Current inventory and sales forecast - December 2007

I will keep my comment brief (shocker) and simply mention that current inventory levels have much to do with sellers not being realistic with their prices. I have shown plenty of examples in the past where two neighboring properties, with similar features, have a price variance greater than 50%. Until one the lower priced one sells, there is really only one property for sale, even though you will see two listed. Remove those over-priced (not sellable at current time) from the market, and you will see the real inventory.

Smiling Joe,
You hit the nail on the head. The main reason the inventory is up, is overpriced property still on the market. But really not for sale ass no one will buy them. They are creating an over inflated number of homes on the market.
Kurt,
You are absolutely right. Sadly enough, we do not have a person that runs out snd rings a bell with the market has bottomed out or reached it's peak.
This is what a free market is all about. I purchased a lot of property when the market was down and made some money. I purchased some property with the market was and lost some money. God bless free trade.

I will keep my comment brief (shocker) and simply mention that current inventory levels have much to do with sellers not being realistic with their prices. I have shown plenty of examples in the past where two neighboring properties, with similar features, have a price variance greater than 50%. Until one the lower priced one sells, there is really only one property for sale, even though you will see two listed. Remove those over-priced (not sellable at current time) from the market, and you will see the real inventory.

Absolutely correct SJ. I think it would be a huge difference in inventory if the unrealistic listings were pulled off the market.

so maybe it is not the real inventory but just one's perspective/perception of the inventory?

Wow, while reading this thread I see that a certain real estate agent poster has made 21,500 postings in the last 3 years. At 2 minutes a piece, minimum with the treatises he writes , and forgetting that he must read some of our musings, he has spent over 700 hours on this forum alone. Is this what most r.e. guys are doing while waiting for the market to turn?

Wow, while reading this thread I see that a certain real estate agent poster has made 21,500 postings in the last 3 years. At 2 minutes a piece, minimum with the treatises he writes , and forgetting that he must read some of our musings, he has spent over 700 hours on this forum alone. Is this what most r.e. guys are doing while waiting for the market to turn?

I can tell you one story about the real estate agent you mention. He was able to sell a house for 90% of list price in October 2006 when the wheels had supposedly fallen off the market. The sell was closed within 60 days of the original listing and by the way, he wasn't the listing agent either. So, I think he has been doing a little more than sowalling.;-) Maybe he is just more efficient than some of the rest.

By the way, I think the buyer found him on sowal so it seems like it may be a good marketing tool for some.

Wow, while reading this thread I see that a certain real estate agent poster has made 21,500 postings in the last 3 years. At 2 minutes a piece, minimum with the treatises he writes , and forgetting that he must read some of our musings, he has spent over 700 hours on this forum alone. Is this what most r.e. guys are doing while waiting for the market to turn?

I will also point out that the SoWaller to whom you refer, spent more than 40 hours after Hurricane Ivan passed through, taking photos of people's homes and posting them on SoWal.com so that the homeowners could feel more comfortable knowing the condition of their home, without having to hire someone to check on the homes for them. Add to that, the time that it took to take accurate notes on home condition, and reducing the image size of the photos, plus the time to upload them, and you will get more than 700 hours. Though, I can tell you that your average post time of two minutes is too long. I'm a fast typist. ;-)

By the way, I'm not a Realtor who tries to gain everyone's business. I want to keep my number of listings small, and be able to give excellent customer service to each of my customers. I think that is much more difficult when you have too many listings.

I will also point out that the SoWaller to whom you refer, spent more than 40 hours after Hurricane Ivan passed through, taking photos of people's homes and posting them on SoWal.com so that the homeowners could feel more comfortable knowing the condition of their home, without having to hire someone to check on the homes for them. Add to that, the time that it took to take accurate notes on home condition, and reducing the image size of the photos, plus the time to upload them, and you will get more than 700 hours. Though, I can tell you that your average post time of two minutes is too long. I'm a fast typist. ;-)

By the way, I'm not a Realtor who tries to gain everyone's business. I want to keep my number of listings small, and be able to give excellent customer service to each of my customers. I think that is much more difficult when you have too many listings.

Re: 2,500 Sqft under $300k in Miramar Beach

I pretty much agree with what Shelley said above. We will see a spike in inventory early 2008. Plus 2008 will be known as the "year of foreclosure" unless congress saves the subprime loans from ballooning:

"Treasury Secretary Henry Paulson, seeking to limit damage from a subprime-mortgage crisis that threatens to end the U.S. economic expansion, said he's confident the government and banks will agree on a plan this week.
Paulson is negotiating a deal among banks, mortgage servicers and securities-industry lobbyists to fix some subprime mortgage rates before they reset higher and trigger a wave of defaults. The Treasury chief also proposed letting state and local governments temporarily exempt taxes on bonds issued to help refinance subprime borrowers."

http://www.freep.com/apps/pbcs.dll/article?AID=/20071204/BUSINESS04/712040391/1002/BUSINESS

Joe,

So how long will it take to pay back a $500,000 (2/28) loan if the first 2 years were "interest only" payments and then next 5 years it is fixed at 3.5%? And what would the suits at "Now's a Great Time to Buy Hedge Fund" do when their promised 11% bond didn't pay out as planned?


.

I will also point out that the SoWaller to whom you refer, spent more than 40 hours after Hurricane Ivan passed through, taking photos of people's homes and posting them on SoWal.com so that the homeowners could feel more comfortable knowing the condition of their home, without having to hire someone to check on the homes for them. Add to that, the time that it took to take accurate notes on home condition, and reducing the image size of the photos, plus the time to upload them, and you will get more than 700 hours. Though, I can tell you that your average post time of two minutes is too long. I'm a fast typist. ;-)

By the way, I'm not a Realtor who tries to gain everyone's business. I want to keep my number of listings small, and be able to give excellent customer service to each of my customers. I think that is much more difficult when you have too many listings.

And he did all this with the prettiest smile I have ever seen.

IMO the number of SJ's posts and the amount of time he Sowals are noone's business but his.

Do you think vacant lot prices will continue to fall?

And he did all this with the prettiest smile I have ever seen.

My wife likes his lips... You da man SJ! Thanks for all your posts and keeping folks up to date.

So..here is a question, inventory is higher but there certainly are a lot more homes/condos nowadays. Does anyone know the increase in properties relative to the increase in inventory?

I do agree with Shelly - there doesn't appear to be any economic indicators that would point positively in 2008. Real estate markets are local, and this market might move a little upward in '08 but I don't hold out that that would be a light at the end of the tunnel.

IMO the number of SJ's posts and the amount of time he Sowals are noone's business but his.

Agreed.

Re: 2,500 Sqft under $300k in Miramar Beach

Shelly,

I'm not saying that price decreases won't continue into next year. I think several areas are still overpriced, but I believe sales will rise overall. There are a lot of GREAT deals out there at this time. If you would have told people 3 years ago that they'd soon be buying properties under $150/ft they would have called you crazy! I know several properties that you couldn't reproduce for the sales price. I think you have to be near the bottom when that's happening. I don't see another boom by any means, but I think we will see increases in sales for the next several years to come and increasing prices soon enough. All of this is my personal opinion from studying the market Shelly.

Josh, your cost to reproduce assumes that building costs stay put or rise in the future. With the quickly slackening pace of new construction, the price of commodities like lumber, concrete, etc is likely to fall meaning construction costs will be falling (in fact, builders I know say it is already occurring). In addition, builders will be competing more with each other as people build fewer homes. Building a new home will become cheaper, not more expensive, over the next year or two.

Re: 2,500 Sqft under $300k in Miramar Beach

The magic bottom? I think we're very close. I was looking at the stats from Destin-Inlet Beach at the end of November. We have 3 less sales this year than 2006 with all of December left. Our months of inventory was also down compared to last year. Things are looking up. I think we'll see a larger increase in sales next year!

What type of sales are you talking about, new homes, resales home, new condos, resale condos, lots or all of the above?

For all of Walton County, SFH sales are down 12% year to date, condo sales are down 8% and lot sales are down 42%.

What's the similar breakdown for Destin-Inlet Beach (also, can you factor out precon condo closings)?

Re: 2,500 Sqft under $300k in Miramar Beach

Josh, your cost to reproduce assumes that building costs stay put or rise in the future. With the quickly slackening pace of new construction, the price of commodities like lumber, concrete, etc is likely to fall meaning construction costs will be falling (in fact, builders I know say it is already occurring). In addition, builders will be competing more with each other as people build fewer homes. Building a new home will become cheaper, not more expensive, over the next year or two.

Building prices are definitely going down - by more than $100 a sqr ft. from a year ago. IMO the building and real estate industry are getting a much needed reality check. Competition will hopefully readjust prices more in line w/ reality and winnow out the less skilled and less honest.

I live here but also have property in Nashville. There are actually some better deals here right now than there are in Nashville. The realistic prices here are lower than Nashville. You can also get a long term lease here cheaper than Nashville.
This should tell us one of two things.
A. Prices are much more realistic and more in line now than the past three years.
or
B. Nashville's prices are more inflated than here. (I dont think so)

IMO the number of SJ's posts and the amount of time he Sowals are noone's business but his.

Do you think vacant lot prices will continue to fall?

It's a public message board not a sexual identity--number of posts bears comment if someone wishes to make that comment. SJ answered well. Beyond the number of his posts I have been more amazed by the content/quality of many of them. He appears one constructively active person.

Thanks for the kind words. Many of my posts may be nothing more than a smiley, and every picture counts as a post. I wish that I could post more photos for you peeps who do not get to live here year round. With my slow internet, let's just say that it is hard work doing so.

Back to the topic at hand. I hear several people talking about construction costs decreasing and builders getting more competitive. While I agree that I have seen construction costs decrease over the last year or two, I am wondering what the international demand will have on supplies which we use. Perhaps a supplier or a builder has some inside knowledge of this and will share it. Also, regarding the General Contractors, I know that times are tough for these guys right now, and I hope that they can survive through this difficult time. I've seen many pull up their stakes and move on. Many were never really "local" builders in the first place, so moving on wasn't too difficult a decision. Just like with the local Realtors, I think we will see many Gen. Contractors move on in the future, leaving a decent earning up for grabs for the remaining few. I think they will be more competitive, but they won't work for free.

Re: 2,500 Sqft under $300k in Miramar Beach

Josh, your cost to reproduce assumes that building costs stay put or rise in the future. With the quickly slackening pace of new construction, the price of commodities like lumber, concrete, etc is likely to fall meaning construction costs will be falling (in fact, builders I know say it is already occurring). In addition, builders will be competing more with each other as people build fewer homes. Building a new home will become cheaper, not more expensive, over the next year or two.

I believe building codes may mitigate that somewhat.

Joe,

So how long will it take to pay back a $500,000 (2/28) loan if the first 2 years were "interest only" payments and then next 5 years it is fixed at 3.5%? And what would the suits at "Now's a Great Time to Buy Hedge Fund" do when their promised 11% bond didn't pay out as planned?
.

3.5% . I don't think the proposal includes keeping someones' rate at the teaser, and I have never seen a subprime loan priced that low or even a prime for that matter. IMO with a foreclosure costing an average of 50K, that will downgraded the security anyway. Better to get some income on performing loans than none. The real question is how long to allow the fixed term period? Clinton is proposing 5 years (the highest) which I think may be a reasonable time period. Others are pushing for 2 years or so.

I, too, heard that Congress was considering trying to manipulate the mortgages and fix the rates at the teaser rates. In particular, I thought I heard Hiltlery's name being the pusher.

Re: 2,500 Sqft under $300k in Miramar Beach

Joe,

So how long will it take to pay back a $500,000 (2/28) loan if the first 2 years were "interest only" payments and then next 5 years it is fixed at 3.5%? And what would the suits at "Now's a Great Time to Buy Hedge Fund" do when their promised 11% bond didn't pay out as planned?


.

Looks like we'll get some answers today at 1:45.

"Dec. 6 (Bloomberg) -- Treasury Secretary Henry Paulson's success in crafting agreement on a five-year fix of subprime mortgage rates owes a debt to an unlikely source: congressional Democrats.

Legislation pushed by House Financial Services Committee Chairman Barney Frank that would bypass lenders and investors, giving power to judges to rewrite loans, helped persuade banks and securities-industry lobbyists to sign on to Paulson's effort, mortgage-industry analysts said."

http://www.bloomberg.com/apps/news?pid=20601103&sid=aAsVymCNU7go&refer=us

This could give new meaning to "here come the judge!"

What about the prudent folks who financed at a 15 or 30 year fixed? Their properties have still declined in value and if they bought in 2004-6 cannot sell without writing a check- in some cases a big check! Their property taxes and insurance rates have increased raising their payments but they will receive no cherries from the gov't.

Looks like we'll get some answers today at 1:45.

"Dec. 6 (Bloomberg) -- Treasury Secretary Henry Paulson's success in crafting agreement on a five-year fix of subprime mortgage rates owes a debt to an unlikely source: congressional Democrats.

Legislation pushed by House Financial Services Committee Chairman Barney Frank that would bypass lenders and investors, giving power to judges to rewrite loans, helped persuade banks and securities-industry lobbyists to sign on to Paulson's effort, mortgage-industry analysts said."

http://www.bloomberg.com/apps/news?pid=20601103&sid=aAsVymCNU7go&refer=us

This could give new meaning to "here come the judge!"

What about the prudent folks who financed at a 15 or 30 year fixed? Their properties have still declined in value and if they bought in 2004-6 cannot sell without writing a check- in some cases a big check! Their property taxes and insurance rates have increased raising their payments but they will receive no cherries from the gov't.

I suppose that wouldn't be any different than appearing before a Bankruptcy judge. My husband and I were just discussing the same exact issue about the folks who were prudent enough to lock at fixed rates but who now are paying the piper due to this whole subprime/easy money debacle that aided the run up in values.