By Al

August 4, 2006 10:26 PM | Link to this

I just gave up a 38k job…& moved to TX after living in S. FL since 1992. Just plain & simple….I got priced out.

By Steve

August 4, 2006 10:28 PM | Link to this

I think housing will become affordable eventually on it’s own.

After the fallout of all the adjustable rate mortgages is felt and people who put their faith in them are financially destroyed.

Then the old rules for borrowing money will reappear and prices will have to adjust to what people can truely afford.

By Mike Fink

August 5, 2006 08:22 AM | Link to this

These articles hit it right on the head. I challange any of the “ra-ra” cheerleaders to dispute what is said in these studies.

One of my favorite parts “there is little correlation between resident worker demand and current housing values”. Ie, the fundamentals are not there; without the workforce, the housing boom is over and will keep deflating until it returns to affordability. Either that, or salaries will rise to meet falling home prices and things will stabilize.

People who say “this is a resort/retirement” area do have a point, but if you cannot house the working individuals (and not just those making 500K+ a year) you will find the area will quickly die.

That is the situation PB is in right now, and has been for the past 1-2 years. We will see how the plays out.

I am going to read the rest of this article; thanks for the post, very good info.

By cmgr

August 7, 2006 09:56 AM | Link to this

What I find most interesting is that although the PBC overall median has jacked back above $400K again, the median closing prices for individual municipalities are spread out over an astronomically wide price range.

Boca/Delray are right about $500k, while right next door Boynton Beach is closer to $300k.

Manalapan is over $2M, while many area around Lake Worth and West Palm Beach have median prices in the low to mid $200’s.

So, it’s pretty useless for us to lament over a $400k+ median price when that number is pragmatically useless.

Folks will pay more than $2M if they want to live in Manalapan, but they can pick from their choice of 50% of the homes in many other places for around $200k.

From unaffordable, to quite reasonable: PBC really does have it all.

Thanks for the stats. This clears up a lot of frustration and confustion in the minds of buyers.

By pbc

August 7, 2006 10:52 AM | Link to this

Neophyte Landlords Caught In Downturn

“Most of the neophyte landlords figured it would be easy to rent their properties at prices that would cover their costs until it was time to sell. But it is now dawning on them that the rental market is not a no-brainer, and selling out during the current sales slump is not an option unless owners are prepared to dump their properties at significant discounts.”

EQUITY LOCUSTS!

By Fascinated

August 7, 2006 11:56 AM | Link to this

Following SOFL mkt for past yr has been and continues to be fascinating. Homes and Condos that should have moved months ago when sellers dropped prices have not sold. I believe we have underestimated the effect of 2.2% Tax on selling price and the Ins. Rates. (Higher end mkt has been OK so far.) 500K range is having problems selling. Buyers who want to start off with over $10,000 yr Tax layout and Ins hassles must be getting scarce. Have heard from more than one potential buyer they would not mind the Tax if everyone payed same. Out of state 2nd home buyers say doubly insulting as they see thier rates vs. others. Inventories are getting out of control, something has to give. Soon ?

By cmgr

August 7, 2006 12:50 PM | Link to this

Homestead portability on the November ‘08 ballot will solve the tax problems unlock trillions of $$$ of real estate transactions into Florida. The “boom” of the past five years is nothing compared to what lies ahead once this landmark legislation is passed. The best is yet to come.

By I don't think so

August 7, 2006 02:30 PM | Link to this

I think you’re wrong about tax portability making everything better. You are not taking into account new people moving into Florida. Tax portability will not benefit them. Do you really think new arrivals are going to be OK with paying double or triple the tax that their neighbor might be paying? It’s a no brainer; it will discourage people from moving here.

By Tax Portability

August 7, 2006 03:11 PM | Link to this

Tax portability doesn’t appear to be the answer. I’d be surprised if it passes.

If anything, I think the move would be to unwind the “Save Our Homes” from 10 years ago.

The inequities are caused by owning a primary home for an extended period of time or in periods of rapidly escalating prices.

The 3% cap on appreciation has largely benefitted the rich, or those with expensive homes living in expensive communities.

If the 3% cap on appreciation is removed, then the higher priced homes would pay more of a fair share of property taxes and thus may result in the lowering of millage rates across the board.

Another option is to again do away with the “Save Our Homes” and institute a % discount on the millage rate for those with Homeowner’s Exemptions.

If all homes go up by the same (similar) % then, all other things equal, taxes would remain the same for each property. The fault lies in the taxing authorities wanting to use the rise in prices to their benefit by increasing the services they offer.

By wondering

August 7, 2006 03:53 PM | Link to this

New buyers (especially wealthy 2nd home buyers from out of state) dont want to subsidize others by paying triple the tax as current owners of similiar properties. Eventually the shrinking pool of buyers will cost those who want to sell more than they saved in lower taxes. Once the “net” starts blogging on how new buyers in FL get raped to subsidize current residents the pool will shrink even more as nobody wants to be the fool paying triple what his neighbor pays. Very short-sighted policy. Will hurt more than help eventually.

By Mike Fink

August 7, 2006 07:16 PM | Link to this

The comment below is SO on the mark. Why in the heck, when home prices are doubling every 3 years, should the millage rate not be half?!?

This is SUCH an easy fix, its a total no-brainer. Remove the Save Our Homes act, allow everyone’s values to float. OH NO, if home prices appreciate again like they have in the past, I will wind up paying 3X as much for taxes every 5 years?!?

No, the next (and final thing) is to remove the “millage rate” as it exisits now. Goverment (state and local) will have to propose a budget every year, and then the millage rate is determined from the budget. Isn’t that what happens now? No, now the millage rate is set, and the budget is determined from the millage rate. What’s the problem? There is NO incentive to save money; the status quo brings 30% increases in budget every year (at least for the past several). If it was changed as I suggested, the status quo (regardless of home prices) would be NO increase!

Save our Homes is going to save some geezers (sorry, can’t stop laughing about that comment) but is going to kill Florida’s professional development. If you don’t live here now; don’t come, is the message we send to the rest of the country.

I, for one, will be leaving FL is the portability act passes. That takes this already crazy law, and just moves it to the next level of unfair. Now if you not locked in, you will never be able to get a reasonable tax bill.

Ever hear of rent-controlled apts? They are passed down from generation to generation like jewlery. That’s exactly what we are setting up here. People will pass their “tax” down from generation to generation.

Its a terrible law, designed to address a problem that should not exist. Let the rates float, and let govt actually justify (some visibiliy) their spending. The “default” should NOT be 30% tax increases per year!

If all homes go up by the same (similar) % then, all other things equal, taxes would remain the same for each property. The fault lies in the taxing authorities wanting to use the rise in prices to their benefit by increasing the services they offer

By Rich R

August 8, 2006 10:25 AM | Link to this

Homestead / SOH portability is a wonder concept, but when was the last time you’ve seen any government cut your taxes because people think they’re too high?

If portibility is given, you can bet your milage will go up.

As the area grows by large numbers and developers are granted approval after approval, the infastructure needs to be built to accomodate this growth. New roads, schools, fire/police etc.

Everyone wants relief for the higher taxes, but I wouldn’t hold my breath.

Consider that the voting pop. in FL are homesteaders and the people being screwed are the 2nd home/snowbirds.

If portibility is approved, it will undoubtedly rase taxes everywhere.

Face it, government will say how much they need to operate, and the prop. owners will pay it, plain and simple.

Snowbirds are already complaining and many are opting for AZ, NC or other places instead of FLA.

What happens when everyone gets portibility and the tax income declines? And at the same time, the snowbirds start to bail out for AZ, NC or other states?

Values will drop like a rock due to even more inventory on the market that’s busting at the seams, and you may see your milage raise.

Everyone is in a real hurry to set a policy to benefit themselves individually with no thought or view of the big picture.

Growth must pay for itself, but the problem is, grow cost $$ upfront and the current population gets to cover the costs for it and wait for the new tax base to come in.

The situation is not a good one, but you all have a choice. If you can’t take the heat, get out of the kitchen as I did.

Enough wes enough; enjoying a normal life in NC.

Property Taxes on my home: $965 per year TOTAL.

Insurance: $328 per year (not month).

i live in an average home (2,000sf,3BR, 2.5 BA, 2cg, one acre lot. Brand new from the builder.

Cost: $149K

Life is normal in other places of the country, not to mention the insurance costs are crippling the working class; and this is for coverage with such high deductibles, in many cases can and will cause extreme finacial hardship for many that are not sitting on a pile of money to cover these deductibles.

For me, the $27,500 deductible on my NPB home was just too much. Had I had this inplace for Francis and Jeane, it would have wiped me out.

Way too much risk for the average family. WOW!

State Leg. had the opportunity to provide fixes for the insurance issues, but failed to do so.

I really don’t see the portibility being approved.

Keep complaining, keep coming up with ways to reduce your individual costs, and you’ll see yourself with a State Income Tax.

Either way, you will pay.

By Realitytax

August 8, 2006 10:52 AM | Link to this

Sooner or later State income tax has to come. RE mkt cannot survive in current setup. If we are true beleivers of “carrying our own weight” we will stop hoping for Fed bailouts (form of WELFARE)and look for leaders courages enough to face facts and reorganize tax structure that is strangling RE market suffering enough with Ins rates.

By Plain and simple facts.

August 8, 2006 11:01 AM | Link to this

I found out that people who buy property, really don’t care of the tax price that goes along with it. It is like people who buy SUV’s and other cars that have a high price tag and low gas milage to them. You want it, no matter what the gas cost that goes along with it.

If you can’t afford the taxes, then you can’t afford the house/condo. If you can’t buy the house/condo, you don’t have the money in the bank or the salary to buy. And if rent in South Fla., then you will keep some landlord happy as you pay out your savings to his property. In return, he can buy the property that you were looking at! In the meantime, the median price will rise and your “dream” of owning will vanish. Plain and simple.

It is basic knowledge that the newer of the area you move into, the higher the taxes will be needed to support the the infrastructure (roads, schools, drainage, fire, police) that has to put into place for that location.

Buyers either have the money or not for what they want. Plain and simple. Just because you cry, complain and stamp your feet, will not help you get that house/condo. What will get you that property that you want is your salary rate, savings you have, a good credit report and how much you can sacrafice to save for your “dream” home.

If you are waiting for politicians to do something about tax relief, you will be watching the median prices go up. Politicians have other state problems on their agenda, and people with no money to buy property is on their low list. They know people who rent do not vote and the renters will not be around to vote against them in the next election. You will be living in another state, renting! Plain and simple.

Take a look at the new construction that is going up from Miami to St. Lucie County, and see what the prices are, that will reflect on existing home prices. Developers & realtors have said that every condo will be bought up in these areas by 2010. In the meantime, existing condo prices are falling due to conversions that happen in the past year. The buyer who could not afford a house, will might have to buy a condo. This in turn will raise the condo prices in the future. With the condo prices going up, exisiting homes price also goes up. Not only Americans buy property here in South Fla., we have the Europeans and South Americans also buying. Plain and simple.

Building materials and labor is going up, new construction prices going up, existing home prices going up, median sale price going up, taxes going up. Plain and simple.

The realtors, home lenders, mortgage companies, moving/storage companies have their lobbyists working in Tallahassee. Let them work on getting the politicians to fix the tax rate on property here. What buyers need to work on is how to afford the house they want. As we talk, the home prices are going up in Florida. Plain and simple.

Salary + savings + good credit = homeowner. Plain and simple.

No money + no savings + bad credit = non-homeowner. Plain and simple.

By Choices

August 8, 2006 12:09 PM | Link to this

Even more plain and simple is the fact that fewer and fewer buyers from ANYWHERE are buying in SOFL, while more and more want to sell. If you are happy here, that’s great. The incredibly growing surplus of RE indicates plain and simply many facts that Polyannas refuse to acknowledge, including many people who HAVE money opting NOT to buy here. Plain and simply, RE mkt is in trouble and wont recover till issues like taxes and insurance are acknowledged and addressed.

By We have to get use to it

August 8, 2006 01:08 PM | Link to this

Florida is an incredibly growing state, data shows that. Plain and simple. Surplus of property was a product of condo conversions and flippers trying to make a fast buck on property they bought in the last year. Plain and simple. People opting to buy somewhere else will still raise the real estate market value across this country. Plain and simple. Cost of housing in South Fla. is far lower than any other large markets. Plain and simple. The next real estate boom will wipe out the ones who were waiting for a big crash. We had a small bump in the road, but the indicators are telling that money is pouring into the area with new construction, new bank lenders and new out of the area buyers. Death, insurance costs and taxes are the only thing for sure in life. We all have to deal with it. Plain and simple.

By Choices

August 8, 2006 03:24 PM | Link to this

Calm down- we are only giving opinions, based on our own observations. Some of surplus definately condos. Growing single family surplus also.- Here is just one example of nice home not moving despite incentives and price drops : WOW !! YOU”VE GOT TO SEE THIS ONE. JUST REDUCED TO $334,900 !!! BEAUTIFUL HOME WITH 3 BEDROOMS AND 2.5 BATHS. BEAUTIFUL FORMER MODEL WITH ALL THE EXTRAS. DRAMATIC SOARING CEILINGS AND SPACIOUS LIVING/DINING AREA. LARGEMASTER SUITE ON 1ST FLOOR WITH DUAL VANITIES, ROMAN TUB,AND SEPARATE SHOWER. COZY COUNTRY KITCHEN WITH TILECOUNTERS, AN ISLAND, AND NEWER APPLIANCES. HUGE COVEREDAND SCREENED PATIO. FULLY FENCED BACKYARD. HURRICANESHUTTERS. GREAT COMMUNITY WITH SWIMMING POOL AND TENNIS.PERFECT LOCATION, MINUTES TO TURNPIKE, THE AIRPORT, OR THEWELLINGTON GREEN MALL.

(MLS ID R2642439) Hundreds more- just go look. This is new reality you have to accept along with death,taxes,etc,etc

By to choices

August 8, 2006 03:29 PM | Link to this

the choice between buying in fl and nc, tn or ga is not a choice many are going to make. many people with family, friends and money already here in fl.

the insurance, taxes and costs are all based on where you are comming from.

this is cheap if you are from the northeast, ny, or any other metro area. it might be slow now, but this will correct and work itself out.

forget the fact construction costs have gone way up. you can not deliver a home for same sq. foot cost from 2 years ago.

some pain if you need to sell now, but if you don’t, you are just fine.

maybe pbc has changed, and it is more like other metro areas. in other metro areas, workforces do not own sfr. or they have long commutes.

if the local teachers, firefighters, police, etc do not like it. i am sure many from other places, who could and want to buy a condo/townhouse for 250k would love to get out of the cold and move here.

By totochoices

August 8, 2006 03:57 PM | Link to this

Re taxes elsewhere: I am looking at my tax bill for other home I own in Cape May NJ- assessed val- 507700; 2006 total tax 3909.29. If I were a new buyer here my tax on a 500,000 home would be over 10,000. This is what is turning away some new buyers, who are not stupid with their money and dont want to subsidize my lower tax on similar home. They have the money, they also have choices.

By stop denying reality

August 8, 2006 04:43 PM | Link to this

We live in a world of finite resources. Presently the resource that is in short supply is home buyers. It is a nationwide shortage. Those without money can’t buy into the market and those with money are waiting to see what the market will do. And just like the stock market the real estate market will drop from it’s artificial high to a level that the community can sustain. That’s the way bubbles work. Unsustainably high asset values brought on by overly enthusiastic investors. Then like a rubber band the prices snap back to an unrealistic low. The real estate low has been going on in Japan for 18 years. And they are an island! Gie the market a year or two more and you’ll see the beginnings of a big price correction.

By Little choices in Jersey

August 8, 2006 04:52 PM | Link to this

Comparing Cape May, NJ to South Florida? Come on, that is like comparing apples to oranges. I will keep South Florida and you can keep New Jersey. Everyone should see what you get for $500,000 at Cape May, NJ. on realtor.com It probably looks nice with snow in the winter time.

By Choices

August 8, 2006 05:02 PM | Link to this

My Cape May home is assessed at over 500k for taxes. Market price much different. It is over 100 yrs old, 2 blocks from beach, many great old touches despite upgrades. It is nice to have both, but honestly if I were forced to give up a home it would be the one here, not Cape May. Great place.

By Lookedatcapemay

August 8, 2006 05:15 PM | Link to this

Looked at listings in Cape May, a few very nice places. Was amazed at how few on market compared with our areas in 500k-900k range. Maybe we do have too many for sale here to keep prices up.

By Bubba

August 8, 2006 05:34 PM | Link to this

The fed stopped raising rates today. This should make the housing market worse than it already is. Now buyers won’t feel pressure to get a home while interest rates are still low. I sure feel sorry for those who bought late last year to flip their properties, they are going to get burned!

By cole

August 8, 2006 05:39 PM | Link to this

the inventory will correct itself. 100 people a day move to florida, i guess they will live in thier cars?

rich baby boomers, still will retire here, not to other places. they do not care about the taxes or insurance rates. they care about the lifestyle. they care about being close to thier friends. we have some hurdles to overcome, but the sales are still happening, and the inventory will be eaten up, under a normal market, a 9 month supply is normal, so we are double that. that should not take more than a year to change. btw, the first round of baby boomers start to retire in 2009. we have not even seen the start of it.

By Going, going, gone....

August 8, 2006 06:10 PM | Link to this

Doubt baby boomers will retire to FL. They’re active and want to continue their active lifestyle in places like CO and NC.

As for real estate market, the Chief Economist of the National Association of Realtors has stated on more than one occassion that a normal housing inventory is 6 months worth of inventory. Of course that was said last year when national inventories were about 3.5 months worth.

Personally, I’m waiting to finish my degree so that I can high-tail it out of South Florida. I’ve lived down here all my life and don’t want to live in SFla anymore.

By REmaven

August 8, 2006 07:19 PM | Link to this

Keep hearing about buyers waiting in the wings, waves of rich boomers,etc,etc. No one wants to hear about owners waiting to put house on mkt once some of the glut starts clearing. I know of at least 4 in my area who want to sell, but after looking at what is already out there decided to wait. There are probably many more who have taken homes off current logjam, hoping somthing starts an even “normal” movement. This backlog of homes is going to last a LONG time as it keeps getting replenished by owners holding back now, but wanting to sell when possible.

By Heycapemay

August 8, 2006 07:39 PM | Link to this

Hey cape may man, love it there. Had great time at Jazz Festival. Hope “Ugly Mug” is still going strong. If you are in onc of those old victorians, congrats. Earlier neg. post about that area had to be by someone who has never spent time there and who would choke at what those places sell for.

By dot

August 8, 2006 10:34 PM | Link to this

“They keep telling me 1,000 people a day move to Florida,’ she says. ‘I don’t know where they’re going”

Umm, a wild guess - they are renting from you, at your loss.

=)

By Mike Fink

August 9, 2006 06:51 AM | Link to this

My parents are baby boomers, and long had the idea of retiring to S. Fl in the back of their minds. I moved here several years ago, and my parents often come to visit. However, they decided very early on that S. Fl was not for them.

Its not the price of homes (although that does not help), not the tax structure (again, not a real positive, but not a deal killer). It’s the fact that Palm Beach is quickly becoming another Miami. My Dad took one look at Wellington and said “this is Long Island all over again” (talking about a crazy overpriced bedroom community).

Lots of these boomers are not going to move here; we have become too much a “real” city; traffic problems, pay to park everywhere, crime, ghettos, etc. We are a victim of our own desires.

Not many people want to retire into a lifestyle that is more hectic then the one they are coming from. Granted, compared to NYC this is still not bad. But compared to the suburbs (which the baby boomers built and primarily live in) this might as well be 5th Avenue.

rich baby boomers, still will retire here, not to other places. they do not care about the taxes or insurance rates. they care about the lifestyle. they care about being close to thier friends. we have some hurdles to overcome, but the sales are still happening, and the inventory will be eaten up, under a normal market, a 9 month supply is normal, so we are double that. that should not take more than a year to change. btw, the first round of baby boomers start to retire in 2009. we have not even seen the start of it.

By Mike Fink

August 9, 2006 07:07 AM | Link to this

Real quick, about the taxes:

I don’t mind paying the tax bills to help create the infrastructure/etc. What I mind is that I have to pay it and my neighbor does not because he bought before the boom. If portability passes, then I am going to be really upset. Now I will ALWAYS have to pay it, and he never will. At least now I can sleep well knowing that when he moves, he will be more screwed then I currently am.

Govt, btw, absolutely LOVES this taxing structure. Lots of people think that this “stifles” govt spending.. Oh, how wrong you are!

What this does is make 100% certain that those you are taxing the most are unable to do anything about it. Only the people in most recently are killed with taxes; there will always be more people getting a “break” then getting killed. Majority rules during elections….

Once your taxes are locked, what the heck do you care what govt does with the money? WPB could build a 100 story granite monolisk covered in gold downtown for 500 million dollars for all you care. It does not affect your taxes, so what difference does it make?

All service (public or not) sounds like a GREAT idea when someone else is paying the bill. Add 500 police officers for the CityPlace corridor, great idea! As long as its the poor sap next door who bought last year that foots the bill and not me.

By cmgr

August 9, 2006 07:55 AM | Link to this

Ten years from now no one will remember this so-called “boom”. They’ll be dealing with the next one. The escalator is always going up in South Florida. Just get on; you haven’t missed a thing.

By to mike fink

August 9, 2006 07:58 AM | Link to this

mike, i am sure you can still pick out individual cases, people who do not want to retire here, but other places. but generally, atleast according to aarp, florida still tops the list, and by far. once again, rich baby boomers, who are from the northeast will continue to come.

this is far from long island, the prices are not the same. a brand new 3200 sq foot home in wellington for 800k, is not a 2000 sq foot home built 30yrs ago in great neck. sorry.

the traffic is not the same, and the weather is not the same.

nc, unless you are within 20min of charlotte does not offer what we have here, plain and simple. it costs less, because there is less.

individual examples, my aunt and uncle69 and 57 yrs old, wealth.

huge group of thier wealthy friends, about 20 couples at a party in buffalo two weeks ago, i asked anyone hear who owns in florida thinking of selling, absolutely not. they love it. anyone looking at retiring anywhere else other than florida, absolutely not.

the trend by the way for the wealthy baby boomers is to dump the suburban home, by a second home and a condo back in the city. this is a different generation, and they want the hustle and bustle of the city and lifestyle of florida.

half these people already own down here, they are not selling, they love it, they are mostly on palm beach, jupiter and pga. they could care less about prices right now, because this is a long term play for them.

By Rdr

August 9, 2006 09:15 AM | Link to this

Boosters on this site must think the rest of the world is illiterate. Even current WSJ articles acknowledge boom is over, especially here in SoFl. Stop embarassing yourselves trying to blow air back into a balloon with too many holes. Relax, enjoy life, try to grasp the meaning of “The Truth shall make you Free”. Go for The Truth, not only the green.

By the man`

August 9, 2006 09:27 AM | Link to this

A ‘Trillion Dollar Tsunami’ In Florida

The Palm Beach post reports from Florida. “Mortgage trouble is creating some of the biggest bargains this side of eBay, allowing buyers to snap up homes for tens of thousands of dollars less than what they might have paid just a few months ago. Notices of pending foreclosures are piling up, in what many believe to be the first wave of a trillion-dollar tsunami: The dollar volume of home loans with interest rates that will be ratcheted upward over the next several months.”

“New Palm Beach County foreclosure filings rose by 34 percent in June compared with June of last year. Clients these days are from such well-to-do areas as The Acreage and Wellington, Jeff Pashkow said. ‘They’re mostly (middle class) people who have financed it to the hilt, and there’s really not much you can do for them.’”

“From March through May of this year, the average sale price of a home in Palm Beach County sold at foreclosure was just $195,705. That’s more than $200,000 less than Palm Beach County’s median home price in June 2006, which was $405,500.”

“It’s a fraction of the $582,000 average Palm Beach County home price in May. And it is almost exactly the amount considered affordable for a worker earning the median income in West Palm Beach, according to the Florida Housing Coalition.”

“Realtor Diane Corbin cites the case of a local developer who was selling a home a week, and who is now selling a home a month. ‘It’s killing them,’ said Corbin.”

The Herald Tribune. “Jade Homes, a Sarasota-based builder with 75 houses in varying stages of construction in Sarasota, Charlotte and Manatee counties, has shut down its operations and closed its main office and six sales centers.”

“Andrew Coles said he hopes Friday’s closure will not be permanent, but added that he is meeting with his lawyers to examine options. ‘We are having to downsize because of the slowdown,’ Coles said.”

“Jade, which has built more 500 area homes since its founding in 1997, sold 123 in 2005, according to Coles. This year, Jade sold four. ‘That tells you the nature of the problem,’ Coles said.”

“Jade Homes is one of three builders that have models at a northeast Manatee County subdivision with large lots where homes are priced from the upper $500,000s to $700,000. On Tuesday, four lots there had Jade Homes’ ‘Sold’ signs on them and two Jade houses were under construction. One of those had a roof ready for a tiling crew. On the other house, the roof had been sheathed with plywood but tar paper rolls sat unattended on the roof.”

“Smaller construction-heavy communities such as North Port, Nokomis, Osprey and East Manatee will likely be hit first and hardest. North Port’s construction permitting activity speaks to that. A year ago, 300 to 400 permits were granted each month in the city. That number has shrunk to 65.”

“With thousands of homes already permitted and waiting to hit the market, the inventory surpluses will likely peak at the end of this year, said Jonathan Dienhart of Hanley Wood Market Intelligence. He remains uncertain about the long-term impact on labor. ‘The constant state of labor shortages in the industry will be assuaged,’ Dienhart said.”

By Tom

August 9, 2006 09:28 AM | Link to this

The media has been bashing the South Florida real estate market for over 2 years in an effort to scare away buyers. The attack was started by the Wall Street Journal and Business Week with fabricated stories on Miami’s 90,000 condos being built when the real number of condo starts in 2006 is 6000. The Post, Sun-Sentinel and Herald then masqueraded foreclosure/distressed property consultants as real estate experts and pounding the market with weekly BUBBLE headlines scareing away buyers and killing the market! The media is responsible for putting thousands of local residents out of work and killing the economy all in the name of political correctness!

By To Tom

August 9, 2006 10:12 AM | Link to this

Tom, Although the media is reporting what is going on as they have, fundamentally, the housing market was due for a big correction given it’s dramatic run.

The media reported how the housing market was doing well 5 years ago and it did better than it should have.

It’s all psychological both on the way up and on the way down (or self fulfilling prophecy. But the key is that it works both on the up and on the down side.

The media isn’t the only one to blame. You can blame over zealous investors who got in hoping to make a quick buck and only led to pushing prices higher. You can blame complacency for ignoring the risk of hurricanes in FL which have pushed costs of owning a home (i.e.: insurance premiums up). You can blame over confidence in elected officials which have created a property tax mess.

FL was in this predicament in the mid 1920’s and it ended busting.

Suggesting the psychology is being broken down, the CEO of Toll Brothers said today, the current housing slowdown “is the first downturn in the 40 years since we entered the business that was not precipitated by high interest rates, a weak economy, job losses or other macroeconomic factors.”

BTW, I’m not in the media or anywhere near it. Just a spectator of the housing market.

By the media

August 9, 2006 10:36 AM | Link to this

All the media cares about is selling newspapers - therefore the RE market according to the media is either bullish or bearish. Fear and greed sell. Right now fear is selling newspapers. As a result, buyers are backing out of contracts left and right. And the media always claims they are not the cause of the fall in RE. They are right, they are not, but they are a huge factor. If I were a buyer and had a house under contract and then read headlines that constantly will force the words “bubble burst” in it I would probably start 2nd guessing my decision to buy.

I think its a shame. The classic example was the report that came out about 2 weeks ago whent he headline meantioned the housing bubble was bursting…and then as you read it, in a nonsignificant paragraph, the article meantioned median prices remained unchanged. THAT IS NOT BURSTING you idiotic writers. Tell me that inventory is up, tell me taxes are up along with insurance and that leading indicators are suggesting the market may correct itself…but don’t throw out some phrase that the bubble is bursting when median prices are the same as a year ago.

And then the writers go on to get quotes from the most bearish RE people they can possibly find. They quoted a guy from Weiss Research, Mike Larson, who has been predicting a RE crash since 2002. If you want another reliable source I am sure you can find one at the intersection of 10th ave and Congress.

Another classic example was when Palm Beach Post published an article about how investors were getting burned. They quoted one lady who said she had 12 houses she could not unload. This was printed as headline news. If you read the article a couple days later, on the internet, there was as astro next to the statement about a lady with 12 houses she couldn’t unload. I scrolled to the bottom and read, “the investor contacted us to clarify that she owns 12 houses and is renting 10 out, she is having trouble selling 2 of them.” I would think the writer of this article needs to get their a— kicked. This is like a sportwriter saying Tom Brady threw 5 interceptions, and then making a note that these interceptions were actually from passes that he never threw.

Its really quite funny.

There is no doubt we are in a slow down and there will be more foreclosures, but banks are not going to give places away and there are bargain hunters (like me) waiting to buy a place at a discount. Go get a quote from a construction worker on building a new home - news flash, commodities are up, it costs nearly twice as much to build a home now as it would in 1990.

So for all the pathetic Palm Beach Post writers and every other doom and gloom sheep out there, hang on to your hats, because this is going to be one boring soft landing in the real estate market.

By Setting the Record Straight

August 9, 2006 10:47 AM | Link to this

Tom, you are so correct. Maybe readers should halt their subsrciption on this paper and the others for their reckless reporting.

Another point to discuss about is our local home sales, on which the Realtors in Palm Beach County are reporting. Home sales are recorded as condo sales at the Palm Beach County Record & Title Office. This skews the median home price, and brings it lower while raising the median condo price. I see fraud here with realtors and county employees at the recording office.

To the Florida States Attorney Office, I hope you are reading this! I believe there are criminal charges that should be brought to certain realtors, brokers, title companies and county employees at Palm Beach County.

People will always be moving here, over 1,000 a day. Baby Boomers are not the only ones with money. Yes, the Truth shall be told of who has the money and does not.

The foreclosure sale price which was listed above is not true. There are many hidden costs, fees, etc. that comes with a foreclosure. Please read the “unedited” article in todays paper and talk with a qualified Realtor who deals with foreclosures and what a buyer should expect on picking up “hidden” costs.

As a local Realtor Broker, I believe our profession’s reputation is on the line and it is time to clean out the agents & brokers who give the real estate business a bad name in Palm Beach County.

By Nervehit

August 9, 2006 11:15 AM | Link to this

Slow down guys, stop bashing the messenger. If you have been tapped in to RE for past two yrs you did not need a newspaper to see this coming. Unless blinded by GREED. Adjust to shrinking pool of new buyers willing to give the State three times what existing owners pay, and then have to deal with rapacious Insurance rates. Some people are priced out,many others, with money, do not want to subsidize other owners by being TAXED UNFAIRLY for similar property. Grasp reality, or keep dreaming of thousands of rich boomers who cant read or do the basic research that shows idiocy of buying here now.

By The media

August 9, 2006 11:33 AM | Link to this

I will stop bashing the messenger when the messenger can report an accurate message.

By Nervehit

August 9, 2006 12:00 PM | Link to this

As I said, an open-eyed, practical,experianced, tapped in RE owner/investor who did not see this coming himself was blinded by greed. Grow-up, take responsibilty if investments not panning out. Long term (5 yrs or so)things will get better. Double digits were great while they lasted. Enjoy rewards, plan properly, no need for regrets or blame games.

By Think it through...

August 9, 2006 12:15 PM | Link to this

My thought is if you blame the media for how it is going down then you must do the same for how it irrationally went up.

If you believe that assets have an underlying fundamental on which their pricing is based on, then the media isn’t to blame. There are plenty of reasons for the housing market to slow down and to decline.

This is just a classic example of the psychology that occurs during a boom/bust market. When prices are going up, people rationalize it by naming every good reason why prices are going up and continue to go up and pumping people to keep buying. When prices go down, everyone rationalizes it by placing the blame on any person or thing they can lay blame to. And if you remain in the market you become upset when people continue to talk the market down, even if it is true.

While median prices haven’t gone down much, the June report was significant in that it was the first year over year decline in prices in since August 1998 to August 1999 prices declined 2.57%.

The year to date 34% decline in single family homes sold in PBC is only a testament to (1) buyers believing prices will decline due to 18 month supply of unsold inventory, (2) banks not lending money to anyone with just a pulse, (3) costs of owning a home (taxes & insurance) being unaffordable for people moving to the area, and (4) disparity between the price sellers want and buyers are willing to pay.

I have a relative in the mortgage writing business in Miami that was telling me last year over 90% of the mortgages he wrote were interest only. If you don’t think that can have a negative affect on the market then you need serious help. Interest only loans make sense when (1) appreciation of home exceeds the cost of interest less tax deduction or (2) as a short term vehicle waiting for long term interest rates to decline. By and large interest only loans rely on continuously appreciating prices.

I am curious to know, of the 34% year over year increase in foreclosures in PBC, what the raw numbers are and how many of those were interest only loans?

By the media

August 9, 2006 02:02 PM | Link to this

I prepared myself for this slump, and I embrace it. I am just making the point that the media, especially PBP writers, exaggerate the extent of the decline.

And yes, they fueled the bubble as well.

I agree 100% with the “think it through” article.

I would be interested in how many were ARM loans, interest onluy, neg. am. loans as well.

By RunToTheHills

August 9, 2006 04:36 PM | Link to this

I am leaving South Florida. This is cRaZy. Unless you make $150K + a year. You should leave too.

Bye

By Al

August 9, 2006 05:33 PM | Link to this

hey ‘run to the hills’….I left on Aug 1 & moved to TX. After living in S. FL for 16 yrs. Still having some homesickness but have to tell ya…my auto ins went down $190…renting a 3 yr old house, 1800sq ft 2 car garage for $900/mo. Now I can actually save some money & buy a house within 6 mos. I would have not left if my employer would have given me a cost of living adjustment…now living the cheaper life in S TX

By NUMBERCRUNCHER

August 9, 2006 09:18 PM | Link to this

I have noticed some recent sales where the buyer was actually the realtor selling the properties. If realtors are buying properties that are about to go into foreclosure that they cannot sell, does that mean they know the market is going to take off again soon?

TO SETTING THE RECORD STRAIGHT

In case State’s Attorney, Barry Kirshner, does not know what goes on in his own neighborhood, maybe you should tell him.

Yes, all realtors will suffer for the few no good ones out there giving you a bad name. Get rid of the bad realtors, they are not good for business.

By Notouting

August 9, 2006 10:49 PM | Link to this

Considering number of RE touts on this site, there should be alot more of them buying.(If they really believe 1000s of rich boomers, So Americans, Europeans, Canadians,etc,etc on the way). Inventory should shrink in no time. Sellers rejoice !

By cmgr

August 10, 2006 09:04 AM | Link to this

The Post oversensationalized the so-called “boom”. Does anyone remember all the young couples profiled with their 70 investment properties in Olympia all financed with interest only loans back in 2004?

That was some of the most preposterously slanted reporting I have ever seen. Made anyone who owned real estate in PBC look like an idiot. Gee there’s a novel business reporting concept: make homeowners of real estate in one of the most desirable locations in the world look like idiots.

Now The Post has somehow taken a median price that has finally broken back through the $400k barrier for the fourth straight time in as many years and spun it to read “Housing bubble has finally burst” simply because the number of transactions keeps dropping.

Hey, get a revalation: as real estate gets more expensive in PBC (and it will) the number of transactions will continue to drop. Ford sells a whole lot more cars than Rolls Royce. That doesn’t mean Rolls Royces are overpriced. That doesn’t mean there is a “bubble” in the Rolls Royce market. That simply means there are far more people who can afford a Ford than a Rolls Royce. That’s a simple supply-demand metric that applies to any market.

There are far, far more people who can afford a $150k house than there are who can afford a $400k house.

That doesn’t mean the $400k houses are overpriced. That simply means the $400k houses will take longer to sell as there will be a much smaller pool of buyers at that price level.

If and when the median hits $500k in PBC you will see a commensurate reduction in number of transactions.

This isn’t rocket science; and it sure ain’t no “bubble”.

I cancelled my subscription after their reaction to June’s NAR median report. They have committed themselves to a bubble bursting and will only see and report information which agrees with that perspective.

With zero hurricanes for PBC this summer, I wish you the best of luck supporting your bubble theory into the 2007 house buying season Linda!

Listen, there is enough negativity in this world without manufacturing it.

If this is “The Real Deal” then The Post should get “real” about a correcting market that is still appreciating regardless of all thie negative spin.

Watch the NAR numbers: they will most likely never drop back below $400k ever again. If you believed the hype and were waiting for The Post’s precious “crash” then you may have waited too long. The past 6-month “dip” was about all the crash you’ll most likely get out of Palm Beach real estate I’m afraid.

And major insurance law and tax reform is on the way soon. This is the number one campaign issue in Florida.

It’s only gonna get better. And a $400k and rising median ain’t a bad place to start either!

Don’t buy The Post’s hype. In other words: Don’t buy The Post.

By Rich R

August 10, 2006 09:30 AM | Link to this

The market is unbalanced and working class people can no longer live there.

I left in early 04 and now in Raleigh enjoying the normal life.

Just like the post above that moved to TX, I too have found my paradise. No Traffic, cheap insurance, cheapest property tax i’ve ever paid, and much higher wages.

For the people that feel that values will continue to rise, I hope for your sake you are not one of the flippers holding a few condo’s that you can’t sell.

If you continue to fool yourself, you will only get burned.

Wake up, smell the smog and realize that if the working class people cannot afford the live there, the local economy begins to crumble. When this occurs, you will see a mass exit from SoFla.

This year alone, 3 boat builders have been lured to NC from Florida and more on the way.

The only thread the market is holding onto is the lower activity with storms this year.

Family members in the north that have long planned a move to FL are now looking in all area’s except FL.

People with money that can afford SoFla, are also smart enough to realize that the quality of life in SoFla is not worth the cost or the risk. Not to mention the disproportionally higher property taxes they have to pay as snowbirds.

I grew up in SoFla and couldn’t get out fast enough.

It’s changed allot! Not for the better.

By CMGR: You're wrong

August 10, 2006 09:36 AM | Link to this

CMGR: I move here about a year ago and we’ve been looking to buy, but had held off as prices plummet. Here are a few examples from my looking at prices in Abacoa for the last 9 months:

Martinique and Tuscany townhouses (3/3/2) that late last year were selling in the 440s is now listing from 380k to 369k.

Tuscany 4/3/2 home with a screened heated pool that was listing in the high 700s is now listing at just over 600k.

There are also New Haven 3/2.5/2 homes that were selling for 550s and one is now listing at 459k.

My favorite is a 3/2.5/2 home with a 1/1 apartment over the garage that was bought for 887k early this year is now listing for 885k. That’s the first listing that I’ve seen in Abacoa under the prior purchase price.

Volume in Abacoa is also increasing. So CMGR, maybe you need to get out and actually track what is happening in the housing market, and you’ll see that the bubble has burst. Prices have dropped about 15% from their old high in Abacoa for most homes in one of the more desireable neighborhoods.

And this is going on during the summer, when properties should be moving. Sorry CMGR, but you couldn’t be more wrong.

By pd

August 10, 2006 09:37 AM | Link to this

To notuting — Right On! Couldn’t have said it better myself!

By Cancelevrything

August 10, 2006 09:42 AM | Link to this

cmgr will soon have nothing to read if he cancels ever publication reporting on RE not appropriate to HIS dogma. Better not read WSJ recent articles, stay far away from todays NY Times especially. Its a conspiracy I tell ya, a conspiracy !

By addLAtimes

August 10, 2006 10:56 AM | Link to this

LA times in on conspiracy! : “2 Key Firms’ Results Raise Housing Fears- Mortgage demand at Countrywide and new-home sales at Toll Bros. fall more than expected, casting doubt about a ‘soft landing.’”

By Annette Haddad, Times Staff Writer August 10, 2006

“Key housing industry players Countrywide Financial Corp. and Toll Bros. Inc. said Wednesday that mortgage demand and new-home sales were falling more than expected, raising fresh concerns that the nation’s real estate slowdown might be deepening.

Some experts and industry officials are beginning to question whether the widely expected “soft landing” — in which home sales and prices level off — might be replaced by a harder, more prolonged decline.”

Cancel subscriptions, don’t go to website. They are involved in conspiracy to drive down prices. Reporters and editors have formed vulture funds !!!

By DROP

August 10, 2006 11:12 AM | Link to this

“Paul Ciotti has had his two-bedroom beachfront condominium in Naples on the market since late last year. He first asked $999,000, when ‘everybody was going for pie in the sky.’ He has since cut the price to $799,000. Mr. Ciotti bought it for $515,000 in 2004.”

DROP, DROP, DROP

By to cmgr

August 10, 2006 12:35 PM | Link to this

‘Speculators Have Disappeared Off The Face Of The Earth’

The News Press reports on the WCI numbers in Florida. “Bonita Springs-based WCI Communities said Wednesday that orders for its condominium towers have screeched almost to a halt, and businessmen across Lee County said the residential construction industry as a whole is slowing dramatically.”

“‘We are backing down on the tower business, we can’t offer the incentives or financially motivate people’ to buy, said CEO Jerry Starkey. Total new orders were down 62.4 percent, but towers were down 82.6 percent to $57 million, and the number of units ordered fell 88.8 percent.”

“‘We don’t think the bottom is here yet, we think the bottom is six months away,’ said Ed Bonkowski, a Fort Myers-based real estate broker who said he represents $25 million from investors. ‘The sellers of property are in denial right now that they’re not going to lose money on their deals, and they will. The main thrust is the speculators: They have completely disappeared off the face of the Earth.’”

“The signs are everywhere that the downturn is taking place throughout the industry. ‘The answer is an unequivocal yes,’ said Rad Hazen, (who) provides landscaping plants for builders locally and around Florida. ‘It’s statewide. Almost everybody is saying there’s a downturn in major projects. A lot of the business seems to have dropped off.’”

“Underlying the doldrums, said real estate broker John McWilliams, is the huge 2005 run-up in prices that came to an abrupt end early this year. ‘All day, every day I’ve been in price-reduction meetings with the sellers,’ many with lots or houses in Lehigh Acres, he said. Sellers are finally coming to their senses, McWilliams said. ‘The obstinance is over with the sellers who didn’t want to believe this.’”

“The numbers bear out the coming hard times, said Lee Building Association VP Michael Reitmann, who notes ‘new permits (have) slowed quite dramatically.’ Only the strong will survive, he predicted. ‘It’s going to affect those people who are not good businesspeople and aren’t watching very closely what they’re doing. The days of just being order takers in the residential market are over,’ he said.”

The Naples News. “Once one of the hottest places in the country for real estate, Southwest Florida has turned into one of the slowest markets for WCI communities. ‘Active adult (communities) in Florida was the largest decline,’ Starkey said. ‘The east coast of Florida is down, but less so than the west coast. West coast continues to be the weakest of all areas.’”

“The company also saw a spike, almost a doubling, of cancellations, up to 30 percent from about 15 percent. The decline is causing the company to look at cost-cutting measures, including recently announced layoffs. ‘It continues to be a tough environment. We don’t know if it will continue for three quarters or seven or eight quarters,’ Starkey said.”

“Other builders in the area are feeling the same pains. Last year, Mercedes Homes sold more than 300 homes. This year, said Lisa Perry, VP of sales, ‘I would like to see 175. We are pushing for that. With the investor influx we had in the last two years, it was great for sales then, but now we’re competing with our own inventory,’ Perry said.”

“A market correction to some extent was in order because the pace of the last couple of years was unsustainable, said Alan Foster, of Divco Construction. His company builds primarily high-end single-family homes and even that segment is feeling the impact of investors dumping homes. ‘We are competing against homes that we sold to investors before,’ Foster said.”

“Any market segment where there was speculative building is now facing hardships, said Mark Raudenbush, a general contractor. ‘It’s reverse musical chairs. Anyone left holding a chair when the music stops is the loser because they have a chair they couldn’t sell,’ Raudenbush said.”

By to cmgr

August 10, 2006 12:39 PM | Link to this

BANKERS OFTEN LEND MONEY ON CHARACTER, BUT SELDOM ON REPUTATION ALONE, FOR THEY HAVE LEARNED THAT NOT ALL REPUTATIONS ARE DESERVED.

When considering a loan, a banker attaches great importance to three things: the borrowers ability to repay the loan, the borrowers credit history, and the borrowers character. The first two considerations can be calculated mathematically; the third requires judgment and experience. Prudent bankers have learned that persons of character are always a good risk because they take their obligations seriously while those who spend their resources on the trappings of success should be avoided at all costs. Protect your good reputation as you would protect your home, your investments, and your life. Once shattered, a good reputation can only be regained by those who have developed the courage and willpower to persevere in the face of great odds.

This positive message is brought to you by the Napoleon Hill Foundation. Visit us at http://www.naphill.org. We encourage you to forward this to friends and family. They can sign up for this free service at our web site. —————————————–

Take a look at the 3 things of ‘great importance’ to a banker, and lets see if the ‘bankers’ of today follow those rules, or if they have been relaxed a bit. With stated income and no-doc loans, are you giving a banker the info needed to show your ability to repay a loan? With the explosion of the subprime lending markets, are bankers looking at a borrowers credit history the way they ‘used to’? And finally, are the ‘bankers’ of today really looking at the character of the person they are lending hundreds of thousands of dollars?

Napoleon Hill and Andrew Carnegie worked closely with Charles Schwab. Do you think Mr. Schwab would have become the success that he was by ignoring those 3 principles? Maybe the mortgage lender Encore would still be in business if they applied Napoleon Hill’s thoughts on banking to their business. Instead, they lent about 60% of their money to people with undocumented income via stated income loans. Is it really any surprise they went under? They were not the first, and they will certainly not be the last company that tries to ignore the ‘old’ fundamentals in favor of new ones.

People don’t understand that this bubble is going to be worse than any other because never in the history of this planet has money been lent the way it has the past 5-8 years. In previous real estate boom/bust cycles, people STILL had to put money down and get a mortgage that paid down the principle (either through a fixed rate or an adjustable rate). How bad would previous busts have been had people been able to borrow 100% of the money on stated (exaggerated) income?

Look at this quote from the CEO of Toll Brothers: ‘It appears that the current housing slowdown is somewhat unique: It is the first downturn in the 40 years since we entered the business that was not precipitated by high interest rates, a weak economy, job losses or other macroeconomic factors,’ said CEO Robert Toll.

The reason this is unique is because the industry completely ignored the fundamentals. Because times were good, they ‘creatively’ stretched the dollar so that short term monthly payments could be kept low. They have about stretched the dollar as far as it will go…50 year mortgages, 1% neg-am loans, interest only, etc. If the dollar has been stretched to its max when the times are good, what do you think will happen if we DO get higher unemployment? higher rates? a weakened economy? Combine any of those factors with the ‘lawless lending’ of the past 5-8 years, and what do you think will happen?

Never in the history of the planet has money been lent out in such large quantities, to borrowers with so little documentation, with such ‘creative’ programs, at such high loan-to-values. The stock market ‘defied’ the fundamentals for a while. Remember all the ‘experts’ saying it was a ‘new economy’ and that you could make money buying companies with NO earnings, that were trading at 180 times future earnings, because it was different this time. Just like the real estate experts that will tell you an ‘income property’ that loses over a thousand bucks a month is a ‘great investment’ because it will appreciate.

Once the banks start holding the paper instead of selling it on the secondary market, look for the above fundamentals to return. The free markets work, and will return to the fundamentals. The ‘investors’ that have been buying all these crappy MBS (mortgage backed securities) will stop buying once they see the junk they have been buying. Once these payments really start adjusting and the defaults start piling up, MBS won’t be as attractive as they once were. When the banks don’t have somebody else to assume the risk, they will tighten their standards because it will be THEIR money on the line, and not some 3rd party.

By What can you afford?

August 10, 2006 01:36 PM | Link to this

It is all about what buyers can afford to buy. With the median price going up, the pool of cheap home buyers will go down because they cannot even afford the median price. Some of these hopeful buyers missed out getting on the ground floor when property prices took off. Now they feel we should go back to 1995 prices. If they all think that the Carolinas or Texas Panhandle is so much better than Florida, why are they still begging for prices to drop here? Because they all want to be here!

Because this is a MAJOR home market. This is a MAJOR business market. This is a MAJOR entertainment market. This is also a MAJOR financial market. These people who complain all the time about high prices, cannot afford to live here. They have no money now, nor in five years from now. They just missed out to make some money on real estate here. Hey, if they complain about taxes and insurance, they cannot afford to maintain the house expenses. Need to have a bigger salary, bigger than what they give you in that “hick” town.

People who live in New York or Boston, they will know expenses are cheaper in Florida. If they also think it is expensive here, than they need to buy another blanket for the winter and watch the snowflakes fall.

Home prices and expenses might be very cheap in Texas, Carolinas and some other “hick” towns, but so is the salary. Always has, and always will be.

Florida is where California was back in 2000, with more room to grow in home prices. Sellers, there will always be people with money, in all price levels ready to buy property in Florida. All others will be left out in the cold.

By Rich R

August 10, 2006 02:12 PM | Link to this

to: What can you afford?

What MAJOR markets are there in Florida?

No industry to speak of except tourists/citrus, that’s about it.

What’s the great appeal of the horrible traffic, high crime, extememly high taxes, unafordable housing and a working class that has no chance of survival there? and the simple fact that nobody speaks english anymore.

What’s so great?

I grew up there and after 30 years of deteriorating lifestyle, i moved to Raleigh, NC.

Raleigh is anything but a “Hick” town. There are fourtune 500 companies all over the place here, from IBM, Fidelity, Novartis, Glaxo-SmithKline, Citibank and many many more. What does PBC have?

Raleigh has 13 universities within one hour and the education level of the population of the Raleigh area far surpasses that of PBC (within the working group).

Some feel SoFla is paradise. Not for me. If your definition of paradise is traffic jams, road construction, dwindling public beach access, high taxes, high housing, and high crime, then I must have it wrong.

For me, it’s about quality of life. FL was nice, long ago, but no more. What’s the sense of living in “Paradise”, if you have to have 3 jobs just to survive. I do well with one job, but not the folks in FL.

Wages are about 20% higher in NC then in FL and the cost of living is LESS THEN HALF of what it costs to live in SoFla.

In NC, the average person, can own the average home, with the average wage.

Brand new homes, from the builder here for LESS THEN $150K - 3 br, 2 1/2 Ba, 2 car garage on an acre of land. Hardwood floors (not laminate), chair rails, crown molding, all included. 10 year warr on home.

Prop. Taxes: $965 per year

Homeowners: $328 per year - StateFarm.

12 mile commute - 15 minutes.

2BR apt’s here go for $600 a month.

Why struggle like that.

$7,000 a year for insurance that won’t pay anyway.

Yeah, that’s paradise alright. NOT.

Grow up, smell the smog and re-evaluate Florida.

For the optimist’s, i just say good luck. For the more realistic people, be careful.

I feel sorry for anyone who bought within the last 24 months. You will loose big if you try to sell. Thats if you even get an offer.

Btw, my best friend has had her home listed for 9 months with no offers at all. She bought for $469K and now listed for $379 and no offers. She’s willing to take a $90K loss just to get out of the “Cesspool by the Sea”. Still no takers. She’s paying $1,800 per month just for taxes and Insurance. That’s about $600 more then the total housing cost here, including mortgage, electric, water, cable etc.

WOW!

Enjoy your paradise; or is it “Paradise Lost”

By Think it through....

August 10, 2006 02:18 PM | Link to this

So let’s look at today’s events in the UK.

Let’s just think through what could be on the horizon.

Whether you agree with the war in Iraq or whether you disagree with it, one thing is obviously clear about the world today: There is a lot of hatred in the world right now. There is hatred for Americans, hispanics, blacks, jews, arabs, asians. I read a few days ago that Venezuelan leader Hugo Chavez wanted to start an anti-American alliance.

If we were in the midst of what Newt Gingrich called the start of World War III, just how do you think that would affect the financial markets? What would be the response?

I don’t know what will happen, but initially my thought is consumer spending would decline and liquidity would tighten making borrowing more difficult. The tightness in borrowing could then lead to asset price decreases in all financial markets if they were kept higher by the amount of liquidity.

I realize it’s somewhat an extreme idea, but we can’t ignore what is going on. There is war in Iraq, Afghanistan, Israel, Lebanon, and there is political instability in many more countries across the planet. Anyways, just a thought….

By Rich R

August 10, 2006 02:38 PM | Link to this

Think it through.

you have a good point.

This may get much worse before it gets any better.

Batten down the hatches and get ready for the RE roller coaster ride.

Anyone out there that is having trouble with their mortgage, let me know. I have my own vulture fund and would be very interested in empty land in Loxahatchee on fire/forclosure sale.

By doc

August 10, 2006 03:02 PM | Link to this

whats up rich r

people on this blog dont read. they are cheerleaders of real estate.

i call them equity locust.

they come up with every reason that prices must go up, and yet they are going down in south florida.

ask them about their tax bill this year and all you will hear is this. —————————————————————————- only hearing a pin drop, peace.

‘Landlords Are Doing Renters A Favor Right Now’

USA Today looks at the rent versus buy decision. “In some of the nation’s priciest real estate markets, the financial reasons for renting instead of buying are the strongest they’ve been in 25 years. So how out of whack is it now? The national median mortgage payment is $1,687 a month, nearly twice the median rent payment of $868 a month. The financial gap is even larger in cities where home prices recently rose to sky-scraping heights, such as New York, San Francisco, Los Angeles and Washington.”

“Micki Seibel and Jan Leger told their friends they were going to sell their home in the heart of San Francisco and rent an apartment. Though Seibel and Leger love their home, which they bought in 2002 for about $1 million, it’s been draining them of $5,600 a month for their mortgage and taxes, when they could be renting a place just as nice in the same neighborhood for about $3,400.”

“‘We can put that savings in the bank and make it work for us and take away the risk of the unknown future of the real estate market,’ Seibel notes. ‘For what we’re paying for our mortgage and property taxes, we could be renting a mansion in Pacific Heights,’ he said.”

“Add rising interest rates, and it’s easy to see why many would-be home buyers are sitting on the sidelines and why even some homeowners are cashing out. By renting, they gain the flexibility of a lease and freedom from home repairs. They can also invest more money in other assets that could appreciate faster than real estate over the next couple of years.”

“‘For someone debating whether to rent or buy in a market that’s experienced recent and substantial house-price run-up, it may be better to delay the home purchase and see what the market looks like a year or two down the road,’ says Stuart Gabriel, at the University of Southern California.”

“A homeowner in Orange County, Calif., for example, would have to stay in his or her home for a decade before breaking even on out-of-pocket costs compared with renting, according to Marcus & Millichap.”

“‘Real estate is probably the best investment any young person can make,’ says Yadiris Ferreira, who bought a condo last month in Pembroke Pines, Fla. Still, her mortgage, including homeowner association fees, totals $1,800 a month, more than half the money she takes home as a high school math teacher. ‘It’s crazy,’ Ferreira concedes. But, she explains, ‘If I didn’t buy something soon, it was going to get to the point that I couldn’t afford anything.’”

“Lots of other people thought the same way during the boom years. But now home sales are falling, and in some cities, prices have started dropping, too. In June, condo prices fell 2% nationwide, and single-family home prices dipped in several markets, including San Diego, Boston and Washington.”

The Times Standard in California. “According to the Humboldt Association of Realtors’ latest affordability index, home prices dropped in every community except McKinleyville. In May the median home price in Humboldt County was $319,500, with around 11 percent of Humboldt County residents able to afford a home. June’s median price was $307,500, representing a one-month price drop of $12,000.”

“Local economist Erick Eschker said that he still expects a ‘large downturn in local real estate’ in terms of prices and number of homes sold. One indicator he looks heavily to is the housing price-to-rent ratios. Currently, rent prices in the county aren’t capable of covering property owner mortgages, he said, and owners are banking on the ability to make up for the loss in appreciation.”

“Eschker expects that appreciation to come a lot slower or even fall off in coming months, which would even out the rent-to-purchase ratio. ‘Landlords are doing renters a favor right now in comparison to the cost of buying a home,’ he said.”

By For Rich and the thinker...

August 10, 2006 03:22 PM | Link to this

So Rich R. - If you like Raliegh, N.C. so much, why are you still reading the Palm Beach Post web site?????? Looking to buy back down here???? Feeling bad you sold at a low price and saw prices jump later on????

You must not had your eyes open here while you lived here. We are more than tourists and fruit trees these days. Florida has Miami, Tampa, Jacksonville, West Palm Beach, Ft. lauderdale and Orlando as large metro areas. Banks, Universities and corporations in all these cities. Yes, crime is here also, just like any other large cities. North Carolina is no angel state. You need to travel back here and see what you have missed.

People buy and sell in all of the states. Life takes everyone into different paths. Maybe family, a divorce or a new job took you away from Florida. Are there no real estate blogs in North Carolina?

For the one who wanted to know about current war conditions and the affect on housing. History shows that our nation goes into home buying surge soon after a war. We also had a surge into home sales after 9/11. This was because people wanted to feel secure by buying property. During WW II, rent was hard to find n many cities, then home building surged afterwards.

We are the strongest nation on earth, in military, in economics, in production, in politics. Why do you think all these nations hate us? Because we are strong, we are a threat to their “idealism” in their countries. Our ideas are superior than theirs. We practice freedom, while the enemy practice hatred. That what makes the USA so great.

By Rich R

August 10, 2006 03:28 PM | Link to this

Hey Doc,

Its nice to see you are doing your research.

If more people in SoFla did that, I doubt the current conditions would be as bad as the seem to be.

Greed is a horrible emotion and it’s showing it’s evil head all over florida.

I still would like to know why PBC finds it that it needs $1.3 BILLION dollars in their reserve fund. To put that into perspective, you can fill an entire Winn Dixie store from floor to ceiling with dollar bills and run out of room before you runout of $$

Can anyone answer that? Where are you Karen Marcus?

By Rich R

August 10, 2006 03:40 PM | Link to this

to: For Rich and the thinker…

I am educated and always lookin for a good deal. Notice in my post I am looking for land, not homes. For the long term.

In Florida, I was a landlord and owned numerous properties. I have an MBA, but didn’t need it to see this coming a mile away.

I sold out at the peek in 04 and realized over $700K return on a total investment of $46,550 and with leveraged assets. I cleaned up.

You won’t see me bitching about the values falling, because I bailed and took the $$ with me.

I don’t like Florida at all as far as living there. But after this shake-down and market adjustment, things will be more normal. I really don’t care where I earn my money, Florida born cash spends well in NC.

It’s just going to involve a whole lot of people being wiped out.

So, I’ll say it again. If anyone is stuck with empty land, let me know. I’ll offer cash, but you might be offended by my offer. Call me during your foreclosure, I’ll do the redemption during the period after the foreclosure.

If that’s you,”For Rich and the thinker”, just let me know.

I was never a flipper and owned each one of my properties for the cash flow and long term gains that worked out perfectly to plan.

By Rich R

August 10, 2006 03:44 PM | Link to this

I just did a search of the News & Observer” (Raleigh’s Daily newspaper) and found a few articles about our local housing market.

It’s nice, they talk about how the nation is experiencing a slowing housing market, but New and Exsiting home sales in the Raleigh region are still going up.

Last month, NC was one of only 4 states in the country that have still increasing home sales. 15.1% increase in the med. house last year, with average time on market 42 days. Not bad considering you can’t even get an offer down there

One of one the people in my community is a RE Broker and can’t keep up with the leads coming in.

Do you want to guess where these people are coming from? You go it.

FLORIDA.

Like I said, Florida money spends well in NC.

By Rich R

August 10, 2006 03:56 PM | Link to this

I forgot.

The reason I view this website is easy.

It’s all in the timing. Things are real bad now and getting worse.

Lot’s of folk will have to bail and at any price.

I will be there, with checkbook in had to swoop up the bargins.

Thanks to all the foolish people who bought my properties; it was life changing for me. Enjoying an early semi-retirement because of it.

Thanks again for all the $$ SoFla.

By To Rich R

August 10, 2006 04:02 PM | Link to this

Sounds like you are one of those carpetbaggers, or others would say “Scumbag”.

You hate Florida, but willing to take advantage of people who are down and out. If there is anyone who like to meet Rich R., have him meet you on your land, show him how we treat “scumbags” like him, southern style. Tar and feather would be to good for Rich.

Rich, have you ever been out to the National Evergaldes State park ???? At 2 am??? With a bag over your head???

Sorry, I am not down and out. But i will reserve a guided everglades tour for you.

Yes Rich R., you let everyone know what people are like in the Carolinas. Who wants to move there with people like Rich R. ????

By the way, people with $$$$, never tell they do have it. Rich R = Carolina Trailer Trash.

By Rich R

August 10, 2006 04:07 PM | Link to this

I am a product of Florida my friend.

Raised and educated there.

Lived in Boca, do I need to say anymore.

Grew up there, and watch all the scumbags from the north roll into town and ruin it.

I had to move, just too much for me. but as they say.

If you can’t beat’m, join’m, so I will.

One more time.

Anyone out there in trouble because you didn’t time the market? Got yourself in over your head with crazy mortgages?

Let me know, for the right deal, I’ll bail you out.

At least you can saver your credit because your $$ is gone.

LOL LOL LOL

By Rich R

August 10, 2006 04:13 PM | Link to this

Posts from people who don’t identify themselves are useless and of no importance.

Stand behind what you say and let’s us all know who you are.

you put in a post with an email address of:

richr@scumbag.com

that’s funny, considering the source. What source.

Typical for florida, no suprise here.

If I had to bet, you are one of the soon to be statistics. bet you bought at $400K, paying about $4,000 a month on a home that’s now worth $300K

Boy, i bet that hurts.

For me, it was the other way around and I timed the market well, and you seem to be upset over it.

If it were you with the gains, and I bought your house I wouldn’t be the scumbag; I’d be the sucker you seem to be.

laughing all the way to the bank, not the bankruptcy attorney.

enjoy your paradise man and don’t slam me because I did it better then you did.

By To Rich R.

August 10, 2006 04:30 PM | Link to this

Only thing that Rich is slamming is in his hand as he pounds his keyboard with the other hand….ha ha ha

Have fun with yourself in Carolina.

Nothing is more finer than Rich going more blinder in Carolina!

By to richr

August 10, 2006 06:47 PM | Link to this

do you have any common sense?

things might be bad in the florida re market right now, but some huge total wipe out?

housing prices? traffic? taxes? insurance?

you list these as out of control costs. maybe you should price out living in boston, san fran, la, or any real city.

look at

house ins. car ins. income tax. prop tax. sq. foot cost. traffic. energy costs.

not some small town, a real city.

this place still looks good, and maybe the housing market looks bad, but you use no real figures to back yourself up.

what are the forclosure rates?

what is the average savings to a buyer of a forclosure?

how have other down markets reacted in the past?

how many people move here, and where are they moving from?

what are the top 5 retirement destinations according to aarp?

i would also ask you, why do you wish such ill will on florida?

everyone here will be in trouble if the re market crashes, and if it really crashes here it will be crashing everywhere for the most part.

you grew up here?

don’t you have friends and family here?

give me some real figures, about what is happening now, happened in the past, not some wacked out predictions from some small town in nc. btw this place is not about jobs, it is about retiring you fool.

By cole

August 10, 2006 07:03 PM | Link to this

hey rich r, do you have any base for your predictions? sure anyone who thinks the real estate market is not in tough shape right at this time is an idiot, but some 50% sale on good location property are you sniffing glue?

By rich r haters

August 10, 2006 10:08 PM | Link to this

stop hating on rich.

i dont see any of you fools telling me your new insurance bill cost, this year!

just a bunch of losers.

in recent months she has begun to get calls from borrowers looking to unload houses they can no longer afford. ‘They’ve upgraded their houses, put in a pool and bought themselves Hummers and BMWs,’ she says. ‘Now they can’t get it refinanced and they can’t sell.’”

By Steve

August 11, 2006 10:56 PM | Link to this

Sounds to me like Rich R is sniffing ya’lls money. I too saw this bubble coming and made some good dough but not as much as Rich. Nice work. I’m jealous.