A commentary on the bubble

[Smiling JOe]

Good point. There's always that...

My first thought is that with any investment paying dividends or interest on an annual basis or more frequently, you pay the Man at the end of the year. However, with real estate you pay the Man after the sale unless you meet the qualifications for selling your home tax free or partially tax free, or unless you 1031 the gains.

After a little more thought of the situation, you are correct in that even with real estate, you pay the Man every year through property taxes, which makes my aforementioned statement mute.

 

[Kurt]

Moral of the story: "It's good to be the man".


Though most likely immoral.

 

[patticakes]

... However, with real estate you pay the Man after the sale unless you meet the qualifications for selling your home tax free or partially tax free, or unless you 1031 the gains...

Maybe I'm just not a trusting person, but might be part of the reason for the bubble hype as well. Too many people taking advantage of those breaks. You don't have to be a million dollar investor to play the game. Works for $100k properties as well, just smaller returns. Maybe more people benefiting from those breaks than anticipated.

Have a great weekend everybody! Me and my dark cloud are going to the pool for a dose of much-needed sunshine. 11 days to SOWAL and counting...

 

[patticakes]

Moral of the story: "It's good to be the man".


Though most likely immoral.

I truly enjoy reading this board, Kurt. I try to pop in once a week just to see what's going on. Until today, haven't really posted any opinions - mostly a lurker. Thanks for the outlet for information and commentary.

 

[Kurt]

I truly enjoy reading this board, Kurt. I try to pop in once a week just to see what's going on. Until today, haven't really posted any opinions - mostly a lurker. Thanks for the outlet for information and commentary.

Lurkers are boring.

 

[skier]

Mack,

Please give some actual examples of resales getting snatched up at prices comparable to homes, lots or condos that sold very nearby last year.

Also, these constant comparisons to Naples are interesting and clearly apples to oranges. The reason Naples will likely always command higher prices than SoWal is because it actually stays warm there all year long. Avg temp in January is 63 versus 52 in SoWal. Lots of rich retirees are looking for year round warmth or warmth in the winter when they migrate to south florida. It gets too cold in the winter in SoWal (with average Jan lows of 37 degrees) for many of these people. Golf is also another big draw for Naples. The golf is also much better and there are more places to play in Naples. The warmer weather makes it more pleasant to play in the winter. Along 30A, there is only one option for golf or you need to drive 15 to 20 miles to play. And, it is too cold for most people to play on many winter days in SoWal.

Naples is not for me, but I'm not a rich retiree from the Northeast. Nor do I play much golf.

My neighbor loves South Walton for the beauty, but he is investing in a condo in Naples for retirement in a few years. Not because it is more beautiful, but because it's warmer in the winter.

At some point, you need to start facing the reality of the current real estate situation in SoWal. Not that the long term won't be okay, but in the short term the market is in bad shape. Too much inventory, and not enough buyers. That WILL drive prices down.

 

[Smiling JOe]

Mack,

Please give some actual examples of resales getting snatched up at prices comparable to homes, lots or condos that sold very nearby last year.

Also, these constant comparisons to Naples are interesting and clearly apples to oranges. The reason Naples will likely always command higher prices than SoWal is because it actually stays warm there all year long. Avg temp in January is 63 versus 52 in SoWal. Lots of rich retirees are looking for year round warmth or warmth in the winter when they migrate to south florida. It gets too cold in the winter in SoWal (with average Jan lows of 37 degrees) for many of these people. Golf is also another big draw for Naples. The golf is also much better and there are more places to play in Naples. The warmer weather makes it more pleasant to play in the winter. Along 30A, there is only one option for golf or you need to drive 15 to 20 miles to play. And, it is too cold for most people to play on many winter days in SoWal.

Naples is not for me, but I'm not a rich retiree from the Northeast. Nor do I play much golf.

My neighbor loves South Walton for the beauty, but he is investing in a condo in Naples for retirement in a few years. Not because it is more beautiful, but because it's warmer in the winter.

At some point, you need to start facing the reality of the current real estate situation in SoWal. Not that the long term won't be okay, but in the short term the market is in bad shape. Too much inventory, and not enough buyers. That WILL drive prices down.

Skier, I believe you are painting only half of the picture. What about summer, when Naples is so blazing hot that most people bug out? I think your statements regarding the winter in Naples is very accurate, but Naples does not have warm weather as you say, year round.

 

[Cavallino]

SKIER is playing that broken record again...."The SoWal Real Estate Market Bites the Dust."

However, I have noticed that he is at least showing a pulse of optimism with respect to the longer term - which is what real estate is typically about.

Doug

 

[skier]

Skier, I believe you are painting only half of the picture. What about summer, when Naples is so blazing hot that most people bug out? I think your statements regarding the winter in Naples is very accurate, but Naples does not have warm weather as you say, year round.

Joe,

If you check out the average temps during June, July, August and September, the avg highs and lows are almost exactly the same in Destin as they are in Naples. The reason the summer is so slow in Naples is because all the rich retirees go back to NY, NJ, etc during the summer. Whereas SoWal get all the younger tourists with families during the summer. It's the warmer winters and the golf that create a more favorable environment for the retirees in Naples.

Another difference between SoWal and many of the other areas that are compared to SoWal is that the lot size adn home size for most SoWal homes is tiny compared to these other places. A $5 million beachfront home in Seaside, Watercolor or Rosemary might have 3000 to 4000 square feet and be built on a lot that is 50 by 100 with another home crammed just 10 to 20 feet away. In Naples, Palm Beach, South Ponte Vedra, Hilton Head, etc. the comparably priced homes are much larger and sit on much larger and more private lots. SoWal beaches are definitely prettier in my opinion, but the homes don't compare in size, privacy, etc. The market comparisons are apples to oranges.

 

[Buckhead Rick]

Please do not forget you cannot compare property prices from last year with this year in developments with buildouts, this year that lot has 12months less time until the shovel hits the ground. The new Watercolor releases are up 8% per release with each one over surscribed, while Rivercamps keeps moving along at just under that number. By the way I hope everyone saw the front page article on Rivercamp et.al in the NY Times a week and half ago, start looking for some New Yorkers as your new buyers.