[firemed]

Florida has sunshine and has been advertising to the northern people for years. I am seeing alot of people moving away now. Desperate investors are renting just to get some cash and will most likely walk. I don't see the cars on the road this season and alot of my friends are saying sales are down 40% this year in other then realestate. Will the market come back? well in the 1920's it took over 50 years to come back to the prices of 1926. People are moving to areas that have more to offer with a stable economy that match the fundamentals. I don't put alot of faith in foreign investors most of this mess was caused by investors. We have to face it, this was a bubble and with insurance and property taxes Florida is not that cheap retirement spot anymore.

[macguy]

Originally Posted by CJFlorida

Because we have found 5 homes we like that are listing for $525,000-600,000, 3 of which are also for rent.

One is also listing to rent for $2500, one is listing to rent for $2400, and another is listing to rent for $1800. Rent includes all HOA fees, maintenance, lawn and pool.

All these costs plus, insurance and property taxes, make it much better to rent until prices come down about 50%. You would have be sure you would live in a home for over 20 years before the prices make even a little sense. We doubt we will be in a house 20 plus years, and the average family moves every 5 years. When you run a rent vs own calculator, if prices even stay stagnant for a few years, let alone drop, then you have to stay 30 years to make today's prices work. That is not a smart gamble to take.

We won't buy in a housing market with so much inventory and foreclosures on the way for a rent multiple of over 120. The numbers don't add up when rent multiples are at their current levels of 240-300.

Also, the median income of the area where these houses are located is $63,000. We would be purchasing at 8-9 times median income at today's prices. I don't think that makes any sense at all.

Lastly, the inventory of for sale and for rent in Palm Beach Gardens is huge. We would be foolish to pay these prices, 8 times income and 250 rent multiple. There is no incentive for us to do anything but rent until prices drop a lot.

Maybe you can't afford it, but people with money don't need incentives. They are same people who pay $2500.00 a night for a top floor in Vegas. They just spend their money on what they want. Local economy and income multiples don't matter to them, they are not tied to the local economy.

[CJFlorida]

Originally Posted by macguy

Maybe you can't afford it, but people with money don't need incentives. They are same people who pay $2500.00 a night for a top floor in Vegas. They just spend their money on what they want. Local economy and income multiples don't matter to them, they are not tied to the local economy.

Sure I could afford it, that is besides the point. We bought for $325,000 in 2003 and sold for $550,000 in 2005. Our winnings are in a 6% CD and we rent for a fraction of what owning the same home would cost.

These houses I am referring to in Palm Beach Gardens are middle class focused houses and neighborhoods. I am not talking about the high rollers. Multi million dollar homes are their own market.

I am discussing homes in neighborhoods that sold for $180,000 in 2000 and now are on the market for over $500,000. They are not selling and they will not sell until prices come way down. Lenders will no longer lend money like they did 3 years ago. The faucet of money has been shut off.

By the way, those high rollers did not get rich by paying $600,000 for a home they could rent for $2500, that is for sure.

[TriMT7]

Originally Posted by firemed

Florida has sunshine and has been advertising to the northern people for years. I am seeing alot of people moving away now. Desperate investors are renting just to get some cash and will most likely walk. I don't see the cars on the road this season and alot of my friends are saying sales are down 40% this year in other then realestate.

Gosh, I wish I could say the same! It was like all of Quebec was down here last week, and the ubiquitous car trailers shipping in cars from out of state.

[firemed]

Originally Posted by TriMT7

Gosh, I wish I could say the same! It was like all of Quebec was down here last week, and the ubiquitous car trailers shipping in cars from out of state.

Yeah, I think the eastcoast is doing good. The westcoast in my area seems slow but its hard to tell. It is a deal for people from Quebec with the dollar so low..

[macguy]

Originally Posted by CJFlorida

Sure I could afford it, that is besides the point. We bought for $325,000 in 2003 and sold for $550,000 in 2005. Our winnings are in a 6% CD and we rent for a fraction of what owning the same home would cost.

These houses I am referring to in Palm Beach Gardens are middle class focused houses and neighborhoods. I am not talking about the high rollers. Multi million dollar homes are their own market.

I am discussing homes in neighborhoods that sold for $180,000 in 2000 and now are on the market for over $500,000. They are not selling and they will not sell until prices come way down. Lenders will no longer lend money like they did 3 years ago. The faucet of money has been shut off.

By the way, those high rollers did not get rich by paying $600,000 for a home they could rent for $2500, that is for sure.

My point is the same principals don't apply in all markets. A property that is worth 2.5 million does not have to come down half to find a buyer because the buyer can afford the house, they just need to be inclined to buy it.

[kmtjss]

Originally Posted by CJFlorida

Sure I could afford it, that is besides the point. We bought for $325,000 in 2003 and sold for $550,000 in 2005. Our winnings are in a 6% CD and we rent for a fraction of what owning the same home would cost.

These houses I am referring to in Palm Beach Gardens are middle class focused houses and neighborhoods. I am not talking about the high rollers. Multi million dollar homes are their own market.

I am discussing homes in neighborhoods that sold for $180,000 in 2000 and now are on the market for over $500,000. They are not selling and they will not sell until prices come way down. Lenders will no longer lend money like they did 3 years ago. The faucet of money has been shut off.

By the way, those high rollers did not get rich by paying $600,000 for a home they could rent for $2500, that is for sure.

Hit the nail on the head. The market doesn't turn that quick anywhere. People don't move in a week. If they move away the remember why they left. Florida is way to over priced for what there selling. I rent too and would like to buy a home but unless I see this market really drop than there's no point. I've told this story before that my brother sold his home for $140K in Cape Coral and sold it 7 years latter for $450K with zero improvements. Now the new owners are asking less than what they paid to get out of it but they can't even get a drive by. It will be years before it gets better. Don't get me wrong, I love Florida but the Income doesn't match the Out-come!

[Jareb]

Originally Posted by firemed

Florida has sunshine and has been advertising to the northern people for years. I am seeing alot of people moving away now. Desperate investors are renting just to get some cash and will most likely walk. I don't see the cars on the road this season and alot of my friends are saying sales are down 40% this year in other then realestate. Will the market come back? well in the 1920's it took over 50 years to come back to the prices of 1926. People are moving to areas that have more to offer with a stable economy that match the fundamentals. I don't put alot of faith in foreign investors most of this mess was caused by investors. We have to face it, this was a bubble and with insurance and property taxes Florida is not that cheap retirement spot anymore.

There are just as many people here this year as before. The influx has started and new expensive homes are being built. $1mil + home just started next door to me and several $2mil + housing developments in progress and selling well less than a mile from me. This is Vero Beach oceanside so I guess all real estate really is local. Homes between $450-750K are very slow and are on the market for many months.

[CJFlorida]

Originally Posted by kmtjss

Hit the nail on the head. The market doesn't turn that quick anywhere. People don't move in a week. If they move away the remember why they left. Florida is way to over priced for what there selling. I rent too and would like to buy a home but unless I see this market really drop than there's no point. I've told this story before that my brother sold his home for $140K in Cape Coral and sold it 7 years latter for $450K with zero improvements. Now the new owners are asking less than what they paid to get out of it but they can't even get a drive by. It will be years before it gets better. Don't get me wrong, I love Florida but the Income doesn't match the Out-come!

Very true. And like another poster said, the homes that seem to be sitting forever are between $400,000-750,000. In Palm Beach County the supply of homes in this range is epic.

[kmtjss]

CJ, I was offerded a job in Bocca a year ago but the pay couldn't get me a 2 bed / 2 bath home under 400K . The job paid better than the west coast but the cost of living was outrages. People just don't make that kind of money down here. Some do but the average Joes don't want to be house poor the next 30 years. It will be years before it goes back to 2 years ago.