Trade stocks or trade Florida condos?

Discussion in 'Trading' started by The Kin, Jun 9, 2005.

  1. :D

    Golly! The return on "flipping" construction-priced condos than selling them once the building is complete is becoming a joke.

    Say $10,000 down to buy a $200,000 condo, wait a year or two and the condo is now $240,000. Sell and that's an 300% return (using extreme leverage of course :p )

    It's becoming a joke. I accidentally discovered this when I purchased a south Florida condo to use as a vacation home and once the building was complete about 1 year later, it was worth over $240,000. So I sold only to lose out on another 45% increase the next year.

    Now I know why Florida condos openings are filled with investors and sell out within days. It's free money. It can't go on forever but so what, some of these propertises are gorgeous and can rent for the mortgage payment with a slightly larger downpayment.
  2. range


    Sounds like a different version of the Internet stock bubble to me.
  3. I can't disagree.
  4. Actually I am a Real Estate broker in S FL and all I see is more demand here. Unlike internet stocks going up on speculation. The market here has 1000 new people moving into the area a day, and a serious shortage of homes. There is no land to build on and the only choice is to knock down small buildings and put up bigger ones(S FL is becoming just like Mannhatten).The other problem is the counties are not giving out many permits due to traffic congestion problems. They also chopped down the height limit on many proposed projects. Besides that the job market is starting to grow here. The choice people have who want to live here is pay up or get out. I see a lot of working class people leaving because of housing prices. And many more willing to pay top dollar to live here.
  5. It will all come to an end very soon, just wait for rising interest rates. When the affordability index is very low and people have to stretch and finance through interest only notes, it is a bad situation
  6. Assholes. They want the property tax dollars but are too cheap to pay for road improvements. These 20 to 50% annual price gains are unsustainable.


    Did your 300% take into account costs during the 1-2 years of holding? Mortgage, property taxes, homeowners insurance, flood insurance, condo regime fees.) can add up. I live near the ocean in SC and homeowners insurance is skyrocketing .. lots of companies are pulling out of the coastal areas due to the hurricanes. No doubt $$$ can be made in real estate but the old "if you build it, they will come" is going to start to get "old" as traffic congestion is becoming worse each year. And as with the NASDAQ back in 2000 .. nothing goes up forever. Once rates start to creep back up those with adjustables will have some issues to deal with.
  8. trader99


    For Retirees, One Home Is Not Enough

    Published: June 9, 2005

    THE most serendipitous move David and Penny Handorf ever made, as far as they are concerned, was buying a house 25 years ago in San Jose, Calif.

    Last year they sold the four-bedroom house, which they bought in 1980 for $300,000, for just under $1.4 million. With the proceeds they bought a custom-built 5,200-square-foot house in Park City, Utah, for $700,000 and a four-bedroom Tuscan-style house with a guest casita near Chandler, Ariz., for $400,000.

    "Without the San Jose sale, we wouldn't have been able to have both places," said Mr. Handorf, 61, who retired as a manager from a semiconductor manufacturer in 2003.

    In the Handorfs' case, at least, "retirement has been transformed by the real estate boom," he said.

    Call it the sell one, buy two plan. With the upsurge in house prices in hot markets, a growing number of retirees are cashing out and finding that they can afford to buy not one but two retirement homes. What's more, people now retiring and those preparing to have generally collected more wealth than previous generations. As affluent baby boomers in particular approach retirement, the trend toward two homes is likely to increase.

    According to the National Association of Realtors, 51 percent of all vacation homes sold in 2004 went to buyers 55 and older, in a year when vacation-home buying in general was up 19.8 percent, to 1.02 million units, from 2003.

    Of course, in retirement, the definition of a vacation home is fluid. Many retirees are splitting their time between a home near where they worked and raised families, and one in a Sun Belt locale. Although there have always been snowbirds, as retirees who migrate to follow the sun are commonly known, Greg Snyder, the division president in Central New Jersey for U.S. Home, a homebuilder, said many more retirees can afford to buy two homes now than in the past. At Greenbriar Westlake, a retirement community in Jackson, N.J., that is being developed by U.S. Home, nearly 40 percent of all homebuyers own another home in Florida or some other Sun Belt state, Mr. Snyder said, up from about 20 percent of buyers in the developer's other 55-and-over communities 10 years ago.

    In addition to their swollen home equity, many of today's retirees have accumulated large amounts of wealth. And the baby boomers, the oldest of whom will turn 60 next year, appear to be "on the verge of retiring wealthier and healthier," said Nicolas P. Retsinas, the director of the Joint Center for Housing Studies at Harvard.

    "I think I'm different from my parents," said Billy Halpern, a 53-year-old hair salon owner who, with his wife, Marjorie Halpern, 57, a Weight Watchers leader, has bought a house in a gated community in Boynton Beach, Fla., and a condominium in a retirement enclave on Long Island. When his parents retired, he said, "they bought a condo on Long Island and that was fine; they were near their family, and that was enough for them."

    Mr. Halpern, by contrast, said he didn't like the Northern winters and preferred to spend the cold months in Florida. "I want a little more out of life than they took," he said.

    In an effort to capture the growing group of retirees inclined to buy two homes, developers are building age-restricted retirement communities across the Northeast, the Atlantic Seaboard and parts of the Midwest as fast as they can.

    The number of so-called "active adult" communities in 10 states in those regions, including New York, New Jersey, Connecticut, Massachusetts, Virginia and Illinois, increased by nearly 500 percent between 1995 and 2004, from 60 to 355, said William R. Parks, a consultant to homebuilders who works in Scottsdale, Ariz.

    In some cases - particularly in the Northeast, where real estate prices may make it harder for buyers to afford two homes - builders are selling smaller town houses and condos.

    "We're trying to develop communities that have a variety of different product offerings so that somebody can come in at various price points," said Mitchell C. Hochberg, the president for the Northeast United States region of WCI Communities, a homebuilder that develops communities for those over 55 in both the Northeast and in Florida. "So if they want to have two homes, they have the ability to buy something smaller here rather than spending more and only having one place."
  9. trader99


    For Retirees, One Home Is Not Enough


    At Encore Lake Grove, WCI's new retirement community on Long Island, for example, Mr. Hochberg said the company is building 1,450-square-foot condos, which are selling for around $400,000, along with 2,400-square-foot town houses, selling in the low $600,000's

    Some who buy first in the Sun Belt and discover the resortlike qualities of retirement communities there - clubhouses, golf courses and services like lawn mowing and landscaping - are now deciding to buy something similar in the North.

    David and Meredith Markfield bought a house in a retirement community in Poinciana, Fla., two years ago when they sold a 2,800-square-foot house in Commack, N.Y., for $410,000. At the time, since Mrs. Markfield, 54, was (and still is) working as a middle school English teacher, the couple also bought a $320,000 town house in Hauppauge, not far from Commack.

    But Mr. Markfield, 58, who is a retired high school principal, quickly became bored. Having grown accustomed to the leisure-oriented setting in Florida, the couple decided earlier this year to buy a new $463,000 town house in one of the new WCI communities on Long Island. Mr. Markfield said he was looking forward to swimming in the indoor pool, hitting some balls on the putting green and meeting people his age at the clubhouse.

    Meanwhile, Mr. Markfield said, the booming real estate market is likely to help the couple pay close to all cash for their new town house, because the value of the one in Hauppauge has appreciated greatly in the two years since they bought it.

    "You get lucky once in a while," he said.

    Indeed, some retirees are cashing out of their old homes earlier than they had planned, in part out of concern that sales prices are peaking (even if the new homes they buy as replacements are nearly as expensive).

    Carl and Barbara Natola bought a condo in a gated golf retirement community in Bonita Springs, Fla., three years ago and were happy spending three-quarters of the year in their three-bedroom colonial-style home in Saugus, Mass., where they raised two children and had lived for 31 years.

    But two years ago, Mr. Natola, 65, and Mrs. Natola, 64, decided that they should sell it. "With the market being what it was, where the value of the homes were at a high and the mortgage rates were low, I felt it would be nice and easy to sell the house," Mr. Natola said.

    They sold in Saugus for $415,000 and bought a $385,000, two-bedroom house in Great Island, a retirement community in Plymouth, still within driving distance of their children and grandchildren in New Hampshire and Connecticut.

    Nonetheless, even as the strong housing market is helping an increasing number of people spend their retirement in multiple places, some buyers have made compromises. The Handorfs, for example, had originally wanted to retire in San Diego when they first realized how much their San Jose house was worth. But they quickly realized that an oceanfront house there would be even more expensive than the home they were leaving. Since one of their daughters lives in Salt Lake City and they had previously lived in Tempe, Ariz., they decided to leave California altogether, even though their other daughter lives in San Francisco.

    Mr. Handorf, who recalls how his parents split their retirement between a house in Phoenix and an Airstream trailer, said he considers his own arrangement an upgrade. "That's just a difference in the real estate," he said. "They didn't have the luck we did of owning a house in San Jose for 24 years."

  10. They are all ready using eminent domain to buy the land for roads(The Florida Turnpike). FYI 20 to 50% is not typical return. Those are the glory stories that everyone talks about.
    #10     Jun 9, 2005