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Blood In The Water In Florida Property Market: Reuters

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CAPE CORAL, Florida (Reuters) - Phone books that were delivered but never opened rot away next to empty driveways and overgrown lawns, telltale signs that once-booming southwest Florida is now the center of the U.S. housing storm.

Until two years ago, middle-class retirees vied with property speculators for houses and apartments in Cape Coral, a town near Fort Myers on Florida's sun-drenched Gulf Coast. Now almost every other house on some of its streets has a for-sale sign outside.

With a bloated inventory of unsold homes and a growing number of homeowners forced by mortgage delinquencies to sell -- thanks to the subprime crisis and ensuing credit crunch -- southwest Florida's once warm clime for property has turned stone-cold.

Linda Setterlund, 61, owns a pristine three-bedroom, two-bath, Cape Coral house that has been on the market for about a year. At a reduced asking price of $183,900, she said the house had been priced to match what she and her husband owed on it, after moving in three years ago with a 30-year fixed mortgage.

"They're saying that we're heading for a recession but I think we're past that," said Setterlund, referring to the housing glut and its effect across much of south Florida. "I think we're headed more into a depression."

There was a nearly 27-month supply of existing single-family homes on the Fort Myers market last month compared to a three-month supply at the height of the local boom in housing in August 2005, according to Denny Grimes, a top real estate agent in Fort Myers. Continued...

OK, I know this is Florida, but it's interesting to see how a booming area can bomb in a couple of years... this should at least sound a warning to those who believe the market cannot fall significantly.

TD

Edited by The Dragon

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OK, I know this is Florida, but it's interesting to see how a booming area can bomb in a couple of years... this should at least sound a warning to those who believe the market cannot fall significantly.

TD

Is it that common in the USA to lend a 58yo $183,900 over 30yo! She'll be 88yo by the time its paid off :blink::unsure:

No doubt their lender has CDO'd it to some German or French bank <_<

Why does the rest of the world keep on subsidizing Americans lifestyles like this?

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Is it that common in the USA to lend a 58yo $183,900 over 30yo! She'll be 88yo by the time its paid off :blink::unsure:

No doubt their lender has CDO'd it to some German or French bank <_<

Why does the rest of the world keep on subsidizing Americans lifestyles like this?

well, not anymore it seems.

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I'm curious to know what the Florida equivalent of jumping out of a high-rise building is ?

Do they just drive to the centre of the Everglades, get out the car and walk into the nearest deep swamp ?

The alligators will be having a feast if the HPC continues in Fla. :lol:

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That really is quite scary...and I think this has a long, long way to go yet.

A lot of people are really going to get stuffed over - sometimes your forget when you just look at YoY, MoM, CDOS, MBS etc etc.

Ho hum...life's a bitch and all that.

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Linda Setterlund, 61, owns ... with a 30-year fixed mortgage.

HPI the miracle anti-ageing solution.

Banks won't allow you to die while you owe them money.

Remortgage every 20 years and live forever

Edited by ScaredEitherWay

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What is really scary is that the resets have barely started yet.

It is all happening alot quicker than anticipated over there...

Hence my question to RB (who has a particular interest in the US)... many have predicted how quickly we follow the U - I've heard 6 months, 12, 18 etc - I wonder now what people think the lag time is and how quickly they belive things will start to tumble here.

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OK, I know this is Florida, but it's interesting to see how a booming area can bomb in a couple of years... this should at least sound a warning to those who believe the market cannot fall significantly.

TD

IIRC Dr. Bubb has called the lag at about 18 months. This could be right although I think its more like a year. The Government and VIs are doing a good job masking the effects of Great Crash 2 and there is still some denial in the system. We are at the VI's "soft landing" idea at present which preceded the start of the crash in the US by about 6 months or so.

We are turning quickly and with credit choking off the fuel of Brown's bubble (excessive cheap and easy credit) things will happen quickly from the 2nd Q 2007. IMO, that is.

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OK, I know this is Florida, but it's interesting to see how a booming area can bomb in a couple of years... this should at least sound a warning to those who believe the market cannot fall significantly.

TD

How MAD is that! lending over 30 years to a person that age LOL

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Circa 24,000 Brits own 'vacation/investment' homes in Florida many will cost arround $25'000 a year to own/run (excluding mortgage). Many were sold sub-prime mortgages because as 'none-resident buyers' they are seen as high risk (none conforming loans). The ability to refinance to a better deal is diminishing by the day. Most Mew'd the 20% deposit for their 'detached 5 bed pool villa' required to be 'self cert' (=no docs) out of their suburban 3 bed semi's in the UK, therfor they're 100% leveraged (howmany bought in Spain in the last 5 years?.

I have 'run the numbers' for half a dozen (a couple of which bought as far back as 2001, effectively pre boom) and when all costs are accounted for they are all well underwater.

One couple walked away from a $100k deposit on a villa theyed agreed to buy at $510k (because they realised if the completed/closed they would be running it at a $30k+ pa loss) and the builder was now marketing them at $390k (= $120k drop in 2 years). Another guy from Scotland bought 10 at the top........ he knew he couldn't loose............

Florida has at least another 18 month to 2 years of falls........

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I wonder if UK with its "mustn't grumble" attitude is a radically difficult place to the US though.

Whereas in US it's viewed as perfectly sensible to mail your bank the keys once you're in negative equity (and therefore the positive feedback loop starts quickly), in the UK people may be more inclined to grind and bear it stoically...

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It won't take 18months for it to happen over here.

Look, we're not going to do things at the same rate as the US because the US was FIRST!!

Now we know what the process will look like it'll be twice as quick to arrive and will be twice as fast when it starts!

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I agree. Sentiment plays a big part and when there is an example scenario evident, it will change much to fall into line with that (sentiment) in the US much more quickly. 6 months IMHO. BTL could play a decisive roll.

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Guest d23
IIRC Dr. Bubb has called the lag at about 18 months. This could be right although I think its more like a year. The Government and VIs are doing a good job masking the effects of Great Crash 2 and there is still some denial in the system. We are at the VI's "soft landing" idea at present which preceded the start of the crash in the US by about 6 months or so.

RB you were posting on another website in late 2004 that prices in san diego (our mirror market) were crashing; that was nearly 3 years ago. Apparently we're now in the period six months before they started crashing.

3 and a half years? thats quite some lag.

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