That sound you can hear is the air being let out of the U.S. property bubble.
That smell in the air is from the **** hitting the fan.
I split time between south Florida and Dublin and witnessing the beginning of something ugly down here in the Redneck Riviera. Florida, along with California and Las Vegas have been at the center of the buying frenzy over here, with most propertys up over 100% the last four years. It was just too good to last. I guess you just can't outrun economic laws forever.
The market here quietly peaked about a year ago without anybody knowing. Since then home inventorys on the market have skyrocketed. In Miami alone there are over 20,000 condo up for sale, mostly over $250,000. The smart ones are beginning to lower their asking price to entice buyers, but nobody is buying. Oh, by the way, there are currently over 70,000 condos in some stage of development that speculators bought pre construction to sell off when they're completed (at what they thought would be a higher price). I have already hear stories of thousands of people pulling out of their contracts and loosing their deposits. I have a feeling alot of these condo developments may go bust before they are ever built. Alot of people were just trying to make some easy money, but will end up bankrupt. I thought real estate prices could only go UP UP UP????
Homes in my area have been sitting on the market longer and longer. The buyers, most investers, have gone away and people are getting desperate to get rid of their 2nd homes. I have a fried who has dropped his asking price from $450,000 to $350,000 and still can't find a buyer. Everyone agrees that house prices will drop, but who knows how far they will go in the next few years 10%, 20%, 30%, 40%?????
The same thing is happening in all other property hot spots around the country. Housing inventories numbering in the tens of thousands in most cities. Oh crap, I think they overbuilt.
Things are still in the early stages of decline here, but I'm amazed how quickly things can turn. The press is only beginning to spin a bad vibe on the whole situation. Only months ago, people were desperate to sign up for some hot new pre constuction housing project.
Heres the scary thing. The property bubble over here has been fueled by exotic 100% "no money down" adjustable rate 30 year mortgages with a teaser interest rate for the first two years (1 or 2%) and will then adjust to normal levels. Many of these rates will begin to adjust in the coming months. Yikes. Imagine having your mortgage payment jump from $1000 a month to $1400 when they start paying 7% interest. Most economist predict that at least 20% of these "suicide mortgages" will end up in forecloser in the next few years. Property prices would be much lower if people actually had to put 20% down on a house like they did in the past.
Anyway, I just wanted to shed some light on the state of the union here. I hope none of you had hopes of an investment property in Florida or Cali. If so, you may want to wait for the FIRE SALE in 2008 when the dust settles.
That smell in the air is from the **** hitting the fan.
I split time between south Florida and Dublin and witnessing the beginning of something ugly down here in the Redneck Riviera. Florida, along with California and Las Vegas have been at the center of the buying frenzy over here, with most propertys up over 100% the last four years. It was just too good to last. I guess you just can't outrun economic laws forever.
The market here quietly peaked about a year ago without anybody knowing. Since then home inventorys on the market have skyrocketed. In Miami alone there are over 20,000 condo up for sale, mostly over $250,000. The smart ones are beginning to lower their asking price to entice buyers, but nobody is buying. Oh, by the way, there are currently over 70,000 condos in some stage of development that speculators bought pre construction to sell off when they're completed (at what they thought would be a higher price). I have already hear stories of thousands of people pulling out of their contracts and loosing their deposits. I have a feeling alot of these condo developments may go bust before they are ever built. Alot of people were just trying to make some easy money, but will end up bankrupt. I thought real estate prices could only go UP UP UP????
Homes in my area have been sitting on the market longer and longer. The buyers, most investers, have gone away and people are getting desperate to get rid of their 2nd homes. I have a fried who has dropped his asking price from $450,000 to $350,000 and still can't find a buyer. Everyone agrees that house prices will drop, but who knows how far they will go in the next few years 10%, 20%, 30%, 40%?????
The same thing is happening in all other property hot spots around the country. Housing inventories numbering in the tens of thousands in most cities. Oh crap, I think they overbuilt.
Things are still in the early stages of decline here, but I'm amazed how quickly things can turn. The press is only beginning to spin a bad vibe on the whole situation. Only months ago, people were desperate to sign up for some hot new pre constuction housing project.
Heres the scary thing. The property bubble over here has been fueled by exotic 100% "no money down" adjustable rate 30 year mortgages with a teaser interest rate for the first two years (1 or 2%) and will then adjust to normal levels. Many of these rates will begin to adjust in the coming months. Yikes. Imagine having your mortgage payment jump from $1000 a month to $1400 when they start paying 7% interest. Most economist predict that at least 20% of these "suicide mortgages" will end up in forecloser in the next few years. Property prices would be much lower if people actually had to put 20% down on a house like they did in the past.
Anyway, I just wanted to shed some light on the state of the union here. I hope none of you had hopes of an investment property in Florida or Cali. If so, you may want to wait for the FIRE SALE in 2008 when the dust settles.