Florida Real Estate Market "Report"

[FRED]

"Report" from the front

[ax]

Re: Florida Real Estate Market "Report"

"Report" from the front

As mentioned previously, I live in S. Florida about 50 miles north of Plantation. The housing market is in a word, awful. One of the many things that worry me most going forward was expressed in a NYT article concerning condos (http://www.cnbc.com/id/24641425). Here is an excerpt:

"Each of the remaining owners has had to chip in an extra $1,000 assessment and $50 more a month for cable and Internet. That is on top of Ms. Sanz’s $450 monthly maintenance fee."

As HOA fees continually go uncollected, the builder accumulates more and more debt. As per our contract, we don't take over the HOA until 90% of the units are sold. Now, that may never happen, but when it does, a large assessment is undoubtedly coming. In the meantime, multi-family dwellers (supposedly illegal) have become rampant and destruction of community property is a weekly occurrence. To collect some of these fees, the builder has resorted to "deactivating" gate clickers and cutting off cable (successful I'm told).

On a positive note, 2 homes in my subdivision have sold in the last month. One a foreclosure and the other a builder-reduced sale.

[jimmygu3]

Re: Florida Real Estate Market "Report"

My brother, who is as much a believer in FIRE economy dogma as I am a contrarian, sold his Pompano home last year and has been renting a condo on the beach. Lucky move, as he did not see the collapse coming. He was, however, wise enough to take what the market would bear rather than wait around for prices to come back up.

[touchring]

Re: Florida Real Estate Market "Report"

As mentioned previously, I live in S. Florida about 50 miles north of Plantation. The housing market is in a word, awful. One of the many things that worry me most going forward was expressed in a NYT article concerning condos (http://www.cnbc.com/id/24641425). Here is an excerpt:

Is there an excess supply of homes in Florida right now? Where do people stay if their homes are foreclosed?

There's a big condo building boom going on in Singapore. If all the projects in the pipe are developed, the supply is expected to increase by 30% over the next 4 years.

I would be curious as to the supply versus demand situation in Miami?

[ax]

Re: Florida Real Estate Market "Report"

Is there an excess supply of homes in Florida right now? Where do people stay if their homes are foreclosed?

There's a big condo building boom going on in Singapore. If all the projects in the pipe are developed, the supply is expected to increase by 30% over the next 4 years.

I would be curious as to the supply versus demand situation in Miami?

That may be the understatement of the year. Gross excess supply increasing daily with pending foreclosures, auctions failing at an all-time high, and builders unable to sell any inventory.

Compounding the difficulty in selling your own home is the ability of the developer to offload excess land to another developer who may not finish the intended project. My friend lives in a community where about 500 of the 1800 proposed homes will never be built. His builder has sold tracts of land to another builder who will now put multi-family dwellings smack in the middle of his community! These units may or may not match the decor of the original community. That ain't good for property value.

Where do people go? Good question. Some people go nowhere. Foreclosures are taking forever down here much to my dismay, so some are simply squatting in their own homes. "In Florida, a St. Lucie County (2 counties north of me) court actually added a night shift to handle the massive backlog of foreclosure filings. The clerk of the courts was quoted as saying the caseload has become, “just horrendous.” The court used to handle about forty filings per month. http://www.cnbc.com/id/24615625

In January they were tracking 715 foreclosure filings. Some are reporting lower numbers because the numbers simply can’t get into the system."

Others are doubling and even tripling up with family members. Anecdotally, I can tell you there has been some flight to Georgia and the Carolinas. My friend was able to sell his house for break even and move to Hickory, NC where he pays about $600/yr in property taxes on 3+ acres.

The condo glut is another huge problem. The most recent estimates I've read on Miami range from a 37-month to 4-year backlog! And don't be fooled into thinking it's just Miami. Waterfront condos span from Miami to Stuart, about 120 miles of overbuilt space that is causing the type of dilemma from my previous post.

[touchring]

Re: Florida Real Estate Market "Report"

The condo glut is another huge problem. The most recent estimates I've read on Miami range from a 37-month to 4-year backlog! And don't be fooled into thinking it's just Miami. Waterfront condos span from Miami to Stuart, about 120 miles of overbuilt space that is causing the type of dilemma from my previous post.

3 years is bad. So the Miami situation is not just subprime or foreclosure, but also too many excess units?

[ax]

Re: Florida Real Estate Market "Report"

3 years is bad. So the Miami situation is not just subprime or foreclosure, but also too many excess units?

The condo glut was particularly susceptible to vultures who thought that they could buy 2-3 units, live in 1, and just watch their money grow exponentially. Instead, they can't even afford their mortgage let alone 3. There are stories daily here of sub-20% occupancy in these massive projects which has all the benefits of increased crime, poor utility use, etc. While many projects won't be finished, they line downtown skylines with dirt piles and cranes.

[metalman]

Re: Florida Real Estate Market "Report"

The condo glut was particularly susceptible to vultures who thought that they could buy 2-3 units, live in 1, and just watch their money grow exponentially. Instead, they can't even afford their mortgage let alone 3. There are stories daily here of sub-20% occupancy in these massive projects which has all the benefits of increased crime, poor utility use, etc. While many projects won't be finished, they line downtown skylines with dirt piles and cranes.

ah, those were the days...

These were launch parties for condominium projects, one of the stranger forms of nightlife in a city obsessed with real estate. Alcohol and music were abundant, but so were sales agents and brochures with statements like, "It is the impeccable aesthetic of textures and calming shades—limestone and blue marble—that further distinguish these voluminous spaces."
—Salsa Dancers and Stunt Men? Must Be a Miami Condo Project, The New York Times (registration required)

Dancing, Booze, and Overpriced Houses

[ax]

Re: Florida Real Estate Market "Report"

ah, those were the days...

These were launch parties for condominium projects, one of the stranger forms of nightlife in a city obsessed with real estate. Alcohol and music were abundant, but so were sales agents and brochures with statements like, "It is the impeccable aesthetic of textures and calming shades—limestone and blue marble—that further distinguish these voluminous spaces."
—Salsa Dancers and Stunt Men? Must Be a Miami Condo Project, The New York Times (registration required)

Dancing, Booze, and Overpriced Houses

Along with people camping out for 3 days to be first in line for the glorious opportunity of being in a lottery for a primo unit.

[Starving Steve]

Re: Florida Real Estate Market "Report"

I am not in Florida but rather, central coast California. And from what I can see, nothing is selling. There are endless listings and almost zero sales.

Add to this mess, outrageous--- and I mean OUTRAGEOUS--- prices. Florida, by comparison, looks prudent.

Then add into this mix here in California: the gang violence, the Nortenos versus the Surenos, the drive-by shootings in Salinas and Watsonville, the non-existent job market, the field-worker starvation wages, the lack of unions, the tech blow-out in Silicon Valley, the energy crisis, the impending bankruptcy of the State of California, the pending bankruptcy of Vallejo, the mess in the public schools with the phonics crap and the English-only, 1 in every 204 homes already bank-owned in California, the La Nina drought cycle, the lack of any kind of realistic energy plan (except for silly windmills and solar roofs), the $127 oil, Bush in Washington, the Republicans blocking everything in the US Senate, the bozo-Bernankee running the Fed, and you have a total disaster.

This is where we are now. I'll keep you informed of how this mess festers.

[Rajiv]

Re: Florida Real Estate Market "Report"

There's a big condo building boom going on in Singapore. If all the projects in the pipe are developed, the supply is expected to increase by 30% over the next 4 years.

Touchring, from "Land Value Taxation Around the World"

Hong Kong and Singapore - Both of these Asian city-states are small in area, heavily urbanized and densely populated. Because of the scarcity of land, the majority of land in both cities is publicly owned and distributed to developers via long-term leases. In this way, ground rent provides a sizeable portion of public revenue, and taxes, on both personal and corporate incomes, are relatively low. Also, many people live in public housing in both cities (86% of Singapore's population, and roughly half of Hong Kong's). This keeps the cost of housing low, which tends to dampen costs for employers, helping to keep businesses competitive. Hong Kong has now been returned to the jurisdiction of China, but its land-tenure policies have not changed and it remains prosperous.

Has the above underlined situation in Singapore changed? If not, I do not see much impact of the excess supply.

See also the two threads - Ricardo's Law - The Great Tax Clawback Scam
and Beating the Bust: Land Value Taxation

In particular, see my comments about the real estate market in Pittsburgh PA -- there was no real estate bubble in Pittsburgh, and hence no real estate bust -- that I believe is because of the property tax structure that reduces the probability of a real estate bubble from happening. I believe that things are similar in both Singapore and Hong Kong, though becuse of a similar effect but from a different mechanism.

Comparing the situation in San Diego to Pittsburgh, one has the following

San Diego median income 64,273 median house 569,900 ratio 8.9
Pittsburgh median income 30,278 median house 74,000 ratio 2.44

The ratio 0f 2.5 had been considered the rule of thumb historically.

[GRG55]

Re: Florida Real Estate Market "Report"

Along with people camping out for 3 days to be first in line for the glorious opportunity of being in a lottery for a primo unit.

Back in March FRED posted this video about a different sort of real estate related "camping out" experience... :eek:

http://www.itulip.com/forums/showthr...31327#poststop

[Thailandnotes]

Re: Florida Real Estate Market "Report"

In Singapore, rents for people not living in government housing are sky rocketing. Renters are being told that as soon as their leases run out, their rents will double. People living in homes are having to move into apartments.

[touchring]

Re: Florida Real Estate Market "Report"

In Singapore, rents for people not living in government housing are sky rocketing. Renters are being told that as soon as their leases run out, their rents will double. People living in homes are having to move into apartments.

A lot of apartment blocks, some only a few years old, were sold to American hedge funds, and demolished to make way for new apartments, causing a sudden shortfall in rental housing. A lot of hedge fund money poured into Singapore last year, driving up the Singapore dollar versus the American dollar.

[Thailandnotes]

Re: Florida Real Estate Market "Report"

A lot of apartment blocks, some only a few years old, were sold to American hedge funds, and demolished to make way for new apartments, causing a sudden shortfall in rental housing. A lot of hedge fund money poured into Singapore last year, driving up the Singapore dollar versus the American dollar.

I'm hoping you can elaborate. It's always amazing to see buildings being torn down less than 10 years after they were built, especially if they are big with lots of units. Did the value of that land/location explode that much? It's very suspicious, and looks too much like money laundering. Condo occupancy where I live is less than 30 percent. You can read about it or just drive around and look at 40-story condos with only 18 apartments with lights on at eight pm. Yet, the cranes are everywhere just ten years after '97, in which a speculative housing boom and the money borrowed to pay for it brought on the crash of Thailand's currency. Billboards and sales offices are everywhere. And the prices are ridiculous...higher than you would pay in many cities in the US.

Singapore has an influx of expats. International schools are full, with waiting lists.
Do you really think hedge funds are driving up the Sing dollar? The currency seemed to be moving in concert with other regional currencies.