The property taxes and insurance will not create a downfall in Florida. However, if prices had kept increasing as they were for the last couple of years, that would have been a problem. The prices were getting too high for most people to afford a home. However, there is a correction in process that will fix the high price problem throughout the state. Speculators have overrun the state--this will come back to haunt people chasing "easy" money but create more buying opportunities for long term owners as prices fall in a big way over the next few years. It will be especially ugly in the condo and raw land market. The longer term owners might lose big paper profits, but they weren't real in the first place. The speculators still in the market today will be hurting big time.
Property Taxes = Florida's Downfall?
- Thread starter SHELLY
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beachmouse said:
Mouse,
Yes, I'm familiar with that site--there are quite a few out there. The "bubble blogs" tend to drone on and are pretty much getting to all sound alike right now; but I expect some new and interesting stories to pop (pun intended) up as the condo frenzy starts to unwind next year. There was, however, one site with an incredibly well-written 4-part short story (hypothetical of course) that tied the housing boom, exotic mortgage financing, hedge funds, and overextended credit together into an entertaining read. (IMO, the best I've read.) You might find it fascinating if you like big puzzles.
Smiling JOe said:
Not quite. BRAC will bring in just over 2500 Army Special Ops grunts from Ft Bragg to mesh with Air Force Special Ops. The 10,000 number being bandied about includes family members and various camp followers (too high in my estimation). Although there will be some impact on the housing in and around Eglin, I don't see a big contingent of overpaid civil servants and defense contractors glomming in on this move. If it was AF going the other way, things would certainly be different, but the Army?...I don't think so. The money to be made will be in rental apartments and homes (but NOT of the +$1000 ilk). Special Ops Grunts will leave their families in Ft Bragg until they find suitable and affordable housing in the area--no matter how long it takes--they're wired that way.
BRAC breakdown is something like 45% Green Berets, 45% for the new joint fighter jet training wing, 10% other missions. I feel like it's probably okay to assume that the fighter training wing is going to skew a bit older and higher ranking than the Green Berets are. Other missions includes some more weapons development jobs that fit well in with Eglin's missle development programs.
And maybe it's just the crowd I know, but all the Air Commando officers I've had the pleasure to meet have seemed to really buy into the Florida golf & fishing lifestyle. Plus, good motorcycling weather most of the year.
And maybe it's just the crowd I know, but all the Air Commando officers I've had the pleasure to meet have seemed to really buy into the Florida golf & fishing lifestyle. Plus, good motorcycling weather most of the year.
Good points, Mouse. But it's pretty widely known in military circles that some officers are notoriously...ah...shall we say...."frugal" when it comes to money (i.e., cleaning out cash in unit coffee funds and leaving behind post-dated checks?? 
). In this over-priced housing market, they'll be bargining HARD for below market value when they go looking for a home and won't pay a sheckle more. But that is the here and now...the BRAC move won't happen for another 2 years, who knows what the state of housing, the economy, the military, or the Florida coastline will be by then? 
). In this over-priced housing market, they'll be bargining HARD for below market value when they go looking for a home and won't pay a sheckle more. But that is the here and now...the BRAC move won't happen for another 2 years, who knows what the state of housing, the economy, the military, or the Florida coastline will be by then?
I see 2007 as the really interesting year for Panhandle real estate. You've got a lot of SoWal subdivision lots with buildouts coming up soon sandwiched by what's going to be a huge glut/oversupply in new condo construction in PCB on one side, and the military people who bought with low down VA loans at the peak of the market in 2004 getting orders from somewhere else, and some of them are going to be somewhat upside down on those loans without being able to get enough rent to cover costs if they don't want to sell for a loss.
Some recovery in 2008, and I see a healthy market panhandle-wide by about 2010 again, depending on how the weather goes.
Some recovery in 2008, and I see a healthy market panhandle-wide by about 2010 again, depending on how the weather goes.
beachmouse said:
Ditto, Mouse.
I see the condo market as the "canary in the coal mine" for the real estate downfall. Way too many folks are leveraged to the hilt! Once those condo developers finish the "boxes on the beach" and come knocking on doors for their money, "investors" are going to find the friendly bankers and rich baby boomers--like Elvis--have left the building.
Not only real estate will be an "issue" in the upcoming year. The bankers are going to clamp down hard on easy real estate money (private and commercial) after Christmas (or "The Holidays" if you prefer). Refi's will dry up as a source of "income" for consumers. Housing/condos in the "bubbliest" markets will stagnate and/or deflate which in turn will effect jobs (Realtors [and BMW leasers], appraisers, construction, mortgage brokers, etc.). The economy, which has been held afloat by consumer spending and housing will stagger. The gloom isn't going to go on forever (just as the tech and housing party couldn't go on forever); the Fed will eventually have to start easing up on the money to pull the US out of a nosedive and the economy will (hopefully) start to heal. But before that time comes, there are going to be hard lessons yet to be learned from the fallout in the real estate market--and I don't think the party we've experienced in the last couple of years will be repeated anytime, for a long, long time, in the foreseeable future.
OnMackBayou said:
The demand in Florida has dropped through the floor due to hurricanes, EXCESS SUPPLY, high taxes, high insurance and high prices. As a result, prices will plummet over the next few years. They have already started falling and the fall will continue. The condo and raw lot market will be severely hit. But, single family homes will not be unscathed. It will happen in all of the overvalued markets across Florida. Palm Beach, Naples, SoWal, St. Pete, etc. It will eventually bottom out and remain fairly flat for a long long time. Just like the stock markets in japan and the US when they became over valued significantly. People waiting on the sidelines to buy in order to have a second home will get some great deals over teh next two years compared to where prices have been over the last 18 to 24 months. However, there will not be a huge runup in prices for the forseeable future even after prices fall. No investors will rush back in and artificially pump up prices ever again. It just won't happen again. The runup was artificial and prices will fall back to reality again. Look for prices to go back to 2001 or 2002 levels again.
Bob: Does that mean my taxes will go down 60 to 90%?
to monty: are you SHELLY's idential twin? You forgot to capitalize all the letters.
I agree that the condo market-particularly beach front-could be in serious trouble, but do not understand your rationale for saying existing houses would be more in demand than raw lots.
What seems to be increasingly happening is that "baby boomers" in their anticipation of retiring soon are looking for lots so they can "plant a seed" by purchasing a vacant lot for a future retirement home without assuming the greater financial burden and risk of buying an existing building that was built to who knows what quality.
Increasingly these lot buyers are asking these questions: what is the sea level elevation of this lot and is there a build out time? Also, can I walk to the beach? Because if you are planning on living inland and driving to the beach good luck finding a place to park at beach accesses not to meantion the traffic in just getting there.
Then when the "baby boomer" is ready to retire and move down they can better build a home on their "seed lot" that meets their needs and one that will be able to integrate all the newest engineering to withstand a hurricane. Of course if I could afford an existing house such as in Alys Beach where they are designed and built to stand up to the rigors of coastal living I would consider buying.
I would agree with you about buying an existing dwelling but only if one is sure they are buying a building built to the highest hurricane standards on a high elevation lot. This is because such properties are rare and will be become even scarcer as buyers figure out the emerging NEW PARADIGM in adaptation to coastal living.
to monty: are you SHELLY's idential twin? You forgot to capitalize all the letters.
I agree that the condo market-particularly beach front-could be in serious trouble, but do not understand your rationale for saying existing houses would be more in demand than raw lots.
What seems to be increasingly happening is that "baby boomers" in their anticipation of retiring soon are looking for lots so they can "plant a seed" by purchasing a vacant lot for a future retirement home without assuming the greater financial burden and risk of buying an existing building that was built to who knows what quality.
Increasingly these lot buyers are asking these questions: what is the sea level elevation of this lot and is there a build out time? Also, can I walk to the beach? Because if you are planning on living inland and driving to the beach good luck finding a place to park at beach accesses not to meantion the traffic in just getting there.
Then when the "baby boomer" is ready to retire and move down they can better build a home on their "seed lot" that meets their needs and one that will be able to integrate all the newest engineering to withstand a hurricane. Of course if I could afford an existing house such as in Alys Beach where they are designed and built to stand up to the rigors of coastal living I would consider buying.
I would agree with you about buying an existing dwelling but only if one is sure they are buying a building built to the highest hurricane standards on a high elevation lot. This is because such properties are rare and will be become even scarcer as buyers figure out the emerging NEW PARADIGM in adaptation to coastal living.