FL post

The Orlando Sentinel reports from Florida. "The champagne-popping days are over for Natalie and David Luongo, who banked enough money flipping a South Florida condo three years ago to stage a $100,000 wedding. Should they walk away from the $117,000 deposit they plunked down on another investment condo in the ritzy Miami-Dade enclave of Bal Harbour? Or should they close on the one-bedroom unit, which is similar to others now on the market for less than the $585,000 they agreed to pay?"

"'It's painful and scary,' Natalie Luongo said. 'We saw the frenzy, and we bought in. Now we're paying the consequences.'"

"Just how many other speculators face the same dilemma in the nation's most glutted condo market will become clear during the next two years. That is when 25,000 new condo units, most of them rising in or near Miami's downtown, will flood an area already saturated with 23,000 condos listed for sale. An additional 40,000 units have been approved, but analysts doubt the majority will break ground."

"(Consultants) warned that up to 70 percent of the condos rising in Miami were being snapped up by people who didn't plan to hold on to them, much less live in them. That was evident from the hordes who camped overnight, fought over lottery numbers, even paid homeless men $20 and a pack of cigarettes to hold their places in long lines, all for the chance to put 20 percent deposits on condos that existed only in brochures."

"The frenzy for some projects was so fevered that some developers raised their prices hourly."

"'It was a nightmare. Lines around the corner. People screaming into phones. I would look at them, and think, 'You don't know what you're doing,' said Mark Zilbert, president of Zilbert Realty Group."

"Gregg and Mary Mullins, retirees living near Fort Myers, finally rented out the two-story $885,500 penthouse they closed on last year in Blue, a concave tower overlooking Biscayne Bay. But the $2,800-a-month rent they're collecting is less than half their monthly mortgage payment, maintenance fees and property taxes."

"The couple never planned to live in the condo, but jumped at buying it at pre-construction prices in 2004 after friends shared a familiar story. 'They said they made lots of money, so they told us to try it and maybe we could make lots of money, too,' Mary Mullins said. 'But that didn't happen. We don't know what happened.'"

"A sheepish Tom Leon says he knows. The retired businessman from Illinois said he knew he had made a mistake about six months after he put down $200,000 on two $500,000 condos at the end of 2004."

"'Every 2 inches, I'd see another [construction] crane, and I knew: There is no market that can absorb these many units,' said Leon. 'It doesn't take a rocket scientist to say, 'Gee, who's going to live in all these buildings?'"

"After a more than five-year frenzy, the condo-building boom in downtown Orlando has ground to a halt. A new Orlando Sentinel survey of the downtown core finds that more than two-thirds of the 40 new high- and mid-rise condo projects announced in recent years are in limbo."

"Not a single project has broken ground since an identical Sentinel survey six months ago found only 15 of the 40 projects had begun construction or been completed. Scott Stahley, a senior VP at Lincoln Property Co., calls the current condo environment 'scary.' 'It cannot be done,' said Stahley."

"The projects that have yet to get out of the ground may be the lucky ones. Many developers say the condo market has fallen so precipitously that the true danger now lies with the handful of still-incomplete towers that have already passed the point of no return."

"A number of developers are in a situation some say is the worst-case scenario: halfway built. Five downtown condo towers are in the midst of construction right now, including the 100-unit Star Tower and the 146-unit 101 Eola. The other three are giants."

"Developers make no secret that they will be anxiously watching to see how the newest projects perform. 'I think everybody is in the search mode: How many investors are there?' said Michael Beale, of Raleigh, N.C.-based Highwoods Properties, which has a 125-unit downtown condo project on hold and another in early planning stages."

"'We were all hoping it was like 80 percent owner-occupied and 20 percent investors,' he said. 'But no one knows.'"

The Palm Beach Post. "After 14 months, Pam Crosby finally blinked. The former morning news anchor put her Lake Worth home on the market on June 9, 2006. 'I had been told for the past two years I could get all this money for it, and then I went to have it appraised, and it appraised high - $260,000 to $280,000,' she said. 'Then the bottom fell out.'"

"Despite being listed with a widely respected Realtor, the two-bedroom, one-bath house was shown only five times in 14 months, she said. There were no offers."

"The supply of single-family homes and condominium units for sale in Palm Beach County's MLS reached 32 months' worth in June in the $200,000-$299,999 price range, according to Illustrated Properties Real Estate."

"In the $300,000-$499,999 range, which has included the county's median price since the boom times, sales declined 73 percent from June 2006 to June of this year. And it would take 37 months to burn off the supply."

"In Palm Beach County, 1,142 homeowners lost their bid for the American dream - or their investment flip - compared with 370 foreclosures in the same month a year ago, the Palm Beach County clerk's office said. It was worse in St. Lucie County, where 429 homeowners got foreclosure notices last month - nearly five times as many as in July 2006, when 90 were filed, according to the clerk's office."

"After getting nary a nibble on her home for more than a year, Crosby lowered her asking price from the original $260,000 to $156,000. She decided to sell the 800-square-foot house herself, a challenging task for an out-of-town owner. If Crosby can't sell the house, she said, she'll rent it."

"'My sellers are sticking to their guns in pricing,' said Douglas Rill, president of Century 21 America's Choice. How are sales? 'Slow,' he said."

"'One client - a famous guy, but I can't tell you who he is - thinks, 'Well, it will sell now or it will sell next year,' Rill said. 'But he really can't hold out because he has a $1 million mortgage. He moved to North Carolina, so he's going to lose his homestead.'"

'"When that sticker shock comes up and his taxes are $75,000 instead of $7,500, then I think in November or December when the tax bill comes, price is going to matter. When it's costing him $15,000 a month, it's going to matter,' he said."

The St Petersburg Times. "Bleak headlines say the home building industry has sunk into its worst trough in a decade. With sympathies to laid-off construction workers and model home sales staff, three cheers for the trough. It's good news for Tampa Bay area homeowners."

"In our region the big picture depicts a glut the size of Goliath. In July, of 41,000 homes for sale in Pinellas, Pasco and Hillsborough counties, about 2,400 sold. With so many homes competing for so few buyers, a house sells for about 10 to 20 percent less than it would have 18 months ago."

"Aside from sellers yanking their home listings to await better days, the market needs builders to give it a rest."

The Ledger. "Foreclosures filed for single-family homes in Polk in 2007 totaled 1,696 through July, nearly doubling 2006's total of 998, according to data collected by Largo-based Foreclosures Daily. And there's still another five months to tally."

"Tracy Beebe, a manager in Polk County's Circuit Court's civil division, spoke with several real-estate lawyers who estimate thousands of foreclosures are waiting to be filed around the state."

"Chris Osmon, who owns AAA Housebuyers LLC, hasn't found any deals. 'It's a down market right now,' said the Lakeland investor. 'No one is bidding because the homes are at 100 percent of their value or greater and the banks don't want to take a loss. It makes no sense as an investor to bid on those properties.'"

"At the auction last week, properties were sold within a matter of minutes, sometimes seconds. But only the lenders foreclosing on the property were bidding."

"Polk's median home sales price has increased 96 percent from $89,000 in 2002 to $175,300 in June. Across Florida, median property values increased 76 percent during that time from $137,800 to $243,200."

"The rise in prices helped fuel a craze among buyers hoping to get into a new home, investors wanting to make quick cash and lenders looking to make money off new mortgages. 'The less you understand and know, the more money they make,' Jeff Lazerson, CEO of a mortgage broker in Laguna Niguel, Calif., said of mortgage lenders."

"That is what has helped fuel the current foreclosure situation around the country. 'Many of the lenders were loose or had no standards for underwriting,' he said. 'You could be dead and get a loan.'"

The Herald Tribune. "Sarasota Realtors coined a new slogan in January: Time2Buy. One of these days they may be right, experts say. Those willing and able to buy can take their pick, make low-ball offers without fear of derision and wait for a seller to take the bait."

"But though it is easy to make a buy now, not all the experts agree that it is the right thing to do."

"'Prices definitely have declined, especially in areas like yours,' said Susan Wachter,a professor of real estate at the Wharton School in Philadelphia. 'You are in the epicenter of the subprime-induced bubble.'"

"In July 2005, a Sarasota buyer would have found just 1,626 active single-family listings, a mere 10 weeks' worth of inventory. Realtors were closing on 156 deals per week. This summer, that would-be buyer has 8,135 homes to consider. At the current sales rate of 90 houses a week, that inventory will last 90 weeks."

"'We are in a holding pattern, because we haven't seen the bottom yet,' said George Huhn, founder of Gulf2Golf Properties in Venice. 'There may be another 20 percent, 30 percent on the downside on this thing.'"

"'Everybody wants to know when will we get out of trouble,' said Sarasota banker Jody Hudgins. 'In January of '06, people were saying, 'Sometime in the spring and summer of 2007.' Well, that has come and gone, and what are we saying now?'"

"As chief economist at Wachovia Bank, Mark Vitner of Charlotte, N.C., has a unique vantage point on the construction-related economy in the Southeast. He claims to know the executives of every major builder in the region." "In Vitner's view, the nation is roughly halfway through a two-year-long correction in existing home prices, which started in third quarter 2006."

"'We are in the early stages of a buyer's market, because there are more sellers than buyers. But sellers really haven't come off their prices enough to make it attractive to the buyers,' he said."