CBS4 News Takes Center Stage
Nov 5, 2009 12:12 am US/Eastern
Two Different Views Of The Foreclosure Crisis
Read More In David Sutta's Blog
MIAMI (CBS4) ―
Spend a day on South Florida's beaches and you would have a hard time understanding why, for the first time in Florida's history, more people are leaving then moving here.
But on main street the evidence is clear, this housing crisis has cleared out fortunes, including people's retirement.
CBS4 News wondered though if this is as bad as it's going to get, and found it depends on who you ask.
"History always seems to repeat itself." said Michael Cannon, of Integra Realty Resources. Cannon, has more than 40 years in South Florida real estate consulting. He also has more history in his cabinet than some museums in this town.
The decades of Miami Herald Sunday editions dating back to the 1950's show how far we have come. There are ads for your own bomb shelters. Real estate ads advertising $13,990 for new homes in Hollywood Hills. A mortgage for a four bedroom home in Miami went for $63 dollars a month.
"You have to go back into history, because it sets the foundation for what you are seeing today," said Cannon.
Scattered among the ads are headlines that look familiar. Dim housing outlooks from the 50's. People stuck renting in the 80's. As Cannon pointed to the articles he said, "We are seeing the same characteristics today that we saw during the 80's, during the periods of the 70's, during the 60's as well. History is repeating itself. It's just that it's bigger this time. This is the great recession."
Cannon is positive though about where we are headed. In fact, based on history and the numbers he's crunching today, he said, "On an overall basis, I believe we have hit the bottom."
The bottom, according to Michael, is prices around 2004, in some markets 2000. But before you celebrate the end there are other opinions.
Jack Mccabe, of Mccabe Research, said "Unfortunately we are not at the bottom everybody has been seeking."
Mccabe, who is an analyst, called this great housing crisis years before it happened. Now he's looking at the data calling for a 5% drop in single family home prices next year. For condos it's far worse.
"With no job growth, with a declining population, and a huge wave of foreclosures to start in 2010, we are going to see condominium prices drop a good 15-20 percent next year." said McCabe.
Mccabe believes of new wave of submarket loans resetting is going to fuel another foreclosure frenzy. This would be in additional to a stockpile of homes banks are holding to keep from flooding the marketplace.
"You can only keep the grim reaper away for so long. Once he's at your door you are not going to keep pushing him away. You can't pretend and extend forever and that's what a number of banks are doing right now," McCabe said.
Cannon responded, "The percentage of foreclosures probably represents about 6% of total inventory. That mean 94% is unaffected by it. But we are scared to death."
So are we at the bottom?
It depends who you ask.
"We are there. I believe we are there." said Cannon.
"I would say he's a little eager optimistic," Mccabe responded.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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