Yet another article “predicting” the crappy future of South Florida real estate comes to us via tomorrow’s New Times. Bob Norman interviewed Jack McCabe, industry analyst, and here are his predictions for 2008:
- Home prices will fall by at least another 15 percent.
- Individual foreclosures will increase 300 percent from last year, when they already soared.
- About half of all new condo buyers will walk away from projects by the time they reach completion.
- Bankruptcies by developers and lenders will proliferate to the point that they become common.
- Many lenders, appraisers, and brokers will be indicted for mortgage fraud.
- A recession will be declared by the third quarter of the year.
- Government efforts at bailouts and interest rate cuts will be like putting a “Band-Aid on skin cancer” and only ensure ’70s-style stagflation.
To the writer, all of the above seems “reasonable.” As I’ve mentioned before, we still have a while to go before things
get better stabilize. There is no doubt that the market, in general, will worsen before it gets better, BUT, only in some areas. For example, luxury properties in South Beach have NEVER gone down, AND in the condominiums that I specialize in, only a HANDFUL, maybe six in total, have been foreclosures.
Interesting perspective on the South Florida real estate “meltdown” (see video above): Could it be that the pain of the deflating real estate market will primarily be spread out among many broad shoulders? I think that the Related Group, WCI, Bank of America, and Countrywide losing a couple hundred billion dollars will go a long way in creating “soft landing” for the rough times ahead.
Here are a couple of doosies “weaved” flawlessly into this article:
McCabe has made his name on such dire predictions, and I should note that he stands to profit if he’s right.
The Deerfield Beach-based consultant is now working full-time advising hedge funds and other vulture outfits that await some bottom-feeding deals.
McCabe says he’s seen only two such deals so far, both involving townhouses on the west coast of Florida.
It’s easy to get carried away with a doomsday scenario.
“…two such deals…”. TWO!
For the record, I’M a realist.