Judge orders Trump Tower to return deposit

Further tribulations for the Trump Tower Tampa project.  If this becomes a trend, the project could lose potential buyers tired of waiting two years for construction to start. Read here.

Tampa Bay area home sales off 29 percent, prices off 8 percent

Another month, another downer of a home sales report.

Tampa Bay area home sales dropped 26 percent in August from 3,029 in 2006 to 2,154 in 2007. Median single-family home prices fell 8 percent from $232,400 to $214,100.

Our numbers were a bit worse than the overall state numbers. Florida August homes sales declined 26 percent and prices fell 6 percent.

Did a little digging through historical charts and discovered our August sales numbers approximated those in 1995. That wasn't a housing boom year, but it wasn't the real estate pits either. Median home prices have retreated to what they were in Aug. 2005.

Here are two charts showing our single family and condo numbers compared to those of other Florida metro areas: Download FARAug07SF.pdf and Download FARAug07Condo.pdf

Tampa Bay area home builder loses half a billion

Bad news from Lennar, the huge Miami-based builder that has suburban projects all over the Tampa Bay area. Here's the latest on a whopping $514-million quarterly loss.

In a morning conference call, Lennar's executives singled out August as a horrible month, describing it as a "melting pot of all things negative.'' In the face of sales off more than 40 percent, the company has ditched 138,000 home sites it had once planned to build on.

The Miami-based company said it's boosted incentives per house by $10,000 the past year but vowed to avoid "fire sales." Some housing analysts took the builder to task for not cutting prices enough relative to competitors like Hovnanian/Windward and Standard Pacific.

Let's not paint all housing with negative news

The broad brushes have been slathering black paint all over the national housing scene the past week.
In case you missed the dark headlines: Foreclosures at record highs, builders in the dumps, home prices riding a greased pole to the ground floor.

The problem with broad brushes is they’re sloppy and stray beyond the lines of what’s reasonable. Let’s take each dollop of bad news one by one:

The foreclosure crisis: Yes, Floridians are defaulting on their mortgages at unprecedented rates. The firm RealtyTrac flagged 5,904 “foreclosures” in the Tampa Bay area in August. Read the fine print: 770 of those homes were repossessed by lenders. The rest represented people behind on their mortgages, most of whom will likely either keep or sell their homes. And huge numbers of foreclosure properties are owned by speculators casting off what for them are bad deals. It’s a mountain of a problem, but more Matterhorn than Everest.

Builders got the blues: We heard last week that home construction is plunging to depths not reached since 1995. Is anyone perplexed why slower residential construction, in a Tampa Bay market with 41,000 homes listed for sale, is bad news? Sounds like a market purging itself of excess supply. And when did 1995, amid a tech boom, become a benchmark for sluggish economies?

Home price slide: I sold my house during the slump this year. I got $205,000. My neighbor a year earlier got $245,000 for a smaller house. I felt cheated. I was wrong. In eight years I made $113,000 profit. That brings us to Moody’s Economy.com. It published a list that breaks down how far prices should fall in markets across the country. Here in the Tampa Bay area, Moody’s foresees home prices bottoming out in the summer of 2008, when we should have lost 12 percent from the peak in late 2006. Let’s return to my example. My home sold for 16 percent below my neighbor’s. That’s worse than Moody’s forecast, and we haven’t even reached 2008.

Here’s the point: Real estate is intensely local. A bird flu of a market in Sarasota — Moody’s projects a 25 percent home price decline — may be a head cold of a market here in Tampa Bay. Not every neighborhood will suffer the same from the slump.

Easy answers are scarce. But it helps to use a finer tip on your brush.

Home prices could fall another year

Housing prognosticator Moody's Economy.com predicts Tampa Bay area housing won't hit its price trough until the summer of 2008.

By that time, it predicts our prices will have fallen about 12 percent from the price peak in late 2006.

It could be worse: We make out much better than Sarasota, Melbourne or Fort Myers.

Here's a link to a story with a good chart showing us in 32nd place on a list of 100 top metro areas.

One thought leaps to mind: Sales prices in many Tampa Bay area neighborhoods are already down 15-20 percent. It's got to make you wonder about that 12 percent prediction.

The dark side of lowering mortgage rates

The real estate industry is cheering this week's rate cut by the Federal Reserve, a cut that will lower the cost of mortgages.

An editorial this week in the Wall Street Journal spells out why easy money is often a deal with the devil.

In a nutshell, easy money kills the dollar. It makes imports more expensive since companies have to convert those weaker dollars into foreign currencies to buy overseas stuff. It jacks up the price of oil and gold, commodities whose international price is set in dollars.

In other words, our monthly house payment may be lower. But are we saving that much after accounting for higher gas prices and the added cost of all those Toyotas, French wines, Chinese flat screen TVs and plastic toys?

Here's a snippet from the Journal:

"The housing recession has caused the overall economy to slow, and recession worries are rampant. Many on Wall Street want their bubble back, and they are begging the Fed to reflate. But inflation also remains near the upper limit of the Fed's comfort level, the dollar is weak, gold is back above $700 and oil briefly popped above $80 a barrel last week.

For those of us who remember the economics of the 1970s, one abiding lesson is that trouble comes when the Fed is asked to spur economic growth. The job of a central bank is price stability. The Reagan-Paul Volcker policy mix was tight money combined with tax cutting, which reversed the 1970s' mix of easy money and tax increases. Washington is in danger of drifting back, almost unconsciously, to that 1970s' policy."

New home construction lowest in 12 years

New home construction numbers are out for August. Or course, housing starts, completions and permits are down from a year earlier. They say it's the poorest performance since 1995. Here's the actual report from the U.S. Department of Commerce.

Negative headlines notwithstanding, this is actually good news for the overall housing market. Florida builders overbuilt from 2004 to 2006 based on speculative purchases by investors. Supply and demand are out of whack.

Investors went away. Builders needn't build as much. It's that simple. 

Florida stung by latest foreclosure figures

This new foreclosure report may exaggerate things a bit by including homeowners a couple months behind on their mortgage payments. Still, it's not too flattering for Florida.

Online calculator figures property taxes with and without Save Our Homes

January 29 is the big day when we vote whether to change the way we tax our homes.

Check out an amazing online tool to calculate whether you'd be better off with the current Save Our Homes or the proposed Super Homestead Exemption. The calculators come courtesy of your county's property appraiser.

To review, Save Our Homes is a $25,000 homestead exemption combined with a 3 percent yearly cap on property assessment increases. The Super Homestead Exemption gives you a $150,000 exemption on the first $200,000 of a home's value but no 3 percent cap.

You can click here to find the appraiser's site for Pinellas, Hillsborough, Pasco and Hernando counties.

When you find your property online, the calculator tells you which method would save you more money and for how many years. Generally, if you've moved in the past few years, the new exemption is best. If you've been in your house a long time, you probably can't beat Save Our Homes, provided you don't plan to move.

In any case, approval of the Super Homestead Exemption on Jan. 29 doesn't get rid of Save Our Homes. It merely gives you the option of choosing one or the other.

Are foreign buyers the salve for housing's ills?

Ever hopeful for a sign of a housing recovery, real estate people are once again burning incense at the altar of the foreign buyer.

You've probably heard the spiel: Germans, Frenchmen and Brits loaded down with overvalued Euros and British Pounds bargain hunting for Florida real estate and soaking up all those surplus condos on the market.

Here's the latest take along these lines from the Florida Association of Realtors.

I thought I'd call a genuine European, and a home developer to boot, for enlightenment. Beat Kahli, who's German Swiss, made some cautionary points you don't often read about.

It's true Euros buy a lot more dollars than they used to. That makes American real estate seem cheap. But most people forget how many Europeans got burned by the recent dollar and home price declines.

Kahli gave an example of the Germans who gobbled up investment homes in Fort Myers near the peak of the market. Not only have home values fallen, but when they try to reconvert their dollars into their native currencies, they discover the dollar's lost 25 percent against the Euro. Talk about double whammies.

According to Kahli, Europeans could plunge into our market again if real estate prices keep falling and the dollar remains weak. That way they can reap any home price rebound and make extra cash on the currency exchange when and if the dollar strengthens against the Euro.

So don't forget to leave out the Wilkommen mat.

 

Think Tampa Bay market has it bad? Think again

We in the press get whacked for playing up the negatives, particularly from the housing market. I wanted to change that perception with a glowing tribute to our local real estate market.
Unfortunately, the news around the Tampa Bay area is pretty grim, unless you’re a bargain hunter who enjoys low-balling some of the tens of thousands of people trying to sell homes.
Not to be deterred, I’ve sought out regions whose real estate reeks worse than ours, operating on the theory that things may be bad here, but they’re worse elsewhere. Consider it similar to Dustin Hoffman cracking jokes about Danny DeVito’s height:
Miami: For all of our overconsumption of stucco and shingle, our neighbor to the south went on a binge. With about 78,000 houses and condos for sale on the market, Miami’s been ranked “most vulnerable’’ and “most overpriced” by Forbes.com. Thanks partly to high housing prices, it’s the only major Florida metro area that’s lost population since 2000. Don Johnson’s probably renting a place in Boca these days.
San Francisco: You think adjustable rate mortgages were bad here? About three quarters of Golden Gate City home buyers used them, partly to take the edge off of a median home price that’s scraping $850,000. And when it comes to insurance risk, our hurricanes have nothing on the San Andreas fault.
Las Vegas: Dancing lights, show girls and Elvis impersonators? Yes. But this landlocked city of casino workers isn’t everyone’s Shangri-la. Home prices in this Sodom of the Sands average about $75,000 to $100,000 more than ours. And the Wall Street Journal says real estate speculation was even more rampant in Vegas than here. What do you expect from the city of slots?
Elmira, N.Y.: I decided to take one on the chin personally. Of all markets in the United States, my hometown puttered into last place with a median price of $71,700 after falling 18 percent in a year. That’s dead last out of 150 U.S. metro areas. Lest you think cheap homes deserve applause, the closest competition is Youngstown, Ohio, and Decatur, Ill.
Are you feeling better about the housing market yet? After that Elmira bit, I think I need a wild weekend in Vegas.

Clearwater's Cay Clubs lays off dozens, blames housing downturn

You may not have heard of Cay Clubs Resorts & Marinas. It's a developer based in Clearwater that feverishly expanded in places like the Florida Keys and Las Vegas since its founding in 2004.

Cay sold investors units in condo-hotels, agreed to act as landlord in renting those units to tourists and promised stellar returns to investors.

A sign that it hasn't worked as advertised: Last week Cay laid off many of its employees at its Clearwater headquarters at 18167 U.S. 19. Several of its restaurants in the Florida Keys have been shuttered. Angry investors are filing the first lawsuits.

Cay made $46-million last year but got roughed up in the housing slump. The real estate speculators that fueled the company's growth have mostly gone away.

Incidentally, the St. Petersburg Times wrote about Cay Clubs last year when chief executive Dave Clark announced he was buying Walker's Cay, an island in the Bahamas.

Adding to its string of bad luck, Cay Clubs cancelled the deal when the Bahamian government demanded the prospective owners clean up years of buried waste.

 

Putting your mortgage payment on plastic

Why does this seem like a far-from-ideal solution to the foreclosure crunch?

A new company, CardIt LLC is making a splash by setting up an online system to make mortgage payments with credit cards.

"Until now, consumers have had no easy way to directly pay mortgages using credit cards," CEO Philip Mikal said.

Let's get this straight: You're behind on your 7 percent mortgage, the bank's clamoring for payment, so you lard up your 20 percent credit card with thousands of dollars in house payments.

CardIt LLC is based in California, one of the nation's foreclosure leaders and the birthing ground of many a funky innovation. It accepts Visa, MasterCard and Discover. Why, of course!

Donald Trump docile in defense of Trump Tower Tampa

Talked to Donald Trump on the phone yesterday about his ill-fated namesake, Trump Tower Tampa.

He's been having it out in court with the Tampa developers who have spent two years unsuccessfully trying to get the skyscraper condo off the ground.

Shedding much of his stereotypical New York combativeness, Trump was almost mild mannered. It's no mystery why: Both he and his Tampa partners hold out hope of a settlement to get the $300-million condo tower built.

I wrote about the latest developments in a story in today's St. Petersburg Times.

J.D. Power ranks Tampa Bay area home builders

It's time again when Tampa Bay area home buyers get to award laurels or booby prizes to their builders.

Tops this year on the J.D. Power new home builder customer satisfaction survey are Centex Homes, DiVosta Homes and Pulte Homes. They all got five "power circles" from J.D. Power.

The bottom of the list includesTranseastern Homes, Ryland Homes, Maronda and Levitt. All got two power circles.

Click HERE to see the whole list.

Tampa Bay area home builder stocks trading near ground floor

Here's a different way to view the recent ups and downs of the real estate market: Check out the performance of new home builder stocks.

Many builder stocks - including Tampa Bay area stalwarts like Beazer Homes and Standard Pacific - are trading at bottom basement levels. Graphs charting their activity over the past few years show mostly screeching ascents followed by death defying plunges.

Yahoo helpfully lists builder stocks together. Click on "chart" for each builder, choose a range of 5 years and follow the boom and bust through the jagged lines.

Are Florida foreclosures really outpacing home sales?

Here's the key sentence from last week's Tampa Bay Business Journal: "The stats are clear: Foreclosures are far more common than closings."

That publication isn't the only one to repeat the suggestion that more people are losing their homes than buying them. But is it true?

Probably not.

The firm RealtyTrac counted what it said were 19,179 Florida homes entering some stage of foreclosure in July. Compare that against the 15,286 sales of existing homes flagged by the Florida Association of Realtors in July.

So far, so good. But here's where things grow complicated. RealtyTrac is liberal in its definition of foreclosures. Of those 19,179 "foreclosures," only 3,449 were actually seized to be sold off for non-payment.

The bulk, 14,828, were properties on which owners were late with payments. Will lenders repossess all of those homes? Of course not.

On top of that, Florida Realtors undercount home sales. Realtors catch only a minority of sales by new home builders, which amounted to hundreds a month in the Tampa Bay area at the start of the summer. Nor do Realtors count "by owner" sales that account for about a tenth of the market.

Hillsborough County's sales/foreclosure statistics are telling. The county reported 1,103 single-family home and condominium sales in July. That same month, RealtyTrac tallied 1,009 homes entering the "foreclosure pipeline" in Hillsborough.

That's 94 more sales than foreclosures, even granting that all of those "foreclosures" come to pass. Based on the best statistics available, I'd conclude foreclosures still have some catching up to do before they overtake sales.

It could always get worse. But let's not jump the gun.

 

August numbers out for Tampa Bay area home sales

Ahead of the release dates of the national and state real estate groups, house and condo sales for Pinellas, Hillsborough and Pasco counties for the month that just ended are now public, courtesy of the Pinellas Realtors Organization.

The news is mixed, though it's more glum than giddy.

The good news is that Tampa Bay area inventory - the number of homes for sale on the market - is the lowest it's been this year.

The bad news is that sales in August were off big time over sales in August 2006. Only Pasco County showed a sales increase (and that's just month to month) from July to August of this year.

Total sales for August in Pinellas, Pasco and Hillsborough counties were 2,374. Listings totalled 40,896.

For a more detailed breakdown county by county, click on these links: Download pasco.pdf; Download pinellas.pdf; and Download hills.pdf

Is Trump Tower a go? No word even now

This week was supposed to climax Trump Tower Tampa’s two year pursuit of financing. Area developer SimDag LLC promised either to seal a deal to build the $300-million luxury high rise or concede defeat and refund buyers’ deposits on condominiums costing up to $6-million. But as the work week drew to a close Friday, the project found itself in familiar territory: limbo.

SimDag announced on its Web site in late August that it was nearing the point when its proposed lender, a New York hedge fund, would decide whether to commit to the project.

One condition of the deal was whether Donald Trump, the New York tycoon and lifestyle icon who would license his brand name to the project, drops a lawsuit against SimDag. Trump’s suit was filed in May and demanded $1.03-million in fees owed by SimDag.

Negotiations among the three parties continued for much of this week. But as of Friday, SimDag would neither claim victory nor admit defeat."As soon as we hear we’ll let you know," SimDag executive Eby Paul responded in an e-mail Friday.

Buyers, who placed deposits of 20 percent on units costing from $700,000 to $6-million, were told to expect a decisive turn of events by Wednesday. By Friday, it appeared they’d be left hanging. "They’ve e-mailed us nothing new," George Galiourides, one of the condo buyers, said Friday.

After a grand introductory gala in February 2005, the proposed 52-story tower at 111 S. Ashley Drive has struggled to find its footing. Banks have steered clear of financing the project in the slumping housing market. And last year developers learned that underground instability on the 1.5-acre riverfront site would require expensive new pilings.

According to Trump’s lawsuit in May, fewer than 70 percent of the 190 units had "bona-fide purchase contracts." Several buyers have sued to get their money back.

Coast Bank directors dump shares in advance of buyout

We haven't talked about the Coast Bank turmoil on this blog yet.

Here's a recap: Coast bankrolled the construction of 482 houses for customers of St. Petersburg builder Construction Compliance Inc. CCI went broke last fall and left the homes unfinished. On the hook for up to $70-million, Coast insists customers repay the construction loans, even in cases where CCI never broke ground.

Anyway, the CCI ordeal, combined with other bad loans, left the Bradenton bank without ready cash. It's found a savior/rescuer/merger partner in First Banks Inc. of St. Louis.

Here's the kicker: Though First Banks has agreed to pay $3.40 for each share of Coast, two Coast directors have shed thousands of shares to the tune of two bucks and change.

Just this week Alex White, a member of the bank's board of directors from Tampa, sold 5,190 shares for $2.60 apiece. The sale followed similar dumping by director Michael Ruffino in late August.

In prepared statements, both men cited personal reasons for the timing of the sales. To this amateur's eyes, it looks as if those directors have little confidence First Banks will cough up $3.40 a share.

"I'm sure the appearance is not great," bank spokesman Tramm Hudson said.

Lenders vs. flippers: Who preys on whom?

Ever on the lookout for a heart rending housing slump story, we journalists naturally gravitate to the hard up families being put out of houses they can’t afford.

But a Wall Street Journal story that ran last week suggested a good percentage of Floridians defaulting on their mortgages don’t deserve the tear-soaked hanky treatment.

In 2005, the boom year in which houses appreciated about 30 percent in the Tampa Bay area, almost a third of home purchase loans in Florida were for "non-owner-occupied" properties.

Translation: Most of these homes were bought by investors, speculators and flippers eager for quick profits.

How are some of those investors doing two years later? Well, the Journal pulled those statistics, too. In Florida, a quarter of prime home loan defaults this year are on those very investment properties. Such busted loans are even more common in Nevada and Arizona.

I’m not trying to be heartless: I have friends, neighbors and acquaintances who collectively own more than 15 investment properties. But it’s hard to avoid the fact that they willingly ponied up to the gaming tables with a stake they couldn’t afford to lose.

Investors’ share of mortgage defaults might be even greater than the Journal let on. That’s because investors often hid their intentions when lining up to buy new homes and condos.

As a house hunter in 2005, I lined up at a home sales center behind two men who swore they were buying four-bedroom houses for their widowed grandmothers. They later confided to me that they planned to flip each house at a $50,000 profit in less than six months. Nudge, nudge, wink, wink, say no more.

My family and I eventually bought a house in a new subdivision. The builder assured us investors were barred. I wonder how they’ll explain the quarter of the houses on my street that have become rentals?

Keep these facts in mind next time you have the urge to savage banking predators who ripped off little ol’ home buyers. Sometimes you’ve got to wonder who preyed on whom.

-- James Thorner

Housing slump worsens credit card debt

Just what we needed: The housing slump is weighing on people's credit card debt. USA Today explains the connection in this story.

Disparities in home loans for minorities: The other side of the story

I wrote a story for the St. Petersburg Times today that highlighted how black and latino borrowers got higher interest home loans than whites did in 2006.

The conclusion of ACORN, the coalition of neighborhood activists that published the report, was that discrimination was at work. But are explanations that cut and dry?

The story brought a prompt defense of the lending industry from Sharon Gates, a mortgage broker who lives in Pinellas County.

Gates said ACORN erred by ignoring the three biggest reasons minority borrowers failed to qualify for the best interest rates: Bad credit scores, high consumer credit card debt and unstable incomes.

Gates' views are worth considering: All of the local credit counselors the Times interviewed for a home foreclosure story earlier this year cited the same factors.

Pending home sales down, mortgage tightening gets blamed

Realtors keep track of pending home sales because it gives them a glimpse of home closings one or two months down the road.

So it's a bit of a downer when the National Association of Realtors announces that pending sales in July were down 12.2 percent nationally.

Here's the full report straight from the NAR. Here's a short news report on the issue.

One ray of sunshine: The South, which includes Florida, showed the smallest drop at 6.6 percent.

Business hitting rough patch? Blame housing crisis

Anyone notice that the housing slump is becoming this year's Hurricane Katrina, the all purpose excuse to explain why a company's doing poorly?

Mind you, it's easy to see how builders, plumbers and cement truck drivers would be hurting. Furniture dealers are also obvious targets to take it in the midsection when new home sales drop.

But auto companies would have us believe the shaky housing market explains why they're selling so few cars and trucks. Aside from waning demand for the large pickup trucks beloved by building contractors, it's not always easy to see the connection.

But my favorite is a recent item from St. Petersburg Times columnist Ernest Hooper. Seems a local beer distributorship is blaming, you guessed it, slumping real estate for why its suds have been duds.

Stay tuned for more of this type of stuff. It probably can't get weirder than a Florida-based home improvement store that blamed the hurricane plague of 2004-2005 for its declining business. No call for building supplies 'round here, no siree.

Home builder incentives get creative

Home builders are using creative giveaways to try to rouse the slumbering housing market.

A couple weeks after Lennar announced it would let prospective homebuyers stay overnight in its model homes, Nohl Crest Homes is offering to pay a person's mortgage, taxes and insurance on his OLD house for a year.

The Oldsmar builder calls the offer its Peace of Mind Program. It addresses the phenomenon of buyers getting stuck with two mortgages when the old home doesn't sell.

Is it just me or do you get the feeling the builders will recoup the "freebies" somewhere in the price of the house?