Economy & Markets

[DavidL]

I'm not sure if this is the best place to start this and I'm not even sure if I am posting a start to a thread or just my opinion or maybe both.

For the last 10 days I have the misery of travelling on I4 up towards Lee Rd (Junction 88). Prior to last week, I hadn't gone as far as 88 in a long time. Why would I? I was amazed at all of the building work started and the conversions which are taking place although I didn't see much work in progress. Have the builders pulled the plug on some of the developments or were all the workers just taking a much needed vacation.....this was my impression with my eyes.

On the economic side, all of the numbers comming out look bad and are deteriorating. I see that GWB is hoping to get some more tax cuts passed through congress to "keep our economy strong" more like "keep our economy from sinking." Now everyone I talk to tells me that there are 1000 people a day moving here, or is it a 1000 a week or a 1000 people a month (the story seems to change on a daily basis) and that the baby boomers are/have arrived to keep buying the houses and new developments so they are gonna take up the slack. I can also visually notice that the number of vacant shops are increasing which is a sign of bad times. The cost of electric & gas must be at or close to record levels which comes out of hip national bank thus reducing ones ability to spend in the shops, restaurants or vacations. Mortgage rates look set to increase further and as foreign investors withdraw from the US markets, its fragile currency looks set to fall possibly further.

The good news is that hurricane season doesn't start until June 1st and so we have at least another 18 days before the weather is allowed to turn on us.;)

[Kriz1]

I hope people don't put to much hope in bqby boomers...if the ones around here are anything to go by....when they retire they'll still have large home loans...FL is getting to costly....most of the people from around here who would of retired to FL ..are now in VA....

[DavidL]

I hope people don't put to much hope in bqby boomers...if the ones around here are anything to go by....when they retire they'll still have large home loans...FL is getting to costly....most of the people from around here who would of retired to FL ..are now in VA....

I agree, FL is getting costly to live and you need a decent income to enjoy the life here or rather be able to enjoy the life here. I really can't see a short term senario of things ending in anything but tears for this economy.

There are too many warnings signs which shouldn't be ignored. Forewarned is forearmed.

[Kriz1]

Also a lot of builders have put a hold on building any new homes just yet...plans for a place behind us are now gone for good I was told....there are way to many homes for sale as it is....the Four Corners area was looking a bit run down a few weeks ago...I'm glad my HOA is keeping our place a little more up together....


I spelt baby wrong in my last post sorry....:(

[Bobby]

As far as new build communities go, to my eyes it still seems like we are in the boom of last year where resale homes were on the market for a matter of days before being snapped up by anyone and everyone. Ground is being cleared and new homes are going up faster than you can think of.

I have no idea why!!

There are around 14000 homes for sale right now and that's resales. God knows how many builders are at the bank pleading with them for some money to finish those developments that haven't sold out. I just can't see where they are going to get those buyers from. Anyone have any idea?

As far as I can see, they are asking for too much money for these homes, based on what happened last year, and it's not going to happen.

Of course there's the usual smoke and mirrors in the tabloids with figures of 1,000 people per month arriving, but it's just not happening.

Drive around any subdivision in the I-4 corridor and for sale signs are like trees! There's one in every yard. Where are the buyers coming from??

It's not so much doom and gloom, as I'd guess that a percentage of these guys are still speculating on what happened last year and when prices correct themselves, we'll get a more stable market.

Bobby

[Kriz1]

People moving to FL just don't have the money for $400k pool homes...or are to old to need a large house and pool when a condo is easier to upkeep......
Also Orlando was never the first place people look to retire....I think the coast will still do OK if the storms keep away for a few years.....you don't want the worry of losing your home every year after retiring....

[katya]

I know that down here Real Estate sales have gone down big time. Personally I think the market rose far too quickly. The problem now is that if your house was built before 1995, you are hard puched to get a decent company to insure your home. A few of the larger insurance agencies are no longer touching FL policies....lets hope the hurricanes keep away this year, if not only for our well-being but also for the state.
They are also trying to pass a law in Palm Beach County that would protect you from losing your home exemption if you bought in the same county.
Otherwise as you all know you will be charged at a todays market value, rather than if you had purchased 2 years ago.
Can get quite expensive when you way all the insurances up, something of which new comers ( including ourselves at one stage) are not so aware of.

[DavidL]

For those that follow the 'markets' Ben has been and spoken and apparently he thinks that the US economy can absorb higher interest rates and higher energy costs!! Now this is Ben Bernake (the new US Fed Reserve Chairman who took over from Greenspan in Jan of this year) and so the 'markets' listen to him. So far he has been missquoted and missunderstood and so I think that Ben is talking a load of trap. IMHO of the US economy continues along is current trajectory, then the US is heading for recession........

[katya]

Here, Here David. If we encounter anymore Hurricane's, people will not be able to afford the Insurance premium's that have gone up SOOO much. The property taxes are already at an all time high, which is why they should think about capping the taxes, even if its to allow local market to upgrade, within the same county.
Absorbing higher interest rates, higher property taxes and higher home insurance does not spell good news to me !!

[JulieC]

Terry studies alll this stuff and is convinced the writing is on the wall. The problem is America doesnt make anything any more, it just consumes what China makes at a favourable exchange rate, god know what will happen if that rate changes. Pretty sure the little yellow man will rule the 21st century in the way the US did in the late 20th and the US is going, well a way which isnt up!
As for Florida, this area is overheating building wise. Loads of people are trying to get out and sell, no buyers, who can afford these prices? So it is bound to drive prices down again. Cost of living is sky high, we have noticed a change in the last three years. This aint a cheap place to live any more ( if it ever was). As for the exchange rate, if we dont get through renewal, we are really relishing the prospect of leaving at 20 percent less than we came in at.

[DavidL]

Julie, I'm not saying that most American's aren't smart enough to be creative (Disclaimer : we know several Amercian's who are incredibly bright and whom we seek advice from) but you are correct. Looking back through History what have they discovered or created?

As far as exchange rates go, circa $1.80-$2.10 has my money for the future going forward. This certainly isn't a cheap place to live. Last month I was sat next to this Puerto Rican chick who had just left colledge after 4 years and was leaving with $80k in students debts!! Holy Smossey.

[JulieC]

Thats about right, David, for an international student. I would agree the Americans have the ability but who wants to manufacture when they can buy in at less than they manufacture for?? Long term one can see problems looming, the exchange rate fall shows the market makers know this.