Alan Greenspan et al. warn of Florida as local housing bubble.

[BigBadBuick]

Originally Posted by Joe

Have you seriously been living under a rock?


http://www.censusscope.org/us/s12/chart_popl.html

Do the math...

Joe Joe Joe, that only shows to 2000, we're talking about the future. I'd say by 2010 the population will have dropped significantly and by 2050 or so we'll be back down to the 4-5 million range of the 60's. People are getting wise to the whole 'Florida Real Estate' scam and they are moving away in record numbers.

[Scott]

Originally Posted by onefastcavyz24

Do you have proof of that?

Looks like Joe posted you something but I have proof. I get proof on internal documents at my office every quarter.

Long story short Florida is taking on surplus of about 660 people a day on average and has been above the 600 mark per day for the past three years, it is projected to go to almost 800 per day within the next few years. This is AFTER factoring in deaths, people moving, but not illegal aliens so you do the math how much higher than 660 a day we must take on.

Some of you just don't get it and just figure something bad or some massive correction is going to happen in this area, it is very very unlikely it will ever happen, there is far to much demand and far to many jobs being added.

There is also a massive shift in wealth going on right now from baby boomers which is the richest and most massive grouping of people our economy has ever seen. Now they are starting to hit retirement age, guess where they move ? A litte hint, where it is warm and much cheaper to live than Cali.. Plus they are giving money to other family members and guess where a lot of them end up ?

Don't be a dooms day'er just because you don't understand, I realize it is easier to be negative but inform yourself better before making half assed, uninformed statements like many of the ones I have seen in this thread and other Real Estate threads.

You know it is actually possible some of us are very well informed and educated on this topic, so while different opinions are great to see / hear don't make statements just to hear yourself talk. Now if you have something that counters all of the good news many of us post regarding Real Estate and it has some logic or stats to back it then post away I (and I am sure some others) would love to see / hear it.

[Leonard]

Scott,

I'll agree that the need for growth of the Florida housing market (quantity of homes) is there based on the influx of people. What you didn't touch on is whether there is going to be a price correction in the near future. Housing prices in Florida are increasing rapidly. That leads to a large number of people doing real estate speculation. (particularly your wealthy baby boomers). The problem is that the wages in the state aren't increasing at anywhere near that rate. Sooner or later it's going to reach the point where people (non-baby boomers) won't be able to afford to rent these speculation homes. The houses will sit empty, prices will drop and appreciation will drop to reasonably sustainable levels.

[Rob.M]

Originally Posted by Leonard

Scott,

I'll agree that the need for growth of the Florida housing market (quantity of homes) is there based on the influx of people. What you didn't touch on is whether there is going to be a price correction in the near future. Housing prices in Florida are increasing rapidly. That leads to a large number of people doing real estate speculation. (particularly your wealthy baby boomers). The problem is that the wages in the state aren't increasing at anywhere near that rate. Sooner or later it's going to reach the point where people (non-baby boomers) won't be able to afford to rent these speculation homes. The houses will sit empty, prices will drop and appreciation will drop to reasonably sustainable levels.

Extremely well put.

[dnstommy]

I agree with Scott, but the simple fact of the matter is the houses are not worth 400k. And when the rates are 8.5 a 400k house will cost 3000 a month. A person willing to pay 3000 a month will not want to live in a 2100 square foot house in moderate neighborhood. A person whoi is willing to spend 1700 a month would live there. When the rates are @ 8.5 % 1700 will get you 200k, now that will be a reality shock.

Also to note, it is supply and demand and right now the demabd is high, but rentals occupancy is going up and will be higher when the rates go up, taking the demand away. Thus lower prices.

[dnstommy]

I guess I just said Leonard said. Well put.

[Joe]

Originally Posted by Leonard

Scott,

I'll agree that the need for growth of the Florida housing market (quantity of homes) is there based on the influx of people. What you didn't touch on is whether there is going to be a price correction in the near future. Housing prices in Florida are increasing rapidly. That leads to a large number of people doing real estate speculation. (particularly your wealthy baby boomers). The problem is that the wages in the state aren't increasing at anywhere near that rate. Sooner or later it's going to reach the point where people (non-baby boomers) won't be able to afford to rent these speculation homes. The houses will sit empty, prices will drop and appreciation will drop to reasonably sustainable levels.

That is a good theory, but then again some facts are not accounted for...

Things like, incomes ARE increasing. Mine has. Many people I know have had an income increase. Sure, if you sit in one job forever and never improve upon yourself, you will only increase at the standard rate of about 5%. If you're smart, you'll move up in the ranks and increase your salary.

As far as more jobs, have you not seen Monster lately? There are MORE and MORE jobs coming into Tampa every day. Why? Because Tampa is now seen as one of the best places for a company to move from the high costs in the north/cali.

When those people move from the north with their company, do you seriously think their salary gets "adjusted" to "Floridian Standards"? Hell no. I know I wouldn't move anywhere if they cut my pay... Same thing.

The "drop" people are talking about seems to have two sides, the drop that people are "hoping" for, and the REAL drop.

Look at what is taking place here and you will start to realize that the only "drop" that will take place here will be a "slowing" of sales which will simply slow the increase of prices. The only thing that would "burst" any price bubble would be if everyone in Tampa had some wierd thing that caused many of them to want to exodus out of here and head elsewhere, which in REALITY will not take place.

Again, the ones that have the "evidence" for bad things here, are the ones not taking the risk and getting the gain by jumping in the house market here.

Sure, sales may slow in a few years and the price increase may slow... I will still have more gain from my property then I ever could by playing around in some cheesy paper stocks.

Don't get me wrong, don't throw everything you have into real estate, but don't be stupid and sit back waiting for some unrealistic "price slam"...

Then again, I'm just a retard...

But I'm a retard that is on the path to greatly increasing my wealth by taking soem risk while I'm young...

[Scott]

Originally Posted by Leonard

Scott,

I'll agree that the need for growth of the Florida housing market (quantity of homes) is there based on the influx of people. What you didn't touch on is whether there is going to be a price correction in the near future. Housing prices in Florida are increasing rapidly. That leads to a large number of people doing real estate speculation. (particularly your wealthy baby boomers). The problem is that the wages in the state aren't increasing at anywhere near that rate. Sooner or later it's going to reach the point where people (non-baby boomers) won't be able to afford to rent these speculation homes. The houses will sit empty, prices will drop and appreciation will drop to reasonably sustainable levels.

Great question / reply !

I honestly do not see a correction (drop) in prices. I definitley see a slow up on appreciation coming (when ? ) but even at a slower rate it will still be the best return on your money, anywhere and we will still be behind many other metro areas as far as entry level homes go.

The builders are quickly making it more difficult to let people buy multiple homes. They are doing this for a few reasons (mostly for themselves) but the side effect of the builders curbing multi-home investors is that it is starting to balance out rental rates. Rentals is a whole other aspect of this conversation so lets save that for another thread.

As far as the homes sitting empty because people will not be able to afford rent then prices will drop, I have to disagree.

The investors will have made enough appreciation while the home was being built that they will be able to drop the rental price and bleed on their mortgage payment for a few years and still be able to turn a profit when they sell. Almost all of my investors as well as myself bleed (mortgage payment is higher than current rentable amount) anywhere between $75-$200 a month which is most savvy investors target. It is damn near impossible to rent for the same amount of your mortgage unless you have put in a lot of your own cash to lower the debt, which is not the target of most investors. Most want little to nothing down (0-10%), a bleed of about $100 a month, and sell in 2-3 years making their profit on the sale.

The rental market is actually busier than I have ever seen it and I do not completely have my finger on why. I rented out five homes in the last two weeks, that is usually what I do in two months. I have a few ideas why the rental market it crazy.

Dnstommy (Chris) you are oretty much correct with the scenario you posted. But this applies to people with ARM loans and most people planning to stay in their home long term usually do not have adjustable mortgages. If they do they get what they get for rolling the dice.

I hope I am not boring anyone or coming off "arrogant", that is not the intent I just type it as it comes up.

[Joe]

Originally Posted by dnstommy

I agree with Scott, but the simple fact of the matter is the houses are not worth 400k. And when the rates are 8.5 a 400k house will cost 3000 a month. A person willing to pay 3000 a month will not want to live in a 2100 square foot house in moderate neighborhood. A person whoi is willing to spend 1700 a month would live there. When the rates are @ 8.5 % 1700 will get you 200k, now that will be a reality shock.

Also to note, it is supply and demand and right now the demabd is high, but rentals occupancy is going up and will be higher when the rates go up, taking the demand away. Thus lower prices.

Again, you are using flawed stats for this stuff.

Who are buying ALOT of the homes in Florida? Floridians? No.

Try people from New York, Boston, Etc... Ask ANY of the people who work in home sales.

Now, ask your friends from New York what and how much they paid for a 2100sq ft home in NY?

You mean they were willing to pay $400,000? Shit. I thought that there is no way a 2100sqft home could be worth that...

There is, when people live here. Demand will not suddenly go away... it will just slow eventually...

[number_2]

Originally Posted by dnstommy

I agree with Scott, but the simple fact of the matter is the houses are not worth 400k. And when the rates are 8.5 a 400k house will cost 3000 a month. A person willing to pay 3000 a month will not want to live in a 2100 square foot house in moderate neighborhood. A person whoi is willing to spend 1700 a month would live there. When the rates are @ 8.5 % 1700 will get you 200k, now that will be a reality shock.

Also to note, it is supply and demand and right now the demabd is high, but rentals occupancy is going up and will be higher when the rates go up, taking the demand away. Thus lower prices.

who are you to say what people will be willing to pay or what a house is are worth? a house's worth is correlated to its demand, and demand rises as more and more people are in NEED of housing. it's not like people are going to move here and say "sorry, but three thousand a month is far too much for a 2100 square foot house" and go homeless instead. if that's how much the houses are going for, that's how much they have to pay. if they refuse, someone else who NEEDS the house will buy it.

the only thing that could cause prices to fall would be for supply to somehow surpass demand. so basically you guys are forecasting sooo much "speculation" that people build more houses than there are people to buy or rent them, thereby lowering demand for housing and, consequently, causing prices to fall. but how realistic is that? is the possibility of new home production outstripping population growth really something worth worrying about?

i'm not in a position to say, but it's something to think about.

[Scott]

Originally Posted by number_2

is the possibility of new home production outstripping population growth really something worth worrying about?

i'm not in a position to say, but it's something to think about.

Not a chance on the over supply, the huge undersupply is one of the factors for driving up demand and prices so rapidly. As long as there are builders sell all of there available homesites before the first one is even built there is zero chance of a over supply.

Great point / angle it is right on but not a factor here.

[number_2]

Originally Posted by Scott

Not a chance on the over supply, the huge undersupply is one of the factors for driving up demand and prices so rapidly.

exactly, that's the point i was trying to get across to the pople who are predicting the bubble-burst. not that it isn't possible, just that it's unlikely, because prices would not be rising so noticeably in the first place if population growth wasn't driving up the demand. unless demand is being artificially inflated by a LOT of speculators/builders who are mistakenly under the impression that the need for housing is rising, then this isn't a bubble at all.

[fencerider2]

Originally Posted by Scott

Not a chance on the over supply, the huge undersupply is one of the factors for driving up demand and prices so rapidly. As long as there are builders sell all of there available homesites before the first one is even built there is zero chance of a over supply.

Great point / angle it is right on but not a factor here.

Over supply became a reality and will be here for a long time to come.

[juke]

No need to dig this one up. If you want to start a new thread you should, but in the appropriate area.