The Daily Soak - June 30

The Next "Victim" of the Florida Housing Crisis: Government

BusinessWeek says state and local governments will be the next victims of the housing crisis. The article paints a picture of governments that got fat and happy on a buffet of rising property, sales and income taxes from 2000-2006. According to BW, "The Florida housing slump is one of the worst in the nation and only appears to be getting worse. The $66 billion Florida budget for the coming year is about $6 billion less than the one approved last year." One of the most profligate squanderers of public funds in recent years, Palm Beach County is facing $653 million in education budget cuts over the next five years, but BW says county officials should look on the bright side...Palm Beach County's population has decreased every year since 2004. Hopefully Floridians will vote their local "victims" out of office in favor of fiscally responsible elected officials. (Slideshow)


Bad Timing for Florida Congressman's Real Estate Deals

The Sarasota Herald Tribune examines recent real estate deals undertaken by U.S. Representative Vern Buchanan (R-Longboat Key) and his partners in Southwest Florida. Two Sarasota purchases have been the most disappointing for Buchanan including a 5,200-square foot bayfront home bought for $3.2 million (currently listed for $2.6 million), and a luxury condo in the Ritz-Carlton Residences bought for $1.9 million in 2005 which sold 22 months later for $1.6 million. But the long-term outlook is brighter for some of the non-residential properties that Buchanan and partners purchased between 2004 and 2006 for $33 million. A Wingate Inn under construction in Bradenton is scheduled to open next January, and a $2.5 million penthouse unit at Sarasota's Plaza at Five Points is in line with current market pricing.


Opportunity Funds Forming to Purchase Florida Real Estate

Real Estate Florida interviews Craig Studnicky of Aventura-based International Sales Group (ISG). ISG recently partnered with a Dallas firm to create a real estate fund geared toward purchasing undervalued properties, also known as an opportunity fund or vulture fund. Studnicky explains that the fund will probably not be in acquisition mode in South Florida until the last third of this year (Sept.-Dec.) when he anticipates prices will have bottomed out in many markets. ISG plans on renting out many of the acquired properties for the next 2-3 years and waiting for prices to recover. If more opportunity funds take a similar approach, the removal of thousands of vacant units from the MLS would have a positive impact on inventory levels, median prices and--perhaps most importantly right now--consumer confidence of potential buyers.

The Daily Soak - June 28

Don't Let the Sun (City Center Prices) Go Down On Me

Quick...pop quiz...which of these two couples is truly happy? A or B? Well, it's a trick question, because the answer is "Both." You see Couple A are just two models pimping a retirement community they don't live in, and looking that good at 60 is something to celebrate. Now Couple B, Heidi and Harry Oelgart, are definitely not models, but they did just buy a house for $130,000 less than it was listed for 2 years ago. The St. Pete Times reports that sales are up in Sun City Center thanks to aggressive price slashing; some condos are reportedly going for as little as $37,000. These price reductions are good news for everyone except desperate sellers and the original developer, WCI. While the Oelgarts picked up their 3 bedroom dream home for $345,000, WCI is trying to sell homes in the same neighborhood for almost $500,000. That news should help the stock price.

Couch Time with the Housing Cinderella of Palm Beach Gardens

HB.com reported yesterday on the 42 year-old woman auctioning off herself and her home on eBay, and some train wrecks demand a second look. Deven Traboscia invites NBC in for a heart-to-heart confession on her white leather sofa. In the interview, she repeatedly uses words like "fairy tale" and "Prince Charming" to give this lame attempt to unload her house an air of dignity and innocence. Never mind the fact that she is inviting a total stranger to come live with her and her two daughters. Traboscia says she is targeting European men because,"The men there are very captivating (Translation: stupid); they're very vibrant (Translation: desperate)." Apparently some Internet stalker named Claudio is planning to fly over from Italy to check out the goods. Fortunately for Cinderella, he's dreamy. (VideoLink)

Marina Auction Reflects Hard Times in South Florida Boating Industry

Fort Lauderdale's New River Marina is going on the auction block after 15 years of business, and the timing could not be much worse for the current owners, Mary & Bob Wickham. Financial problems started in 2000 when the construction of a new luxury condominium, The Falls at Marina Bay, interrupted access to New River's dry dock facility. And during the current economic slump, fewer boaters are hitting the water and bringing their boats in for costly repairs. The marina was valued at $21 million in 2006, and the Wickhams, who filed Chapter 11 bankruptcy last year, still owe $13 million to their creditors. There is still one ray of hope: the auction can be avoided if an investor steps forth between now and the scheduled July 17 auction date.

The Daily Soak - June 27

Palm Beach Woman Selling House, Herself on Craigslist

A Palm Beach Gardens Realtor has an interesting new listing: herself. Deven Traboscia, 42, has posted her 2,000 square foot Dakotah model home for sale on Craigslist's European sites for $500,000. The list of amenities includes 4 bedrooms, 2.5 bathrooms, ceiling fans, a hot tub, and Deven as a wife. The seller paints an uber-cheesy picture of life at Casa Trabaoscia: "If you want to live the never ending dream and experience the real love, life and the romance you have always felt was a fairytale then this is the vibrant outstanding woman of your dreams!" To spice things up, Traboscia threw in some chin-down/chest-out/wink-wink photos for good measure. Traboscia is only targeting men in Europe, presumably thinking that some clueless Euro would not realize he is just buying a home she can't unload in today's market. One can only hope Borat is the winning bidder. High Five!


CNN Panel Discusses 1,000,000 Foreclosure Milestone

Larry King hosted a panel of real estate experts including Donald Trump and Barbara Corcoran to discuss the housing market collapse. The program cited some troubling data including the number of U.S. homes in foreclosure (1,000,000) and the number of U.S. homes worth less than what their owners paid (10,000,000). As always, King brought his A-game and peppered his panel with brilliant questions like, "Is this a good time to sell a house?" Dumbfounded, Corcoran responded "Of course it's not a good time to sell a house." She then encouraged desperate sellers to under-price their homes 20-25% below what they believe is fair market value. True to form, Trump encouraged deal-making in this buyer's market, "This is now the time to go out and try making a deal, try buying a house. The banks are there. It's already financed. You don't really need the money because it's already financed. They are already in. They are already wet." A perfect description for the HousingBath. (Video Link)


Bulk Auctions Moving Condo Inventory in Florida Panhandle

Back in April, HB.com reported on the growing popularity of auctions in and around Pensacola. The Pensacola News Journal has a follow-up on National Auction Group, an Alabama-based auction company that is thriving in the over saturated Panhandle condo market. NAG just sold 9 units in a Pensacola high-rise during an absolute auction that grossed $4.12 million or $457,000 per unit. The transaction was good news for all parties involved according to the auctioneer, "This clearly... shows that there's no reason for condo developers to sit on unsold inventory when they can be sold efficiently and quickly by auction. Today, we had a happy seller and many happy buyers." The NAG website lists several upcoming auctions in Panama City Beach and Orange Beach including this August 2nd auction of 28 new condos at a development called Palazzo.

The Daily Soak - June 26

On The Count of 3...You Will Open Your Eyes and Sell A Condo

Ahhh foreclosures, neurotic sellers, reluctant buyers, squatters and vandalism...it's enough to shatter the fragile psyche of a Florida Realtor. So in an effort to help his agents cope and alleviate the stress of a mean housing market, a Palm Beach Gardens broker, Chappy Adams, has hired a meditation specialist to bathe his sales team with housing harmony. Mordy Levine teaches yoga and meditation to a traditional clientele in Boca Raton but is now branching out to heal legions of stressed sales associates coping with the housing status quo. Presumably 15 minutes of breathing exercises help the sales team find their happy place just before leaving the office and crumbling in the fetal position in the back seat of their leased c230s and RX350s. (Editor's Note: HB.com has already optioned the movie rights detailing the friendship between the broker and the meditation specialist tentatively titled, When Mordy Met Chappy). (VideoLink)

Please Welcome Downtown Miami's Newest Condo Residents: Mold

Last week, HB.com reported on the unexpected arrival of squatters and vandals in some downtown Miami condos. Well apparently another new guest is keeping a low profile living in the walls of several (unidentified) buildings: mold. CBS4 reports that many owners facing foreclosure are shutting off their A/C units, sealing the units and thus creating the perfect breeding ground for mold. And according to a local attorney the problem doesn't necessarily go away when the banks take possession of the units. Facing stacks of foreclosures and rising expenses, the banks aren't exactly in a hurry to kick on the A/C and start paying exorbitant Florida utility bills. With mold growing in new high-rises and thousands of residents with buyer's remorse looking for cash and a way out, get ready for an unholy alliance of personal injury lawyers and thousands of "victims" filing toxic mold lawsuits. (Warning: Video link features potentially disturbing images of mold and lawyers.)

Trump Tower in Tampa Files for Chapter 11

Earlier this week, HB.com featured an article detailing the demise of downtown revitalization efforts in downtown Tampa, and now the Tampa Tribune reports the local developer of a high-profile project is in financial trouble. Tampa-based SimDag/Robel LLC paid $16 million for the prime waterfront parcel in 2004 and announced the ambitious $300 million dollar, 52-story high-rise in February 2005. Three years and dozens of liens and lawsuits later, the parcel still sits vacant and the developers face upwards of $50 million in debt. One of the most embarrassing lawsuits was filed by Trump himself who wants his name removed from the stalled project. That's quite a change-of-heart from the June 2005 unveiling when the Donald boasted of record unit sales, predicted an influx of New York Yankee buyers, and joked about relocating to Tampa with his new wife, Melania.

The Daily Soak - June 25

Developer Thinks Cape Coral Really Needs Some New Condos

Few markets in Florida embody the boom and bust of the HousingBath better than Cape Coral where overbuilding and speculation left a glut of foreclosed units and unsold homes. But one developer seems to think that building a new luxury condo and adding to the supply/demand imbalance would be a great idea. Cape Grande developers are seeking approvals to build a 124-unit luxury condo on the Cape Coral Parkway. A representative for the developer says the timing is great, because "there aren't a huge oversupply of condominiums now." And if that argument isn't enough to get potential buyers off the fence, the developer really pours on the sales cheese, "We still have all the things we've ever had: sunshine, water and tropical breezes." Yes, and if those tropical breezes weren't blowing around an ocean of vacant properties in Cape Coral, now might be a great time to build another luxury condo.


Florida Consumer Confidence Hits All-Time Low

Falling home prices and a glut of unsold homes are just two of the factors weighing on the minds of the average Floridian, according to a key consumer confidence index. The University of Florida's Survey Research Center (SRC) released its Consumer Confidence Index yesterday, and the key number dropped to 57 last month, the lowest level in the index's 26-year history. And SRC Director Chris McCarty feels this is an indicator of growing longer-term pessimism in the Sunshine State, "We are seeing an accelerating decline in confidence. On top of the housing problem, there is increased gas and food prices, a rising unemployment rate, and an airline industry wondering if it will make it.


South Florida Condo Odors Send Residents to the Hospital

Residents of a Fort Lauderdale condo made several calls to 911 this weekend complaining about a strong odor. Broward County officials dispatched Fire & Rescue to the Tennis Club II complex, but nothing was resolved. Finally when one resident was hospitalized and neighbor complaints continued, Fire & Rescue returned with equipment to detect hazardous gas levels. The source of the odor was a polyurethane stain in a condo under renovation. The video link shows how the situation was resolved...the windows and sliding doors of the condo were all opened so the unit could vent properly. One can assume the offgassing was sufficient to sicken and hospitalize residents of Tennis Club I and Tennis Club III. Only in South Florida.

The Daily Soak - June 24

HousingBath Prompts Florida Shift in Drilling Sentiment

As a supplement to this week's HB.com survey regarding offshore drilling, the Wall Street Journal examines the shifting sentiment among Floridians facing "skyrocketing home insurance, the housing bust and funding cuts, forced by state budget deficits, to schools and other services." A Rasmussen poll taken last week found that 61% of Floridians believe that increased drilling would lower gas prices. Just two years ago, when gas prices were around $3 a gallon, a St. Pete Times poll found state residents were split 50/50 on the issue. If $4 a gallon has prompted an 11% swing to the Drill Now camp, just wait until we hit $5 statewide. According to GasBuddy.com, Floridians in some parts of the state are already paying $4.69.
, DealsGoneBad, Excess Inventory, Florida economy, Florida HOAs, Lawsuits, Palm Beach Post, Riviera Beach, Tampa, Wall Street Journal

Ruling Makes It Harder for Buyers to Avoid the Closing Table

A recent decision by the 4th District Court of Appeals in Palm Beach County was bad news for pre-construction purchasers in Florida looking for any possible loophole to renege on their contracts. The ruling was in response to a lawsuit filed by two investors who bought a Marina Grande condo in Riviera Beach for $495,000 in 2005. When the HOA fees jumped 36% in 2006, the investors sued for the refund of their $99,000 deposit citing a "material and adverse" change. But the judge based his decision on an affordability test meaning, since the investors could afford the increase, it was not a material and adverse change. Another area developer, Catafulmo Construction, faces similar challenges with their 2700 North Ocean project on Singer Island. According to sources, 40 of the building 242 units are currently tied up in some form of buyers' remorse litigation.


Are Downtown Revitalization Efforts Stalling in Tampa?

HB.com reported last week on the downtown Miami situation, but BusinessWeek expands the focus to other parts of area, specifically downtown Tampa. 11,000 new condo units were announced for the downtown area in 2003; however, only 3,500 units are under construction or completed today. Just like downtown Miami, several projects were scrapped when the market changed course, and a high percentage of finished units sit vacant. Completed projects like SkyPoint are pushing price reductions on their websites, while 13 real estate companies in Tampa just hosted a six-hour Open House this weekend featuring 9 developments with more than 1,300 available units. Here is the full BW slideshow of Downtowns in the Downturn.

The Daily Soak - June 20

Foreclosures Converting Realtors Into Property Managers

Good news for struggling South Florida Realtors looking to make some extra cash. CBS4 tours several foreclosed properties in Pembroke Pines with a local Realtor turned property manager. Tim Thompson manages several Broward County condos and duplexes, and with foreclosures on the rise, business is brisk. Thompson checks on each property weekly making sure the abandoned homes are locked and free of squatters and vandalism. The number of foreclosures in Broward County year-to-date is 19,720 compared to 8,152 in 2007. Miami-Dade foreclosures totaled 26,391 in all of 2007; however, 20,508 have been recorded in just the first five months of this year. (Video link)



Operation Malicious Mortgage Targets Fraud in Florida

The FBI and Department of Justice have been working with local authorities since March 1 on a sweeping probe of mortgage fraud in several states including Florida. Miami and Tampa rank among the FBI's list of Top 10 cities where mortgage fraud is rampant, and the Tampa office reports a 365% increase in the number of mortgage fraud cases since 2004. According to the Tampa Tribune, "the most common type of mortgage fraud found is misstatement of income or assets. That is followed by forged documents, inflated appraisals and misrepresentation of a buyer's intent to occupy a property as a primary residence." In related news, two Bear Stearns hedge fund managers were arrested for their role in two funds that collapsed last year during the initial subprime mortgage meltdown.



Condo Commandos Keeping Florida Safe, Boring & Toy-Free

A wonderful editorial from the Sun-Sentinel coming to the defense of John Madden, an 84-year-old South Florida man who apparently angered members of his condo association by playing with a toy motorboat in one of the man-made lakes at Coral Gate Condominium. When residents started complaining, Mr. Madden traded in his 22-inch, gas motorboat for a quieter, battery-powered boat, but that was still too loud for some residents. The editorial highlights the death of common sense in a gated world where condo documents prohibit playing with toy boats or placing chairs next to lakes. For a daily dose of legal insanity, check out Overlawyered.com.

The Daily Soak - June 19

Florida Condo Announces Clothing-Optional Pool

HB.com reported last week on the growing popularity of nudist resorts in Central Florida, and now a Hillsborough County apartment complex wants to get in on the action. New marketing materials for the Arbors at Branch Creek tout a new, clothing-optional pool, but the announcement is not sitting well with long-time residents who prefer the "resort-style living with Southern charm" advertised in the old marketing materials. The development's new website features photos of semi-nude models lounging poolside and some extra cheesy swinger-lingo, "Our residents are welcome to shed more than their inhibitions as they enter the gates of Eden." Who knew the gates of Eden were located on County Road 580, just south of Race Track Road?

Scope of Miami Overbuilding Not As Bad As Some Predicted

Since 2002, over 22,000 new condominiums have either been built or are under construction in downtown Miami. And while that number is staggering, it could have been much worse. During the housing boom, some analysts were forecasting new condo numbers in the 50,000 to 80,000 range, and developers filed plans for 90,000 units with Miami-Dade building officials. But as the market started cooling and the foreclosures started rising, dozens of proposed condos were scrapped. While 22,000 units will be absorbed more quickly than 80,000, there is growing concern over who will occupy these units in Miami's less-than-vibrant urban core. Real estate analyst Michael Cannon summed it up, ''You have successful buildings next door to troubled projects that should never have been built. And, more broadly, we know Brickell is a successful market but we don't know what type of person buys in the central business district, or in Midtown. The jury is out.''

Squatters Living In and Vandalizing Vacant Miami Condo Units

Well, this certainly answers the question posed above regarding who will buy in Miami's central business district. OK, technically, squatters are not buyers, but they are helping to fill some otherwise lonely units in downtown Miami. With 260 units in foreclosure, the condo association at the 800-unit Club at Brickell Bay has had its share of financial challenges, but the presence of squatters raises serious concerns regarding building access and the safety of residents. The no-nonsense property manager (photo) showed a Miami Herald reporter the 33rd floor condo where the door had been kicked in, toiletries were left in the bathroom and clothes were left in the dryer. As a parting shot, Jackson Pollock was kind enough to pour black paint all over the condo's marble floor. (Video link)

The Daily Soak - June 18

Mad Bather: Cramer Sees Good News in Florida Housing Market

The host of CNBC's Mad Money, Jim Cramer, points to the earnings release of large residential homebuilder Standard Pacific as evidence of a turnaround in the Florida housing market. Standard Pacific released plenty of bad news yesterday (housing orders down 12%, a 25% cancellation rate, etc.), but the most encouraging news was the whopping 42% increase in home sales in Florida. Cramer reminds his readers that Toll Brothers CEO Bob Toll was equally bullish in recent comments about the Florida market. Toll made a recent appearance on Mad Money and said, Florida had gone from being the worst to the best and that he was no longer worried about it.

Southwest Florida Zip Codes with Highest Foreclosure Rates

33909, 33971, 34120...if any of these five-digit numbers appear on your snail mail, chances are your neighborhood has no shortage of For Sale, Make an Offer and Reduced signs. And while Southwest Florida foreclosures are up over 400% compared to last year, the bulk of the distressed real estate is concentrated in certain zip codes of cities like Cape Coral and Lehigh Acres. Satellite maps of these zip codes a few years ago show large areas located well inland with undeveloped parcels and few man-made amenities. (Cape Coral map, Lehigh Acres map). Undeterred, one local realtor gushes that home prices in these zip codes have fallen to 2001 levels. There's one small problem with that statement...judging from the satellite maps, 95% of these homes did not exist in 2001. The complete zip code foreclosure breakdown is available here.


So...How Much House Will $850,000 Get You?

The New York Times looks at home prices in three radically different U.S. housing markets: Tucson, Arizona; Milwaukee, Wisconsin; and a small town in coastal Maine. The homes range in size from 2,600 to 4,000 square feet and all feature desirable locations, large floor plans and anywhere from 4-6 bedrooms. The sharpest contrasts lie in the architecture, interior decoration (as detailed in the photo gallery), and the property taxes (from $3,000 in Maine to $12,000 in Wisconsin). For the sake of comparison, HB.com pulled together $850,000 listings from Trulia for three distinctly different Florida cities: Miami Beach, Ocala and Santa Rosa Beach.

The Daily Soak - June 17

HousingBath Means Less Trash for Florida Landfills

Times are tough for Florida homeowners, mortgage brokers, realtors, and...landfills? Yes, it seems an unforeseen consequence of the HousingBath has been the recent drop-off in the amount of solid waste being deposited in the state's 158 permitted landfills. The decline in recent years is due to three factors: the absence of tropical storms that leave tons of natural vegetation debris, the drop in housing starts meaning less new construction debris, and the thousands of foreclosed homes sitting vacant statewide without new occupants throwing out trash. In Florida, approximately 45,000 tons of solid waste are generated each day. Watch dumping fees become the next fee that local governments start hiking to deal with falling appraised values and mounting budget deficits.


Florida Foreclosures + Empty Pools = Mosquitopalooza

The combination of new Florida homes with the requisite screened-in pool plus the wave of recent foreclosures has created an aquatic breeding ground for millions of mosquitoes. To combat the rise in blood-feeding anthropods, local authorities are stocking many swimming pools with Gambusia holbrookii, also known as the guppy, that devour the mosquito larvae before they hatch. The practice gained popularity following Andrew in 1992 when the guppies were placed in over 20,000 swimming pools. Local experts say the pools are a good start, but mosquitoes are also breeding in the saturated buckets, flower pots, and other containers that foreclosed home owners are leaving behind.



Some Floridians Fighting, Others Fleeing Tough Economic Times

The Sun-Sentinel asked online readers to share their strategies for coping during these difficult times. And while some Floridians aren't looking back, ("Lost my job 9 mos ago with no prospects in financial services sector in Florida. Preparing to turn the house over to the bank and leave for work out of state.), others are coping comfortably, ("Walk to both jobs, make my own soup and stew ($6 for 12 meals), videos from library, saving more than ever before. I'm single and happy."), and still others are just tired of all the whining. ("Organize ur time and work more efficiently. Pick a career where you can use your mind, not the labor of your buttocks! Carve your own destiny!") Carpe bathum.

The Daily Soak - June 16

Tuscany Reserve: The Real Estate Gaffe That Keeps On Giving

WCI has the dubious distinction of developing the biggest luxury marketing dud in the history of Naples real estate. Ill-conceived and woefully-timed Tuscany Reserve cost the company in excess of $250 million in land development and initial construction costs, including the notorious I-75 mega-berm eyesore. And just because the company sold the failed project to foreign investors last month for $65 million doesn't mean the lawsuits will end anytime soon. One group of potential investors that pulled out of a deal to purchase TR last Christmas Eve want their $1 million deposit back, but WCI attorneys say "No way." One can understand why WCI would fight to keep a paltry $1 million...the $65 million paid for Tuscany Reserve is equal to the company's entire market cap.



More Foreclosure Gems on Florida's Emerald Coast

Northwest Florida took a beating from Ivan in 2004, but the latest wave of pain is coming in the form of foreclosures. Both Okaloosa and Walton Counties are on pace to record more foreclosures in the first half of 2008 than either county recorded in all of 2007. Inventory is rising along with foreclosures, as the average home in Northwest Florida has been on the market for 27 months. When asked about the light at the end of the housing tunnel, University of West Florida economist Rick Harper said, "Since the peak was three years ago, the time from peak to trough probably means a similar recovery cycle. So it could take several more quarters before the market begins to grow."



Foreign Buyers May Account for Half of Miami Activity

The International Herald Tribune looks at the influx of international buyers in the Miami real estate market. By some estimates, foreign buyers account for close to 50% of all activity in Miami's luxury condo market. A recent convention hosted by the Realtor Association of Greater Miami & the Beaches (RAMB) attracted over 200 participants from countries like Brazil, Costa Rica, Belize, Italy and France. RAMB is credited in the article for taking a proactive stance in tough times and ramping up alliances for foreign agents in countries like France where bilingual listings and marketing collateral have helped to attract more European buyers. The 50% price reductions on new construction high-rises downtown may be playing a small part as well.

The Daily Soak - June 15

Florida Real Estate Problems Shut Down Minnesota Bank

Interesting boom and bust story of the management of a small town bank in rural Minnesota that got swept up in the Southwest Florida housing boom frenzy. Over the past decade, First Integrity Bank (Oh, the irony) shifted more and more of its operations and lending focus from Minnesota to Naples, Florida. In addition to making speculative real estate loans and selling them on the secondary market, the bank president and his wife formed a partnership to purchase the 52-room Olde Marco Inn. Now that the bank has lost millions and the FDIC has shut down operations, dozens of angry First Integrity investors are filing lawsuits. One disgruntled investor shared this on how bank executives managed his funds, "They were living in penthouses down in Florida on everybody else's money."



Foreclosure Rescue Scams On the Rise In Tampa Bay Area

The HousingBath continues to bring out the worst in predators looking to capitalize on the desperation of Florida homeowners facing foreclosures. The Brandenton Herald cites three separate and sophisticated "foreclosure rescue" scams that have involved over 60 homes and their owners. With feel-good names like "4 Solutions Inc." and "Fresh Start Leaseback," the schemes have a variety of undesirable outcomes: owners unknowingly sign over their homes which are then sold or owners are paired with phony investors with the false promise of purchasing and leasing back the home. Most of the conspirators, primarily husband and wife duos or siblings, are either awaiting trial or already in prison.



A Swingin' Bachelor Pad...Southwest Florida Style

It's refreshing to occasionally step back from the HousingBath gloom and find someone who really loves living in the Florida condo they purchased at the height of the market in 2004. The Marco Eagle's Interior Design writer, Marion Nicolay, visits Tom Cinquni's bachelor pad and falls in love with his masculine color choices ("peach and pink to light plum, deep rose and maroon"), subtle furnishings ("a tall Oriental screen in black-and-green bird designs") and understated accent rooms ("the powder room has faux painted walls in gold tones"). The rugged atmosphere has a profound impact on Nicolay's word choice as she gushes over a "handsome family sofa" and "the foyer with its handsome wrought iron mirror." A Renaissance in the Sky, indeed.

The Daily Soak - June 12

Ewwwww...Business Is Booming At Florida Nudist Colonies

Pasco County Florida demonstrates the importance of tapping a niche in an over saturated real estate market. Hundreds of amenitized, gated communities in Central Florida are competing for the same generic pool of clothes-wearing buyers. But Land O' Lakes developments like Caliente Resorts can offer the same amenities and outdoor activities with the added bonus of clothing optional. Just imagine the joys of nude tennis, nude golf, nude BBQs, nude HOA meetings. Nudist developers rely on slick marketing materials with attractive models (not actual residents) and multilingual websites to attract new buyers, many of whom are coming from Europe for their nudist fix.


Spitzer Wants to Launch Real Estate Vulture Fund

Fresh off his D.C. prostitute humiliation and gubernatorial resignation, Eliot Spitzer is hoping to make some fast money in the world of distressed real estate. The New York Sun reports that Spitzer is proposing to start a vulture fund that would buy distressed real estate around the country and then flip it for a profit. If the real estate fund doesn't pan out, maybe Client 9 will turn to his former call girl, Ashley Alexander Dupre, for some business advice. By one account, she stands to make upwards of $5 million in the glamorous worlds of porn and Hustler magazine.


Orlando Housing Market Moving In Positive Direction

There are some signs of life in the Central Florida housing market for the third consecutive month. Median home prices, home sales and homes under contract were all up in May compared to April. And while there were 421 fewer homes for sale in Orlando last month, there is still a 20-month inventory of existing homes on the market. Some local experts attribute the uptick in sales to a wave of European buyers being lured by low prices, a weak dollar, and-oh right-the abundance of clothing-optional communities. According to Caliente Resorts, revenue is up 120% over last year.

The Daily Soak - June 9

Fire sale Pricing Leads to 41% Sales Increase in Cape Coral

Few Florida cities have seen the extremes of the Housing Boom and Bath like Cape Coral. The median home price reached $340,000 in April 2005; today that figure is a more sobering $200,000. According to locals, the revised median price comes courtesy of mortgage companies that have slashed prices of foreclosed properties. Thanks to fire sale prices, the number of homes sold in Cape Coral jumped 41% this year, the best year-over-year increase in Florida. And while this has been good news for interested buyers, some are describing the recent uptick as a "boomlet." In other words, most of the vacant lots and existing homes are being snatched up by just another wave of investors. Out of this boomlet, The Waterfront Wonderland may garner a new nickname, Vultures' Paradise.

Unsold Homes Keeping Florida Seniors Out of Nursing Homes

Some Tampa Bay area retirement communities have seen vacancy rates rise to near 20%, as interested new residents have been unable to sell their homes. And they need that equity tied up in their primary residences, considering the hefty $50,000-$500,000 entrance fees required at continuum of care facilities like University Village. One Florida life care expert says these communities used to be willing to purchase and resell the homes of new residents, but they are simply not taking that risk in today's HousingBath. The President of the Florida Healthcare Association sums up the challenge facing seniors with one foot at home and the other in the nursing home, "They move in thinking surely the house will sell before they run out of assets. But it doesn't and they end up having to move in with a relative."

Postcards From the Next Miami....Panama City

An investment letter reveals the truth about the next big condo mess in this hemisphere and warns the rapidly cooling environment "may discourage short-term investment strategies." (See "Speculation"). The article notes that 70 to 80 percent of the buyers in Panama City are foreign speculators, a statistic I can vouch for from my experience working for a local developer of what is perhaps the tackiest high-rise in the whole city. The only buyers were Europeans lured by the favorable exchange rate, but those days are over considering the looming credit crisis across the pond. The Euros did absolutely zero due diligence prior to making deposits on $300,000, 1 bedroom units in high-rises with no balconies on the banks of Panama City's sparkling brown waterfront. With demand plummeting and 42,000 units remaining to be delivered, the Panama City condo implosion will make downtown Miami look like a mild housing hiccup.

The Daily Soak - June 7

Orlando High-rise Lawsuit Filed Over Cracked Foundation

The developer of the 313-unit Paramount on Lake Eola in downtown Orlando is named as the defendant in a $20 million lawsuit filed yesterday by purchasers looking for a loophole to avoid taking possession of their units. And they may have found one in the structure's cracked concrete foundation. The plaintiffs argue they should have been notified over the structural issues and given the option to back out of their contracts. In his defense, the developer claims to have spent $20 million on additional steel beam reinforcement, and the project, scheduled to open in the next 3 weeks, has already been green lighted by local building inspectors. Ron Burgundy and the Channel 9 News Team filed this report.


Would You Buy a $650,000 Noodle Franchise From This Man?

Southwest Floridians must have lots of free time, boundless trust and discretionary income lying around their gated communities, because this is the second story this week of a charismatic con coaxing millions from close friends. Described as a "slick mover and a sweet talker," Rodney James was involved in a variety of shady real estate deals and bilked 11 "friends" out of close to $2 million over a 4-year period. One friend in particular, Carey Mulwee, had been friends with James since the 7th grade and apparently couldn't get enough of R.J.'s Kool-Aid. In the span of a few months James convinced Mulwee to quit his job as VP of a software company and invest $650,000 in an Arizona noodle franchise. I smell a sequel to the Bad Idea Jeans commercial.



HousingBath Doesn't Slow Down the Party on South Beach

A reporter comes to Miami and finds the scene incredibly superficial. Here's the problem with that condescending construct....she's from L.A.! Rosemary McClure tours several neighborhoods in the Magic City but seems most intrigued by South Beach which she describes as "the engine that drives tourism, a 24-hour-a-day place where supermodels, actresses and hip-hop stars rub shoulders with visitors from Sioux Falls, S.D." Despite the HousingBath, SoBe still brings out the A-list celebrities as well as droves of aspiring locals (A Miami ad executive friend calls them $30,000-millionaires). Soaring gas prices and the growing popularity of "staycations" have also been a boon for hotels and restaurants on Miami Beach, or as McClure affectionately calls it "The Epicenter of Conspicuous Consumption."

The Daily Soak - June 6

Q: Hi, How Much Is the Rent? A: How Much You Got?

The excess inventory of the HousingBath has created an ideal situation for potential renters in Florida, but more and more renters are getting burned by leasing properties in pre-foreclosure. With slim prospects for selling, many desperate homeowners are hungry for tenants and whatever cash flow they can get their hands on. The Palm Beach Post reports on a mother and son who leased a Palm Beach Gardens house before learning that the original owner had bought the house for $710,000 in 2006 and sold it to a relative a month later for $10. And while the owner is on probation for mortgage fraud, the renter is still on the hook for monthly rent. Renters are encouraged to research foreclosure filings on their local county clerk's website.


Lifestyles of the Formerly Rich & Recently Foreclosed

From Ed McMahon to Evander Holyfield, the media can't seem to get enough of Celebrity Foreclosures, but CNBC's Diana Olick says "Enough Already!" Olick rails against the formerly rich for their inability or unwillingness to save and spend rationally during their respective heydays. Evander Holyfield's 109-room Georgia mansion and Veronica Hearst's 59-room Palm Beach villa are viewed as two examples of wretched excess. Appearing on Larry King last night, McMahon took a page from the Patrick Ewing School of Economics: “If you spend more money than you make, you know what happens.” During the 2005 NBA player's strike, Ewing offered this gem to rationalize the player's stance.


Subprime Crisis Was Bad...Option ARMs Could Be Worse

BusinessWeek looks into the housing crystal ball and sees an avalanche of option ARM resets triggering the next wave of housing foreclosures. The next wave could start as early as April, but there are already signs of distress according to the Mortgage Bankers Association. The rate of foreclosure starts for option ARMs in Florida jumped from 0.7% in the first quarter of 2007 to 2.57% in the first quarter of this year. A mortgage strategist at Credit Suisse put the option ARM HousingBath in context, "Most of the public is thinking that the subprime thing is over, but this is another thing waiting. The problem for these borrowers is that once you go underwater, it's very hard to refinance, and if you cannot refinance there is very little option for you." So many Option ARMs, so few options.

The Daily Soak - June 5

Hurricane Fred Leaves Condo Owners $38,000 Lighter

We're only five days into the 2008 Hurricane Season, and the Broward Sheriff's Office already has the first named storm behind bars. Storm shutter "installer" Fred Rathke took $38,000 in deposits from 26 residents of the Waters Edge Condominium in Pompano Beach. Mr. Rathke, described by residents as "a great salesman," began taking deposits in 2006, but he forgot to actually install the shutters or repair the concrete damage caused by the 2005 storms. This isn't the first time Hurricane Fred's company, Roll-Tek Industries, has been in the news. The company has garnered dozens of complaints and an unsatisfactory rating from the Better Business Bureau.


"Ventana" must be Spanish for "Troubled Real Estate Deal"

The old joke was, What does "La Quinta" mean in English? Answer: Next to Denny's. And while the word "ventana" does in fact mean "window" in Spanish, there must be a lesser-known definition reserved for bad real estate transactions in Florida. A few years back, WCI had a legal issue and dozens of cancellations at their 87-unit Ventanas condominium in Naples. Now the 85-unit Ventana Condos near Tampa is being turned over to the original lender of $32 million for the mid-rise project, Mercantile Bank. With only 41 of the 85 units sold and signed contract holders walking, Mercantile filed a notice to foreclose on Ventana Condos in March.


Home Foreclosures...Over 1 Million Served!

The Mortgage Bankers Association reports today that roughly 1.1 million homes are in foreclosure nationwide. The outlook is bleak considering 382,000 homes entered foreclosure during the last quarter of 2007, while 448,000 homes entered foreclosure during the first three months of 2008. The usual suspects-Florida, California, Arizona and Nevada-account for one-third of the nationwide foreclosures and almost 90% of the latest increase in foreclosures. An economist with MBA blames falling prices for the current trend: "The number one problem is the drop in home prices. In other days, you could sell the home. But because home prices have fallen so much, in many of those cases, the homes are going into foreclosure."