Maybe the sky is not falling after all?

For two years I've been thinking that big brother JOE is going to create a new split. It'll be the pre-boom product and the post-boom product. Any company with as much product for sale as theirs has no choice but to.

I think this will lock in those who bought during the frenzy days for 2 to 3 times as long as would normally play out. Developed Counties will work through the inventory normally, but Walton County has JOE's nearly unlimited new product coming to market with no debt service attached. They can come in under the boom period product as far as the eye can see, thereby trapping those who think they'll hold till prices are restored.

Beachfront/Gulfview properties are not "unlimited" of course. These properties are rare. So I don't think what you say applies to them.

That LIBOR spread is way out of whack. But the financial disarray, though real, will right itself within a few years. The world economy will deleverage and growth will slow a bit. The big risk takers will have their assets redistributed. They will have to work harder to make that up. But no depression. No apocalypse.

Man, I feel so much better now. Where are you getting this information? Or is this just a hunch you have? I guess the info. I've been hearing from oldtimers that have been around the block a few times in the real estate industry must be off a bit. They say they've never seen anything even close to this before but they were born around the 1930's. This type of confidence does kind of remind me though of that quote from the Titantic, "Nothing could sink this ship. Not even god"

Man, I feel so much better now. Where are you getting this information? Or is this just a hunch you have? I guess the info. I've been hearing from oldtimers that have been around the block a few times in the real estate industry must be off a bit. They say they've never seen anything even close to this before but they were born around the 1930's. This type of confidence does kind of remind me though of that quote from the Titantic, "Nothing could sink this ship. Not even god"

I thought you might enlighten us about Pizza and Burritos...apparently your favorite subject. But gosh the Titanic quote is so much...deeper.

I thought you might enlighten us about Pizza and Burritos...apparently your favorite subject. But gosh the Titanic quote is so much...deeper.

Wow. Researching my past quotes... That's weird. But I'm just glad that you are here to enlighten us, O great one. Keep up the great investigations on the market.

PS. Let me know if you know any good burritos around here because I still can't find any besides my wife's.

Beachfront/Gulfview properties are not "unlimited" of course. These properties are rare. So I don't think what you say applies to them.

I agree with that 100%.

At the same time, JOE has most all of Watersound West Beach to sell and they are oblitering the competition with that one. That's a neighborhood that has its own private beach access, full amenities and the Watersound Beach Club. They sold original properties for about 750,000 and now product like that in there is + or - 300,000. What that did strategically is, that other developers bought into their parent parcels at a rate that precludes them from competing. That takes whole sub-divisions out of favorable play.

Watersound North, with golf and the Watersound Beach Club, and the last phase of Watercolor equally obliterates the 2nd tier sub-division competition. I'm surprised that JOE hasn't supported their own customers in this, some of whom bought into the projects I mentioned directly from JOE, but they have chosen to sell property at todays rate which is the only way to sell property.

These properties add about 1,900 new lots to the available inventory in Sowal.

I agree Joe could slash prices. But for all the reasons you mention, they can afford to wait if they choose. However they do have stockholders to please, so we will see.

When everyone says BUY, it might be time to sell. On the other side, the smart folks are going to start buying. Most of them will be very big predators but little fish with a little cash and low rates will become big fish over time.

JOE sells land for their revenue. As told to me by three of their exec's, "We don't sell paper anymore, we sell real estate." If JOE doesn't sell real estate it doesn't generate revenue. I am pretty sure that it is beneficial for them to come in below the pre-boom pricing and trap in the existing post-boom owners.

I admit I'm uneducated and have no training other than field training so take what I say with quite a few grains of salt.

I agree with that 100%.

At the same time, JOE has most all of Watersound West Beach to sell and they are oblitering the competition with that one. That's a neighborhood that has its own private beach access, full amenities and the Watersound Beach Club. They sold original properties for about 750,000 and now product like that in there is + or - 300,000. What that did strategically is, that other developers bought into their parent parcels at a rate that precludes them from competing. That takes whole sub-divisions out of favorable play.

Watersound North, with golf and the Watersound Beach Club, and the last phase of Watercolor equally obliterates the 2nd tier sub-division competition. I'm surprised that JOE hasn't supported their own customers in this, some of whom bought into the projects I mentioned directly from JOE, but they have chosen to sell property at todays rate which is the only way to sell property.

These properties add about 1,900 new lots to the available inventory in Sowal.

Can't disagree with anything you say. I bought a Watersound Beach condo. Even in WS Beach there are many empty homesites still (as you know). I'm thinking these will all fill in in a next 5 years, and I guess West Beach will do the same within that time frame. Your thoughts?

But I really can't understand where all the buyers for Watersound North and the newer parts of Watercolor are coming from any time soon. There just doesn't seem to be that many locals/retirees in the market for upscale housing like that. Many similar properties. Little to distinguish one from the other. I guess JOE is banking on a mass migration into the area. But there are many beautiful, warm places in this country that have great golf courses. Who knows?

When I think of SoWal, I'm thinking beach. Since I'm not local, I just don't think about what it would be like to live in one of the normal neighborhoods. I don't know enough about that. But I remain very bullish on beachfront/gulfview for the simple reason that, for those properties, demand will always be high and supply limited.

Same here thoughts with Watersound North. There's a lot of lots out there, the people with $500K for a vacation home can do better south of 98 (heck, you can buy a house in Watercolor in the mid-high 500s and that's a far better location) and if you're going to sell them to primary residence middle class families in this area, you need a price point somewhere in the $250-$350K range. Which is still on the high price end of things considering family incomes, but at a point where you might start getting higher buyer volume.

Yes, properties on or near the beach will always be in demand and hold value, but it's not like there are only 1 or 2 left. By my guesstimate, there's enough vacant land to add hundreds more homes within a block or 2 of the beach and thousands south of 98.

Watersound, Watercolor, Seaside, Alys etc. will completely fill out, but it will be because of buildouts/that's how they planned it, not because we have used up all available land.

Can't disagree with anything you say. I bought a Watersound Beach condo. Even in WS Beach there are many empty homesites still (as you know). I'm thinking these will all fill in in a next 5 years, and I guess West Beach will do the same within that time frame. Your thoughts?

More like 15 to 20. Looking at current communities in the area that started selling in 1999 and these are still maybe 50% or more lots? It's takes a lot longer than five years, especially in markets like these.

Same here thoughts with Watersound North. There's a lot of lots out there, the people with $500K for a vacation home can do better south of 98 (heck, you can buy a house in Watercolor in the mid-high 500s and that's a far better location) and if you're going to sell them to primary residence middle class families in this area, you need a price point somewhere in the $250-$350K range. Which is still on the high price end of things considering family incomes, but at a point where you might start getting higher buyer volume.

Lots or homes? I'm seeing homes in Windswept for 200-250K. North of 98 I'd say needs to be in this area for the whole package before you move any property. Even then, right now, it's tough for these income groups to get loans, so I'd say these areas will be stagnate for another 2 years or so followed by a slow recovery.

$250K-$350K for lot and home combined. It would seem like buyers ould be willing to pay a little bit of a premium to get south of the Bay, so I'd put what they could charge as slightly higher than what they could charge in Freeport.

If you've got 1,000 lots north of 98, the competition is more Windswept, Hammock Bay, random large mid level PCB project, etc. than something in walking distance to the beach, and it needs to be priced to compete with those places. (Okay, maybe not Windswept because Windswept's seriously beyond BFE in terms of location, good golf or no, but you get the drift)

Yes, properties on or near the beach will always be in demand and hold value, but it's not like there are only 1 or 2 left. By my guesstimate, there's enough vacant land to add hundreds more homes within a block or 2 of the beach and thousands south of 98.

Watersound, Watercolor, Seaside, Alys etc. will completely fill out, but it will be because of buildouts/that's how they planned it, not because we have used up all available land.

I know you know JOE neighborhoods, but do you think they will really enforce buildouts?

I know you know JOE neighborhoods, but do you think they will really enforce buildouts?

They can't and they won't.

Enforcement means buying back lots at original sales prices. That would require significant cash outlays and most of the lots they would need to repurchase would be at boom prices. You think Joe will buyback at boom prices then have to resell at a loss at current prices. Don't think so.

Where's your confirmation Scooter?

Do you really think JOE will enforce build outs? You seem to know a bunch about this stuff....

I think they will issue extensions when pressed on the issue to avoid the money loss of buybacks and so that when the market picks back up there are still time pressures to fill in the neighborhoods.

And I don't know nearly as much about JOE as you think I do! ;-)

I've seen the Memorandums of Agreement that JOE issues to first purchasers, but I can't imagine how they can modify the buildout's here and there without also recording modifications of the Memo's of Agreement. From a Title Insurance standpoint I just don't know how any Insurer of Title can feel safe issuing insurance against recored doc's that are possibly being modified at the leisure of the original Memo. Drafter. Then further, how do lenders know where they stand when they loan to the resale customer who is paying more then the Memo. is willing to repay in default.

Anyone????

An article appeared in the Aug 28 Atlanta Journal Constitution that flew all over me. While not directly relevant to the SoWal real estate market, I hope y'all won't mind if I vent out loud.

The story is about an event that did not occur at a realtor's open house but on the steps of the Georgia State Capitol. There weren't any balloons but there were plenty of buttons that said "Buy Now". The target market wasn't high end buyers but buyers who have not owned in the past 3 years and have incomes in the "middle" . And the head cheerleader wasn't a real estate professional but one of Georgia's two senators, Johnny Isakson, who was quoted in the article stating: "You will never see a better opportunity than the opportunity before us right now" (referring to buying a home).

Johnny Isakson made his money as a real estate broker before entering politics and since 2004, according to the FEC, has had over 25% of the contributions to his campaign come from the National Association of Realtors Political Action Cmtee.

Link below for FEC reports..

http://herndon1.sdrdc.com/cgi-bin/can_give/S6GA00119

The full article is here...

http://www.ajc.com/search/content/business/stories/2008/08/28/rally.html

I'm all for talking up the economy, being optmistic about the future and representing the interests of your constituents. But given the level of risk that's left in the market, isn't this a tad bit irresponsible for a US Senator?

An article appeared in the Aug 28 Atlanta Journal Constitution that flew all over me. While not directly relevant to the SoWal real estate market, I hope y'all won't mind if I vent out loud.

The story is about an event that did not occur at a realtor's open house but on the steps of the Georgia State Capitol. There weren't any balloons but there were plenty of buttons that said "Buy Now". The target market wasn't high end buyers but buyers who have not owned in the past 3 years and have incomes in the "middle" . And the head cheerleader wasn't a real estate professional but one of Georgia's two senators, Johnny Isakson, who was quoted in the article stating: "You will never see a better opportunity than the opportunity before us right now" (referring to buying a home).

Johnny Isakson made his money as a real estate broker before entering politics and since 2004, according to the FEC, has had over 25% of the contributions to his campaign come from the National Association of Realtors Political Action Cmtee.

Link below for FEC reports..

http://herndon1.sdrdc.com/cgi-bin/can_give/S6GA00119

The full article is here...

http://www.ajc.com/search/content/business/stories/2008/08/28/rally.html

I'm all for talking up the economy, being optmistic about the future and representing the interests of your constituents. But given the level of risk that's left in the market, isn't this a tad bit irresponsible for a US Senator?

Once a Realtor?...always a Realtor?.

.

I knew YoungFT's post was shelly-bait.

An article appeared in the Aug 28 Atlanta Journal Constitution that flew all over me. While not directly relevant to the SoWal real estate market, I hope y'all won't mind if I vent out loud.

The story is about an event that did not occur at a realtor's open house but on the steps of the Georgia State Capitol. There weren't any balloons but there were plenty of buttons that said "Buy Now". The target market wasn't high end buyers but buyers who have not owned in the past 3 years and have incomes in the "middle" . And the head cheerleader wasn't a real estate professional but one of Georgia's two senators, Johnny Isakson, who was quoted in the article stating: "You will never see a better opportunity than the opportunity before us right now" (referring to buying a home).

Johnny Isakson made his money as a real estate broker before entering politics and since 2004, according to the FEC, has had over 25% of the contributions to his campaign come from the National Association of Realtors Political Action Cmtee.

Link below for FEC reports..

http://herndon1.sdrdc.com/cgi-bin/can_give/S6GA00119

The full article is here...

http://www.ajc.com/search/content/business/stories/2008/08/28/rally.html

I'm all for talking up the economy, being optmistic about the future and representing the interests of your constituents. But given the level of risk that's left in the market, isn't this a tad bit irresponsible for a US Senator?

As long as the buyer can pay his mortgage, I don't see what the problem is. The banks will be taking a much more sober look at borrowers than they did a few years ago.

Why should it matter that he is middle class? If he has good credit and his ratios are in line, go for it. He has to live somewhere. His new house payment may be less than his rent.

Life goes on.

"Now is a great time to buy!"
(This has been a paid political announcement)
.

And I heard Isakson likes granite countertops and stainless steel...

'nuff said