Carl leason

Optimism Takes a Hit as Real Estate Continues to Slump

Housing costs, nationwide went on a real rampage from 2001 up to 2005 and people, investors primarily, finally realized that they were way overpaying, so now it's time for them to see what happens when you don't do your homework ! I.E. Return on investment ! Too bad,..so sad !
It's time to stop following the "herd" guys and start figuring if your investments make any real sense.
LC

The Fed Stops Spoonfeeding Us: A Great Depression for Housing?

Can't argue with the comments above ! Right now housing is in big trouble with Fl , CA, and Az leading the way. Floridas problems are primarily State Laws at work, driving up RE Taxes so high that people can't afford homes and Insurance is also to blame as we had Allstate and State Farm bailing out,..too risky they say ! Relief is on the way they say, but we have to wait until Nov. 9 ( When the tax bills come out ) and again in Jan. when issues about the taxes , which are a Constitutional problem are up for a vote to change the way Taxes are calculated.
Our only real hope, nationwide, is to have our currency devalued,..which is happening fast,..to the point that our prices become bargains to Europeans and Canadians.

Weak Home Sales, Tightening Credit Standards = Multiple Mortgage Apps

Personally I blame the Mortgage Loan Companies for the problems in housing this time. They were writing loans with no documentation and convincing a lot of unqualified people that they "deserved" to have their own home,.and that it was in their interests to buy,...buy,...buy !!! No one "deserves" a home,...you must be in the right financial shape to "Deserve" a home.
The Appraisers are also much to blame for not sticking to their guns and placing realistic values on homes but they too were afraid of loosing business to appraisers who would OK anything.
Even the big banks were way to loose with their lending policies.
Being in Real Estate for over 25 years, I saw similar loan activities in the early 80's when lenders were writing 17-18 % loans and having the buyers paying at an 8-9% rate and adding the balance of the REAL payment to the principle every month .Lenders were convincing buyers that the int. rates would be coming down fast ! ( The Reagan years ), For those who don't remember that time, it took 8 years for interest rates to drop below 10% !.. Huge numbers of people went into forclosure over that activity because, like adjustable loans, you can get in trouble real fast, and missed payments are simply added to the principle every month, making buyers even more "upside down".
This time, again, I blame it on the lenders !!
Unfortunately, by playing with the numbers, the lenders can make any deal sound attractive. ( How about zero down loans ,..PURE INSANITY !)
Also, please don't blame the Realtors because they are always at the mercy of the banks ! Always !!

ZipRealty + Zillow Could Be a Winner

The problem with those great sites like Zillow is that the information is so far from factual and the aerial photos and street names and addresses are so old, in many cases,..some of the photos in my particular area are over 10 years old or more ! The aerial photos in my particular subdivision show huge areas that are vacant land and I know for a fact that some of the homes in those areas are more than 10 years old,...so how does that affect credability ??? Even some of the current sales prices are off by $20-$30,000 . ..so how can one see any value in visiting that site or similar ones. Unless those companies get up to date info. they are simply dead ducks !
I am a Realtor,..25 years in the practice and my own subdivision as presented by Zilllow ,..is so out of touch it is simply amazing. The values they place on homes are 5 years ago values !! LC

From a Homebuilder's Perspective, Resale Market Is the Problem

The builder you talked to obviously doesn't understand the Florida market, which is a bit unique,. even though he is building in Fl !
People who are trying to sell probably have a "Homestead Exemption" and that means their R.E. taxes
are way lower than if they bought a new house. The problem is one of super high R.E. taxes and insurance,..in FLORIDA !
FL is unique in that the homestead exemption keeps ones R.E. Taxes from going up more than 3% a year
and they may be paying a very low tax on their present home,..but, if they try to sell their home, the new buyer gets hit with a reassessment of the home by the County and the result is a far higher R.E. Tax cost for the new buyer ..thus no one is buying because if they do, they may be able to afford the Mortgage payments but when you add in new , much higher taxes plus Insurance,. which has skyrocketed, or probably unavailable ( State Farm and Allstate dropping out of the market totally ) ..no one can afford a new home or even a resale ! Just for the record, in FL, Citizens Ins. which is a State run and backed agency is now the largest insurance writer,..and yet listings are 4 times as numerous as 3-4 years ago and sales have been dropping to about half of a typical years sales. ! I have been selling in the FL market for 26 years and this is, by far, my worst year,... and I am not alone !!!! The State has been working on solving this problem and we are supposed to get some relief this Nov.. but a complete overhaul of the R.E.Tax system is up for a Constitutional vote this coming January,...in the meantime, we are stuck in our present homes because, if you move,..even to downsize, you end up with higher TAXES and an Insurance bill you cant afford ! It's become so bad that people who no longer have a mortgage are dropping their Insurance ! So, what makes this great builder so informative ??? He certainly doesn't seem to know about about super high taxes and Insurance and/or what triggers the new higher taxes when one moves !! Yeah,..a real brilliant guy. !!! Ask him if he personally talks to potential buyers or better yet ,..talk to a potential buyer yourself. ! You will get the real scoop then and only then !

June's Retail Sales Report: Should We Be Worried?

I can't believe that so many "economists" and "advisors" can't see the bigger picture. They look at retail sales, and auto sales in the same way as housing and really don't get the big picture ! Think for a moment about the massive trade imbalance, the weakening dollar, the higher price of oil and the trillions of dollars of US being held by other countries along with the cost of the wars,..The strengthening of the Canadian dollar and the Euro,.. and I could go on and on,....!
In my opinion, we are going into an economic slump that's going to take years to dig our way out and these brilliant Economists and talking about relatively minor market sectors that are going thru changes. !!! Start thinking about the massive debt we owe and the trillions of dollars being held by other countries that are shrinking in value every day ! When the dollar is weakening this much because of "outsourcing" everything we buy, and the huge cost of war, and the fact that the Oil producers are starting to use the Euro as the new Base Currency,..(which is now worth about $1.38 to the dollar ), is there any wonder that gasoline prices are up , that home sales are way down and dropping, that everything we import is costing us more ??? I know,..you may think that housing is a major market sector, but in terms of the oil imports, along with our massive national debt, ..the weak dollar,..housing and automobile sales are nothing but a local problem !
For European and Canadian buyers, housing here is becoming very cheap, in fact a bargain .
Along with all that,..China is buying up the worlds supply of cement, steel, lumber, oil, copper, etc. all with American dollars that they have been holding onto for decades and it is causing basic materials to skyrocket in cost the world over. NEW Housing prices have to go up because the cost of materials are going up, and fewer people can afford to buy ! If the Fed. Reserve keeps printing money like they have during the last 10+ years, they will soon make it completely worthless ! Please start looking at the BIG picture !LC