Foreclosures hit Celebration

[abw]

From Bloomberg:

Celebration’s foreclosure rate is about double the state’s pace as homeowners who paid a premium for a vision of utopia fall behind on their mortgages. Earlier this month, a resident on the verge of losing his house shot himself after a 14-hour standoff with police. Three days before that, the town had its first murder when a man was bludgeoned with an ax.

 

[CanadianGuy]

The man bludgeoned with an ax wasn't related to foreclosure.. just in case anyone is wondering.

 

[Oglet]

What is going to be interesting is to see how these things change the value of property in Celebration.

As was mentioned people are paying a premium to live in Celebration because it is Celebration and has been immune from many of the problems that normal towns have, now that it has started to show signs of becoming more like any other normal American town how will this impact things.

Obviously there still isn't a major crime problem there however the pure image that has attracted people and in many ways was responsible for these premiums has been tarnished.

 

[Big]

House prices in Celebration are semi reasonable now. It's still the HOA and property taxes that demolish you though. Like 7000+ per year on an 80,000 condo.

Insane.

 

[Jason71]

Just based on my own observations, I would say Reunion, another development in Osceola County, is even worse off than Celebration when it comes to foreclosures. But Reunion doesn't have the name recognition that Celebration does. All comes down to this: developers overbuilt vacation homes while Disney was overbuilding hotel/DVC rooms. Now there's too much supply going after too little demand, and Disney has a huge edge when it comes to marketing.

 

[CandyMandy]

Reunion, another development in Osceola County, is even worse off than Celebration when it comes to foreclosures. But Reunion doesn't have the name recognition that Celebration does. All comes down to this: developers overbuilt vacation homes while Disney was overbuilding hotel/DVC rooms. Now there's too much supply going after too little demand, and Disney has a huge edge when it comes to marketing.

Not sure that is the best comparison, since Celebration was marketed as a permanent residential community, not a seasonal vacation residency.

The real issue behind the foreclosures in Celebration is the fact it attracted a surplus of "over-extended asprationalists" - middle income buyers who stretched their resources too far in pursuit of (as the quote at the front of this thread properly labeled it) a supposed “utopia.”

Frankly, the same sort of story (driven by the same sort of aspirations) appears quite frequently over on the wedding board….

 

[Michael623]

House prices in Celebration are semi reasonable now. It's still the HOA and property taxes that demolish you though. Like 7000+ per year on an 80,000 condo.

Insane.

You hit the nail on the head with this. What exactly are you getting for that $900+ per month HOA fee? Is it just the name Celebration? I happen to think Windermere is just as nice and the HOA fees for a very similar townhome are typically around $300.

 

[WDWisTheBest]

Just based on my own observations, I would say Reunion, another development in Osceola County, is even worse off than Celebration when it comes to foreclosures. But Reunion doesn't have the name recognition that Celebration does. All comes down to this: developers overbuilt vacation homes while Disney was overbuilding hotel/DVC rooms. Now there's too much supply going after too little demand, and Disney has a huge edge when it comes to marketing.

This analysis is right on the money.

 

[Peter Pirate 2]

I own in Celebration and realize I'll never recoup what I've lost (but that's the way it goes). Celebration is a beautiful place with a really great infrastructure. I disagree that Windemere rivals Celebration in feel (JMO). I think Celebration has that independent feel despite the fact that it's part of Kissimmee and only blocks from the real world (which sadly intruded on our little fairy tale).

I can't believe the market is so bad that these current prices for homes and condo's aren't being gobbled up by the next gen investor. We're still at WDW's back door. Downtown has some great restaurants, it's extremely family friendly and it's very pleasing to the eye. I cannot imagination it failing.

These are just my thoughts but I'd still love to live there full time and certainly would if I were just starting family life (rather than just finishing).

 

[KYMickey]

You hit the nail on the head with this. What exactly are you getting for that $900+ per month HOA fee? Is it just the name Celebration? I happen to think Windermere is just as nice and the HOA fees for a very similar townhome are typically around $300.

..I can't believe the market is so bad that these current prices for homes and condo's aren't being gobbled up by the next gen investor. We're still at WDW's back door. Downtown has some great restaurants, it's extremely family friendly and it's very pleasing to the eye. I cannot imagination it failing.

These are just my thoughts but I'd still love to live there full time and certainly would if I were just starting family life (rather than just finishing).

I think the first quote above answers the second one. With that kind of HOA fees you would certainly expect everything to be perfect and done for you! Then when you add in the taxes you were already at the normal monthly payment for most middle class homeowners who aren't overextending themselves! Like many things the benefits don't match the cost.

 

[Oglet]

with HOA association fees and tax thrown in do you ever really own something?

 

[TheRustyScupper]

1) Originally people bought in because of the Disney tie-in.
2) They paid dearly in prices and HOA fees and taxes.
3) Then, Disney found they could not legislate morality or conformity.
4) Then over one night, people saw "Disney" removed from the water tower.
5) Disney has sold the downtown and trying to sell other parts.
6) With this and the economy, the house prices have nose-dived.
7) The HOA fees have remained high.
8) Now, residents can never recover their loses.
9) The prices and high HOA still keeps residents and investors away.
10) Disney also installed their own long term leases for office buildings.
. . . DVC member services
. . . lots of WDW executive offices
. . . many WDW support divisions
11) So, WDW's low rent can't be increased to help the town financially.


NOTE: With all this said, Celebration is still a lovely neighborhood in which to live. VERY expensive, but pleasant. But, with the exit of Disney ownership and sponsorship, the cache is diminished.

 

[Big]

with HOA association fees and tax thrown in do you ever really own something?

That's the thing. I would guess that quite a bit of people would LOVE to live in Celebration. It really is an outstanding place even sans the Disney tie ins anymore.

Speaking as a middle-classer we've been looking at some properties there for a couple years, and while we could afford the house payment, we can't afford the house payment + the extra 700 a month for fees.

I will admit though that the fees are probably a good thing in a sense to maintain the higher quality of living, since it's going to keep out the riff raff and only really attract the upper class that have money to spare on vacation homes and could care less about fees. And I'd guess that the majority of people who own in there also could care less about current property value since for them, it just represents a weekend getaway instead of a real permanent residence that they don't plan on selling or turning a profit from.

 

[Peter Pirate 2]

That's the thing. I would guess that quite a bit of people would LOVE to live in Celebration. It really is an outstanding place even sans the Disney tie ins anymore.

Speaking as a middle-classer we've been looking at some properties there for a couple years, and while we could afford the house payment, we can't afford the house payment + the extra 700 a month for fees.

I will admit though that the fees are probably a good thing in a sense to maintain the higher quality of living, since it's going to keep out the riff raff and only really attract the upper class that have money to spare on vacation homes and could care less about fees. And I'd guess that the majority of people who own in there also could care less about current property value since for them, it just represents a weekend getaway instead of a real permanent residence that they don't plan on selling or turning a profit from.

Good post.

I too lament the high HOA fees but the maintenance and amenities around celebration are outstanding and that couldn't be accomplished in any other way.

That said, I do believe the CROA will have to look into reducing fees, even if just slightly to become more attractive to prospective buyers.

Once again I can't stress enough how I would have loved to have lived andraised my family in Celebration had it been possible.

 

[CandyMandy]

I can't believe the market is so bad that these current prices for homes and condo's aren't being gobbled up by the next gen investor.

The problem is there aren't enough so-called "next gen investors" to go around:

"According to the U.S. Census Bureau, there are 6.3 million vacant homes on the market for sale or rent. David Crowe, chief economist at the National Association of Home Builders, said that the "more normal" level should be around 4 million."

Translation: housing supply far, far, far outstrips demand.

http://news.yahoo.com/s/nm/20101216/bs_nm/us_usa_economy_special

 

[ShellyLynn3630]

1) Originally people bought in because of the Disney tie-in.
2) They paid dearly in prices and HOA fees and taxes.
3) Then, Disney found they could not legislate morality or conformity.
4) Then over one night, people saw "Disney" removed from the water tower.
5) Disney has sold the downtown and trying to sell other parts.
6) With this and the economy, the house prices have nose-dived.
7) The HOA fees have remained high.
8) Now, residents can never recover their loses.
9) The prices and high HOA still keeps residents and investors away.
10) Disney also installed their own long term leases for office buildings.
. . . DVC member services
. . . lots of WDW executive offices
. . . many WDW support divisions
11) So, WDW's low rent can't be increased to help the town financially.


NOTE: With all this said, Celebration is still a lovely neighborhood in which to live. VERY expensive, but pleasant. But, with the exit of Disney ownership and sponsorship, the cache is diminished.

What do you mean Disney could'nt legislate morality? Can you explain?

 

[Peter Pirate 2]

The problem is there aren't enough so-called "next gen investors" to go around:

"According to the U.S. Census Bureau, there are 6.3 million vacant homes on the market for sale or rent. David Crowe, chief economist at the National Association of Home Builders, said that the "more normal" level should be around 4 million."

Translation: housing supply far, far, far outstrips demand.

http://news.yahoo.com/s/nm/20101216/bs_nm/us_usa_economy_special

I understand but shouldn't 'desirable" spots bounce back first? I mean where I live Key West and Key Colony Beach are certainly rebounding at a much higher rate than the rest of the Keys ... For a reason.

Celebration was a victim of the fast buck fanatics that helped to bring the housing market to its knees but it doesn't change the basic tenants that Celebration itself was built on. If I didn't already own here I would certainly buy (at a higher level) than I did, now. I know my investment will be a loser for years to come, but I love it there and we have no plans to sell anyway.

 

[JimB.]

Like Peter, I am also an owner in Celebration. Fortunately for me (& bad for someone else) I bought my Condo after the market tanked, not before.

I can't really comment on whether property there ow is actually selling for more/less/or just about what it's worth.

I paid, in 2009, literally 1/2 of what my condo sold for in 2006. I consider it a steal. My DW & I had always considered Celebration, but always felt it out of our reach. It was just a matter of luck meeting opportunity for us to get our property there. It's not utopia & has the same issues of many other communities with regard to the RE market, but we still love it and come as often as we can (we live out of town).

It is our "retirement" home purchased way in advance. There ARE a lot of extra fees paid here. Condo HOA fees, Celebration community HOA fees, extra property tax assessment. But I DO see constant re-investment in the community here, so I am satisfied with that.

I DO see many vacant properties. It's sad, but I also see property being purchased, so, hopefully, at some future point, those vacancies will be filled.

But it's a great place. Really. No, I MEAN it!

 

[lockedoutlogic]

I understand but shouldn't 'desirable" spots bounce back first? I mean where I live Key West and Key Colony Beach are certainly rebounding at a much higher rate than the rest of the Keys ... For a reason.

Celebration was a victim of the fast buck fanatics that helped to bring the housing market to its knees but it doesn't change the basic tenants that Celebration itself was built on. If I didn't already own here I would certainly buy (at a higher level) than I did, now. I know my investment will be a loser for years to come, but I love it there and we have no plans to sell anyway.

Celebration?

More like the state of florida, the sun belt, the pacific coast, and half of the eastern seaboard.

We all see know that the "ownership society" was an elaborate ruse to attempt to transfer wealth up the chain (i know...shocking)...and Florida was ground zero.

It's gonna take alot longer for a rebound in Florida...like perhaps 10 or more years. And that's assuming that everything else on the national and world economy holds...far from certain at this point - safe to say.

In august the average sale price in orlando fell to below 100K for the first time in 12 years...

that's bad.

The "housing boom" ballooned the perceived need for property in florida...and commercial developers went all in...

that's really bad.

now things have gotten back to normal and people have realized that nothing has changed in florida....it is generally low income, rental individuals and families, small pockets of the uber-rich, and huge developments of modest fixed income retirees...which basically don't exist now and as they die off (full swing) their descendents dump them as quickly as possible.

All these things contribute to a terrible market and will for years to come.

And it even has destroyed the rental market (complex...so i won't spell it out...but makes perfect sense from the perspective of those who have lost big in the ownership market)

Long story short: If you worked in travel or the service industry in 1995 and couldn't afford to own....why the hell would you think you could afford in 2005? When more than likely your wages didn't even rise enough to counteract inflation and cost of living?

The answer is simple, harsh, and direct:

you were dumb enough to believe a fantasy (not spectromagic) and those selling you the "product" see you only as a commission and really weren't disciplined enough to know when they passed the breaking point.

It is just the way it is. And Florida has nothing to cope with the underwater real estate on the whole...there just isn't enough "wealth" for those that went under to get above again.

Another completely depressing article i saw in the sentinel was that in september 28% of home sales were "traditional"

i.e. where the sale price covered the outstanding debt and a private seller was selling to a private buyer on a traditonal loan, cash or mortgage transaction.

almost 3/4 bank-owned, shortsales, or in serious delinquency.

that kinda harsh reality is cured by a "stimulus" or "5 quarters of positive growth"...it will take forever...may never get back to even as the vast majority of those affected would need it to to not suffer serious loss.

Just a bunch of stupid decisions and fundamental shift in what we all deep down know was right.

Greed...that's all

 

[jen_eck]

It is not that much of a surprise that foreclosures would hit Celebration. It is a very expensive town to live in, but a very pleasant town to live in.