houses when we sell them. And the prices aren’t imaginary, because people are paying them. Slightly inflated? Possibly, but not imaginary.

By dg

May 25, 2006 07:42 AM | Link to this

i guess the person who posted the comment about the stock market, lives in his certificates. since when has pbc consistantly posted a 3% to 4% return annually on real estate.

property/income tax rates, traffic, crime and weather are all relative. try living in nyc, boston, la, dc or any other large metro area.

as for the “locals” here, stop complaining about the people moving here. what do you think caused, and will continue to cause our property values to rise, bring cultural events, jobs and development to the area.

currently pbc has one of the lowest unemployment rates in the country.

i grew up in ft lauderdale/davie area. i am 40. i welcome the renovation i have seen in that downtown area. ft lauderdale went from run down spring break and tee shirt shops, to a great place to eat, drink and shop.

as a teen i remember visiting relatives who lived on palm beach, what a dump wpb was. now look at it. maybe the downtown was torn up for some time, but how great is it now. the job they are doing is even better than ft lauderdale or delray. not to mention the gardens mall/downtown area.

the streets, the shops, the food, the nightlife. these changes do not happen quickly, but the end result looks great, and continues to get better.

times change, and places change. if the true “locals” don’t like it. take the home you paid 150k seven years ago and sell it for the 800k you can get now. oh, by the way….

depending on your tax situation most of that gain will be tax free. try that in the stock market.

By D.Legler

May 25, 2006 08:00 AM | Link to this

The decision to buy now or wait is really a function of your financing options. The market will continue to cool, but an implosion as referred to in prior posts, is highly unlikely as florida’s economics are a continually draw of residents and investment. The decision to buy should be based on financial calculations considering amount mortgaged, at what interest rate, and your current cash flow situation. While prices may become further depressed during the next year or two, financing will surely become more expensive. If it is a mostly cash purchase, wait a little. Mostly financed, perhaps it is best to buy sooner than later. Best advice given; If its an investment, fall in love with the deal not the house. If its a long-term personal residence, fall in love with the home not the investment. A quality lifestyle is priceless, and your long-term return will be fine.

By Mike

May 25, 2006 08:38 AM | Link to this

Mike again,

I am going to stay in the Boca area, my family is here as is my business. All of the issues that other raise about PBC are not a concern to me. I am not looking to make 30% on an investment in 12 months and move I want a place to live. I want to follow the advise of the last poster and live somewhere for the long term in a place I like.

My Question: Can you all give em some advise on how to offer on these properties. If a place is listed at say 325k, what is a good low ball offer? How do I find out what the prior prices were listed on the property? Should I offer 66% of an asking price if I plan on offering upto 80% of the asking price? What are your alls thoughts?

Mike

By rca

May 25, 2006 09:08 AM | Link to this

the housing market is over. no matter how many people will move to florida, the price is too high to live here for working class. make your posting clear. just look around and see how many businesses (retail and food) need employees. see if you can survive on $10 per hour salaries and afford living in a house in south florida. better yet, buy a 200.000 home in riveria beach or lake worth (no water view) and not get insurance coverage because you live east of i 95 or work 80 hours a week and dont complain. that is what the mayor of fort lauderdale wants us to do. if you want to buy a dump, do it, but stop telling us to buy a dump at 300.000. maybe some people know who is smarter in the housing market.

By

May 25, 2006 09:52 AM | Link to this

Price Reduced: 12/17/05 — $519,000 to $499,000 Price Reduced: 01/20/06 — $499,000 to $489,000 Price Reduced: 02/01/06 — $489,000 to $469,000 Price Reduced: 03/18/06 — $469,000 to $455,000 2/2 condo on sand (1000 S Ocean Blvd Pompano Beach).MLS #F690313 One of many. The cheerleaders need to look at market NOW not as it was. Buyers are looking at TAXES, INS, etc compared to other nice areas of states via internet which has made comparison easy. Our legislators bettter start doing same. They will not do so until enough people realize tipping point has been reached, the goose is being killed, and make govt reps change RE TAX policy and find INS cost solution. As dual resident I am afraid Some So Fl residents are not aware of how far down So Fl has dropped in attractiveness. I think it is still beautiful, but in NY area many people I know think seasonal rentals now smarter than buying. Ins., RE tax, mtg, utilities, assessments, storm threats having turned off huge segment of potential buyers. Please dont take this personal. Just reporting and hoping some responsible politicians and local leaders take an unblinkered look at what is happening.

By For Mike

May 25, 2006 09:53 AM | Link to this

The site where you can find out exactly what the previous owner paid for the home is http://www.netronline.com/frameset.asp?StateID=11. Choose your county on the left, then choose property appraiser on the right. Then all you have to do is type in the address or neighborhood. To see recent sale prices in the neighborhood go to http://www.zillow.com, type in the address and when it comes up, click on ‘view comparable homes’. Only pay attention to what the other homes actually sold for, not what they ‘estimate’ that property will sell for. Their estimate is usually wrong. You will find through your research that properties are listed way too high compared to previous sales and according to current market conditions. That’s why they aren’t selling. Pure and simple. The prices that the last few sold for were the peak. Buyers are refusing to pay those prices now. I’m speaking from experience. Be willing to walk away from the deal if they don’t meet your offer. I paid substantially less than asking price for my home because I stuck to my offer price. I’m talking tens of thousands less. And less than what the last few sold for. You will lose out on some homes, but it will be worth it to wait for the one that takes your offer. Especially since this is going to be your home for a long time.

By D.Legler

May 25, 2006 10:42 AM | Link to this

Properties listed above $350k can be put under contract @ 12% below list with a realistic seller. Properties under $300k can lock in @ 8% below list. Properties under $250k can be put under contract 3%-5% below contract, as this segment still attracts a wide pool of buyers. These are general observations, no rule exists.

By

May 25, 2006 11:49 AM | Link to this

12% below list?? Not in Delray Beach, that’s for sure. Buyers will be fortunate to get back to the 8% below list; if even that at all. Now if a property is overpriced, that’s another matter altogether, and in Delray, like some other exclusive areas, many listing are overpriced. But these will weed themselves out as sellers acclimated back to normal market conditions over the next year or so.

By

May 25, 2006 12:30 PM | Link to this

Delray has many homes dropping price and looking to negotiate further. Browse any listing service, eg: http://www.realtor.com/Prop/1055883108 Anyone who cant find sellers looking to get out of almost anywhwere in So Fl is not looking or does not want to see. Inventories dont grow like this without reasons.

By

May 25, 2006 12:48 PM | Link to this

Many people are in WAY over their heads and the investor ridden market is becoming well ugly. I know some people who use their pay checks to pay their mortgage and then live off credit cards for the rest of the month.

By rca

May 25, 2006 01:53 PM | Link to this

Housing: 10% Decline May Trigger Financial Ruin (May 22, 2006)

Astute reader Bob Decker wrote: Many people don’t seem to understand that if you put $100,000 down on a million dollar house … and the market drops just 10% …you lost your $100,000 of savings/equity and may not ever see it again. If you need evidence that prices are falling, consider this USA-Today story, median prices fall, just one of many media stories documenting the decline in both new and existing home prices.

Let’s take Bob’s point and extrapolate it a bit. Consider a family which bought a home for $400,000 at last year’s market top, and now for one reason or another find they have to sell: someone lost a job, got transferred, developed a chronic medical condition, etc. In many markets, they will find that the values in their neighborhood and price range have already dropped; in areas such as greater Boston, a 10% decline appears to be common.

Let’s assume that the family was one of the rare home buyers who took out a conventional mortgage, with 20% down payment in cash and a loan balance of 80%. (As documented here earlier, up to 60% of recent home buyers have selected no down, interest-only loans.)

So let’s do the math, given a 10% decline in values since they bought:

down payment: $80,000 (balance of $320,000) Escrow and loan origination fees: $8,000 (2% of purchase price) total mortgage: $328,000 (fees added to loan amount) Difference between cost of renting an identical house ($1,500/month) and owning ($2,500/month): $1,000/month or $12,000 a year

(Here are the assumptions, plugged into the calculator at MSN Money: $328,000 mortgage at 6% assumed in June 2005, payment = $1,966 /month, property taxes of 1.5% per year plus homeowners/fire insurance = $2,500/month payment) Value of tax write-off of mortgage interest: $6,000 Net loss in owning compared to renting: $6,000

Now, on the sale: Sale price: $360,000 (10% decline from $400,000 purchase price) Pay-off mortgage of $324,000 (as per the MSN Money amortization chart, about $4,000 was paid off in the year of ownership), leaving cash of $36,000. Deduct 6% realtor’s fees and closing/escrow costs of 1%: $25,000. Cash remaining: $11,000 Deduct $6,000 net loss due to owning rather than renting: cash remaining: $5,000
Value of house they qualify to buy with $5,000 down payment, assuming conventional 20% down: $25,000 Locations of homes for sale for $25,000: Northern Siberia; suburb of Chernobyl; yurt in Mongolia (must be moved with seasonal movement of herd)

Let’s be frank: this poor family which started out with a solid $80,000 and 20% down, has essentially been wiped out by a “mere” 10% decline in housing values, once actual transaction and ownership expenses are accounted for. As for those new homeowners who bought with no money down, this example shows that the transaction fees alone will drive them into bankruptcy, even if they sold the house for their original purchase price.

As this chart of the San Diego market illustrates, the number of homeowners exposed to rising mortgage payments is over 2/3 of recent buyers. Combine this with the large number of people who bought homes with no money down, and you get a fuller picture of the damage which will be wrought by a “mere” 10% decline in housing values in an era of rising mortgage rates and “resets” of ARMs to much higher rates.

(According to the National Association of Realtors, the median first-time home buyer’s deposit last year was just 2% of the price, while 43% of first-timers put down nothing.)

Thank you, Bob, for making this all-too-easy to forget point about leverage: works great in a rising market, not so great in a declining market.

By Da Man

May 25, 2006 02:16 PM | Link to this

THe public is once again being mislead! Read carefully… Sales are down from last year. DUH… Prices are up a moderate 4-5%… DUH Sounds like the normal rate of sales and pricing increases are back. People will panic, loose their shirts, and the investors will once again win. YOU PEOPLE REALLY NEED TO FOCUS ON THE DETAILS…NOT THE HYPE.

By Greg

May 25, 2006 02:42 PM | Link to this

Many of the people who financed a house with “creative” financing are really going to get screwed. Also all those folks that lined up days in advance to get in on the new construction condos…are finding they can’t flip their properties and are now renting them out at a loss. Drive down Federal/Dixie from downtown WPB to Delray and how many of those huge condos are dark!? No one is living in them….can’t afford them, and are having a hard time renting them.

And taxes! OMG. I bought my condo in ‘04 for under $75K….correct, its no palace, but suitable for 2. I could now sell it for 200K but the taxes on the new price is going to be triple what I pay…not to mention my windstorm insurance of $2000/yr. Young people can’t afford to live here. Jobs don’t pay enough to survive….although you could have 2 jobs I guess? Glad I bought when I did. Too bad I can’t afford to move (else where in PBC).

By

May 25, 2006 02:46 PM | Link to this

PBC is not a declining market. The median price went up yet again in April to $386+K. Numbers do not lie. Media “hype” does. I’ll stick to the numbers.

By

May 25, 2006 03:00 PM | Link to this

While the April 2005 to April 2006 median price did rise 4%, the median price has declined 8.3% since the high of $421,500 in November 2005.

Most interesting in all these numbers is the slowdown in sales volume. PBC is down 35% Jan-Apr 2006 compared to Jan-Apr 2005. In calendar year 2005, there were 13,679 homes sold in PBC. If the 35% decline continues throughout the rest of the year then we could figure 8,891 homes sold in 2006.

I go through this process to lead into the inventory problem. If you look at the below link which aggregates all listings of single family homes in PBC based on Zip Codes, there are 14,563 single family homes listed. I would estimate there are about 10% - 15% of homes for sale not listed by a realtor and being sold independently. Assuming 10% being sold without a realtor would raise the inventory to 16,181 homes or 1.8 years worth of housing inventory based on 35% decline in 2006 volume from 2005. If we remember what David Lereah from National Association of Realtors said, a market is in balance when there is 6 months worth of inventory.

http://www.realtor.com/FindHome/HomeListings.asp?frm=byzip&mnbed=0&mnbath=0&mnprice=0&mxprice=99999999&js=off&pgnum=1&lnksrc=&fid=so&mnsqft=0&mls=xmls&vtsort=&typ=1&poe=realtor&zp=33401&zp=33402&zp=33403&zp=33404&zp=33405&zp=33406&zp=33407&zp=33408&zp=33409&zp=33410&zp=33411&zp=33412&zp=33413&zp=33414&zp=33415&zp=33417&zp=33418&zp=33426&zp=33428&zp=33430&zp=33431&zp=33432&zp=33433&zp=33434&zp=33435&zp=33436&zp=33437&zp=33438&zp=33444&zp=33445&zp=33446&zp=33458&zp=33460&zp=33461&zp=33462&zp=33463&zp=33467&zp=33469&zp=33470&zp=33476&zp=33477&zp=33478&zp=33480&zp=33483&zp=33484&zp=33486&zp=33487&zp=33493&zp=33496&zp=33498

By

May 25, 2006 03:02 PM | Link to this

While the April 2005 to April 2006 median price did rise 4%, the median price has declined 8.3% since the high of $421,500 in November 2005.

Most interesting in all these numbers is the slowdown in sales volume. PBC is down 35% Jan-Apr 2006 compared to Jan-Apr 2005. In calendar year 2005, there were 13,679 homes sold in PBC. If the 35% decline continues throughout the rest of the year then we could figure 8,891 homes sold in 2006.

I go through this process to lead into the inventory problem. If you look at the below link which aggregates all listings of single family homes in PBC based on Zip Codes, there are 14,563 single family homes listed. I would estimate there are about 10% - 15% of homes for sale not listed by a realtor and being sold independently. Assuming 10% being sold without a realtor would raise the inventory to 16,181 homes or 1.8 years worth of housing inventory based on 35% decline in 2006 volume from 2005. If we remember what David Lereah from National Association of Realtors said, a market is in balance when there is 6 months worth of inventory.

http://www.realtor.com/FindHome/HomeListings.asp?frm=byzip&mnbed=0&mnbath=0&mnprice=0&mxprice=99999999&js=off&pgnum=1&lnksrc=&fid=so&mnsqft=0&mls=xmls&vtsort=&typ=1&poe=realtor&zp=33401&zp=33402&zp=33403&zp=33404&zp=33405&zp=33406&zp=33407&zp=33408&zp=33409&zp=33410&zp=33411&zp=33412&zp=33413&zp=33414&zp=33415&zp=33417&zp=33418&zp=33426&zp=33428&zp=33430&zp=33431&zp=33432&zp=33433&zp=33434&zp=33435&zp=33436&zp=33437&zp=33438&zp=33444&zp=33445&zp=33446&zp=33458&zp=33460&zp=33461&zp=33462&zp=33463&zp=33467&zp=33469&zp=33470&zp=33476&zp=33477&zp=33478&zp=33480&zp=33483&zp=33484&zp=33486&zp=33487&zp=33493&zp=33496&zp=33498

By jr

May 25, 2006 03:04 PM | Link to this

While the April 2005 to April 2006 median price did rise 4%, the median price has declined 8.3% since the high of $421,500 in November 2005.

Most interesting in all these numbers is the slowdown in sales volume. PBC is down 35% Jan-Apr 2006 compared to Jan-Apr 2005. In calendar year 2005, there were 13,679 homes sold in PBC. If the 35% decline continues throughout the rest of the year then we could figure 8,891 homes sold in 2006.

I go through this process to lead into the inventory problem. If you look at the below link which aggregates all listings of single family homes in PBC based on Zip Codes, there are 14,563 single family homes listed. I would estimate there are about 10% - 15% of homes for sale not listed by a realtor and being sold independently. Assuming 10% being sold without a realtor would raise the inventory to 16,181 homes or 1.8 years worth of housing inventory based on 35% decline in 2006 volume from 2005. If we remember what David Lereah from National Association of Realtors said, a market is in balance when there is 6 months worth of inventory.

http://www.realtor.com/FindHome/HomeListings.asp?frm=byzip&mnbed=0&mnbath=0&mnprice=0&mxprice=99999999&js=off&pgnum=1&lnksrc=&fid=so&mnsqft=0&mls=xmls&vtsort=&typ=1&poe=realtor&zp=33401&zp=33402&zp=33403&zp=33404&zp=33405&zp=33406&zp=33407&zp=33408&zp=33409&zp=33410&zp=33411&zp=33412&zp=33413&zp=33414&zp=33415&zp=33417&zp=33418&zp=33426&zp=33428&zp=33430&zp=33431&zp=33432&zp=33433&zp=33434&zp=33435&zp=33436&zp=33437&zp=33438&zp=33444&zp=33445&zp=33446&zp=33458&zp=33460&zp=33461&zp=33462&zp=33463&zp=33467&zp=33469&zp=33470&zp=33476&zp=33477&zp=33478&zp=33480&zp=33483&zp=33484&zp=33486&zp=33487&zp=33493&zp=33496&zp=33498

By

May 25, 2006 04:21 PM | Link to this

Yes, that was the drop. But this is the rally. No appreciation curve is straight over time. Bumps, dips, spikes, and curves. That’s how markets track over time. And all this extra inventory is deceptive. The vast majority of it is greedy homeowners trying to “see what they can get at the top of the market”. They are mistaken. They won’t get anywhere near their asking prices. And this is nowhere near the top of the market. Actually, there is no top of the PBC real estate market. Never has been. Never will be. I advise these people to take their ridiculously overpriced homes off the market and let the market return to business as usual.

By

May 25, 2006 04:35 PM | Link to this

the median price will continue to go up because there is no volume of sales expect for those who can really afford to buy. if you have 10 houses that sells on the average of 400.000, it would look like the prices are going up, but 1000 houses are not selling in comparison to 200 that sold a year ago in a month. the price will go up until 2007. go ahead and buy a house at 500.000, when insurance is double, interest is triple and the govt will taxes you based on what you paid for the property, prove to me if it worth buying a house in south florida today. by june 1st, it wont matter because insurance companies wont renew or issue out new policies. that is real.

By

May 25, 2006 04:43 PM | Link to this

Some sellers may be trolling, but have some sympathy for many who are being forced out by RE taxes, Insurance costs, huge assessments from Katrina. A lot of these people would stay if they could but have to dump. So will a lot with “creative” financing coming up for reset at rising rates. Sometimes bad stuff happens to good people. Don’t think all this is happening in a vacume. The buying pool is shrinking,inventory growing and a lot of non-spec people are going to get hurt along with the speculators. Other areas are courting buyers as our RE tax/Ins mess is ignored. Not a problem if not selling for many years, but who can gaurantee our family/work situations(or more hurricanes) wont put us in the same boat as those trying to sell for past 4 months with little luck despite dropping prices.?

By Dave

May 25, 2006 05:01 PM | Link to this

I agree with the keep waiting philosophy. I heard that it takes 18 months for a single FED interest rate adjustment to take effect (up or down). We are just beginning to feel the effects of the FED’s belt tightening the last 3-4 yrs. Great for serious long term real estate investors and homeowners. Really bad for the speculators.

By Mick

May 25, 2006 05:58 PM | Link to this

66% low ball offers will get you no where in Boca. Yes the market is returning to normal and that means LOCATION IS KING! 325K might get you a DUMP in a bad neighborhood. But in East Boca that will not buy you anything. The pessimists are like short sellers in the stock market trying to scare prices down. In the last week 2 homes sold in my neighborhood, both were on the market less than 2 months. By the way, for all you experts, a normal market is considered balanced when homes take 3-6 months to sell. The cheap one went for 525K and it is dump that will be torn down. So that means the lot alone sold for 525K. People are tired of HOAs and the older eastern neighborhoods in Boca are hot. Yes there is alot of inventory but I know a large amount of the inventory is just “we heard prices are peaking lets put up a sign and see what we can get” If people don’t get what they want the house will come off the market. Some people are very emotional about their home and a 66% offer just might get you a sock in the nose. Be careful out there! LOL!

By Chuck Wackerman

May 25, 2006 07:06 PM | Link to this

You should see what I am seeing in mortgage business.

A lot of busted borrowers….

People who are in ARMS that are adjusting or just people who need to tap equity to pay more bills and they dont have it. Their homes are appraising lower.

Regardless of what the real estate market is doing…banks have tightened their guidelines. That is the first sign that they dont want to assume any more risk.

I could go on and on but what is the point. You will see a correction unlike any other in the housing market that will take months or years to pan out. You are just starting to see the tip of the iceberg.

CW

By Chuck Wackerman

May 25, 2006 07:14 PM | Link to this

Oops

Forgot to mention the current foreclosures….take a look at what is going on nationally…some states are up 20 through 60% regarding foreclosure activity. I think foreclosure.com just stated they are up 40% across the US over last year.

People have been snookered into taking more home than they can afford. Now it is all catching up. We have become a credit dependant society. We have turned homes into biggy banks. Now it is time to pay.

By

May 25, 2006 07:51 PM | Link to this

I see a massive correction here. Most of the economic recovery was due to the “housing market”. Homes have been turned into ATM machines, and we spend more than we save and live WAYYYY outside of our means. Pretty soon the piper will need to be paid. It will probably end with a recession or the dreadful “D” word.

By Mick

May 25, 2006 09:39 PM | Link to this

Funny thing about the foreclosures Chuck, the areas where there are highest % of foreclosures are areas that did not experience the boom: Indiana etc. That’s because there are no jobs in those areas. I don’t know where you all live but I know a lot people in their late 20’s early 30’s making 6 figures and alot of couples making high 5 figures, so together they bring in 150K plus, they sure can afford these prices. Another thing about interest rates, the “real” rate of interest is close to 0% Don’t believe the govts inflation #’s, the real inflation rate is easily 6% or higher. Rates on 30 year fixed mortgages for people with good credit are in the 6.5% range which means that mortgage money is not only free (in real terms) it actually saves you money factoring in the tax deduction. Go figure.

By

May 26, 2006 06:56 AM | Link to this

All true. There are plenty of buyers out there for the “real” inventory of homes that are priced “right”, which is why the median price keeps increasing. The balooning inventory is a red herring: I would estimate at least 50% of the homes on the market in PBC right now are not sellers who truly need or wish to sell. They are just “fishing” ‘cause they are spooked by the media. No one in their right mind is going to pay 50% or more over appraisal for a home in PBC, so we’ll see thousands and thousands of homes eventually pulled off the MLS; probably this year. All these “phantom”” homes on the market is having a deadening effect on overall sales, however, as buyers still have to contend with slogging through these listings and trying to weed out those “fishing” from the real market. It is sad and the true losers are those who depend on transactions like realtors and mortgage brokers. Washington Mutual is laying off 1,500 workers just announced yesterday. Sad. Irony is it’s the media ultimately responsible for this phantom market phenomenon. They hyped the market up and brought in thousands of amateur investors who paid too much and didn’t know what they were getting into, and now they’re hyping the market down and bringing in thousands of phantom sellers who think now is the time to “cash in” on the crashing real estate market.

Ridiculous.

By For the Low-Ball Offer Guy

May 26, 2006 07:31 AM | Link to this

Mike,

Three things for you…

First, you have financing in-hand you might want to wait unitl the the middle of hurricane season in Boca to place an offer. Insurance might be a short-fuse issue, however prices are going to drop significantly when all the national headlines are saturated with hurricance frenzy. Place your offer then.

Second, since Sellers are still placing unrealistic numbers on inflated appraisal numbers, submit your offer on what you think not that the number is a “low-ball.”

Third, find listed properties on Relator.com or another internet vehicle. Then find the information about the homes next door that are unlisted and not overpriced. Also, you remove the Broker and save yourself at least 6% of the Gross Purchase Price.

Good Luck!

By

May 26, 2006 07:45 AM | Link to this

I don’t know if the media is to blame for the hype. Don’t get me wrong, I blame them for plenty, but I think the blame in the financial bubbles lies in people’s greed and self interest. They believe they are pre-destined to become millionaires. They believe they are expert enough to enter a market or arena of which they know very little of. Some get lucky and make a good/great amount of money, but others lose (or will lose) badly. And when they lose money they place the blame on someone else (i.e.: stockbroker, media, realtor, friend, developer, insurance co, etc.).

Would you blame the stock market bubble on the media? I’m not so sure about that either. My friends & family all believed there was nothing that was going to bring it down. Those that invested in risky stocks lost most of the money they had invested. It all boils down to valuing what you invest in on some fundamental analysis.

Just as in any market which has risen beyond its “true” value, it is highly reliant upon a psychological euphoria. Right now, home sellers are unwilling to believe their prices will go down from what it currently at. With the sellers not willing to budge on pricing, we see less existing homes sold. Professional developers know the prices are going down but they are temporarily supporting listed prices by adding numerous upgrades and not lowering the base prices. They too know that once the prices begin to go down then the psychological euphoria will disappear.

Unfortunately, many “non-expert” investors/speculators are now competing against “expert” developers in selling homes. And unfortunately it will be the “experts” that will read the market appropriately and the “non-experts” will be slow to adjust and rely on information (as opposed to dismissing it as a falsehood).

Keep in mind that many home sellers are selling because they are strapped for cash with ARM’s, rising insurance premiums, and living expenses. As the ARMs adjust, it will only make their ability to meet their obligations all the more difficult. I have already seen some employees and friends leave the area because of its relative expensiveness. And while the luxury homes will always remain expensive, it’s difficult to support an average home price when the average worker moving to the area cannot afford the average home. Florida already has the highest number of low-paid workers in the country, due to tourism jobs which on average pays little. The 1999 census indicates a median household income of $45k. I’ve seen recently this number is around $61k. Still though, half of all households make less than $61k which certainly can’t support the most recent median home at $386.5k.

Nonetheless it will all be an interesting case analysis in the future.

By For the Low-Ball Offer Guy

May 26, 2006 07:53 AM | Link to this

Mike,

A couple more things for you…

Timeframe - wait at least until July 1st to place an offer. If the storm season is bad (at this point, if a hurricane skirts the Fl coast Sellers shall freak) then place the offer while the storm is tracking this way.

Ancillaries - Please inspect insurances (significant rise east of I-95, windstorm and flood…receive QUOTED prices in writing) and RE taxes (Boca is about 1.5% - 2% of the assessed value of the home)

Price - in this market I would not settle on 80% of the asking price (again, suggest working with unlisted properties, substantial savings). I think in the RE world and yes, even in SoFl a 8%-10% annual gain is “healthy” and realistic, not 30% a year. So, if you find out what the Seller paid on all these listed and unlisted properties, I am sure you will see…

Terms and Conditions - Sellers want their money now, no matter what they say or how they act. So have your inspector/engineer on the sidelines ready to go and close within a quick amount of time 30-60 days. If the Seller is really sticking to the price then close March of next year at your price and let some appreciation work for you…

Again Best of Luck!

By NYC realtor

May 26, 2006 10:07 AM | Link to this

I’m a realtor in NYC area and for the past couple of years 33% of all my transactions have been people buying homes in South Florida. This trend stopped abruptly 6 months ago. Now the reverse is true, people are asking me to help sell those same properties. The AMR, property taxes are just killing them. A 1.5 M property stayed on the market until the seller reduced the asking price several times to just less than 1.0 M. More and more of my clients are reducing their asking price even if it means losing money on the investment. You see, people in NYC vividly remember the dot.com bubble. Those who held on thinking that the market was going through a “correction” in the end was completely wiped out. Clearly anyone with common sense knows the real estate market would never get that bad, but the winds of change are coming, and it is coming from the NORTH. Despite what they say up here about those living in south florida, I believe that you guys are smart enough to know that an average household income of 45K to 60K cannot afford homes that cost median 400K. This means police officers, firefighters, teachers, nurses etc. For those of you who plan to ride out the storm, expect the housing market to be flooded by your local teachers, and police officers, and nurses who were forced to take AMR to buy a 400k home they really can’t afford either selling or face foreclosure. You guys really have a mess on your hands down there. As for us Northerners, we are hoping the south floridians take their customary “slow to react” position. This should allow us enough time to dump all these bad investments. We hope it is a mild hurricane season for two reasons; It will perpetuate the false sense of real estate security among south floridians, more importantly it gives us time to unload these bad investments before the natives realize that they are in the eye of the storm.

By viewfrmny

May 26, 2006 11:13 AM | Link to this

Even before Katrina there was movement to No. Carolina vs. So Fl by many retirees/boomers. As word spread by these initial buyers about tax, ins, etc differences, and great climate, more and more are opting for that area. Fl govt helped No Carolina attractiveness with RE tax policy and failure to really address insurance problems. Other areas have recognized value of attracting residents who are spenders and do not need schools. Hurricanes and out of control speculation hurt So Fl, but really dumb govt is putting nail in coffin.

We should pay for lawmakers to take tour of areas now favored by segments that previously would have opted for So. Fl. They need to wake up to COMPETITION before it gets worse here.

By rca

May 26, 2006 11:44 AM | Link to this

low ball dont realize that prices on housing is not going up. the sun-sentinel (shocking) has an article stating that the median price rise is based on all housing sales and that if 80% of the sales are above the previous median price, house prices will rise. people better look at how many houses are selling below the median price vs. above the median price. it will really shock you.
nyc makes an excellent point, the northeasterners are moving to georgia, tennessee and the carolinas. they see the writing on the wall. one more hurricane wilma will be the tipping point. since everyone that earns 75.000 dollars or less is priced out the market. i guess them real estate investors may have to teach their own children or work a mcdonald to get a sandwich.

By outofstate buyer

May 26, 2006 12:17 PM | Link to this

Fl legislators are free to enact Tax policy and insurance policy that puts burden on out of state and 2nd home owners who dont vote in Fl. Buyers vote another way, however, with their feet. Feel bad for those stuck with units and 2nd class treatment. Bye, bye,(not buy,buy), So Fl, may look again in year or two if Tax and insurance burdens more equitably shared.

By Dwain Wall

May 26, 2006 01:49 PM | Link to this

Read more about One City Plaza owners problems at our website:

ihocp.com

By Dwain Wall

May 26, 2006 01:50 PM | Link to this

Read more about One City Plaza owners problems at our website:

ihocp.com

By Young Northeaster

May 26, 2006 02:43 PM | Link to this

NYC realtor is so on point. I’m sorry if people who have purchased homes do not want to accept what is going to happen here. Keep believing. We moved to Florida July 2005. We decided to rent until we could find a house in a nice neighborhood with great schools for my daughter. Well, our lease is up next month and we’re moving to NC. Great schools, colleges, and the cost of living cheaper. Any smart person would not purchase a home in So. Fl with the high taxes, uncertainty about insurance, and the schools A rated or not are not great. Why would I use my windfall from the sale of my home up North and purchase an overpriced home and still have to put my daughter in private school. I’m so glad that I took the time to rent before purchasing. I have been telling all of my friends from the Northeast not to buy at this time. They will be able to purchase great deals, foreclosures,etc. if they wait it out. Personally, I’m not longer interested in owning property in So. Fl. I would look at other areas of Florida to purchase or just rent. And what were people thinking when they fell for the interest only loans and ARMS. It’s great for a short term person or investor but if you truly want to live in the house long term, that’s a crazy move. People should really look at houses they can truly afford not what the lender tells them they can purchase. Do you really think that lenders and developers are your friend????? Good luck to all of the Florida residents. If this is your home and you are in it for the long run, you will be okay. Investors,as my daughter says, you get what you get and don’t get upset.

By

May 26, 2006 04:01 PM | Link to this

Very well spoken young northeasterner. People have the common misconception that real estate always goes up. I always tell people this quote…the bigger the boom, the bigger the bust….words of wisdom…last one out turn off the lights..

By

May 26, 2006 06:07 PM | Link to this

Florida has weathered at least three real estate booms since the first one in the early 20th century. No bust yet. And if you do the math you will see a “median” price is not “skewed” either up or down by extremes. Which is why NAR uses median pricing and not average or mean. The media, frustrated that median prices are still rising in spite of all predictions otherwise for the past six years, are now claiming the median price is falsely “skewing” upwards because of a few isolated luxury home purchasers. Not so. What you see is what you get. You may not like it. And for every loser in any market, there is a winner. For every winner, there is a loser. I would be smart right now, but I would never bet against Florda real estate. I’ve been here too long and seen too much. Never.

By

May 26, 2006 06:14 PM | Link to this

Do people really have that short-term of memories that they think they are escaping the hurricane threat by moving to North Carolina? Does anyone else remember that prior to the last few years it was the Carolinas that were consistently pounded by hurricanes year after year? Don’t you think that there is a good chance that whatever climate shift pushed them further south to Florida could turn around and push them back to the Carolinas?

It just seems that many residents here in Florida have an attitude of entitlement to everything. These residents feel that they should be entitled to perfect weather year-round, low taxes, good schools, beaches nearby, and the list goes on. God forbid you have to make a compromise on something. Want perfect weather in Nov, Dec, and Jan? Fine, in return for that weather, you may have to face a storm or two every year, and be inconvenienced for a few days. Want good schools, nice roads, city services? You need to pay taxes for these things. I for one don’t mind paying taxes, and dealing with a few days of inconvenience after a hurricane in return for beautiful weather the other 360 days, being able to be at the beach in 15 minutes if I want, and all the other benefits of living in Florida. Throw in on top of that decent appreciation on my home in the last 5 years, and I don’t see what all the complaining is about. It’s a pay to play scenario.

If you aren’t happy, move to some other region in the country and try life there. Midwest you have to scrape snow off your car 4-5 months out of the year and dress like Eskimos. California? You think hurricanes are unpredictable? Try earthquakes. They also have terrible traffic, and higher cost of living. Northeast? Isn’t that where a large amount of you left already for whatever reason you decided, either traffic, weather, cost of living, taxes, overcrowding, etc.?

I know this is a pretty informal blog, and a magnet for gripes and complaints, but seriously, go to the beach, take a deep breath, stick your toes in the sand, and really decide if living in South Florida is really that terrible of a situation.

By Noproblem

May 26, 2006 08:08 PM | Link to this

No arguement So Fl can be lovely place. Confluence of events has conspired to make other places as or more attractive to many (like me) who have loved Fl from the Keys to Orlando for over 30 years. Maybe it is not as apparent to younger folk but but Fl has lost an awful lot and while No Carolina of course has it’s own problems I have to admit my brother who bought there 5 yrs ago instead of Fl made a very smart move. It is lovely and great people.

By rca

May 26, 2006 11:45 PM | Link to this

south florida or north carolina. north carolina for me! you can pay taxes, insurance and a card board house, i wont.

By Mike

May 27, 2006 06:01 PM | Link to this

Stay on subject people.

I am the first poster on this thread so let me just lay out my story and give you all a pop quiz.

I viewed a property that was listed before at 440, the reduced to 399. I offered 340 they dropped to 390. I made a ‘final’ offer of 350 and thier final is 375.

At that price the home I am looking at meets my needs and I can afford it with regular financing. I have budgeted for ins and taxes. I want to stay here all of my family is here work, etc. etc..

Now for the peanut gallery out there your thoughts. What do I do next? Like I said before 375 is ok with me, but 350 would have been really OK. I have not the salesmen anything yet. What do I do next…….

By Mike

May 27, 2006 06:01 PM | Link to this

Stay on subject people.

I am the first poster on this thread so let me just lay out my story and give you all a pop quiz.

I viewed a property that was listed before at 440, the reduced to 399. I offered 340 they dropped to 390. I made a ‘final’ offer of 350 and thier final is 375.

At that price the home I am looking at meets my needs and I can afford it with regular financing. I have budgeted for ins and taxes. I want to stay here all of my family is here work, etc. etc..

Now for the peanut gallery out there your thoughts. What do I do next? Like I said before 375 is ok with me, but 350 would have been really OK. I have not the salesmen anything yet. What do I do next…….

By Mike

May 27, 2006 06:01 PM | Link to this

Stay on subject people.

I am the first poster on this thread so let me just lay out my story and give you all a pop quiz.

I viewed a property that was listed before at 440, the reduced to 399. I offered 340 they dropped to 390. I made a ‘final’ offer of 350 and thier final is 375.

At that price the home I am looking at meets my needs and I can afford it with regular financing. I have budgeted for ins and taxes. I want to stay here all of my family is here work, etc. etc..

Now for the peanut gallery out there your thoughts. What do I do next? Like I said before 375 is ok with me, but 350 would have been really OK. I have not the salesmen anything yet. What do I do next…….

By

May 27, 2006 08:10 PM | Link to this

Don’t ask us, ask your Realtor. YOU are paying them 6%, not the seller, so it is time you ask them for advice, and make them earn their commission. Why are you asking advice from a bunch of strangers on how to spend $350,000?

And to anyone who wants to bark about “the seller pays the Realtor fee” not the buyer, think about it long and hard. When the seller lists their home, they inflate the price to cover their Realtor fee. So instead of selling a home for $300k, they now price it at $318k to cover the 6% Realtor fee. So instead of you getting the home for $300k, you have to pay $318k. See, the buyers actually pay the Realtor fees through higher purchase prices.

So, as I mentioned, ask your Realtor what to do next, they are the “experts”

By

May 27, 2006 08:19 PM | Link to this

Wait a while, i’m sure the price will drop some more……I’ve heard a couple of people (and probably more fall into this boat) tell me they will wait till after hurricane season to perhaps buy…They’ve told me its too risky with the insurance situation here and depending on how bad it is, buy and live elsewhere.

By

May 27, 2006 08:31 PM | Link to this

I read this tidbit of information today… “A decline of greater than 20% in a market is generally referred to as a “crash”, not a “correction”. A correction is a price decline of 10-20%…We are already at the 20% decline in some places….

By

May 27, 2006 08:37 PM | Link to this

Boy, if everyone who went bankrupt on Black Monday in ‘85, or 2001 when the dot-coms went bust could have only lost 20% (which is what you are calling a “bust”) that would have been a different situation altogether wouldn’t it.

The PBC median price has been up over and down below $400k several times over the past two years.

Relax. Overall, we’re still tracking upwards. Not as fast as ‘05, but a whole lot faster than ‘95.

Relax and enjoy the ride.

By

May 27, 2006 10:29 PM | Link to this

Why the massive inventory? Investors fleeing? “In Palm Beach County, inventories of unsold homes have more than tripled in the past three years, to more than 25,000. Some brokers in South Florida are reporting a quadrupling of inventories over the past year. In what some see as a sign of the times, Coldwell Banker recently closed four of its 31 offices in the Palm Beach region.”

By rca

May 28, 2006 09:37 AM | Link to this

easy to get loans cause thousands to lose homes. in palm beach county? i here a pin drop!

By

May 28, 2006 11:29 AM | Link to this

Things are gettin really ugly, and yet they are still building!!

By

May 29, 2006 08:13 AM | Link to this

Don’t be fooled. The vast majority of so-called “inventory” is greedy people just trying to “cash out on top”. They are asking way too much, will not lower their price (because they have no real reason to be selling in the first place), and will take their ridiculously overpriced homes off the market soon.

The real inventory of correctly priced homes listed by people who really need or want to sell out there is actually fairly small.

If there are people with so-called “exotic” mortgages I suppose as interest rates inch up every three months then their payment will inch up every three months. All indicators point to the Fed. capping rates at 7% though by ‘07. I don’t see how that is high. Historically speaking a 7% mortgage is a bargain.

I rememeber I bought my first house and felt incredibly fortunate to get a rate under 10%. That was back in the 90’s though.

Still, I don’t see how 7% interest rates are going to bankrupt people in “exotic” mortgages. 7% is still only 7%. It may be higher than 4.75%, but it’s still cheap money. Especially when you condider inflation is 6%.

So they’re really only paying 1% on their “exotic” mortgage.

I’m not seeing the problem.

But then, I don’t know anyone with one of these “exotic” mortgages though, so perhaps there’s more to the picture?

Anyway, there really isn’t all that much “real” inventory. Taxes are keeping most folks in their homes. If they would fix the tax laws down here, now that would flood the market with real homes for sale. But for now, all these signs in every other yard: they’re just greedy people fishin’ for a windfall.

Won’t last.

By rca

May 29, 2006 10:07 AM | Link to this

insurance is the big problem and exotic loans are a problem.
some people are paying at 1% are now at 4 and 5%, plus most are not paying the principle for a few years and/or just the interest. these loans payment end up doubling or tripling after a year or two and then they still have to pay the principle. basically they may pay 500 a month and then go up to 1000+. there are so many loan options and those with tight budgets or barely could afford the house are having trouble. it is one thing to talk about inventory , but when people are actually losing their homes, then you have problems. one thing that no one talks about in housing blogs is the actual ability for people to pay for homes. if on average a household should only pay 30 to 40 percent of their income towards a house after a 10 to 20 down payment, how many people can afford it. if you average income with price, most people shouldnt be in housing. that is the tipping point. lawyers in broward county are moving because housing is too high. it is called brain drain and it happening all over south florida. taxes is based on the value of the home and most people start at 200 dollars a month. i guess that is not alot, huh. like most people here, they didnt go through the housing market in the 1980’s or like my family did in the 1920’s. it is not going to be pretty. rent is not cool but will you pay 1500 for 3 years or pay 2700 with a 30 years debt hanging over your head. that is 1200 - tax break you save a year but, 2700 + insurance, taxes and repair which go up every year. rent or own?

By Steve

May 29, 2006 12:51 PM | Link to this

First is denial, then anger, followed by depression. I’m seeing alot of denial with a hint of anger in some of these responses. The parties over, if you still own real estate better get out fast, if you can. IMO

By For Mike

May 30, 2006 08:59 AM | Link to this

Mike, stand your ground on the $350,000. You may have calculated in the insurance, but it will go up. As will your taxes, even if it’s homesteaded. I understand the sellers want to squeeze thousands more out of you, but is it worth it to you? If it’s your dreamhome, then go ahead and pay what they are asking. Because at that price it should be.

By

May 30, 2006 09:05 AM | Link to this

I don’t think people are in “denial”. Just look at that lady profiled in The Post the other day. She owns 14 half-million dollar homes in Olympia and is bleeding to the tune of $50k in interest payments per month! Her only quote is “I’m not sleeping at night” That doesnn’t sound like denial to me. Honestly though, the lunatic-fringe investors who own 14 luxury homes in one subdivision leveraged by interest only mortgages make up only a small percentage overall of the housing market. They sure sell newspapers though; with those numbers plastered on the front page of the Business section. The media hyped up both sides of this thing, just like they always do. FAct is, I bet no one reading this knows anyone else who owns 14 homes in one subdivision. Actually, in my entire subdivision there is only one “investment” property and it is rented out to a lovely young professional couple from the northeast who are spending a year or two exploring the neighborhoods in Delray before they buy. What we do have a lot of, at least in Delray, are quite a few greedy homeowners with signs in their yards and “fishing” for astonomically high asking prices at the “top of the market”. I suspect a full 8 out of 10 homes for sale, at least in east Delray, fall into this classification. That’s not denial. That’s pure foolishness.

By

May 30, 2006 09:52 AM | Link to this

I think we may have to retool our traditional numbers, at least in S. Fla. We can hang onto old rules of thumb, like the 30% for housing thing. But when prices rise across the board highly enough to usher in a paradigm shift, then old numbers just go out the window.

Like the price of gas. I used to budget $30 a week for gas. That number right now won’t even fill the tank in one of my cars. Those old numbers simply don’t work for me anymore. I can go into denial. I can get mad. I can get depressed. I can complain. I can “hope” those good-ol-days return.

But in the final analysis it just makes the most sense to adjust my budget, drive less, ride my bike more, and most importantly: prioritize fuel economy next purchase.

Likewise, the 30% of total income rule of thumb for housing went out the window for most folks when the PBC median whizzed past $300k. Then it whizzed past $400k and has been dipping above and below that number now for almost a year. If the sales closing numbers keep trending back up the way they have all 1st quarter ‘06, that economic indicator will inch it’s way past $400k yet again before the end of summer.

So, we adjust. Renting makes great sense right now. No market is going to willingly divest itself of trillions of dollars of equity by itself. So rentals will have to come down. Way down. Conversely, what can be rented dollar for dollar will go up. Way up.

That’s one adjustment that will take place all on it’s own.

Another is wages.

S. Fla. wages will, eventually catch up to other indicators (such as housing median). But wages are always the last indicator to go up. Just look how long it took for S. Fla. real estate to catch up to other coastal markets.

Don’t look for Florida real estate to evaporate. That simply isn’t being realistic. Look for the concommitant indicators to evetually rise, because they eventually will.

Do you know what cops and teachers in Manhattan make?

There is your answer. Economic simply laws cannot be broken.

By EconLaws

May 30, 2006 10:34 AM | Link to this

Isn’t Supply/Demand most basic of Econ Laws ? RE tax, Ins, Storm anxiety, over-specs, and other factors have put extraordinary number of units on the market. I don’t know about sigle family homes, but I do know condo situation. There may be some units on market just as trial for high price. A lot are sellers really trying to get out from under, with no buyers despite price reductions and other incentives. It does seem like buyers have found other areas or are waiting to see what happens this storm season.

By

May 30, 2006 11:46 AM | Link to this

Sellers are definitely waiting. We’re down on transactions by 30% over last year this time. I think a lot of that has to do with the expectation of prices falling. Every month they keep going up though. Eventually that reality will sink in. As for hurricanes? NC got hammered ten years in a row. Eventually they just got used to it. If it’s our turn now, I guess we’ll just get used to it. Hey, a few days with no power ain’t nothing compared to what the rest of the world is going through. Whether FL, NC, or Ohio: we’re blessed to be in this country that is for sure.

By Chuck Wackerman

May 30, 2006 02:43 PM | Link to this

Thanks for the response.

Foreclosures were up nationally across the board. I live in a brand new development built by glhomes. The quality is terrible IMO.

In my development, 25% of the homes are for sale and vacant.

Most people are also not aware that lenders play games with banks. Many second homes are really investment properties. You have to expect in FL and other spots of the country 20 to 30 or even 40% of the homes are speculative in nature. The numbers the press issue or often not accurate.

When appreciation slows and the infomercials vanish, things will return to flat or slow appreciation which will only make people bail out faster when they cant make a fast buck.

As for my realtor friends, they all lie to save face. They say things are fine when it is exactly the opposite.

I am very interested in seeing the end result. You must understand that if housing contiues it’s horrid pace my offspring will never be able to afford a home. Even if they make 2million a year in 20 years it will probably get them an entry level house. Something has to give.

For those who remember the NASDAQ, it was definately a bubble. Everyone new it was. To this day, the average joe is fearful of investing. Remember when your barber was giving you stock tips? That was time to get out.

Be careful and healthy everyone. CW

By

May 30, 2006 06:21 PM | Link to this

My barber is saying the market is about to crash. Sure indication it won’t. Your logic is correct.

By Steve

May 30, 2006 06:34 PM | Link to this

Denial is trying to sell your house for 2005 prices. If you call that fishing, then I agree. People better get realistic and start pricing agressively if they want to sell now.

By realist

May 31, 2006 08:31 AM | Link to this

From Fortune article on Real Estate:

“Get out as fast as possible,” says Mark Zandi, chief economist with Moody’s Economy.com. “The market is moving away from the investor, and even when it stabilizes, I don’t think it’s going to come back anytime soon.”

So don’t repeat the mistake that tech investors made during the dot-com bubble. As stocks spiraled downward, they held on, thinking that the market would bounce back quickly. Just accept that you’re going to lose money on that Miami deal. “Take your lumps,” says Jon Duncan, a Tacoma financial planner. “If you’re feeding this thing cash flow, it won’t take long to make this a very bad investment.”

By For Mike

May 31, 2006 08:51 AM | Link to this

Mike,

Whatever you based your offer on, WAIT…

As one individual stated taxes on the property are going to jump significantly and insurance (who knows? the state is attempting to correct spikes of 50% to over 120% for homes east of I-95)

Like I stated, if you must move now then go ahead; otherwise WAIT until hurricane season officially commences and then place your offer for $325,000 with a quick close, ~ the end of July/early August (as stated before, watch out for the ridiculous insurance premiums and have corporations place those quotations in writing).

Yes, Seller is fixated on $375,000. You are the Buyer and you are in control, wait. There is no need for you to accept an offer above what you feel the market value of the home is.

Again, never look at the list price…who cares? A Seller can affix any price they desire. Recent solds (within the last five (5) months are a good inception point)

In summation…

(1) Wait…place offer end of July/early August

(2) Whatever your researched offer, take 10% -15% off of that

(3) Realize you are in control as a qualified Buyer

Good Luck out there!

By

May 31, 2006 08:52 AM | Link to this

The PBC real estate median closing sales price is rising every single month. How can that be interpreted as “spiraling down”?!?

All this “bubble” talk is tied to the fact that the PBC median sales closing price simply is not rising as fast as it was in ‘05.

However, by historical standards this market is appreciating at a robust pace.

Stop looking at the abberations of ‘05.

Forget the past.

The market is advancing every month by month, and this Summer is poised to break all records.

Those are the numbers; not assumptions skewed by the rear view mirror.

The ridiculous appreciation of ‘05 is gone forever. Why dwell on one year?

Move on. The market already has. And it’s moving on up!

By

May 31, 2006 08:59 AM | Link to this

Big mistake to “wait till end of hurricane season”

Sellers are more spooked by hurricanes than buyers. Now is the time to take advantage of them. If you wait until after the season, it really doesn’t matter how many storms we get or don’t get. They are never as bad in actuality as the fear of their prospect is in the seller’s mind.

This ain’t New Orleans. And the vast majority of PBC is impervious to any flooding from Lake O. PBC has never been ravaged by a hurricane; never.

If you wait until the season is over, seller’s will be breathing a HUGE sigh of relief by that point and you will see prices SKYROCKET with relentless greedy fury.

Remember: it is the sellers’ who are waiting for the end of the season. And they are the ones holding their breath.

Now is the time to take advantage of that fear. Don’t wait until the fear has evaporated. That theory is a huge mistake.

By For Mike

May 31, 2006 10:06 AM | Link to this

Mike,

Again, did anyone state ‘end of hurricance season’? No, I stated end of July/early August…(to let the offer sit in the Seller’s minds and let the “end of the world” media work in your favor…all while your offer sits on a Seller’s desk)

For your records…

Take a look back to find out when the latest flurry of hurricanes struck the U.S.

Sidenote…hurricane season is officially from June 1st - November 30th, BTW

Sellers (and everyone else for that matter) have a distinct and vivid reminder of 2005 hurricane season. The storms hit the U.S. east coast from Rita (Sept 21st) and Wilma (October 24th ) for South Florida and Katrina (August 29th)…

So again, does anyone honestly think, a Seller in this market, is not going to take a quick close offer at the end of July/early August…are you kidding me?

Again, Mike take 10%-15% of your researched offer ($300,000 - $320,000), place the offer at the end of July/early August, and remember you are in control (so you can always move on to the next opportunity)

Good Luck

By Buy?

May 31, 2006 10:56 AM | Link to this

Buying now may be good for those with absolutely no cash flow problems, looking to enjoy living in their purchase. Others should read the new Insurance Blog on this site, absolutely understand thier new Tax obligations, and other expenses (closing costs, mtg fees, lawyers,etc). Also read analyses of RE mkt future.(Fortune Mag,etc). Consider possible other investment of money that will go to Taxes, Insurance,HOA,repairs,etc for years to come. We are all adults, do analysis, make a decision and live with it.

Personally, numbers and outlook in SoFL do not look as attractive as other possibilities to me.

By James Baldwin

May 31, 2006 05:32 PM | Link to this

To the person that said, ‘why can’t we expect the values to keep going up the way they have for the last 50 years?’ …

Take a realistic look at Florida real estate, especially Boca Raton. For the last 50 years, Boca and other párts of South Florida have been places to retire. They have also been great places to immigrate to immigrate to from other countries. However, there have been many times in the last 50 years where Florida real estate didn’t do so well. From 1982 until 1998 there was little or no appreciation. In Boca Raton, especially where the condos are on the beach, prices fell 30% in the late 90’s. I know because I bought a foreclosure that the owner paid $325000 in 1987 and I paid $228000 in 1998 after he foreclosed. It is currently listed at $1,250,000

Yes. Take a look at the at the history of Florida real Estate. People who are touting how secure it is probably haven’t lived in South Florida more than 5 years or they are realtors or mortage brokers.

By

June 2, 2006 08:53 AM | Link to this

You bought a condo for $228k and are selling it for $1.25M ???

That sounds pretty secure to me.

By Selling

June 3, 2006 10:18 AM | Link to this

Listing for 1.25M means nothing. I have been watching lists like that for months. It is possible to sell some, but vast majority sit and sit and sit. Owners just feel good looking at the number LISTED at.

By

June 3, 2006 02:02 PM | Link to this

Homes in the $1M+ range are closing consistently in Delray Beach finally now. The time on market has slowed to 6-12 months for these types of homes. But they were taking almost 6 months to sell during the heated final months of ‘05 anyway. No one is going to throw a million dollars at a house just because CNN says it’s a good idea.

Conversely, no one is going to lose $1M+ on a home simply because CNN says it’s a good idea either.

We’re not talking about anonymous traders on the floor in Wall St. We’re talking about people’s livelihoods, futures, and families.

House prices are sticky, sticky, sticky on the way down. What goes up is not necessarily what comes down where home prices are concerned.

It would probably take a nuclear waste disaster to tank the PBC market. And the Atlantic can throw as many category-1 storms as it wants to over here and nothing changes but the roofs get nicer.

As for CNN: their latest take on the Florida market as of June 2nd is this—

“Florida markets continued to see strong house price gains, with that state home to 10 of the 20 metro areas with the strongest appreciation in the past year.”

By Fortune

June 3, 2006 08:04 PM | Link to this

Think I will rely more on Fortune articles than CNN “analysis” See May articles for dispassionite analysis of RE. Gist is get out NOW if you are Speculator trying to ride it out. The longer you hold the deeper your losses will be. Please dont take this as trying to scare anyone into dumping. We should be able to post what we see and if you disagree with Fortune analysts cited you are entitled to say so, as I am entitled to say I agree . I wont accuse you of trying to pump up a market correcting downward, dont accuse me of trying to scare folks. TIME (not the magazine) will tell. Good luck to all.

By

June 3, 2006 08:11 PM | Link to this

I’m seeing some serious price drops in several areas of PBC. I guess buyers are waiting for even more of a drop to buy. guess thats why more people are choosing to rent than buy. I think the renters have more smarts then the speculators who keep thinking the market is going up!!