By crazydem

August 16, 2006 04:41 PM | Link to this

If they are losing money then everyone should lose money…I’m going to take the Post with me when I go look for houses next week! I’ll use it as a bargaining tool to convince the seller that their property is overpriced and they should sell based on what they paid for it 5 years ago. Disregard the fact that most of the people with a sign out front are fishing for offers-they don’t really need to sell. I’ll convince them otherwise, after all, this the investment advice I’ve gleaned from reading the Post-surely this is a viable resource for financial advice,right?..I’ll show them the articles-the boom-the bang-the burst-the big one that “has been coming” for the past 6 months but never actually materialized. It’s right under the “cop abducts neighbors wife, eaten by alligator” headline, by “lightning blows up tree” headline, right next to the in-depth coverage of Paris Hilton Drunk in South Beach article…

Surely such an informed resource will sway the seller and get him to lower the price cause after all-the Post has been/does/will insist that the “boom is over”-(well a couple months ago they said it was over, but no at the present “it’s coming” next month “it’s around the bend,” by Christmas it’s “experts say bust arrives.”)

((Anyone remember beginning of 2005 when housing was suppossed to bust?))

OR maybe since Toll Brothers is hemorraging cash the seller will agree to cut his asking price by a huge amount!!! After all, if Toll loses money it affects all sellers, doesn’t it??? Even the ones who bought 5 years ago at 1/4 of current asking price-they’re gonna lose money too, right???

I’ll show them comments from bloggers like RCA in eastern hill country and expert writers, surely this will bring them to believe THEY MUST SELL NOW-THEY HAVE NO CHOICE!!!

By Michael Fink

August 16, 2006 06:19 PM | Link to this

Well, its not the Post/bloggers/etc that is telling someone they have to sell. I would hope that they don’t “have” to sell because its going to be hard in this environment.

However, in areas where investors/speculators own 30-70% of the development, guess what, they DO have to sell, and they do NOT have a choice. They are hemoraging money every month with no end in sight. The market it flat/declining around them, and they need to get out of these houses.

So, no, its not the blogs/re market/etc that makes people have to sell. Its getting in WAY over your head; renting a property for 1/3 - 1/2 the carrying costs, and being unable to recoup anything at the end. Those are the people that have to sell.

Guess what, I can wait alot longer then they can. I don’t have a 5K monthly nut beating me over the head. I can wait until the price moderates; or just keep renting from these people and allowing them to subsidize my lifestyle. Either way, until home prices start to apprecaite rapidly again, I win.

I’ll show them comments from bloggers like RCA in eastern hill country and expert writers, surely this will bring them to believe THEY MUST SELL NOW-THEY HAVE NO CHOICE!!!

By rdr

August 16, 2006 08:56 PM | Link to this

From todays WSJ aticle on owners unable to sell going auction route : “…in Florida, the number of homes listed for sale has more than doubled from a year ago and prices are eroding” “The market has chilled so fast that sellers have little idea how much their homes are now valued at or how to attract buyers” Destin FL home asking 510,000 since last year, “no offers, no lookers” auctioned in March, happy it sold for 435,000. See Wall St Journal sect. D.

By RDR

August 16, 2006 09:04 PM | Link to this

This was interesting from same wsj article : “Late in July,real-estate investor Ben Stern unloaded 104 homes in the Miami-Fort Lauderdale,Fla.,area during a five-hour auction handled by Auction Co. of America that he says attracted more than 2,000 people. The winning bids ranged from about $80,000 to $600,000.Mr Stern says the results were about midway between his highest hopes and worst fears”

By cmgr

August 17, 2006 08:05 AM | Link to this

And The Post convinced us that all the adjustable rate suckers were going to bust the bubble?!? Not so says the numbers. The adjustable rate suckers are simply refinancing into fixed rates now according to CNN/Money—

“In the past, adjustable-rate mortgages, known as ARMs, have been a refuge for cash-strapped consumers seeking to buy a home with low initial mortgage payments. But with rates on fixed-rate loans dropping considerably in recent weeks, consumers have been refinancing out of their floating-rate products into fixed-rate loans, analysts say.”

No propaganda; just facts. Read on: http://money.cnn.com/2006/08/16/real_estate/bc.economy.mortgages.reut/index.htm

By PBGPAT@yahoo.com

August 17, 2006 08:34 AM | Link to this

I’ve grown weary over the past two years waiting for The Post’s precious RE bubble to burst.

Now the PBC median price has risen back over $400k and I expect it most likely will never dip back below that watermark ever again.

I know some pretty smart guys (Harvard educated, certified investors) who swear there is at least another $100k of upward mobility in PBC’s median and that we may even get to see it before the earliest of the true boomers start to trickle in around 2008.

I’ve been watching how the investors have been holding their ground against all this silliness, and I agree that the smart money will simply refi out of ARMs and into fixed product now that the fixed rates are ratcheting back down again.

The only real threat I’ve heard these guys whisper between themselves is “the big one” (cat-5). If we get it: all bets are off and only the few lucky ones will reap the windfall like after Katrina and Andrew. Most will be left out in the cold of tring to get Uncle Sam to cough up compensation for all the belly-up insurance companies.

However, if we don’t even get one little Cat-1 this year, I would expect this market to be just as overheated and “stupid” as it has been for the past six years in a row.

You have no idea how much money is sitting on the sidelines right now waiting for November 1st.

Bottom line: if you think we’re gonna get “the big one” then I would cut and run. Dump everything you’ve got and get out.

But if you’re like a growing number of investors who are rapidly becoming convinced all the CNN hype over another 28-storm hurricane season being “inevitable” for Florida, then now is probably the last, “real” chance to buy left in PBC.

Like I said: Nov. 1st all bets are off. We might look for that $400k median, and see nothing but dust.

By max

August 17, 2006 09:03 AM | Link to this

is cmgr a cheerleader or locust for the real estate industry?

By Auction?

August 17, 2006 10:50 AM | Link to this

From earlier post-

WsJ aticle on owners unable to sell going auction route : “…in Florida, the number of homes listed for sale has more than doubled from a year ago and prices are eroding” “The market has chilled so fast that sellers have little idea how much their homes are now valued at or how to attract buyers” Destin FL home asking 510,000 since last year, “no offers, no lookers” auctioned in March, happy it sold for 435,000. See Wall St Journal sect. D.

Has anyone tried buying/selling this way ? I have had no luck selling with open houses, RE agent etc

By Rich R

August 17, 2006 11:07 AM | Link to this

Prices cannot climb much further.

Working class people are priced out of the market and businesses are leaving the area.

The Insurance crisis is driving more financial problems then the cost of median home price. When you stand back and take a look at the total cost to carry the average house, it’s just insane.

At $400K, mortgage P&I about $2,500, Prop Taxes & Insurance another $1,500 per month.

That’s $4,000 a month and we didn’t even talk about HOA fees, Maintanence, repairs etc.

The average household income is in the area of $60K, it just don’t work in the numbers.

As all of the people who want to be cheerleaders, that’s cool with me. But I grasp the reality of the situation.

I grew up on PBC and basically had to leave. Not because I couldn’t afford it, it got to the point where enough was enough and I started to feel like a sucker. I actually did very well on some rental properties I had since before the boom.

I sold out in ‘04 and moved to Raleigh, NC to found a normal life.

Very high quality of life, thriving business community with Fortune 500 companies everywhere.

recently revealed numbers on home sales showed a significant drop almost nationwide with only 4 states showing gains.

North Carolina saw an increase in home sales of 11% from the same time last year with Floirda showing a 34% decrease for the same period.

I bought in a brand new community and was able to get a brand new 3 BR, 2 1/2 BA, 2 car garage, two story home, on an acre lot. with Hardwood floors (not laminate), chair rails in the formal dining room, crown molding, etc.

Cost: $147K Taxes: $965 per year Insurance: $328 PER YEAR - State Farm.

NC currently has a very nice balance in the local economy as the average person with the average job, can afford the average home.

Working Class people live well here.

I have realized that wages are about 20% higher here too.

My point is this - When families are paying in excess of 50% of their income for housing, it hurts.

Like rats seeking higher ground in a flood, people are starting to realize the the cost of paradise is too high.

As the working class folks bail out of SoFla due to sheer financial trauma, areas like NC benefit.

Too much uncontrolled growth, too much traffic, population density way, way too high, and no end in sight has changed Florida forever.

Combining this with the unfair approach to RE taxes with snowbirds/ 2nd home owners having to pay a disproportially higher tax burden, Florida no longer has the appeal of the huge base of “Boomers” to start their retirements in the next few years that it once had.

I have quite a few relatives in this catagory, and recently at a wedding on Long Island, we had “The Discussion” to find they ALL have a much different opinion of Florida- I was shocked.

It seems that all of them have freinds who are already down here and have heard all the stories/complaints and each and every one of them are now exploring other areas.

Boomers are not stupid, and many will choose Florida, but I don’t think in the numbers Florida is expecting.

When working class people bail out of SoFla, the local economy that relies on these folks as a workforce will suffer and deteriorate.

Who’s going to mow your lawn, teach your children, answer your 911 call, clean your pool etc.

Only time will tell - WHAT’S NEXT FOR FLOIRDA? It’s anyone’s guess.

Comments…

By Bmr

August 17, 2006 11:31 AM | Link to this

Only way I go to SoFl is seasonal rental. The dual tax system inequity towards second home buyers did not take long to circulate in NY/NJ area. No one we know plans buying in Fl mainly because of unfairness of paying triple while using only few months a yr. Eventual storm (this yr, next yr ?) and ins hassles people we know had also has turned people off from getting locked in by buying. More fun to rent, enjoy, say bye bye.

By Rich R

August 17, 2006 01:21 PM | Link to this

to: Bmr.

BINGO….

Your post is so true.

By Poor Babies

August 17, 2006 02:29 PM | Link to this

I feel so sorry on the poor souls who will be renting on the upcoming high rate seasonal properties. What happen? Did those Enron & Tyco stocks fail on you? You are making many landlords happy. I think some of us will raise the rental price a bit more.

Carolina and Florida….the only thing they have in common is they share the same ocean. People in Florida walk their dogs along the ocean….People in Carolina share the same tree with their dogs. Some people in Florida live in trailers by the ocean….most people in Carolina live nearby that same tree that they just used with their dogs nearby a creek. I really think Carolina people are a fine bunch of rebels. Where else in this country can you find NASCAR, a fireworks stand and a “Checkers” business in every town? Those poor people are still getting over what happen in 1865. Yes, you lost the civil war…..time to change your history books to reflect what happen.

To the blind person who says businesses are packing up in South Florida, look again. There are so many construction cranes building up and down along the coast from Miami to West Palm Beach. Especially in the Hollywood - Ft. Lauderdale area, where Donald Trump has SIX large projects alone in those areas. Sorry if your corner gas station or deli closed up, but what will take its place will be much better. BIG money is pouring in here, a strong indicator for growth and wealth for decades to come.

The local work force will survive here. Not all homes cost $500,000. Plenty of areas that have homes in the $100,000 to $200,000 range. I am sorry if they are not mansions, or the homes are 35+ years old, but what do you expect to have when you are in the service industry making low wages.

Many people do not have to sell, the flippers who bought last year will just refinance their mortgage or rent out or just wait next year for even a higher price. See people, all the bargin hunters will have to figure out that summer bargins are almost over. Prices are going up, and there is still more room to climb even higher. You have to realize this area is looked at by many demographics for one reason or another. That is why prices will keep pushing up and up and up.

As they say…”Life is a Beach”

By Bmr

August 17, 2006 03:35 PM | Link to this

Some of us ” poor Babies” have done well enough, and continue to do so, that we seem to have different priorities than some of the obviously upset posters here. Relax. If the rentals help you, that is fine. We enjoy the freedom, you enjoy the rental money. Win/win. Ownership in SoFl is just not worth it to us. It is to you. No problem. PS I have also rented homes at Hilton Head, nice golfing and fishing. Give it a try, might calm you down.

By Otherrntr

August 17, 2006 04:07 PM | Link to this

We also enjoy rentals availble in many different areas. Don’t know what happened to angry poster in Carolinas. We have met nice and nasties all over, (especially nasties in some areas we found ourselves in by mistake in FL) As far as raising seasonal rentals, you should get what the market will support to help you pay your bills. Good Luck. PS before raising too high it backfires, do what we do- search net for ALL areas, (sorry, but that includes beautiful spots in other states also)compare and go for what you can get.

By to: Poor Babies

August 17, 2006 04:11 PM | Link to this

To: Poor babies.

You are either very confused, very stupid or just don’t read the papers.

It’s all in the numbers.

btw, I am laying off over 200 employees in florida because my medicade contract don’t pay enough for them to live.

Guess where my MEDICAL PROS are moving too.

That’s it, NC.

You just can’t handle the true and you too shall crash and burn with your cheerleader outlook.

Good Luck.

I for one, took the money and ran, ran fast.

NC also has the Atlantic ocean, and we walk our dogs in a great place.

Trailers are nice, but none in my area.

Renting for seasonal people is fine, it spares them the fun of paying 3 times the taxes of their next door neibours.

No hassles, and don’t have to worry about your property values drop like a rock.

once again, its all in the numbers.

Enjoy your traffic, congestion, rude people (if you can find any that speak english), High taxes, no insurance worth a crap.

Enjoy your Paradise.

I wouldn’t give you a nickel for the whole state with the way things are.

Your really a funny guy.

Laughing all the way to the bank in NC.

Thanks again to the folks that bought my propeties. I wish you luck.

By tonya

August 17, 2006 04:32 PM | Link to this

To: Poor Babies

Where are you finding decent housing for under $200k in South FL.?Single family, not condo. Not in some crime-infested area but a normal average working class neighborhood?

You can’t. Why should 2-income households need to live in the ‘hood?

Moving outside of South FL requires a change of mindset and expectations. If anyone doesn’t want to make it, then they can suck it up and quit complaining.

I will make the change and get out of here for points north. And many more like me (skilled white-collar workers) will do the same.

By to the nc posters

August 17, 2006 05:53 PM | Link to this

i still do not understand why all of these folks who hate so. fla, moved away, still read the paper here.

please stop comparing a huge metro area with over 5 million people living east of 95 from miami to palm beach, and several millions more west of that, with a small city. i have been to charlotte, and if you want to live within 20min of downtown it costs, and costs big. no other city in nc even comes close to the population we have here.

it is two very different lifestyles. in nc you have income tax and other expenses we do not have here. you also do not have culture, arts, diversity, and the entertainment we have.

to each his own, but if you left, and have no intentions on moving back, be gone. i am not blogging on the hicksville daily news. go to church and eat at the ruby tuesdays, but shut up.

btw, can you find a decent house for under 200k near nyc, boston, la or any other major city? no. somehow those cities function just fine, for a big city. they have teachers, firemen, and police. this place has grown into a major metro area, and has all the problems a big city has, and all the benefits too, and the weather is better.

By Michael Fink

August 17, 2006 08:24 PM | Link to this

The comparison between NYC and PBC, although valid, does not expose the actual sutuation. NYC/SF/PHL/etc; they are all in the bubble too! Although PB has been hit very hard, the whole country has experience “irrational” runup in the price of homes.

As I have said many, many, times before, its not the price. The price does not matter. Its the fundamental ratio between median salary and median home price.

If you take a median home (400K), and figure 4K/month to cover expenses, you need a HH income of ~140K per year for this home. That’s using the “old” traditional calculations for morgages, before our housing market became “the crack cocaine of the masses”. 140K is about 3X the median HH income in PB county.

This ratio will never, I repeat NEVER, stand. A few options exist.

1) Salaries grow 2) Home prices drop 3) The middle/upper middle class leaves S. FL.

Again, everyone has to remember, S. FL is not a city; its more like a state. Yes, the median can be 10 million dollars on PB island. It does not matter, as long as affordable housing is available for the people who support those very wealthy people.

However, when you have an area of hundreds of square miles….. No way; your not going to get people to commute in from GA to do your professional jobs, its just not going to happen.

Pockets of wealth? Sure. Priced out of an entire region of the country? No way, never, ever going to happen long term (it has happened right now, but will not/cannot persist).

By Mike Fink

August 17, 2006 08:31 PM | Link to this

Oh, one more quick comment:

I’ve been watching how the investors have been holding their ground against all this silliness, and I agree that the smart money will simply refi out of ARMs and into fixed product now that the fixed rates are ratcheting back down again.

And yes, I am sure your right, some people are going to do just that.

However, there are intrest only ARMS that these people took out on their investments. Even if they go into a fixed at a similar rate, they are going to jump their payments by 30-50%.

And, if you look at the price of rentals, they are not even covering the cost of the option ARM, let alone a traditional morgage. So these people are going to go even further underwater if they have to get into a traditional morgage. These people bought to flip, not to hold/rent for years.

By to psychnet and tonya

August 17, 2006 09:00 PM | Link to this

It looks like the North Carolina people show their true colors. Who wants to live next to “psychnet” in Carolina with an attitude like that? I doub’t this guy had any property in Florida. If he did, his ex-wife took him for all he had. And if he laid off 200 people at his company, it shows he couldn’t hack it down here in business. What is your business? Christmas trees or firework stands? I bet this is our friend Steve! We all remember Steve, one hand pounding the keyboard and the other hand ……well, lets not try to remember. He is a very angry person. By the way Steve, why are you still watching our real estate news? Is it all those regrets you made? We believe you on what you said about selling property….and made millions……good for you…..or your ex-wife and her lawyers of whoever got the money. Or maybe you want to return to Florida, looking for a good trailer park? Hey psychnet, is that a storm off your coastline? Run for them hills! If there is any of those 200 former employees who got laid off because of some loser couldn’t pay your medicare, give us a line here. It seems i would have read that in the business sections in South Florida. Hmmmm, strange how nobody wrote about that. It would have had an article in the papers here. Maybe because it is not true? I will do some research myself to see and report back if is true all not. Need to cover all your tracks Steve!

Nothing could be finer than seeing these jerks leaving for Carolina tomorrow morning!

Life is wonderful in Florida and good old boy Steve just went out of his trailer in Carolina with his dog and they both will share a tree together. I wonder what his reply will be?????

Hey Tonya, some of the best people i know live in the “hood” areas. They are better than some people i know living in multi-million dollar mansions. Those are your real criminals, Corporate America. Just see what psychnet is like. Tonya needs to mix with people with diversity. What would you think if you died and went to heaven and saw God as one of the boys from the “hood”?????

By reese

August 17, 2006 09:36 PM | Link to this

i agree with the above links, stay in nc. don’t they have blogs there? or is electric power optional in the trailer park? go away, stay away.

the market will return, it may take a couple of years, the state will work out the ins. issues, tax issues, and they will, because real estate and growth is what drives this economy in fla, and “it is the economy stupid” that gets people into office.

By Steve

August 17, 2006 10:34 PM | Link to this

Huh? My reply?

Up your dose of Ritalin.

By To Mike Fink

August 18, 2006 07:59 AM | Link to this

To Mike Fink: Right on with your posts.

Have you read Irrational Exuberance by Yale Economics Professor Robert Shiller? If not, you should check it out.

By Mike Fink

August 18, 2006 08:42 AM | Link to this

No, I have not, but I think I may head over to the bookstore this morning and pick it up. I have heard its a great read; although I expect it will just further inforce my views on the national economy.

Although I respect everyone’s opinion; I really feel that many people here are “living in denial” of what is happening/going to happen in the housing market over the next few years. Yes, you can all say everyone is going to be priced out forever, or the prices are going to be 30% higher in 2 years, etc. But until someone can explain how that could happen, I just have to shrug it off. The fundamental factor controlling housing prices is not the # of retirees, or the % profit people are making selling their homes elsewhere. Its the affordability index, which nobody seems to want to touch/discuss. How do you afford a home in the bubble areas making anywhere near the median income? And why can you rent for 1/2 to 1/3 the cost of ownership? Until someone can explain that to me, I stand by all my comments; the housing market is heading for a correction; back to “typical” affordability numbers.

By rdr

August 18, 2006 09:27 AM | Link to this

“Whatever the actualities, a lot of people in the home-building industry are giving off signs that they think prosperity has gone into remission. Executives in the industry have sold off almost a billion dollars’ worth of stock in their own companies this year, something they would not be doing if they thought the arrows were pointing upward.” Guess when this observation was made ? Oct 2005 !! Guess what has happened to RE stocks. To see if a ship is going to go down watch the behavior of the rats.

By tonya

August 18, 2006 09:50 AM | Link to this

Let’s see? You chastise me for not wanting to live in a neighborhood plagued by shootings and continuous violence? My husband was a PO in Palm Beach, feed that line of bull to someone else. I know just how dangerous the areas are and the type of people living there. Are there some good holdouts? Yep. But the bad ones ain’t gone kill my kids b/c I wanted to be politically correct. I’m black you jerk, so save the guilt trip for someone else. My husband and I worked our butt off to get OUT of that type of area, and I’m not risking my health and well-being to go back.

Do you live there? You may know people there, but do you actually LIVE there? Have you ever looked out a window and see someone pull out a gun when they have an argument? I have. Have you had a known drug dealer in your complex a few doors down and no one will do anything about it? I have.

Diversity in surburbia is just as great WITHOUT the drama. We are moving to a suburb in Atlanta that way more diverse than most “hoods” I’ve seen.

You still didn’t tell me where I can find a nice 3/2 with 1500 square feet for $100-200k? What DECENT neighborhoods are you talking about?

By Mike Fink

August 18, 2006 10:08 AM | Link to this

Tonya,

If anyone answers that question for you… Well, lets just say you better be quick to call your realator, because I know I will be calling mine. :)

300K does not buy a SF home in a good neighborhood in WPB. :( It buys you a small condo in a good neighborhood, or a big condo in an iffy development.

But, on the upside, I know some great homes you can rent in your budget (same payments as a 1-2K home). That’s the thing that’s so laughable, you can rent a 750K home here for 2K a month. ;) That, btw, is in a very good neighborhood!

By Rich R

August 18, 2006 10:40 AM | Link to this

I have one single family home for sale in Lake Worth. It’s a small home on 1/4 acre.

Just south of lake worth rd and just west of Military Tr.

2 BR / 1 BA, with a 12X20 Ted’s Shed in the yard, fully fenced.

Mixed area, mostly rental duplex’s on street.

any takers?

$210K - I’ve had it for years, so there is a little room. Currently rented with no lease.

Just trying to finish my move out of SoFla.

By tonya

August 18, 2006 10:40 AM | Link to this

Mike Fink,

Thanks. You’re right, I think we’d both be on the phone with a realtor and mortgage broker before he could finish typing.

I am NOT knocking FL, but like you said—the state as a WHOLE needs to get realistic. Salaries have not kept pace, and I’m sick of everyone skirting the issue. Affordability comes down to money made which beomes money saved. You can’t save for anything without living like a pauper.

Sunshine and beaches won’t pay a mortgage.

By Never will be the same

August 18, 2006 10:52 AM | Link to this

Tonya has to be told by her husband, the policeman and by others that crime can happen ANYWHERE. You could be standing next to a policeman and be a crime victim. Even Palm Beach island, a decent place, has murders, child molesters, rape and robberies.

If Tonya can only afford $100,000 - $200,000 for a home, let me tell you something…you will be renting in Atlanta looking at that price range also. And what i can tell, you will be in the “hood” neighborhood. What you need is for you and your husband to look over your family budget. You need to start saving and making more money. Go out and get a second job. Your salary reflects your education. Stop going out to eat, stop buying clothes, get a cheaper auto to drive and cut loose the SUV, put the husband and yourself on a weekly allowance. Look up Suzie Orman on her tips for money mgmt. You should have bought in the late 90’s, many properties in PBC had homes in great areas with prices that you were looking for. There are still homes around, need to be fixed up witht hat price range you are in. Was there a special area you really wanted to be in? What was the zip code area?

What happen to Tonya and many others like her was that the housing market exploded in Florida and will never be the same. Good luck in Atlanta and your endless search for yor dream home. Or you can shack up with Mike Fink up in Abacoa in his multi-million dollar mansions he has.

By Rich R

August 18, 2006 11:05 AM | Link to this

Tonya,

You speak a similar story to every working class person I know in SoFla and some Professionals I know as well.

Life in Fla gives you beaches, sunshine, allot of fun things to do; never bored.

Unfortunately, if you have to work more then one job to survive, when do you have the time to enjoy all the things that make SoFla has to offer?

Tonya, you posted that you and/or your hubby work in law enforcement, this IS the real sad part of the story. You should be subsidized.

As I’ve posted before. If things don’t change soon, who’s going to teach the children, answer the 911 call, drive the ambulance, mow your lawn or clean your pool.

School enrollement dropped for the 1st time in over 20 years as the number of people in the county increased significantly.

Does this suggest that working class families are leaving and being replaced with folks with $$ and are empty nesters?

If so, this trend cannot be allowed to continue. When the working folks leave, the business community can’t survive. Wages MUST go up, prices go up and viscious cycle just continues.

WOW!

Good Luck in GA Tonya,

Waiting for State Government to help, in my opinion is just funny. When was the last time the state did anything that provided any reasonable help to floridians?

By Rich R

August 18, 2006 11:23 AM | Link to this

to: Never will be the same.

All of the suggestions to Tonya are of very sound principals, but…..

In your heart felt attempt to provide valid suggestions to her, you illustrate the activity throughout the area that affect so many others in the same boat.

Everyone is cutting back, on everything. Many don’t have a choice.

Now you have to explore the “Quality of Life” issue.

As other area’s of the country like NC, GA, TN and many others offer a much higher quality of life for the working class then Florida can now offer, it simply becomes a matter of choice.

Choose to stay there and struggle, or leave and seek a normal life. It really is that simple.

I did it and don’t regret it for one minute.

People will bash NC, but I’m willing to bet none of them have ever been there. That’s fine with me, I really couldn’t care less. I like it MUCH, MUCH better then Florida. We have choice’s.

I hope it works out for you. Atlanta’s a nice place. I am very familiar with the area and for your price point, I would suggest you take a look at Newman or Sharpsburg, GA. These are about 15 miles out of the city and you’ll have no problem finding your 3/2 1,500+ for $200K. You may even get 3 or 4 acres with it.

Good Luck again.

By Mike Fink

August 18, 2006 11:50 AM | Link to this

Or you can shack up with Mike Fink up in Abacoa in his multi-million dollar mansions he has.

I guess this was supposed to be an insult.. But if you want to get the facts right, here they are.

I live in City Place, not Abacoa. I have a 1BR condo, not a mansion. I pay about 1/2-1/3 the carrying cost of the place here, the rest subsidized by my landlord. If you would like to buy it, I am sure my landlord would appreciate it, 280K will steal this little gem. :)

Now, for a little fun with math. Tonya can afford a 100-200K home, which equates to a carrying cost of between 1000 and 2000 a month. We all know, nothing in S. Fl is going to sell for 200K and be reasonable… So, what to do? Well, how about she rents this:

http://www.mrrenter.com/index.php?option=com_hotproperty&task=view&id=46&Itemid=

1900/mo for a SF home, 3br, 2.5 ba, 2 Car Garage. I am sure she could also buy it, for around 450-600K. :)

It’s actually laughable to me; why on earth would you rent this to me for 2K a month? Did you buy it for 200K? If so, then your right on the mark. If not, your subsidizing my lifestyle. Thank you for making up the other 2-4K/month in living expenses for me.

By tonya

August 18, 2006 12:34 PM | Link to this

Rich R and Mike Fink:

Thanks for the encouragement. I have lived here all my life, and until recently never seriously considered moving. But I can’t keep up the struggle and cutting back—where does it stop? At what point do you live and enjoy life a little? I can’t afford to take my kids (school age and infant) to anything b/c I’m always broke. I love museums and gardens, but can’t afford admission.

The funniest part of all this? My husband is a state employee. They have offered no help and no ideas. But they so graciously provided a generous 3% COL increase. Whoop de freaking doo. We gross $65k at 25 and 26 years old. We are responsible, hard-working, and good members of the community. I serve on the parent committee of my son’s boy scout pack, go to PTA meetings regularly. My husband coached my son’s soccer team last year. We’re active, not just complainers sitting on the sidelines.

Essentially, we’re the people you want next door. We’re having kids and getting long-term white-collar jobs. We’re putting down roots. The irony is that b/c we’re just starting out, we are coming into the fold too late.

By tonya

August 18, 2006 12:44 PM | Link to this

To never the same again:

I only shop sales. I buy clothes for my children and I at thrift and consignment stores, and only when I NEED them. I shop grocery sales. I drive a ‘02 minivan with 130,000 miles on it, my hubby a ‘00 full size chevy bought for 4k with 120,000 miles.

Suze Orman is a hack. The information she provides, for the most part, is bad advice. I prefer Rich Dad, Poor Dad. I also visit creditboards.com—some of the best and varied advice around. I read WSJ, USA Today, and Money magazine (online b/c mags are expensive).

You cannot create money that isn’t there. Period. Your advice does not apply to most anyone I know in a similar situation as ours. We’ve cut everything possible in our budget and still ain’t ‘cutting it’.

What about quality of life? You name all the fabulous attractions but who the heck can go if they are working two and three jobs?

By Rich R

August 18, 2006 01:18 PM | Link to this

To Tonya,

I left SoFa in mid ‘04 because I saw this coming and didn’t want to be left holding the bag.

I did have a few rental properties that I picked up in the mid ‘90’s and was really just working the positive cash flow.

After the market starting going CRAZY, I figured I could cut and run with great gains and I did.

I left florida not because I couldn’t afford it, it just didn’t make sense to me. I was up to $5,400 for homeowners and because I was on the water, my deductible basically ment I would have to have a total loss before any inusrance would pay. Not a good plan for me.

I moved to NC and really enjoy it here. Many folks down there bash me for this and refer to Trailers, Hicks etc. (Like there are no Rednecks and trailers in Fla - Just Funny), but I really don’t care what they say or think.

Moving out of Florida was life changing for me as the pressure is off. No worries at all.

Just a choice I made and with absolutely no regrets.

It’s just a shame that a young thriving family such as your’s find it hard to survive on $65K, that’s a reasonable income and it’s just no longer enough.

As Mike Fink will tell you, you really need to double that in order to maintain a normal lifestyle in SoFla.

Both GA and NC afford you a great Quality of Life for the income.

As I’ve posted before, I will recap for Tonya.

This is for TONYA ONLY - don’t bash me for making a personal choice.

I bought a 3 BR, 2 1/2BA, 2 Car Garage, two story home, on one acre of land in a brand new community. The home is brand new with a 10 yr warranty, has crown molding, hardwood floors (not laminate) in the formal dining room, foyer and hallways, chair rails, solid oak cabinets. just under 2,000 sqft.

Here are the costs: $147K

Total property Tax bill: $965 per year, including Ad and Non-Ad Valom.

My home owners insurance is with State Farm with a $500 deductible for all perils. The premium is $328 per year, not per month.

The total cost to carry this home is:

775 P&I 85 Tax 30 Insurance

total cost: in the area of about $900.

I don’t have a mortgage, but you can easily see the contrast between FL and NC.

I am in Raleigh, the state capital and not a small hick town.

$65K up here, you can live very well, and be able to take your kids to the Museum (Great ones in Raleigh, btw) and other thinks that kids should be doing.

You could even be suprised to find you’ll earn more here. I was shocked to find that out.

I am simply trying to make a point.

As I said in earlier posts, it’s all about choice’s, and we all get to choose.

There is normal life out there, you just need to want it bad enough and seek out YOUR paradise as I did.

Not trying to offend any of the RE Cheerleaders or FL lovers, you have choices too and it’s nice to see somebody still likes it there.

By TANC

August 18, 2006 01:40 PM | Link to this

Rich R,

My wife and I are visiting Raleigh and Asheville in a few weeks to “check it out”. I’ve been in Florida since 94 and I don’t like what’s going on here anymore. I have nice equity in my home in Palm City and even though its down in value from its highs I’m still way ahead.

Looking for a place where it’s not super hot 8 mos out of the year and is overall cooler.

Question…when you take into account ALL factors (not income tax in FL, car tax in NC, higher sales tax in NC, etc.) do you find it is still cheaper to live? Also, do you see any red flags for the Real Estate market similar to FL a few years ago or do you think it will remain reasonable?

Seriously considering the same move you made.

Your thoughts would be helpful…

By Rich R

August 18, 2006 01:50 PM | Link to this

To Tanc:

NC does have a State Income Tax. I earn about $80K and after the normal deductions and such, I paid about $3,000 in State tax.

Considering that I was paying $5,400 for Home owners, and now paying only $328, just the savings on Home owners covered the State tax and left me with over $2,000.

I’m glad you checked out Raleigh, I find it to be just a great place. All working families and they speak english, lol.

I would encorage you to take a look at this website. I bought my home from these folks and it was a pleasure. All of the homes on this website are brand new, and come with a one-year bumber to bumber, with a 10 yr warranty on the typical stuff.

take a look.

www.donwhiterealty.com

You will be shocked to see what $200K buys up here.

We do have a state income tax, but the property tax is so low, it’s a savings overall.

Taxes on my home this year are only $965 total.

Good luck and if you decide to move here, by all means, you can contact me with any questions you may have about the area.

Anything to help the struggling working class in Florida to no longer struggle.

Boy, I should go and get an RE license up here. It seems everyone that visits me here, ends up moving here.

Good Luck TANC

TONYA, you too should consider taking a look at this website. Citys around here are recruiting cops and the Highway Patrol was just on the news about having over 147 vacancies.

Just a thought.

By tonya

August 18, 2006 01:51 PM | Link to this

TANC

I’ve done the math for us (GA) and we still come out ahead by at least $5k, not including the increased salaries we’ll probably gain.

In addition, the areas are growing but with smarter planning. They’ve seen the follies of FL, and don’t want to repeat the same mistakes.

By Rich R

August 18, 2006 01:53 PM | Link to this

after thought.

NC charges a 3% highway use tax on the purchase of a car, no sales tax which is half of what Florida charges on the purchase.

I live in Wake County and pay a property tax on my car yearly.

My car is worth about $18,000 and my tax was $87

non issue all considered

By tonya

August 18, 2006 01:58 PM | Link to this

RichR,

I will. We’re renting in ATL, just in case we find better opportunity elsewhere. That DEFINITELY includes NC. Being in GA, we’ll be able to make some weekend runs to see the areas and then make a firm decision on where to buy.

To TANC: State tax pays for schools. If you have kids, you’ll love NC. The schools are far better than FL and their is a continuous stream of income for them. No relying on real estate to fund education, whcih can fluctuate all over the place.

By Rich R

August 18, 2006 02:11 PM | Link to this

Tonya,

In NC we do pay for schools in our property taxes, but since the state kicks in most, the school part of the property tax is very low.

I think my school tax was in the area of $150 this year.

schools here are great, you will find only 24 kids on a classroom.

Due to allot of new arrivals, many of the middle and elementary schools do the yearround thing.

This saves a fortune in new school construction and the parents don’t have to worry about expensive child care during the summer.

Kids get I beleive two or three weeks off 3 times a year instead of the whole summer.

Parents like this - allows for a more stable home situation.

I don’t have any children, but all of my coworkers and friends have kids and they can actually read and write. Schools here are not plaqued with the laugage barriers that so many children in SoFla battle with.

Just more Chevrolet, Baseball, and apple pie here.

The American Dream is alive and well, just not in SoFla for working class.

Once again….

WE ALL HAVE CHOICES.

Good, bad or indifferent, I grew up in SoFla and I can honestly say that I have no desire to even visit family and friends still down there.

I come down there for business only and get out as some as the tasks are complete.

that website again for all the cheerleaders that want to bash NC. Take a Look.

When you call ask for Lee. Great guy and will help you find EXACTLY what you need.

www.donwhiterealty.com

Choices

By Rich R

August 18, 2006 02:37 PM | Link to this

Hey TANC.

To answer you earlier question.

I don’t see any sqeeze here over time. SoFla has limited land mass to build on. Ocean to the east, and everglades to the west. There are limits and as the development continues the cost of land skyrockets.

NC is the largest tobacco producing state and with all the stop smoking stuff going around, we are seeing tobacco farms become housing developments. They almost have unlimited land mass for development here.

Acre of undeveloped land in suburban Raleigh:

one acre of undeveloped land in Loxahatchee:

$250K

You compare.

More construction going on here then I ever saw in SoFla, and I am not kidding.

As the boom turns to bust down there, people like Tonya and many like her are giving up and coming here, as NC is all working class and we don’t deal with the seperation of classes as we see in Floirda.

If this blog was up here, you would not see the bashing. Everyone up here lives in harmony and instead of it being 50% retiree’s and 50% working, it’s more like 90% working class and 10% retirees.

Just a different world. Good or bad depending on how you view it.

Just works well for me.

I’ll say it again.

Take a look at what less then $200K can buy here. Take a look

www.donwhiterealty.com

By Mike Fink

August 18, 2006 03:24 PM | Link to this

Rich,

Although, I do agree that NC has plenty of land to build on, I disagee with the assesment of S. FL.

There are huge open expanses of land here; granted, much of it is out west, but even close to the water there are very large tracts of land for development. The problem, from my discussion with people in the business, is not the lack of land, but the price of it.

There is a open lot, almost a full block, right across the street from Publix (open, with grass growing in it) in CityPlace. They built 610 Clematis 2 blocks from there, and charged 300 a sq/ft for the condos. And there also large expanses (everywhere but waterfront) of homes that are teardowns, sitting on nice land. However, again, when you have to pay 2-3X the “normal” price for the land, it makes it unrealisitic.

250K for an acre in Loxahatchee.. That is just “stupid money” as my father would say.

We have plenty of land to develop in PB County, much of it close/on the water. However, with home prices at this level, nobody can afford to buy something and tear it down to start over; its just not feasible.

By Rich R

August 18, 2006 03:31 PM | Link to this

I fully understand Mike.

I guess to clarify, the land up here is as far as the eye can see, not just parcels here and there.

Supply and demand will drive prices as usual.

acre here less then $30K, for whatever reason the land is cheap, it’s the combined cost (Land, prep, construction) that will bring you to the cost.

With the Land being the biggest part, lower prices call for lower overall costs for construction.

Also, they don’t even know what Impact Fees are here.

You save thousands just on the building permit.

good point though with the ripdowns.

btw, seems it’s a very quiet storm season this year.

THAT’S GOOD, REAL GOOD. “Knock on Wood”.

I wonder if a couple of years of lower then normal storm activity will lower insurance costs.

Any thoughts on that Mike? That would give badly need releif for you guys.

:)

By SQUEAL TIME

August 18, 2006 04:10 PM | Link to this

I LOVE IT, 8 MILLION PEOPLE IN SOUTH FLORIDA AND THE ONLY ONES BAD MOUTHING THE REAL ESTATE ON THIS BLOG SITE ARE THREE REDNECKS FROM THE WOODS OF CAROLINA AND A POOR BLACK WOMAN MOVING TO ATLANTA, WHERE SHE IS TRYING TO ESCAPE THE CRIME IN FLORIDA. I BET THERE ARE FLORIDA REAL ESTATE DISCUSSIONS AT THE LOCAL CRATE & BARRELL IN RALIEGH EVERY TUESDAY NIGHT! THESE TALKS ARE A REAL RIOT, NEED TO BE PUT INTO A MOVIE. HEY BOYS, CAN YOU ALL SQUEAL LIKE A PIG? I BET TONYA’S GREAT, GREAT, GREAT, GREAT GRANDDADDY OR MOMMA WORKED YOUR GUYS FAMILY PLANTATION. I KNOW YOUR TYPE GUYS, YOU DON’T CARE WHO TONYA IS, JUST TRYING TO PEDDLE YOUR REAL ESTATE OFF ON HER. THE BOYS FROM CAROLINA NEED TO WORK AT THEIR LOCAL CHAMBER OF COMMERCE. WHAT IT SOUNDS LIKE, 300 MILLION PEOPLE LIVE IN NORTH & SOUTH CAROLINA. GET OVER IT, YOU ALL MOVED AWAY OR WILL BE SOON. ENJOY WHERE YOU ARE AT OR GOING TO AND FORGET WHERE YOU WERE IF YOU HATED FLORIDA SO MUCH.

By tonya

August 18, 2006 04:25 PM | Link to this

SQUEAL TIME:

Did you forget to take your meds today? Please make sure to get a refill on the Prozac.

No one hates FL. As a whole, those with issues are disappointed in the situation in South FL. Speculators have artificially increased a market and priced out the very ones who need to live here.

I have been more than civil in my tone. Please exercise the same netiquette. Have a nice weekend.

By Steve

August 18, 2006 10:33 PM | Link to this

Dang, Florida homeowners are rude and paper rich. he he

By dot

August 18, 2006 11:50 PM | Link to this

rednecks from florida!

stop hating on north carolina and go back to your trailer in the swamp!

By er

August 19, 2006 01:46 AM | Link to this

I am totally amazed at some of the vitriolic comments and the total state of denials of homeowners/realtors comments I read. Very interesting and amusing.

By Mike Fink

August 19, 2006 06:52 AM | Link to this

Interesting idea/point made by a friend.

I was discussing my plan of renting a SF home in a higher end area; and he pointed something out to me. What does that do to the home values?

For example, the home/development I am looking in is currently selling from 400-1mil. However, I can rent in there for 1500-2500/mo. Well, that puts me in a totally different monetary league then the people who are buying there. Lots of people can afford a 2000/mo rent payment. Not many people can afford a 4-7000/mo housing payment. My neighbors will be in a totally different finacial league; making north of 200K-300K a year.

I am just curious, do you think that is going to affect property vaules? Its kind of like a comp (this home rents for 1500 a mo, how can you expect to sell it for 500K) but not exactly.

Also, I wonder if the theory even holds, I have a feeling that the people who own are not making 200-300K a year, they are just leaveraged to death on the place, and hoping that the value continues to climb.

Any thoughts?

By AL

August 19, 2006 09:47 AM | Link to this

LOL….reminds me of that comercial…”I’m in debt up to my eyeballs.”

By rca II

August 19, 2006 01:34 PM | Link to this

INSURANCE!

INSURANCE Residents dreading insurers’ letters As the insurance crisis deepens, policy cancellations and sharply higher premiums have South Florida homeowners reeling. BY BEATRICE E. GARCIA bgarcia@MiamiHerald.com

Many South Florida homeowners are approaching their mailboxes with dread these days, anticipating a notice from their insurance company. Such a letter can only be bad news — either a massive rate increase or worse yet, a policy cancellation.

For some consumers, like Jill Puppilo of Davie, it’s both.

First Protective Insurance canceled the fourth-grade teacher’s homeowners policy soon after repairs from Hurricane Wilma were completed.

Finding no other willing insurer, she landed with Citizens Property Insurance, the state-run pool. Her premium is now nearly $7,500 — about three times what she had paid last year.

”When I first heard the new premium, I got tears in my eyes. Now I’m resigned to it,” Puppilo says.

As insurance companies continue to reduce exposure in this hurricane-prone state, more than a dozen are notifying homeowners that their policies will be canceled at renewal time.

”Companies are getting rid of anything that’s borderline,” says Dulce Suarez-Resnick, an agent with HBA Insurance in Miami.

That means insurers are bailing on older homes or coastal properties. Sometimes, they are just reducing policies in a certain region.

Companies quietly cutting back in recent weeks include Florida Family, Universal Property & Casualty, Clarendon Insurance, Liberty Mutual, and Vanguard Fire & Casualty.

Meanwhile, the Florida units of State Farm, Nationwide and Allstate have been trimming nearly 200,000 policies from their books.

”Some companies have too much exposure in Florida. If we’re going to have more hurricanes, then they have to balance the needs of policyholders against their financial health,” says William Stander, government affairs representative for the Property Casualty Insurers Association of America.

One of those is Tower Hill, which is cutting about 20 percent of its agents throughout the state as it pares policies. It now has some 700 agents statewide, with nearly 250,000 policies in force.

Donald Matz, Tower Hill Insurance Group’s president, says the company’s action is driven by the higher cost of reinsurance — that’s insurance that insurers buy to help cover catastrophic losses — and premium rates that could still be too low to cover losses the company expects.

Also, one rate hike for Tower Hill has already been approved, and the company has requested a second one to cover higher reinsurance costs. The two add up to a nearly 50 percent increase for homeowners in some parts of the state, Matz says.

As private companies drop policies, the state’s insurer of last resort continues to swell. Already the largest insurer of homes, condos, apartments and mobile homes in Florida, Citizens is the only option for many homeowners receiving nonrenewal notices.

Citizens now has 1.2 million policies. On July 1, it took on more than 300,000 policies from the three now-defunct Poe Financial Group firms.

Citizens is ”becoming the greatest gift to the insurance industry,” says State Rep. Dan Gelber, D-Miami Beach. “Insurers can walk away from any policy they believe will present the slightest risk. They can get rid of the lemons and keep all the cherries.”

Agents and company officials say the homeowners insurance market tightened considerably as hurricane season got under way. Only a handful of private insurers are writing new policies, but far fewer than before. For instance, Travelers is allowing each agent in Miami-Dade County to write two policies per quarter. Until July 1, it was writing about four to five policies per agent each month.

Florida Family and Universal of North America stopped writing wind coverage after July 1.

Joan Hernandez of Homestead was distressed when the bill from her home insurer, United Property & Casualty, hit her mailbox. The new premium was $11,529; last year’s was $3,795.

So she got an inspection done and received discounts for her roof and shutters. She also opted for higher deductibles and reduced or eliminated other coverages, such as for her screen enclosure.

Her revised premium will be closer to $7,000, but that’s still almost double. ”If it keeps going like this, we will have no choice but to go without insurance,” she says.

Norvell A. S. Holyfield of Northwest Dade is paying her $4,502 premium in several installments. She’s considering borrowing from a long-term healthcare policy for the next payment. Two years ago, her premium was $900.

”The money you’ve set aside for your retirement you’ll have to use today just to keep what you have now,” Holyfield says.

By Michael Fink

August 19, 2006 01:34 PM | Link to this

How’s this for a “real” price drop. I used to live in Legacy Place in PB Gardens. They went condo about a year ago, and I was given an option to buy at that time.

My price 230K for a 1BR/1BA, with 800 sq/ft. I was promised that would be the lowest price offered (although it was never put in writing), and told that “I would never be able to buy anything if I did not get in now” by the condo conversion company. I laughed at their prices, and moved to my current residence in CityPlace.

Anyway, take a look at today’s paper. They have a 1BR/1BA advertised in Legacy Place for 189K. So, had I purchased my unit, I would be out ~40K right now? And that was my “special” price, because I was already a renter there. Yeah, it was special all right.. :)

Anyway, this is a huge % drop. I think their inital prices were absolutly nuts (they wanted 250K for a 1BR), but still from 230K to 190K in under a year? That’s huge. And its just beginning.

I have said this before, but the “manufactured” areas, like CityPlace, Town Centre, Downtown, etc are going to hurt the most. These areas can be recreated anywhere, for a fraction of the 2-300/sq foot cost they are currently asking. And they are trendy, and come in and out of style. CityPlace, in particular, has a real problem right now, many businesses have/are leaving because the foot traffic/sales are not what they were promised. Well, duh, nobody lives in the 1000 condo units that are right next to it! Its probably about 30-50% occupied. Your “captive” audience is not here, and will not be here until the prices return to a level where younger people can afford to purchase them.

By Steve

August 19, 2006 02:27 PM | Link to this

Not only do prices in City Place have to come down. People have to stop getting robbed by all the locally vibrant culture in abundance.

By dot

August 19, 2006 09:16 PM | Link to this

Insurers Urge Action On Risky Mortgages Firms Want More Loan Restrictions

Despite regulators’ warnings that some popular types of mortgages are risky, lenders are still making them, and mortgage insurance companies have begun pleading with federal banking agencies to act quickly to restrict them.

The loans under scrutiny include interest-only mortgages and “option” mortgages, in which borrowers decide each month how much to repay. Because monthly payments are lower than with traditional fixed-rate mortgages, borrowers can buy more expensive houses. In the past five years, millions of Americans have bought or refinanced homes using these loans. The risk comes because eventually these loans “reset,” meaning the payment is adjusted upward — sometimes as much as doubling — to repay the full interest and principal owed.

“We are deeply concerned about the potential contagion effect from poorly underwritten or unsuitable mortgages and home equity loans,” Suzanne C. Hutchinson, executive vice president of the Mortgage Insurance Companies of America, wrote in a recent letter to regulators. “… The most recent market trends show alarming signs of undue risk-taking that puts both lenders and consumers at risk.”

Many borrowers are paying as little as possible. About 70 percent of the people who take out an option adjustable-rate mortgage, which lets the buyer avoid paying even the full interest on the loan, end up paying the lowest permissible amount each month, according to the Federal Deposit Insurance Corp., which regulates banks. The amount unpaid is added to the mortgage balance, so borrowers end up owing more than when they started. Having no equity in a home increases the risk of foreclosure, especially when housing values fall and houses are hard to sell.

Late last year, regulators began telling the industry that some of the new loan types put some buyers in jeopardy and lenders at risk of loan losses. But lenders continued making the loans at a fast clip.

In 2000, just 1 percent of American homeowners who got new loans had these types of loans, but by May 2005, about a third of all borrowers did — about the same percentage as in May 2006, according to new data from First American LoanPerformance, which tracks the statistics. These loans are even more common in the expensive Washington area, where about half of home borrowers used them in May 2006.

Regulators also told lenders last year that they were considering an advisory called a “guidance,” setting new rules on these nontraditional loans. Lenders would be expected to require borrowers to have higher down payments and better credit, to verify borrowers’ income, and to make sure borrowers could withstand a payment increase. Lenders would also be required to explain the loans more carefully. Regulators say the final version of the rules will be announced within a few months.

The rule change has few supporters in the lending industry, and much opposition.

In written comments to regulators, the Mortgage Bankers Association called the proposed ruling “overly prescriptive” and said heavier regulation might stifle product innovation. Guaranty Bank said new rules might have “an adverse effect on the availability of credit to homeowners.”

J.P. Morgan Chase & Co. said that it was unfair that restrictions would apply to only banks and thrifts under federal oversight, giving more loosely regulated lenders a competitive advantage.

Wells Fargo said that although it “applauds” the regulators’ efforts, the agencies should distinguish between mortgages that are really risky, such as those with mortgage balances owed that can rise rather than fall or with introductory teaser rates likely to increase, and interest-only loans, which the bank said were less risky.

But the mortgage insurers, which cover the losses when loans go bad, see big problems. Their trade group, in a plea to regulators delivered in a comment letter last month, alluded to its fear of widespread foreclosures if some of these new borrowers default on their loans. An increase in such problem properties could weaken the real estate market and drive down home values even for those who bought conservatively and diligently paid their mortgages.

Hutchinson urged faster action and accused mortgage lenders of disregarding the regulators’ warnings.

“Although the non-traditional guidance is now only in draft form, one would have expected a far slower growth in industry reliance on non-traditional products in anticipation of final standards with far-reaching market impact,” Hutchinson wrote. She added that the final regulation should require “consistent enforcement” and “clear penalties for those who disregard it.”

Not all lenders agree with the big banks and industry trade groups. David Dowling, a loan officer with First Trust Mortgage in Tampa, asked regulators to “ignore the lobbying efforts of those in my industry about keeping lax lending standards.”

He said he has had a string of elderly clients come to him for help after lenders placed them in adjustable-rate, interest-only or option loans. Accustomed to “traditional underwriting standards,” he said, these borrowers did not understand that they had placed themselves at risk of losing their homes. Dowling said he has met people who had owned their homes free and clear and who lost them to foreclosure after taking out these loans.

By Rich R

August 20, 2006 07:09 AM | Link to this

it’s people like Sequal that makes florida less attractive.

People come here to post concerns and compare notes with others.

Why do the rude people in Fla always want to get personal

TONYA, when you get out of Florida, you will see this attitude really is a florida trend.

The only thing I can figure is the bashers are buried in debt, option mtg, credit card debt, charging gasoline on a credit card and paying the minimum.

They could be jelious as you have a plan to move, as I did, and they’re probably stuck.

If I had to guess, this guy’s in a house he can’t afford, already with late payments on everything and couldn’t finance a peanut.

Just a guess.

To H**l with them.

Good Luck

By RHM

August 20, 2006 08:25 AM | Link to this

I think it’s funny when people talk about all the “culture” in Palm Beach County. The bottom line is Palm Beach County is a place only for wannabee big shots waiting to be be on the ‘Shiny Sheet’. I worked for 30 years in the resort business and am one of those low rollers you refered to who only made $40,000 a year. I saw the rich and famous grubbing for shrimp in the buffet line. Talk about cheap! Bumbs on the street had more class than these people. The people who are belittled for being ‘middle class’ in Palm Beach County and unable to afford paradise outclass those island bumbs.

By Michael Fink

August 21, 2006 07:36 AM | Link to this

From USNews.com:

Notice the length of time for the avg downturn (3+ years, not 6 months).

Contrary to popular belief, the housing market hasn’t cooled off that much. In fact, residential real estate prices continue to soar in a number of key metropolitan areas, according to a new study released this week.

That’s a good thing, right? Actually, no–because the froth building in housing prices raises the distinct possibility of significant corrections to come in many of those regions.

In the first quarter, home prices nationwide rose an additional 7.3 percent, according to a joint study by the financial services firm National City Corp. and the research firm Global Insight. As a result, there are now 71 metropolitan areas–representing nearly 40 percent of all single-family homes–that can be classified as “extremely overvalued,” according to the study. By comparison, only 64 metro regions were considered frothy at the end of last year and only 1 percent were classified as such in the first quarter of 2004.

The report further stated that Californians and Floridians ought to be the most concerned, as their states are home to 17 of the 20 most overvalued markets. The frothiest region in the country, according to the study, is Naples, Fla., where home prices are said to be 103 percent overvalued. Rounding out the top five markets are Salinas, Calif.; Port St. Lucie/Fort Pierce, Fla.; Merced, Calif.; and Bend, Ore., which are all more than 75 percent overvalued, according to the report. (Global Insight and National City based their judgments on valuations on several factors, including historical market premiums and discounts, household income levels in those regions, interest rates, and population density.)

“The fact that this number of metro areas – representing such a large percent of the total single family market–is extremely overvalued should be a cause for concern,” said Richard DeKaser, chief economist for National City.

Another worrisome sign is that the 50 most overvalued markets at the end of last year were again the biggest winners at the start of 2006. Indeed, the 50 hottest markets saw a 10.1 percent increase in home prices, on average, in the first quarter.

This study’s findings would seem to contradict other housing market reports that have shown a steady decline in home prices recently. For example, the Commerce Department has indicated that the median sales price on new single-family homes purchased has fallen around 3 percent since the start of the year.

But DeKaser notes that new homes are sold by developers, not families. And developers generally don’t have the luxury that regular families do of living in their homes for several more years to wait out attractive offers. Moreover, DeKaser said new homes represent only a small percentage of the total housing market. For their part, National City and Global Insight relied on national housing data collected by the Office of Federal Housing Enterprise Oversight.

Under normal circumstances, the fact that housing prices are continuing to rise would be something to cheer. But the housing boom has been going for most of this decade. And housing markets can’t be overvalued for too long, as imbalances in residential real estate prices will eventually lead workers to relocate to more affordable cities.

The bottom line: Real estate prices eventually correct themselves. And unfortunately for homeowners, it often takes years before home prices start to rise again, especially after a big run up.

National City recently studied 66 major metro regions over the past 21 years that suffered through a 10 percent or greater decline in prices for at least a two-year period of time. It found that home prices, once they begin to correct, tend to decline 17 percent on average before markets heal themselves.

“And the average duration of these adjustments is 3.5 years,” says DeKaser.

So what about families who recently bought into one of these “extremely overvalued” markets in hopes of turning a fast buck? “I extend them my deepest sympathies,” says DeKaser.

By Michael Fink

August 21, 2006 07:38 AM | Link to this

Check out the end of this article. Downturns typically last 3+ years, not 6 months (like all the builders/flippers would have some people believe!).

Contrary to popular belief, the housing market hasn’t cooled off that much. In fact, residential real estate prices continue to soar in a number of key metropolitan areas, according to a new study released this week.

That’s a good thing, right? Actually, no–because the froth building in housing prices raises the distinct possibility of significant corrections to come in many of those regions.

In the first quarter, home prices nationwide rose an additional 7.3 percent, according to a joint study by the financial services firm National City Corp. and the research firm Global Insight. As a result, there are now 71 metropolitan areas–representing nearly 40 percent of all single-family homes–that can be classified as “extremely overvalued,” according to the study. By comparison, only 64 metro regions were considered frothy at the end of last year and only 1 percent were classified as such in the first quarter of 2004.

The report further stated that Californians and Floridians ought to be the most concerned, as their states are home to 17 of the 20 most overvalued markets. The frothiest region in the country, according to the study, is Naples, Fla., where home prices are said to be 103 percent overvalued. Rounding out the top five markets are Salinas, Calif.; Port St. Lucie/Fort Pierce, Fla.; Merced, Calif.; and Bend, Ore., which are all more than 75 percent overvalued, according to the report. (Global Insight and National City based their judgments on valuations on several factors, including historical market premiums and discounts, household income levels in those regions, interest rates, and population density.)

“The fact that this number of metro areas – representing such a large percent of the total single family market–is extremely overvalued should be a cause for concern,” said Richard DeKaser, chief economist for National City.

Another worrisome sign is that the 50 most overvalued markets at the end of last year were again the biggest winners at the start of 2006. Indeed, the 50 hottest markets saw a 10.1 percent increase in home prices, on average, in the first quarter.

This study’s findings would seem to contradict other housing market reports that have shown a steady decline in home prices recently. For example, the Commerce Department has indicated that the median sales price on new single-family homes purchased has fallen around 3 percent since the start of the year.

But DeKaser notes that new homes are sold by developers, not families. And developers generally don’t have the luxury that regular families do of living in their homes for several more years to wait out attractive offers. Moreover, DeKaser said new homes represent only a small percentage of the total housing market. For their part, National City and Global Insight relied on national housing data collected by the Office of Federal Housing Enterprise Oversight.

Under normal circumstances, the fact that housing prices are continuing to rise would be something to cheer. But the housing boom has been going for most of this decade. And housing markets can’t be overvalued for too long, as imbalances in residential real estate prices will eventually lead workers to relocate to more affordable cities.

The bottom line: Real estate prices eventually correct themselves. And unfortunately for homeowners, it often takes years before home prices start to rise again, especially after a big run up.

National City recently studied 66 major metro regions over the past 21 years that suffered through a 10 percent or greater decline in prices for at least a two-year period of time. It found that home prices, once they begin to correct, tend to decline 17 percent on average before markets heal themselves.

“And the average duration of these adjustments is 3.5 years,” says DeKaser.

So what about families who recently bought into one of these “extremely overvalued” markets in hopes of turning a fast buck? “I extend them my deepest sympathies,” says DeKaser.

By Have you notice ?

August 21, 2006 12:06 PM | Link to this

Anybody notice the cheap land that will be developed out in the Glades area? Or the Pre-fabricated homes that will be built for people with little or no money to put on a house?

This is what developers will be offering for buyers who have small savings accounts. The travel time & distance and the quality of the home is what will get you for low cost affordability in PBC. There are also developers building multi-million dollar condo/spas in the Miami area for the ones who have money.

All of us are classified of either “have” or “have not”. Consider this, who owns title of your house/condo? If it is you, then you “have” it….if is the bank, then they “have” it. You are not a “have not” for not owning title, but you are one step better than one who rents. The one who have equity in a house, is more better off than the one is renting on the long term. What is consider to be long term? Anyone renting more than two years. If you are renting for a short term, you either have money and going to buy within a year or a “floater”, one who will float from one area to another. You might like to do this because you are searching the perfect area, the perfect job, or you need to be one step ahead of the creditors that are chasing you. If you have been floating for over five years, then money is the issue why you don’t own. Ladies, beware of men who float for more than five years. These are non-committed guys, don’t fall for them or their lines.

Did anyone also notice all those ‘flipper” homes missing from ads and MLS listings? What happen to them? I tell you what happen to them, they were mostly pulled for higher prices that will come in the fall season. Did also anyone notice that realtors have been buying homes from their sellers? If anyone knows about the future of real estate, it will the broker/agents themselves. They know what is going to happen for the future here in prices.

These people who complain about the ratio of home prices and salaries can talk their heads off about the injustice, but it still won’t get them become homeowners.

I saw those overvalued markets in California, and i wouldn’t mind to be there…..life out in California is far better than in Florida. We are still much cheaper in price than most major markets. Don’t complain about prices, just remember what you can get in New York City.

And who do you think is behind all of this “over valued price” bashing for South Florida? I tell you who….Baby Boomers….yes, these people had their way all their life and now planning to lower the prices here before they move in to buy. Guess what, it really didn’t work. there are 60 million baby boomers who will retire, and they have over 1 TRILLION to spend. Just think if they spend only 10% on real estate here, but they will spend even more…..and the ones who own property here know it!

The banks who took over homes here in the past year are holding those homes for higher prices in the future. The banks will become the new realtors in the Florida market. And what nice fees they will be attaching to those homes. Banks can afford to hold onto property in limbo because they have their customers using those their ATM’s.

And finally, not much in the hurricane season here. We still have another month to go, high point is Sept 10th, in the meantime, sellers are pulling their homes off the market for them to stay here for another winter season. And the prices will be higher for next year, don’t think otherwise. Or we can look at New Orleans, if the worst did happen here, the price to live here will be out of reach for majority of owners and renters. New Orleans property value tripled, South Florida land value would be out of sight!

By Rich R

August 21, 2006 12:42 PM | Link to this

WOW. allot of assumptions here.

I would rent a $750K house for $1,900 and bank the difference

Buying now is stupid; until the insurance crisis is resolved and values settle, it’s not the sure thing it used to be.

Too many family and friends with too many bad stories.

No way - So Fla.

By for the flippers!

August 21, 2006 03:11 PM | Link to this

“Last week, Holland cut his losses. He put his house up for an ‘absolute auction,’ meaning no minimum and no reserve. He walked away with $255,000, a painful reminder that real properties, like stocks, do not always go up.”

“‘I knew I would probably lose money,’ said Holland. ‘But I thought it would sell for at least $300,000. The problem is there aren’t any buyers. I think the people coming to auctions today know that, and they are looking for just incredible deals.’ That’s exactly what they are looking for.”

By buy now pay later

August 21, 2006 03:12 PM | Link to this

JTS offered me an $800,000 home last week for $517,000 (plus $10,000 rebate because I have a RE license). I would still be a fool to buy. It would cost me $8,000/year more than renting, and I would take the risk of collapsing prices. Renting is a great way to go right now.

By from britian

August 21, 2006 03:26 PM | Link to this

A collapsing market means the outlook for British owners in the Sunshine State is gloomy”

“…British buyers, along with other foreigners, are turning their backs on Florida.”

“One British-based agent, who insists on anonymity, admits that he hasn’t sold any Florida properties for months.”

By TH

August 21, 2006 05:34 PM | Link to this

The boomers are looking into North Florida and Georgia area. I read in the AJC that Georgia is expecting 30 million retirees/boomers between now and 2030!

By Bmr

August 21, 2006 11:27 PM | Link to this

The only boomers who would buy instead of seasonal SOFL rental or purchase elsewhere are probably so financially illiterate they could not bring much with them. As with most other boomers, I have owned Real Estate for years, investigate before purchasing. The two tier RE tax, the Insurance mess,and severe overbuilding in some areas has made So Fl much less appealing than many other areas. Golf courses and fishing with minimal hassles are what I want and SoFl’s problems need too much attention.