Watercolor

Prices will bottom in Waterclor in the $250 -275 sq. foot range, at some point late this year - just a guess - and they will then go sideways for a few years. ... and they still will NOT cash flow.

gasp ... what, $250 a sq/ft!!!..... it can't be true, b/c it cost x per sq. ft to build and the lots were 'worth" $ x. Well, all that don't mean sh*t anymore... it used to be that price itself, didn't mean sh*t, b/c tomorrow's price was invariably higher... then the music stopped.

It's hard to believe that Mr Davies, I would bet money that will not be the case. The music has not stopped, just on pause for a few.

Why would you be willing to wager, if I may, why Watercolor prices won't drop another 10% when they've already been cut down 40 % or more from the 05 peaks already?? What's the stopper, or catalyst? Markets always overshoot and also over-correct. Whether it drops another 10% or stays flat is a moot point if you like the area, as I do. Both scenarioes, flat and/or 10% down will be terriblly underperforming returns on investments, as compared to other asset classes like equities over the next few years, IMO. and yet, people still love SoWal.

I agree that the worst case scenario is remote for South Walton. That would be a case where investment vacation homes would have to be competitive to other investments on a discounted free cash flow basis - if that were the case Watercolor/Seaside/Rosemary would be selling for right around $135/sq ft. Since I'm willing to bet against a depression, I'm willing to bet against that scenario. I'd also bet you that 10 years from now, we'll be well up through even 2005 prices, and that 50 years from now, this will have been incredibly good dirt to own.

It's hard to believe that Mr Davies, I would bet money that will not be the case. The music has not stopped, just on pause for a few.

I think there wil be some short sales and desperation that give you costs at that price point, but since you can't buy land and build quality at that cost in WC, it will be a blip on the radar screen. Well constructed homes (whose owners are not under duress) will need to sell higher to make a profit or break even.

According to St. Joe, the company saw a 71% increase in sales for Jan 08 compared to Jan 07 for Watercolor and Watersound. The calls from buyers I have received in the last couple of weeks have been specifically for Watercolor. And yes they want the best 'deals', but there are competitive prices in Watercolor along with short sales and at least one foreclosure.

I still have a real hard time figuring a 2k sq ft home can cost 1 million, and not be on the beach.

I still have a real hard time figuring a 2k sq ft home can cost 1 million, and not be on the beach.

It can happen!

I still have a real hard time figuring a 2k sq ft home can cost 1 million, and not be on the beach.

Two words: Granite Countertops

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Two words: Granite Countertops

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Some where in the high 400's per square foot in WaterColor seems about right to me right now. When you look at current (not past) lot prices plus the current (not past) cost to build plus a premium for getting plans through the DRB and incurring the hassle associated with building a home, I think high $400's per square foot seems about right. I would say low to mid $500's per square foot in WaterColor seems about right for Phase I.

Any thoughts on this?

Do any of the realtors or other professionals on this board have any thoughts on my last post on this topic?

Since Aug08 quite a few homes in the various areas of Watercolor have had Lis Pendens Pre-foreclosure filings filed with Clerk of Courts. Has anyone followed up on these? Are the banks holding them? If any have sold what was the $/sqft range?

PS-I'll get the lot #s if someone will check the status.

Some where in the high 400's per square foot in WaterColor seems about right to me right now. When you look at current (not past) lot prices plus the current (not past) cost to build plus a premium for getting plans through the DRB and incurring the hassle associated with building a home, I think high $400's per square foot seems about right. I would say low to mid $500's per square foot in WaterColor seems about right for Phase I.

Any thoughts on this?

One needs to be very careful when talking about s.f costs because it is important to know and understand what this entails and includes. Is it cost divided by gross s.f? Is it cost divided by net s.f? How are garages, porches, balconies, etc counted? Are soft costs rolled in? What about tap fees? Permit fees? Printing costs? Is GC involved and does number include O & P, etc. etc.....

This is especially prescient when one is comparing costs between different builders or even against different communities.

And a HUGE number depends on interior finishes - one can add a lot or cut a lot depending on choices.

Hope this helps a bit. Thanks

Net and Gross square footage?

The common terms are:

Total - The total square footage of the building. Including all interior spaces, garages, porches, etc.
Under Roof - The total square footage of the building covered by a roof. Includes all of the above as long as it is under the roof.
Heated - The total square footage of the heated/cooled space. Usually the above minus garages and porches.

Net and Gross square footage?

The common terms are:

Total - The total square footage of the building. Including all interior spaces, garages, porches, etc.
Under Roof - The total square footage of the building covered by a roof. Includes all of the above as long as it is under the roof.
Heated - The total square footage of the heated/cooled space. Usually the above minus garages and porches.

Many builders use gross and net when talking about sq.ft. costs.

In addition, many architects and builders assign different costs to conditioned space (heated and cooled as you say) and spaces such as garages and porches, loggias, galleries, etc.. are NOT calculated as such but rather as a percentage of conditioned space. Under roof is too vague as many spaces may indeed be covered but not conditioned and therefore not as $$$$.

Thanks

One needs to be very careful when talking about s.f costs because it is important to know and understand what this entails and includes. Is it cost divided by gross s.f? Is it cost divided by net s.f?

I think the emphasis on the "cost per square foot" came from investulators using it as a way to keep score. "I paid $200 per square foot last month and sold it for $350 yesterday."

Unless you are are sizing up the price of the "Cookie Cutter II Model" at Vinyl Village or Stucco City the "cost per square foot" pretty much means nothing.

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Unless you are are sizing up the price of the "Cookie Cutter II Model" at Vinyl Village or Stucco City the "cost per square foot" pretty much means nothing.

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Agreed wholeheartedly.

I think the emphasis on the "cost per square foot" came from investulators using it as a way to keep score. "I paid $200 per square foot last month and sold it for $350 yesterday."

Unless you are are sizing up the price of the "Cookie Cutter II Model" at Vinyl Village or Stucco City the "cost per square foot" pretty much means nothing.

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This is true as you could have a 2000 sq ft home with high end appliances, granite counter tops, lots of upgrades and the house runs $200/sq ft. Then you have a 4000 square foot home with no extras, cheap paint, and no frills for the same price or less per sq ft.

There was an auction in Watercolor recently of quite a few properties all owned by the same entity. One was a property on Western Lake Drive in Phase 2 ( a 4 BR ) that drew a final bid of $760,000 ( about $275/ ft ), which was rejected by the bank. FYI

Sorry to say, but there's your market value. Having been a realtor in a previous life, I remember being taught that market value is what a buyer is willing to pay for a property at a particular point in time. It does not matter what the last buyer paid, what the land cost, what amenities it has or anything else for that matter. Bottom line is - the value is what a buyer is willing to pay. Period. That's why comps are not based on listings, but on sales.

Sorry to say, but there's your market value. Having been a realtor in a previous life, I remember being taught that market value is what a buyer is willing to pay for a property at a particular point in time. It does not matter what the last buyer paid, what the land cost, what amenities it has or anything else for that matter. Bottom line is - the value is what a buyer is willing to pay. Period. That's why comps are not based on listings, but on sales.

The daze of the 'Drive-By Appraisal' apparently are over according to this article:

Appraisers are looking for signs that values are headed lower. Lenders need to know if a home worth $400,000 today might be on its way to a value of only $360,000. They want assurance that borrowers will have enough cash invested in the home to keep them from walking out on the debt.

"There is higher scrutiny because the market is going down," said James Loizou, co-owner of Suburban Appraisers & Consultants in Fairfax. Loan underwriters, the people who pass judgment on your loan application, are being more demanding. They want information on comparable home sales, homes still on the market, those under contract, closed sales, foreclosures and incentives offered by home builders. They may even want info about homes that didn't sell and were taken off the market.

"Frankly, those are fair questions," Loizou said. "It just makes more work."

"You're looking at what's on the market today and at what's listed. That affects the appraisal, also," he said.

If there are foreclosures nearby, or home builders offering deep discounts, or desperate sellers setting their asking prices 10 percent lower than the most recent closed sale, your appraised value will be lower.

http://www.washingtonpost.com/wp-dyn/content/article/2008/03/07/AR2008030703907.html

I think the emphasis on the "cost per square foot" came from investulators using it as a way to keep score. "I paid $200 per square foot last month and sold it for $350 yesterday."

Unless you are are sizing up the price of the "Cookie Cutter II Model" at Vinyl Village or Stucco City the "cost per square foot" pretty much means nothing.

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I'm pretty sure cost per square foot is just the way realtors have been looking at values for many years in Florida. It is not like that in every state, but it was the standard in 1996 when we bought our first home.

I think it is not altogether a bad way to look at values, as long as relevant factors (location, lot size, amenities and quality) are comparable.

Local realtor passed along the following results for 2007:

2007 average sales per square foot for resale houses-

Number
of sales
#20 Seaside- $1,071
#26 Rosemary- $773
#20 Watersound- $546
#45 Watercolor- $510

Local realtor passed along the following results for 2007:

2007 average sales per square foot for resale houses-

Number
of sales
#20 Seaside- $1,071
#26 Rosemary- $773
#20 Watersound- $546
#45 Watercolor- $510

Not sure how the realtor came up with these figures. But, in looking at the Walton county website, only 5 of the sales in Seaside sold for over $1000 per square foot so it is hard to imagine how the overall average was above $1000 per square foot. In addition, you need to consider location in these developments when comparing prices per square foot. Three of the Seaside sales were gulf front and none in Watercolor or Watersound were gulf front. In addition, none of the homes in Phase II or Phase III in Watercolor are as close to the beach as any of the homes in Seaside so you are comparing apples and oranges.

I would be interested to know how the realtor came up with the numbers and it would be interesting to see more comparable comparisons such as non oceanfront Seaside compared to Phase I in Watercolor, Phase I in Watersound and non oceanfront/almost oceanfront in Rosemary. I would bet the numbers would be more tightly packed together.

Local experienced Realtors will counsel a client about SF. I have been asked "what is the average SF per home in general for the area?" There isn't one. Unless it cookie cutter as mentioned already or a condo, then a condo's $ can reflect furnishing, which in some units are better than others. Each property is unique and my experience is to pull comps for each property and do the math.