Housing Rolling Along 2

http://www.wilmingtonstar.com/apps/pbcs.dll/article?AID=/20060903/NEWS/609030355/1002/business

“Dear Mr. Berko: In May of 2005 we bought a condominium on St. Pete Beach, Fla., for $885,000. Five months ago my wife and I lost our jobs in the travel industry. We immediately put our condo on the market and have lowered the price twice, finally to what we paid for it.”

“Last week we got a lowball offer of $795,000, which is the only offer we’ve had since we listed the unit. At first we thought the offer was a joke because shortly after we bought our unit, two other condos in our building just like ours sold for $1.1 million. Then we were shocked at the possibility we might have to take an $83,000 loss.”

“Now we are frightened that we may have to keep the unit making mortgage and interest payments and paying maintenance taxes and insurance until the market gets stronger. That would certainly bankrupt us because we can’t afford the $7,000 monthly costs. It’s killing us and the possibility of taking an $83,000 loss would wipe out all our savings and we’d still be about $18,000 short.”

“We’ve read that the experts believe housing prices will increase this year between 3 percent and 7 percent. It seems that interest rates have stopped rising. So do you think when rates begin to fall again that the condominium market will get stronger? If so how long do you think it will take? D.S.”

“Dear D.S.: You folks are in big trouble and so are tens of thousands of others who bought homes with zero money down using an adjustable rate mortgage. And the banks may be in deep do-do, too, because in almost every instance the amount of those mortgages exceeds the market value of those homes.”

“I’m quite familiar with that section of Florida and I know that the number of resale listings has increased fourfold in the past five months. Your unit is competing against a surging glut of thousands of resales as well as a record number of unsold new units sitting empty and a soaring number of unsold ‘new builds’ that will soon triple the already swollen unsold inventories.”

“Now I know my advice is going to be hard to swallow, but you’ve got to consider the circumstances and take your loss and lump it. The housing boom, no matter what the experts, real estate agents or builders tell us, is going bust. Of course housing experts are predicting a 3 percent to 7 percent increase in property values this year. But these well-paid idiots completely ignore the fact that there wasn’t a sane reason for the astronomical rise in housing costs during the past five years.”

“Common-sense valuations suggest that as of January the prices of most homes and condos were 40 percent to 50 percent too high. So sell that unit before the buyer rescinds his offer.”
 
Quote from Renegen:

The lesson of this is not to have your spouse in the same industry as you.
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i think if you read that again, there may be another lesson or two in there:D
 
These people are morons but I guess the bigger question is how did they even get approved for a 7K mortgage.

In Canada their gross would have to be about 28K/month and since they said the worked in the travel industry it's pretty unlikely they were making that much money.
 
Quote from jmccain:

These people are morons but I guess the bigger question is how did they even get approved for a 7K mortgage.

In Canada their gross would have to be about 28K/month and since they said the worked in the travel industry it's pretty unlikely they were making that much money.
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well as traders, the real risk is not the $90,000 they have already lost. it will be focusing on the $1.1M comps of just a short time ago and hoping for a bounce. at $7,000/month, the holding cots alone will approach $100,000/year - dont know tax rate in FL, but imagine its higher than 1%
 
Quote from QQQBALL:

i think if you read that again, there may be another lesson or two in there:D
More...
The RE market is fine! The perfect buyer could walk in their doorstep anytime :p
 
http://www.tbo.com/pasco/MGBT3IMBLRE.html?imw=Y
The full-page advertisement in the Gulf Harbors Civic Association's newsletter was a desperate plea to homeowners.

"WHY IS EVERYONE SELLING?

MORE HOMES FOR SALE MEAN LOWER PRICES!

STOP SELLING!"


http://www.sun-sentinel.com/news/lo...ay06sep06,0,6276752.story?coll=sfla-news-palm
“For the first time in 35 years, Palm Beach County public schools started class with fewer students than the previous year. District officials anticipated a small decline this year, with hurricanes and high housing costs driving residents out of the county. But actual enrollment was about 2,200 students below even those projections.” Officials say housing costs may be the biggest factor in the decline."


http://www.courant.com/news/local/hc-rgreen0905.artsep05,0,102412.column?coll=hc-utility-local
‘The two burning questions at this moment are why are so many people trying to sell and why aren’t there more buyers?’ said (realtor) Michael Tetreau in Fairfield. ‘The problem is, following the baby-boom bubble, there is no bubble. There just aren’t as many buyers,’ said Tetreau. ‘I don’t see anything on the horizon that is going to change. We have two times as much inventory compared to a year ago. There certainly are some danger signs. It is possible that things will go down a lot,’ said John Clapp, a business professor at the University of Connecticut."


http://www.marketwatch.com/News/Sto...FA59D25-BAC5-4A7F-A2E2-CFE209A87A48}&keyword=
‘These data are a strong indication that the housing market is cooling in a very significant way,’ said James Lockhart, OFHEO director. ‘Indeed, the deceleration appears in almost every region of the country. It’s the fastest deceleration in the index in its three-decade history, OFHEO said.’ "




How would you have liked to buy a Ryland home in this neighborhood in the last year or so....owners are screwed, comps are trashed. I don't think everyone is "sharing the joy" as their ad says...OWP

ryland.jpg
 
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