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Granny Hulk
Tourist who stayed too long in Caly
You turn into the Hulk
Rob I could go along with what you say if you could articulate something.. anything.. that would enlighten us as to Florida's situation.
Meanwhile Florida's state of distress appears to be escalating in spite of all the hopium. For the life of me I can't see how anyone could recommend Florida as an opportunity to an inexperienced overseas investor with concomitant exchange risk and still sleep at night.
From Zillow
This is an interactive map. Go to their site and mouse over each county for foreclosure detail
Florida Defies Housing Rebound as Foreclosures Soar
By Dan Levy – Jan 18, 2013 12:53 AM GMT+0800
Florida’s foreclosure crisis just won’t end. More than six years after subprime lending and overbuilding led to the worst U.S. real estate slump, the state had the biggest increase in home seizures last year, and the highest foreclosure rate, RealtyTrac Inc. said.
One in every 32 Florida households received a notice of default, auction or repossession in 2012, more than double the average U.S. rate of one in 72, the Irvine, California-based data seller said today in a report. Home repossessions increased by 16,276 during the year to 84,456, the biggest gain nationwide. Adding to the state’s woes is a backlog of foreclosures caused by a required court review of each case.
January 28, 2013
By RealtyTrac Staff
Foreclosure Activity Down in 12 of 20 Largest Metros, Led by Phoenix, San Francisco, Detroit
Stockton Posts Highest Metro Rate, But Florida Cities Account for 8 of Top 20 Rates
Now if you think all these hedge funds and companies entering the market and driving up prices is good and that it mops up excess capacity.. well think again.
Is the “Buy to Rent” Party Over?
- Rents for single-family homes are rising slower than property prices as firms such as Blackstone Group LP (BX) flood the market with homes for lease, posing risks to investors betting billions on the burgeoning market.
- In Atlanta, asking prices climbed 14 percent as single family rents gained 0.5 percent, and in Las Vegas rents dropped 1.7 percent even as asking prices soared 18 percent.
- “Investors are buying homes, in part, to rent them out, and that has added a lot of rental supply, and that’s preventing rents from rising,”
- Tina Africk, a Las Vegas broker who manages 60 single- family home rentals, said houses that might have rented in 30 days in the past can now take 60 to 90 days to fill, while rents have dropped about $100 a month from a year ago.
- “One of the risks is prices run up and therefore the rental economics don’t justify the business model,” Rahmani, who has an outperform rating on Silver Bay and Colony, Rahmani said in a telephone interview from New York. “The problem could be that you would have assets that are up a lot in value, which isn’t the worst thing in the world. The risk would be that everybody goes to sell at the same time.”
The major risk aspect of these markets are that they are bubbles fueled by Fed money via corporate/hedge funds looking for yield. As the price rises yield evaporates. Once that nexus is reached you'll start to see sell offs as funds look for better yield. First to sell will make money after that everyone's a potential looser. This will be driven by declining rents as more and more properties enter the market looking for tenants. Hedge fund investors are currently struggling with occupancy rates of 54% on average.
Most small investors will have paid too much and become caught in the rent squeeze. The small investor will have to compete for management services as the big guys monopolise resources. When the selling starts prices will revert if not outright crash. The foreclosure cycle will start all over again.
You're going to have to be a very astute, agile investor with your finger glued to the pulse to have any hope of making a buck out of this market over the long haul. In normal times returns are in the 6-8% bracket for low to no risk. In this market risk is everywhere. You will need 3 – 4 times that return as reasonable compensation. If you can't get 20%+ net yield it's just not worth being there.
Florida’s Long Term Economic Trajectory Emerging from the Great Recession
Bureau of Economic and Business Research
College of Liberal Arts and Sciences
University of Florida
- the housing boom temporarily masked what has otherwise been a two decade long downward trend in the underlying determinants of Florida’s relative income and GDP per capita.
The following illustrates another dimension that highlights Florida's vulnerability to economic shock.
Poverty in Florida
*Supplemental Poverty Measure (SPM)
In Florida, there are 2,055,778 families, with 3,885,132 children.
Poor Children: 21% (809,655) of children live in poor families (National: 21%), defined as income below 100% of the federal poverty level.
April 1, 2011
Top 10 Reasons for Central Florida’s Need
Author: Dave Krepcho
1. Food Hardship
A recently released study showed the hardest hit markets for families not being able to afford adequate food. The Orlando area ranked #10 in the nation for food hardship with 23.6% of the population struggling — higher than the State and national averages.
2. Childhood Hunger
Orlando has a higher percentage of children in poverty that are of school age than the rest of Florida or the overall United States. One in six children lives on the brink of hunger in Florida. The number is closer to one in four for Central Florida. Orlando: 23.3% vs. overall U.S.: 17%
3. The Meal Gap
A study released March 2011 shows that Central Florida ranks higher than the national average for a measurement of what percentage of the population is in need of food. This study also measured the Gap in terms of dollars needed to provide missing meals over the course of one year. For Central Florida the gap is $84,548,545.00.
4. Poverty Rate
For Central Florida, there are approximately 400,000 people living in poverty, almost 20% of the population. Just over 100,000 of that population are children.
5. Hunger Study
The Hunger Study for Central Florida measures several indicators every four years on the hunger landscape. One key measurement is the number of different people receiving help through our feeding programs. In 2004 the number of people was 298,000. When measured in 2009, it grew to 732,000 people….a 152% increase. This increase outpaces most parts of the country. Florida ranks #1 in Nation for increase in households struggling with hunger . Increase from 2004-2006 period of 8.9% to 14.2 % for 2007-2009.
6. 211 Calls
The number of 211 calls for help in Central Florida increased by 43% from 2009 to 2010. The increase continues in 2011. Food assistance is one of the top three requests.
7. Food Stamp (SNAP) Usage
SNAP usage has increased in Central Florida by 32.8% vs. the State average of 20.8% from 2009 – 2010. One in six Floridians use Food Stamps. There was a 113% increase in Florida from 2007 -2009 in the number of people who lived in households that had no other cash income other than Food Stamps.
8. Unemployment
U.S = 8.9% rate vs. Metro Orlando = 10.8%. Surrounding Counties in Central Florida have a rate as high as 12%.
9. Under- Employment
Florida ranks fifth in the nation as a percentage of people that are considered under-employed…. ranging from 21% – 24.9% . While we do not have Central Florida data, we believe this range fits or may be understated due to the heavy tourism base and the tens of thousands of low paying jobs related to that industry.
10. The Perfect Storm
All of the previous nine key indicators add up to a perfect storm of a dire situation. This data paints the picture of Central Florida’s dubious distinction as a geographic area in great need. When compared to other markets across the country, Central Florida, unfortunately, stands out as an area of higher need.
You guys still don't understand the population dynamics of Florida. You just parrot MSM headlines as if they convey the real story.
The problem with Florida is really America. The US is a disaster zone economically and given the scale of corruption and malfeasance since the GFC it rides within a hairs breath of a repeat of the GFC x 10 at almost any time. As every day passes we edge closer to the cliff as the powers that be try every trick in the book to wriggle out of this financial tar pit they find themselves in.
Florida is a state that ticks along alright in relatively good times but is one of the first to burn when things go wrong. It also tends to burn more than any other state under those circumstances.
- Florida's rate of growth has been declining for decades
- during the GFC people couldn't get out of Florida fast enough
- population inflows tend be low socioeconomic and retirees
- jobs growth is predominantly low paid
For a more comprehensive understanding read the following;
An Analysis of Annual Migration Flows in Florida, 1980 – 2008
Florida has been one of the most
rapidly growing states in the United
States for many years, but growth rates
have fluctuated considerably from one
year to the next. Most of these
fluctuations were caused by changes in
the number of people moving into and
out of the state. I
Percentage growth rates, however, have
been declining steadily, from 44% in the
1970s to 33% in the 1980s, 24% in the
1990s, and a projected 18% between
2000 and 2010
Low, Declining, Polarizing: Job Skill in Florida
ABSTRACT
After removing the effects of local amenities, prices, and local labor supply and demand
shocks, on a wage based measure of skill Florida’s average job just before the Great Recession
was 3% below the nation’s, down from 2% at the beginning of the last decade. Florida mimics
the national pattern of wage and job polarization—the hollowing of the middle of the skill
distribution coupled with strongly rising relative pay for high-skill jobs, slightly rising relative
pay for low-skill jobs, and falling relative pay for mid-skill jobs. In addition, labor force
participation fell more in Florida than in the U.S. over the past 30 years, and this was more
pronounced at low education levels. Simultaneously, real earnings for those with low education
levels fell, but less than in the rest of the nation. Florida is in the midst of a pronounced emptying
of the middle of its job skill distribution in which increasing demand for workers in low-skill
manual non-routine jobs is apparently outpacing increasing demand for high-skill analytical
workers. The agglomeration economies exhibited by high-skill jobs and expected baby boom
retirements are likely to accelerate this process absent aggressive and urgent public investment in
education and infrastructure, which seems unlikely.
This graphic suggests that Florida's high end job market is not performing very well in comparison to other regions. The data suggests that Florida is in fact seeing a decline in the sector. Jacksonville hits a high but only because of a high 12 year average. Overall the trend is in decline. The next best city, Tampa, comes in at 22nd and the remainder are well down.
This is only a part graphic – click to see full version
When the next correction comes holding property in Florida could well cost one their shirt. Florida is the leading edge of the new property bubble.
