The Daily Soak - August 27

Bather's Note: The Daily Soak will return September 5.

Tighter Lending Guidelines Putting the Brakes on Recovery

It seems like only yesterday when the no-income verification, no-doc, interest only, 1 year adjustable rate mortgage was all the rage. Those days are officially over, and if you have any doubts, just ask anyone trying to buy a house today. Many middle class buyers, who are finally well positioned to take advantage of more affordable housing, are being left on the sidelines. Lenders are demanding much larger down payments and verifiable proof of income. One South Florida realtor says, "Europeans, wealthy Northeasterners and the wealthy locals who have the cash can buy. The average working class here, they are left out.'' The Miami condos with the highest foreclosure rates in areas like Brickell and Biscayne offer the best bargains, but banks are requiring deposits of 30-40% in many of those buildings. Interested buyers in hard-hit areas should get familiar with a new term/fee in the lender lexicon: Adverse Market Premium.

Locals Foreclosing, Dutch Moving In: Worlds Collide in Orlando

Disney World, It's A Small World, Sea World...Orlando leads the U.S. in world-themed destinations where foreign tourists, singing children and even sea creatures live in perfect harmony. That same vibe doesn't exactly spill over to Orlando neighborhoods according to one Dutch reporter. The political editor for Radio Netherlands Worldwide reports on the bizarre dynamic emerging in some subdivisions where middle class American citizens are losing their homes to foreclosure and middle class Dutch tourists are snatching up the same homes at fire sale prices. One Dutch buyer sums up the experience, "We looked at 80 houses in three days, all in one resort. When you do that, you see lots of human suffering. You see from a distance that people aren't doing well, and I really didn't like that. You feel like a vulture circling overhead. That was the not so nice side of it."


Advice to Obama: Bring Some Bagels to the Condo

From Berlin to Denver, Democratic presidential candidate Barack Obama has been addressing throngs of adoring admirers this summer. But in sharp contrast, Obama messengers have apparently received a less-than-enthusiastic reception in the South Florida Jewish community. Florida state Senator Nan Rich says Obama surrogates "have been shocked by the hostility they have encountered at condominiums in her area aimed at their candidate." And Senate Minority Leader Steve Geller says he has been "nearly chased out" of some of these same South Florida condos. Both politicians made the comments during a roundtable discussion on the Jewish vote during the Democratic National Convention. Searching for solutions, one Florida Representative offered the following game plan for Barry, "He needs to come down and have bagels and cream cheese in the condos and he will be fine."

The Daily Soak - August 25

Judge Denies Class-Action Status for Orlando Condo Lawsuit

Back in July, HB.com reported on the $20 million lawsuit filed against the developer of the 313-unit Paramount on Lake Eola in downtown Orlando. The lawsuit was filed by purchasers looking for a loophole to avoid taking possession of their units. Earlier this year the plaintiffs found out about the building's cracked foundation and argued they should have been notified and given the option to back out of their contracts. An Orlando judge has now rejected the class-action status of that lawsuit and ruled that each purchaser must fight the developer, Zom Inc., individually. Attorneys for Zom applauded "the judge's rejection of the class-action request because it clears the way for other buyers to close on their purchases and move into the building." A 1,200 square foot, 2bed/2bath unit in the Paramount is listed on Trulia for $460,000, or $387 per square foot. (July 7 Video)



Boca Project: "When Bad Things Happen To Good Condos"

A stalled condo conversion project in Boca Raton will revert back to an apartment complex according to Ceebraid-Signal, the West Palm Beach developer. Like many projects, the 212-unit apartments were converted to condos during the housing boom, but the project stalled, according to the Palm Beach Post. "The four-building project has sat, unfinished, with two buildings completed and the other two incomplete. Little to no construction work has taken place during the past year. The two boarded-up buildings serving as a constant reminder - and eyesore- of when bad things happen to good condos." Eden resident and local teacher Kathleen Callaghan can't wait to give back her $393,000 condo. "They can turn it into an amusement park," Callaghan said. "I don't care. Just let me go." Callaghan may not get her wish as quickly as promised. Her closing date was just moved from August to September and, according to the Post, "financing remains tricky" for the developer. (Google Map)



Buying A Condo? Better Do Your Homework First

AP published a checklist of good advice for those considering a condo purchase. The author of Tips and Traps When Buying a Condo, Co-op, or Townhouse warns "The biggest single mistake that people tend to make is to think that buying a condo is just a less-expensive way of buying a house and not really understanding that it's shared ownership, which is a lot different." The first priority should be finding out about monthly HOA fees and the likelihood of special assessments in the near future. Next, buyers are encouraged to ascertain the number of unsold or investor-owned units in a condo, because high percentages can be a red flag for lenders. "Banks typically won't finance or will charge a premium to finance a unit in a building where 40% or more of the units are rentals." Finally, find out about the financial status of the condo's developer and make sure any deposit monies are placed in escrow.

The Daily Soak - August 22

Magazine's Advice to Interested Second Home Buyers...Rent.

BusinessWeek takes a look at some of the nation's most popular second home destinations and asks whether renting makes more sense than buying in some of these markets. Non-Florida cities like Austin, Boston and Charleston factor high on the list, while four Florida cities dominated the ranking: St. Augustine, Kissimmee, Miami and Bonita Springs. The 4bed/3bath in Kissimmee offers the most bang for the buck at $1,595 monthly, and the most expensive listing is the lone high-rise offering, a 2bed/2bath in the 50 Biscayne Tower in downtown Miami. Real estate analyst Jack McCabe agrees with BusinessWeek's advice, "If [home] prices were going up and you could hold on to [a house] for a long time, you might be able to make a case that it's a better time to buy. But if you have the ability to rent for half the price without the liabilities that go with owning, it's a smarter decision to rent." (Slideshow)


Have We Bottomed? Where's The Bottom? When Will We Bottom?

John Maynard Keynes once described speculation as "the activity of forecasting the psychology of the market." And with housing prices stabilizing in several markets, Florida media outlets are jumping into the speculation pool waist-deep. Local news teams will lunge at any panic-inducing headlines (i.e., 24-hour coverage of a thunderstorm), so playing on the fears of potential buyers scared of missing "the bottom" of housing prices is a natural. Housing speculators proved the folly of market timing on the way up, so why would we encourage similar behavior on the way down? The buyers who will be rewarded are people like Robert Ward who just bought a $1.1 million Miami Shores home for $379,000. Could the price have fallen further in six months or a year? Sure, but Ward realized a $720,000 haircut was ample incentive and cushion to ameliorate the risk of pulling the trigger today. Of course the local news team had to couch Ward's purchase as a huge gamble, "Ward got lucky." No, Ward got a great deal on a home. Other Florida fence-sitters would be wise to do the same.


Foreclosure Leaves Pig On Fort Lauderdale's Mean Streets

It's not easy being a Vietnamese, pot-bellied pig. It's especially tough when you're a Vietnamese, pot-bellied pig and your owners lose their home to foreclosure. But such was the fate for Moogy, a Fort Lauderdale resident, who was forced to trade in his plush digs for a more modest pen at the local Wildlife Care Center. The Center's adoption supervisor says the family separation and subsequent move have been traumatic for all parties, "They were heartbroken - to have to give him up, and I think, he was heartbroken to be back here because he's back in the barn." Moogy was first adopted in 2005 by the couple who found him on the side of the road in Plantation. The housing boom was good to the couple and their newly adopted son, who quickly became an indoor pet, but foreclosure left all three homeless. No word on the couple's whereabouts, but Moogy is awaiting adoption if you'd like to welcome him into your home. (VideoLink)

The Daily Soak - August 21

South Florida Homeowners Slashing Prices to Sell Homes

The Sun-Sentinel analyzed home sales data for the first halves of 2006, 2007 and 2008 and found that South Florida homeowners who are able to sell their homes are typically slashing their asking prices or accepting offers well below the original listing prices. 23% of homes in Broward and 27% of homes in Palm Beach were sold this year for a loss compared to 2006 when only 2% of homeowners sold their homes for losses in both counties. The price reductions are bringing affordability back to South Florida and first-time buyers like Katarina Lytle can't believe their good fortune, "My husband and I walked out of the closing, jumped in the truck and just screamed." The Lytles paid $205,000 for a home that sold previously for $355,000. Despite the financial hit sellers are taking, housing analyst Brad Hunter explains many of these sales are still win/win transactions, especially for those "who regret having bought the house at the price they paid and if they can get rid of the obligation of having to continue paying on it, they're happy to do it."


A Little Taste of South Beach in Rural Florida...Swinging Optional

You've heard the term "rondo" used to describe a rental-to-condo conversion of an apartment complex. Well, a rural Florida apartment complex is more of a "rudie" or rental-to-nudie conversion. HB.com reported on the Arbor at Branch Creek complex back in June when the developer announced the community pool was going clothing-optional. Peter Mead, the Sales Director draws a quick comparison with luxury hotels on South Beach, "It's going to be hot, there are going to be a sound system and cabanas. The vibe is a South Beach concept that is being utilized in several different hotels around the country." True, the pools at SoBe hotels like the Delano and Shore Club have enormous pools with great sound systems and cabanas, but that's where the similarity ends. Take a closer look at this photo gallery from the Raleigh, and you'll notice clothing is not optional. Resident Amy Toson is upset over the pool situation, "We moved here because of the family friendliness of the area and all the family things to do." Peter Mead would probably tell Toson to chill, put on her birthday suit and bring the whole family down to the pool, because "It's going to be hot!"


Few Bargains In High-end Condo Market Nationwide

The median condo price in the U.S. is $224,000, and most major metropolitan areas have gluts of unsold units in this price range. But what about the high-end market where prices start over 5x the national median price? CNBC takes a closer look at the $1 million-plus segment of the condo market and finds few bargains in cities like Boston, Los Angeles and New York. The $1 million-and-over market is outperforming the broader market from Orange County to Manhattan, where the median price for a luxury condo rose 19% this year to $4.37 million. The article points to the strength of Miami's high-end market with disbelief, given the recent avalanche of negative housing news emanating from The Magic City. Local analysts say the bottom has been passed and prices are now rising in "proven, mature markets" like Coral Gables, Key Biscayne, Coconut Grove and Fisher Island. Still, Miami high-end condo bargains can be found in areas like Brickell and Biscayne with the biggest glut of new high-rise towers.

The Daily Soak - August 20

Buyer's Remorse: Condo Ruling Should Stem "Gotcha" Lawsuits

A Miami judge's recent ruling against a group of condo buyers could set an important precedent for South Florida and other U.S. markets suffering housing boom hangovers. The U.S. district judge threw out 29 lawsuits filed by condo buyers in the high-profile Opera Tower in Downtown Miami. The plaintiffs filed under the federal Interstate Land Sales Full Disclosure Act, a measure intended to prevent "outrageous fraud," claiming the size of the swimming pool and the tile depicted in the advertising materials differed from what was actually delivered. The attorney representing Opera Tower presented the developer's case, "Folks are simply trying to get out of their contractual obligations because the market's gone soft. They're trying to flyspeck everything, find any way out of the contract because the market's changed." Apparently, the judge agreed and ruled in favor of the developer, but the measure doesn't guarantee remorseful buyers will stop walking away from their deposits. Only time will tell.


$100K Condos? 171 Tampa Units To Be Sold At Bankruptcy Auction

When Key Developers unveiled The Place at Channelside in 2005, the eight-story project was touted as a chance to buy in "the Channel District, Tampa's latest, most vibrant renaissance neighborhood." By 2007, only 74 units had been sold, and many of those buyers began filing lawsuits hoping to back out of their deals. Now a bankruptcy judge has ordered the sale of the entire portfolio of 171 remaining units. And here is the best part for an interested buyer: the minimum reserve price for all of the units is only $17.25 million. That translates into $100,877 per unit for condos that range in size from 600-square-foot studios to a 3,600-square-foot penthouse. That's amazing considering discounted 2/2 resale units can be found on Zillow for $300,000. St. Pete Times business reporter James Thorner sums up the opportunity,"Let's face it: Whoever can come up with $17-million is going to make a ton of money. The 2.1-acre site comes with ground-floor shop space, a parking garage and other extras."


We Now Return To Our Regularly Scheduled Programming...

Or at least we hope so. I received the following e-mail Monday evening from one of our loyal bathers, Bill Myers: "I very much enjoy the HousingBath site and appreciate the amount of work you put in to it. However, lately when I visit using IE6, IE7 or Firefox, the site locks up my computer." Bill went on to explain how he ran a series of diagnostic tests to no avail. And, sure enough, when I opened the site traffic report Monday night, it showed site visits dropped like a rock over the weekend. Long story short, it ended up being a blogger.com bug that Google (hopefully) worked out over the weekend, and I apologize for any locked up computers out there. I now check HB.com on three separate browsers to be safe, but there's still no substitute for getting immediate feedback from you at info@housingbath.com.

The Daily Soak - August 19

Homebuilding Freeze Good News for Anxious Sellers

The glut of unsold homes in many Florida markets is finally getting a little less "gluttier" thanks to the homebuilding freeze sweeping our state and many parts of the U.S. The Census Bureau reports that permits and housing starts both fell to their lowest levels in 17 years. CNN puts the housing numbers in perspective, "The continued drop in building could be just what the battered real estate market needs. Since demand for homes remains weak, the glut will only ease if fewer new homes are built." The builder confidence index released earlier in the week is further evidence the big homebuilders aren't planning to ramp up new home production anytime in the near future. Of the builders surveyed, "only 5% of builders said the current market is good, 8% said they expected a favorable market in the next six months and fewer than 2% said they were seeing strong traffic from potential buyers."


From Palm Beach Condos to the King of Beers...Make Us An Offer

Fresh off another Florida hatchet job, the editors at Time Magazine look out the window and see a giant yard sale stretching from Florida high-rises to U.S. highways and airports to bargains at the local mall. "It's everything from the St.-Tropez crowd buying up condos in Palm Beach, Fla., to Europeans taking over U.S. pharmaceutical and infrastructure companies. Even tourists are busy using their euros and pounds to snap up iPhones, jeans, shoes and everything else they can stuff into the empty suitcases they carry along for just that purpose." HB.com has credited foreign buyers from London to Moscow on several occasions for playing a role (albeit small) in today's Florida real estate market. As June Fletcher of the Wall Street Journal notes on her blog, over half of foreign buyers are still reluctant to pull the trigger, because they don't have a firm grip on current vs. historical prices. Fletcher says motivated sellers would be wise to include such data for foreign buyers, "This may be more persuasive than a lavish description of your outdoor kitchen."


Distressed Property Buying 101 & Florida Auction Updates

The Miami Herald offers some good advice for those contemplating the purchase of distressed properties..."homes that have been abandoned, lost to foreclosure, or with owners in default." Basic information is provided for private auctions, public auctions, REO properties and pre-foreclosures. In distressed property transaction news statewide, we reported on the successful public auction of 75 properties in Tampa last week that attracted 300 bidders. Today, National Auction Group is reporting the Saturday sale of 21 condo units at the Harbour Pointe community on Big Lagoon Bay near Pensacola. According to their website, "79 registered bidders from as far away as California bid on 10 condos at Absolute Auction. Due to the great demand, 21 sold for $6,377,250, or $303,678 per unit." And looking ahead, two additional auctions are scheduled for September 6. 23 condominiums and marina slips will be auctioned off at Bella Sol in Apollo Beach, and 21 luxury homes will be sold at absolute auction in Vero Beach's Antilles community.


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The Daily Soak - August 18

Condo, Existing Home Sales Stabilizing In Tampa Bay

The threat of a possible Cat-1 hurricane isn't putting a damper on the housing market in the Tampa Bay area. Sales of existing homes in the second quarter were down only 1% compared to the second quarter last year. Condominium sales improved for the second consecutive quarter, as the 1,540 condo units sold in Tampa represented a 4% increase over the first quarter. Fort Myers and West Palm Beach were the only two Florida cities posting greater increases in condo sales. As in other corners of Florida, lower median prices are a contributing factor in the sales numbers. The median sales price of $177,000 is down 16% compared to last year and puts median prices back at 2005 levels. FAR President Chuck Bonfiglio puts a positive spin on the news, “Prices appear to be reaching equilibrium in many areas, another encouraging sign that could boost the market’s momentum


Florida Auctions Drawing Buyers, Moving Properties

Last week, HB.com shared the news that Texas auction house Hudson & Marshall was hosting a week-long series of real estate auctions around Florida. One local news team headed out to a packed hotel ballroom where nearly 100 bank-owned properties were on the auction block. Auctioneer Brett Richards set the tone for the evening's activities, "A very high percentage of the bids tonight will be accepted to get these properties of the books." The news team video shows one house selling for $40,000 while a dilapidated 3 bedroom/1 bathroom is purchased for $18,000. Richards says business is up 100% over last year thanks to the rising number of foreclosures and the number of banks now pursuing the auction route. There were no minimum starting bids at the auction and Hudson & Marshall is already planning another Tampa auction in December.


"It Was The Greatest Thing Since Peanut Butter"

Two Orlando Sentinel reporters travel across Central Florida to see how investors overheated the housing market and to interview a few of those who got burned. "The infusion of outside dollars contributed to a doubling of prices over five years," they explain, "When investors could no longer flip properties by selling them for more than they paid, the market collapsed." And while the existing home market in Central Florida is stabilizing, that's little consolation for speculators who gambled big and lost. Colorado resident Robert Shaeffer, 66, retired from his job at IBM and bought a 1bed/1bath, 1,110 square foot unit in the Orlando Cay Club for a staggering $374,900. "It was the greatest thing since peanut butter, " said Shaeffer of the Cay Club sales pitch which promised everything from guaranteed rental income to private jet access. Shaffer's tale is a sad one, but buying property sight unseen is never a good idea.

The Daily Soak - August 15

Foreclosures Up, Sales Down in Palm Beach and Broward

Tampa-based website Foreclosuredaily.com reports the number of homeowners facing foreclosure in Palm Beach rose from 1,063 last July to 1,739 this July, while the number of Broward homeowners in the same boat jumped from 1,430 to 2,865. Meanwhile, banks are finally tackling the backlog of properties, as the number of foreclosure sales more than doubled over last year in both counties. A Moody's analyst predicts the number of foreclosures in both counties will peak next June when fewer adjustable rate mortgages are resetting and the job market stabilizes. South Florida housing analyst Brad Hunter is less enthusiastic, "I think if you are hoping that the worst will be behind us by the middle of next year, that's a pretty optimistic scenario." Florida Association of Realtors data released yesterday would seem to support Hunter's thesis; existing home sales were down 3% in Palm Beach and 8% in Broward compared to last year.


Tampa Bay Condos Will Be Sold At Absolute Auction Next Month

Alabama-based auctioneer J.P. King announced an absolute auction of 23 condominiums at the Bella Sol development in Apollo Beach south of Tampa. (Map) In order to sweeten the pot for interested boaters, 12 new boat slips will also be auctioned off at the waterfront complex on September 6. The auctioneer says, “The villas in Bella Sol provide luxurious amenities and a Caribbean resort feel that creates a vacation getaway atmosphere. Most of the premier villas feature a spectacular view across Tampa Bay, where residents witness beautiful sunsets on a daily basis.” Interested bidders should be able to pick up these units at a deep discount to their original listing price. According to this website, the Bella Sol villas were originally offered between $457,000 and $990,000. For more information, the developer's website has floor plan PDF's and Tampa Bay realtor Debbie Zito put together a nice three-minute video tour of the community.


New Rate Quote Websites Offer "Cozy Blanket of Anonymity"

While mortgage lenders have definitely raised the bar for borrowers, some websites have made the process of searching for rate quotes a little less painful. Forbes reports that consumer-friendly sites like Zillow and MortgageMarvel don't require visitors to input reams of personal information just to generate a simple quote. The Zillow Mortgage Marketplace claims to have 3,333 participating lenders and has processed over 61,000 mortgage requests since inception. MortgageMarvel makes the assumption that interested borrowers have a good credit score (720 or higher) and offers real-time rates and lender fee quotes rather than annoying teaser rates. Another advantage of these sites is the transparency they offer in an industry that desperately needs it. An eBay-style honor system and active forums are weeding out shady lenders. According to Forbes, "Zillow has reviewed hundreds of red flags and barred more than a dozen lenders for employing bait-and-switch tactics with their loan rates."

The Daily Soak - August 14

Orlando Housing Market Named Florida's "Most Stable"

A new real estate study commissioned by Attorney's Title Insurance Fund names Orlando the "most stable" real estate market in Florida. While Orlando has a glut of unsold homes like most regions of Florida, The City Beautiful's outlook is brighter than most given Orlando's economic diversity. “[The forecast] shows that Orlando continues to be the strongest residential real estate market in the state because of its large share of fast-growing industries, such as tourism, healthcare, education and defense manufacturing,” according to Reuters. The study also points to other positive trends including the area's appeal for foreign buyers, a rising number of homes under contract and an overall affordability index of 103.8%. Orlando is riding a recent wave of good publicity. HB.com reported last week that Orlando was named the best city in the U.S. for renters. The bottom line? Civic leaders and elected officials in other Florida cities would be wise to follow the Orlando model and court more high-growth, higher-wage industries.


Double-digit Foreclosure Spikes In Manatee, Charlotte Counties

News out of Southwest Florida suggests home foreclosures are on the rise, but some industry analysts see light at the end of the tunnel. In July, foreclosure filings in Manatee and Charlotte rose 74% and 59%, respectively, over the same period last year. Port Charlotte real estate consultant Dennis Black puts the blame on the City of North Port, "Those people were the first to walk away from their homes when the market blew up." Wachovia analyst Adam York says the monthly numbers are lagging indicators, so they aren't accurate reflections of the current environment. Sarasota banking consultant Tramm Hudson sees this as a natural progression, "What we're seeing is the housing bubble moving through the court system...we may see a few more quarters of this before banks are able to work through it all." Fortunately banks already have less paperwork in neighboring Sarasota County; foreclosure filings there showed no increase over 2007.


After Years of Neglect, Lennar Reaches Out to Florida Brokers

Call it a sign of the times, but homebuilding giant Lennar is courting outside brokers with a new, 3-tier commission structure. According to the South Florida Business Journal, "The company is offering a tiered commission schedule through Aug. 31: 3% commission for the first sale, 4% on the second and 5% on the third and subsequent sales. An additional 1% is payable if the sale is from existing inventory." The move represents a real shift in strategy for Miami-based Lennar which traditionally shunned outside parties in favor of Lennar's New Home Consultants. The company's website, which has an FAQ discouraging outsiders, is now covered with promotions targeted at Realtors. Real estate analyst Lewis Goodkin applauds the move, "These are desperate times for the industry...giving brokers a greater reason to bring prospects to your product has been working." Lennar currently sells homes in 122 different communities around Florida; The Oaks townhomes in Tampa are the most affordable, while Savannah Ranch Estates in Homestead are the most expensive.


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The Daily Soak - August 13

Fewer "New Florida State Bird" Sightings In Miami

The credit crisis was just three-months-old when NPR last checked in with Miami condo specialist John Paul Rosser last September. Rosser told NPR listeners that construction cranes were thriving in Dade County, "At one point I counted 75 cranes in the sky, after that I lost count." Now, ten months later, he paints a different picture of the Miami skyline, "Well, you still have construction going on, but probably the number of cranes are less than half of that. Some of the cranes have come down because the building's are finished, and I think some have come down because the money's run out." Rosser explains that the 50,000 plus new construction condo units have created a renter's paradise in parts of downtown Miami. "Just two days ago in the The Daily Business Review, they were noting that a young, University of Miami law student rented a 42nd floor penthouse in one of these buildings for only $2,400 a month." Rosser remains optimistic the Miami market will rebound once seller's come to grips with the new market realities and lower their prices. (AudioClip)


"Tax Mess" Could Create Bottleneck for Short Sellers

Short sales are tricky. Taxes are painful. And a "tax mess" is brewing that could slow the rate of short sales in Florida. The uncertainty centers on the state taxes that Florida home seller's must pay at closing. While these taxes (called documentary stamps) are tied to the home price, what happens when banks accept a short sale price that is tens or hundreds of thousands of dollars below the mortgage amount? Who should be on the hook for the difference? The Tampa Tribune's Shannon Behnken explains why state officials are scrambling to find a solution, "Although the difference may add up to only about $300 on a typical short-sale transaction, multiply that by hundreds of thousands of properties across the state and the impact is substantial. Millions of dollars in lost tax income are at stake for Florida's financially struggling government." The state's Department of Revenue will try to sort this mess out, but at least some state legislators are siding with struggling home owners. "These properties are already ready to be foreclosed on," State Sen. Mike Fasano said. "If these short sales don't happen, I'm worried it could really hurt our market."


"FloRicans" Could Pick Up Housing Slack in Central, South Florida

Latin American and Caribbean residents hoping to escape social, economic and political problems at home have been coming to Florida for decades. But who would possibly want to relocate here during the current economic downturn? Apparently thousands of middle-class Puerto Ricans, according to Frances Robles at the Miami Herald. Robles notes, "Central and South Florida are increasingly becoming home to members of Puerto Rico's middle class, who are fed up by an island wracked by inflation, unemployment and the perception of crime grown out of control." The President of the Puerto Rico Chamber of Commerce "blames the government for the reality that more and more people find Florida's safer streets, nicer housing and lower prices too irresistible to pass up." So maybe the "FloRicans" will pick up some of our housing slack in the short-term, but the article unintentionally brings to light a longer-term problem facing Florida. In describing Puerto Rico's demographic dilemma, Elías Gutiérrez, the Director of the Graudate School of Planning laments, "We are committing collective suicide. This is going to become a country of elderly and poor people.'' Replace "country" with "state," and Gutiérrez could just have easily been describing Florida.

The Daily Soak - August 12

Lee County Pool's Toxic Stew; Inflatable Shamu On Life Support

Just when you think the Florida's Nastiest Pool Competition can't get any dirtier, another local news team steps forward and delivers a fresh batch of murky green cesspools. Sure these reporters and videographers aren't going to snag any national journalism awards, but how can you beat the spine-tingling visuals of abandoned homes, torn pool cages and rampant mosquito infestation? The Fort Myers CBS affiliate really ups the ante with some dead frogs and assorted UFO's (unidentified floating objects). The segment focuses on the use of mosquito fish to control the breeding in abandoned pools, and some disturbing insight into the mind of the mosquito: "A pool in Florida can turn green within a couple days of not being treated. The mosquitoes can smell what is going to be a better site for them than just plain water." On a more serious note, the fate of inflatable Shamu is still unknown. Local environmental officials are taking up a collection to have him airlifted to a neighbor's pool, but time is running out. Even if he is able to make a full recovery, Inflatable Shamu will likely have serious abandonment issues for years to come.


Florida Foreclosures Turning NIMBY's Into IIMBYBINPFI's

Florida NIMBY's (Not In My Backyard) have always been vocal about keeping everything from nuclear power plants to solid waste landfills to adult entertainment venues far from the purity and sanctity of their gated communities. But what happens when something that is already in your backyard starts to change for the worse? Well, that's when NIMBY's become IIMBYBINPFI's (It's In My Backyard But I'm Not Paying For It). Such is the case in cities like Deerfield Beach where the HousingBath is converting formerly occupied homes into abandoned eyesores. According to NBC6, "Last week the Deerfield Beach Commission approved $50,000 to be used from a contingency fund to hire contractors to mow lawns and disinfect pools...If the Code Enforcement Board declares the foreclosed homes in Deerfield Beach to be health and safety hazards, the city manager said that the cleanup process could begin on Thursday." Apparently 65% of respondents to NBC6's online poll are card-carrying IIMBYBINFI's.


America's Sexiest Cities: Miami Beach, Beverly Hills....Newark?

That's what Shaquille O'Neal thinks...or at least that's what he told reporters who showed up for the unveiling of a $90 million, 25-story condominium he is building as part of Boraie O'Neal Urban Development, a partnership that includes Newark-native Shaq and two other developers. "I am happy to be involved in such a tremendous project," O'Neal said in a prepared statement. "Newark's future is also going to be bright with a lot of new properties and buildings going up," O'Neal told The Star-Ledger last year. "It's going to be a sexy city." This has to be the busiest off-season in Shaq's career: He has now unveiled his first luxury high-rise, filmed VitaminWater commercials at the Belmont Stakes and dissed Kobe with a free-style rap that blew up on YouTube in June. About the only thing dormant in Shaq's life right now is his Star Island mansion. Despite two multi-million dollar price reductions, the 20,000 waterfront home is still on the market for $29 million.


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The Daily Soak - August 11

Housing Bailout Offers Hope for Millions, Relief for Thousands

Last week's HB.com reader poll was the most lopsided ever, as 90% of you voiced your opposition to the federal government's Hope for Homeowners Act (HHA). The legislation is nothing more than bad election year politics allowing Obama, McCain and all members of Congress to go back to their districts during their five-week vacation and say they voted FOR keeping Americans in their homes. Few would argue that's a noble position, but the HHA will only benefit a fraction of those who need help. In an excellent analysis, the Sun-Sentinel's Harriet Johnson Brackey picks apart just one aspect of the flawed bailout package and unearths a variety of trapdoors for both borrowers and lenders. Basically if a borrower is lucky enough to clear the qualification hurdles, there is no guarantee the lender will even participate in this voluntary program. Brackey's conclusion: "From what I see, they'll be the lucky few, if there are that many who succeed in saving their homes."


The Doctor Is In...But Will He Stay?

In another issue with serious consequences for Florida homeowners and potential retirees, we turn our focus from bad federal politics to bad state politics. With over 4 million residents aged 60 and older, Florida obviously needs good doctors...and lots of them. Why then is Florida considered one of the least doctor-friendly states? In an emotional op-ed, Sun City Center physician Jack Jawitz offers several reasons why: "When newly trained physicians, with school loans to repay, start to look for their "home" practice, they consider factors including conditions of practice, income potential, and risk of lawsuits. Florida fails in all considerations." Florida will open two new medical schools in 2009 and applications to both FIU and UCF have been staggering (2,800 applicants for 80 spots), but how many of these Florida-trained physicians will stay in a state where doctors pay some of the highest medical liability insurance costs? Unless state legislators take action, many of these graduates may head to more doctor-friendly states like Texas, Kansas, Indiana and Oklahoma.


Lee County's Million-Dollar Foreclosures

In a Top 10 List you probably won't see on The Late Show, the News-Press compiles a list of the Top 10 Foreclosures in Lee County. Rather than offering any useful data, the compilation is more about stirring up class envy. And the schadenfreude oozes from the headline (Even Wealthy Lose Their Homes) down to the third paragraph: "The list shows that even savvy businessmen, longtime homeowners who have resided in their properties for decades, mortgage brokers and Realtors have succumbed to the wave of foreclosures still flooding the country." Four of the homes are located in Cape Coral, two are located in Fort Myers, and two are in Estero. The slideshow lists this Cape Coral mansion as having the largest interior space (12,811 square feet) and the largest outstanding loan balance ($3.06 million). While most of the homes were built in the last five years, two were built in the 1970's including the most upside-down of the Top 10. This waterfront Fort Myers home was assessed at $1.13 million, but the owners had a $1.68 million outstanding loan balance. Looking on the bright side, we have another nominee for the Florida's Nastiest Pool contest. (Full Slideshow)


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The Daily Soak - August 9

Market Conditions Forcing Developers to Shift Gears

With demand for new construction condominiums stalled, many of the multi-family residential projects announced between 2004 and 2006 are being reworked or simply placed on the back burner. NRW Development paid $56.2 million for a 40-year-old Boca Raton apartment complex in 2006 and planned to convert the 160 units into condos. Chicago's Laramar Group just bought the same complex for $32 million from the bank and plans to continue operating the complex as apartments. In a similar scenario, a 232-unit Carollwood apartment complex purchased in 2006 for a planned condo conversion was just re-sold by Compass Bank to Asset Development & Management Group for $13.7 million. Further south, developers of the Grand Bohemian project in downtown St. Pete want to eliminate condos entirely from their project and delay construction until next year. And a planned auction of the 260,000-square-foot Las Olas Riverfront shopping complex has been postponed by the lender. Prior to losing a foreclosure lawsuit earlier this year, Boca Developers had planned to raze Las Olas and build two high-rise towers on the site.


Downtown Fort Myers' 24-story Pink Elephant

Whenever faced with limited food choices, there's something deeply disturbing about eating in a restaurant that used to be a franchise. Large franchisers usually pull out of town when a location loses its luster, and mom-and-pop operations often try to fill the void. A once clean McDonald's becomes Wang's Siam Garden and a once busy Wendy's is converted into Joe's New York Style Pizza, Bail Bonds & Fireworks Emporium. The 24-story hotel in downtown Fort Myers has followed a similar trajectory: From a gleaming Sheraton to a sketchy Ramada to it's current incarnation as the Amtel Ambassador Riverfront Hotel. Sources say the hotel is rarely more than 30% occupied and the reviews on TripAdvisor probably aren't helping lure future travelers. Meanwhile convention business has fallen so dramatically in downtown Fort Myers that the Harborside Convention Center adjacent to the hotel was renamed the Harborside Event Center. City officials desperately want someone to buy and renovate the hotel, but the current owners from Thailand want at least $25 million for the Chateau Pepto.


We Could All Use A Little Sunshine Right Now

The prospect of selling a Florida home in this market is daunting for some and depressing for others. So we'll end the week with a little sunshine...Al Sunshine. In this video segment, the Miami reporter offers his list of "Things You Need to Know to Sell Now." You've heard most of the tips before, but tips #4 (Price realistically) and #6 (Don't wait for the ideal offer) are increasingly relevant in this market where truly motivated sellers are often being rewarded with signed contracts. Still, if you can afford to stay in your existing home for now, Sunshine says do it because, "the experts say this could be the darkest before the dawn in South Florida real estate." Sunshine interviews Tony Villamil of the Washington Economics Group who says, "We may see a lower reduction in prices with home sales, especially single-family, beginning to pick-up in the first quarter of '09 and maybe even the last quarter of this year." (VideoLink)

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The Daily Soak - August 8

The Down Low: Naples Homes Under $300k Generate Most Interest

The low-end of the housing market continues to generate the most sales activity in the Naples market. In June, almost half of the homes sold in Naples were priced below $300,000, a 15% increase over the number sold during June of last year. There seems to be a greater willingness to negotiate on the low-end where many homeowners are feeling the biggest pinch. This flexibility is evident in the $85,000 drop in median home prices in Naples to $310,000 in just the past six months. The number of homes and condos for sale was down 10% over the same period, but overall inventory remains high at 10,837 units. European buyer activity has not been as robust as some anticipated; however, some brokers report Canadians buyers are helping to partially offset the recent drop-off in U.S. demand. A Naples Daily News poll shows readers are pretty evenly split regarding the outlook of the real estate market in Southwest Florida, although 1 in 4 respondents believes "It is bad and will remain so."

Renter's Paradise: It's A No-brainer In Some Florida Cities

With prices already depressed and more condos coming online in most major Florida metros, the rental market is fast becoming the Match.com of the Florida housing market. Investors wary of selling their new units at the bottom are pairing up with renters who either can't qualify for a home loan given today's tighter lending standards or don't want the added financial strain of property taxes, insurance and HOA fees. Forbes recently ranked Orlando and Miami the top two U.S. markets for renting a home, thanks to sharp annual increases in new construction and nominal changes in annual rents. News this week out of Miami confirms renters, primarily young professionals, are taking up the slack in the over-saturated downtown market along Brickell and Biscayne Boulevards east of I-95. According to the South Florida Business Journal, "fewer than 800 units are available for rent, despite a construction boom during the last five years that produced nearly 21,000 new residences."

Public Builders, Private Companies All Search for Answers

Two of the nation's largest home builders and one of Florida's largest private landowners delivered disappointing second quarter earnings reports this week. The nation's largest home builder, D.R. Horton, blamed rising foreclosures and tighter lending guidelines for its fifth straight quarterly loss. The CEO of Atlanta-based Beazer Homes blamed his company's $109 million quarterly loss on a lack of confidence among potential home buyers who have lingering fears regarding "employment growth, higher energy costs and the overall economy." And closer to home, Jacksonville-based St. Joe reported a drop in second quarter residential real estate sales from $30.8 million a year ago to $7.2 million this year. New St. Joe CEO Britt Greene offered this assessment, "We cannot predict exactly when the national economy or our real estate markets will recover, but we are continuing to execute our strategic plan and keep St. Joe lean and efficient to better withstand these very difficult conditions."

The Daily Soak - August 7

Non-Hispanic Whites Leaving Palm Beach, Broward "In Droves"

That's how the Sun-Sentinel describes the latest U.S. Census data for two South Florida counties most severely impacted by the HousingBath. Over 24,000 non-Hispanic whites left Palm Beach County between 2006 and 2007, while 9,000 moved out of Broward. Granted, some may be moving to other Florida counties, but a Sun-Sentinel poll suggests otherwise: 60% of respondents cite the rising "cost of living" in Florida as their primary motivation for leaving. Semore Borker, a 28-year resident of Boynton Beach is one of a growing herd of "halfbacks" moving to the Carolinas. Borker is looking forward to life in South Carolina where "the insurance for his two cars will be cut by about half. His property taxes will drop to about $1,000 from $3,400. Gas is about 30 cents a gallon less." William Frey, a demographer with the D.C.-based Brookings Institution, calls the out-migration from Florida "the demographic story of the year."


Company Plans to Auction 700 Florida Homes Next Week

Leading auctioneer Hudson & Marshall will auction off five Panama City homes next Tuesday, but that's just the tip of the iceberg. The Dallas-based company plans to auction off over 700 properties between Tuesday and Sunday of next week in several Florida cities including Fort Lauderdale, Fort Myers, Fort Walton Beach, Gainesville, Jacksonville, Miami, Orlando, Tampa and West Palm Beach. Hudson & Marshall has auctioned off over 500 Florida homes so far this year, the majority of which were sold in Orlando in April. The H&M website has a detailed list of the upcoming Florida auctions which range in size from a dozen properties in Fort Walton to over 250 properties in the Miami/Fort Lauderdale area. Miami auction listings run the gamut from 800-square foot Brickell condos to medium-size townhouses to large, single-family homes. Interested parties can select "Bid Now" and submit bids online to be considered by the seller prior to the live auction date.


Florida Mortgage Fraud Tied to Upscale Carolina Development

Last month, Lucy Morgan of the St. Pete Times wrote an interesting article on an unusual high-end luxury development taking shape in the Blue Ridge Mountains near Cashiers, North Carolina. The project, Blue Ridge Mountain Estates, is being spearheaded by Miami resident Domenic Rabuffo. At the time, Morgan seemed bewildered that half-acre lots were being snatched up in the development for $1.2 million with no advertising. Fast forward two weeks and the picture is a little clearer. In her follow-up today Mogran writes, "SunTrust officials this week accused 14 property owners in a controversial North Carolina real estate development of falsifying their income when they obtained mortgages totaling more than $20-million." One of the borrowers, a 29-year-old female from Lutz, claimed monthly income of $29,113 when in fact her family business (a porn site) only pulls in $6,716 a month. The rest of the Florida borrowers claimed monthly income 5 to 10 times their actual salaries. The 14 lots in question have now been approved for sale at public auction.

The Daily Soak - August 6

Condo Auctions, Bulk Sales Moving Units in Miami, Panama City

Developers are turning to auctions and bulk condo sales to to move stalled inventory in new high-rises, and their efforts are paying off in some Florida markets. Back in June, HB.com reported on the upcoming auction of unsold units at the Palazzo Condominium in Panama City Beach. The auction, which took place last Saturday, was a huge success according to the auctioneer's website: "126 bidders from 14 states and Canada bid on 28 condos at absolute auction. Due to the great demand, 50 (units) sold for $17,933,590.00 or $358,671 per unit." And down south, Related Group and its partner Cousins Properties announced the sale of the last remaining 120 units in the high-profile 50 Biscayne tower in downtown Miami. The buyer is a partnership made up of private-equity firm Lubert-Adler Partners and Related who plan to rent the 120 units for up to 5 years and eventually sell when the Miami market has firmed up. The sales price of $30.3 million translates into an average unit price of $252,500. Resale prices in 50 Biscayne currently range from $188,000 for a studio to $845,000 for a 3 bedroom unit.


"Here's the Story...of A Bunch of Hoodrats...

...who were busy trashing their poor neighbor's home." Lee County authorities cast a much wider net in the case of the teenagers who destroyed the home at Stoneybrook Golf Club in Estero. The result was more arrests and this Brady Bunch-esque collection of mug shots. Few would argue their faces demonstrate genuine anger they got caught remorse for their behavior. A dozen delinquents are in custody, while sources say more arrests are likely. This story has generated heated feedback from neighbors in the gated community who wonder how this 5-day vandalpalooza went unnoticed. Fines2Pay posts, "I live in Stoneybrook, pay my dues for (the) gated community and all the security. As reported the vandalizing happened over an entire week. And just where was Security?" And of course the finger-pointing responses from the parents have been the most amusing. Marjorie DeFrancesco says, "(My daughter) was not one of the major players. She did not break into the house; she went into the house after it was broken into. She ate some chips and left." Where's an incriminating YouTube video when you really need one? (VideoLink)


Double Down: Estimated Impact of HousingBath Now $153 Billion

State economists revised an earlier estimate of the total loss in market value of all Florida real estate downward this week. They now believe Florida residential and commercial properties have lost a total of $153 billion in market value since 2007, a figure twice their original estimate. The Miami Herald examines the local impact, "One county stood out for the property-value losses: Miami-Dade, which is being hard hit by foreclosures and dropping prices," and the statewide implications for next year, "The loss in so much market value also translates into a loss of taxable value for schools and local governments, a decrease of .3 percent this year and 1.5 percent in 2009 for schools statewide." One economist did look on the bright side through the lens of affordability: "You're seeing more of what you would think of as 'fire sales,' just really rock-bottom prices to move property,'' said the Legislature's chief economist, Amy Baker. "It's not a terrible thing. You want to see that.''

The Daily Soak - August 5

Florida's Nastiest Pool Competition Really Heating Up

A fire-damaged home in Lakewood Ranch Country Club has received lots of attention since being abandoned 8 months ago...none of it good. According to the Herald Tribune, vandals cut down the pool cage and sold the aluminum for scrap, neighborhood teenagers have been sneaking in for parties, and mosquitoes have found a murky Nirvana in what qualifies as a front-runner in the 2008 Florida's Nastiest Pool competition. The home also has all of the requisite variables for nothing to be done about its hazardous condition: a delinquent borrower, an out-of-state mortgage holder, and our overly-litigious society which prevents the HOA or local officials from securing the property for fear of assuming liability. In a bold exercise in futility, Manatee County officials posted a Warning sticker on one of the home's windows. Manatee Building Department Director John Barnott gave the Texas-based mortgage company until Friday to secure the property, because he is running out of patience, "They are either going to repair it so it can be lived in or they are going to tear it down."

CNBC Segment Spotlights Clueless Buyers and Sellers

CNBC celebrated the one-year anniversary of the credit bubble's bursting with a series titled, "One Year Later: Is Your Money Safe?" For the two housing market segments, CNBC chose a buyer and a seller who epitomize the fence-sitting mentality that won't help the housing market rebound anytime soon. The buyers, a young D.C. couple, complain about how hard it is to find a home in a Maryland suburb, when in reality they have been tire-kicking since last November and making two low-ball offers...both of which were rejected. (Buyer Segment) And on the sales front, CNBC chose a California nurse who is in a serious state of denial. Mary Gage first listed her two-bedroom Los Angeles townhouse for $410,000 in June. Mary can't believe her home didn't sell "in a couple of weeks" and agonizes over dropping her asking price to $395,000. WOW...a 3% price reduction! Florida to Mary...you live in the state with the #1 ranking in foreclosure sales, so here's some free advice...try a 30% price reduction, or accept one of the two offers you've already rejected. Otherwise, stay on the sidelines and don't expect any sympathy from the Sunshine State. (Seller Segment)


Teenagers Do $100,000 Worth of Damage to Estero Home

We all know kids get restless in the summer months, but some bored Estero deadbeats kids need to find a better outlet for their pent-up aggression. Robert Williamson and his wife just returned from summer vacation in Michigan to find their Stoneybrook Golf Club home completely ransacked. Aspiring career criminals Tyler Campbell, 17, and Juliana DeFrancesco, 14, allegedly led a group of friends on a 5-day vandalism spree of the residence during which they destroyed furniture, cracked marble floors and left meat exposed for maggot infestation. "The house was crawling with crap," said Williamson about the moment they returned home. The kids also stole $50,000 worth of jewelry, merchandise and a Ford F-350 pickup...which the enterprising youngsters later traded for some pot. The family says the house needs to be gutted, but they are moving because, as Julia Willamson said, “I don’t know how you live in a neighborhood where so many have done this." And who can blame her? It sounds like Stoneybrook has some prime candidates for RottenNeighbor.com.