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Is Florida housing a bubble? One economist says no...


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September 09, 2005

Is Florida housing a bubble? One economist says no...

Dean Foust

Few markets have boomed like Florida. Prices there are up 33% in the past year, up 105% over the past five years, and have risen a honking 180.7% over the past decade. Amid all the concerns that Florida is a bubble just waiting to be pricked, one economist, Mark Vitner of Wachovia Corp. (who in a previous like was an economist for a Florida bank) has come out with a new report arguing that Florida isn't really a bubble. While Vitner currently works out of Charlotte, N.C., he knows a little about the Sunshine State: Prior to joining Wachovia, he was an economist for Barnett Banks in Jacksonville, Fla., for about nine years. His arguments: The robust growth in Florida's population, coupled with the inability of Florida builders to get houses up fast enough, has created a case where demand for single-family homes is vastly outstripping supply. Florida homeowners will be heartened by Vitner's analysis. Read on...

03:41 PM

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That report is an excellent read.

I still disagree on some parts though. I live in the Tampa metro area and know that many jobs created here are not the high paying ones. Call center jobs---$40k a year. Not horrible, but it's a stretch to afford a $250k house on that kind of salary, espeically once interest rates rise back to historical norms.

Other factors including communting times, lack of career opportunities, and spraw (yes it's happening here as well) may cause some urban professionals (yuppies) to move back up north. I am one of those yuppies, and the price increases on everything from housing to insurance is enough to make me want to say "enough is enough" and get a better paying job with better opportunities up north. Winters might be colder but the wallet will be fuller.

Posted by: Wes at September 12, 2005 12:17 PM

But this argument suggests it is a bubble because once construction catches up with demand, and there is no reason to expect supply not to catch up with demand eventually though it could take a recession to do so, prices could fall.

Posted by: Lord at September 12, 2005 03:08 PM

I don't think the housing bubble will burst in Florida. Too many people want to move there. A lot of baby boomers from the north and people from Europe have the money to buy at peak prices, as the dollar continues to slide.

There may be a slow down and a slight decrease in value but there won't be a crash. Florida is too popular with a lot of people wanting to retire there

Posted by: Chris at October 31, 2005 10:33 AM

Chris:

I don't understand your comment. You think that people will want to move to FL and live in a subdivision once they retire?

I think FL is going to slow down - as more poeple move here and turn the "new south" into the north it will lose all of it's allure except the weather - and the way it looks, hurricanes are doing a good job of making the weather look crappy.

I thought the dollar was rising as well.

Posted by: Wes at October 31, 2005 04:11 PM

Just sold my house for 480k, i built it for 150k. My taxes are 3k the person buying my house will pay about 8k to 9k. My house insurance has more than double. The new owner got a estimate of 2k. Ten thousand dollars is quite a bit on money for taxes and insurance. I am taking my profit to smith lake in alabama. Taxes 400 dollars a year, for a bigger house with 2 car garage and a guest house, with a pavillion. 3 acre's of land, 535 ft of water frontage. Its the third cleanest lake in the country. As soon as people start getting their new tax and insurance bills, they will wake up. Home inventories are rising, that means only one thing to me, prices will go down. Its already starting in some markets. There are plenty of places that are nicer than florida, you just have to look around.

Posted by: George at November 9, 2005 01:11 PM

The dollar has been rising for months, so are interest rates, taxes, house insurance, fpl bills are up too. Hurricanes are starting to get on people's nerves also. Florida better do something about their tax system. People will get sick of paying huge tax bills.

Posted by: George at November 9, 2005 01:20 PM

As a young professional living in South Florida I can attest to the fact that the housing market is OUT OF CONTROL. While everyone is reveling in the obscene amounts of money they've made selling their first home or buying expensive one named condos like zenith or pinnacle I think we're all overlooking one very important fact...who's going to work? If anyone honestly believes that the baby boomer retirees and South American and European vactioners want to work they are sorely mistaken. When people with advanced degrees can barely find a job paying enough to move out of their parents homes they begin to look at other areas o relocate to alt

Posted by: Clarisa at November 14, 2005 10:32 PM

As a young professional living in South Florida I can attest to the fact that the housing market is OUT OF CONTROL. While everyone is reveling in the obscene amounts of money they've made selling their first home or buying expensive one named condos like zenith or pinnacle I think we're all overlooking one very important fact...who's going to work? If anyone honestly believes that the baby boomer retirees and South American and European vactioners want to work they are sorely mistaken. When people with advanced degrees can barely find a job paying enough to move out of their parents homes they begin to look at other areas o relocate to altogether. In the end the talent that ideally would have helped power south florida's workforce may ultimately have to leave in order to afford some quality of life.

Posted by: Clarisa at November 14, 2005 10:35 PM

The developing has outpaced the infrastructure in the last two years in the outlying Tampa bay area. Condo townhomes of 200 or more being built on six acre lots feeding out to an already crowded single lane road is all too common. The lack of trees has now created an ozone haze this last year and the temperatures are a record high. The lack of emissions testing for the state means plenty of blue smoke sedans puffing in front of you at a grid locked intersection in front of a new mega walmart. Sorry to sound negative but the developers are just too greedy and the county just wants more tax revenue. They claim there are jobs here and that is true if you want to work at a doctors office or a dry cleaners.

Somebody mentioned call center jobs but Capital One just emptied out their newly built campus of all call center jobs and other companies are doing the same. If you don't mind assisting the elderly that might be the only higher paying job other than being a waitress.

My commute in 2002 was fifteen minutes for a ten mile drive. That same one in the fall of 2005 is now 45 minutes to an hour if it rains.

Posted by: Brent at November 17, 2005 02:36 PM

We all are loosing by rising home values if we ever planned on moving within the same market area if the market doesn't tumble back soon. It is a negative to say your house gained 30% last year. The house that you liked a year ago that was only 100k difference in price has increased by 30% too and you must subtract the difference between the two houses to see how this house pulled away from your current homes value. 30% of $200,000 is $60,000. While 30% of

$300,000 is $90,000. You didn't gain a thing you actually lost the difference between the two gains which is $90,000 - $60,000 = $30,000. Plus of course the taxes now are not on a 300,000 house but a 390,000 house. Insurance is higher and interest rates are on there way too. If you do this for two or three years you can see how the house of your dreams keeps pulling further and further out of reach. Enjoy the Equity Boom?? This will collapse on itself as more and more people realize they cannot move unless they want to loose money by paying too much for a home. Your dollar will be considerably weaker then your new neighbor's dollar because you are paying much more for a similar home due to the increase. Your $100 bill might be worth as little as their $50 bill and if you want your hard earned money to be worth less then enjoy the move. This is a market that traps the home owner and depresses the new buyers. It is negative and will not prevail long. The only temporary winners were the investors falsely driving the market higher by taking advantage of the strong rate of returns that were rolling forward due to the new creative home financing, therefore, creating more rate of return as more investors jumped onto the band wagon. This investment pull will decrease and sell out. Fear will be inevitable as interest rates rise and more people realize they do not want to move to purchase these investment properties because the new taxes are not worth the move. It will be the "Trapped Home Buyer Syndrome" that forces the market to crumble. Inventory will increase, these investors will get nervous because no one is willing to pay the new taxes and feel they are moving up enough in the world by spending allot more money for a home that is not much better then the one they are currently living in. People will start making offers. The downfall has begun and it is a good thing. Remember, the larger the number the faster it increases if percentages are constant for both a small number and a large number and the faster they decrease as well. So that home of your dreams may come back to reality faster then your home will fall. Enjoy the Slow Down!

Posted by: Jeff Novak at November 18, 2005 12:03 AM

People wake up housing bubble burst not if when. (at least here in Florida). In a nutshell salary 2005=salary 2000, house 2005 = house 2000 x 2. Here is the balance sheet for myself and a lot of middle income folks such as myself. Gross pay 70k me 20k wife. Net pay me after IRS, Social Security, Medicare, 401k(since we no longer get pension and probably not SS in 2040 either) and health care = 40k. Wife = 15k. Bills = 2k per month not including food or gas. House with real mortgage not in ghetto = 220k. Payment at 6 percent real mortgage not buy now bankrupcy later ARM, (with property taxes) 1600 per month.------leaves grand total of 900 dollars a month for food, gas, clothing, recreation, christmas, pet food, you get the point. Folks we make gross 90K per year that is alot compared to average family (AND WE HAVE NO CHILDREN). These numbers are not fudged, sure I have 300 per month student loan + wife 300 month credit card, who doesnt have something like this??

--Bottom line, we can not afford to buy a house in Tampa Florida on gross 90k per year. Many in my neighborhood where I rent, are landscapers, cops, etc.. with ARM loans. Now if we can't afford 220k with 90k gross per year how is the truckdriver neighbor with secretary wife going to make the payment when it is 1600 per month??

--Do the math, its simple really, noone can afford houses soon, noone can sell them, noone can sell them price goes down = bust

--ARM loans 50 dollar a month mortgage payment now (sarcasm) jumps to 1600 per month, average family can not afford it, sells it, every 2nd house on the street is up for sale, what happens to the price? ARM'ers are upside down on loan because they are forced to reduce sale price.

Basically, the real estate market made alot of money for get rich quicker's and and people who bought several years ago, however all good things come to an end. Talk to any realtor, the last couple of years brought a plethera of baby-boomer first time home investors with second/third home investment properties. This is a new variable in the housing market. People with one house will live in it and ride out the bad time, people loosing rapidly on an investment will sell and cut their losses.

--Time to wake up, don't buy the realtor/mortgage broker hype of take out an ARM for 200k now sell for 450k in two years, its just hogwash..

Posted by: Chris at December 1, 2005 04:16 PM

Real Estate in any desirable coastal area will not decrease in value; there is nothing to replace these properties......Thirty two years ago we paid $26,000. for a small house in Belmont Shores, CA - that property now sells for at least 15 times what we paid -

Posted by: Susan Parker at December 15, 2005 04:51 PM

Will the bubble burst soon? For the sake of my community (Naples, FL) I hope it does. Young professionals cannot afford the average housing price of $500K with the few well paying jobs there are here. The school district, fire and Sherriff's departments, and hospitals can't recruit anyone. The same goes for banks, stores, and restaurants - who are constantly hiring - can't find good stable help which in turn creates a lack of quality service. Construction work is abound but there's no one to work which creates ridiculous delays in building homes and infrastructure. All this work is here, and Naples is popular with retirees and the wealthy, but the average worker cannot afford a small house in town at a price which could get you a much larger house with more amenities elsewhere. Most of the affordable housing is in Lehigh Acres or Fort Myers, which are rising in prices as well, and don't have as many jobs as in Naples. Those who make that commute can make it at best in 45 minutes or at worst, with a minor fender bender or during winter season, on an already failed road system, a commute time that can rival the largest of American cities. I for one can tell you that the quality of life down here has been on the downward spiral for more than a few years now.

Posted by: Azza at December 28, 2005 07:30 PM

I don't know what the average person in Tampa Florida will do for housing. My Son is a fireman /paramedic. He can not afford to buy even a condo in this area on his salary. I don't know what a lot of the younger people will do, and the sad thing is what will happen to our Firemen, Police, Teachers, and Nurses when they find they can not afford to live in the area they work in. I think all of us in Tampa will lose!

Posted by: jackie at January 2, 2006 01:20 PM

I made the blunder of moving from Memphis,

TN to Tampa, FL about 18 months ago. It has

been nothing but frustration since. I

honestly have no idea how people can live

down here. I think there are two classes of

people: the ones that beat the wave and the

ones that are drowning in its wake. My

wife and I have decided that we will

continue to rent until something drastic

happens. At the very least we can cut

and run if things continue on this course.

Posted by: Angry at January 8, 2006 12:28 PM

The market in all of South Florida is ridiculous. I make 70+ a year and refuse to pay 200,000+ for those pathetic apartment/condo conversions which is about all you can get for that amount of money. I'll move before I pay the prices they're asking down here. (Palm Beach - Broward area).

Posted by: waitandsee at January 11, 2006 10:11 AM

Hi, my uncle lived for years in Belmont Shore. He bought a house there on Quincy St for 24 thousand in the 60's. It was where I learned how to swim, in the back bay facing Naples, Ca. It is beautiful, but the price was driven up by the Japanese. Now, of course if a rich person in LA cannot breath the smog and wants the coast, little Belmont Shore may resist price reduction longer than most places. However, if the speculators leave, then it could be subject to severe price drop, which would wash out those who just want to be rich. If you are there for the long term you probably are ok, and I would guess that a lot of homes there are paid for.

Posted by: Gary Anderson at January 11, 2006 11:45 AM

I recently moved from Memphis, TN as well the

prices of housing down here are insane St.Petersburg is defently insane 1 bedroom ,1 bath condo downtown area $150,000. The condos on the beach $500,000. I could buy a 3 story ,2 car garage underground pool, tennis and basket ball court with circle drive and natural gas burning lights, on at least 20 to 30 acres of land for what they are asking here! I just wonder what happens when no one buys? I mean the place is great and all but what real attractions are their in St. Petersburg & Tampa? My point is if I'm going to fork out that kind of money why not live at Disney !! It's the happiest place on earth. I can tell you this place sure as H@ll is not . Everyone seems to be from upstate NY. They

have either ridden in a taxi their whole life or

taken the subway ,because they sure don't know how to drive. The place also smells like as which I recall NY did too!!!!

( Welcome to Florida) sunshine state my a@!

Posted by: mj at January 21, 2006 09:14 PM

just amazing to read the comments yes some are very true indeed'ive been living in florida for 50 years born ans raised.there will a bubble big time like back in the 1970's with townhouse same sinero buy buy than whamo hit bottom.flroida was always based on how much the citizens make until the developers came down from out of state and the mortgages where affordable to the comeon citizen.i think alot of these developers and realiter's nedd to get some florida history.and please dont let these guys fool you into to thinking that it wont. oh by the way have i forgot the high insurance you pay as well.most of the 72% homes in flroida are why over priced and the taxes are the same so buyer bewhare of what you buy and check the history of the home and see for you're self thanks gary

Posted by: gary tillman at January 22, 2006 11:36 AM

http://www.gtar.org/mlsjan06.pdf

As you can see residential resale's in 2006 are looking great relative to January 2005. Almost the exact same number of sales and contracts were written and closed during January 2005 as January 2006. However, the only difference that I can see is more listings then before were placed on the market. I am not sure if this is a slight panic by the general public to cash out (because they were looking for a slow and December/January always is slower then the rest of the year) but the total sales and contracts suggests there is no reason to list their homes and cash out. However, if the trend continues with people not seeing the stats and listing too much supply will through the demand out of balance and they will create there own slow and allow for low ball offers due to oversupply and false panic. Enjoy the stats.

Posted by: Jeff at February 13, 2006 08:33 AM

I moved to Florida a year ago after my brother's house almost tripled in 3 years (New Tampa). house prices are starting to fall as speculators try to dump. It was inevitable, Florida's low personal income level(no economic base here) could never support those prices. Also,only 53% of Fori-tards finish high school, and the average IQ is 72. Since there is no income tax,there is little state government(bad schools, no prisons, shockingly inadequate roads, and no consumer protection of any kind) quality of life is extremely low. The Baby Boomers are moving in already, but then moving out and half-way back home when they see the low quality of life.(the term is "half-backers", according to a northern GA real estate agent I spoke with)(yes me too!)

Due to the Baby Boomer's mis-begotten retirement planning, they know they will have working retirements, but they won't do it for Florida's hardscrabble wages and bubble prices/taxes.

This is Florida's 5th real estate boom/bust, it's not like it hasn't happened before.

Also, car insurance cost is 3X Detroit! (DETROIT!)

Detroit is looking better all the time, crime levels are pretty comparable to here.

And don't even get me going About the NY/Long Islanders

Posted by: steve from Detroit at February 13, 2006 05:46 PM

Steve from Detroit, your comments are rather harsh about Florida. My entire family has raised our children here for close to 100 years. I am a nurse, one brother is a Dr. and another brother a career Air Force retiree. Your whole theory on IQ is proved false with my family and I am sure that it is an unfair remark for countless other Floridians. I assure you Detroit needs you far more than we do down here just for the massive welfare/pension gig ya got going in Detroit. The real reason prices are escalating so rapidly is lower interest rates and 1000 people moving here daily....I heard 6000 people move to Orlando a month on average. The demand exceeded the supply.

Posted by: Pamela at February 14, 2006 03:53 PM

In general, I'd have to agree with Steve. Pamela's comment just reminds us that there are always exceptions to the rule.

Posted by: mc at February 16, 2006 02:18 PM

My wife and I currently rent in St. Petersburg. We are a young couple and have been married for 6 years and we have been trying to buy a house ever since. I recently landed a decent job and now between the 2 of us we make about 85K/year. I remember looking at houses 6 years ago for 80K (because that was all that we could afford at the time). This is completely rediculous today. We are looking at 2/2/1 houses in St Pete for 220K+, which equates to almost 2K/month. We have recently started looking up in Pasco county, where at least the houses are reasonably priced 140-170K, but those houses were around 100K 2 years ago. We want a house so bad, but are unsure what to do. We can now afford those houses in Pasco, but the drive down 19 is going to be terrible. I hope the bubble bursts soon. We are finally at a point in our lives where we have paid off ALL of out debt, saved a few thousand, but are basically being driven to another county to find housing that is over priced, but at least affordable. I am so stressed. I just want a decent house at a decent price. Bubble, hey bubble, its time, please burst soon.

Posted by: Jason at February 16, 2006 08:51 PM

Jason, I grew up in St. Petersburg and by the grace of God my husband and I were able to buy a historical home in old NE a decade ago. Sold out five years ago and headed to Parrish to buy land and a home. stayed five years. My husband after selling that retired at 43 and we now live in Brandon. Try Brandon. Great schools and affordable housing with many choices..Another great place is Dade City. We have 60 acres up in the Ocala area now and a fantastic home in Brandon....Do not despair.Please keep trying and keep an open mind about other areas.

Posted by: Pamela at February 17, 2006 01:47 PM

Anyone who thinks there isn't a serious bubble in South Florida is either a real estate agent or living in a cave. The baby boomer myth is a joke! Listen, every baby boomer isn't a financially wealthy individual who has sold his or her house up north for a couple million and looks at a 350K home in Florida as a drop in the bucket. The average boomer has struggled his or her whole life to save some money and isn't going to come to Florida, buy half the house for twice the money and get a job to pay the bills. That is NOT retirement.

Currently over 30% of the building going on in Florida is speculation. That is what driving the market along with low interest rates. I have builder friends who tell me that the market is currently double what it should be. That means that a $350k house should actually be priced at 175k according to building costs vs sales price.

Just hold on and things will return to normal. I sold a house on the water that was my dream home for 4 times what I paid for it in '96 and am currently renting until the bubble bursts. At that time I will be happy to buy up foreclosures with the money I have in the bank. Just be patient Florida. Sanity will return

Posted by: Bobby at February 18, 2006 06:26 PM

I am a young professional here in Florida and I have been waiting for a couple of years until I could get the financial stability I needed to get into real state. Now I am terrified I don't know if I should buy a condo for $200K or wait and wait and wait as I have been doing until something different happens.. I make a decent salray but I really don't knos if it's worth risking getting into real state at this point. Is a condo from teh mid 80's really worth $200K?

Posted by: pedro at February 24, 2006 03:35 PM

The Real State bubble in Florida is now a Big Trap for everybody. You feel free and ready to purchase a house? Keep waiting about more 1 year and get a good deal.

Posted by: Newton at February 26, 2006 12:45 AM

I grew up in St. Petersburg. I've lived in Los Angeles since 1988. Florida's market is now very simular to Los Angeles's. As a Realtor myself, I do feel both markets are largely over inflated.

I also feel the market will come down over the next several years. When working with buyers I tell them my feelings about the market heading downward. I've advised many clients to wait and see if the market softens. Some clients feel I'm wrong and proceed to buy, which is fine as long as they aren't hoping to flip the property. If the market does turn down, they will be able to ride it out market conditions as long as they don't sell.

I've personally sold my home in Los Angeles and I'm waiting as well, ready to buy once the market softens. Most likely in Florida.

I feel although L.A. is grossly over valued, Florida is at much greater risk, due to many factors, especially income. If you are curious to see what homes are listed for in Los Angeles, go to my site: http://www.SuperHomeSearch.com

Click on Search the MLS - you better be seated, I don't want you fainting at the sight of 2+1 780 square feet fixer bungalows priced at $525,000 !!!

Posted by: John McQuilkin at February 28, 2006 04:39 PM

I am a college grad in my late 20's, born and raised in Miami. I CANT for the life of me buy a house or condo without using thise ridiculous ARMS loans. ATTENTION PEOPLE: Baby boomers are not moving down here. Most pre-construction condos and housing are being bought up by speculators. I have a friend that works for a developer and he says that people come in and buy three or four units at one time.... I am just sitting at home living with my parents until the bubble burst and I pray that it will soon. I would love nothing more than to buy a condo on the beach at some crazy reduced price.

Posted by: Gabriel at April 10, 2006 11:50 PM

Tampa & St. Pete's quality of life wasn't bad in the last 20 years considering low pay but a fair housing market. Now that the housing market has sky rocketed, I'd rather pay for a nice home out of the state of Florida. $200k should buy a home you are proud of, not a Rondo (apartment/condo). If I had to live in a Rondo, commute on streets that can not handle the current traffic flow and drive in a traffic jam for 90 minutes to get to the beach I'd go nuts. While you are waiting for the bubble to burst in Tampa & St. Pete, travel the country and find a new haven to call home (preferably one that hosts a good majority of English speaking citizens). Will the bubble burst or will the 2006 Hurricane Season take care of Pinellas? "First one out is a rotten egg"!

Posted by: Rob at April 15, 2006 11:49 PM

Born and raised Florida Cracker here. Again, 12 of the top 30 metro areas for job growth are currently in Florida. I agree with Rob to drive around the country and find a little slice of harmony elsewhere. There are 3.4 million people headed this way in the next ten years. I believe we call that a Yankee hurricane. Investment opportunities are in the rural areas. Ocala, Wildwood, Micanopy (Sorry guys to let that cat out of the bag) and a host of other small towns.

Florida at this time is a "Red State" and reaps the positives as well as a few negatives (Developers) for their pro growth initiatives. I love my State and am proud to call her my home.

Posted by: Pamela at April 17, 2006 02:47 PM

People - Florida real estate is still afforable compare to the west coast. My sister just moved from Miami to Seattle.

Housing prices in Seattle was pretty mellow for the last five years, as the NW economy tend to lag the rest of the country by about three years.

A typical 3 br/1 bath craftsman house in Seattle (in a decent neighborhood) will cost you about $500k. The price increases are starting accelerate as our economy start to really pick up. A 2200 Sq ft new house in the burbs, with 5000 sq ft lot, and 4 br/2 ba will start around $500k. Spend an hour commuting into the city.

Northern California and the LA Area's cost is double of Seattle's.

On that note, I think Tampa is relatively affordable compared to most growing urban areas, especially with the amentities, activities, and job opportunities. Try not to compare the prices to other states where the economy is either stagnant, land is plentiful, or wages are lower.

Posted by: Tony at April 19, 2006 08:22 PM

Bubble? No Way.. NOT EVEN CLOSE. At least not for Miami and the Downtown Condos going up.

Why? The sea of Baby Boomers, The Stong Euro, Wealthy South Americans and Islanders looking for second homes and safe havens and ... MTV, the Media and public perception of Miami. Accurate or not, Miami is sexy, exciting and different. Don't forget warm and sunny year round.

Fear of Huricanes? Not a real factor for new highrise construction.

The Miami skyline is changing so fast if you've not been down in 6 months you won't believe what's going on.

We get calls every day asking about Miami. Outside interest has grown tremendously in Miami. Miami is a magnet .. as I walk the streets you can feel a city growing into it's rightful place in the Global spotlight.

Sure there are nay sayers who caution you to be careful and we've always had the scared and ignorant warnings about the dangers of Miami .. That's all based on ignorance and stupidity. Hell, North florida tries to steal tourism by advertising, "The Other Florida" .. You can read between the lines in those ads. Yes Miami is very diverse.. Yes Miami is different .. Yes, Miami comes with all the problems of big multicultural cities where money and power moves around. But Miami is also surprisingly rich in culture, jobs and history. Miami is inevitable. If you travel frequently and have not been down here, you are probably going out of your way to avoid this great city.

In the next few months the new and Art Center opens. The streets and lots surrounding it look like war torn Iraq with all the buildings being blown up and replaced with grand Skyscrapers. 20,000+ units comign in, many to be purchased by speculators... Reason to be concerned? NO

I was in NYC last week.. condos in the upper west side for 2, 3, 4 million... You can still buy brand new Downtown units with water views for under 500k.

[miami preconstruction condos]

[miami condos for sale]

[miami downtown highrise condos for sale]

For more information:

http://realestate.1stmiami.com/miami_preconstruction_condos.aspx

Posted by: jc at April 25, 2006 08:14 PM

Wake up and smell the coffee realtors! Quit justifying the prices.

Tampa, Sarasota, Bradenton have homes sitting on the market for months and months. A home that was priced as others similar for 1.2 million in Bradenton has been reduced to $799,900 after six months. It's still $200,00 more than they paid in 2002. Obviously the seller isn't an investor as they aren't concerned about everyone elses property values. They just need to get their money out.

Face reality, the Europeans aren't investing since UK investors have thousands of rentals in Florida. so many rentals make it hard to even cover the cost of their mortgage, taxes and insurance. It was a great investment for the Europeans when they could get a four bedroom house for less than $200K

The prices doubled and tripled due to investors who are now sitting on their houses. Whose going to buy them? I wouldn't want a house that's been sitting empty for a year or more. Shame on the builders for getting greedy too! Of course they have lots of room to lower the prices. David Weekley homes is having Red Tag Sales.

This is just the beginning. The "creative financing" hasn't played a part yet. Give it another year and we will start seeing foreclosures. What about the hurricane insurance? Who can get it let alone afford it?

Comparing Florida to California is ridiculous! California boasts the best climate as well as scenery! As a Floridian, I love Florida, but come on it's not California. California doesn't have the bugs, humidity, constant hurricane evacuations.........

Many of my Yankee neighbors are moving back after only a year or two. Can't take the heat, bugs..... Many are choosing North/South Carolina.

As soon as the realtors face reality and start accepting the decline in the real estate market, the sooner we can get back to a normal market. A home is to live in, it's not the NYSE!

Posted by: lizabeth at April 26, 2006 02:15 PM

a florida author wrote tongue in cheek that mother nature hasn't finished with Florida yet. he continues that all those high rises on narrow spits of land in Miami, well, they may eventually make good mooring for yachts that visit the flooded lowlands. If the water doesn't drive you out, the taxes/insurance will. $8,000 tax on a $400K house, and $7,500 insurance on a pre-1992 construction home. South Florida is a dream that the American Middle Class has already been denied.

Posted by: floridanever4ever at April 27, 2006 08:33 AM

So, where would you recommend for reseasonable priced housing in FL? Or does it exist? Are you seeing prices decreases greatly in Tampa or are the builders just letting the houses sit? What about housing resales- are sellers coming down much on prices yet? How about Jacksonville - housing prices & job opportunities? The high cost of housing in FL is putting us off moving & buying there! Any recommendations on where to relocate in a warm state with decent job opportunituies for 2 MBA's?

Posted by: diane at May 2, 2006 02:03 PM

You won't see the major drop in Tampa or surrounding areas for another year. The realtors are convincing sellers they will get their prices. The houses are sitting on the market. Only the serious sellers are lowering the price. I would say at least 35% of homes on the market are owned by a realtor or investor. They want to get their money. These houses are sitting empty or have "Castle Keepers" living in them for free rent.

Florida is a great place to live, but unfortunately, the investors have ruined great neighborhoods! Check out Lakewood Ranch in Bradenton. Awesome place to live, work and play. If you go to realtor.com, type in Bradenton zip code 34202, you'll find over 500 homes for sale. The cheapest home is for $349K and is only 1500 sq ft. No yard, no pool..... These are the homes the europeans and northerners were buying for investments. Most of them are empty. The house is actually worth around $150,000. Because the small houses are so pricey the larger homes are even pricier. What you can get for $800K is only a $400K home. 1 million is a $700K......The investors have ruined this wonderful community. Every other house has a for sale sign. Rentals are popping up everywhere.

This is the trend all over Florida. The market is too volatile! I would say, move to Florida. It's awesome. Rent! There are so many rental properties in great areas! You have more to lose than the tax break you get from owning! Don't risk your hard earned money thanks to a bunch of greedy developers and day traders.

Wait for all the creative financing to really hit the fan. Prices will be basement bargain! The salaries are not up to the cost of housing.... When these loans come up, people sitting on their investments will have to bail. People won't be able to make their payments and unfortunately will sell to get out or foreclose. This will effect the more expensive homes too. People who make $200k are living in $1+ million dollar homes. What if they lose their job or have a hardship?

A friend who builds small communities has cpa's for doctors, dentists and other investors come in and try and buy 4 houses at one time. Luckily he has stuck to his guns and wouldn't allow investors. As he says, he builds houses for people to live in! Unfortunately, this has been the case all over Florida and the majority of builders have just worshipped the money god rather than worry about the overall impact on the community they are building.

Jacksonville is way overpriced too! There really isn't an area in Florida that won't be hurt. My preference would be Tampa to relocate. Just don't buy right away. The builders are coming down $30-$50,000. A house in Waterchase, tampa zip code 33626, in 2004 was selling for $400k Now is selling for $700-900K. They encouraged this frenzy by making as much money they could. Now they need to lower their prices more than that. According to many reputable sources, Tampa is anywhere from 30-40% overpriced right now. Not a good time to buy.

Want to move south where it's warmer and have MBA's try Charlotte, NC. Major banking center, great downtown area and housing is unbelievably cheap. Raleigh is also great. However, they are a bit colder in the winter and get more snow. Columbia South carolina, Greenville, SC and many areas in GA are awesome and still relatively cheap. Hurry though, the halfbackers are going to bring up the prices in these areas next.

Posted by: lizabeth at May 3, 2006 12:25 PM

I am a Florida Realtor/Baby Boomer/Empty Nester who moved here in 2003. At that time Florida Real Estate was a bargain!!...I had cashed in on my high home price in Boston!!...and proceeded to invest in Florida.....Yikes, it was good move!!.....I have since sold all my Real Estate Holdings and Rent a beautiful home for Cheap!!

Why???....A good investor will buy right...then sell right....THE BOOM IS OVER!!!....

Why? Lots to Blame..For One...The Save Our homes Act, causing in my opinion the most unfair property taxes in the country!! ...( Even my Baby Boomer friends in Taxachusetts will no longer move here!)...niether can most Floridians afford to move. Even,into a similar home to the one they currently own. Our legislature is only going to give this a band-aid solution...Sorry Folks..this is killing our market....Wait till this November's Tax Bill comes ...OUCH !! It will be too late by then!!...Most "out of staters" don't know about our property tax problems!!

As a REALTOR , I value my reputation in Florida and tell my buyers (the investors are gone!).....Be careful...! Do not buy a condo/townhome...the price will be(actually is) Falling!!

Single Family, is a safer investment...but only if you treat it "as your home" for the long term...also,if your only going to have a job in Florida for only a few years...Renting Is Best!( get the hint investors...Buy Rental RIETS)

Great Home Buys are now arriving here in Central Florida...the Smart investors are out of the game..the headstrong Investor/Sellers are holding on against hope!!.....The sellers are not going to win this battle ...the laws of economics are taking over...ALSO, the home builders seem to be in trouble...and are releasing the bad news piece meal (maybe trying to save thier stock prices?)

I represent my buyers to get only the best possible price!!

Floridians who have never seen the "low ball offer" ..will have to get used to it!! ( Sorry Sellers)...

While housing bubbles do not Pop (LIKE STOCKS)...they do loose air...

My Advice;...Your Real Estate decision must be for the Long term..."Buy and Hold" five to ten years minimum...Or sell now!!!!! for whatever you can get as quick as you can get it!!

Seller's/Investors take what you can...don't be greedy...your making lots of money( or at least don't loose it by attempting holding on to long for that high price!!)..... Remember the old saying....."In a Fire ...Only the first people to the exits are the ones who survive!!"...............

(Yes ...I always check where the Fire Exits are located in a night club/casino too!! Do You??)

Posted by: Phil Dennesen at May 7, 2006 12:06 PM

I live in the Bradenton-Sarasota Area. And , you couldn't ask for a nicer climate in the winter, as long as it snows up north, buyers will be here, just wait until the winter of 2006-2007, they will be begging to buy our homes. Yes, it is a buyers market now, but any realtor you talk to said in the past 2 weeks the buyers are really coming out, because they are concerned about the interest rates and as quick as it turned to a buyers market it will turn overnite into a sellers market. Everybody is in real estate to make money, we came down from NJ 13 years ago, and you talk about expensive, our taxes then were higher than they are now, which is about 5 grand. We have the sunshine and it is still less expensive to live here than in NY or CA and a few other states. Everybody I know said moving to Florida was the best decision they ever made. Everybody that complains about Florida's high prices, go somewhere else and complain. Forget about complaining about the hurricanes, every state in this Country has either tornadoes, earthquakes, mud slides, ice storms, blizzards-take your pick. WE LOVE FLORIDA!!!!!!!!!!!

Posted by: Tricia at May 8, 2006 08:56 PM

Tricia is right about all of whats going on in Florida right now. We left Manatee county last year to be in Brandon...It is really beautiful in her neck of the woods. People are driving up and down the streets looking for homes again. And another statement about Florida that is true is how quickly the market can and will change back to a sellers market. 1000 people are moving here every day. Our inventory levels can change overnight. And if we experience hurricanes this year,I assure you it will impact us AGAIN positively. It always does.

Posted by: Pam at May 9, 2006 12:01 PM

Tricia and Pam,

Nobody is disputing that Florida isn't a wonderful place to live! Hands down, it's the only place for me! The fact remains that the market has been over valued for the last 2 years! You are probably enjoying the equity in your home. If you've been there 13 years, your house must be worth 2-5X what you paid. Am I jealous, ABSOLUTELY! If you moved houses wi


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