Wilma Helping the Real Estate Cool Down in Florida?

[OuterBanker]

Odd thing, seems like hurricanes have little bearing on the real estate on the Outer Banks. It has flattened quite a bit here but only because we are overbuilt. Too many rental homes and not enough renters. This place was a boon for Realtors for quite awhile, in fact we have 1,100 licensed real estate agents here with a year round pop of only 35k. I'm afraid that we will be one of the first in the real estate bust because now people are not renting enough to cover their mortgage. So now you have a lot of real estate that was bought on equity lines and property that is not covering their mortgage and expenses. The trickle down is affecting business here. In our case last year was the best ever because we had numerous large sales to real estate brokers that were making a killing selling multi-million dollar real estate. This year we don't have any of those sales. Restaurants here are suffering because the owners are making dinner on their property because they can't afford to eat out. Rental maintenance companies which use to flourish are now begging for work because the owners are doing the work themselves. And the story goes on. Now one would think that the mid 90's would slow business because of Bertha, Fran, Bonnie, Dennis, Floyd and Isabel, but just the opposite happened. It seems that Americans suffer from hurricane amnesia, and the onset can happen the day after a hurricane

[windycity]

Real estate here in PMCo. is nuts, but the market has softened. I say if we get hit again this year, many many people will high tail outta here. I love Fl. but not everyone can handle our stressful summers!!

[BocaGirl]

I keep warning but nobody listens...what do you all think?

http://www.stock-market-crash.net/florida.htm
http://www.investopedia.com/features/cr ... ashes4.asp

Chris,

Wilma was a minor factor in the cooling real estate market. The cost of money - i.e. rising interest rates - had more to do with sales going more slowly than our favorite lady. That said, real estate in the Boca Raton area is still phenomenal. Many homes in East Boca area that sold for $200,000 or so maybe three years ago are listing and selling for - GET THIS - $500,000 or more today. The big difference is that they take a longer time to sell.

Anyway, who are you are warning? And what are you warning them about? As a student of history, I truly believe that you cannot compare the economic Florida scene of 1929 and 2006. While they may appear similar on the surface, there are just too many differences to stack them side by side.

By the way, I loved reading about the Tulip Bulb Mania in the link you provided. It proved that even back in the 1630's, people were easily misled about what might have value. It made me think about that Pet Rock I've been saving for years now.........waiting for that craze to return.

BocaGirl
Barbara

[Bocadude85]

Yes real estate in the Boca Raton area is still as crazy as ever. I recently listed a home a block west of A1A that a little old lady bought 7 years ago for get this $180,000 and it sold for $815,000!

[gatorcane]

Chris,

Wilma was a minor factor in the cooling real estate market. The cost of money - i.e. rising interest rates - had more to do with sales going more slowly than our favorite lady. That said, real estate in the Boca Raton area is still phenomenal. Many homes in East Boca area that sold for $200,000 or so maybe three years ago are listing and selling for - GET THIS - $500,000 or more today. The big difference is that they take a longer time to sell.

Anyway, who are you are warning? And what are you warning them about? As a student of history, I truly believe that you cannot compare the economic Florida scene of 1929 and 2006. While they may appear similar on the surface, there are just too many differences to stack them side by side.

By the way, I loved reading about the Tulip Bulb Mania in the link you provided. It proved that even back in the 1630's, people were easily misled about what might have value. It made me think about that Pet Rock I've been saving for years now.........waiting for that craze to return.

BocaGirl
Barbara

Very well-said. Good points.

[weatherwindow]

bc...nothing short of a repeat of october 11, 1846 will take the steam out of the market on cayo hueso ...ANYTHING still standing starts at 250k in old town. double digit appreciation annually since 1982..it is just amazing. .....rich

[EDR1222]

Here in Brevard County the effects of Wilma were not significant, so I don't think it had anything to do with the real estate cooling off. I would say it has more or less leveled off here. I still don't see prices of homes coming down a whole lot. There are some residents who have finished up repairs from the damage caused by Frances and Jeanne that are now selling their homes and leaving the area. The difference here is it is just taking a little longer to sell the homes than it did a couple years ago.

Prices here are not as high as in other parts of the state, but nevertheless a crisis is looming and a recent article in our local paper discussed how people essential to the area such as Police Officers, Teachers, and Nurses are leaving the area because they cannot afford to live here. That is pretty sad and the county commission has been addressing the issue, but I am not sure if there is much they can do. Too little too late I guess.

[SootyTern]

Houses are being built like mad in South Dade because the builders realize there is room there and the mayors/councilpeople are begging for them to build to get the money. There was a slump after Andrew but it is over now. Florida is the fastest-growing state in the country, last I heard. I doubt Wilma by herself has had much more than a local impact on property values; other forces will prevail. I do think that Katrina + Wilma is expediting the transition from nursery or farming in South Dade to subdivisions; many smaller nurseries have gone under and are idle since the double-hit. With land worth what it is, developers are probably going to use the storms as an opportunity to acquire acreage once used for planting.

[zlaxier]

Don't forget that the majority of policies in Dade, Broward, and Palm Beach are covered by Citizen's, the state insurer of last resort.

We get that Cat 5 into South Florida, it won't only be a disaster for South Florida, it'll be a disaster for Orlando, Tampa, Jacksonville, even Like Oak!

That's because all of Florida will be on the hook to pay for the damage. A $100-$200 billion storm will probably cost every single property owner in Florida thousands of dollars in assessments or the state will be bankrupt. We'll probably need a government bailout.

People have no idea how bad the insurance situation is in South Florida.

[Aquawind]

I do think that Katrina + Wilma is expediting the transition from nursery or farming in South Dade to subdivisions; many smaller nurseries have gone under and are idle since the double-hit. With land worth what it is, developers are probably going to use the storms as an opportunity to acquire acreage once used for planting.

Well Said.

Don't forget that the majority of policies in Dade, Broward, and Palm Beach are covered by Citizen's, the state insurer of last resort.

Good Point that will be disasterious and the state is already looking at helping assist payments for policies with the hurricane fund money.. So wether payments are pre or post storms and with likely more storms things are going to get real tough. Helping drop insurance rates with state funds and we don't have enough for actual recovery.

[gatorcane]

Houses are being built like mad in South Dade because the builders realize there is room there and the mayors/councilpeople are begging for them to build to get the money. There was a slump after Andrew but it is over now. Florida is the fastest-growing state in the country, last I heard. I doubt Wilma by herself has had much more than a local impact on property values; other forces will prevail. I do think that Katrina + Wilma is expediting the transition from nursery or farming in South Dade to subdivisions; many smaller nurseries have gone under and are idle since the double-hit. With land worth what it is, developers are probably going to use the storms as an opportunity to acquire acreage once used for planting.

Actually from the data i gathered Wilma did impact the real estate market temporarily in South Florida due to rising insurance costs and mostly because there was no power and landscaping damager everywhere. Once it was cleaned up enough after about a month or so - things really didn't get back to the pace that we saw before Wilma - helped by rising interest rates and fear of a market collapse.

Now - sniffing out the real estate market here I sense the worries people are having about upcoming hurricane season and rising interests rates and the fact that NOBODY CAN AFFORD PALM BEACH COUNTY except the upper class and wealthy - MIDDLE CLASS IS GETTING PUSHED OUT. Something has to give.

It is so similar to the 1920s it has me very worried because if Wilma's big sister with CAT 4-5 winds roars through here - it will take longer than a couple of months to clean up the landscaping damage - it may take years for things to return to the hype that once was.


-Chris