The Daily Soak - May 31

HousingBath Proven Safe, Effective As Contraceptive

Newsweek takes a closer look at the slumping earnings of neonatal care company, Pediatrix Medical Group, and surmises America is in the midst of a Baby Bust. After five straight years of rising birth rates, 2008 has been a real disappointment for Pediatrix meaning, in very technical terms, baby-makin' activity probably started tapering off last summer. Pediatrix CEO Roger Medel confirms, "Our results are being affected by lower neonatal volume, which is related to a lower rate of growth of births at our hospitals throughout this year." Florida is one of five states that accounts for 50% of Pediatrix's revenue and the state flagship, Florida Hospital Orlando, reported a 14% decline in the number of newborns this April compared to April 2007.


Miami Beach Artecity Project Seeks Loan Extension

Citing delays caused by a change in general contractors, the developers of the Artecity project on Miami Beach are requesting an extension on their $60.3 million construction loan. The lender, Chicago-based Corus Bank, already sent a default letter to the developer, Artecity Park. The project seeks to transform an entire city block in-what the Artecity website describes as-"an up and coming area" of South Beach. The 61-room hotel has been completed; however, the 141 condo and townhouse units are still under construction. Incredibly, Corus Bank has over $1.7 billion in outstanding loans to condo projects in South Florida. While Corus executives have been purchasing hundreds of thousands of shares of their own stock in recent weeks, many on Wall Street believe the bank will ultimately fail.


HousingBath Creates "Dirt Bond" Default Bonanza

Dirt bonds are the bonds that municipalities issue in order to finance the infrastructure for new housing developments. 30 of these bond issues have defaulted this year nationwide to the tune of over $700 million, and half of the defaults are located in Florida and California. Zeroing in on the 10 Florida defaults, Bloomberg points to the Monterra development in Cooper City which sold $50 million in special assessment bonds in 2006. More dirt bond defaults are expected this year thanks to the subprime crisis and the rising price of oil. The latter is making "exurbs" like Monterra less and less desirable given the longer commutes to major downtown areas.

The Daily Soak - May 30

Taxable Value of Homes Plummets in Palm Beach County

The effects of the HousingBath are beginning to be felt down at City Hall. According to the Sun-Sentinel, the taxable value of the 625,000 properties in Palm Beach County fell $12 billion this year, a 7% decrease from 2007. The decline, the first in the county since the early 1990s, reflects both falling home prices and the recent doubling of the Florida homestead exemption from $25,000 to $50,000. Veteran Palm Beach appraiser Gary Nikolits emphasizes the severity of the situation, "It's probably the worst we've experienced. I don't recall a time when the values have been this dramatically reduced." With the tax base eroding, local governments must now curtail the outrageous spending sprees they embarked on over the past five years. (2006 FlashBath)


Tough Times for Housing, Bath & Associates

OK, you know it's bad when law firms start to have layoffs. But according to the National Law Journal, the HousingBath in South Florida is part of the reason for recent "Black Friday" layoffs at large firms like Holland & Knight and Shutts & Bowen. And a third firm in Fort Lauderdale specializing in real estate transactions cut lawyer salaries 12%, because several clients are behind on their legal bills. Oh, and before you break out the Kleenex for the lawyers who received pink slips on Black Friday, there weren't any; only paralegals and administrative staff were kicked to the curb. Apparently the rising tide of foreclosures has created an avalanche of new work for Housing, Bath & Associates....For the Bathers.

No Luck with Lotto? Try Florida Tax Certificates!

The county tax deadline has come and gone, and apparently over 110,000 Central Floridians are delinquent on their tax payments. According to county officials, homeowners owe over $320 million to local governments in Orange, Seminole, Osceola, Lake, Volusia and Brevard counties. And now the good news...you can profit on the delinquency of others. The Orlando Sentinel explains how anyone can bid on delinquent tax certificates which pay an attractive interest rate depending on the outcome of reverse auctions (bidding starts at 18% and works downward). And the family fun doesn't stop there. The Orlando Sentinel also offers two additional tools for Florida thrillseekers: a Foreclosure Database and a Suprime Mortgage Search Engine. Good night and good luck!

The Daily Soak - May 29

International Buyers Can't Resist This Opportunity

One Floridian's depressing neighborhood teeming with For Sale signs and foreclosure notices is a Canadian or European's intoxicating buying opportunity. According to the National Association of Realtors, 20% of Realtors sold properties to international buyers in the past year and, given the continued drop in median prices and relative weakness of the dollar, that percentage should continue to rise in 2008. One Miami Beach realtor describes the typical international buyer profile as 30-somethings who can't resist the opportunity to buy at 2002 prices. The Wall Street Journal notes international buyers bring a refreshing perspective and confidence regarding the long-term outlook for the U.S. economy relative to their home countries.



Coldwell Banker's 10-Day Sale of 1,000 South Florida Homes

Another first for the South Florida HousingBath, Coldwell Banker announced a 10-day promotion during which the prices of over 1,000 homes will be dropped a minimum of 5%. The majority of the homes are located in Palm Beach and Broward counties where the median price drops for the sale will actually be closer to 10% than the mandatory 5%. Whether the promotion is a sign of creativity or an act of desperation depends on who you ask. Realtors at competing firms are bashing the sale as "a marketing ploy" and "meaningless hype," but they will probably change their tune if the promotion is a success. According to one real estate analyst, the key will be whether the homes were priced aggressively even before this 10-day price drop.



Retirement Home Buying Guide for Aspiring Vultures

Forbes offers shopping advice for anyone looking to make a killing on a retirement home in depressed markets like Florida. Among the recommendations: Avoid Golf Subdivisions (water views have greater scarcity and potential price appreciation), Consider the Commute (one-third of second-home buyers purchase within 100 miles of their primary residence), and Play Vulture With Care. The Vulture comment was prompted by one Ft. Myers realtor who complained that interested buyers are calling her and saying, "Hi, I'm a vulture." Forbes encourages aspiring vultures to avoid new condominiums run by HOAs, as high default rates can lead to increased HOA fees and special assessments. Regarding future home prices, the Case-Shiller price index chart (click to enlarge) is jaw-dropping considering Naples is a stronger housing market than many areas of South and Southwest Florida.

The Daily Soak - May 27

Abandoned Homes Keeping Florida Contractors Busy

North Florida is a beautiful part of the Subprime State...lush countryside, horse farms, rolling hills. Now, according to the New York Times, we need to add vacant homes to that list. Jacksonville area contractors, who can earn up to $10,000 a month, have been inundated with new business. The director of their trade association, the National Association of Mortgage Field Services, estimates most contractors specializing in foreclosures have doubled their revenue over the past year. Angry homeowners and random vandals are the main culprits for the damage being done to vacant homes, but more and more banks are offering "Cash for Keys" incentives to reduce the number of break-ins and vandalism.


HousingBath Has Furniture Stores Offering Deep Discounts

If you thought 30% home price reductions were drastic, you haven't been to a furniture store lately. The HousingBath environment means tough times for the furniture industry, and sales at large national chains like Haverty's are weak. For those in the market for new furniture like the Florida couple in this story, discounts up to 75% await. But considering the outrageous markups in the industry, the furniture retailers are probably still making money. As one store owner quipped, "You know, we're happy to make a few dollars on a sofa where we were making a few hundred dollars on a sofa before." And for those like me selling furniture to make mortgage payments, there is always Craigslist...and business in Miami is brisk.


Florida Consumer Confidence Hits All-Time Low

Most of the headlines today focus on the fact that home prices dropped 14% in the first quarter of the year; yet, another more telling indicator for us Floridians has also plummeted. According to researchers at the University of Florida's Survey Research Center, our state consumer confidence index fell to its lowest level since December 1991. The index is made up of five key components including perceptions of personal finances compared with a year ago and overall outlook for the year ahead. Center Director Dr. Chris McCarty estimates Florida housing prices will hit bottom in July; however, he cautions "significant increases in housing prices are years away."

The Daily Soak - May 23

Home Prices Post Largest Drop In 17 Years


As a timely follow-up to yesterday's post regarding housing price data not reflecting local market reality, it looks like historical data might be catching up to the status quo. One of the most comprehensive barometers of U.S. home prices posted a 3% drop in the first quarter of this year compared to the first quarter of 2007, the largest single drop in the 17-year history of the OFHEO's home price index. The states with the sharpest drops in home prices were California (-10.6%), Nevada (-10.3%) and Florida (-8.1%). In an attempt to make non-Floridians feel better and emphasize that certain states are skewing nationwide data, one economist offered this soothing gem, "Most people don't live in a Miami condo."



More Setbacks, Competitors for Troubled Sarasota Condo Project

In recent years an Ireland-based investment group spent over $100 million to assemble 15 waterfront acres in Sarasota adjacent to the Ritz-Carlton. The group planned an ambitious $1 billion high-end condo complex called Sarasota Bayside, but a series of miscues, costly redesigns, land carrying costs and the evaporation of interest in Sarasota's high-end condo market have apparently wiped out most of Irish American's equity in the project. The developer just announced the first tower completion date is being pushed back to 2012, and there is speculation they will have to charge "hundreds of thousands" more for already overpriced units. Factor in the presence of more sophisticated, better financed developments like the Proscenium with 200 condos and a 225-room Waldorf-Astoria, and it's obvious Sarasota Bayside is fighting an uphill battle in a downhill market.



HousingBath Can't Douse Threat of Everglades Fires

The most recent blaze in the Everglades National Park engulfed over 40,000 acres and kept several South Florida residential communities on high alert. While the fire is almost 75% under control, the debate is still heating up between scientists and environmentalists regarding the cause of the fire and, interestingly enough, whether such blazes are net positives for Florida's ecosystem. Rick Anderson, the fire management officer for Everglades National Park, points to the nutrient-rich ashes and reminds us, “The Everglades dies without fire. Fire is (Florida's) grizzly bear...it has to be here.” Then Anderson points to the roofs of new housing developments bordering the Park and adds, “But it can’t be over there.”

The Daily Soak - May 22

A Trulia Tale of Two Cities: Vero Beach and Sunrise

Popular real estate search engine Trulia always offers snapshots of a variety of real estate price trends, and this month's data focuses on two Florida cities moving in opposite directions. Trulia's Price Movers table summarizes month-over-month movements in median prices nationwide. Among the Top 5 Gainers is Vero Beach at #2 which reported an 8% increase in median prices last month. At the opposite end of the spectrum is Sunrise, Florida which ranked #2 among the Top 5 Fallers down almost 10%. Unlike Sunrise, Vero Beach weathered the housing bath well thanks to higher median incomes, more builder restraint during the boom years and fewer unsold units today.

"Florida For Sale!" Declares Wall Street Journal Reporter

Wall Street Journal reporter Brett Arends travels to Southwest Florida and discovers some drastic condo price cuts on the order of 20-30%, but he cautions that recently reported median price drops are not factoring in the inventory that has been slashed further and remains unsold for a variety of reasons. He points to websites like Zillow that are still valuing some Naples and Sarasota properties at pre-bath levels. The writer summarizes his motivation for flying to Florida and kicking the condo tires first-hand, "What's actually happening in these markets isn't always showing up right away." Further up the coast in tony Longboat Key, Arends finds some multi-million dollar waterfront mansions that have also been drastically reduced.

CNBC Unmasks the Retail Real Estate "Dirty Little Secret"

Like her counterpart at the Wall Street Journal, CNBC's Margaret Brennan ventures out to the local strip mall to get the lowdown on the downturn in retail real estate. And what she finds are more vacancies than tracking firms are reporting in markets like Florida, Arizona and California. Retail real estate's "dirty little secret" boils down to the thousands of Mom and Pop stores that chased residential construction growth during the boom years and closed their doors when foreclosures rose and population growth faltered. She notes that formerly hot big box retail chains CompUSA and Linens 'n Things have both gone bankrupt.

The Daily Soak - May 21

HousingBath Impacting Home Improvement Sales in Florida

Home improvement giant The Home Depot (HD) reported a 66% decline in quarterly earnings due in part to weakness in the housing and home improvement markets in key states like Florida and California. The Atlanta-based company posted only $356 million in quarterly earnings compared to $1.05 billion in the first quarter of 2007. Earlier this week, Lowe's (LOW) reported an 18% drop in quarterly earnings citing similar challenges in the Florida market. Shares of both HD and LOW have lost roughly 25% of their value in the past year.



Demand Wanes for Boynton Beach Redevelopment Projects

Just two years ago the City of Boynton Beach set an ambitious agenda for 22 housing and mixed-use developments which would create over 3,500 residences in blighted neighborhoods. Despite millions in incentives offered from the city's Community Redevelopment Authority, many projects are stalling or being pulled completely. A handful of mixed-use projects like Las Ventanas are still moving forward, but Boynton Beach Vice Mayor Jose Rodriguez is less-than-optimistic about the development: "I don't see the demand and nobody else sees the demand. And the economy doesn't project demand."



Tampa Market Added to New Real Estate Website

Web-based real estate search engine, Roost.com, announced the addition of Tampa Bay to its roster of major metropolitan markets. The feature-rich site includes listings of over 9,000 homes in the Tampa Bay area, many with photos and virtual tours. The website site claims "Like real estate, Roost is fundamentally local." This is open to debate considering the Florida map on the company's homepage shows Tampa somewhere in Central Florida and Orlando closer to the Gulf of Mexico. Cartographic nitpicking aside, the site is another attractive online tool empowering individual homebuyers and sellers in Florida.

The Daily Soak - May 20

HousingBath Keeping Boat Repo Men Busy

The boat repossession business is booming thanks to the large number of Americans who used cash-out refinancing on their homes to purchase luxury cruisers and miniyachts in recent years. Recreational boat sales surged 40% from 2000-06 reaching a peak of nearly $40 billion while the average boat loan size tripled to $141,000. When the housing tide turned in 2007, boat sales dropped 8% and many owners either fell behind or defaulted on boat and dock payments. Lenders are working aggressively with repo men to recover vessels in case of default, and Florida is home to some of the nation's leading boat liquidation companies. This slideshow link chronicles the repo of a 34-foot Donzi Express.



South Florida HousingBath Offset by International Trade

Housing inventory and prices may be moving in the wrong directions, but international trade, primarily to Latin America, is booming. One of the few bright spots of the South Florida economy, exports to key trade partners in the Western Hemisphere rose to $12 billion in the first quarter of this year alone. South Florida's most important regional trade partners are Brazil, a country enjoying its strongest economy in decades, and Colombia, a beacon of regional hope and free market capitalism led by President Alvaro Uribe. In related Latin American news, Mexican cement giant Cemex reported capacity will be ramped up 32% by the end of 2009 prompting speculation that Mexican homebuilders are gearing back up for a recovery.



The Next Condo HousingBath: Panama

A former Congressman and South Florida resident blogs about his recent trip to Panama and boasts that "the bubble (if it can be called that) has not burst." In the case of Panama, it's not a matter of "if" but "when." Not since downtown Miami in 2003-08 has there been such an unjustified concentration of overpriced, overhyped, under-amenitized condominiums. Mr. Bauman accurately notes "the bargains are over," as 700 square foot units in most high-rises begin in the mid-$200s. Factor in Panama City's high unemployment and complete lack of clean beaches, golf courses or adequate infrastructure to support the 170-200 high-rises currently under construction, and you have all the ingredients for Latin America's first official HousingBath..er..HousingBaño.

The Daily Soak - May 19

New St. Joe CEO Takes Over; Optimistic About Future

Incoming St. Joe CEO Britt Greene was hired ten years ago and groomed over the past four in Jacksonville to replace outgoing CEO Peter Rummell. Greene takes over the helm of Florida's largest private land owner at a turbulent time, but he is optimistic about the company's prospects, especially in the Panhandle. With the new Panama City Airport scheduled to open in 2010, Greene anticipates a steady influx of tourists, retirees and homebuyers in Florida's Great Northwest. St. Joe shares are currently trading at $40, well below the 52-week high of $57.


Tallahassee Avoids the HousingBath

Local news coverage of the resilience of the Tallahassee housing market over the past two years. Despite the downturn in other corners of the state, prices in the capital city have remained steady and the outlook is equally encouraging. Tallahassee avoided the rampant speculation of 2000-05, and the presence of state government and two major state universities continue to provide steady employment and local economic stimuli. Tallahassee's stability is serving as a magnet for homebuilders looking for stable markets with good growth prospects.


Simon Says Retail Sector to Be Weak Through 2009

David Simon, CEO of Simon Property Group, shares his impressions of the retail market in advance of this week's International Council of Shopping Centers convention. Simon says the tighter lending guidelines have made it difficult for commercial real estate buyers and developers to finish projects. Still, compared with the residential market, commercial vacancies have risen "mildly" and mortgage default rates remain low. Simon sees recently-built "lifestyle" centers with small, boutique shops as being the most problematic going forward. Real estate analysts believe Southwest Florida is one of the retail markets that will get hammered for overbuilding in recent years for a population that never materialized (Flashback).

The Daily Soak - May 18

South Florida Condo Glut Luring U.S., International Buyers

What do Boston, Bogota and Bangalore all have in common? According to this article, they are home to interested buyers who are wheeling and dealing for condo bargains in South Florida. With 30-60% price reductions from the 2005-06 peak, the outlook is positive for condo buyers in both Palm Beach and Broward County. Median existing condo prices are down exactly 30% in both counties from 2007, and recent buying activity suggests a bottom is near. Not so in Miami-Dade where 30,000 additional unfinished condo units will come online and only push prices of existing condos down further.



Palm Beach Condo Deal Implodes; Credit Union Loses Millions

Eastern Financial, the credit union formed in 1937 to service employees of now-defunct Eastern Airlines, got away from its core business during the housing boom and is now paying the price. Eastern made a $30 million loan to Miami-based Merco Group for a 338-unit waterfront condo in West Palm Beach called Palladio Terrace. 8 months after receiving the loan, Merco stopped making payments, and Eastern sued to foreclose in October. The Palladio parcel on North Flagler will be auctioned off July 17, but Eastern will likely settle for millions less than the $37.2 million in unpaid principal and accumulated interest.



Workshop Focus Shifts From Speculation to Survival

Floridians used to attend real estate workshops to learn about buying and flipping houses they would never live in. The focus of today's workshops is simply about hanging on to the roof over your family's head. The City of Orlando Housing Authority is hosting foreclosure education seminars, and attendance is growing along with the number of upside-down homeowners in Central Florida. The two most important workshop takeaways for any homeowner facing the prospect of foreclosure: 1. Avoid scammers offering to help bail you out, and 2. Keep the lines of communication open with your lender.

The Daily Soak - May 17

2008 Spring Selling Season Didn't Provide Needed Boost

MarketWatch takes a comprehensive look at spring sales activity nationwide. A combination of excess inventory, falling prices, and negative consumer sentiment prevented this spring selling season from kick-starting the housing market out of its recent doldrums. Toll Brothers CEO Bob Toll opted for superlatives in describing spring sales activity as "the worst that we have ever seen." Still, it is worth noting that Toll Brothers' stock is up 18% this year, and other homebuilders have posted similar double-digit gains. Considering the performance of housing stocks is thought of as a leading indicator, the positive performance of these stocks is probably factoring in a housing turnaround in the next 12-18 months.


Love Thy Neighbor...or At Least Pay His Cable Bill

Broken Elevators...Dimly-Lit Halls...Moldy Carpet: These weren't the advertised amenities in most new South Florida condo developments, but they are the reality facing unit owners in buildings with high foreclosure rates. Owners in one Miami 43-story tower are facing $1,000 assessments and higher utility bills thanks to the almost 20% of buyers facing foreclosure. In addition to broken fixtures and unkempt common areas, residents are growing accustomed to other visual signs of the HousingBath: multiple lockboxes in stairwells and yellow foreclosure notice flyers left on apartment doors. Even though the New York Times would not name the condo in question, it is the Club at Brickell Bay. The Milk of Magnesia-green balcony in the photo matches the condo's northern and southern facades.


What Will $300,000 Buy? In Florida, More Than It Used To

WNBC in New York pulled together an interesting study of how much home you can buy with $300,000 in select markets nationwide. At the polar extremes were markets like New York and Honolulu on the high end with 400 square foot apartments and 1/1 lofts. At the opposite end of the spectrum were cities like Houston and Santa Fe where $300k buys 3-4 bedrooms plus upgrades and pools in nice neighborhoods. Somewhere in between were Florida cities like Tampa where $300,000 buys a 2-story home with "4 bedrooms, 2.5 bathrooms, pool with auto sweep, two car garage and spacious closets." For the complete slideshow, click here.

The Daily Soak - May 16

Bold Buyers Wading Back into Florida Real Estate Pool

The Christian Science Monitor suggests the HousingBath water temperature is increasingly irresistible for many buyers in recently battered markets nationwide, especially Florida. The article cites the recent brisk sale of 116 developer-owned units in Cape Coral (albeit at a 40-50% discount) as one sign of recovery. Another source points to the falling number of properties listed on CountrywideForeclosures.com as a broader sign of an encouraging nationwide trend. But then Deerfield Beach real estate analyst Jack McCabe throws cold water on our little housing fantasy by reminding us that median prices in Florida are still very high relative to median incomes.


Canadian Buyers Can't Resist Lure of Cheap Florida Real Estate

Death, taxes, and Canadian buyers in Florida. Three things in life are certain, and the latter is riding a new wave of interest fueled by drastic Florida price reductions and the strength of the Canadian dollar. NAR reports that Canadian buyers are more likely to purchase properties priced over $1 million than other nationalities, while a leading Canadian lifestyle magazine points to the Hollywood-Bal Harbour corridor as the most desirable destination for such Canadian buyers. One South Florida broker put the attractiveness of the numbers in perspective, "We're selling suites in brand new condos for $368 a square foot. A couple of years ago they sold for $600 to $700 a square foot."


Florida Association of Realtors Calling A Bottom...Almost

The Florida Association of Realtors released quarterly housing statistics this week, and the spin was positive as usual. However, upon closer inspection, there really may be some evidence of a long-awaited bottom in many Florida markets. One has to look closely through the haze of year-over-year, double-digit declines in median home prices, single family home sales and condo sales, but FAR President Chuck Bonfiglio points to the increased activity in most markets as ample cause for optimism. According to University of Florida's CRE Director Wayne Archer, results of a recent UF Housing Survey echoed this positive sentiment, "It sounds like an old song re- sung, but our respondents are still keeping the faith in the real estate market."

The Daily Soak - May 15

Palm Beach Condo Sale Sets Florida Record

"Housing Crisis?...Oh, How Quaint. Say, have you seen my new G650?" A 6,000-square foot Palm Beach condominium formerly owned by Miami Dolphins co-owner Stephen Ross just sold for $12.1 million. Residences in the ultra luxurious Il Lugano are some of the most coveted in Palm Beach for their prime location and amenities. The building was a 66-unit rental complex until 2000 when a massive renovation transformed the Dorset House into Il Lugano. The listing broker gushed, "Il Lugano, in my opinion, is the most exquisite condominium building for many miles around. It's new and beautiful." Almost as beautiful as her 3% commission check for just listing the property: $360,000.

We Now Return to Our Regular Programming...

Foreclosures! Delinquent Mortgages! Falling Home Prices! The Sun-Sentinel polls several local housing analysts and economists regarding the status quo in Broward and Palm Beach County (at least the rubes who aren't buying $12 million waterfront cribs). The triple-digit increases in scheduled foreclosure sales suggest that a growing number of desperate Floridians, unable to negotiate more favorable terms with their lenders, are losing their homes. There were 785 and 2,568 scheduled foreclosure sales in Palm Beach and Broward Counties, representing 167% and 426% increases over April 2007, respectively. One analyst summed up the anxiety of many Florida homeowners in the foreclosure on-deck circle: "A lot of homeowners are trying to do the right thing, but they're stuck in the waiting room of the mortgage ER."

Florida Absent from 10 Fastest-Growing Real Estate Markets

What a difference two years make. Money Magazine compiled a list of the nation's 10 fastest-growing real estate markets and Florida was a no-show. In the 2006 survey, Florida cities dominated the ranking with Panama City, Lakeland and Ocala cited as three of the top 10, but the fast growth torch has been officially passed to Texas, Louisiana and New York. Median home prices in the $100k-$150k range and double-digit home price appreciation since 2003 are two of the key factors. Major Florida housing markets now have the dubious distinction of occupying 5 of the Top 10 Markets Set for Steep Losses. Money compiled the following sobering slide show which forecasts falling home prices in most Florida markets until June 2010.

The Daily Soak - May 14

Miami Commercial Market Teeming With Deals Gone Bad

Lawsuits are flying in Miami's commercial real estate market where parcels acquired four years ago are currently being appraised for 50% of their purchase price. Several high profile Brickell and Aventura projects like Brickell CitiCentre had lofty luxury condo and mixed-use aspirations in 2004-5, but when the market went south, the projects were postponed. Instead of cash flow, the undeveloped parcels are only generating debt for their owners. Depending on the borrower's status and the likelihood of getting projects off the drawing board, lenders are moving forward with loan workouts or lawsuits and foreclosure filings.


We're #1! We're #1!. Florida Tops in Mortgage Fraud

Mortgage fraud was a huge problem during the go-go flipper days; I am living in living proof. The new construction Miami townhouse I am renting in Coconut Grove is one of several properties purchased by a South American investor. He committed mortgage fraud by getting inflated appraisals on each property ($800,000 loans on $600,000 units) and pocketing the difference. Now he has disappeared, all the units are in foreclosure, and the banks are trying to unload them for $450,000. Fast forward to the present day and the depressed housing market; the FBI report warns it is an equally opportune time for mortgage fraud. Just click on the beautiful photo of properties described in a recent appraisal as "recently renovated condominiums."


Florida has 4th Highest Foreclosure Filing Rate

RealtyTrac released nationwide foreclosure filing numbers, and the news is not encouraging for Florida homeowners. There were 35,264 foreclosure filings in Florida in April which represents a 146% increase over April 2007. Viewed another way, one in every 242 Florida households received a foreclosure filing, and that rate is the fourth-highest in the nation after Nevada, California and Arizona. The concern is that subprime mortgage defaults will be compounded by defaults on prime loans as the economy continues to weaken. A flood of foreclosures will only add to the already bloated inventory levels in most Florida markets.

The Daily Soak - May 13

Upside Down Homes in South Florida

The local news teams are keeping homeowner fears alive in South Florida. At least this time, they are offering some advice and solutions for those who owe more than their homes are worth. NBC6 teases tonight's special report, Upside Down Homes, which will answer the question, What are Upside Down Homes? (Hint: We just told you), help homeowners figure out whether they are upside down (Hint: House Value - Mortgage = Negative Number) and offer some "Helpful Solutions" to help you get right-side-up. Details at 11.


Luxury Builder Stockpiles Cash, Awaits Pent-Up Demand

Toll Brothers, the largest luxury homebuilder in the U.S., reported first quarter earnings which were higher than analyst expectations. While revenues declined the past 24 months, Toll has been playing defense by cutting production, selling lots and undeveloped land and stockpiling cash. CEO Bob Toll said luxury buyers are still in the sidelines, but he foresees pent-up demand. One of the country's most diversified big builders, Toll's regional earnings breakdown offers a glimpse at the good (NY, NJ, IL down 3%), the bad (AZ, CA, CO, NV down 28%) and the ugly (the South including Florida down 46%).



Nation's Largest Auctioneer Announces 72-Hour Sales Blitz

Oklahoma-based auctioneer Williams and Williams announced a 72-hour multi-state sales blitz. The auction will be held in person and online between May 13-15 and features 565 properties in 26 states. Williams and Williams currently has 46 properties listed in Florida. The majority of the Florida properties are concentrated in Fort Lauderdale, Orlando and Miami; however, there are several homes available in smaller, rural markets like Dunnellon, Davenport and Micanopy. The site offers detailed property descriptions with photos, driving directions for the auctions and opening bid amounts.

The Daily Soak - May 11

Foreclosure Finds in Upscale Neighborhoods Nationwide

BusinessWeek and online foreclosure listing service, RealtyTrac, compiled a database of some of the best foreclosure bargains in the high-end residential market. Bank-owned properties are now being aggressively priced and marketed by lenders like GMAC and Countrywide complete with online listings and links to local agent contacts. While bargains abound in upscale neighborhoods, potential buyers are reminded that most banks list foreclosed properties in "as-is" condition. Arizona, California and Florida ranked high among states where "bargains are abundant, especially for buyers with strong credit, ready cash, and a willingness to take a chance on markets in free fall."


Foreclosed Dreams in Manatee County

An in-depth analysis of the two faces of foreclosure in Florida: sheer agony for the newly foreclosed and unbridled joy for bargain hunters. Manatee County markets like Bradenton are awash in vacant 2/2 condos and 3/2 townhomes. Lenders are looking to foreclose one in eight homes in pleasant-sounding neighborhoods like Stoneybrook at Heritage Harbour and Bayshore Gardens. The article chronicles the tribulations of a Bradenton couple who admittedly did not read their loan documents and ended up foreclosing on a 2,200 square foot home. Meanwhile, local brokers are ramping up the guided tours where "amid the rubble of foreclosure, some are beginning to find gems." In summing up his unhappiness, one desperate seller said, "If I had it to do all over again, I wouldn't be here."


Go to Your Happy Place...(Note: Maybe It's Not Florida.)

If Florida sellers are unhappy with the status quo and looking to relocate, sociologist Richard Florida offers a fresh perspective on places and happiness in his new book, Who's Your City? Florida analyzes the results of the recent Gallup Place & Happiness Survey of Americans and finds that place is more important than money but not as important as relationships and work. The most important attributes of "place" according to most respondents were aesthetics, basic services and physical/economic security.

The Daily Soak - May 10

Southwest Florida Housing Absorption Rate Encouraging

According to a new report released by Metrostudy, the absorption rate of unsold inventory in certain areas of Lee and Collier Counties is encouraging. Lennar's Bella Terra community in Estero is one of those developments that has changed product and price points (approximately $150 per SF) to meet shifting demand. As a result, the community had 267 move-ins during the first quarter of this year alone. End-user occupancy of finished units combined with the dramatic decline in new housing starts should continue to boost absorption rates in Southwest Florida going forward.



Creative or Desperate? Florida Incentives Reaching Six Figures

A different story emerges on the East Coast of Florida where developers are offering boatloads of incentives at projects in Royal Palm Beach and Deerfield Beach. Price guarantees, free maintenance, free HOA fees, and even luxury cars are fair game in the condo concession craze. Researcher Jack McCabe points to the downside of the incentive game, "If everyone’s offering concessions, then it’s not a concession; it’s just seen as part of business. Then, you have to ultimately move to the last resort--cutting prices. Once you lower prices, it’s very difficult to ever raise them again in the future."



NBR Spotlight on Cape Coral and South Florida

The Nightly Business Report saved the worst for last in its five-part series on "the nation's battered housing market." Cape Coral is ground zero in Southwest Florida where foreclosures are off the charts and a new wave of buyers (most likely speculators) are snatching up properties for 40 cents on the dollar that some buyers paid just a year ago. The outlook is not much brighter in Miami and Fort Lauderdale where excess inventory is compounded by a "steady supply of new units" that keep pushing prices in general in a southerly direction.