Pat Beall
Alexandra Clough
Jeff Ostrowski
Linda Rawls
Home > Real Estate > Archives > 2006 > August > 31 > Entry
The Housing Market Gives, The Housing Market Takes Away
Tell me if you know this person: He (or she) has a bigger bank account than most people you know, but he never stops spinning a sad tale of financial woe. His boss doesn’t pay him enough, the tenants in his rental property are a pain, the oil companies and insurers are ripping him off and the tax collector always has his hand out.
Of course, this affluent tightwad has never missed a meal (although he never leaves more than a 15 percent tip), he drives a new car (and he’ll gladly tell you how bad he beat up the dealer) and he takes posh vacations (only to return home with gripes about the chintzy exchange rate).
Sound familiar? I thought so. Anyway, looks like this brand of pessimistic penny-pincher was overrepresented in the University of Florida’s latest Consumer Confidence Index.
It shows Floridians’ opinions about the economy at their lowest point in 13 years — in spite of unemployment at near-record lows, housing values at near-record highs and historically low interest rates. The last time the Florida Consumer Confidence Index was this low, the Dow Jones Industrial Average was at 3,500 and Palm Beach County’s median home price was $117,300.
The survey’s director blames the precipitous decline on Florida’s flat-lining housing market. If his analysis is accurate, it shows just how profound the hangover from a speculative bubble can be — and how the deflated expectations can darken what seems to be a bright economic picture.
In its Aug. 24 edition, The Economist calls the housing boom “the biggest bubble in American history.” Check this BusinessWeek story for a slightly more optimistic analysis of what it calls the “housing recession.”
Permalink | Comments (7) | Post your comment | Categories: Jeff Ostrowski
Comments
By TANC
August 31, 2006 04:40 PM | Link to this
The Business Week article in Jeff’s blog talks about the effects of the general housing market on the overall economy. In general, the fact that housing downturns have only been the result of high interest rates and broad economic weakness leading to rising unemployment is true, and that scenario is not playing out here is also true, BUT, the other point made is what’s important here.
This is an inventory correction and a big one and in Florida it is a BIG BIG ONE. And, the real risk here is that the inventory problem will eventually (and possibly quickly) create the more common cause of economic weakness and job loss to once again ring true on a regional basis for Florida as financial problems appear from foreclosures, delinquencies and the like. If interest rates continue to come down,although that would be very helpful, it will only delay the pain.
I do believe that over time things will work themselves out in our fine state, but, that workout period I believe will be measured in years, not months. In order to achieve long term gains now in this market, we need a whole lot of short term pain.
For those who are wealthy, it doesn’t matter, it’s the cost of living here and they’ll pony up, but for those hoping to achieve the American Dream in Florida, sorry, you’re going to have to wait awhile, maybe quite awhile or move.
By Rich R
August 31, 2006 07:25 PM | Link to this
Wow, change in topic that fast.
Ok, Jeff I don’t know that person.
By D. Trumpmeister
September 3, 2006 08:49 PM | Link to this
Hello! I AM that person! Because that’s describes how I got to be wealthy. I’ve always believed that if you closely watch your nickles, dimes and quarters..the big dollars will automatically follow! Stay focused, don’t buy drinks for the house if you don’t have a house! Real Estate Investing is the safest road to riches, if you do your homework and learn to buy at the right price, in a PRIME location, and you can qualify for reasonable non-variable fixed rate financing/. Importantly have a long-term view and have the discipline PATIENCE to ride out the downturns. This is what separates the yearners from the earners! Remember no risk..no reward!
By kurt kelly
September 3, 2006 10:51 PM | Link to this
September 3, 2006 10:49 PM | Link to this
Happily renting! Ahhh…its good to be a renter in SoFla! I live in a cozy 2brm adjacent to City Place, 100 yards from Publix, easy walking distance to my job, Clematis, the Library, Sunfest, etc…All for $780/month! I laugh thinking of the suckers paying THREE times that amount to OWN in the same exact area. Even better, then next bad hurricane hits, I have none of the hassles of homeownership. I simply break my lease, and go back home in the greatest American city, CHicago. Snow you say? Never saw a snowstorm destroy roofs, trees, or cause a 2 week long blackout! Cold? Having lived both places, I find cold winter day in Chicago no more miserable than a hot sticky summer day in FLA. Besides, central heating works just as well as central air. But for now, Im enjoying my convenient downtown life by renting at a third of the price of buying! Life is good!
By darkernicer
September 5, 2006 10:40 AM | Link to this
Strolling on beach ater dark from Lauderdale by the Sea to Lighthouse Point much less light pollution lately. More dark condos than past years.
Either people in condos trying to save on elect bill or growing crop of empties. Pompano area has some outrageously huge projects underway, however, that if ever filled will be death knell of stargazing in that area. What a mess we will be leaving for future generations. As always, the Bard said it best : “Lord, what fools these mortals be!”
By Time of the Season
September 5, 2006 03:04 PM | Link to this
Maybe the stroller at the beach has to realize that part of the area they stroll along are mostly seasonal, time shares and motel units. This is September, not tourist season yet. You will start to notice the long waiting time for your favorite restaurant and the crowded beach in a couple of months. Those fools you speak of, are most likly making money to buy those new units, just like you did 20 years ago. They are just younger folks making money and you are an old fool who didn’t figure out yet what season you are in. The future is bright here in Pompano.
By old fool
September 5, 2006 04:06 PM | Link to this
Having watched the march of the condos up the beaches for 25 yrs, I know their usually light patterns each season, just as sky patterns also change.
Not only are fewer than normal for this time of year illuminated, many are still boarded up presumably from unrepaired hurricaine damage. Try taking a break, take a stroll on the beach and relax. You sound a bit strung out, as we used to say in ancient sixties.