South Florida home prices keep plunging

Full story: South Florida Sun-Sentinel

Prices of existing homes and condominiums continue to plummet in South Florida as the weak housing market searches for a bottom.

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Since: Jan 07

Hialeah, FL

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#147
Feb 26, 2009
 
LOL. You people who think it takes a "crystal ball" to predict home prices really crack me up. Read "Irrational Exuberance" by Robert Shiller, that will explain the housing market, and housing market pricing to you, giving you a "crystal ball" as well. Home prices are about as predictable as sunrise/sunset, with the exception of the RE bubble, when adjusted for inflation, home prices are pretty much flat throughout all of recorded history (with the exception of after one of the world wars). Home prices mirror inflation; once you realize that, you "suddenly" can predict home prices out into the future!

Now, what I can't tell you is the exact time/day to buy. But what I can tell you is when we have again reached the historic price levels on homes in this area. And we're still not there, we have another 10-20% in most areas to go. And then we may overcorrect (because we built WAY too many houses!), but at least you won't get killed if you wait for historic price/income and price/rent (as well as Case-Shiller) numbers to fall back in line.
yea right wrote:
<quoted text>
WHere did your BRo get his crystal ball from I need me one of them.
anyone who thinks they can prodict the future is just fooling THEMSELVES

Since: Jan 07

Hialeah, FL

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#148
Feb 26, 2009
 
Absolutely, 3X income is the MAX for a home in S. FL, and, on 60K (median income) a 180K house is really pushing it! Remember, taxes and insurance are incredibly high in FL (compared to the rest of the country), as well as HOA fees and other fixed costs. IMHO, anything over 2.5X income is asking for trouble in this area, our cost of living is just too high to support 3X home prices (at least at the median income levels). 100/sq/ft is the other gauge that I use, don't even consider buying a home for over 100/sq/ft unless you are look at something very unique (which is, IMHO, ONLY waterfront, deep water, or ocean front.. And no, man made ponds are not waterfront).
Apock wrote:
Until home prices are 3 times the average income for a family in Broward County, they will continue to fall. Period. Something the Obama adminstration seems to ignore is affordability. No one can afford a home that is 4, 5 or 6 times their annual income. This sensibility went out the window years ago because everyone who played into the Ponzi scheme felt that they could jump ship and move for big profits when the adjustable rate became fixed.
Home prices will continue to fall until the average 3/2 home in this county falls to $180,000 based on an average annual income of $60K. Only then will the market hit bottom.
RE Agent

United States

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#149
Feb 26, 2009
 
It's a new paradigm, and everybody who doesn't buy, now, will be priced out forever. Anybody who does buy will be rewarded with a lifetime of riches, as their property will continue its 30% yearly price increase.

Renters, and anybody born in a future generation, will not be able to afford a $10,000,000 starter home in 15 years. They will live in tent cities, and Hondas.

This asset bubble is different than all of the others - it will never slow down, or pop. The gains are permanent.

Since: Jan 07

Hialeah, FL

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#150
Feb 26, 2009
 
He (like me) is waiting for fair value to be reached. The way he got his high credit score and high income is through making wise choices in life. Buying into a crashing market isn't typically considered a "wise" choice!:)

Rent X 100, 100/sq/ft; those are the numbers we will hit when we're fairly valued. Once we hit those numbers, the smart money will start to move again. But, there is a VERY good chance that we will fall far below those guidelines, we have a massive oversupply of homes down here, there will be communities where homes will fall to nearly 0, they simply have no value to anyone (other then scrap value of the house).

I was out in Wellington last week looking at some homes prices ~50/sq/ft. It's still too much, there's simply too many homes in Wellington, and the homes there are FAR too large. They need to fall further, and likely bulldoze some communities to reduce the supply.
Real World wrote:
<quoted text>If you are so well off, what are you waiting for? A free house?
NotThereYet

Alpharetta, GA

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#151
Feb 26, 2009
 
Its Our Own Fault wrote:
If the median is down to 2002 levels then we've technically reached the bottom. HOWEVER, now comes the over-correction.
I don't think SFL has reached bottom...it still has another year to go...around 2010...that will be the time to buy...I would sit tight and just wait...

As far as a overcorrection..no such thing...people waited years to have a correction from the DOT com era..it will return to the normal 2-3% increases a year..
NotThereYet

Alpharetta, GA

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#152
Feb 26, 2009
 
Mike Fink wrote:
He (like me) is waiting for fair value to be reached. The way he got his high credit score and high income is through making wise choices in life. Buying into a crashing market isn't typically considered a "wise" choice!:)
Rent X 100, 100/sq/ft; those are the numbers we will hit when we're fairly valued. Once we hit those numbers, the smart money will start to move again. But, there is a VERY good chance that we will fall far below those guidelines, we have a massive oversupply of homes down here, there will be communities where homes will fall to nearly 0, they simply have no value to anyone (other then scrap value of the house).
I was out in Wellington last week looking at some homes prices ~50/sq/ft. It's still too much, there's simply too many homes in Wellington, and the homes there are FAR too large. They need to fall further, and likely bulldoze some communities to reduce the supply.
<quoted text>
I agree with you Mike that based on supply vs demand SFL has a long long way to go...and that the days of the McMansions to show off have come to a end...people are now "stuck" in their homes and will have to actually plan on living in them for years to come(like many of our family members did before).

Those communities will never be torn down, which may be a good thing as monuments to our greed and mistakes will make good reminders to the future generations.
mr p

Miami, FL

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#153
Feb 26, 2009
 
Its Our Own Fault wrote:
<quoted text>
3X income is not logical in South Florida. Nice weather plus low wages = nobody who actually works here can afford to own a home here. You're forgetting the "sun" penalty.
With high property tax rates and sky high insurance costs (built into the sky high condo fees), you're looking at carrying costs that will be more than the mortgage payment. That's assuming you can even get someone to loan you the money for property down here. I wouldn't do 3X income on property here--the carrying costs in addition to the mtg. payments on the 3X income stretch will sink you. I'd shoot for 2X income max. And I'm debt-free with no dependants. Subtract from that 2X if you're not.

Since: Jun 08

United States

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#154
Feb 26, 2009
 
Real World wrote:
<quoted text>If you are so well off, what are you waiting for? A free house?
Not that I need to explain sh!t to you, but I am hardly "well off." Second, unlike most of the dopes in today's world, I actually do the due diligence on any purchase I make, like this I don't make a stupid mistake and buy a house in 2005, when I first could afford it.

One of the reasons I have some money is because I don't buy a house "just because I can" only to watch $100k in hard-earned equity evaporate. No. I'll rent nice places on the cheap and when the prices are right, we'll buy in.

And that day is coming very soon.

Since: Jun 08

United States

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#155
Feb 26, 2009
 
dan maraschino wrote:
<quoted text>
A 175% increase on a 100k house equals 275k. Minus 40% makes it 165k.
Anyway, I would ignore the sales from 2003-2007, if not earlier. To say "it sold for 300K in 06 is meaningless." They were the bubble prices and not the trend prices. Anyone who bought Yahoo in 2001 for "half price" got creamed. bubbles burst, and they return to trend (but first overcorrect).
Thanks for the link.
Where'd you learn to do math?$100k * 175% is not $275k.
I AM A1ACharles Dammit

Lake Worth, FL

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#156
Feb 26, 2009
 
Amendment 1 was no help at all.

Voters can be bought and paid for all day.
bigboy

United States

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#158
Feb 26, 2009
 
re foreclosure. agent, keep em coming

Since: Jan 07

Hialeah, FL

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#159
Feb 26, 2009
 
LOL. Amend 1 was for the mental deficients, plain and simple. There were VERY few people who would have been helped by that plan; and the number falls more and more every day as SOH values and actual values converge again. Had we passed something like the 1.3% max mill rate that had been proposed, many of us would see our taxes at 1/2 their peak levels. But, once again, we had to try to "f**k thy neighbor" and stick others with our tax obligations through SOH. This time we are getting what we deserve, higher tax rates and no help from portability. Perhaps, after this collapse ends, we can have a real discussion again about CAPPING THE REVENUE of the taxing bodies, to prevent the 100-300% tax increases that we say from 2000-2006.

I'm not hopeful that this system will ever be fixed. The people of FL just don't understand how it works, SOH has pushed up taxes MORE and FASTER then ANY other law passed in FL property tax history. And yet we (the people of FL) continue to defend and protect it, because most of us don't understand what it really does.
I AM A1ACharles Dammit wrote:
Amendment 1 was no help at all.
Voters can be bought and paid for all day.
Cyndi NC

United States

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#160
Feb 26, 2009
 
Ann wrote:
I sold for three times what I bought for and move out of state an bought cash and works part time.
Me too bought in 94 for 75000 sold in 2007 for 280,000 moved to NC and bought a beautiful home on an acre for 115,000 and the cost of living here is so low all my bills are 1/3 what they were in Florida. Prop taxes very low, no flood ins needed. I am almost semi retired at 54 - I miss my friends and sometimes want to move to FL again, but it is beautiful here.
Cyndi NC

United States

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#161
Feb 26, 2009
 
Bought my house in FL in 94 for 75,000 sold in 2007 for 280,000 moved to NC and bought a beautiful home on an acre for 115,000 and the cost of living here is so low all my bills are 1/3 what they were in Florida. Prop taxes very low, no flood ins needed. I am almost semi retired at 54 - I miss my friends and sometimes want to move to FL again, but it is beautiful here. Is it worth coming back to FL?
ENOUGH

West Palm Beach, FL

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#163
Feb 26, 2009
 
just me wrote:
<quoted text>
That is just the bank paying $100 to take the property into their name that they hold the mortgage to. Doesn't mean that YOU can buy the house for $100.
No shiite, I was just pointing out what was being constituted as sales in the "figures".
I AM A1ACharles Dammit

Lake Worth, FL

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#164
Feb 26, 2009
 
Mike Fink wrote:
LOL. Amend 1 was for the mental deficients, plain and simple. There were VERY few people who would have been helped by that plan; and the number falls more and more every day as SOH values and actual values converge again. Had we passed something like the 1.3% max mill rate that had been proposed, many of us would see our taxes at 1/2 their peak levels. But, once again, we had to try to " ******k thy neighbor" and stick others with our tax obligations through SOH. This time we are getting what we deserve, higher tax rates and no help from portability. Perhaps, after this collapse ends, we can have a real discussion again about CAPPING THE REVENUE of the taxing bodies, to prevent the 100-300% tax increases that we say from 2000-2006.
I'm not hopeful that this system will ever be fixed. The people of FL just don't understand how it works, SOH has pushed up taxes MORE and FASTER then ANY other law passed in FL property tax history. And yet we (the people of FL) continue to defend and protect it, because most of us don't understand what it really does.
<quoted text>
SOH worked just fine. What you describe is a symptom of an overheated RE market.
ENOUGH

West Palm Beach, FL

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#165
Feb 26, 2009
 
Go Gators wrote:
<quoted text>
Learn how foreclosures work, pal. They're not buying homes for $100, they're simply getting the homes back that they had a mortgage on.
They were using those "sales" for $100 as a "home sale" in the "figures".

Again, that was my point. I should have made myself more clear on that.
140 dollars per sq foot

Akron, OH

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#166
Feb 26, 2009
 
dan maraschino wrote:
<quoted text>
A 175% increase on a 100k house equals 275k. Minus 40% makes it 165k.
Anyway, I would ignore the sales from 2003-2007, if not earlier. To say "it sold for 300K in 06 is meaningless." They were the bubble prices and not the trend prices. Anyone who bought Yahoo in 2001 for "half price" got creamed. bubbles burst, and they return to trend (but first overcorrect).
Thanks for the link.
LOL, I had to ask my teenage stepson how to multiply and divide percentages. How embarrassing.
Thanks for the clarification, seems too obvious now.
Here's a great blog.

http://southfloridabubbletrouble.blogspot.com...
Millionaire Freebie

Indialantic, FL

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#167
Feb 26, 2009
 
The Anti-dope wrote:
<quoted text>
Where'd you learn to do math?$100k * 175% is not $275k.
That is where you made your mistake. When something increases 10%, you multiply it by 110%, by adding 100 to the "increase" number.

So, if it increased 175%, that means 100K *(100+175)%. Your match was right, you just forgot the initial 100% of the original property value.

I hope this helps.
Millionaire Freebie

Indialantic, FL

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#168
Feb 26, 2009
 
ENOUGH wrote:
<quoted text>
No shiite, I was just pointing out what was being constituted as sales in the "figures".
Correct. The median (sale price in the middle of the full set of sales) is lowered by the multiple $100 sales. ENOUGH is right.

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