July 16, 2007

Florida: "epic slump", "everybody is trying to get rid of property", "property values are melting like ice cream"


Sometimes, I see a housing crash article so ugly it makes me cringe. Here's one from Florida.

It's still amazing how quick we went from lines in front of new home developments to lines outside the foreclosure auctions

Classic mania, classic bubble, and now a classic crash underway in Florida and around the nation. No matter what realtors on commission try to tell you.

Post-boom hangover lingers - Once ground zero for speculation, now in the throes of an epic slump

NORTH PORT -- The first thing you notice as you drive the hundreds of miles of crumbling roads in this once rapidly growing city is the enormous number of "For Sale" signs.

Every 9th or 10th house is either listed for sale or will be as soon as foreclosure proceedings are concluded.

"Drive any block in North Port and you will see four or five 'For Sale' signs in every direction," said Michael Tenn, a Daytona Beach resident still trying to sell the house his grandmother moved out of last year. "Everybody is trying to get rid of property."

A few years ago, it was just the opposite.

Speculation was rampant and home prices were bid up rapidly on the theory that retiring baby boomers would pay anything for a place in the sun.

It is a game that was played throughout Florida and across the United States during the boom. In North Port, it proved especially attractive because of the lower cost of land and houses, which allowed people of more limited means to play.

The victims of the bust are myriad.

"It's pretty doom and gloom," said Jason Painter, an agent with Program Realty LLC in North Port.

Convinced that wave after wave of retiring baby boomers would continue to spur growth for years to come, builders kept building.

Today, all that has come to screeching halt.
"We've come way down on price," Martin said. "We're just about where we were three years ago, and I don't see any upswing."

In the meantime, he is trying to rent the houses to cover his expenses. But rents have also plunged. "I have one house on a deep water canal that I'm renting for $895, and I used to get $1,100. The others I used to rent for $1,000 and I'm now getting only $800."

"There's a tremendous supply of homes on the market and demand is way down," Clyne said. "Property values are melting like ice cream, and no one knows how far they will drop. The only way to attract buyers is to keep moving the asking price below the rest of the pack."

A 1,600-square-foot home built in 2004 that might have commanded $203,000 during the boom is now worth $60,000 less, Black said.

An acre of land that went for $50,000 two years ago can now be had for $10,000.

42 comments:

Frank@NeverColdCall.com said...

I was in Florida this week, I think I'd live in Phoenix first. Everyone in FL looked like Larry the Cable Guy and in Neil Peart's recent travel essay "Roadshow" he points out that contrary to popular belief, Florida is actually the most redneck and backwards of all the deep south states.

No wonder why no one wants to live there anymore....

Anonymous said...

Why is this happening in Florida and not in places like Arizona.

Instead of rents going down 200, they have gone up at least 200 with more increases next year in Scottsdale, Chandler, etc.

Any intelligent thoughts on why????

keith said...

Nice try arizona realtor troll.

Rents are dropping in Arizona with over 80,000 empty and unwanted houses on the market in addition to hundreds of thousands of apartments and the disappearance of the illegal mexican homebuilder labor force. If anyone tries to raise your rent in arizona, move on.

and don't forget, you can rent in arizona for pennies on the dollar vs. the cost of buying

Here's a just a sampling of "reduced rent" desperate ads from craigslist

Jul-12 $810 / 2br - PRIME TEMPE: LAKE/MILL AVE- POSS. ASSIST MNGR FOR REDUCED RENT (TEMPE) pic

Jul-12 $895 / 3br - Reduced Price Home for rent in Phoenix (Phoenix) pic

Jul-11 $1095 / 3br - *REDUCED* 4+ ACRE Horse Property in Marana for RENT (Marana) pic

Jul-11 $1175 / 2br - REDUCED RENT! Beautiful Condo Home in Grayhawk (North Scottsdale) pic

Jul-11 $595 / 2br - Reduced Rent & Move In Costs**Gated (quiet) community (7th St & Camelback) pic

Jul- 9 $1585 / 3br - Reduced! For Rent or Rent To Own. Lots of Amenities! (Ahwatuk

keith said...

more from arizona apartment vacancy report:

Competition from new supply, investor owned condominiums and unsold condominiums exerted downward pressure on market occupancy in spite of constructive population and employment trends.The 1Q07 market average fell 30 basis points to 93.0%. Occupancy isnow down 140 bps from the 3Q06 peak and 70 bps year-over-year. • 2007 supply promises to be the greatest in four years, a heavy burden for this market. Moreover, condo conversion activity will have a smaller positive impact on inventory. • Reis forecast a 30 basis point increase of vacancy in 2007, followed bya gradual decline as supply retreats to trend levels in 2008. RANK: 34tthout of 502008 VACANCY RATE OUTLOOK: Stabilizing

Anonymous said...

Florida property crashes are almost comical

David in JAX said...

The Jacksonville apartment vacancy rate has dropped from 96% in June 06 to 93% occupied in June 07. That's 3% in one year. 3% may sound like a small amount, but in the property management business it is HUGE. Over 95% is considered robust and below 90% is panic time. We are probably going to hit panic at the end of this year. This rate is only for apartments and the overall rental rate is not published in this area. I believe if you put condos and homes in the mix it would be well past the panic point.

The price of vacant land in NE Florida has dropped well past pre-bubble levels. As I've posted before, I get e-mails several times a week from people trying to unload for just about any price.

Hymen Ho said...

Can we help these people with a government check.... they we're lied to after all. It's not their mistake.

Anonymous said...

That's great news. I've wanted to move to FL for a long time. If in a year or two I can buy a house for $200K again, I'm there.

Anonymous said...

Keith,

Examples of craigslist ads don't mean much. Craigslist ads in general - whether for rentals, real estate, cars, you name it - start out at absurd price levels and then work their way down. I've done it too with cars. Ask $30K, wait 2 weeks, lower to $28K, wait two weeks, lower to $26K and then sell it for $25K. Had I needed to pay for the ad, I probably would have asked $28K to begin with, but since it's free, what the hell, no cost i n playing around with the price.

I have no clue whether rents are going up or down in Phoenix, I just know that craigslist asking prices aren't a good judge of market values.

Anonymous said...

More important is Vodafone' bid on Verizon.

The falling dollar is making U.S. companies cheap and foreigners are going to swoop in and buy up the best. Corporate headquarters will be moved overseas and jobs will be cut.

This is the peace time destruction of America!

Shakster said...

As Andrew Dice Clay would say......
OHhhhh!!!!
He also mentioned a RealHO on his,ooops won't mention that one.
From Bubble denial to Crash Denial.

Anonymous said...

South Florida still in denial..Housing asking prices still holding steady..Nothing is moving but that hasnt stopped the sellers and 1000's of inexperienced realtors from listing homes at 2005 prices. It really is laughable.

Anonymous said...

pwned

Anonymous said...

That cop has a realtor by the tail!

Anonymous said...

At least Florida has hope. 1 good hurricane can get rid of a lot of dead wood. California should also do well after the big one. Here in Colorado we are going to have MCMansion crack houses.


Sequoia512

fatboy said...

News flash for Keith - repo-ed houses don't figure in the rental market, and most flipper houses won't either. The banks and flipper don't want renters trashing their properties so they either sit vacant or the flippers and/or relatives live in them.

Rents are going up because inflation is chugging along at 10% now. You HPers who dream about falling rents are delusional. Look at the price of milk, gasoline, college tuition, property taxes, etc., and with a straight face try to explain how that translates into falling rents.

westchester chick said...

Hymen Ho - I hope you're kidding. I do feel sorry for people that were truly duped but an awful lot of people knew exactly what they were doing. No one can possibly afford a $600K house if they make only $50k/year. Even in the days when you had to put 20% down for a mortgate - the bank would always tell you that you could afford more than you actually could. It doesn't take a rocket scientist to figure out monthly expenses cannot exceed monthly income. If the government wants to bail the "victims" out - they should go after the companies that perpetrated the crimes with monetary penalties, better policy and perhaps provide better subsidized housing programs for the future homeless population. It's one thing to "lift up thy brother" when he's ailing, can't work and can't stand on his own - it's quite another to bail him out just because he's an idiot.

Anonymous said...

Nice comeback to the Arizona realtor troll/liar, Keith. That's the best indicator of all, that they're trolling the blogs trying to spread lies instead of out there selling all the "great" real estate deals. We need to send Arizona realtor troll to ethics training at a used car dealership. Maybe the realtor/liar will learn from the more ethical profession of used car sales.

Anonymous said...

WOW, SOME CRASH!
STILL WAITING!

DOPES!!!!!

cool widget - vot 4 paul said...

Hey Kieth consider putting a live election ticker widget from this site on your blog. Gonna be a lot more interest in this soon.

http://elections.newsvine.com/

i saw this at
mikeindustries.com

its pretty cool. if we get it on all the bubble blogs Paul will start to get more exposure maybe?(im not sure if there is a better one or not, i just hit this)

Multi-Use said...

Dow closes in on 14,000 you chicken littles!

Frank@NeverColdCall.com said...

To the AZ realtor troll,

I left AZ 5 months ago. I was renting a $600k condo at Kierland for $1,500/month. Last I heard the owners still hadn't rented it out to anyone else. I know people in AZ who are landlords who are going bankrupt because they can't fill their rentals. Drive around any neighborhood and you'll count "for rent" signs by the dozens.

Those million-dollar condos at Optima Camelview near Fashion Square can be rented for as little as $2,000. Just look on Craigslist any particular week.

You need to stop drinking the kool-aid (or smoking the crack) and get with the times.

J said...

Where I live in Az rents are dropping foreclosures are way up and people holding RE will lose a lot of money as the arm resets keep happening.Next door snooty homeowner is getting foreclosed on as we speak.I guess he was wrong he used to brag about how much his home would be worth in a few years instead the value has plummetted .Oh well another genius bites the dust.

westwest888 said...

hymen_ho - you have some complex feelings but your message is lost among the lack of descriptive emoticons, conjunctions, and pronouns in your sentence.

This makes me think that people who, say, get a $500,000 loan should by law have to:

1. Have earned GED or high school diploma.
2. Have US citizenship or permanent resident status. Everyone else invest in REITs.
3. Pass a ten question exam administered at a federal agency on amortization, interest rates, and loan types.
4. Prove their income.
5. Prove cash holdings in the amount of 5% the purchase price.


> Hymen Ho said...

Can we help these people with a government check.... they we're lied to after all. It's not their mistake.

Joe Who? said...

These people need our help before things get too far out of hand. I's gladly support a penny per gallon added to the gasoline tax, that could be placed in a govenment fund to make sure these people can afford to remain in their homes. Otherwise we're facing an epidemic of homelessness, social upheaval and a slow descent into anarchy.

Anonymous said...

Hey David in Jax,
Do you have any links for those stats? I have a friend who owns properties in Jacksonville and swears up and down that Jacksonville is doing "just fine".

Anonymous said...

"An acre of land that went for $50,000 two years ago can now be had for $10,000."

Assuming that's true, it might almost be time to do some buying in Fl.

Anonymous said...

No comments here about rising homeowner insurance rates in Florida? No comments here about rising property taxes in Florda on second homes? No comment here about whether these factors are relevant anywhere else in the U.S.A.?

You're looking at your basic FACT-FREE blog, folks!

Anonymous said...

Anon said:"I have no clue whether rents are going up or down in Phoenix, I just know that craigslist asking prices aren't a good judge of market values".

LauraVella said:In the bay area they are! I found the place we are now renting on craigslist. We saw 5 other rentals that were in our budget that we looked at and settled on this one. Actually our rent was listed at 1850mo but when we sighned the paperwork-they dropped it to 1800mo! We are happy and hope that rent goes down next year.

Anonymous said...

A "penny a gallon"?

That's 2 billion dollars a year.

PEANUTS.

How about $1 a gallon. Would you support that you clown?

Why should I have to pay to help people "afford" what they couldn't afford in the first place. What kind of system is that? Buy shit you can't afford and then cry poverty when you start to lose it. "Bail me out!". "No Fair!".

Why don't you pay $5 a gallon and buy me a Ferrari.

Keyser Soze said...

Anonymous said...
That cop has a realtor by the tail!

July 16, 2007 3:04 PM

This post had me laughing out loud!!!!

David in JAX said...

Anonymous said...
Hey David in Jax,
Do you have any links for those stats?...


The occupancy rates for the area are published by the First Coast Apartment Association. Our company is a member and gets their monthly newsletter. If your friend is a landlord, he or she should join just for the rental stats. Each month lists the area occupancy rate other valuable rental statistics. The occupancy rate and rents are very much down in NE Florida. On a persnoal business note, our company has about 1,000 units in JAX. We have gone from having near 100% occupancy and deep waiting lists to occupancy in the low 90% range. I assume your friend is renting SFH's since he doesn't have this information. If so, he should hold on to his tenants because they are getting harder and harder to come by.

http://www.fcaaonline.com/

David in JAX said...

Anonymous said...
No comments here about rising homeowner insurance rates in Florida? No comments here about rising property taxes in Florda on second homes? No comment here about whether these factors are relevant anywhere else in the U.S.A.?

You're looking at your basic FACT-FREE blog, folks!


Come on. This blog (and others) have beaten those issues to death. If this blog was a continual discussion of taxes and insurance it would be the most boring blog in the world and few people would read it. I know I tune out when I read more about FL taxes, insurance and hurricanes because it is an issue that dominates RE blogs.

Guy Daley said...

That cop has a realtor by the tail!

Okay if I had been drinking something, it would have fountained from my nose. That was pure comic genius. I just wish you weren't anonymous so I could thank you personally.

hahaha said...

My rent 3 years ago was $849/mo

My rent today for the same place is $792/mo


I will buy a house in a year or two from a bank REO or desperate builder selling for below cost.

louie said...


"An acre of land that went for $50,000 two years ago can now be had for $10,000."

Assuming that's true, it might almost be time to do some buying in Fl.


How much did that acre of land cost in 2000? It was probably $5000.

Anonymous said...

Many people ended up dying flat broke during the California Gold Rush. Many others lost everything at the close of the Golden 20's. Many would-be retirees couldn't retire because of the dotcom scam. How many lives will be ruined by the RE ponzi scheme?

Stephen said...

Anonypussy 12:32 said . . .

"Rents are going up because inflation is chugging along at 10% now. You HPers who dream about falling rents are delusional. Look at the price of milk, gasoline, college tuition, property taxes, etc., and with a straight face try to explain how that translates into falling rents."

---------------------------------

Do you understand the difference between real dollars and nominal dollars?

Anonymous said...

"I assume your friend is renting SFH's since he doesn't have this information. If so, he should hold on to his tenants because they are getting harder and harder to come by."

Yes, he's renting SFH's, and thanks very much for the link!

Anonymous said...

"How much did that acre of land cost in 2000? It was probably $5000."

Which is why I said "almost".

Anonymous said...

The HP game is on again.

Step 1. Claim rents are falling.

Step 2. Claim inflation is 15% for everything but housing.

Step 3. Realize #1 and #2 is ridiculous.

Step 4. Admit rents are rising but throw in the gibbersih about real vs nominal.

Step 5.Go back to the 1 bed/1bath ghetto basement apt and surf dailykos for 4hrs, then report back to HP armed with more "facts" .

Anonymous said...

I just rented a 2400 square foot house in Scottsdale AZ - currently listed for sale @ $450k. $1350 per month. I was able to choose from 10 nearly identical homes in the same subdivision currently offered for sale or lease. Do the math - buying doesn't make sense if you factor in insurance, HOA, taxes, maintenance, and opportunity costs. Appreciation? not for a while with so many homes on the market, possibly never, if the median income in the zip code doesn't come up over $50k - liar loans don't work anymore...