STEVE INSKEEP, host:
This next interview is not what real estate sellers want to hear. It's a description of the real estate market around Miami. That's one of many areas where housing prices have dropped, and it's a place where John Paul Rosser has been selling property for decades. He's a real estate broker.
And this morning, he joins our conversations on the housing crisis. Rosser's company makes a big part of its income by selling plots of land to condo developers, yet even he does not understand why some builders are still building in the Miami market.
Mr. JOHN PAUL ROSSER (President, John Paul Rosser & Associate, Inc.): Well, it's saturated. At one point, I counted 75 cranes in the sky. After that, I lost count before I could finish. And now, some of the cranes are coming down, but almost for every one that comes down, there's a new start out of the ground, which is…
INSKEEP: You're talking about these giant construction cranes that you can see from blocks and blocks or even miles away.
Mr. ROSSER: Yes. The new state bird.
(Soundbite of laughter)
INSKEEP: And every single time the new state bird is up, that could mean another condo building going up, right?
Mr. ROSSER: Condos, there's offices, there's apartments, and they're all saturated. There were buyers for a thousand, and now there's only buyers for less than 400 per year.
INSKEEP: Can you just give me an idea how many contracts you had working a year or two back, and how many you've got working now?
Mr. ROSSER: We had probably $40 million worth of commercial deals - buying land for developers, industrial warehouses, offices. That was a year ago, March. And within a month, almost all of them went away. We'd never had anyone in our company walk away from a deposit before, and people walked away from probably close to $150,000 in deposits.
INSKEEP: What happened?
Mr. ROSSER: Well, I think someone at the federal level just quit lending new money. Everybody knows they've been printing money and lending money much more than they should be, and they still are. They still are lending. Some of these buildings are just coming out of the ground now.
And who would make that loan? And I've been reading in the paper, I think I tracked over 450 million in loans for three different buildings, and who would make a loan like that in this market? The sleeper there is some of these buildings may go back to the banks en masse, you know? We've talked about defaults on single-family homes and condominiums individually. But when a bank gets back a 350 million or 400 million building at a pop, you know, it doesn't take but two or three of those, and their numbers really get askew.
INSKEEP: Sounds like your business is hurting along with everybody else's here.
Mr. ROSSER: Well, we're a small boutique company, so we've only had as many as six or seven people with us, but there's only two left. I live on a little island here off the coast, Key Biscayne, which is a rather affluent area. And the sales have slowed so much that in July and August, there were no signed contracts on Key Biscayne.
INSKEEP: So have prices fallen at all, or is it just that deals are not being made in any fashion?
Mr. ROSSER: Yeah. I would say the single-family homes like mine - the small ones - they were as high as 1.45 million two years ago. Last year, I was looking, and the highest sale on a single-family home was 1,250,000. And this year, we've had a couple of sales at 1,080,000. Now, to keep that in perspective, you've got to realize that just five years ago, there were only 750,000. So there was a spike in the price, and now I think we're going to go back to that trend line. It's probably somewhere around 750 or 800. And I anticipate I'm going down to that level again before leveling off.
INSKEEP: Which means that you do not think the downturn is over.
Mr. ROSSER: Oh, no. We've just begun. Conservative people like me that haven't gone out and leveraged ourselves to the hilt, well, I can bleed for two or three or four or five years, but you carry this on beyond five years, and everybody's going to be hurt someway.
INSKEEP: Who are you showing real estate to today, by the way?
Mr. ROSSER: A little old lady who has three houses, and she called the other day and wanted me to list them. Now, a year ago, I brought her a two-and-a-half-million-dollar offer because it zoned high rise and somebody wanted to build on it. And she insisted on three million dollars, and I wrote her a nice letter and said, you know, this is really one of those opportunities that comes by once in a lifetime. You should take this. And she wouldn't sell it, you know, she's 86-some years old.
Now, today - in today's market, I don't think that 20,000 square foot of land with three houses on it is worth half of what it was before. But the market has changed decidedly, and the opportunity's are gone.
INSKEEP: Well, John Paul Rosser of John Paul Rosser & Associates, thanks very much.
Mr. ROSSER: Thank you. You're very kind.
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