By Rich R

September 7, 2006 01:54 PM | Link to this

I guess this can be perceived as good news and he suggests that things will return to positive territory in a few months.

Personally, I think that the other factors unique to Florida will infuence any correction in a upward fashion.

Run away Insurance rates, Resetting of the Tax base on Trade-up/Trade down and of course the huge inventory of unsold homes currently in the 22,000 level, not including any FSBO’s which adds a few thousand if not more.

By gatorcane

September 7, 2006 02:06 PM | Link to this

no way they will be positive in a few months. It is denial and unsupported optimism. I just don’t see any positive territory at least through this year and 2007. Prices have to drop first.

By mike

September 7, 2006 03:19 PM | Link to this

August 25, 2006

Real Estate’s Crash Landing

During the unprecedented run up in housing prices over the last decade, most economists and real estate professionals firmly declared that the market would always move higher. When the recent cooling dashed those hopes, many reluctantly fell back to the “soft landing” hypothesis, which predicts that price appreciation will return to historically average rates. However the latest housing data, particularly this week’s figures on new and existing home sales, have made these overly rosy assumptions untenable. The “hard landing” scenario, which envisions real estate prices moving sideways, or actually posting moderate declines, is finally gaining broader credence. But, even this forecast will prove overly optimistic. The real estate market will not land soft or hard, it will crash and burn. Those who did not have the foresight to bail out may be faced with a distinct shortage of parachutes.

The glut of homes on the market, the highest level since 1993, doesn’t even begin to tell the story. Homes were far more affordable back in 1993 than they are today, and there were significantly more renters (who had not yet entered the market) who could potentially buy them. Today, home affordability is at an all time low, and just about anybody who could buy one already has. For those who think the inventory of unsold homes is high now, you ain’t seen nothing yet.

Consider these factors. There are a record number of new homes currently under construction. Real estate speculators who bought solely on the anticipation of rising prices will likely try to unload their properties now that the market has turned. With higher short-term interest rates, those who financed with ARMs will also try to sell their homes to get out from under mortgage payments they can no longer afford to make. A record number of Americans who bought second homes, or vacation properties, will likely reassess the wisdom of those purchases, and put these properties back on the market as well. Finally, homeowners who watched the values of their homes rise for years, but were reluctant to sell them for fear of missing out on even bigger gains, will rush to cash in before all those paper profits disappear.

This raises two pertinent questions. First, where will all the buyers come from to absorb this supply and second, at what terms will lenders be willing to finance these purchases? When prices were rising everyone wanted to buy, no one wanted to sell, and lenders were willing to finance just about any transaction. As a result, there was a “shortage” of homes for sale, a surplus of buyers, and prices rose accordingly. As prices begin to decline, few will want to buy, many will want to sell, and gun-shy lenders will be reluctant to finance all but the most secure transaction. As a result, the “shortage” will become a glut, and prices will collapse.

Close Window

By GB

September 7, 2006 03:41 PM | Link to this

Your logic assumes sellers are being forced to sell; which is never the case in most transactions.

By far the vast majority of people selling one home and buying the next one are transitional buyers; those moving up, or scaling down. Both situations are voluntary; in other words: these people are moving up, or scaling down for no reason other than they simply want to.

This is, has always been, and will always be the major driving factor in the U.S. residential markets.

The current leveling off of inventory without commensurate number of sales indicates these transitional sellers are responding to recent market antagonistic market conditions by simply pulling their homes off the market in droves.

That is the logical response; and one which will exponentially escalate over the months to come; probably well into 2007.

You have to realize residential real estate is not like commercial real estate: it is a zero-sum game.

Anyone selling their primary residence would of necessity have to also buy another primary residence.

That is, sir, where your doomsday logic fails.

If it’s an unaffordable “buyer’s” market then I will simply pull my home off the MLS and stay put. I don’t want to take less than what I believe my home is worth; nor do I want to overpay for an “unaffordable” next home.

Current inventories will evaporate.

The mortgage and realtor sectors will suffer the most. As will builders who add to the pool of homes for sale. With no more buyers coming into the picture this inventory will be carried by these builders for two to three more years.

That will help the banks who will collect the interest off those construction loans, but builder’s profits, already stretched to the limit by record construction and labor costs, will be killed.

The publicly held companies will survive because it’s the stockholders who will bear the brunt of this loss.

Private builders though are in for a rough two to three years.

But the market for existing home sales can, and will not be affected either positively or negatively in a zero-sum market; regardless of where it’s headed.

Just the logic behind the physical impossibility of a collapse in the U.S. residential real estate market where existing homes are concerned.

Sorry to burst your bubble.

By Rich R

September 7, 2006 04:14 PM | Link to this

This seems to be a broad approach, not taking into account the unique elements in SoFla.

A higher then normal percentage of Mortgages have been Exotic’s and will soon begin to adjust upwards, leading to much higher PI payments. This is occurring as people are see triple digit insurance increases, which not only drives the payments higher, but depending on when the increase occurs, you may also have an escrow deficency to make up driving the payments even higher.

As values begin to drop, and banks/mtg co’s tighten the standards, many folks won’t have the ability to refi into a more conventional vehicle such as a fixed 30 or even a fixed 40.

The foreclosure rate in SoFla is much higher then years past already, and If we see a rapid drop in prices, many will be in deep trouble.

The insurance that used to cost a few bucks a month, now cost more then ever before seen anywhere in the US.

All of these factors combined, could very possible cause a “stand and wait” for even the wealther potential buyers.

Many educated folks planning to retire/relocate to SoFla, may find it hard to commit to a purchase when there is no way to perdict the costs.

Think about it…

If you lived in another part of the country, paying you insurance and the amount rarely changed and if it did at all, it was a small, insignificant change.

Whould you buy (even for cash) and hear that your insurance could be $4,000 this year, $10,000 next year, and who knows after that? And if another storm hits, the gloves go off and you can just bend over…

I feel there are many factors present in the SoFla market that makes it even harder to pertict the future using national standards and national historical data.

We’ll all be educated as this materializes.

I don’t think anybody has a crystal ball with the power to handle this one.

I know confidence is way down and that drives sales activity on both sides. Seller won’t sell, buyers won’t buy, banks lookin closer at deals, it’s almost a standoff. Where do you go from there?

WOW

By the rant

September 7, 2006 04:43 PM | Link to this

Realtors & brokers are the ones who will be looking for new jobs. New home builders will adjust and live off all those large rental communties that they own under various names. That is ongoing rent money that keeps them going, that is “rent money” i said that helps home builders survive here. Something to think about to all those renters out there.

GB had it right of how this market wil go. Sellers don’t have to sell below the market price, they will wait it out. And those homes that do go under to foreclosure, the banking institutions will just add additional fees to the next home buyers. They can do this, because they are the banks. The median home price will rise, the banks will give out more money, the buyers will have to buy at higher rates if they keep on waiting for a major price drop that will never come. Look how many couples who get married or have kids and have to upgrade or expand. Look at the number of non-americans buying into this area. Look at the “Boomers” ready to buy here. And this area is getting into the bio-tech age. More jobs, more people, more house sales. We hear the same rants from those who talk about taxes, insurance and who will answer our 911 calls. The louder you rant about cost of living here, the more you tell us you cannot make it here in your profession. Something to think about to all those who can’t make it here due to lack of funds.

By MikeG

September 7, 2006 04:47 PM | Link to this

Why does everyone seem to want a huge real estate crash? Don’t people realise that if the market were to crash it most likley means that we are in an economic crises and we will all be in trouble. Not just people trying to sell some homes. Don’t forget houses are not stocks, we don’t live in stocks we don,t have family gatherings in stocks. People have to live somewhere. Bottom line, no ifs ands or buts about it we have to live somewhere. Weather you buy or rent we need to have shelter over our heads. Right now I bet there are tons of people who are trying to sell there house becuase they think they can sell it high and then watch the market fall and buy back in. It just dos’nt work that way you buy a house to live in it you buy investment property to rent it out and have it for the long term while your renters make your mtg. People have been trying to trade houses like stock and you just can’t do it. Eventually the people that don’t have to sell will pull there houses of the market and we will return to a normal mkt. A mkt were you have time to look at houses and don’t have to buy it right then and there. Appreciation will go back to normal levels and realestate will be what it is a place to live. So all of you that want a huge realestate crash just be carefull what you wish for.

By gatorcane

September 7, 2006 05:02 PM | Link to this

I appreciate the comments. First of all the median house price of a home in Palm Beach County is absolutely ridiculous at $400,000 and those of you who think you can brag about your home being worth that much are wrong.

You did absolutely no work to earn that money. There is no free lunch. It was the investors who ran up the prices based on speculation - so I claim the housing market, like the tech stock market of the 1990s was driven upward without merit. The housing boom is in the process of collapsing right now as we speak and it will fall hard just like the tech bubble of 2000.

The problem with Americans is that we are greedy, materialistic, and want quick results. We search for quick profits and in the process corrupt the true working of the economy. The housing boom was a quick burst up but I just can’t see a soft landing.

The realtors and sellers WANT you to believe that. Your house that you think is worth $400K should be worth more like $200K - prices before the big rise happened.

By To GB

September 7, 2006 05:30 PM | Link to this

GB, You say that if people think they are going to get below market prices they will not sell. I’m not sure if I agree with you.

By and large, the majority of homeowners have owned for quite some time, but you have a good number of people that have purchased or upgraded in the last few years. If someone cannot afford the house now, they may be forced to sell. We’ve seen evidence that salaries have not kept pace with cost of living increases such as fuel, electricity, insurance, taxes, services. This means people have had to fund the increased costs out of their disposable income if any. To the extent that they don’t have any disposable income they may be tempted to take equity from their home. Even still, some of those that are tight may take the view that selling out of this overpriced market and moving to a more reasonably priced market is the proper approach. Many sellers right now are not as conncerened with selling below the market, but with all the appreciation of recent years, their concern would be selling below what they owe.

You’re right that it is a zero sum game, but you’re looking only at PBC. Someone could sell out of PBC and go to X (fill in desired non local location). That will leave a glut of unused homes somewhere.

Look at all the dark condos for sale in our area. Without the masses of people moving to the area, the quicker you want to sell your home the more competitively priced your property has to be in order to sell it quickly.

As for upgrading homes, if someone upgrades their home, they’ll be stuck with a much higher tax bill because of SOH. This may or may not disuade them from upgrading, but it goes without saying that it will be considered.

My view is that PBC is overbuilt relative to its price and the result has been people moving away and more homes on the market.

Until salaries begin rising to a level where a person can afford the average home…something like a 3Br2Ba place, our market is in trouble.

Also, in regards to other blog posts that claim FL is affordable….if you plot PBC’s median home price vs FL vs US, we have seen PBC well exceed these other medians.

For example, in Jan 2001, PBC median price was $136,600, FL was $116,700, and US was $136,600.

Today, those numbers, as of July 2006 are PBC: $390,100, FL:$250,800, and US: $231,200.

My thought is that the PBC median price will trend closer to the median price of FL and US and come back to its long term historical % differential.

Ultimately we will have a reversion to the long term historical differentials which are premiums/discounts or living in particular areas.

By Happy Renter

September 7, 2006 05:47 PM | Link to this

THe real shame, is that in a country like America, there should not be ANYONE who works a full 40 week, that cant afford basic housing. There is something terribly wrong with a system that has allowed such a gap between what the majority of the OVERALL population earn, and what the housing costs. Despite what some self important bloggers believe, the over whelming majority of citizens in FLorida do NOT earn 6 figures. And a college degree does NOT automatically mean 6 figure income.

School teachers, social workers..all have college degrees, and most earn less than HALF of 6 figures. None of them can afford a decent home, in a decent neighborhood, a reasonable distance from work.

This is an issue that effects ALL of us, NOT just the poor, unneducated peasants who dare to live in south Florida and earn LESS than $100,000/yr.

By I'm A Happy Renter Too !

September 7, 2006 05:59 PM | Link to this

Rich R

Personally, I think that the other factors unique to Florida will infuence any correction in a upward fashion.

RICH MUST BE A REALTOR ! HAHA ! GOOD LUCK SELLING ME A HOUSE UNTIL PRICES GO DOWN !!!

Everybody sit on the sidelines…we need to work together here !

By Rich R

September 7, 2006 06:25 PM | Link to this

It’s been very hard to keep social workers and Care givers on the payrolls, as many have fled SoFla because it’s just too much to handle and every day is a struggle for most. These are despertly needed people and many just have to leave.

I know this first hand, I deal with it daily.

The folks are just throwing in the towel and leaving for areas that are much cheaper to live and they actually make more money. My best “Supported Living Coach” just quit today, heading to Atlanta. She’ll make $12K per year more, and bought a brand new home with a PITI of $960; she was renting here for her and her daughter and was paying $1,250 RENT.

Can anyone blame her? Now there are 21 disabled folks that will have to deal with a rough trasition.

This happens too many times a week, I’m finding it very hard to maintain staff in SoFla; they are leaving.

I, as you all know moved to NC, and love it very much here. I still operate business in SoFla, but not for long. The money is good, but too much liability with the revolving door of staff. They mover here, then they leave just as fast.

It’s sad, but very true.

For the well to do folks that can handle the higher costs…. Good for you.

Unfortunatly, there are not enough of you to take on the entire market place and you too will suffer the effects of these market conditions.

I get such a kick out of the people who think it’s as easy as saying: “If you complain, b***h etc, you just don’t make enough so you should leave” That’s very offensive to many and has many side affects.

Keep in mind, as the working class folks leave and nobody shows up to replace them, you will suffer.

If you think things cost allot now, wait until you try to hire a tradesman such as a plumber, carpenter, electrician and you may find that they demand much more money because they too have to deal with Citizens insurance, the Tax man etc.

There is a rippple down affect to market conditions that push the working class aside.

So, for the ones that do well (I do very well but still left) and don’t care about the fellow man, beware.

It’s nice to have $$, but if you can’t find the services to support your lifestyle, you too will feel the affects.

Face it, the market has to adjust. Basic economics.

For the past few years, demand exceeded supply and we saw prices skyrocket to the benefit of many (Me included) but just as fast as it went up, it could come down.

We are dealing with unique issues never before seen in any RE Market, so it’s anyone’s guess where we go from here.

As for the biotech, that’s just funny. Please explain to he how Scripps and their 500 jobs over the next 10 years will deplete over 25,000 homes on the market currently (MLS & FSBO).

Notice the article in today’s paper about business being killed (My post above with link). This trend is continuing.

I now live in NC as many of you know, and weekly, I see how a boat builder is moving here from FL or other stories on our local news.

NC and many other states know what’s going on and are very diligently courting these companies with huge incentives.

So, as we all blog away, there are groups out there taking advantage of this deteriorating situation. One’s loss is another’s gain.

Cheerleaders I ask you, if the market is prone to go up, why are you not buying? I suggest you are just wishful thinkers and I really do hope you are correct.

I just disagree. It’s ok to disagree, this makes America great.

By Rich R

September 7, 2006 06:32 PM | Link to this

For the Record.

I am not a Realtor, nor do I work for Raleigh visitors center.

I provide medical/care services to developmentaly and physically disabled folks from Dade to St Lucie County.

The market conditions that some seem to enjoy, has eroded the ability to provide critical services to people who can’t live without them.

I am in the process of a full transition to NC as this market enjoys a nice balance.

The average person, with the average job, CAN afford the average home here. A happy worker is a productive worker.

It’s all in the numbers.

You can call NC “Hickville, or tobacco row, or what ever you want. I really don’t care, but I can say life is much nicer here FOR ME AND MY BUSINESS. It’s a choice I made.

If you like Florida, that’s very good, for me a change was good.

Now, before you start to bash me and call me a hick, i have a question for you.

Are you self employed 18 years? did you gross 12 million last year?

Don’t bash me for expressing my opinion, it just belittles you.

By Michael Fink

September 7, 2006 06:54 PM | Link to this

Just wanted to answer a question posed above.

I don’t think anybody really wants to see RE crash. Your absolutely right, all of us are going to be affected, homeowners or not.

I am hoping that after the crash I will be in a position to buy. I am hoping that my job stays intact, and that market conditions to not detoriate too far. Who knows what the fallout from this is going to be like; we have never had something happen like this on a national level before. And, in all likelyhood, the fed may start to print money with a vengance to stop it from getting too bad; which will cause a hyperinflation, but will maintain home values. That will really suck for those of us saving money; but hey, that’s what we get for being prudent.

However, all the wish/hoping/praying/etc does not change the fact. The fundamentals are not there, the market cannot continue in this condition. Did I want to see the .coms crash? Heck no, I work in the industry; and was impacted significantly by the overload of highly skilled technical people looking for work after the collapse. Did that stop me from shorting the heck out of their stocks? Nope. I shorted them; using as much leverage as I could (which, at the time was not very much!).

Just because we don’t “want” something to happen does not mean its not going to happen. Look around; realize the situation your in, and try to make the best of it. If you don’t own, don’t buy now; rent is a fraction of the price, and you will be somewhat insulated. If you do own; get into a fixed rate, right NOW, and stop with the HELOC! If you feel more adventurous; short homebuilder stocks, especially those that have large investments in S. FL and Las Vegas.

There is money to be made on both sides of this. But sticking our heads in the sand and saying “we don’t want prices to go down” is not going to stop the market from stripping your equity away.

By Michael Fink

September 7, 2006 07:28 PM | Link to this

Twice as many units built as there is demand?

Interesting, I would want to look it over a little more in detail.

http://www.safehaven.com/article-5841.htm

By PG

September 7, 2006 08:13 PM | Link to this

I guess a lot of people are still in denial and show a comlete misknowledge of the nature of the market in S Florida and other speculatice areas (high percentage of investors), the fact that an alarmly high percentage of ARMs and interest only mortgages reacting to the prime rate. The fact is investors will pull out, they already are on new peoperties (numbers have shown that they are abandonning deposits and bailing out of contracyts), home owners in esoteric mortgages already cannot afford their new interest rates (and we are only at the beginning of the interestv readjustment phase)as well as the rising cost of insurance. let’s not forget that rising interest rates not only affect aRM mortgages, but also most other debt (credit card, car loans). One only has to look at the high number of for sale by owner signes (they are so leveraged that they cannot afford the services and cost of a realtor). As the inventory grows, sales keep slowing, owners will be more willing and likely to drop prices substantially to get out of bad situations and foreclosure. And let’s not forget the other fantasy…. people will always move to Florida, the numbers are showing the reverse trend and companies are considering moving out since they cannot attract employees or reconsidering moving in due to high cost of living, insurance etc. price of condos are already predicted to drop 25 to 30%, single family homes are not far behind. I have seen in in the NE in the late 80’s and in CA. The real estate market is no different than the stock market when investors get involved and people take high risks. we read a lot from realtors, mortgage brokers who have a vested interest in keeping the fantasy going, their jobs and incomes are at stake.

By Joe

September 7, 2006 08:53 PM | Link to this

I put my house on the market last September and after several price reductions it still is not moving. I CAN”T EVEN GIVE IT AWAY!!The house is in Loxahatchee on a few acres. I’m self employed and trying to relocate my business to a more desirable location. So FL just isn’t for me anymore. If you know anyone interested in this particular house drop me an email plz….I’ve had open house after open house with hardly any traffic. The one year anniversary of me putting it on the market last year is on Sept 14th. I know many others with houses just sitting looking to move to other areas of the country. They are fed up with what South FL has become; Rude, crowded, overrated, high insurance, and too much like a state up north.

By Rich R

September 7, 2006 09:44 PM | Link to this

Good Luck Joe, I really hope you find a willing buyer.

Have you considered advertising your home in the NE or other areas that have shown migration to SoFla.

Although the market is moving to a strong buyers market, there are still people moving to florida.

I would say if you can capture some activity before they arrive and fall prey to a starving realtor, you may find some luck. My uncle sold his Manalapan home this way and saved over $100K in RE commissions.

Just a thought.

By Joe

September 7, 2006 10:17 PM | Link to this

I’m gonna hold out until after hurricane season and see what happens and then contact a realtor most likely. I have thought about advertising up in the NE but that market is stale too. I know there are a ton of people still moving to FL but are they moving to So. Fla or other parts of FL more than here. I guess we’ll find out sooner or later…Thanks for your advice Rich R.

By Mind Set

September 8, 2006 10:42 AM | Link to this

The problem with people in Florida is that they think beyond their means. You make “x” number of dollars, and want live the lifestyle of a person who makes “x” times 3.

The renters, the low paying service worker, the uneducated store clerk see people who are highly educated, highly paid, who own nice homes and drive nice cars and they want to be like them. The only way to get there is to start bashing the housing market here. So the “have nots” want to have the median price go down in half. And you want to know why people laugh at you? We even have a guy who lives out of state who said he was done with Florida, screwed his sellers on the property he sold to them, laid off over 200 people in his medical firm to make more of a profit and is taking advantage of “medicare” with the medical businesses he claims he has in the South Florida region. His next property he might be sitting on might measure of an 8’ x 6’ area if the law finds out of his antics. I wonder if there is a state law enforcement or district attorney reading this, who might want to track that guy down?

What would happen if no property sold as these “have nots” are hoping for. Moving companies will start laying off people. People who make applinaces will suffer, so would tradesmen, construction workers, delivery people, etc. Lets not stop there, what about the retail section, if you are not buying because of your job loss, people get laid off ther also. Then the restaurants will soon to close, less people go the movies, and not let us forget of how many people in the real estate, mortgage and banking industry who will go hungry.

What would happen will be people sitting on their property until they have a buyer for the price that is right, or the older people would pass it along to their kids if they cannot sell. Sellers are not going to give their property away here. We are not at “ground zero” to watch the property prices to fall in this country. You want cheaper housing, call Rich R.

What some of these "have nots" worry about the most is that Florida will soon be in the California market area of home prices. People out there adjusted to the prices jumping up high, Florida will also.  Look at this way, you wanted higher salaries, you will get it with the higher home prices.

Here is another counter point, for all the “have nots” who want to bash the market down to the ground for them to buy at lower prices, you will have “the haves” who will move here to retire, people from other countries, people who want a second home, or to work or start a business, and they make or have the money to support the expenses to maintain a home. The only ones who talk about the cost of insurance, taxes and the poor slobs who cannot afford homes here are your “have nots.”

So people like gatorcane, happy renter, rca, oscar, tonyas, mike finks, and the rich r’s and the rest of the “have nots” in the world will have to get set in their minds that if you want something in life, you are going to have to pay for it. And if you do not have the money, start getting yourself a second job or look somewhere else in this country for housing that you can afford. Remember, I-95 and I-75 goes both north and south. If North Carolina is affordable for your price, ask Rich R. for information. He has been telling everyone about low taxes, insurance and housing in Raliegh. But we still want to know why Rich R. is concern about our costs in Florida? For someone who has loads of money by ripping off medicare at his medical business and those suckers who bought his property, i would believe he would more mind set of making money for himself and not looking out for others. What is your real aggenda Rich R.??? I smell a rat or a Fink.

And not us forget about those realtors who cannot sell at high prices, and need to survive by going back to pre-2000 house sale prices. I see the trend more and more every weekend of dumping the real estate and going to FSBO signs.

I remember what Dan Akroyd use to say to Jane Curtain on SNL during their news program part, a note for the happy renter……Happy Renter, you ignorant slut, this is America, a country that has social classes of all types, rich and poor and in between. You have to go out and make a living to get what you want in life. It is your education that makes you, not who you sleep around with to help you pay your rent. Get off your back and out of the bed and go earn an honest living. There are no hand outs in life. What did you do in life to earn respect in your neighborhood.

Even the realtors of today have to back to school to earn a college degree if they still want to sell homes in Florida in the future. The clock is ticking for them, how many of them will sell their homes below market value? None! To many bar-flies like you don’t know what the meaning of respect is. Get off the computer, leave your rented unit and jump into that rented car of yours and drive around and open your eyes. Money is here in Palm Beach. You are just to stupid or playing your part to lower the real estate prices here.

Don’t let this gang of bashers, “have nots”, make sellers there is a panic of prices going down by 50%. The only panic that will happen is the panic of prices being like home prices of California.

By Inventory

September 8, 2006 11:17 AM | Link to this

Mind Set sounds a wee bit panicky. Can everbody make points in bit shorter posts please ? Somthing like this :

Its the inventory that tells the story . Check open houses out. Track some units/houses from list date to sell date and list vs selling price(and seller sweeteners).

If still convinced SoFl not correcting drasticaly, purchase bridge connecting Brooklyn and Manhattan.

By Rich R

September 8, 2006 11:44 AM | Link to this

mind set, or whatever name you’ll use next.

YOU ARE AN IDIOT!

I still have interests in SoFla, and keep track of things as I wish. For the 4th time.

Have your opinion as I DO ALSO.

When this market crash arrives, i will feel very bad for most, but I’ll be laughing my A** off thinking of you. FOOL

By GB

September 8, 2006 01:31 PM | Link to this

Anyone waiting for any market at all in Palm Beach to crash will be waiting forever.

This county is literally the center of the financial universe for both the east coast of the U.S. as well as the vast majority of Latin America.

We’ve seen, and will continue to see a slowdown in number of transactions while the “daytraders” flush themselves out of the market.

But the truth is that over 70% of Palm Beach County property is homesteaded; which means not held by investors.

This market is gold.

Always has been, always will be.

By Point the finger to.....

September 8, 2006 01:33 PM | Link to this

Here are some lines from todays Palm Beach Post about property taxes, rent, housing and who to blame and how many really cares about taxes.

Singer Island resident Mark Valladoa said his rent has increased $200 a month because of hefty property assessments. Property taxes on the eight-unit building have climbed 200 percent from last year, he said.

Now who says the rent was going down ?????

You are venting, but if you really want to vent, vent at the property appraiser,” Commissioner Burt Aaronson said. “You are blaming the wrong people. We cut taxes, we didn’t raise taxes.”

So don’t blame the homeowner either about taxes!

At the $4.28 rate, the owner of a $325,000 home with a $25,000 homestead exemption would pay about $9 less in property taxes this year, assuming the assessed value of the home increased by only the 3 percent allowed under Save Our Homes.

Gee, the happy renter can buy herself another drink at City Place with that savings…..if she owned property. Better save that money for that rent increase.

Property appraisers are bound by state law to base appraisals on real estate sales, St. Lucie Property Appraiser Jeff Furst said at a similar meeting Thursday in Fort Pierce.

Did you vote???? Want a change? Vote people in who will help you buy a house.

About 60 to 70 percent of county residents are protected by the Save Our Homes amendment, which prevents a property’s assessed value from increasing more than 3 percent this year.

Looks like the minority (have nots) will not get the same tax rate as the ones who own now.

Sorry I burst your bubble…again.

As we speak, the prices are going up. I can afford to live here….will you be able to?

By Roger Theriault, a REALTOR

September 8, 2006 01:56 PM | Link to this

If this forum is just going to degenerate into name calling and accusations of idiocy, the Post may as well shut down the open forum. I have heard some insightful commentary (eg from GB above) and I think that anyone who doesn’t like hearing other peoples’ opinions here should just go elsewhere. I’m here to hear peoples’ opinions and insight, not rudeness and repetitive bashing of people (specific or general). Thanks!

By Mike Fink

September 8, 2006 02:37 PM | Link to this

GB,

So your arguement would be that “Palm Beach is different” and therefore will not be effected by the housing collapse? Or do you think there is no adjustment in the coming years, and everything will start to appreciate at a normal rate again?

I would agree with you about PB Island; that area, and those kinds of people, are just not very price senstive. If you want to live on Palm Beach island, you just have to pay.

However, the areas like West Palm, Wellington, PB Gardens, etc. They are not “gold”, and imho, not at all safe or insulated from housing collapse. However, I want to know what the crux of your arguement is so that we can debate more effectively.

Some housing bubble reports from Wall Street.

“The housing market is looking sicker by the day. Economist Ian Shepherdson said that the housing market is so far gone that ‘it’s not rescuable anymore. The housing market is beyond the control of the Fed.’ He compared it to a football game played on a mountaintop. Once the football goes off the edge, he said, it doesn’t stop until it reaches the very bottom.”

“Even the homebuilders, long an optimistic bunch, are all but throwing in the towel on the current market’s condition. ‘We’re running our business today as if we’re in a prolonged downturn,’ CEO Ara Hovnanian of Hovnanian Enterprises told analysts.”

“Heeding the signs of a bursting bubble, St. Joe is bowing out of the Florida homebuilding market. Markets that went up too much, too soon will let gravity guide the way down. The news is unlikely to get any better in the near term. The overabundance of new and existing homes on the market will make this a buyer’s market for some time.”

“The strategy shift will result in job losses, the company said. Jacksonville, Florida-based St. Joe said it expects to take a $10.7 million charge, including $2.3 million for termination benefits.”

“Lennar Corp. Friday became the latest home builder to warn that earnings would fall short of Wall Street’s expectations. ‘The U.S. housing market has continued to deteriorate,’ Lennar CEO Stuart Miller said.”

“Miller said new orders appear to have declined 5 percent in the quarter. But higher sales incentives and ‘certain land adjustments’ were the primary factors behind the company’s lowered estimate, he said.”

“‘The market is very weak and may be staring at a hard landing,’ said Paul Puryear, managing director of Raymond James & Assoc. ‘Housing is a key driver in the economy, and consumers are in for some bad news in regards to the value of their homes.’”

By Curious

September 8, 2006 02:59 PM | Link to this

I would appreciate a serious response to the following question, not the ridiculing and name calling that seems to be way too prevalent…..

Is there is a way to determine the median single family home price in PBC, if ALL properties EAST of US1 were EXCLUDED?

Would it have a significant effect since a majority of these properties are in the millions?

Many of the arguments on this site are about the regular person affording a home. Regular person does not live on the beach or intracoastal.

Still many expensive homes outside of this area, so this is not really picking and choosing the cheap areas only.

Just curious?

By Mike Fink

September 8, 2006 03:08 PM | Link to this

Curious,

I would like to know too, but remember, this is median price, not average. So the million dollars home on the island? They do not significantly affect the median home vaule (which is why they use it, instead of average).

There are reports out there of median home values by area of PB County. I have never seen one that is just west of 95 though.

Actually, interestingly enough, if you look at the values on the island; well, they did not keep pace with the housing boom. You would have been better off buying 300 condos in WPB then one 20 million dollar home on the ocean. That 20 million would be 30-35 million now, but those condos would have 2-3X increased in price (40-60 million). That, of course, assumes you can unload them. :)

By Want to get serious?

September 8, 2006 04:40 PM | Link to this

Ok, you want to be serious. Here is some serious news that will happen.

I see many small time realtors closing up shop due to cost and brokers losing their shirts on bad investments, and the big boys like Remax, I.P., C-21 will get their listings.

I have seen many listings get taken off the MLS and come back later on at a higher price.

We will see the intrest rates going up anotehr point by March, and prices not going down.

I don’t see the govt. helping out the “have nots” who have little money to buy.

I see more new construction, at even higher prices.

You will never see the insurance giving anyone a break.

I hear a lot of hype of the hurricane season and the big housing crash that was going to hit Florida. And everyone will say, it was all hype by the media and bashers.

We will read about the higher rate of people expanding into Florida.

You will read an increase of home sales from October to next May, and the median price going up.

To Curious, you would be surprise the number of multi-million dollar homes there are west of I-95. The best way to figure out the median price home is to look at that neighborhood you are want to buy in only. Take the last six months into account. What cost or sold across town has no reflection to that house or condo price you are looking at. Sales along the Palm Beach island and several other high cost property areas do not represent the median price for the county. If they did, our median price would be much higher. No realtor will tell you that. Most realtors today are throwing the recent home sale into the condo sale at the county, this is to raise the median price of condos in the county. You see, many realtors bought condos last year for investments, and are taking a bath with the price declining on them. The median home price gets adjusted later on by someone at the property appraisers office, with the median price moving up. The Palm Beach Post tries to show the median prices of areas once a year. But they divide the areas by street boundaries and not what type of areas (neighborhoods, homes, condos, townhomes). So their numbers are skewed and it is not realiable for home buyers or sellers. Most people who own those properties along the ocean are either old money, banks, corporations, investment groups, and some new money. Most of that property just sits empty throughout the year. Realtors don’t want to see the median price go up, they will do anything possible to keep it low by taking out a zero or mislabeling the type of property. All because they fear they cannot sell above the median price and rather sell low than high. Hey, it is not their property they are selling…..it is yours.

See……I did not call anyone a S.O.B. in this article.

By Mike FInk

September 8, 2006 05:14 PM | Link to this

How to survive the RE bust.

http://www.prweb.com/releases/2006/9/prweb429485.htm

The question regarding a national real estate bubble, and or a hard or soft landing according to the President of The National Mortgage Complaint Center/Homeowners Consumer Center “is about to get answered.” Mr. Thomas Martin the President of this group has indicated that the “bubble is going to be more like a nuclear detonation with consequences getting progressively worse, with no quick fix.” He calls it “the Hurricane Katrina of real estate, because everyone knew it was coming and no one prepared for what it would, or could do.”

By Rich R

September 8, 2006 05:30 PM | Link to this

Hey Mike Fink,

If that’s true, we may very well find a repeat of the S&L collapes.

Just make sure you have no more then $100K in any one bank. FDIC only insures each DEPOSITOR up to $100K, not each account.

That would really Suck out loud, but very possible.

and just for fun, “prices are going up as we speak” - Just a joke! but it was missing from easyabc’s last post. Do you think he/she’s coming around? LOL

By Reality

September 8, 2006 05:50 PM | Link to this

According to Want to get serious “We will read about the higher rate of people expanding into Florida” If so why does Palm Beach County have over 3000 LESS students than last year?! The answer is that families are moving out. What other demo stat do you need to see that the handwriting is on the wall?

By Home school mom

September 8, 2006 09:51 PM | Link to this

The 3000 plus students that are missing are being home schooled. I am a home school mom and on my block alone there are another 5 home school moms who took their children out of the school system here.

Broward school system lost 90 teachers who moved out of state this term. For every teacher that left, there were 5 more new teachers to take their place at lower wages of course. It is just a revolving door in Florida. People are always moving here and people are always moving out. Employers know that there are replacements for their employees and look forward to getting the new employees at even cheaper wages. Employers do not and will not increase the wages because for every employee they loose, there is another couple willing to work here at lower wages. That is life.

By TH

September 8, 2006 10:04 PM | Link to this

A friend of mine who teaches in the school system has had 6 students withdrawal over the past few weeks for NC, GA, SC….Homeschool, talk about living in a bubble…wow

By dsfdsf

September 9, 2006 01:34 AM | Link to this

LOL @ easyabc@yahoo.com aka $$$@bank.com aka NUMBER CRUNCHER aka PBC OWNER aka John.

He said “Even the realtors of today have to back to school to earn a college degree if they still want to sell homes in Florida in the future.” LMAO!!! He seriously pulls his posts out of his a*s, doesn’t he? LOL @ realtors needing college degrees.

He is so stupid he refuses to believe the law of supply and demand. Now it’s the realtors fault that the prices are moving lower because suddenly the realtors are lazy and they can’t sell things at market price. HELLO!!!!! The market dictates the price based on what people are WILLING to pay. Nothing to do with the realtor…but they weren’t greedy when they were shouting “buy, buy, buy!” No, that’s when your tract house was going up in value (on paper). LMAO @ this goon.

By Michael Fink

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

Lovely staistic from the OFHEO:

“The housing market is now the all-consuming economic topic, and ‘prices are falling’ is the everybody-says, everybody-knows factoid du jour. I hate to give credence to those happy to see prices fall, but they are falling. OFHEO says that in the second quarter this year the overall deceleration in national prices was the most abrupt ever measured.”

By Reality

September 9, 2006 09:17 AM | Link to this

Home school Mom, are you serious? You really expect us to believe that in the course of one year 6000 kids were pulled out of school so the parents could school them? Remember, usually Palm Beach county has an addtional 3000 students each year not 3000 LESS. Listen you can deny and stick your head in the sand but at some time you will have to see what is going on right in front of you.

By Kids Taught At Home

September 9, 2006 09:50 AM | Link to this

I have parents in my area that has their kids at home with tutors instead at a underrated school system. Home school mom is right. Maybe “Reality” is not a parent? I see many new schools being built in the county. You sound like a bitter person that cannot afford a home here. That could be the only “reality” at issue here.

By Reality

September 9, 2006 10:21 AM | Link to this

Kids Taught At Home- your transparent attempt to keep the bubble inflated is one of the main reasons we had a bubble. No bitterness here as I sold at the top of the bubble. Doubled my money in 4 years. Bought 600,000 home with 4002 sq ft. 5 bed 4.5 bath. My mortgate is 150000. My taxes are 3000 per year/ much better lifestyle. My real concern is that people know what is really going on in the marketplace. I can’t stand people misleading others for gain like what happened in the tech bubble. If folks really want to believe there are 6000 more kids being home schooled in pbc than last year then fine for them. Denying reality is their problem not mine. I just want to get the facts out there so people can make their own choices.