I'm told there are 11,000 homes for sale in the Greater Naples area.
Of those 2,600 are *short sales* - in other words they are distressed, upside-down,..., listed below the total mortgage debt on the property.
My insider down there tells me that right now, 85% of *short sales* eventually turn into REO - or full-blown bank-owned foreclosures.
So despite all the hoopla about *brisk sales* nationwide (esp. in California and Florida), the pipeline of coming inventory is still backed up with no end in sight.
And what people have to remember is that the Northeast (and places like Silicon Valley) hasn't even really had its real estate prices decline much - if at all, yet.
Check out the house above that's not far from me and theoretically a target of mine. It got re-listed today (after a few month hiatus) for $750,000.
But it sold AT THE PEAK, in December of 2005, for $702,500!
So 3.25 years later, after a stock market crash, a nationwide housing collapse, a Communist elected President, and skyrocketing unemployment, THEY WANT MORE MONEY THAN ITS BUBBLE PRICE!
This house may be 2,900 square feet and look nice, but it's on a busy street, has incredibly low ceilings, AND abuts the train tracks.
The total capital cost of a $700,000 house at 6% mortgage rates is $4,200 per month, EVERY MONTH, FOR 30 YEARS.
There just aren't enough people earning the money needed to afford that kind of *shelter* expense.
Not even close.
See also Morons Bidding Against Themselves and The Morons Are Still Winning.
1 comment:
I didn't think there were many who could really afford $700,000 during the bubble. Post-bubble 750 is outrageous. Still have property taxes and insurance to amortize on the 4 grand monthly bill.
In a moment of desperation I bet that house finally sells for around $300,000.
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