Florida is doomed

Get in another line of work if you are in Florida.

Heck, I just had my best year ever!!!

Happy New Year to you, Joe, also. :wink:

If the friggen Fed would keep their nose out of the housing industry the market will self correct as always. When the prices drop sufficiently the investors will come back into the market. We as inspectors don’t care if prices are up or down. We just need transactions. The current artificial manipulation of the industry by the Fed will simply delay the inevitable.

I find it very hard to believe that homes will be considered an investment in the way they have been in the past. The false premise that growth equals prosperity has failed the test and past investors now understand that homes only rise above their utility value under the bubble conditions of easy money, cheap credit and the greater fool.

Here in Florida we constructed thousands of homes that no one ever lived in and some of these homes will never be occupied because their total cost of ownership will always be greater than what the documented population can reasonably afford.

The reality is that the bubble in home prices was a scam perpetrated on the public which forced higher property taxes on a inflated home prices. If the friggin’ government would not have driven real interest rates to almost zero then people wouldn’t need to risk their money foolishly on high-risk, low-reward schemes simply to keep up with inflation. I realize there is a sucker born every day, but I find it very doubtful that investors will be buying homes anywhere near its true value in the future.

In the brave new world of real estate, homes will sell a a discount to their worth and the only investors interest will be in those deep-deep discounted properties. The days of bidding up, overpaying and waiting for properties to appreciate have gone the way of T-Rex never to return.

Why just Florida?

Wow Joe F, make up your mind. What happened to your Florida is Booming from 4 days ago? :shock:

Can’t speak for the rest of Florida or the country for that matter but I’ve stayed pretty busy with some drop off. The one thing I’ve noticed I am doing fewer old small, nasty junk homes as apposed to newer, cleaner and vacant homes. I can live with that. I still am doing some very old homes (in the 80 - 100 year old) but those are people who want to restore the homes and are working with local Historical Society. Those are fun and interesting and typically proceed very slowly. No rush to get the reports or to make offers and usually done through lawyers versus Realtors. Works best with a Summary / Punch list style report. When the prices are low (like now) and interest rates are low (like now) inspectors should be doing extremely well.

I have talked to some Appraiser friends and they tell me they are very busy. Hard to believe the hype coming out of the Realtors world as they are still using the huge housing bubble stats to determine market. Of course they are not getting the kind of money they did two years ago. The houses were overinflated on value. Builders were building as fast as they could and simply over saturated the market with too many over priced homes and shot themselves in the foot. There are empty lots and Sud-divisions all around us. The roads are cut in, sewer pipes standing proud all the down the streets and no houses being built. Local contractors are calling me asking if we are hiring anyone. Had a builder serve me at the Alltel store when I went in to upgrade my cell phones. They did this to themselves. I hope a lot of the low ball inspectors DO get out of the business. They are the ones who keep causing the industry to start over again at GO without collecting the $200. Every time we get a rash of new inspectors who undercut prices it restarts the paradigm. Some of the homes I have inspected lately have dropped in prices over $100K and up.

Doug, I don’t think you can blame the low ball inspectors totally, they’re just a product of our environment. Just like all the low ball contractors, when there’s plenty of work they’re out for a quick buck then they move on. I guess it’s a cycle thing, and I’m glad to see them go in both businesses.

Oh I don’t blame them only, but that certainly adds to the problem. I have said many time here and elsewhere, inspectors are sometimes their own worst enemies, especially when it comes to legislation and speaking with one mind. The low ballers are simply trying to break into a market already unstable so they try to capture their piece of the pie by having attractive pricing. The Realtors use them a lot for that and their lack of experience in many cases. No, there is enough blame to go all around the table. I do agree that the Gov’t interference will most likely prolong the process instead of help it. I recommend everyone serious about staying in the business to diversify their services and market the hell out of themselves. Forget about marketing an association as the first line. They can and should market themselves. Some want iNachi (or ASHI, etc) to make them a success and do all their thinking for them. Why is it some inspectors never miss a beat and stay busy when the market is poor while others can’t seem to make it even when the market is blistering?

I ran into a guy who calls himself an inspector and he charges $199 for a single family house with a pool up to 2500SF. He then said he had 3 booked for that day…I said WOW, you got it rolling and congratulated him and told him I only had ONE that day. What I didn’t tell him was that it was a 5200 SF house with a pool, Radon, Termite, 4 molds and a Wind Mit form for $1700. So he DID 3 and I did one…I don’t want to do the most amount of homes, I want to make the most amount of money…2 totally different things. You get what you pay for and I always tell people that…if they want $199 inspection go get it and good luck…

Not true! You’re talking about owner/residents. I’m talking about a fire sale on those properties where an investor can rent the property with no negative cash flow. This will allow the investor to weather the storm indefinitly with little or no up front out of pocket expense. Factor tax advantages into the equation and its a money maker.

Sales in the REO haven of Riverside County here in California are up over 200% compared to last year. All because the prices have fallen substantially to make the purchase pencil out for investors. These investors have no intention of occupying the properties. They’ll simply rent them to the homeowners who lost them earlier in the year. With 10% down these properties cash flow. It doesn’t get much better from an investor point of view…

Those investors will be proven wrong just like the last crop of investors who took their haircut trying to catch a falling knife. This recession thing is just getting started, housing is going to continue to fall, not stabilize and then begin to rise. Deflation is driving down the cost of everything and is creating upheavals across all markets and industries which will have drastic effects on employment.

It is a fine notion to think you will be able to find, buy and then rent a property for a profit. It only works as long as the pencil out figures have a big buffer for vastly reduced rental income should the need ever arise to have to openly compete with other investor-landlords for rental customers whose income has been decimated during this Great Recession. In the emerging brave new economy all things are only going to be worth what someone is willing to pay for them, regardless of government shenanigans & bailouts. The trend is down and anyone who thinks otherwise will be vastly poorer for their mistake in judgment.

I find it comical when people badmouth other inspectors on this board for marketing low cost inspections and then go on to think that they can buy houses in this market to profitably rent. The forces that are driving inspectors to lower their prices is exactly the same force that in the end will drive rents down too, especially with the glut in empty houses. Here in Florida I can rent a home that once sold for $750K for under $1,000 a month, there ain’t a dime of profit in that transaction. If unemployment continues to rise that house may never be sold or rented because the carrying fees in taxes, CDD land fees and insurance apart from any mortgage may be well over $1,000 a month. The housing bubble only ever worked because it was a bubble with unsustainable growth rates and a pool of greater fools which no longer exist.

Homes For The Holidays

Buy a rental when you see the sales price of a property drop well below the cost to build. Then you know you have real equity. More renters than ever with the credit crunch. More families being created every day.

Replacement costs are dropping along with housing prices, just not as fast. What looks like a bargain today may just be a fairly priced home in a year or so with no potential for capital appreciation.

One of the biggest reasons people invested in real estate (aside from tax savings, rental profits, etc.) was appreciation. You really can’t count on that any more.

If I were an inspector, in this market, I would NOT be getting into any kind of long term investment (real estate or whatever). Now is the time to put all your extra cash to work pushing cash-generating businesses (like the inspection business). Don’t let a single penny be lazy.

In a related industry (inspection association industry)… I smell blood myself. I don’t think the inspection industry is any different in that this is the once-in-a-lifetime opportunity to take over entire markets as an inspector.


I guess that settle it then. :mrgreen:

It did if you’re interested in investing is real estate. Not everyone’s cut out for it. There will be some phenominal wealth made over the next 3-5 years. Argue all you like, when property is selling for less than dirt value, its time to buy…