Thursday, May 19, 2005

"It's Insane" In Orlando

The Orlando Sentinel tells us that the RE market may be coming to a head. "'It's insane,' said Gary Balanoff, broker-owner of Re/Max Select. 'Where does it end? I don't know.' The 21-year industry veteran said he has never seen such price escalation."

"There was a sign that change could be coming, with April sales throughout the region falling nearly 5 percent compared with April 2004. That was accompanied by a 5 percent increase in the inventory of available homes."

"Barbara Vance said she is dealing with more investors than ever before, with many buyers quickly becoming sellers."

This is a quote for the ages. "If there is a slowdown, Brenda Rogers of the Lake County Association of Realtors wouldn't mind: 'I kind of wish we would. We've been so busy.'"

7 Comments:

At 9:41 AM, Anonymous Anonymous said...

Seems like the pin is getting closer to the bubble.

 
At 10:29 AM, Anonymous Anonymous said...

With a median home price of only $200k, Orlando is damn cheap. Look at
Miami, Bradenton, Sarasota, the median
is at least $300k. Go to LA, San francisco, and NY, what can you get for $200k? Maybe 200 ft of living space. It is insane everywhere.

 
At 3:08 PM, Anonymous Anonymous said...

I am just shocked and amazed by the techniques used by investors in Florida. I recently went on a rental house hunting trip. My agent took me to see 5 brand spanking new investor owned houses that just came on the market.
Two of them were very basic, no frills, clearly investment purchases. The other three were highly upgraded. Top of the line appliances, upgraded carpet and tile floors. Nice size swimming pools etc. But the most striking thing is that no one has ever lived in them.
And they are being rented at a fraction of what it would cost to own.

I will be waiting for the inevitable market correction in style.

 
At 8:56 PM, Anonymous Anonymous said...

3:08 -- I just did the same, closer to the beach. Brand new condo, rented for a year at less than 0.5% of current sales "value." Took a lot of convincing for my wife to go along, but she caved and it looks pretty sweet from here.

 
At 8:57 PM, Blogger Sunny said...

Thanks for a post from my neck of the woods.

Orlando is still relatively cheap on a national scale, but there are cheaper places. Think this way: this bubble might be a good thing, it is encouraging/forcing people to consider moving to less populated areas for cheaper housing thus decentralizing our population. Spread out folks!

Compare some other areas of the southeast like south Georgia with Florida. It has a very similar climate and topography but 50% the housing costs, at least. Aside from major population centers such as Atlanta, housing is most excellent (on a national scale) in the southeast all the way up to the mason dixon line.

 
At 7:24 AM, Anonymous Anonymous said...

8:57 Sunny -- I think the problem has to do with incomes. In California, for example, people appear to make a lot more money, on average, than they do in Florida or Georgia. There is a "premium" that they pay for the weather there, but they still seem to make more net money and use that to leverage themselves into those expensive homes. As for the South, average wages in Georgia outside Atlanta probably are well less than they are in Florida.

As another blogger wrote, the cost of building a house isn't all that much different from state to state -- most of the price difference is in the land the house is on. I don't know what property taxes are like in Georgia, but Florida now -- as in just in the past 3-4 years -- has a decided disadvantage in its high property tax rates. Used to be that living in Florida was great because there is no state income tax and property taxes were reasonable. No longer, for new purchasers. I believe that a retiree moving to Florida now is almost certain to pay more in property tax than he/she would in state income tax in many other states. That will foul up their budgets for sure.
Chip

 
At 12:24 PM, Blogger Sunny said...

Chip, wage differences are not that great from Florida to Georgia. One of the things that makes Florida so bubbly is the disparity between income and housing costs. There are lots of low wage tourism and retirment services jobs in Florida.

 

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