The Bradenton Herald reports from Florida. Jo Lynne Navarro wants her $270,000 back. Thats how much the Sarasota County woman paid to reserve two Bel Mare at Riviera Dunes condominium units two-and-a-half years ago. The units existed only in glossy sales brochures at the time, but Navarro - like many others lured by a sizzling condo market - was eager to buy early.
Now, units 206 and 801 in Bel Mares second 12-story building in Palmetto are complete but empty, as are numerous others, making the brand-new building resemble a ghost tower. Navarro doesnt want the units anymore and is suing the developer because it wont let her out of her purchase contracts for $1.35 million, or return her deposits. She has a lot of company.
Real estate and legal observers say the rise of buyers remorse lawsuits is just the latest legal fallout from an unprecedented housing slide. This might just be the tip of the iceberg, said William P. Sklar, a West Palm Beach real estate attorney following the trend.
The Herald Tribune. When Joseph Long conceived the idea of buying homes and condominiums in Southwest Florida at 70 cents on the dollar, he was thinking in terms of tens of millions rather than hundreds of millions of dollars.
But as the former elevator company executive discovered that 10 times as many builders and developers wanted to participate as he had anticipated.
People are calling me and saying: Please, Joe, do this deal, he said. One guy told me he would lose $3 million if I succeed, and $13 million if I dont.
The St Petersburg Times. For most home builders in the Tampa Bay area, the gold mine of 2005 has turned into the money pit of 2007. Pulte Homes lost $122-million in Florida in the three months ending June 30. Lennar bled $214-million in just three months this year in its Southeast region, which prominently includes Florida.
Standard-Pacific lost $24.6- million in its Southeast division and, in a note to its shareholders, singled out Tampa for dragging down business. KB Home lost nearly $50-million in Florida, Georgia and North Carolina. Heavy into the Tampa-area suburbs, KB said it cut prices by a third locally since January, a move thats improved sales but decimated profits.
I havent talked to a happy builder in about two years, said Marvin Rose, a Tampa Bay area housing analyst who advises local builders. Demand has completely evaporated. So what is out there for sale is moving slowly.
Houses bought by investors, new but empty, continue to compete with those offered by builders. Tony Polito, a housing analyst in Tampa with Metrostudy, counted 4,200 unoccupied new homes in the Tampa Bay area.
Most analysts predict the new home market wont reach a healthy balance until 2009, when buyers and sellers can meet at prices that please both sides. For most of this new century, the industry has been distorted, first by overdemand, and now by oversupply.
We havent had a normal market since 2002, Rose said.
The News Press. The parent company of First Home Builders is negotiating with a federal agency about what to do with a slew of shaky loans used to construct houses in Lehigh Acres and Cape Coral.
But experts say its questionable how much any deal could accomplish, given Lee Countys downward spiral of property values.
Norlarco and Ann Arbor, Mich.-based Huron River Area Credit Union collapsed earlier this year, mainly because loans they made to build houses here ran into problems when property values plummeted. Both are being run by the National Credit Union Administration.
Now numerous investors are unwilling or unable to close on those houses and numerous lawsuits have been filed 20 of them against DAlessandro & Woodyard, the real estate firm that handled many of the deals.
Norlarco has loans totaling $238.4 million on 1,035 homes in Lee County, McKechnie said. Hovnanian has a backlog in Lee County of 1,787 homes worth $496 million, said J. Larry Sorsby, the companys chief financial officer.
We typically receive between 75 percent and 90 percent of the purchase price from our Fort Myers customers via their construction loans, he said. However, given that the market has deteriorated so significantly in Fort Myers, many buyers are now refusing to convert to permanent financing where we would receive the balance of our sales price. They are effectively defaulting on their construction loan. Therefore it is likely that we will not receive the balance of the purchase price on many of these homes.
The Palm Beach Daily News. Many experts say the deals could get progressively better for potential buyers as more banks start attempting to unload foreclosed properties at below-market prices.
Real estate consultant, Jack McCabe, CEO of McCabe Research & Consulting LLC, recently told me of a Tampa developer who had bought at the top of the market and needed to sell some condo units. At auction, some $180,000 units went for as little as $90,000. Three-bedroom units that had retailed for $295,000 to $325,000, sold for as little as $180,000.
The Palm Beach Post. The eagerly anticipated home-sales reports for August comes out tomorrow, but we get an early peek at Palm Beach County numbers thanks to Illustrated Properties Real Estate and IPRE.com, which posts the latest MLS results.
Sales of single-family homes fell again in August - no surprise there - to 688. The drop is in the neighborhood of 15 percent year over year. Also, the median price of homes in Palm Beach County fell to $280,000 in August, according to IPRE.com. Thats down from $300,000 a year ago.
The most alarming trend the August report reveals is that inventory continues to mushroom. In August, there were 24,428 existing homes and condo units for sale in Palm Beach County, according to the report. Wow! At the current pace of sales, thats almost a three-year supply.