Conversely, if the demand decreases, the opposite happens. If the demand starts at D2 and then decreases to D1, the price will decrease and the quantity demanded will decrease—a contraction in supply. Notice that this is purely an effect of demand changing. The quantity supplied at each price is the same as before the demand shift (at both Q1 and Q2). The reason that the equilibrium quantity and price are different is the demand is different
December 12, 2006
Psst... hey buddy... wanna buy a Miami condo... no?... you sure... wadda ya got to lose?...
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10 comments:
I wish someone would publish what percent of these units were bought by speculators
90%?
Istill love this "upside-down on mortgage" topic of yours!!!
(http://housingpanic.blogspot.com/2006/12/oh-man-thats-gotta-suck-paid-874890-in.html)
Oh, man, that's gotta suck. Paid $874,890 in November 2005. House now worth $639,990 a year later. Ouch.
And this map is just of Miami Beach, where some people do actually want to live. There are also hundreds of condo towers that have popped up just across the water in Miami proper where not so many people want to live. The supply there is just sick.
Growing up, my family owned a ski condo in Park City, UT. It was empty about 95% of the time on weeknights and 50% during weekends. Good thing my father wasn't reading a blog like this. He would have sold at about 1/20th of what that condo is worth today because he didn't see a lot of lights on.
A lot of these condos owned by foreigners, specifically S. Americans and Brits as vacation homes, even weekend getaways. So it would make sense that most of them will be dark most of the time, especially on weeknights.
I'm not saying there isn't a bubble in the S. FL condo market, but your observation doesn't prove anything.
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Vertias Faust said:
The "waterfornt" towers(of which there are hundreds between South Beach and Ft. Lauderdale are larely empty. The lights are on in the hallways and the common areas, but the condos themselves are largely vacant. Some are sparcely populated
My Grand Theft Auto: Vice City map looks just like that.
Article last week about Miami asked residents to use one word to describe their city and the choice? Corruption.
Said more people are moving out than in and that the medium income was $33,000 and one of the lowest in the nation and that Miami, though safer now, was congested and polarized between rich and poor, black/white/hispanic.
A lot of those units may be owned by foreigners, which is a good way to get some dollars back.
Still, I look on Craigslist daily and see very few bargains out there so why are the prices not imploding? Is the demand being filled by South American's hedging their bets against people like Chavez?
foxwoodlief,
The asking prices aren't coming down yet because many, many asking price reflect what the seller needs to receive to cover what they owe to the bank, either their original loan amount (plus any additional HELOCs) or a short settlement amount they have negotiated with their bank.
In alot of cases, asking prices won't really start dropping significantly until there are more bank owned properties and short settlement amounts start dropping as banks become more unwilling to take on anymore inventory.
Asking prices are very sticky and don't provide an accurate view of a market. Closing prices are a better judge of a market, although those are also imperfect as they often don't accurately reflect incentives and cash back at closing.
So you're saying it is impossible to know whether prices are really falling but you are convinced they are. Interesting.
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Tabsaco said:
Asking prices are very sticky and don't provide an accurate view of a market. Closing prices are a better judge of a market, although those are also imperfect as they often don't accurately reflect incentives and cash back at closing.
chauncy,
The double digit YOY median price declines might be a clue that the Miami market is going down. You could also look at the 24 or so months of inventory that is on the market.
Going by the asking prices, though, is not a good gauge and going by the closing prices is better, but still imperfect for the reasons I described.
Good comment, though, smart guy.
Keith, once again you are an idiot. What you are trying to describe is a shift in demand but no fundamental factors have caused a shift in demand. All that is happening is movement along the demand curve. You seriously have to be one of the biggest idiots. Why do you people listen to an uneducated retard spewing hate and extreme predictions on the housing market?
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