Bankers bonked on head: Smith Family Homes stiffs lenders $50-million

There are plenty of tears in lender-ville according to a the 62-page bankruptcy schedule recently released by Tampa's Smith Family Homes.

Smith, active mostly in the Pasco County suburbs, filed for Chapter 7 liquidation last month, a victim of the housing downturn.

The company lists $58.7-million in liabilities, mostly mortgage debt to lenders. It's quite a butcher bill:

• SunTrust: Owed $20.1-million
• Lincolnshire Associates II: Owed $11.7-million
• Bank of America: Owed $6.9-million
• Regions Bank: Owed $6.4-million
• Wachovia: Owed $4.8-million

If you want to wade through it, here's the court document: Download smithfamily.pdf

Equally illuminating is Smith's public debt. It owes Pasco County $1.5-million in back property taxes. Hillsborough County's out $570,000.

What could be bad news for some homeowners, Smith apparently is delinquent in paying back $853,000 in Community Development District bonds used to finance construction of Hillsborough's Panther Trace neighborhood. It's also behind $2.5-million in paying back CDD bonds for Pasco's Seven Oaks neighborhood.

Homeowners living there pay back the bonds as part of their yearly tax bill. As a lot owner in those developments, Smith is responsible for a proportionate share of the CDD debt.

It's worth checking what happens if such a large party defaults on its bond debt. In some cases, existing homeowners have been on the hook for increased fees.

All in all, a pretty fine mess. 

   

Millionaire unloads old Perry Snell waterfront estate

It was once for sale for more than $4-million, but the market decided Thursday the 90-year-old Dutch colonial home built by famed St. Petersburg builder Perry Snell was worth no more than $1.9-million.

  The seller of the house at 1724 North Shore Dr. NE. was William McGill, chairman and president of Clearwater yacht and boat dealer MarineMax.

Thursday's undisclosed buyer is an investment group determined to restore the 9,650-square-foot historic waterfront home.

McGill acquired the house in May, partial payment for the $10-million Belleair ocean-front mansion he sold to Dr. James St. Louis, founder of Tampa's Laser Spine Institute. St. Louis had lived in the Snell house for a couple years, and his purchase of the Belleair estate set a Pinellas County record for price.

"McGill got the home free and clear on the trade," listing agent Ray Alexander said.

The 6-bedroom, 6-bath house takes up three lots along the picturesque North Shore area of Old Tampa Bay. It was modeled after Groote Schuur, the official residence of the Prime Minister of South Africa.

Alexander said the relatively low sales price is more a reflection of McGill's desire to sell than the market's overall health. McGill never lived there, and considered it a short-term holding.

 

Economy grows in 2nd quarter (no thanks to home construction)

What some economists had predicted has come true. The economy actually grew fairly well from April 1 to June 30.

From several conferences I've sat in on, economists assumed we'd get an uptick in the 2nd quarter from the government welfare...um..stimulus checks. The same numbers crunchers assume the economy will slow down for the rest of the year and into early 2009.

What's it mean for housing? Well, it could be worse. Despite the loss locally of thousands of jobs in real estate, lending and construction, we seem to be muddling through.

Signs point to mid-2009 recovery of the housing industry and of the economy in general. By housing "recovery" I don't mean hot potato home sales. More like lukewarm mashed spuds without the gravy.

At least that's the rough consensus of about a half dozen economists I follow.

Case Shiller Index: Tampa home prices back to Christmas 2004

Tampa area home prices fell 20.1 percent between June 2007 and June 2008, according to the highly regarded S&P Case Shiller home price index.

That put Tampa-St. Petersburg-Clearwater home prices back to December 2004 levels and 26.5 percent off the peak prices of July 2006.

The overall price decline on the 20-city index was 15.9 percent. Once again, Tampa dangled near the middle of the pack. Six metro areas showed steeper price drops: Las Vegas, Los Angeles, Miami, Phoenix, San Diego and San Francisco. Charlotte was least affected by home price depreciation, with a decline of 1 percent.

Case Shiller's reports lag a month behind home price reports put out by Realtors, but they generally get the nod for accuracy. The index tracks multiple sales of individual properties, ensuring apples-to-apples comparisons.

July home sales improve in most Florida metros

Tampa Bay area home sales rose 5 percent in July, a positive trend mirrored in 11 out of 20 Florida metro areas.

Sales in Pinellas, Pasco, Hillsborough and Hernando counties totaled 2,174 in July versus 2,068 in July 2007, according to the Florida Association of Realtors.

Lower prices seemed to help stimulate sales. The median sales price of a single-family home dropped 18 percent, from $215,600 in July 2007 to $176,500 in July 2008.

Other metros showing July-to-July gains include Fort Myers, Fort Pierce, West Palm Beach, Melbourne, Punta Gorda, Fort Lauderdale and Daytona.

We're getting close to the point where we can safely say sales - but not prices - have stabilized. May sales were up a hair, followed by a slight decrease in June. With July's improvement we're essentially seeing a quarter of stability.

Here's the chart from the Realtor association: Download farJULY08.pdf   

New Web site shines light on sales in 220 neighborhoods

The newspaper has just launched a Web service called Neighborhood Watch in which you can pick through more than 100,000 home sales from the past four or five years.

The Times' computer guru Matt Waite has done a great service by categorizing home sales, updated weekly from county appraisers offices, into 186 neighborhoods in Pinellas County and 35 neighborhoods in Pasco County. We're going to organize similar data dumps for Hillsborough and Hernando counties, too.

You can choose your neighborhood from a drop down box or insert a zip code. Up pops ALMOST EVERY RECORDED SALE in the community going back to 2004 and 2005. Click on individual addresses to get details of the transaction.

Did I tell you it's free?

Those of you who distrust statistics from the Realtor associations should be happy. Unlike Realtors, we include For Sale By Owner deals, new home sales not sold through the Multiple Listing Service and other deals that often slip through the statistical cracks.

We also do our own math in spotting sales and price trends. Needless to say, price declines vary wildly depending on which neighborhood you flag. Playing off the Web site, I'm writing a story this weekend to highlight some of price discrepancies in neighborhoods only a couple miles away from each other.

You can click here to get started.

Study suggests buying over renting in Tampa

The rent-versus-own debate rages on, but at least one affordable housing group suggests it's probably better to buy than to rent in Tampa.

The National Low Income Housing Coalition and the Center for Economic and Policy Research evaulated the nation's 100 most populous cities. It grouped Tampa among 66 metro areas where buying will make you wealthier than renting through 2012.

According to the data, a person who bought a lower-cost 3-bedroom home in Tampa this year could expect to accumulate between $38,000 and $42,000 equity in his home within four years.

The other 34 metro areas, including Miami-Fort Lauderdale and Cape Coral-Fort Myers, were ranked as places where renting was the best option through 2012.

Study author Danilo Pelletiere stressed that home ownership should be considered a conservative investment, not a get-rich-quick scheme.

And Pelletriere's formula holds only if you can get a 3-bedroom home for 75 percent of the median price, which in the Tampa area probably means finding a place for about $150,000.

This makes sense to me. While prices will likely drop through 2009, buying low now will likely pay off by 2012. If you can land a short sale deal, your gain will be even greater in 4 years.

Builders to buyers: Stop procrastinating

Few recent promotional campaigns have taken so much flak as the Realtors' There's Never Been a Better Time to Buy schtick.

I've been prone to sarcasm myself. If you had followed Realtor advice and bought an average priced home a year ago, you'd probably be bleeding red ink from every orifice this year.

But strangely enough I'm not mocking a similar Buy Now push from the Tampa Bay Builders Association. After sitting for 1 1/2 hours at a round table with Tampa area builders, it's pretty clear to me prices can't fall much further.

Let's start with the obvious: National builders, as a group, are losing billions of dollars. Current new home prices make for skimpy profits. Materials costs, from the concrete in the slab to the diesel in the dump truck, can't be fully passed on to customers.

Then you have the fondness of local governments for assessing impact fees to pay for the likes of roads, schools and sewar lines. It's typical for builders to pay more than $10,000 per home in impact fees, a cost that's passed onto to buyers.

I asked the builders whether, as predicted by some visitors to this site, prices will return to 1998 levels. The scoffed. They chuckled. No chance. Impossible. Forget about it.

It's simply more expensive to build than it was 10 years ago. The area has evolved. Inflation has done its work. Incomes are higher. Land's no longer cheap.

New home prices may drop a bit more in the next 6 months, builders said, but procrastinators could lose those savings by paying higher interest rates. If you're holding your house for 3, 5 or 7 years, there's no sense in waiting longer.

The message might be getting out. Builders like Pulte and Standard-Pacific reported a recent jump in sales over the same period last year. And the quality of buyer is higher. Most of the speculators who treated new homes like trading pit commodities are gone. If builders sell one home a day they're happy.

As Reed Williams, an executive with Pulte Homes put it: "The emotions of buying a home are back."

 

 

Bargain basement: 171 Tampa Channelside condos face bankruptcy auction

A bankruptcy judge has ordered the auction of the remaining vacant condos in The Place At Channelside, an insolvent development near the Port of Tampa that threw itself on the mercy of the court in March.

The 11 a.m. October 5 auction takes in 171 of 245 condos at The Place, ranging in size from 596-square-foot studios to a mammoth 3,665-square-foot penthouse. The whole portfolio will be sold as one unit with a minimum reserve price of $17.25-million.

Based on the minimum bid requirement, units could sell for as little as $100,000 a pop. That would be grand larceny, in the metaphorical sense. Scan the listings and you'll see modest sized units there selling for hundreds of thousands of dollars.

Developer Fida Sirdar of Key Developers Group signed up buyers for two 8-story condo towers in 2005. But by 2007, buyers were suing by the dozens to back out of deals that looked more and more like sucker bets. Based on those boomtown prices, it would have taken years for buyers to recoup their investment.

Let's face it: Whoever can come up with $17-million is going to make a ton of money. The 2.1-acre site comes with ground-floor shop space, a parking garage and other extras.

This probably won't be the last condo-related auction: Major projects such as The Towers at Channelside and Trump Tower Tampa are also inching their way through bankruptcy court.

Trump Tower is little more than a lot on the Hillsborough River, but developers expressed fear last month that their multi-million-dollar property is a prime fire sale candidate.

   

Will Florida's losers lead the way out of the housing slump?

We've been writing about the home sales pickup in places like Fort Myers, Cape Coral and Fort Pierce. Prices fell so far that some buyers have gone into scoop-up mode.  As a result, these left-for-dead communities find themselves in the vanguard of a tentative recovery.

Something similar seems to be brewing in Naples, if reports from luxury home builder Toll Brothers can be relied upon. In discussing the company's performance so far this year chairman Robert Toll singled out Naples as a bright spot.

Come again? Naples? This is the region that went from super potency to forlorn flacidity in the course of 2 short years. It's median home price, which topped out at over $500,000, was last seen spiraling into the "300s" before the local Realtor board ceased publicizing the glum monthly sales price reports.

But here's Toll:  "Naples was perhaps the worst market that we had for some time, and we were very happy to see it come back. It remains an anomaly, though, because the rest of Florida hasn't followed."

For what it's worth, here's my theory: The communities like Sarasota and Naples that hit the skids first as early as 2004-05 will start their recovery this year. Tampa-St. Petersburg should improve next year. Those late to the slump like Gainesville and Tallahassee might have to wait longer.