January 20, 2006

So 2000: Home sales fall "off the cliff" - like tech just a few years back

I was amazed in 2000 when I read what was happening to Cisco, Oracle, Intel etc. - when inventory was hitting a crazy peak, and at the same time orders fell of a cliff.

Skip forward 5 years - housing starts are at an all time high, just when home sales hit the wall.

Supply. Demand. Any questions?

Southwest Florida home builders, subcontractors and suppliers are beginning to fret about the state of their industry.Many have seen sales drop in the past three months. If that trend continues, the regional economy could be in for a rough year.

Whether inflated prices, rising interest rates, fear of hurricanes or a pullback by speculators are to blame, all eyes are fixed on what will happen during the next two months -- a time considered the high season for the sales.

"Sales have just fallen off the cliff," Wetherington said. "There's going to be a dramatic slowdown over the next six months."If he is correct, everyone connected to the powerful housing industry, from roofers and real estate agents to interior decorators and mortgage bankers, will feel the impact.


grim said...

I'm sure everyone is familiar with the Centex blow out sales that have been going on..

Centex ad parody


Anonymous said...

One of my Cuban-american friends, now one of Sarasota's most honest estate agents, used to laugh when car dealers pulled these "1 weekend only" sales. Nonsense, if they have to sell at that price, they will next week too. The tide has turned.

In spite of termites, fire-ants, hurricanes, red-tide, heat and high A/C costs SRQ was a desirable place to live (I rented there.) If they're having a hard time selling there, the prices are just too high.

Only so many people will want to retire to a place where health care workers, pharmacists, police, firefighters and other essential service providers can't possibly afford to live.


Poof - 25% Underwater Overnight
How would you like to wake up in a house that declined 25% in value overnight?
If you are a proud Centex owner at "Martins Crossing" in Florida, it just happened to you.

SAVE $105,000 - Centex Close Out - NOW $294,000 - NEW Single Family Home in Martins Crossing - 4 Bedroom, 2 Bathroom, 2 Car Garage - 1,695 sf.

Let's see.

Save $105,000
Now $294,000
PP $399,000

$105,000/$399,000 = 26.32%

$105,000 just went up in smoke.
That ENTIRE subdivision just took a $100,000+ hit.

Wait a second.
This can't happen, can it?
They are not making land in Florida anymore are they?
People want to move to Florida right?
Did it matter?

This exact scenario is going to play out in bubble area, after bubble area, after bubble area.
The party has just started.


Anonymous said...

What WE must remember is that it is PRIME SELLING SEASON in the warm climes of Florida or San Diego... Usually the snowbirds would be out SHOPPING!

This does not bode well for the coming Spring when most homes get listed up North! Up North the listing are popping up all over the place as the Speculators try to bail out! Just read the CNN/MONEY article! Look at all those for rent signs on the spec houses as the speculators get NERVOUS!


I expect that flood gates of listings to really burst in the Spring............ fasten your seat belt... it'll be a rough ride Virginia!

Anonymous said...

With that 200+ pump and DUMP drop on Wall Street.... The speculators will looking for the window latch!

Grinch34 said...


I love the saying "They not making any more land" to justify these insane prices. Great blog!!!

Anonymous said...

Of course Florida is completely built out, so homes here will continue to appreciate much faster and since everyone in the country wants to move here that will make it all the more expensive (great realtor talking point).

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