Trends

All very true!

What does the crystal ball say about the economic stimulus package? :shock:

Listed to Dubya & "Stuttering Hank" outline the economic stimulus package today :funn:.

Just where do the people of America think this "extra" money comes from to pay for this economic stimulus? (Hint: Rhymes with "Tinting Messes.")


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printing dresses??? no that's not it

printing dresses??? no that's not it

Close, but no cigar --Bill Clinton

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Minting presses?

Minting presses?

Charlie?? Charlie Crist is that you? Sounds like you need a clue.


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raising taxes?

"...(Hint: Rhymes with "Tinting Messes.")..."




But that would be inflationary.



As would the Fed cutting the discount rate.

Joe,
Thanks for the numbers. I am shopping for a gulf front condo as I will be part time and want minimum upkeep. And I do realize it is a different market than single family. The single family beachfront lots have come off the bubble but I don't see any signs of a fire sale. The condo market on the other hand is where the foreclosures seem to be popping up. I suspect because that is where it was easiest to speculate in the market.

Flyguy

flyguy, here are some numbers for you, regarding sales for single family detached homes which are listed as Gulf Front, in the same area of SoWal, described in previous post.

2005
qty sold - 20
avg sales price - $3,570,167

2006
qty sold - 15
avg sales price - $4,796,296

2007
qty sold - 17
avg sales price - $3,252,738

Inventory in 2007 has remained fairly constant, but is up over the previous years.

"...(Hint: Rhymes with "Tinting Messes.")..."




But that would be inflationary.



As would the Fed cutting the discount rate.

So did I guess right then?

I'm not a regular poster but I'm going to give you my position anyway. I have been an owner, investor, investulator, speculator, developer and land swinger in the Destin Area for the last 10 years. I have bought to flip, bought to develop, and bought for my own personal use. I currently have no holdings in the Destin area other than a home I just bought a month ago. I bought because it is my belief that regardless of if its a shortsale, a firesale, or just a extremely motivated seller. I believe that prices will not go too far below the cost to rebuild the exact home, putting a reasonable value on the lot.

Property is valued one of three ways:
1) Income method
2) Replacement cost method
3) Comparable sales or market value method

Throw # 3 out, forget about what it sold for 18 months ago or last month even, comp sale price can and ARE manipulated on every sale so that number is worthless. The quicker we all forget about those unjustifiable prices which were mostly based on the comp sale method with no concern for income or replacement cost, the better off and more healthy the entire market will be.

There will be more foreclosures in the next 24 months than ever before but trust me, there will be investors buying these as well and they will be buying based on replacement cost valuation method and the income valuation method.

Listed to Dubya & "Stuttering Hank" outline the economic stimulus package today :funn:.

Just where do the people of America think this "extra" money comes from to pay for this economic stimulus? (Hint: Rhymes with "Tinting Messes.")


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printing messes? :funn:

I'm not a regular poster but I'm going to give you my position anyway. I have been an owner, investor, investulator, speculator, developer and land swinger in the Destin Area for the last 10 years. I have bought to flip, bought to develop, and bought for my own personal use. I currently have no holdings in the Destin area other than a home I just bought a month ago. I bought because it is my belief that regardless of if its a shortsale, a firesale, or just a extremely motivated seller. I believe that prices will not go too far below the cost to rebuild the exact home, putting a reasonable value on the lot.

Property is valued one of three ways:
1) Income method
2) Replacement cost method
3) Comparable sales or market value method

Throw # 3 out, forget about what it sold for 18 months ago or last month even, comp sale price can and ARE manipulated on every sale so that number is worthless. The quicker we all forget about those unjustifiable prices which were mostly based on the comp sale method with no concern for income or replacement cost, the better off and more healthy the entire market will be.

There will be more foreclosures in the next 24 months than ever before but trust me, there will be investors buying these as well and they will be buying based on replacement cost valuation method and the income valuation method.

And, just how much do you think a 40 X 80 piece of sand 1/2 mile from the beach is worth. Many of the sales occurring now value this land at $100k to $900k depending on the location in SoWal. If raw land prices continue to fall, then the cost valuation method will certainly follow suit for existing homes.

flyguy, some condo numbers for you follow.
These sales numbers are for condos, listed as Gulf Front, which sold in the area of SoWal, between Bay County and Sandestin. The sales data is from Emerald Coast Assoc. of Realtors (ECAR), and doesn't include any units sold outside of ECAR. Also, the sales reflect new condos as well as resales.

2005
qty sold - 101
avg sold price - $1,563,680

2006
qty sold - 19
avg sold price - $1,076,499

2007
qty sold - 38
avg sold price - $1,109,986

prices and qty have increased in 2007 over 2006. You can see the dramatic drop in prices from 2004, for Gulf Front condos.

As I stated, the Gulf front units have been difficult to sell, especially after the storms of 2004, and the great number of storms predicted in 2005 and 2006. Add to that, the other reasons I mentioned in a previous post, and you will see that the Gulf Front units are not recovering as well as the other condos in the same area.

Below are sales for ALL CONDOS in that same stretch of SoWal, according to ECAR.
You will see that although the qty of sales is down in 2007, compared to 2006, but in that same time period, average prices of units sold have increased by 26%. Compare that to the Gulf Front Units increasing in price in that period, only 3%. (an increase of 3% isn't bad, considering we have been in a "bubble bursting" period, but the non-Gulf Front units have outperformed in that period.) That should be good news to you, since you are looking to buy a Gulf Front unit.

All condos, including Gulf front, located in the same area of SoWal (not including Sandestin):

2005
qty of sales - 358
Avg sales price - $929,362

2006
qty of sales - 151
Avg sales price - $635,055

2007
qty of sales - 136
Avg sales price - $804,636

Remember that part you mentioned about wanting to buy on the upswing? Looking at the annual averages for sale prices of Gulf Front Condos, we are currently 29% off the record highs of 2005, and for 2007, we are up 3% over 2006. Those sales numbers reflect a slight upswing in the Gulf Front Condo Market. I've shown examples of other more substantial upswings in the market for other properties. My question to you as a buyer is, how much of an upswing are you waiting to see, before you are ready to jump in? I hear many people who sound similar to you, in that they are waiting to see upswings, but I think they are really waiting to hear the bottom bell ring, telling them it's okay to buy now. I haven't hidden my thought that you will see more foreclosures in the next year, but that hasn't changed the fact that the average prices of properties selling has increased between 2006 to 2007. None of the buyers who say they are waiting to see the upswing, have identified a buy-in point, and I think they are buying more on gut instinct and emotions, so I'm curious to learn your perspective. Thanks for sharing.

Just so that we are on the same page, I'll share some numbers, from the Emerald Coast Assoc of Realtors, comparing the avg sales in SoWal, in the area between Bay County and Sandestin.

Detached Single Family
2005 compared to 2004
qty of sales, down 25%
price of sales, up 17%

2006 compared to 2005
qty of sales, down 57%
price of sales, up 15%

2007 compared to 2006
qty of sales, up 35%
price of sales, down 7%


The "peak of the market," according to qty of sales was June 05. That is when the Shelly's came out and said that the bubble had burst. However, looking at the statistical data, prices of homes sold, increased another 15%. Maybe Shelly was basing the bubble bursting on the quantity of sales, which decreased substantially, 57%. Avg Sales Prices did decrease in 2007, compared to 2006, but compare those of 2007, to 2005, when the "bubble burst," and you will see the avg sales price increase of 6%. Yes, the quantity of sales is down in 2007, compared to 2005. However, the quantity of sales in 2007, compared to 2006, has increased by 35%.

The avg selling price of homes (detached single family) in this area of SoWal, during 2007 is $937,532, and this is based on 361 sales.

Sure, there are foreclosures coming up, but looking at the recent history, it doesn't appear that has stopped homes from selling at prices which are historically significantly.

Raw land prices have CRASHED and construction costs are falling too. It is cheaper to build than to buy a resale in many cases today which will put further pressure on prices. Foreclosure prices today could very easily be average prices in the next year or so.

",,,average prices of units sold have increased by 26%..."





Does this mean that the average price of any particular unit
has increased?

Or does it mean that the more expensive units are selling
and the cheaper ones are not, causing the average price to
increase while the price of any particular unit may not have?

Capricious, you raise a good question, and one which can be answered only anecdotally on a property by property basis.

Joe,

Thanks for the numbers. Good stuff. As for the 2007 upswing. Could it be due to presells closing in a high end condo building?

I have seen the same argument made with condos in PCB. But you have people closing on units they pre purchased several years ago at what is now an above market price. These new purchases skew the numbers. Current resale listings are still decreasing and are now hitting $250/sq ft in buildings just a few years old. $200/sq ft in the old buildings. And these are full gulf front units.

Granted SoWal prices are still higher, but is the trend the same for resells? I know the MLS price changes in SoWal are still almost exclusively down. The few price increases in listing seem to be more of the high end SFH.

Then again, you may be right and the bottom has already come and gone with no bell ringing. But I also think that even after the official bottom of the market is found, prices will be rather flat (3-5% increase) until the inventory comes down.

My wife thinks it is time to start making offers. So as I stated before, we will start off with some lowballs and see what response we get. Because just as a buyer doesn't know when the market hits bottom, neither does the seller.

Thanks again,
and of course JMHO,
Flyguy

flyguy, looking more closely at the stats, while trying to determine your answer, out of the 38 condos listed as "Gulf Front," 7 of those look to be new sales, and 31 are resales. One other thing which I will point out is that some Realtors list condos as "Gulf Front," when there is question to that. Take Bella Vita for example, which has several buildings. There a few of those being listed as Gulf Front, because of the unobstructed view of the Gulf (should be listed as Gulf View in my opinion), but there are several other buildings between the units being sold and the Gulf. Those units included in these "gulf front" sales, alter the real avg price of gulf front units.

Four units in Park Place did close in 2007, bringing the avg sold price up, as each sold between $2 million - 2.5 million. Park Place is the condo building in Seagrove which was bought, gutted, and rebuilt into luxury condos. There were also three new sales in Andante, which helped to bring up the average. If we remove the 7 new sales units, the average sales price for the condos listed as Gulf Front, drops to $898,645.

Looking at 2006, I don't see any new sales for condos. All are resales.

For 2005, when we get into many of those, they are technically resales, because they were simultaneous closings, and in some cases, assignments of contract. However, they are really new, so I'll call those new sales, and for 2005, there were 46 resales of condos listed as Gulf Front, with the average price of $1,090,288.

Because all of the comparison figures are on the other page, I'll bring some of those forward to here:

the sales reflect new condos as well as resale for condos (listed as Gulf Front).

2005
Total Gulf Front Sales
qty sold - 101
avg sold price - $1,563,680

Resales only
qty sold - 46
avg sold price - $1,090,288

**************
2006
Total Gulf Front Sales
qty sold - 19
avg sold price - $1,076,499

Resales only
qty sold - 19
avg sold price - $1,076,499

(no new construction sales)

*****************

2007
Total Gulf Front Sales
qty sold - 38
avg sold price - $1,109,986

Resales only
qty sold - 31
avg sold price - $898,645

So, looking only at resales, we see a 16% drop in prices in 2007, compared to 2006. However, comparing 2007 to 2005, selling prices are down only 17.5%.

All that said, I'm not so sure that we can completely throw out the new sales as part of the equation. They are sales which occurred, and in many cases, the buyers would have been able to walk away from the table, leaving their deposit, coming out financially better than if they closed. The condos around here seem to be built in ten year cycles. We have the 1985 buildings, the 1995 buildings and the 2005 buildings. Buildings depreciate with time, especially the gulf front buildings. The salt air is tough on them. What we see in the data is a combination of lower land valuations as well as the depreciating buildings.

Fisher -

Again I would use the cost basis to value the dirt. Cost of infrastructure alone (roads, sewer, storm water retention, utilties, etc) in sowal runs about 30k per lot for your basic community, then add the cost for the dirt within 1/2 mile from the beach - thats probably worth 40k per raw lot in todays market in no specific premium location, maybe 30k at rock bottom wholesale price. So a baseline cost of around 60-70k cost with no Amenities. Add Watercolor equivalent amenities and your easily at a lot cost basis of around 250k per lot. A community like old florida village would run about 100k per lot total cost basis.

Listed to Dubya & "Stuttering Hank" outline the economic stimulus package today :funn:.

So if we all get a check from the gov for $400, like we did when W took office, and it comes in June, how in the world could that possibly resolve the current mess?

In other words, this is just another empty promise that will be trotted out to say "look, we did something for you".

As SJ says, politricks...

Treefrog, its $800 per person, and it appears that you know exactly what is happening -- poliTRICKS. The same is happening with Amendment 1 on the ballot in FL, and many other programs our gov't creates. If the printing mess, excuse me, if the printing press is broken, I guess we can borrow the $800 per person from the Chinese, at an interest rate of 15%, so that we really stimulate China's economy, when we use that borrowed money to buy more cheap plastic crap from Walmart. Thank God I'm having a good day, otherwise, it would all be rather depressing.

Joe,

I am a numbers guy and I appreciate you taking the time to post those figures.

Thanks very much,
Flyguy

You are welcome, flyguy. Good luck with your purchase/offers.

So if we all get a check from the gov for $400, like we did when W took office, and it comes in June, how in the world could that possibly resolve the current mess?

In other words, this is just another empty promise that will be trotted out to say "look, we did something for you".

As SJ says, politricks...

It's a desperate attempt to distract the clueless (voting-age) masses who are starting come to the realization that there is something seriously wrong with the economy.

It's like when you have that annoying puppy jumping up and down and being a nuisance, so you throw a "pretend" ball across the room so they'll take off and you can make a quick exit before they realize that you screwed them over. That's what the government is trying to do with the "free money."

The stimulus package is not going to resolve the current mess...it's just going to tack on more debt to the huge debt bubble we (or our children and grandchildren) are going to have to eventually deal with on down the line.


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It's a desperate attempt to distract the clueless (voting-age) masses who are starting come to the realization that there is something seriously wrong with the economy.

It's like when you have that annoying puppy jumping up and down and being a nuisance, so you throw a "pretend" ball across the room so they'll take off and you can make a quick exit before they realize that you screwed them over. That's what the government is trying to do with the "free money."
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Reminds me of another gimmick the Gov't does to distract the clueless -- give a tax "refund" check after overcharging people in the first place, while using that money to invest for the year. It's also called, withholding.