Modern-Day Bonnie & Clyde: Former Maid Turned Millionaire
Of all the rags to riches to rags stories I've read from the housing boom to the current bath, this has to be one of the most unbelievable. A pregnant, high school drop-out at age 15 named Eve Mazzarella gets pregnant again and is living on welfare at age 20. She then moves to Vegas, starts a successful cleaning service, and then gets her real estate license. She racks up almost $14 million in sales in 2006 and is named to NAR's coveted "30 Under 30." But the good life came to a screeching, guns-drawn, front door-smashing FBI halt in March. It turns out Mazzarella and her husband are wanted on 13 counts of bank fraud tied to 227 properties they bought worth $107 million using straw buyers.
Chicago Bank Bet Big On Florida Real Estate...and Lost
Corus Bank just released third-quarter earnings, and the news was not pretty for owners of the Chicago bank's stock. According to the South Florida Business Journal, "Half of Corus Bank's condo loans in South Florida were either in arrears by at least 90 days or had unfavorable prospects for repayment in the third quarter, including one unspecified project that the bank intends to foreclose on." Corus holds $1.38 billion in loans on 18 condo and condo conversion projects in South Florida including large notes on Jade Ocean Condominiums in Sunny Isles Beach (pictured), Paramount Bay in Miami, The Mint at Riverfront in Miami, Trump International Tower in Fort Lauderdale, The Ivy in Miami, Artech Residences at Aventura, Tao in Sunrise, the Caribbean Miami Beach and Edge Condominium in West Palm Beach.
Hola...Bienvenidos A Florida Y El HousingBaño! 
Coldwell Banker just announced plans to roll out more Spanish-language tools and features for interested buyers. Casa Coldwell Banker will officially launch today, and the move by Coldwell reflects the shifting demographics in both Florida and the U.S. The Hispanic population in Florida surged a whopping 70% over the last decade and 47 of Florida's 67 counties reported at least a doubling of Hispanic residents. Looking forward, U.S. Hispanics are projected to account for 40% of all first-time homebuyers over the next 20 years. Such statistics validate the move by Coldwell as "muy inteligente."
Have a safe and sudsy Halloween everyone. -HBC
Friday, October 31, 2008
The Daily Soak - October 31
Wednesday, October 29, 2008
The Daily Soak - October 29
"Yo, Prague In Da House...Or At Least Buying A Few."
The Sarasota Herald-Tribune reports on the growing number of opportunity funds and foreign buyers coming from non-traditional Florida real estate investor markets like Slovakia, Hungary and the Czech Republic. And Sarasota attorney Alan Tannenbaum says these new buyers are looking at Florida real estate as a long-term play: "They have a lot of capital and staying power and they are not looking to turn a profit next year. We'll have the channel open so the rest of them will see us as the portal to investment over here. Florida as it exists now will be bought by the world." The second half of the article focuses on vulture funds and opportunistic brokers like Condo Vultures Realty in Bal Harbour. Owner Peter Zalewski launced his firm in late 2006 and, he says, "We've been rocking and rolling ever since." Booyakasha!
"Care-free, Maintenance-free Condo Living" Yeah, whatever.
It probably sounded great in 2004 when you leafed through Del Boca Vista's Phase 3, 120-page glossy catalogue showcasing the wonders of living in the new Portales golf villas or the Ventanas mid-rise or the Puertas estate homes. (Which raises the question...Do you think developers in Spain really name their projects Doors and Windows?) But alas, the highly-amenitized dream has turned into a nightmare for Floridians like Harry Charles (pictured) and Tony Poindexter. Both men live in Brevard County condos where rising foreclosures are shifting a growing HOA and maintenance burden over to responsible, increasingly bitter residents. And don't hold your breath waiting for banks to chip in for future fees and special assessments, according to Bill White of the Community Association Institute. "What we're running into now is the banks are saying we're not going to pay anything."
WalletPop: "Consider Florida Now"
I came across this AOL Money & Finance blog, WalletPop, yesterday. The ugly news about the price of U.S. homes plunging a record 16.6% in August appears on the homepage, but this column by Jennie Fisher offers some creative advice and suggestions for those looking to profit amid the rising tide of the HousingBath. Targeting housing to the tastes and preference of GenY, building homes with first-floor bedrooms and investing in shopping center REITs are all high on Fisher's list. But it's the last recommendations that will spur the healthiest debate among desperate sellers, Florida realtors, circling vultures and market-timers: "Consider Florida Now." Read the column and draw your own conclusions. Happy Bathing.
Monday, October 27, 2008
The Daily Soak - October 27
"Don't Cry For Me, Argentina...But Please Buy My Condos"
An interview with Related Group CEO Jorge Perez appears on a website geared toward readers in Argentina. When asked about buyer activity, Perez says "Buyers are coming back into the market, because we're arriving at the bottom." And when asked where the best deals are, he tells his countrymen, "I think it's the best time to buy an apartment especially in the Brickell area, the financial center of Miami." What a coincidence...according to the Wall Street Journal, Related has ample unsold inventory in Brickell with another 1,800 units set to hit the market. Unfortunately for Perez, Argentina's socialist government just announced the nationalization of all private pensions, so the pool of potential buyers just evaporated in B.A.
FAR Data Shows Single-Family Strength, Condo Weakness
New data released by the Florida Association of Realtors showed an increase in existing homes in September, the first such increase in three years. Statewide, there was a 24% increase in existing home sales and a 22% decrease in median sales price. Sales of existing condos, however, only rose 11% while also recording a 22% in fall in median sales price. The adjacent graphic shows a city-by-city breakdown of Florida condo markets with double-digit gains and losses highlighted in green and red. Markets like Fort Lauderdale, Fort Myers and Melbourne posted strong sales gains and equally large price reductions. The Sarasota-Bradenton market is the only Florida MSA reporting large double-digit decresaes in both sales and median prices.
No Rush: Not Everyone Wants Foreclosure Backlog Reduced
The Lee County court system processes about 2,000 foreclosure filings a month, but they are planning on tackling 3x that number beginning in December. With a backlog of 29,000 foreclosures, some analysts are cheering the news but local realtors are fearful. "I would much rather just stay the course," says Cape Coral broker Elmer Tabor, "If all of a sudden we get a huge supply that starts coming out of the court system, if anything that's going to drop (prices) further." Florida analyst for Moody's, Chris Lafakis, says let's get it over with: "The only way we're going to get ourselves out of the decline is to get rid of this excess inventory."
Friday, October 24, 2008
The Daily Soak - October 24
I-4 Corridor: "Important Piece of Political Real Estate"
Eleven days to go and polls are tightenting in the race for the White House. Most battleground states like Indiana, Missouri, Ohio and Virginia are considered "in play" for both McCain and Obama, and one of the most coveted swing states is our beloved Florida. Barack Obama held a rally Tuesday night in downtown Miami, while John McCain spent all day Thursday hosting campaign rallies along 200 miles of the I-4 Corridor. USF political expert Susan MacManus told The Wall Street Journal the Corridor is "a very important piece of political real estate. It has a good representative of urban, rural and suburban voters and a higher than average percent of independent voters."
Among Foreign Buyers, Florida Still Reigns Supreme
The presidential race may be close, but Florida ran away with a different nationwide survey. The National Association of Realtors just released the 2008 Profile of International Home Buying Activity, and the Sunshine State racked up 25% of all home sales to foreign buyers. The next closest states were California with 8.9 percent and Arizona with 8.7 percent. Brent Handeland, a retired Norwegian carpenter (pictured), just bought a 3-bedroom condo in Indian Harbour Beach condo for $300,00 and-like 47% of all foreign buyers-he paid cash. In sharp contrast, only 7% of U.S. buyers paid cash for homes bought between May 2007 and May 2008. "Handeland said he enjoys living near the beach and riding his bicycle to nearby stores on State Road A1A. He posts a Norwegian flag outside his door. He has a son in Deltona, and enjoys visits with his family and friends."
Florida Companies Reinvent Themselves To Stay In Business 
Such was the case for Creative Mailbox, a Tampa-based company that carved out a profitable niche during the boom making custom signs and mailboxes for real estate developers and master-planned communities. When the HousingBath hit, the residential business vanished, so Creative Mailbox switched gears and started chasing commercial business and lucrative government contracts. The gamble paid off for CEO Jamie Harden when Creative Mailbox landed a big account to manufacture signs for the Florida DOT's I-75 Expansion Project. “There was no capital investment, just investment in brain power,” Harden said. “We’ve truly reinvented ourselves. We had to do it out of survival mode.”
Thursday, October 23, 2008
The Daily Soak - October 23
The Canadian Press interviews Realtors in several states including Florida and finds they are going to great lengths to make a sale. From buying new appliances to resolve disputes to teaching lazy sellers how to clean their homes, Realtors are going to lengths never imagined three years ago when the average house sold in 4 weeks. Today, that number is closer to 12 weeks. One realtor is spending $2,500 per home for interior design services, photographers and videographers to put some lipstick on his listings. "There's no room for poor photography," he says, "We are now in a beauty pageant and a pricing war." The HousingBath is one beauty pageant that we, as U.S. Americans, should take seriously. 
This week's BusinessWeek slideshow survey looks at the worst condo markets in the U.S., and the news is not good for three Florida cities. Fort Lauderdale took the top spot in the ranking followed closely by Miami and West Palm Beach locked in a two-way tie for the third spot. In the footnotes, BW says Fort Lauderdale "is suffering from a glut of condos built earlier in the 2000s," the West Palm Beach market "all but died in the first quarter of 2008, with just 87 condo sales," while Miami "may bounce back more quickly than other Florida cities thanks to foreign buyers who are enjoying the effects of their stronger currencies."
The Wall Street Journal sits down with Jorge Pérez and finds Related Group is "doubling down with the help of outside investors." The 50 Biscayne transaction with Lubert-Adler earlier this year was one such deal, and there may be similar opportunities in the coming months. Related has brought over 1,600 units to market in downtown Miami so far this year, and the massive 3-tower, 1,800-unit Icon Brickell will soon start welcoming new residents. The Journal article includes an interactive map of downtown with detailed information about the each tower. As for Pérez, he remains bullish on downtown's future, "There is no question in my mind that ...people are going to look back and say: 'These units were bought for how little!' Some of these are really a gimme. And we think the future of Miami is very strong."Wednesday, October 22, 2008
The Daily Soak - October 22
Despite Slowdown, Those On The Sidelines Are Upbeat
That according to the latest survey released by the University of Florida's Bergstrom Center for Real Estate Studies. Executive Director Wayne Archer uses a Gator football analogy to summarize the general sentiment by those waiting on the sidelines. “People who have responded to our surveys have not lost their faith in Florida as a place to be and a place to invest,” Archer said. “We have 40 pages of comments from our respondents, and although the dominant theme is the disruption of financing, perhaps the second theme, as one person put it, is people being on the sidelines with full pads and helmets just waiting to jump back in.” While still not calling a bottom, Archer says the experts polled are largely bullish, “It suggests to me that they believe we may have already reached the bottom in that category.”
Vultures Poised to Pounce In Palm Beach County
Jeff Ostrowski of the Palm Beach Post says the dramatic drop in median condo prices in Palm Beach County has many vultures circling and others already swooping in. West Palm Beach is home to 3 of the Top 10 condos with the highest foreclosure rates according to CondoVulutres.com: St. Andrews Palm Beach, CitySide on Congress Avenue and Spa at Sunset Isles on Fox Trail Road. According to CondoVultures, "17,065 homes in Palm Beach County went into foreclosure during the first nine months of 2008," and Ostrowski adds the sobering long-term reality, "Those defaults threaten to drag down home prices for the next five years."
Many Short Sales In Limbo Thanks to Volatility, Bailout
The short sale market in Florida was in high gear for several months this year, but the recent wave of bailouts and Wall Street volatility seems to have thrown many banks into a "wait-and-see" mode. Watson Realty is the largest real estate company in Northeast Florida, and according to a Watson representative, "Realtors have seen more banks choose to wait on foreclosure rather than short sale, because until a home is foreclosed, banks are still receiving payment." While short sales can be advantageous for desperate sellers and bargain-hunting buyers, Jennifer Lindgren says there isn't always a happy ending. "Of the 16,000 properties in Northeast Florida realtors' inventory, about eight percent are offered at short sale (up from two percent last year); many of which eventually end up foreclosed anyway."
Monday, October 20, 2008
The Daily Soak - October 20
HousingBath Won't Slow The Party on Fisher Island
Talk about recession-proof...the recent gains in appreciation and median sales prices makes you think Miami's private island enclave might even be depression-proof. CBS4 gets exclusive access to the island and gives us schlubs on the mainland a glimpse of the good life. The average sales price on the island has risen $525,000 this year alone, and the median sales price of a Fisher Island residence rose to $3.85 million. Some athletes and celebrities who have bought on Fisher Island in the past include Andre Agassi, Boris Becker, Ricky Martin, Julia Roberts and Oprah Winfrey. (Video)
60 Bank-owned Homes to Be Auctioned in Orlando
Texas auctioneer Hudson & Marshall will hold an auction of, what they describe as, 60 upscale bank-owned homes, on October 26th at 1:00pm at the Florida Hotel and Conference Center. The homes appear to be scattered throughout several Central Florida communities, many of them gated. Dave Webb of Hudson & Marshall says most of the homes in next Sunday's auction are move-in ready. As an added incentive, interested buyers have 45 days to close and will only need to put down $1,000 in earnest money for most of these homes. More information including directions to the auction can be found on the H&M website.
Stop Paying Your Mortgage...Send Us The Money Instead
Is there anything worse than getting a call from a telemarketer? Most people hang up immediately. But one Fort Lauderdale company had a sales pitch that was music to hundreds of Florida homeowners' ears: "Stop paying your mortgage." With this alleged scam, the Florida Attorney General's Office says Outreach Housing has put 600 struggling Florida homeowners even deeper in debt. The company told homeowners not to pay their mortgage and instead send that money to Outreach which would hire attorneys to work with the lender to reduce the homeowners' debt. Outreach released a statement saying the Company has done nothing wrong.
Saturday, October 18, 2008
The Daily Soak - October 18
Desperate South Florida homeowners who have turned to short-term rentals to generate much-needed cash flow in recent months may soon be out of luck. Responding to complaints from Miami Beach residents fed up with party goers renting weekly or even nightly, Commissioner Jonah Wilson is supporting a new law that would prohibit rentals less than six months. "I think anywhere from one month to three months will be what the definition of a short-term rental will end up being." The Beach hotel industry wants the penalties for would-be landlords to be even more severe by sticking them with the same hotel taxes, license fees and ADA-compliance standards Beach hotels must adhere to. The Miami Beach Commission votes on the issue next month.
The U.S. Bankruptcy Court has retained Ameribid to organize the auction of Indigo Bay, a new waterfront development in Islamorada. The development, which is nearly complete, is being auctioned off as one bid including all 25 waterfront townhouse villas and a 14-slip marina. The Court has already received one qualified bid for $8 million, so the next bid at auction will begin at $8.3 million. Ameribid President Louis Fisher says this a special opportunity for the right buyer, "This Project lends itself as a unique opportunity to acquire a boutique resort property in a market that is scarce of anything similar. This will be a Bankruptcy Auction, with all permits in place, and clear and marketable title for the successful bidder"
There were 40 at the market peak in 2006, less than 10 last year, and only 1 still standing today. And they're not likely to be seen again in the Miami skyline for another 7 to 10 years according to Peter Zalewski of Condo Vultures, LLC. Canada's Report On Business gives a sweeping overview of the state of the U.S. economy by focusing first on the housing glut in Miami. The article notes that now-defunct Lehman Brothers financed as many as 50 condo projects in South Florida. Zalewski is optimistic the federal bank bailout will work and "bottom-feeding buyers, spooked out of the stock market, will be able to borrow again and invest in 'bricks and mortar.'" Friday, October 17, 2008
The Daily Soak - October 17
If you're in the market for your own private island in Florida, you're in luck. Apparently the price reduction fever here on the mainland has crept out to the secluded islands around the Everglades and the Florida Keys. "Up to 20% of all the islands on the market have recently been reduced, although lower selling prices and more new listings mean we're also seeing a big surge in buyer activity, says Chris Krolow of Private Islands Online. His company just announced a price reduction for Melody Key, Florida (pictured) from $10 million down to $4.9 million. And on the more affordable end of the spectrum, units on a private island near Everglades City that once sold in the $800's are today selling in the $300's. (Club Everglades website)
That's how Commissioner Jerry Libbin described the current situation with banks intentionally delaying foreclosure on thousands of condominiums. ''It's the foreclosures that are not happening, the banks that are not taking the actions that they should be taking that are causing additional assessments to be foisted on good condo unit owners." Libbin was speaking at a forum yesterday where several condo owners and association presidents vented their frustrations over the status quo. According to Herald reporter Monica Hatcher, the general mood reflected "a growing sense of despair among condo owners who find themselves going up against lenders who are benefiting from a $700 billion bailout."
The long-awaited auction of 171 units and almost 13,000 square feet of retail space took place Wednesday in Tampa. An unidentified company paid $21.9 million for the entire project which included everything from studios to penthouse units. Based on that purchase price, the average unit price was reported as $128,000, but when you back out the retail component of the transaction, the average unit price was probably closer to $90,000. Wednesday's auction, the first bulk sale in the Tampa market, was an important first step in breaking up the logjam of unsold condo cholesterol statewide. Hopefully more bankruptcy judges will start ordering similar auctions and speeding up the process. Tuesday, October 14, 2008
The Daily Soak - October 14
Statewide Auction Updates
The U.S. Bankruptcy Court just approved the auction of approximately 55 South Florida properties previously entangled in some bizarre Ponzi scheme. Fisher Auction is handling the November 1 sale of units ranging from a 2/2 condo in Plantation to a 3,500 square foot home in Royal Palm Beach. More photos and information are available online at Fisher Auction. And another follow-up for a story HB.com shared last month regarding the upcoming auctions of luxury residential properties in three of Ginn Resorts' Central Florida communities: Bella Collina, Hammock Beach and Reunion Resort. UK-based HomesGoFast.com reports the Ginn auction on November 8 will also be open to online bidders. And finally, the long-awaited auction of 170 units at The Place at Channelside takes place tomorrow at 11:00.
Units Finally Moving In High-Profile Miami Condo
Back in August, HB.com reported on the bulk sale of the last remaining units in Related Group's 50 Biscayne Tower in downtown Miami. While the plan was to rent many of those units over the next 3-5 years, it seems some European buyers are snatching up some of the unsold inventory. The exclusive broker for the project, Alicia Cervera Lamadrid, is meeting her goal of four sales per month thanks in part to investors from Ukraine and Estonia. According to the Business Journal, "(Three studios) sold for more than $160,000 each, a 9 percent discount from the pre-bulk price. The condo facing the east side, which has a water view, sold for the full listed price, which was in the high $170,000s." For more information, visit the Related Cervera Realty Services website.
Palm Beach Buyers File Third Lawsuit Against Gunster 
26 would-be buyers of condo units in the now notorious Palladio project have been fighting to recoup an estimated $10 million in deposits. Unable to make progress with the developer, Merco Group of the Palm Beaches, the buyers just filed a $2.5 million lawsuit against Palm Beach law firm Gunster Yoakley "claiming the firm failed to properly guard their cash when it served as the condo's escrow agent." Alexandra Clough of the Palm Beach Post says the key issue is "whether Gunster acted negligently when it released the deposits to Merco. Under Florida law, deposits can be released to a developer once construction has commenced on a project. The lawsuit alleges Gunster released 10 percent in deposits to Merco when Merco informed Gunster that construction had begun." Regarding his firm's role as escrow agent, Gunster lawyer Scott Link counters, "We're not construction supervisors. We didn't inspect the property."
Monday, October 13, 2008
The Daily Soak - October 13
Underwater Owners in Southwest Florida; Third Wave Coming
News out of Lee County shows an increasing number of homeowners facing negative equity situations. The News-Press shares a Zillow bar graph showing the percent of homeowners who are upside down in their mortgages by year of purchase. Those who bought at the market peak in 2006 are hurting the most (78%), while 2005 and 2007 buyers aren't faring much better, at 60% and 64%, respectively. Today's buyers are breathing a little easier considering the median sales price of an existing single family home in Florida has fallen a dramatic 54% from the peak of $322,00 in December 2005 to $146,900 in August of this year. Chris Lafakis, Florida analyst for Moody's, sees more foreclosures on the horizon, "The third wave is coming from people who are underwater who are suffering disruptions to income. That includes losing your job or repairing your car or a death in the family. It’s a combination of declining home prices and a weakening job market."
S.S.D.C.: Same Story, Different County
Brevard County homeowners are also wrestling with negative equity situations, and the pain distribution is identical with Lee County, leaving one to believe this scenario is playing out statewide. Just look at the similarities between the distribution of underwater homeowners in Brevard County by year and the Lee County numbers. 2006 was the worst year in Brevard County from a homebuyer's standpoint, while 2005 was the best year to be a mortgage broker. In 2005, when lax lending standards and interest-only ARMs reigned supreme, 11,749 new mortgages were issued in Brevard County. Since then, only 12,609 new mortgages have been issued during 2006, 2007 and 2008 combined. Some homeowners like Maria Acevedo feel trapped, "The only thing keeping us here in Florida is our house." Acevedo probably would have broken even considering she purchased her home in 2004. It was her cash-out refi that finally put Acevedo underwater.
Canada's Elites Eyeing Florida Bargains 
Kelvin Browne, a columnist for Canada's National Post, is one of those buyers who pulled the trigger on a Florida condo in 2006. Browne doesn't believe he is underwater...yet: "I suspect these paper profits will soon evaporate. I worry what happens when all those new towers with units to sell go on the market. Oversupply of new units isn't going to make my place more attractive." Still, Browne says many upper-class Canadians are weighing both the 30-40% drop in Florida home prices and the relative (although easing) strength of the Canadian dollar versus the dollar, "For months, the theme at the dinner tables of the well-heeled has been whether now was the time to buy property in the U. S. (And) while most of foreclosure land isn't what elite Canadians covet, there are wonderful properties in Florida, Arizona and California that have plummeted, too."
Friday, October 10, 2008
The Daily Soak - October 10
Tampa Condo Buyers Try "Soil Contamination" Loophole
A group of 10 buyers in the 32-story Skypoint Condo in downtown Tampa just filed suit against the developer claiming they were never notified the land the tower was built on was once contaminated. According to The Tampa Tribune, "Their lawsuit contends that they never would have bought their units if they had known about the environmental problems." The buyers want to recoup over $200,000 in earnest money deposits, but it's hard to imagine a judge ruling in favor of these flippers-turned-environmentalists. The Skypoint website describes the project as a "finger of glass and steel slicing into an azure sky." And judging by some clips on YouTube, it looks like some Skypoint residents are giving a different finger to their fellow neighbors.
Orlando Update: Home Sales Up 38%, Prices Down 10%
The Orlando Regional Realtor Association released a mixed bag of housing data yesterday. Existing home sales jumped 38% from 970 last September to over 1,3000 last month. The two counties posting the biggest year-over-year gains were Orange County (up 54%) and Osceola County (72%). Pricing data is less encouraging in Central Florida where the median home sales price of $210,000 was 10% below the September 2007 mark of $235,000. Still the $210,000 number was 5% better than the $200,000 median price recorded in August of this year. Average number of days on the market and average sales price as a percentage of listing price were virtually unchanged compared to September 2007 at 113 days and 94%, respectively. The months of supply inventory number has fallen 58% year-to-date to 18.5 months.
Governor Proposes Solution: "Talk To A Banker"
Florida Governor Charlie Crist invited reporters to the Governor's Mansion to highlight the few remaining positives of the Florida economy. When it comes to housing, Crist offered this advice, "Now is a good time to get some deals. Go talk to a banker. You can live within your means, be responsible, and things will work out." Few would argue with the first sentence, but sentences two and three deserve closer scrutiny. As far as simply talking to a banker, there's one small problem: Banks aren't lending money...not to prime borrowers, not to first-time borrowers...not even to themselves. And it's too late to encourage Floridians to just live within their means. That advice would have been helpful in 2003. Five years later, most Floridians' means--home equity and 401(k) balances--are shrinking faster than we can adjust to live within them.
Thursday, October 9, 2008
The Daily Soak - October 9
The HousingBath is probably forcing some couples to rethink their marriage vows. Instead of " 'til death do us part," a more appropriate verbal bond in Florida has become, "' 'til the banks plow through their mountains of foreclosures and we can finally sell this damn house." Miami Today interviews two Circuit Court judges who say the housing situation is prolonging divorce proceedings. "It's definitely affecting dissolution cases," said Judge Joel Brown, "Often times the divorce settlement is contingent on dividing up the proceeds from the sale of the house, (but) sometimes the families cannot afford to live separately." The death of a parent is painful enough for most Florida children, but Circuit Court Judge Celeste H. Muir says grieving today is both personal and financial. "The usual scenario is the children are expecting the proceeds to be 2006 prices and not 2008."Linens 'n Things People Stopped Buying When Housing Collapsed
The hedge fund that owns housewares retailer Linens 'n Things has asked a judge to put the chain's 371 stores up for liquidation auction. During the boom, the chain could not grow fast enough. New home buyers needed to stock up on such essentials as $29 aromatherapy candles, $99 steam mops and $129 down pillows. Now with the recession in full swing, consumers realize those precious dollars will fill a shopping cart at the Wal-Mart Supercenter. A retail analyst blames the arrogance of hedge funds for entering sectors they know little to nothing about. "It's tragic what's happened to the employees and this business," said Burt Flickinger, "but that's what seems to happen when these Wall Street private equity funds think they can run retail companies." Linens 'n Things has 31 stores in Florida.
A bunch of businessmen, government officials and economists got together in Fort Myers yesterday for the 21st Annual Wednesday, October 8, 2008
The Daily Soak - October 8
Painful Lessons Learned about "Affordable Housing" in Florida
Michael Freeman of the Lakeland Ledger shares anecdotal evidence and a well-balanced analysis of the glaring misnomer of affordable housing in the Sunshine State. Freeman recounts the subtle, measured pitch he received from a Naples realtor in 2004: "The bottom line, she insisted, was that real estate was hot. Prices were rising at a stunning rate. I was virtually guaranteed that if I bought a home beyond my means, I'd be sitting on a goldmine within a year. By three years, there was no limit to how high my value would go. Naples was a hot community and it was a no-lose proposition." Turns out it was a can-lose proposition, and fortunately for Freeman he didn't lunge at the brass tennis villa. But rather than gloating over his decision, Freeman ponders whether affordable housing will ever be a reality for the workforce in cities like Naples, Key West and West Palm Beach.
View From The U.K.: Government Aiding Home Buyers
Actually "housing investors" was the word of choice from London-based HomesGoFast.com. Considering that most British home buyers in Florida are investing in a second home property that makes sense, and the website aims to assuage their understandable fears. In planting the seeds of optimism for those in the U.K., the website says, "The hope is that developers will start building new homes and apartments soon, and that reluctant buyers will purchase them. The money that the state will provide will be available to provide property developers a line of relatively cheap credit." But forget "building new homes and apartments soon;" that would only add to the current multi-year excess inventory problem we found ourselves in. The Brits should be encouraged to purchase our existing inventory which is abundant and available at fire sale prices.
View From Minnesota: $700,000 Homes For $200,000
And closer to home, the editor of the Minnesota Star-Tribune describes Florida as the place "Where homes stand empty and people vote." Scott Gillespie visits Southwest Florida and offers a sobering pre-election analysis of the Florida housing market: "Here at ground zero of a housing mess that's wreaking havoc with the U.S. economy, whole neighborhoods of vacant homes await bargain hunters." Turning to the upcoming presidential election, Gillespie sees the unrest among desperate homeowners putting our state seriously in play on November 4. "Florida is in play for the Democratic presidential ticket, and the economy is clearly the reason. Housing is depressed, and crime and unemployment are up. Sarah Palin drew enthusiastic crowds in the area Monday, but many of Florida's Joe Six-Packs, as she might call them, are worried."
Monday, October 6, 2008
The Daily Soak - October 6
South Florida Foreclosure Numbers Top $14 Billion
Bal Harbour-based real estate consulting firm Condo Vultures just released their list of foreclosure numbers in Miami-Dade, Broward and Palm Beach Counties for the first nine months of the year. Broward leads the pack with 24,733 units in foreclosure followed by Palm Beach (17,065) and Miami-Dade (13,939). The firm also gives breakdowns of the Top 10 developments with foreclosures in each county. In Miami-Dade, the Shoma Condo at Keys Cove in Homestead has the most foreclosures (70) while the Club at Brickell Bay has the most money owed ($26.1M). In Broward, the Edgewater condo in Coral Springs has the most foreclosures (102) while the Beach Club in Hallandale has the most money owed ($30.4M). In Palm Beach, the Ponte Verde at Palm Beach Lakes has the most foreclosures (120) and the most money owed ($22.6M).
Looking On The Bright Side In Sarasota 
Condo sales are down 30% compared to last year, sales in the $1 million plus market fell to double-digits and local realtors don't see the housing market coming back anytime soon. But there is some good news coming out of the City Where Urban Amenities Meet Small-Town Living (Sadly, I'm not making that up.) Inventory of unsold condos is down 22% and no new condos came on the market in Sarasota in 2008. OK, that was the article's good news sandwiched between more negative indicators. Median sales prices fell to $220,000 in August and the highly-anticipated influx of Canadian and European buyers never really materialized. Foreign buyers still account for around 10% of Sarasota condo sales, and the continued strengthening of the dollar versus the Euro and the Canadian dollar is making Florida real estate investment less attractive for those overseas.
Spooktacular: Realtor Thinks Haunted Houses Will Bring Traffic
I don't know about other parts of the Sunshine State, but the South Florida radio stations are playing the Universal Studios Halloween Horror Nights commercial every fifteen minutes. They must be on heavy rotation up in Melbourne too, because a local realtor has been inspired to host Halloween-themed open houses or "Twilight Spooktaculars." (The name reminded me of a classic Phil Hendrie segment.) Parents are encouraged to bring their children in costume. Says agent Terry Schneider, "This is a new and chic way of reaching a different market." Yes, six-year-olds dressed as Hannah Montana have long been neglected by the Florida real estate industry. Now is the perfect time to reach out to pre-teens and teach them the value of levering up with a new home purchase. The party invitations make one very p.c. clarification, "The homes will be decorated in a fall theme, with some Halloween whimsy but no scary elements." None needed. Our housing market is scary enough.
Sunday, October 5, 2008
The Daily Soak - October 5
Online Auctions Produce Destroyed Interiors, Dead Bodies
Florida is one of the few states that allows online auctions of distressed properties, but states like California are starting to take a closer look. As the headline suggests, the L.A. Times takes a cynical view of online auctions. Rather than focus on the auctions many benefits (expedited sales, no geographic limitations, a larger bidder pool), some critics say we're only perpetuating the same gambler mentality that got us in this mess in the first place. And to hammer home their anti-online point, the paper solicits auction feedback from a vast pool of 2 buyers. Of course, one of those individuals bought a home that had $40,000 worth of interior damage, while the other respondent from Jacksonville found a dead body in his new home. Yet, despite these extreme examples, The Times ultimately credits Florida lobbyists for pushing creative legislation and companies like RealAuction for helping bidders navigate potential pitfalls.
"Less Money for Bass Boats and High-Definition TVs"
It's hard times in Brevard County where the HousingBath has taken it's toll in the from of layoffs at drywall companies, title companies, furniture stores and home improvement stores. And the labor situation isn't going to improve anytime soon according to a new Manpower survey which showed no local companies with hiring plans. The rising price of gas coupled with economic uncertainty has Brevard residents like Janet Rooks playing defense,"I'm staying home. I'm not going out. I'm not going shopping for clothes." Extrapolate this justifiable bunker mentality across the Sunshine State, and you can hear our housing-dependent economic engine grinding to a halt. The situation in Brevard and other Florida counties is dire. Sadly, rather than proposing creative solutions to jump-start and diversify our economy, most local officials are just kicking back and waiting for the bailout billions to trickle down.
Perfect Storm: Is Florida On the Verge of Bankruptcy?
Apparently the BHM (Bailout Hope Mentality) has also spread to Tallahassee, according to Paige St. John at the Sarasota Herald-Tribune. St. John points out the precarious situation Florida is in considering the state's inability to sell billions of dollars worth of municipal bonds. So what's the problem? Well, just as Florida residents are finding it nearly impossible to get loans for cars and houses, the state is increasingly unable to borrow because, in the words of Florida's bonding chief Ben Watkins, "The municipal market is frozen. It is closed." And the severity of this problem will be felt if Florida takes a direct hit from another major hurricane. "Let's hope we don't have a storm," says Florida CFO Alex Sink, but "failing that hope for a multibillion-dollar federal bailout."
Friday, October 3, 2008
The Daily Soak - October 3
The Donald Severs Ties With Troubled Tampa Project
HB.com has reported on the love and mostly hate relationship between Donald Trump and SimDag, the developer behind the 52-story Tampa high-rise condo which never came out of the ground. According to AP, Trump is cutting ties to the proposed $300 million development for good. "Trump agreed to a mediation deal Monday with developer SimDag over Trump Tower. The (project) was burdened by financial setbacks, legal troubles and the slump in the housing market. Trump sued in 2007 to recover more than $1 million in licensing fees." The Tampa project was Trump's only attempt to promote a development outside of Palm Beach County and South Florida.
Breaking News: New Yorker Wants To Buy Florida Condo
Real estate mogul Barbara Corcoran has a weekly column in the New York Daily News where she fields a variety of questions from readers regarding real estate purchases and financing. This week's Q&A featured a strange new phenomenon: a New Yorker who actually wants to purchase a home in Florida. And the reader was not bashful...he came right out and said it: "I'd like to take advantage of the low prices and buy a condo near a beach in Florida." Fortunately he posted anonymously or else his Inbox would have been inundated with 20,000 seller responses. Corcoran offered this sound advice, "Start online, pick out an area that appeals to you, and then spend your next three vacations there really checking it out. You won't make a good investment without doing your homework."
Hardest Places to Sell A Home: Tampa, Miami & Jax
Forbes always pulls together entertaining housing market slide shows, and this week's offering is no exception. The magazine looks at over a dozen markets where selling a home is much easier or much harder than it was this time last year. Surprisingly, several Arizona and California markets like Phoenix and San Diego show up in the "easier" column. On the downside, three Florida cities showed up in the "harder" column including Tampa (14% more difficult to sell a home than last year) and Miami (23% more difficult) and Jacksonville (32% more difficult than last year). At opposite ends of the spectrum were Philadelphia, the easiest market compared to last year, and Seattle, the hardest market compared to 2007.
