June 2006 Real Estate Sales

[Smiling JOe]

see attachments

[Smiling JOe]

more data attached

[Smiling JOe]

Why so quite? Too much information? Did anyone notice that inventory in a few categories actually decreased for the first time in a long time?

[Mermaid]

Why so quite? Too much information? Did anyone notice that inventory in a few categories actually decreased for the first time in a long time?

I can speak only for myself, but I'm still trying to digest the June 2006 figures for SoWal condo sales:

Avg List Price $644,094
Avg Sale Price $580,625
% Diff Sell/List 90.15%

Any hopes we might have had of selling our condo at a decent price and upgrading to a larger one are now indefinitely delayed thanks to those figures. That's why I'm quiet!

[Beachbummett]

Smiling JOe,
Looking at single family dwelling over the last few years the inventory has more than doubled. How many NEW homes have been constructed over the last few years that would not have been on the market in 2003 or even 2004?

[Smiling JOe]

Smiling JOe,
Looking at single family dwelling over the last few years the inventory has more than doubled. How many NEW homes have been constructed over the last few years that would not have been on the market in 2003 or even 2004?

In all categories, inventory has more than doubled over the last few years. I, for one, am at least glad to see the tapering off of the net number of listings. I think this is a result of what I mentioned last month -- Realtors not taking just any listing at any price and sellers pulling some of the over-priced listings off the market, or allowing them to expire.

I see great prices on many properties in many different areas right now. If you are going to get in the market, you better not wait too long.

[Beachlover2]

I am just glad I am not having to sell right now - but do see some positive signs in the numbers - turning the corner maybe????

[Beachbummett]

We have been in the market for a long time. Luckily have not bought anything in almost three years.
Do you have any idea how many new homes have been constructed in South Walton in the last three years?

[Rlumpy]

I think you should see better results for July. Lets just hope the momentum continues. Those invested for the long term, keep reminding yourself that this is just a temporary blip that "this too shall pass".

Compared to Cal and South Florida, SoWal is still a great deal.

[shelly-moto]

soo sorry you sery amricons buy beechfron ree estate. U watch yor money froat away wist tide. shelly-moto wait for rand to git reel cheep. buy from
por amrecons.

rik takin candy frum rittle amrecon.


l

[spinDrAtl]

I can speak only for myself, but I'm still trying to digest the June 2006 figures for SoWal condo sales:

Avg List Price $644,094
Avg Sale Price $580,625
% Diff Sell/List 90.15%

Any hopes we might have had of selling our condo at a decent price and upgrading to a larger one are now indefinitely delayed thanks to those figures. That's why I'm quiet!

Buy your new place now during the low and then sell your current place later when prices rebound.

[goofer44]

Shelly- Moto
Just like you took candy from us in the early 80's with your astute purchases in NYC and Hawaii, not to mention Pebble Beach !!

[SHELLY]

Why so quite? Too much information? Did anyone notice that inventory in a few categories actually decreased for the first time in a long time?

SJ,

I didn't comment since the numbers pretty much speak for themselves.....but since you asked..........

I don't see the inventory decreases in the stats given for June (neither Y-O-Y(!) nor M-O-M).

Discusing the Y-O-Y would be frivolous, but month-over-month:

I see a decrease of "1" for Det SF Sandestin-Ok, but they sold 19, which means the inventory was increased by 18 before the sales were booked.

In Attached SF Sandestin-Ok, they sold 11 but there was no change in inventory, which means the inventory was increased by 11 before the sales were booked.

The only "real" decrease I see is in Residential Land SoWal where they sold 21 and the inventory dropped by "34", which means 13 must have been taken off the market? Still that leaves 114 months (9.5 yrs) of supply up for sale.

All this inventory and JOE and others are still carving out more subdivisions and throwing up more houses and condos as we speak.

People!!....the Emperor is walking around bare-arsed naked!

I'd really like to know what folks think is going to turn this situation around in the next year or so? That "1,000" baby boomers per day/week/month flooding into Florida isn't it.

<I've declined the blindfold...fire when ready!>

[Smiling JOe]

SJ,

I didn't comment since the numbers pretty much speak for themselves.....but since you asked..........

I don't see the inventory decreases in the stats given for June (neither Y-O-Y(!) nor M-O-M).

Discusing the Y-O-Y would be frivolous, but month-over-month:

I see a decrease of "1" for Det SF Sandestin-Ok, but they sold 19, which means the inventory was increased by 18 before the sales were booked.

In Attached SF Sandestin-Ok, they sold 11 but there was no change in inventory, which means the inventory was increased by 11 before the sales were booked.

The only "real" decrease I see is in Residential Land SoWal where they sold 21 and the inventory dropped by "34", which means 13 must have been taken off the market? Still that leaves 114 months (9.5 yrs) of supply up for sale.

All this inventory and JOE and others are still carving out more subdivisions and throwing up more houses and condos as we speak.

People!!....the Emperor is walking around bare-arsed naked!

I'd really like to know what folks think is going to turn this situation around in the next year or so? That "1,000" baby boomers per day/week/month flooding into Florida isn't it.

<I've declined the blindfold...fire when ready!>

Man you are brutal. When I noted that a few categories saw decreases in inventory, I am referring to the net. Three out of ten categories DID see net decreases in inventory and one category saw no change in the net number of inventory. Sure, inventory is still very heavy. I totally agree with that, but to say that the slight decreasing shift in inventory isn't noteworthy is just wrong. This is the first time we have seen a decrease, as slight as it may be, in the past 2.5 years.

[SHELLY]

Man you are brutal. [/b]

I like ya Joe....consider it "tough love."

(Surely when you solicited comments, you weren't expecting a rah-rah-real estate post from me? )

[shelly-moto]

Sherrey is right. U serry um uricans don't know how buy low , serul high. u pray
fur ree state market turn round. you bank count go berry up while u pray.
u buy big um urican car, when u courd own great japan car like toyota or honda.
Instead u buy gas drinking hummer. you need think like sherrey. she murst be japan worman.

[Smiling JOe]

I like ya Joe....consider it "tough love."

(Surely when you solicited comments, you weren't expecting a rah-rah-real estate post from me? )

I always enjoy reading your slant on things. The greater the number of accurate perspectives, the better information we can milk from the data. We have to stay in check.

[Paradise Sea]

People!!....the Emperor is walking around bare-arsed naked!

I'd really like to know what folks think is going to turn this situation around in the next year or so? That "1,000" baby boomers per day/week/month flooding into Florida isn't it.

Much as I hate to admit it Shelly has been right for a long time. It amazes me that developers still insist on creating new projects in this market! For me, it's reached the point of absurdity, although I am accumulating cash for buying opportunities down the road, maybe next year. I believe the worst is yet to come and we'll probably see a lot of bankrupt projects if not companies before this is over.

[monty]

Why so quite? Too much information? Did anyone notice that inventory in a few categories actually decreased for the first time in a long time?

The numbers speak for themselves . In South Walton, inventories continue to be sky high (I guess St Joe easing build out deadlines didn't have the desired impact of reducing inventory ) . They can't go much higher--it seems 1 out of every 3 or 4 properties are already on the market. This is especially true in the newer planned communities. And, sales are absolutely in the toilet. In many categories, sales in May and June, the busiest time of year, aren't any higher than November-February, the slowest time of the year. The only stuff selling is priced way below market highs. In some cases, lots are selling for 50% below prices of 18 months ago.

Why not simply admit that the market is tanking like other resort markets around the country? And contrary to some opinions on this board, this market is not priced way below California, Naples, and other high priced areas of the country. The market high prices were approaching $800 to $1000 per square foot or more for nice homes in this market and these homes are on postage stamp sized lots. Naples, Palm Beach, Hilton Head, Kiawah homes actually are built on lots that can accomodate more than the house and a pool the size of a jacuzzi. This market is ultra expensive by anyone's standards.

[SHELLY]

Much as I hate to admit it Shelly has been right for a long time.

Like they say, even a broken clock is right twice a day..

I've been watching this Real Estate run-up and the economics behind it for the last couple of years--there was no way the fundamentals could justify continuous, double-digit y-o-y appreication in SoWal real estate or real estate in any other part of the country for that matter. I observed the same thing happen with tech stocks and buyers of stock in bankrupt companies (even Beanie Babies)--the speculative frenzy fueled by the desire for a quick and substantial return on one's money was IDENTICAL in all cases.

It amazes me that developers still insist on creating new projects in this market! For me, it's reached the point of absurdity, although I am accumulating cash for buying opportunities down the road, maybe next year. I believe the worst is yet to come and we'll probably see a lot of bankrupt projects if not companies before this is over.

For homebuilders and developers it's a matter of "Build...or Die." That's why they keep doing what they're doing.

[GVM]

True, because their next paycheck comes from the next draw on their next construction project. It will come to an end, however. Not all resort markets are in the tank...the ones driven by the old fashion notion of someone purchasing a second home for their personal use are doing very well. Lakes Rabun and Burton in North Georgia and Lake Keowee in South Carolina are just a couple of examples of very steady, sure growth in value...driven by end users, not investors.

[SHELLY]

True, because their next paycheck comes from the next draw on their next construction project. It will come to an end, however. Not all resort markets are in the tank...the ones driven by the old fashion notion of someone purchasing a second home for their personal use are doing very well. Lakes Rabun and Burton in North Georgia and Lake Keowee in South Carolina are just a couple of examples of very steady, sure growth in value...driven by end users, not investors.

"Investulators" or "Equity Locusts (Those who cash out of high-priced areas and buy up a bunch of "investment" real estate in lower cost areas)" are fanning out across the nation--if they believe there is money to be made in Georgia, SC or Oklahoma they will be there driving up prices to unsustainable levels and selling to fools who believe the prices can go up indefinitely. This frenzy will continue as long as people believe real estate is a "riskless" investment. Eventually, the game will be up and the frenzy will crash in on itself, the truth will be known, and eventually real estate will go back to "normal" (appreciation just over inflation).

What we've experienced in the real estate market was an anomaly--not a "normal cycle."

[spinDrAtl]

If you are buying a property to use and enjoy, just do your homework. The same rules apply as if you were making a rent or buy decision on your primary residence. How long are you going to be in the property, how much can you afford, how realistic is rental income if you are using that to offset your expenses.

If you are buying 10 preconstruction condos, you better know what you are doing and you better not make a bad decision on an entry point.

There are areas where values are going up as mentioned in another post. I have mentioned here before about Park City, Utah. In Feb 2004, I bought a unit at a developer auction, sitting right on the ski run, next to the main gondola - that was the trough. Some of these areas are now peaking and there does seem to be some speculation in preconstruction, although not nearly as much as the emerald coast. There is building going on there, but the biggest difference is the number of units. There are no 30 story condo towers. I bought into a preconstruction project about 18 months ago - 4 stories, 2 buildings, about 80 units total. Space is severely limited. There are no mom and pop motels to tear down and replace with monstrosities. They do continue to add some new projects but in each case, the number of units is around 40.

[Paradise Sea]

I am so thankful I didn't get caught up in the frenzy of 2004 and early 2005. I did sell a High Pointe beachfront condo and a Seacrest lot in early 2005. Bought a nearby home very close to the beach in May of 2005 but that was just because it increased my enjoyment of the area. I am fortunate that the rentals from this property cover my taxes, insurance and a relatively small mortgage. However, I was VERY tempted to jump into the pre-construction boom and take on a lot of debt. I even put down several deposits. Thankfully, I got nervous and pulled out before going to hard contracts.

Unfortunately, the home I bought has probably declined in value about 35% since my purchase. Still, this has always been a long term investment and source of vacation pleasure so I think I'll do OK. While I believe the worst is yet to come I think we will go through an adjustment where beach front or close beach access properties will eventually recover and appreciate strongly. However, I believe it may be many, many years (think 10-15) before some of the properties without beachfront access appreciate to the levels we saw in 2004 and 2005. I just don't think there will be much demand for $500,000 postage stamp size lots without easy beach access (think Prominence, Aquatera and Cypress Dunes) for a long time. On the other hand, larger beachfront, beachview and beach access lots (think Paradise by the Sea and the smaller lots in Alys beach south of 30A) are scarce and should recover faster, maybe 3-5 years. Ultimately, I think we'll see a larger differential in future pricing as lots become further from the beach or beach access. For instance, if a 40 front foot beach front lot sells for $2,500,000 a 40x80 lot in Aquatera may sell for only $250,000 not $500,000. Just my $.02.

[bdc63]

For me, it's reached the point of absurdity, although I am accumulating cash for buying opportunities down the road, maybe next year. I believe the worst is yet to come and we'll probably see a lot of bankrupt projects if not companies before this is over.

What he said ... I too am accumulating cash and waiting patiently for the bottom, though I suspect that is still several years away.

My theory is that prices will eventually settle back to 2002/03 levels. It seems that since '03 the vast majority of buyers have been the speculators ... speculators buying preconstruction and selling to another speculator who has it built with granit counters in the kitchen and sells it to another speculator who decorates and furnishes it and sells it to another speculator. You have to go back 3 or 4 years to find REAL buyers (ie. non-speculators) in any quantity and market dynamics that make sense.

Speculator driven price appreciation is never sustainable ... I could bore you at this point with my personal dotcom-millionair-on-paper experience, but I'll spare you.

(thanks Smiling JOe for posting the info ... much appreciated)

[CastlesOfSand]

soo sorry you sery amricons buy beechfron ree estate. U watch yor money froat away wist tide. shelly-moto wait for rand to git reel cheep. buy from
por amrecons.

rik takin candy frum rittle amrecon.


l

..........and you think WE need to stay in the lounge!!!!!

[SHELLY]

What he said ... I too am accumulating cash and waiting patiently for the bottom, though I suspect that is still several years away.

It's going to take at least that long for an industry shake-out. First folks gotta realize that "the boom" is really over and isn't coming back (we're still not there yet). Next comes the criminal shakeout of fraud and collusion that went on behind the scenes (that's just starting to come to light). After that is the flood of owners' lawsuits due to shoddy workmanship and broken promises from developers. (I wouldn't rush out too quickly to buy these quickly assembled "bubble" houses/condos--I'd wait a good couple of years for the problems to show up).....

....but if there is a major hurricane, or the property insurance mess isn't fixed soon, or the economy experiences a recession, or worse, stagflation--then the entire timeline will be shifted further into the future.

[bdc63]

....but if there is a major hurricane, or the property insurance mess isn't fixed soon, or the economy experiences a recession, or worse, stagflation--then the entire timeline will be shifted further into the future.

Shelly, I always enjoy reading your posts. My friends always accuse me of seeing the glass half empty ... I suspect that you see it bone dry.

I am curious why you think a dissaster (natural, economic, or other) would shift the timeline out? Seems to me this would speed things up.

(SOWAL folks, you're not the only ones experiencing price depreciation ... my suburban Baltimore/DC home has lost about $75K in value over the past 6 months , and the buying frenzy that was happening last year has come to an abrupt stop. All of us "bubble" cities are in this together).

[SHELLY]

Shelly, I always enjoy reading your posts. My friends always accuse me of seeing the glass half empty ... I suspect that you see it bone dry.

I am curious why you think a dissaster (natural, economic, or other) would shift the timeline out? Seems to me this would speed things up.

I can see your point.....

The shifting of the timeline OUT that I was referring to was the time when Florida Real Estate would be an attractive purchase again.

The insurance problems and hurricane damage would give pause to folks who are looking for a "real place to live" (not investors).

For investors, hurricane-damaged housing isn't as attractive as it once was due to the ever-increasing cost of reconstruction, increasing carry costs AND the fact that there is so little equity in many, many houses and condos, they wouldn't be able to get the "bargains" they would have gotten in the olden days--before folks started using their home as ATM machines and "liberating its equity."

Additionally, if developments and homes are tangled up in a bunch of legal who-ha over crappy craftsmanship and broken promises, folks would be reluctant to purchase for fear of liens or taking over someone's lemon-house.

......Regarding your first comment: as matter of fact--I do like my martinis " very dry"--shaken...not stirred

[Donna]

Monty, you are wrong about the SoWal market being higher than other resort areas like CA and HA. The home we have at Grayton would cost us at least four times what the conservative value of it is in today's market. And the beach wouldn't be nearly as nice or rental demand what it is at SoWal. And I can tell you from firsthand experience in HA, you won't touch a well located resort condo for less than $1.25M...and that's a one-bedroom/one bath, guy. SoWal may be comparatively priced with communities such as Hilton Head and some in South Florida or the Naples/Tampa areas. But it is still a bargain when compared to anything on the West Coast or in HA.

[SHELLY]

SoWal may be comparatively priced with communities such as Hilton Head and some in South Florida or the Naples/Tampa areas. But it is still a bargain when compared to anything on the West Coast or in HA.

But after you figure in the cost of gas to commute....it's pretty much a wash.

[Pirate]

I disagree Donna. I was in Malibu recently and looked at a house on the beach with an acre lot, a pool and a tennis court for 6.5m. Show me a property like that in Sowal, it doesn't exist. Houses on postage stamp lots for 10 million here, or a 50 year old shack with 50 feet on the beach for 4 million? There is quite a bit of beachfront in the same range as Sowal in Cali. Search the MLS, there are much better properties in So Cal in the same price range as the beachfront here. The lower end market is a little higher in price, but there are actually people that live there to support the prices. The 1 bedroom condo you mention in Cali has a 2 bedroom next to it for 1.4m. Have you looked at other threads about Dunes of Seagrove for 1.3m asking or Adagio for 2.5m asking? Houses in Sowal that were 1 million in 2003 have asking prices of almost 4 million, it's ridiculous. If you don't agree, just look back at the sales figures. No easy bank money anymore, no ridiculous sales.

[Bob]

I disagree Donna. I was in Malibu recently and looked at a house on the beach with an acre lot, a pool and a tennis court for 6.5m. Show me a property like that in Sowal, it doesn't exist. Houses on postage stamp lots for 10 million here, or a 50 year old shack with 50 feet on the beach for 4 million? There is quite a bit of beachfront in the same range as Sowal in Cali. Search the MLS, there are much better properties in So Cal in the same price range as the beachfront here. The lower end market is a little higher in price, but there are actually people that live there to support the prices. The 1 bedroom condo you mention in Cali has a 2 bedroom next to it for 1.4m. Have you looked at other threads about Dunes of Seagrove for 1.3m asking or Adagio for 2.5m asking? Houses in Sowal that were 1 million in 2003 have asking prices of almost 4 million, it's ridiculous. If you don't agree, just look back at the sales figures. No easy bank money anymore, no ridiculous sales.

Did the house in Malibu include a wetsuit so you can "enjoy" the full beach experience?

[Pirate]

Did the house in Malibu include a wetsuit so you can "enjoy" the full beach experience?

I wasn't praising the beaches or water quality there, only pointing out the prices are comparable. I like 30-a beaches except for the "restored" areas where the dunes meet the ocean.