Real Estate Bust

That's the sentiment in Bay County, Florida, where some developers say the bubble has definitely burst.

Real estate experts in Panama City Beach say the condo bubble may have finally burst.

"We just got so much supply and we've got a high demand, just not as high as it has been," said Nathan Trent of Coldwell Realty.

And Panama City Beach isn't alone. Phoenix, Arizona, Richmond, Virginia and Las Vegas, Nevada are among the dozens of cities across the country all experiencing the same thing."

Article

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In Palm Beach County, many buyers during the peak have been stuck holding the bag, maintaining sky-high payments on property that's sitting unsold.  In the meantime, renters are making out beautifully.  To give you guys some examples:

• In Riviera Beach three-bedroom townhomes are renting for as low as $1,150 a month. Owning one would cost about $1,800 to $3,000 a month, after a 20 percent down payment.
• In West Palm Beach, $400,000 townhomes are renting in the $1,500 range. Owning one would cost nearly twice that per month.
• In Lantana, a $450,000 three-bedroom condo with an Intracoastal view is available for $1,850 per month.
• In Port St. Lucie, three-bedroom, $450,000 houses are renting for about $2,200, a third less than they would cost to own.
• In Wellington, $800,000 homes that would cost nearly $6,000 per month to buy are renting for about $3,000.

 
Terrence McManus, president of Florida RentFinders, said now that the interest-only periods have ended on many investors' mortgages, "they're trying to get income out of their houses any way they can."

McManus said that most of the landlords he works with are renting at a loss.

"None of them is cash-flow positive," he said.

Some agents are advising landlords to slash rents in order to create even a trickle of cash.

"If it takes seven months to rent at $4,000, you're better off getting $2,000 right away."

For the particular article that discusses this trend, many people wouldn't even comment on the renting situation for fear of further eroding the market.  From the looks of it, why wouldn't someone rent at this point and just wait it out? Considering that some have gotten a $2M house for $4K a month, why would you want to risk owning in South Florida at this point?

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South Florida's housing market remained soft in April, giving buyers more choices and sellers more grief.

Sales of existing single-family homes and condominiums plummeted in Broward County last month, while prices leveled off from record highs in the fall, the Florida Association of Realtors said Thursday.

After five years of bidding wars and huge price appreciations, the market has turned. With more than triple the number of homes for sale compared with last year at this time, buyers have become selective and unwilling to make full-price offers.

Continue reading "Home Sales Fall, Prices Level off in South Florida." »

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Many investors in Port St Lucie, Florida are struggling at the moment, with buyers walking away from contracts, throwing in large incentives and resorting to highly unusual tactics to sell their homes.  Some buyers are even contemplating suing the builders that sold them their home, accusing them of misrepresentation.

"Their thought was, 'I'll make $25,000 on each home, or $100,000 on each home, and I'll get rich,' " said Bradley Hunter, South Florida division director of Metrostudy, a West Palm Beach-based housing research firm. "And for a while there, people were able to achieve that. But those days are gone."

Home Flippers' Investments Flop 

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Things are getting really frigid in parts of Florida.  Many buyers are walking away from $30K-$80K deposits and condo converion sales have literally fallen off the table.  Jorge Perez, CEO of related companies, and one of the main architects of the South Florida housing boom,  blames the retreat on excessive media coverage of the bubble and a U.S. Federal Reserve that does not know when to let up with interest rate hikes.  He states in the article:

"To be part of that great growth, people have done projects in secondary sites, and the media [have] on a daily basis told prospective buyers the bubble is going to burst," he says. "I think people are taking a much more measured look at real estate. So our universe has shrunk. Speculators have almost dropped out of the market and sales have slowed down. And I think those people who should never have been in the development business -- because everybody became a developer in the last few years -- will suffer."

He thinks that his pockets are deep enough to weather the drop in real estate.. thanks to the horedes of buyers that stepped over each other to help sell out the majority of Related developments.  We'd be curious to hear what the selling climate is now in any of these developments.  Any of you out there care to comment?

Great article though, with some interesting vignettes... Full text after the jump...

Continue reading "Housing boom a bust? In Florida it May Be" »

Posted by RE Bust at 03:58 PM | Permalink | Comments (0) | TrackBacks (0)

The Miami Herald ran an excellent article on ways to really leverage the buyer's advantage.  Some of the content is geared toward the South Florida market but will probably be applicable everywhere. 

"These days, we're finding a lot more flexibility on the sellers' side in more spots around the country,'' says Early, president of The National Association of Exclusive Buyers Agents.

But even in those markets that have become increasingly buyer-friendly, purchasers need carefully crafted strategies to obtain the best possible deal, according to Early."

Full Article 

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