LWR Commercial
Posts tagged Sales
Did land regulations contribute to Florida’s boom and bust?
Aug 26th
Liberals tend to blame the bust we're going through on underregulation. Conservatives finger overregulation. Example: Tight land-use controls that impeded housing construction, limiting supply and (temporarily) driving up prices.
Jay Brady, a writer for Florida's Gulf Coast Business Review, recently wrote a long article arguing that land-use rules, mostly at the county level, were culprits in Florida's soaring home prices, which of course ended with a huge bust. (He thought I'd be interested since the article quotes an article I wrote in 2006, "Boom! Bust! Boom?")
Writes Jay:
Economic research reveals a series of government missteps led to over-regulation of the housing industry in Southwest Florida, “tragically distorting” housing and creating the root cause of the real estate crises.
Before the housing boom kicked off in 1997, a typical lot in working class Lehigh Acres was $5,000. At the peak of it, that same lot may have sold for $55,000.
And now, according to Brad Hunter, of housing development tracker Metrostudy, it’s back at $5,000 and may not have yet hit bottom. In one zip code in this 96-square-mile unincorporated city in east Lee County, one in eight housing units faces foreclosure.
For the whole article, click here.
Florida’s Population Dropping with its Home Prices
Aug 25th
Florida's population, which has been rising year after year since the end of World War II, fell for the first time this year, according to the demographers at the University of Florida.
The population dropped by 58,294 from April 1, 2008 to April 1, 2009, according to UF's Bureau of Economic and Business Research, which measures population using household electricity connections and disconnections and housing permit data. That might not seem like much for a state with a population of about 18 million. But it's the first drop since 1946 and it follows a population boom. By comparison, the state's population increased by 430,905 from 2005 to 2006 (By 2007-2008, the population rose by just 126,852).
Florida's speculative building boom was driven by the idea the retiring baby boomers and new immigrants would create steady demand for the condos towers rising from Miami to Jacksonville. But many of the immigrants who helped build homes during the boom have likely left as the state's economic promise diminished, said David Denslow Jr., a professor and Research Economist for the Bureau of Economic and Business Research.
And seniors, who have lost money in the stock market and have been unable to unload primary homes up north, have delayed purchasing their Florida retirement pads, he said. It's also likely that many people cashed out before the end of the boom and moved to less expensive states such as North Carolina, South Carolina or Georgia, he said.
But Denslow is hopeful that the population will start growing again once the economy improves. The snowbirds are slowly coming back, said Denslow, who estimates that 3.5 million Americans will retire by 2020 (compared to about 2 million in 2000).
"We’re bottoming out," he said. "The stock market is coming back. And to some extent, people are able to sell up north. There are some indications that the market is coming back. But I don’t see house prices rebounding sharply."
Kaplan building fetches $25.4 million in largest office sale this year
Aug 23rd
Kaplan Inc. has a new landlord for its fully leased Central Florida Research Park building at 12650 Ingenuity Drive.
What If the Housing Bubble Never Happened?
Aug 11th
Slow and steady housing markets now seem to be in better shape than markets that boomed and busted such as Florida and California. But does that mean that homeowners in the former bubble markets would have been better off if the housing boom never happened?
University of Central Florida finance professor Stan Smith decided to explore that question by studying Orlando metro home prices. Turns out that prices probably would be about the same today even if the area had never experienced a bubble and bust, Smith told the Orlando Sentinel.
Smith says that buyers who bought before 2005 should not have been hurt because prices went up before they went down. Orlando area prices rose 20% in 2005 and 32% in 2006, but -- on average -- they climbed just about 4.7% a year since the 1970s. "Most homeowners are within 6 percent of where they would have been had there not been a bubble," he told the newspaper. "A lot of people did buy in 2005 and 2006, and obviously they have been hurt significantly."
The strongest markets in Zillow.com's second-quarter home value report released today are primarily metros that never had housing bubbles or crashes. Many of the metros are affordable places such as Binghamton, N.Y., Fayetteville, N.C., and Little Rock, Ark. where few homeowners made fortunes on real estate and few were ruined by it.
Short Sales, Fascination and Frustration
Jul 31st
With his permission, I'm reprinting some comments made by Florida businessman Felix Santiago on Activerain.com, the excellent networking site for real estate agents. Santiago is in the business of helping homeowners negotiate the sale of their homes for less what they owe the bank-- a process known as a short sale. I am in no way endorsing this business, but I think it's good to get a lot of different voices on this blog. Everything that follows are the words of Mr. Santiago.
"ANYONE THAT TELLS YOU THEY KNOW THE SECRETS OF DOING SHORT SALES, RUN FROM THEM AS FAST AS YOU CAN! AND HERE ARE THE REASONS WHY...
The lenders still are not sure that what they are doing is right FOR THEM. They are constantly changing their short sale and loss mitigation process to figure out what will make the most return on the loss. It will change at the whim of those assigned to review the pipeline disaster that is their loss mitigation. And, time and time again, the changes usually are not for the best. They only further complicate the process. The banks are in the business to lend money. The whole loss mitigation and short sale business is still a blur to them. Think about how absurd this business is...they will forgive $300,000 on the property without blinking, but will kill a short sale for the remaining $5,000.
The housing crisis is NOWHERE NEAR A BOTTOM! The biggest reason for this is the tremendous amount of inventory. And I'm not simply talking about the inventory in the lender's hands. I'm talking about inventory yet to be taken back. There are millions of homeowners living in their homes for free. I have clients going on 2 and 3 years without a mortgage payment. The lenders and their investors are simply overwhelmed by this crisis and they would rather see someone in the property taking care of it. Once they foreclose, they are responsible for all the bills on the house. Only 30% of the lender inventory is even available for sale. Nearly three times the current inventory is pending foreclosure. And unless everyone behind on their payments gets back to work and starts paying their mortgage, the crisis will not be going away any time soon."
