February 20, 2006

Some wisdom in Florida: The Summer of 2005 is over and isn't coming back


Some are seeing the light. It's pretty tough not to when it's shining blindingly right in your face...

The Summer of 2005 is over and isn't coming back. This is a painful lesson for sellers trying to base their asking price on comparable sales from August."Our members are telling us that owners are beginning to back off prices 10 to 15 percent because they're not getting people pressing contracts into their hands," says Belton Jennings of the Orlando Regional Realtor Association.

Only fools predict the housing market. So here I am, once again playing the fool. Your house won't be worth any more by the end of the year.

Inventory has quadrupled in a year. That generally is an omen of price drops to come. It allows potential buyers to say: "Well, if you won't give me that price, the guy down the street says he will."This is one reason why values dropped 4 percent in December.

But if you paid $350,000 for a house three months ago and the builder now is selling the same house for $350,000 but offering $40,000 in incentives, your house is worth less.Try selling a used condo when the developer offers to pay association fees for two years on new units.When prices settle down, and finally wind up where they really belong, then the appreciation cycle will begin again -- but at a sane pace.

19 comments:

BigDaddy63 said...

Keith,

for the ultimate in South Florida lnacy, visit www.condoflip.com. Care to buy a condo for over $1000 a sq ft in an unfinished building?

Insane.

moman said...

2005, 1926. Both years began with people buying swamps for ungodly amounts of dollars, both years had a severe hurricane hit Miamia (Wilma was a lot more severe than the media played it out), and both years were the year that the singing for the Floirda housing market stopped...

Anonymous said...

Keith,

How about a reader survey of the absolutely WORST hellhole one could live in that also has a housing bubble, and why it is so bad? There are many comments about how unpleasant Florida and Arizona and Las Vegas are, but few other places with bubbles are described as utterly horrible places to live, but are just overpriced.

CA escapist said...

The inland empire of CA gets my vote for both bubble and hell hole. Insanely hot. Ugly tract housing. Pollution. Traffic. Gangs. Miserable schools.

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Anonymous said...

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