It’s (almost) 2008 all over again. Thousands of vacant and foreclosed houses in Florida.

Photo above – Jennifer Lopez and Ice Cube gear up for a “foreclosure boat tour” of vacant homes in Florida. Not shown – Burmese pythons and gators. Screencap courtesy of “Anaconda”, 1997.

“Foreclosure boat tour”. That’s a term you don’t hear every day. It’s sort of like a “supper cruise”, except it happens in daylight, and you’re with 10 other people looking at vacant/foreclosed Florida homes from the dockside, rather than streetside. Boat tours are trending, because nobody wants to show up for open houses. (See link at bottom).

At some point do you think Florida real estate agents will figure out that people are just hopping aboard these cabin cruisers for a free boat ride, and have no intention of buying an expensive waterfront home?

I want to give Fed Chairman Powell some credit here. His “mortgage interest rates to the moon” strategy is finally bearing fruit. Actually, even though rates are 3X as high as a couple of years ago, mortgages today are in line with the long-term averages. People were addicted to artificially low rates, going back to the Bush and Obama administrations. If your mortgage interest rate didn’t begin with a “2”, you paid too much.

You can’t blame Powell for the foreclosures though. Hurricanes and rising property insurance/HOA rates, take a bow. If you can’t afford an extra $500 or $1,000 a month in hurricane/flooding insurance, you might move out and let the bank figure it out. Especially if your home is worth less than what you paid for it a couple of years ago.

All this is happening Coral Gables, which is about 300 miles east of where I live. Here in Tampa we haven’t reached 2008 crisis levels yet. The gators are still in the swamps and not defending new territories in green-scum backyard pools at vacant houses. Yet. Maybe the Burmese pythons will get contend for primacy. There are now about 100,000 of them loose in the Everglades. Or maybe 500,000. The state of Florida doesn’t actually know. Suffice it to say that Burmese Python wranglers might overpaid, because the problem is increasing exponentially.

Does my homeowner's insurance cover gators and pythons? Suppose my postman or Amazon delivery guy gets bit on my property? Wait, my policy doesn't cover that? Can I get a rider to add that coverage, and how much extra each month will THAT cost?

Some of these homes undoubtedly have federal subsidized flood insurance. Because legitimate insurance companies wouldn’t be caught dead where 3 houses have been swept away in 15 years. But the US government keeps paying out, and people keep rebuilding. With ever more lavish and expensive beachfront mansions. Some of which are now vacant and for sale. Did you know there are free refreshments if you take a foreclosure boat tour?

Good thing alligators and Burmese pythons don’t like salt water, or this could get even uglier.

I’m just sayin’ . . .

Florida housing crisis grows as streets are filled with for sale signs

This page is a permanent link to the reply below and its nested replies. See all post replies »

Avectoijesuismoi · 36-40

The boat tour thing is actually a brilliant idea it is aimed at showing the potential purchasers two things the best side of the property which in the case of water front is only really viewable from a boat, secondly it emphasizes the waterfront lifestyle which many people desire.
Next by putting multiple purchasers in the same place you create a "Fear of Loss" strategy amongst them and are likely to actually get a sale out of it. It is an old strategy used in many formats by various industries from retail, real estate etc.
You can bet that the people on the boat are going to have been vetted to see they can afford as well before they go out on the trip.
Some nice champagne and snacks relaxes the occasion and the purchasers, another well worked strategy makes them feel special.
Thirdly you have your purchasers trapped for the duration of the trip they can't just get fed up go out get in their car and leave, they are stuck on a boat unless they fancy a swim you have time to work on them.
Now all you need is some desirable properties as a real estate professional where the seller is more than willing to sell or has to sell.

SusanInFlorida · 31-35, F

@Avectoijesuismoi i'm skeptical that "boat tour vetting" involves anything more than answering like a question "do you currently own or rernt?"

they might pull a credit report to see your FICO score, I imagine.

Avectoijesuismoi · 36-40

@SusanInFlorida It depends on is it for hype of TV or of it a genuine attempt to sell houses on the waterfront?
If it is a real estate Pro they will do a through job they don't want to waste there time or money to take some people for an outing on a boat. Real estate Pro wants to know that the potential purchaser either has the funds or qualifies for the loan in fact unless you do they won't even take you to the property. In fact in some cases if you say you have the funds they want a letter from the bank or financial institution where the money is held to guarantee it is so. In very properties you have to even sign things like a NDA as well to go inside it. If it is TV people they will probably just do it for the hype of it to get ratings.
Go into "off the market" or sales with discretion and those are not even advertised and the buyers and sellers don't even know who each other are.

SusanInFlorida · 31-35, F

@Avectoijesuismoi i'm sure you're right, and that real estate agents are desperate to see million dollar canal front florida houses which are vacant because the homeowners insurance just doubled.

they need to move these things fast, before retirees/prospective buyers read the articles warning them about rising HOA and insurance costs.

Avectoijesuismoi · 36-40

@SusanInFlorida
There are two parts to affordability of a property be it the humble first small apartment or the big lavish home waterfront etc.
Reality is if you cannot afford both you actually cannot really afford the property
The real estate people and the banks will do part one as to what you can afford to borrow and payback, the bank may even offer some sort of insurance, but that usually is to cover them getting their money back rather than covering you should the property be destroyed.
The second part is up to you as an individual to figure out and that is ARC (Annual Running Costs) budget. That is where you pay the bills for it insurance, property taxes, electric, water, maintenance, upkeep, repairs etc.
It is usually calculated as a percentage of property value, but also takes into account your ability, willingness, skill level, having the tools to do things like maintenance upkeep and repairs yourself.
The calculation can start at around 5 % so million dollar home equals $ 50 000 but I would personally set the ARC at 10% of value if it is anything bigger than a one bedroom apartment to be safe.
But having said that now going to waterfront the ARC would need to be adjusted up for that alone due to increased maintenance alone.
Take it up a level to lifestyle properties on the waterfront and lifestyle properties in general. For purposes of the let's use a $ 50 million dollar property. Your ARC is going to need to be 15%.+. So $ 7.5 Million+, lifestyle properties you have to have staff to do all those things cleaning, maintenance etc because otherwise there is no point in having lifestyle home.one does not wish to clean the big house at all you would spend 24/7 365 doing nothing else. That is definitely not the idea. When friends pop around you don't want to be the one getting the coffee etc yourself either so staffing is essential.
Waterfront must have boat that matches the property in statement even if it is just to Moor it at your jetty and other water toys.

SusanInFlorida · 31-35, F

@Avectoijesuismoi the average american cannot balance their checkbook. expecting them to anticipate future risks like uninsured health expenses, job interruptions, etc makes it even worse.