Florida Economy: Headed In The Right Direction?
A recent post by Clayton Ellsworth raised some interesting points about the economic condition of Marion County and Florida, and the state’s general direction. We don’t want to be doom and gloom, but maybe all this exuberance (spin?) about the state of our state we are hearing from Governor Charlie Crist needs some testing and questioning.
As Mr. Ellsworth points out, one of 10 homes right here in Marion County is in foreclosure or pre-foreclosure.
State economists, based on a worsening housing market, just reduced the state’s general revenue outlook by $2.5-billion for the current and upcoming fiscal year. The revenue loss this year will be about $1-billion, on top of $1.1-billion the Legislature already cut in a special session. Next year brings an additional $1.4-billion shortfall. The revisions are attributable to a worsening housing market caused by the subprime loan fallout and resulting tightening of credit and lending practices; a slowdown in Florida's population growth; and higher energy prices.
A recent St. Petersburg Times poll indicates that the number of Floridians believing the state is headed down the wrong track outnumbers those who say the state is on the right track.
A Newsmax brief brings to light some interesting comparisons of California’s current abysmal economic condition, and how it got where it is, to some of the current trends in Florida. Check out the link below.
http://www.newsmax.com/headlines/california_fiscal_crisis/2007/11/01/46007.html?s=sp&promo_code=3C66-1
Our question for you:
Do you think the general direction of Florida’s (and even Marion County's) economic/political environment is heading in the right direction? Why or why not? If NO, what should be done to get it back on track?
posted by Blog Master @ 11:11 AM
50 Comments:
Ellsworth is usually correct, but he's way off in the number of homes in foreclosure or facing foreclosure. It's not anywhere near as high as 1 in 10.
Check your figures again Mr. Ellsworth!
If Charlie Crist says Be Happy, Don't Worry--I'm with him. After all, Republicans don't lie. LOL
I wondered, too, about those figures, Clayton. You say that 41 households are in foreclosure and 1,041 are in pre-foreclosure and that they account for one in ten “Marion County households,” implying that there are 10,820 “Marion County households.” What are the “Marion County households” to which you refer?
The 2000 decennial census reported over 106,000 households for Marion County, and the U.S. Census Bureau estimates the Marion County population had risen by 22 percent by 2006 from its level reported in the 2000 decennial census. As reported by the Marion County Property Appraiser, the Marion County tax roll for 2007 includes 96,302 properties in the improved residential classification, 25,873 properties in the improved mobile home classification, and 6,455 properties in the condominium classification.
Probably closer to 1% than 10%. Still too many!
P.S.: Sorry, I forgot to comment on the question.
I think the County and State are in for 2-3 years of tough economic times. If tax relief and government spending aren't tackled, we will have a mess and I don't see anyone stepping to the plate.
The number of homes in foreclosure or in preforeclosure are from the web site foreclosure .com.
As for my calculation on households,effected, I was working with incorrect numbers and I apologize for that error.
I will add that since reviewing the numbers on foreclosure.com , I have concluded that their numbers are probaly not accurate.
Reason is that lenders are not easily identified because of the packaging and then slicing of mortages. Or to put it another way, borrowers don't know who has their loans now and lenders can't prove with a certainty that the loan is theirs.
In a very recent court case in Cleveland Ohio, the judge ruled in favor of 14 defendants in foreclosure because the lenders could not prove they owned the loans. See New York Times archives for this story that ran this week.
Lenders are throwing a lot of mud at the wall,bluffing on their actual secured interest because they aren't certain. This will be a break for people who can't pay and face foreclosure as more judges play show and tell.
I read awhile back that in Florida where foreclosures are second only to California, that 1 out of 10 mortages are at least one payment behind, and didn't question my erroneous estimated numbers.
I will do more digging tomorrow.
I challenge any doubters to do their own research, as I know Brian will and post their findings.
For certain numbers are going to get worse for the reasons I stated.
I stand by my conclusion that our local economy is going to suffer.
Any body that uses spin to paint another picture[like the bogus unemployment figures ] will reap the whirl wind.
Clayton Ellsworth
Tax internet sales like many other states. Revenue loss to the state in 2008 will be about $2.35 billion. That would be a nice chunk of change to make up for some of that $2.5 billion budget problem.
One help for the economy, I'm voting for the tax reduction amendment. It's not as much as I would like to see but is a start. I think more will be done.
please splain to me the basis for your support. so far we have no information other than crap from gov. charlie and the legislature trying to cover their butts for faiure to do what they promised and thats not enuf to make an informed decision. so pleeeze, ur reasons.
More on foreclosures in Marion County :
The number of foreclosres and preforelosures is to be found on other web sites. These numbers are only properties that have been a matter of "original public notice " that litigation is pending, a legal process that must be followed.
Not included are payment problems in the banking pipe line. Lenders are pushing this paper very slowly so that it won't be neccesary to raise reserves which then become losses that go directly to the bottom line.
If you follow the markets, as I do, you realize that lenders are taking huge hits and reporting big losses. Lenders did not prepare for the subprime melt down and therefore did not boost reserves nearly enough. THey really don't know what their mortages are worth because there is no market for most of the mortages they hold, or think they have.
As stated in a previous blog lenders don't know who has the actual mortage in many situations.
No matter how you look at the problem realistically here in Marion County, foreclosures and preforeclosures are currently a problem and will get much worse next year.
Clayton Ellsworth
I know that Clayton Ellsworth is not enamored with unemployment figures, but here are the ones for October:
Marion County- 4.8%
Florida- 4.3%
U.S.- 4.4%
Marion County was the same as last month and if you believe Rick Cundiff at the Star Banner and a couple of local bankers and building contractors, the local economy is stabilizing.
Gun Nutt says...
One thing we could do to improve things is to elect candidates who aren't living in the past.
Ray Strickland making a big deal about the fact that he was an eagle scout is a good example. I think I read that only one in ten scouts ever makes eagle scout. That's probably because the other nine lose interest and move on to more grown up things. The three biggies when you're that age are normally Girls, Gold and Guns. Besides, helping 100 old ladies across the street or selling a bunch of cookies in front of publix really doesn't say anything about your qualifications for elected office.
In fact, I'm starting to wonder if Strickland even likes guns at all. If not, then I can't vote for him and still have a good conscience.
What the unemployment figures do not include :
1. People who have run out of unemployment benefits
2.Unemployed independant contractors who don' qualify for benefits. Heaviest hit in our area are small subcontractors, appraisers, real estate agents, loan originators,unable to find work.
3. Illegal aliens employed by the building trades. I suspect this is the biggest group in Marion County.
As far as the economy stabilizing, as usual, the Star Banner offers no proof.
I suggest that the Star Banner hits the pavement and talks to retailers, restaurants, travel agencys booking cruises,local health care industry providers which are facing medicare cutbacks.
A hungry, heavily promoted new bank doing $20 million in loan business, a high end builder, a realtor with increased traffic [no doubt from snowbirds looking for non existant bargains ] just don't cut it for me.Chamber Of Commerce style feel good spin. Who are they kidding ?
Clayton Ellsworth
6:18 PM
You said the revenue loss (internet sales tax) to the state in 2008 will be about $2.35 billion.
Reality...$2.35 billion dollars in Floridian's pockets rather than in government pockets. I'd rather keep the savings, thank you very much.
Wasn’t Strickland in the U.S. Army Infantry, I’ll bet he can tear down and reassemble an M-16A1 rifle faster than you could drink your colt 45 beer. Maybe you got so hung up on the Boy Scouts that you forgot to read the rest of his biography, he has the expert Infantrymen’s badge and the expert marksmen’s badge.
I am sure that he can defend the Boy Scouts, one of America’s greatest institutions for educating boys and young men in the principles of becoming a good citizen.
Hey Gun Nutt,
I am not sure why you don't like the Boy Scouts, and the love of our country they teach. I was a Brownie Scout, Girl Scout, and Cadet Scout, and they taught me leadership, as well as loyalty to God and Country.
I would really like to know what YOU consider qualifications to run for elected office??
7:26 AM, I'll take any property tax decrease I can get. I need the money to pay toward the increase in my house insurance. I'm going to count on more tax reductions in 2008 from the Legislature or Tax Commission. I'll take your tax reduction if you don't want it.
A few Florida Revenue Statistics that I consider good barometers of the Florida economy :
In the month of September
1. Sales tax receipts declined 5.3%compared to September 2006. The state estimate was off 3.2 %
2. Corporate Income Tax revenue declined 21.6% compared to September 2006. The state estimate was off 11.9%
3.Doc stamp revenue declined 29.6% compared to September 2006. The state estimate was off 16.2%
The ability of the state to forecast revenue has been poor which tends to descredit their 2008estimates.
Certainly, these statistics suggest a declining economy statewide.Can Marion County be immune to this downturn ? Will the county's revenue projections be any better than the state's have been ?
Clayton Ellsworth
*Credit to my crack research team
More on Florida's economy :
The Miami Herald Tribune reports today that state economists forecast a 2.5 Billion dollar shortfall in revenues in the next 18 months.
It will be the first time since records have been kept that Florida will experience two consecutive years of declining revenue.
As I have pointed out in my previous post, Florida's economists have been wrong about forecasting the severity of revenue decline.
It is obvious, at least to me, that the Florida economy is headed in the wrong direction.
Clayton Ellsworth
* credit to my clipping service for working on Sunday to scoop the Star Banner
Clayton Ellsworth
I found some data on a Miami blog from counties to the south of Marion that present interesting comparatives. Is it possible some renters may be booted out of their apartments/homes when foreclosures and/or delinquent owner tax payments come into play?
In Miami-Dade County, 41,544 residential property owners -- one of every 16 households -- failed to pay their 2006 property-tax bills. That's an increase of 41 percent from the year before, according to an analysis of county tax data. In Broward County, the number grew 54 percent to 29,962 --about one per 21 households.
In both counties, roughly 65 percent of unpaid accounts were from investors, second-home owners, and others with no homestead exemption, the analysis showed.
Also likely fueling the increase are 17,509 properties as of September that have entered foreclosure in Miami-Dade since the beginning of the year -- compared with 9,814 for all of 2006. Most lenders will not make tax payments on loans in foreclosure, even if they've been setting the borrower's money aside.
Tax delinquencies don't hurt governments' bottom line because the debt is sold off each June to investors, who pay up the accounts in exchange for an interest-bearing lien called a tax certificate.
However, as 2007 tax bills arrive this month, the above trends are distress signals that high taxes and insurance costs, rising mortgage payments and a slumping real-estate market are taking a heavy toll on homeowners.
I didn't scoop our blogmaster on the state shortfall of revenue. I put the numbers into historical context which make them look more damning.
An update on foreclosures in Marion County : foreclosures .COM claimed their are 42 foreclosures in Marion County. Marion County Clerk of Courts lists 96 in the next 30 days. This fact helps support my claim of inaccuracy on the part of foreclosure.COM.
Who cares about foreclosures, you may ask ? You will when they show up in your neighborhood and negatively effect the value of your home.
Clayton Ellsworth
Gun nutt says...
To anonymous 9:11, thanks for pointing out Strickland's military service. I missed that the first time I visited his websit. It also eases my mind knowing that he shares my love of guns and the right to self defense which they help insure. That makes me much more likely to support him. I guess I fired those earlier comments before I clearly saw my target. A big mistake in shooting. Thanks again. That changes improves my opinion of Strickland greatly.
To Girlscout1, I don't have any dislike for the boyscouts or the girlscouts. In fact, I really like their stance against gays.
I think the most important qualification for elected office is a strong belief in the Constitution. Too many politicians now think that curing whatever ailes us is the job of the government. Most important qualification though is that he has to like guns.
I know the boyscouts and girlscouts do a lot of "good deeds" and perform a lot of "public service" and even engage in a lot of "charity." I only hope that the former scout will not use government resources to do good deeds, public service, and charity. Those are all fine things to do just not with the public treasury.
Should Governor Crist take a page from the book of Georgia Governor Perdue and convene a prayer group at the State Capitol? Perdue prayed for rain to help with the Georgia drought situation and got one day of rain. Maybe Crist could pray for help with Florida’s budget situation. Looks like prayer might be the only answer. We don’t seem to be getting any solutions from those who are supposed to be solving the problems.
The path to Florida's economic recovery is going to be a long and painfull journey.
As the national economy continues to weaken, so will Florida's economy.
My view is that the national economy is in much worse shape than the administration is admitting, in spite of Treasury Secretary Paulsons remark Friday, that the "economy is strong", an obvious jaw boning statement made to stimulate the stock market.
A national ecoonomic recovery is going to be hampered by a burst in the bubble of credit card debt, which unsecured, has been packaged, sliced and sold just like housing mortages.
The financial sector will take another huge jolt which will add to the solvency and profitability problems of the banks as well as giving consumer spending a knock out punch.
Without consumer spending, what is there to revive the economy ?
The answer is Government spending on national infrastructure with it's accompanying trickle down effect.
But where will the money come from ?
It has been suggested by the Florida Housing industry as well as national housing economists that Florida's housing industry will be rescued by Baby Boomers and Europeans who are going to flock to Florida and gobble up the bargains from the excessive inventory of houses.[ currently 6738 multiple listings in Marion County ].
Whoa, not so fast . Baby boomers are partialy a statistical mirage who will suffer with everybody else in a continued economic down turn. Europeans love bargain bargains, the likes of which we have not seen yet.
Florida housing growth will have to overcome high taxes, high insurance rates and the lack of mobility of familys because of fuel costs and the inability to sell their homes. Choices will have to made. Can I handle one or two houses, and if only one, where will it be ?
Florida has been notibly poor in attracting foreign industry. Other southern states have seen big investments by Mercedes, BMW, Nisson, Hyandi, to name a few.
Florida needs to be able to offer jobs in other sectors than health care, service, agriculture,and building
There will be no badly needed industrial developement in Florida until the economy turns up for a sustained period of time.
The benefit here is that Florida can plan.
It is interesting to note that this is what Ohio did under Governor Rhodes who secured Honda in the 1980's.
In a weakened Florida economy the climate for industrial developement will improve dramatically because of it's neccesity, which has been clouded by developement in the last 15 years.
Tourism is bound to suffer from the effect of higher enery costs, and possiblely gas rationing.
Florida is at a cross roads.Solutions will be clouded by a lot of political rhetoric and heavy lobbying dollars.
We will just have to wait and see what emerges after the dust settles. In the meantime,we can only hope, even pray that our state leadership is up to the task.
Clayton Ellsworth
THE SOLUTION IS A NO BRAINER--REDUCE MY TAXES AND CUT STATE AND COUNTY GOVERNMENT SPENDING.
I thought when the democrats took over the power in congress, everything was going to get better. What the hell has happened?
Because of Charlie Crist's opposition, plans for four coal fired electric power plants in Florida have been shelved. A fifth state of the art plant, ready to go forward, has been denied by the Crist administration.
This is bad news for florida growth of any kind.Grids are overloaded already at times.
In a previous post I mentioned industrial growth in the southern states and the lack thereof of this growth in Florida.
It is impossible to have industrial growth with out adequate electricity.
Florida,with Republican Governors, has not been able to capitalize on record Republican defense spending . Florida is getting crumbs compared to Alabama.
Imagine, having defense contractors like Boing, Saic, Teledyn Brown, Northrup Grumman, Deynetics, Jacobs, Colsa,Lockheed Martin, Raytheon,PPG Industries, with thousands of employees located in Florida. Huntsville, Alabama has all of these contractors.
Does anyone really think that defense spending is going away ?
But, what about Florida's carbon foot print ? There are going to have to be trade offs for Florida's economy to thrive, for Florida to find new revenue resources that will inevitably lower property taxes and take the pressure off of the need to seek revenue at the local levels, by nickle and dimeing us to death.
In a previous post, I suggested we might pray for our state leadership to rise to the occassion. Indeed, they are off to a terrible start.
Clayton Ellsworth
Saw an article that said Charlie Crist is acting like he is King of Florida instead of Governor. Believe that should have been acting like the Queen instead of King!
Clayton,
Saw an item that our State's CFO says the State treasury is not in any trouble from the sub-prime mortage crisis.
"The sub-prime loan industry collapse poses only a minimal risk to the state's $24 billion treasury, according to CFO Alex Sink.
She asked for a review two weeks ago of all state investments, including the $139 billion state pension fund.
However, the $50 billion fund that the state manages for local governments has declined $2.2 billion in value as a result of downgrading in some mortgage-backed securities.
The state is negotiating with investors and won't pull out while the investment, which is backed by collateral, has time to recover.
Less than 1 percent, or about $173 million of the state treasury, is in sub-prime loan-related investments, and they are considered sound and have performed well.
According to Sink, the securities held are not expected to default, as most of the sub-prime holdings maintained by the state treasury are seasoned holdings that have been performing for years.
The investments are backed by collateral and the state is a senior note holder, which gives further protection from potential losses."
Should we feel that everything is just fine?
Anom :
You ask a very good question "is everything OK ?"
There is nothing alarming in what you included in quotes from State CFO Alex Sink.
When times have been good to state assets, managers of this vast treasure look like geniuses, when in fact, their performance, in part, is a product of the economy.
I am concerned about all stocks that the state owns. Have managers been lured into the europhia of a market that seems to have no risks ? Have managers been sheep following trends of others [ they usually are ]? When the "others" head for the doors, will Florida get caught in the squeeze ?
Alex Sink's review is timely. Every investment, line by line should be questioned as to the actual value now,it's liquidity, as well as how will this asset fare in a downturn. Certainly this a tedious but a neccessary task.
Years ago, we first heard of the word derivitives. These instruments weren't nearly as complex or numerous as they are now.
Yet, there were huge losses in state portfolios.
My favorite example of derivitive loss was West Virginia where the State Treasure lacked sophistication. State assets, strangly, included derivitives which tanked for West Virginia as well as other states.
The State Treasure was indicted for receiving kick backs on a trip to New York City resulting in derivitive purchases. When tried, he was acquited, the defense arguing he was not smart enough to do what he was accused of doing.
Today states use hedging to "minimize risk". The problem is that hedging can be risky.
Also very risky is programed electronic trading, which is causing the volitility in the markets right now.
States should be avoiding any risk. A high amount of liquidity is prudent to deal with a severe downturn in the economy, which is certain to come sooner or later, sooner in my view.
Poor money management has been evident in several states lately , causing big problems for those states.
Florida needs to make certain that they are learning from the failures of other states. We are in for a rough ride.
Clayton Ellsworth
A guy wearing a tee shirt at Home Depot today pretty well sums up the state and local political situation:
"If idiots grew on trees this place would be an orchard."
Happy Thanksgiving--I'm going to Las Vegas.
Why are people concerned about their tax bills and government spending? Here is a section from an article we received from one of our regular bloggers that helps answer the question:
The nation's homeowners have been spending more than they have been earning for the past two years. The last time this happened was at the bottom of the Great Depression.
This alone is why consumers are reducing their outlays on all kinds of goods and services -- luxuries and necessities alike. Indeed, you know there's a problem out there when Starbucks reports a decline in traffic in response to -- among other reasons -- a 9 cent hike in the price of a cup of coffee.
Retail sales at 4% over last year during Christmas shopping season. That will be a good measure of our economy.
If the shopping area parking lots are correct, this is going to be bang up sales.
Retail sales 4% over last year---very doubtful. Parking lots full, of course they are on "black friday". This doesn't mean people are spending as much.
Tonight's newscasts will headline shopping storys like they always do the dayafter Thanksgiving. One shopper will say they are spending less, another will say more,
another will be spending the same, and so on.
The jury is out until the first week in January.
Clayton Ellsworth
More bad news on the real estate front.
During the third quarter of 2007, 621 existing single-family homes were sold in Marion County. That's 53 percent fewer than the number sold during the third quarter of 2006, the Florida Association of Realtors reported this week.
That was the largest percentage decrease of any metropolitan statistical area (MSA) in the state, the association said.
Statewide, the number of sales dipped 29 percent.
The median sales price of the homes sold in Marion County was $161,000, down 6 percent from the median in the third quarter of 2006.
No surprises about Marion County housing numbers.
As of today, there are 6750 houses listed on MLS in Marion County [source Weichert Reality ]. Divide this number into the total of dwellings, [128,630,]that Brian Creekbaum has provided us with and you will find that 19.05 % of those dwellings are listed for sale. Add to that, the number of unlisted homes for sale, [an unknown but substantial number]and you can't help but see the staggering depression in housing in Marion County.
The median price decline of 9% as well as the high inventory number tells me that selling prices aren't realistic. This also indicates a reluctance to lower the price because of lack of equity in houses. With a 6% decline, more people are upside down than last quarter.
No good news ahead.
Clayton Ellsworth
Perhaps the total number of 2007 tax roll properties in the three property classes I mentioned above (128,630) is a decent estimate of the number of single family dwellings in Marion County. I don’t know. I would have to research that more.
Assuming that this is a usable estimate, though, I don’t see where the 19.05 percent figure is coming from, which would have about one in five of these dwellings on the multiple listing service.
I can’t vouch for the 6,750 figure as representative of the number of single family dwellings on the market in Marion County, but 6,750 divided by 128,630 is 5.2 percent, less than one third of the 19.05 percent figure. It corresponds to more like 1 in 19 dwellings.
It looks like Mr. Ellsworth is bound and determined to make our local real estate market look worse than it actually is.
Brian and Ocala Realtor :
The topic is about the state and local economy not nitpicking Ellsworth.
Brian , I assumed your numbers were correct, they usually are . You are correct. Is 1 in 19 good for the economy ? Is the fact that there are at least 6760 unsold listed houses , and growing, 12 since the 16th of November, a good sign for our economy ? Remember Brian that is the topic. You usually are first to critize when bloggers are off topic.
Ocala realtor, I don't have to make the Marion County Real Estate Market look bad. It is bad, real bad or do you think it isn't and that there won't be any harm to the local economy ? That is the topic !!
Let's stay on topic, OK, nitpicking is for small minds.
Clayton Ellsworth
It’s unfortunate that Clayton chooses to respond to straightforward correction of his calculation with insult. The fact that he considers correction of figures off by a factor of more than three to be nitpicking tells me a lot about how these incorrect figures got on the blog in the first place and will guide me in deciding how much credibility to attach to data he presents in the future.
Anyone interested in this topic may want to look at the article “Rising Rates to Worsen Subprime Mess” in today’s Wall Street Journal, which I trust to take reasonable measures to ensure the accuracy of their data.
Brian I guess you can't stay on topic. I insulted nobody.
Your not staying on topic is insulting to those who read this blog looking for information on the different topics
Iam sure you have checked all the other statistics I have provided and found nothing wrong because there is nothing wrong with them.
As for the two errors with the calculator, one was my wife's and one was mine . We are not perfect people Brian, as you present yourself to be. You are smart, yes, but perfect, no.
Several hours went into research for this topic plus borrowing from my experience in industrial developement in Ohio, and years of following markets and their relationship to economys.
I have been on the money, as far as area housing has been [please refer to previous posts ]
I have found in my 68 years, that condescension is related to one's insucurity.
Brian, let's get on topic, I am interested on your views of the local and state economy.
Thank you.
Clayton Ellsworth
Once again, Clayton provides a post on this thread laced with insult. I had no idea when I simply pointed out his calculation error that Clayton would lash out in this way. First, he responded with a post about small mindedness. Now he’s posting about insecurity and condescension. I hope he can cease these personal insults at some point and move on from the apparently traumatic process of confronting a problem in the data he posted.
The Star-Banner has an AP wire story today on Page D1 similar to the Journal article from yesterday. It’s titled “Wave of mortgage failures could create a nightmare scenario.” One of the people quoted in the article as concerned about this scenario is Bill Gross, Chief Investment Officer of PIMCO and the most highly regarded bond manager in the United States. Stan could tell us for sure, but, when I last checked, PIMCO was running money for the City of Ocala’s general pension fund. The article is also on the Banner’s website at http://www.ocala.com/article/20071125/BUSINESS/211250341/.
Brian's, post on the AP story in the SB and yesterdays Wallstreet Journal are all OLD NEWS. I have reported much of this in my posts.
Concerning the Wall street Journal. They, as many other media have been way behind the curve on this subject. The views of Federal Reserve Chairman and Secretary of Paulson were what the Market is reporting and they have both been caught short on housing, subprime, foreclosures etc. But, then , the market has wanted to hear good news to inflate it's bubble.
Add Jack Bogel, founder of Vanguard funds and indexing to Bill Gross of Pimco as concerned about the economy. Bogel sees a 70 % chance of a recession. Both of these guys know markets and economics and I have always thought were on target.
As far as the politics of this are concerned, the administration is just trying to get to election day without a collapse.
On a post awhile back, I said that I felt the economy, not the war in Iraq, would be the major issue at election time next November. Right now that is starting to look like a good call.
As far as our local situation is concerned, I have suggested contingency financial planning.
A thorough review of investment quality must be made. The CFO's of Ocala and the county have been reluctant, to say the least, in adapting stringent financial accountibility like ZBB. Will they be any more aggressive in looking at the assets they control ? If mistakes have been made, [I don't know that they have,] will they own up to them ? Human nature is involved, it't won't be easy.
Unfortunately, the issues of Florida's economy and our local economy have not met much interest on this blog. That's human nature. . Most people want to keep dancing, let the good times roll on and live in denial of the fact that all economic bubbles burst sooner or later
For the pragmatic and intellectualy curious I suggest reading America's Bubble Economy published last year by Wiley publishing. Authors are David Wiedemer, Robert Wiedemer, Cindy Spitzer and Eric Janzen. They are right on the money.
Being a contrarian, doom and gloomer to some is not very popular.You are only rewarded as you see your views unfold, and then you feel some vindication as I have on my views on housing and debt is concerned.
There are going to be alot of long faces and angry people when the reality sets in.
To quote Paul Farrell, weekly columnist for Market Watch [ Dow Jones ] "recession now or depression later "
To be fore warned is to be for armed. I hope our local governments take heed and I hope that I have been of help to at least a few who read this blog.
Clayton Ellsworth
Brian,
Ref. your question on the City pension plan. The Ocala City general employee pension plan dropped PIMCO about two years ago and moved to Delaware Investments.
Finding a bond fund manager who could meet the plan’s investment return objectives has not been easy. As a matter of fact, the plan is moving to a core plus plan managed by Pyramis Global Advisors.
FYI: The general employee plan just finished the year with a return of 16.1%; and an average annual return of 12.9% over the past five years. The annual rate of return objective is 8.5%. The plan assets are approaching $80 million; a huge increase in plan assets from when the pension board was created about seven years ago.
I hope you guys have considered how much these manager switches are costing, Stan.
As I’m sure Clayton knows, Jack Bogle made his reputation as a visionary mutual fund industry executive who serves as the conscience of the industry, not as an investment manager or economic forecaster, but he is certainly in a position to have an opinion more informed than most. As far as I’m concerned, there is no one with more integrity in any industry than Bogle. Vanguard, the mutual fund complex he built, continues beyond his tenure as CEO unsurpassed in its ethical commitment to its clients.
Brian said: "I hope you guys have considered how much these manager switches are costing, Stan."
Yes we did. And it was a necessary, but not that expensive a decision, under the circumstances.
Nationwide, property foreclosures are up 94% since last October. Clayton Elsworth may have been way ahead of the curve with his predictions several months ago.
The morning AP story in the SB says that only 188 existing homes were sold in October here in Marion County. This, according to the AP represents a 54% drop from October 2006.
The current multiple listed number of properties is 6737.[source Weichert Realty / Ocala, Marion County Association of Realtors ]
This represents almost a 3 year inventory at the current rate of sales. 6737 divided by 188 = 35.83 months].
Back in 2005 when I heard that big national names like Pulte, Horton, were going to do big developements in Marion County, I could not believe it.
Not that I did not have a lot of respect for Pulte, it was the best performing housing stock I owned in the 80's, helping to send my children to college. I just could not understand their rational.
There was just too many signs of market froth around.
I did my own in house reality check with my wife, a retired contracter, who also was one of the first sales reps at OTOW .
Absolutely nothing justified this type of housing expansion. This was a bubble as far as we were concerned
We acted immediately by warning a friend from Sarasota, who was making a "killing" by flipping houses in south western Florida, as well as having purchased land in Marion County.He partially listened and made a profit by getting out then. Today he is very sorry he did not sell everything.
Lending standards were crazy to two fiscally conservative people from the post depression era as I am certain it was to others.
For us, a real estate crash , credit crunch, and resulting foreclosures in Marion County was a "no brainer ".
We heard that this was a new and different market in Marion county and that past indicators and market disciplin had changed. This was the same tortured logic I had heard before the tech bubble burst.
To my sceptics, including a realtor who said I was nuts on this blog, I say even Joe Granville was right one time.
Now I will take aim at all the commercial developement on 200 which in my opinion is over developing .
The signs of froth are there. Vacant new store fronts across from Timber Ridge, a new hamburger franchise [ wow, what a concept]in the same strip.
Lowes, Publix and the huge strip with big anchors,are all built too close to existing stores and mall. They are adding very costly overhead to the same piece of pie they are eating right now.
Here again, the big names will be wrong.These projections were made on flawed market research. Not the first time for Lowes and Macy's [Burdines ].
Let the good times roll on for ever and ever.
Clayton Ellsworth
The inventory of existing houses in Marion County is 4 times the national average of 8.5 months.
Obviously the prices of the homes in our inventory is too high. The problem of reducing housing inventory is that it is done a listing at a time. You can't have a christmas sale and mark down everything.
The sellers blame the realtor, the realtor blames the sellers. I sense that that both sellers and realtors are in a state of denial. Otherwise you would have a larger number of houses sold and a bigger decline in prices in Marion County.
Until sellers become aware of the lousy market they are in, which will take education from the realtors, Marion County will continue to take a big hit in the housing market.
As is the case in any declining market, take your losses now or face larger losses in the future.
Clayton Ellsworth
Post a Comment
<< Home