First time in 2 years: Tampa home prices don't fall

A surprise in Tuesday's release of the S&P/Case Shiller home price index: Tampa home prices remained flat from June to July, the first time the region hasn't experienced a month-by-month decline since August 2006.

Just a one month reprieve to be followed by further price plunges? Perhaps. The glut of homes on the market suggests prices will keep falling, though no one knows by how much.

And Tampa area home prices didn't look so good when measured year over year. From July 2007 to July 2008, prices plopped 19.4 percent. Cities that performed worse than us: Miami, Los Angeles, Las Vegas, Phoenix, San Francisco and San Diego.

Case Shiller publishes a 20-city index of which Tampa is a part. In July, 14 of the 20 cities showed monthly price declines. So we were in pretty select company for a change.

Here's a link to the index for July

Trump dumps Tampa tower

New York tycoon Donald Trump formally cut his ties to Trump Tower Tampa by agreeing to a mediation deal Monday with former Tampa business partner SimDag-Robel LLC.

Neither side got everything it wanted. Trump sued in May 2007 to recover more than $2-million in licensing fees SimDag was supposed to pay for the right to use Trump's name on the 52-story condo project.

SimDag launched a counter suit accusing Trump of breaching a long-standing confidentiality agreement by going public with his complaints against SimDag.

The tower was planned in 2005 as the biggest skyscraper in west-central Florida, but couldn't get a $200-million loan in the Florida condo glut. SimDag filed for Chapter 11 bankruptcy in June.

“It’s really off the drawing boards right now. That’s the economic reality of what’s happened,’’ SimDag's bankruptcy lawyer Jeffery Warren said of the tower.

“If SimDag wants to use the Trump brand again they'll need a new agreement,’’ Warren added.

Though the Tower deal is dead, SimDag is resisting an immediate sale of its 1.5-acre Tampa riverfront lot at 111 S. Ashley Drive. It prefers waiting until the real estate market improves to get a better price.

The mediation settlement, hammered out Monday by Trump's New York attorney Bernard Diamond, still needs ratification by SimDag's bankruptcy judge.

Good advice for tough times

One person's depression is another person's buying opportunity: Download cycle_of_market_emotions.pdf.

Why do we follow the pack and buy houses and stocks when they're fetching top prices? Aren't we the same people who buy two jars of mayo for the price of one and strip the clearance rack when $50 shirts get marked down to $5.99?

Forgive the amateur psychology, but as social animals I assume we crave the security of numbers, even if it means making wretched overpriced investments.

Big banks in deep foreclosure doo doo in Tampa area

Considering the national banking nightmare brought on by homeowners skipping their mortgage payments, I was curious how many problem real estate loans three of the biggest troubled lenders had in the Tampa Bay area.

Here's the guidelines I used. I decided to count "Lis Pendens" cases, typically how a bank initiates a lawsuit against a late-paying property owner. Not all such cases end in the confiscation of a house, but filing a Lis Pendens is a sign a loan hasn't been paid, sometimes for many months running. I started my Lis Pendens count on January 1, 2006, a rough marker for when the housing slump began.

So here's the extent of Washington Mutual, Countrywide and Wachovia's involvement in lis pendens cases in Pinellas, Pasco and Hillsborough counties the past 2 1/2 years:

• Washington Mutual: 2,077
• Countrywide: 3,200*
• Wachovia: 1,540

That's nearly 7,000 shaky home loans from just 3 lenders. Washington Mutual was bought last week by JP Morgan Chase, the former Chase Manhattan Bank. Countrywide was absorbed earlier this year by Bank of America. Wachovia is the latest buy-out victim, acquired today by Citigroup.

*Countrywide's number is approximate, and probably an undercount, since court records in Pasco wouldn't tabulate higher than 500. 

WaMu joins bankers butchers bill

You probably all know that Washington Mutual - a bank that gave mortgages away like penny candy the past few years - has expired and gone to meet its maker.

WaMu's many Tampa Bay area branches were humming along normally on Friday. To salvage the bank's operations, the government has arranged a shotgun wedding with J.P Morgan Chase & Co. Unfortunately we're fast running out of grooms willing to go to the altar with these bankrupt brides.

Take a look at this chart of bank failures over the past 8 years assembled by the Federal Deposit Insurance Corp. Note that Florida's only recent contribution to death row is First Priority Bank in Bradenton, which went kaput August 1.

But the list underestimates the troubles. Coast Bank, for example, was absorbed late last year for pennies on the dollar by First Banks of St. Louis. Based in Bradenton, Coast had a bunch of branches in our area.

It got into trouble financing no-money-down new home investment schemes near Port Charlotte. The housing market collapsed. The builders and investors bailed from their deals. Coast went broke.

Tampa Bay area home sales stop sliding in August

Tampa Bay area's median home price is back to what it was in December 2004, but those discounts helped keep home sales from falling in August.

Home sales in Pinellas, Pasco, Hillsborough and Hernando totaled 2,154 in August, no change from sales in August 2007, according to the Florida Association of Realtors.

This marked the fourth straight month that local sales were flat, fell slightly or rose slightly, suggesting that the market has flattened.

Low prices have been dealmakers in many cases. Tampa's median home price stood at $171,200 in August, 20 percent below the $214,100 median price in August 2007. Realtors say discounted foreclosure sales have helped drive much of the traffic.

“Sales have picked up significantly in several Florida and California markets,” says National Association of Realtors chief economist Lawrence Yun.

In Florida as a whole, sales were down 4 percent in August versus a year earlier. Sales were way up year over year in Fort Myers, Fort Lauderdale and Fort Pierce. Among the sales losers were Panama City (down 29 percent), Pensacola (down 31 percent) and Tallahassee (down 42 percent).

Here's a full Florida chart: Download august08.pdf

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Latest from Census: Florida third least affordable home owning state

Plenty of confirmation in the latest U.S. Census estimates for those who think housing is overpriced here.

The Census Bureau's 2007 American Community Survey says Florida is the third least affordable state for home owners. Nearly half of all Floridians pay more than 30 percent of their income on mortgage costs. Nationally, 37.5 percent of mortgage holders spend more than 30 percent of their income.

Is rent any better? Not really. Our state actually ranks first in the nation in lack of affordability. Close to 53 percent pay more than 30 percent of their income on rent and utilities.

The Census also breaks things down for the Tampa Bay area, but I never found away to rank our metro area against hundreds of others. Here's the raw numbers:

• Our median home price is $203,300, above the national median of $194,300
• Our median monthly mortgage costs are $1,523
• The percentage of people who spent more than 30 percent of income on mortgages in 46.2 percent

If you want to click around the Census site, here's a link. Scroll down a hair and find the survey results.

Builder loses $89-million, and it's good news!

Big time home builder Lennar, a Tampa Bay area mainstay, lost $89-million in its third quarter that ended Aug. 31. Sales were off by about half.

But all failure is relative. Lennar lost $513.9-million in the third quarter of 2007. Last year's disastrous performance was partly tied to the company's selling off or breaking contracts on land it no longer needed.

Locally, Lennar purged itself of 8,300 lots less than a year ago. The fire sale buyer was Tampa's Metro Development Group.

Lennar president Stuart Miller reported that the company's East division, which Florida occupies along with Virginia, Maryland and New Jersey, outperformed the rest of its divisions last summer.

But Miller emphasized that "the housing market continues to search for a bottom" and bemoaned lack of government action to stabilize home prices.

(He must have missed the proposal for taxpayers to assume $1-trillion in bad mortgages based on the two recent housing rescue plans. So much for corporate gratitude. )

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Florida loses 76,400 construction jobs in one year

If you doubted the economic slump was other than real-estate-related, guess again.

Almost half the state's job losses the past year were in construction, most of that housing-related. Between August 2007 and August 2008, 76,400 construction jobs melted away.

"Professional and business services" shed 31,200 jobs the past year. That's a broad category that includes accounting, architecture, engineering, information technology, secretarial, etc.

And for the not-so-bad: "Real estate, rental and leasing" actually gained jobs the past year. Seems the purge that began in early 2006 has ebbed. And, of course, hospitals kept hiring in droves. What would we do without the health care industry?

Here's the state's employment report released Friday: Download augempl.pdf

Several explanations why we're feeling the higher unemployment now and not a year ago when the housing industry was already in full retreat:

• Many of the first to be let go were undocumented workers able to migrate with ease. Their positions weren't always reflected on the employment/unemployment rolls
• Though sales were suffering a year ago, many projects continued on autopilot in 2007, their developers hoping for a fast turnaround.
• The credit crunch that unofficially began in August 2007 with the subprime meltdown was the start of a period of deeper unemployment. No loan, no project, no workers needed.

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Market madness: Prominent 34-story Tampa condo tower to go rental?

Developers of Element, the still-incomplete 34-story downtown Tampa condominium tower, are considering converting much of the building into apartments until the housing market improves.

A shortage of qualified buyers forced the hand of Novare-Intown Tampa Development LLC, whose completion of the neighboring SkyPoint condo tower was among the few success stories in the imploding urban condo market.

Novare is considering renting out units that range from 691 to 3,445 square feet, using the rental income to help cover its debts until the sales climate improves in a couple of years.

Christine Burdick, head of the Tampa Downtown Partnership, said the move makes sense: Better a vibrant apartment building than a half-empty condo tower.

"There are a lot of people not eligible for mortgages and there's a lot more renters," Burdick said. I think having people living downtown and contributing to its vibrancy is one of the objectives.

Work on Element is so far advanced that Novare plans to remove its tower crane this month from the construction site on Franklin Street. Though the building is nearly topped out, the interior work will stretch well into 2009.

Sales prices range from about $220,000 to nearly $1-million.

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