Archive for the ‘Market Analysis’ Category
Wednesday, October 3rd, 2007
The New York Times just released a new graph showing the housing bubble. The only problem is, they have intentionally skewed the way the chart reads to make their bubble look even bigger and more extreme.
Nat Torkington points this out:
“In effect, they’ve zoomed in on the area from 100-150 and magnified the growth in the last 15 years.”
We very well might be in a housing bubble, that doesn’t excuse the NY Times creation of a misleading and overly sensational chart.
The Calculated Risk blog breaks down the errors and omissions even further and then shows what the graph should really look like if the NY Times wasn’t intentionally trying to magnify the negatives:
Posted in Market Analysis, Orlando | 5 Comments »
Monday, September 24th, 2007
[Hojin Chang guest authors a post this week, he is a real estate agent with Coldwell Banker who specializes in Southwest Orlando (Dr. Phillips, Windermere, Gotha, Celebration, Winter Garden, Ocoee, Clermont and Hunters Creek) and writes a blog at sworlandoblog.com. ]
Use the interactive map to find out who the largest farm subsidy beneficiaries are in the Orlando area
With the state of the current real estate market its becoming harder to find places to invest in real estate that will not be falling in value for the next few years. Perhaps a farm that receives subsidies is a great real estate investment. Farm subsidies that were originally designed to keep farmer afloat during the Great Depression is now a 16 billion dollar a year program being abused by the wealthiest who are farmers in name only.
Paul Allen, co founder of Microsoft, Ted Turner, and the Prince of Lichtenstein are among the recipients of this subsidy. They’re not farmers by any means, they just own land that used to be farms and qualifies for this subsidy. As long as the land you own is designated to receive the subsidy, the government pays even if the land is no longer a farm. Heck they keep paying even when you’re dead.
Another way to abuse this subsidy is that big farmers can subdivide the farm into as many separate entities to get more subsidies. There are cases where a single farm is subdivided into 60 farms to get 60x’s the subsidy and its perfectly legal as long as you legal subdivide the farm.
All of this is being paid by our tax dollars. I don’t see an end to this scam any time soon because the politicians in the Midwest will never get reelected if they even mention anything about reforming this program.
I guess the only thing you can do is buy a farm that qualifies for this program.
Learn more about subsidies for the rich:CNBC video link.
Posted in Market Analysis, Real Estate News | 5 Comments »
Sunday, September 9th, 2007
The Orlando Regional Realtors Association puts out monthly statistics for the MLS in this area. It covers Orange and Seminole Counties and shows a month-to-month comparison for a number of data points.
The chart below is a snippet from the report that compares August 2006 to August 2007. Inventory has gone up, while the average days on market has extended by over 40 days. The number of sales closed is down by about 1000 from this time last year.
You can download the full August MLS report here.
Posted in Market Analysis, Orlando, Real Estate News | No Comments »
Tuesday, September 4th, 2007
The big news on the national real estate front for the past couple weeks has all been about the tightening of credit standards for potential home buyers, mortgage companies closing their doors, and a weakening real estate market throughout the country. We’re leaving the boom-times for real estate prices and settling into a correction period.
How We Got Here (part of it)
There was a very interesting article in the New York Times titled, Subprime Time, that gave some historical perspective on how the mortgage industry was turned into something tradeable on Wall Street. The end result was a mortgage market where borrowers were not placed under the same scrutiny as was seen in the past (prior to 1970).
Foreclosures and Defaults on the Rise
Today the Wall Street Journal has an article on how the large gains in the real estate space led to many more people buying real estate as an investment - particularly, properties that are unoccupied by the owners. We’re just entering into the beginnings of this mess, but it appears that many of the investors, especially in states like Florida, are just walking away from the loan. An excerpt:
Sazzad Khandakar, 43 years old, an information-technology manager and father of three in Monroe Township, N.J., is among the nation’s distressed home investors. In early 2005, he bought a $410,000 condominium and a $390,000 newly built single-family home, both in Orlando, Fla. “Everybody around me bought an investment home in Florida,” Mr. Khandakar said. “Florida was all over the news; my friends were doing it….I didn’t want to miss out.”
He planned to keep the condo as a second home and sell the detached house for a quick profit. For the condo, Mr. Khandakar made a 10% down payment, but he borrowed 100% of the cost of the house, assuming that its rapid price appreciation would soon provide him with equity. Instead, prices began falling, and he has been unable to sell the home or find a tenant. Now, Mr. Khandakar said, he is behind on both loans.
“My credit is shot for the next six or seven years,” he said, and he has run through $100,000 of retirement savings. “It will take me another five to 10 years to recover that,” he added.
This will be especially interesting to watch in Florida. We have a good economy that will continue to grow. However, we also have an inordinately large number of real estate investors and a huge amount of new homes and condos still coming onto the soft market. My guess is that it’ll be really easy to find a nice home to rent here in Orlando for a low price soon. We’ll also see a good number of foreclosures on the market for those with the money to buy at a great price.
Posted in Market Analysis | 5 Comments »
Tuesday, August 21st, 2007
I just read an interesting article by a local Orlando real estate agent Gitta Urbainczyk on her blog. It’s not encouraging.
In speaking with many agents across the country, I have found that the general consensus is this. Unelss you are in one of those ‘luxury pockets’ where the homes are selling and buyers are buying, this real estate market represents an eerie feeling of a directionless downward trend unlike anything we have seen. The market is adrift without a rudder, flowing in no particularly general direction. The outlook is grim at best. Reports are not encouraging, specifically on national and international online news sites.
We are seeing an evolutionary process that is a complete reversal of what we witnessed in the 2004/ 2005 ‘anything goes’ real estate cycle. Major lenders are shutting their doors or ceasing to fund projects on the closing table. If you think you have your home sold, don’t count on it until you have the money in your hands. Mortgage rules are changing and guidelines are tightening to the point of hurting the market in the long run.
That’s pretty bleak. Gitta ran the numbers late last week on the Orlando area (in another post) and it was a mixed bag. Only a few neighborhoods, like Heathrow and Lake Mary, continue to see growth. However, most areas are decreasing as the supply continues to increase and the difficulty in getting a mortgage also increases, thus shutting out more potential buyers.
The silver lining in our city is this - there are more businesses (large ones) that are starting to move into the area. Orlando also enjoys a tourism base that won’t disappear even in downturns.
Posted in Market Analysis, Orlando | 1 Comment »
