Good news. We're at the tail end of a wave of subprime resets.
Bad news. Round Two of approximately $230 billion in resets that will hit home within the next year. Alt-A mortgages and Option ARMs.
The most opportunistic forecast I have seen is a 20 percent reduction in foreclosures for 2009 considered a “good year”. :yikes:
Add 750,000 in the active REO database. 17 percent of the inventory of existing homes for sale reported by the NAR in June. So we know that number is too low, let's add 8% to get to One in Four.
At current levels, there are more foreclosed homes than new homes sold in this country. 😱
25 percent of all sales will be foreclosed home sales, selling at a deeper discount to the market at an average of 33 percent discount to today's prices compared to 20 percent the previous year.
Builders can only compete with REOs by building custom from scratch rather Regardless, builders can't afford to compete against foreclosures at 40 percent to 50 percent off.
Pushing REOs through the FDIC-Asset Manager-Realtor pinhole is hardly any answer at all.
To Shoot The Messenger, aim at the stockings. :angry:
Replies
140Beach Fanatic
Many homes we are showing are well below replacement cost. Not sure what you mean.
Lowest priced home in Watersound Beach for $795k could easily be replaced for less than that, lowest in Rosemary at $825k also easily replaced for less, lowest in Alys at $1.845 million EASILY replaced for less, lowest in Watercolor (outside of Ph IV) at $690k easily replaced for less, etc etc etc.
Banned
Lowest priced home in Watersound Beach for $795k could easily be replaced for less than that, lowest in Rosemary at $825k also easily replaced for less, lowest in Alys at $1.845 million EASILY replaced for less, lowest in Watercolor (outside of Ph IV) at $690k easily replaced for less, etc etc etc.
I agree and can say that many folks would rather pay a fair price today instead of buying a lot, going through DRB and then waiting "X" months or years for the future enjoyment. So long as they are only saving 10% on self development I think they would rather take the buy today option.
Banned
Okay, what number do you want to use? $200 per SF? That would yield a total price in WC of $450,000, or $350,000 less than Grove. Please tell me if I am wrong with these assumptions. I am trying to learn the market. I know in Atlanta, new homes fetch more than resales. Is it the same in SoWal?
Keep asking math or science based questions and you'll be fine. Don't waste to much of your time with a poster who is overly vague or opinionated without providing usable data.
Banned
Check this out. How much better is Rosemary than it was in 2000
How much more is a property in Rosemary worth today than it was in 2000?
How much more is a property in Rosemary worth today than it was in 2000?
SoWal Insider
I agree and can say that many folks would rather pay a fair price today instead of buying a lot, going through DRB and then waiting "X" months or years for the future enjoyment. So long as they are only saving 10% on self development I think they would rather take the buy today option.
Or they can rent and save a whole helluvalot of money.
.
Beach Fanatic
How much more is a property in Rosemary worth today than it was in 2000?
Here is a lot that recently sold for 10% less than it sold for in 2002 and 5% higher than in 1999. http://qpublic4.qpublic.net/fl_walt...33+1490081+469565&layers=parcel_sales+roads#2
Looks like at least one piece of property in Rosemary has fallen back to 1999-2000 prices.;-)
Beach Fanatic
Please provide some example of homes (newer homes, not 15 or 20 year old dumps) selling for below replacement cost in areas where there are lots available for sale.
The majority of every home I have sold this year could not be built on a neighboring lot and compete with the sale of the homes I have sold. That's why they sold.
Beach Fanatic
The majority of every home I have sold this year could not be built on a neighboring lot and compete with the sale of the homes I have sold. That's why they sold.
Bobby, what construction cost per/SF did you assume?
Banned
Here is a lot that recently sold for 10% less than it sold for in 2002 and 5% higher than in 1999. http://qpublic4.qpublic.net/fl_walt...33+1490081+469565&layers=parcel_sales+roads#2
Looks like at least one piece of property in Rosemary has fallen back to 1999-2000 prices.;-)
From my point of view Rosemary Beach roled out quite a number of properties for sale during the tech. bubble days. Many, many sat for sale for a long time at the original price of that lot you presented. I thought at that time many lots could be purchased, developed and fall just short of cash flowing. I think a lot of others were seeing it that way as well.
They were close to being able to financially perfrom as rental's. They just weren't 100% certain. As the tech. bubble played itself out real estate sales picked up. Then things got some momentum in 2003 and appreciation rates moved a little quicker. More and more buyers came, and with them was more rapid appreciation.
All during this that first fundamental for vacation rentals, cash flow potential, stayed about the same. Prices are going to mark to that rate in this market. The bottom and foreclosure rates are definately close when cash flow potential is close. There is no other factor as important.
From my experience I can tell you that I have never had any trouble selling a home when it's cash flow potential was reasonable.
Beach Fanatic
Bobby, what construction cost per/SF did you assume?
I tried to pull up a CMA on all my DFS sales this am to look at that but it did not work. I will post later tonight. Off to turkey and will be away for awhile.
Beach Fanatic
My sq. footage sales have ranged from $127.00 sq foot to $345.00 sq. foot. The diff in the ranges have been based on locations. $127 north of 98 and the $345 Old Seagrove.
Beach Fanatic
Please provide some example of homes (newer homes, not 15 or 20 year old dumps) selling for below replacement cost in areas where there are lots available for sale.
Here's one, Lakeplace at Grayton, closed early 2008 at 385K, built in 1998, needed some TLC, but good floorplan and "bones. If....you could get a Lakeplace lot for 200,000? and build for 127 psf......you could replace it.
Highly unlikely, the buyer got a great deal.
Beach Fanatic
Here's one, Lakeplace at Grayton, closed early 2008 at 385K, built in 1998, needed some TLC, but good floorplan and "bones. If....you could get a Lakeplace lot for 200,000? and build for 127 psf......you could replace it.
Highly unlikely, the buyer got a great deal.
SF? What was the cost of TLC?
Has the market improved or deteriorated since early 2008?
Beach Fanatic
Here's one, Lakeplace at Grayton, closed early 2008 at 385K, built in 1998, needed some TLC, but good floorplan and "bones. If....you could get a Lakeplace lot for 200,000? and build for 127 psf......you could replace it.
Highly unlikely, the buyer got a great deal.
Thanks Nowgirl. That is one of our sales! We have sold many this year just like this scenario.
Beach Fanatic
SF? What was the cost of TLC?
Has the market improved or deteriorated since early 2008?
I could sell that house all day long for that price in that neighborhood. Great buy for the buyer and we had 3 backups. TLC could have been minimal. Painting and maybe new carpet? They may have choose to put more upgrades in but the home was very livable.
Edited
Beach Fanatic
Here is another one. 2424 sq. feet Cassine Gardens for $462,000. Roughly $190.00 sq.foot not to mention home is wrapped in huge porches. You could not redo this home on another lot for that price unless you got the lot for around $75,000. Right now that is not an option but if anyone wants to sell a lot in Cassine for $75,000 please call.
Beach Fanatic
Here's one, Lakeplace at Grayton, closed early 2008 at 385K, built in 1998, needed some TLC, but good floorplan and "bones. If....you could get a Lakeplace lot for 200,000? and build for 127 psf......you could replace it.
Highly unlikely, the buyer got a great deal.
That house sold for $335k in 2000--another example of prices very rapidly approaching 2000 levels. The 9 year return on that property after deducting commission of 6% and assuming they sold it with $20k or so of furniture (but NOT considering ANY carrying costs) is 0%--WOW. Big negative return after factoring in carrying costs.
As for replacement value, IF there were SIMILAR lots for sale in Lakeplace, my guess is the seller could not get rid of such a lot for over $100k (you can't give away lots for $100k in The Preserve, Cypress Dunes, Summersweet, etc). Add a BRAND NEW 1400 square foot home at $175 per square foot on that $100k lot and voila, great replacement house for under the $385k sales price.
Beach Fanatic
Here is another one. 2424 sq. feet Cassine Gardens for $462,000. Roughly $190.00 sq.foot not to mention home is wrapped in huge porches. You could not redo this home on another lot for that price unless you got the lot for around $75,000. Right now that is not an option but if anyone wants to sell a lot in Cassine for $75,000 please call.
Lots in off beach, north of 30A developments such as the Preserve, Cypress Dunes, etc. cannot be dumped for $100k. I would guess that would also be the case for Cassine. I believe there are two lots now for sale in Cassine for over $200k and they are dead in the water. Last sales in there were about 1.5 years ago and ranged from $190k to $247k, but in 2002 rices in Cassine were around $75k and many prices are headed way south of 2002 values. So, I would say that the rough current value of a lot in Cassine IS in the range of $75k or even LESS.
Therefore, looks like the house you reference could be replaced at the $462k sales price.
Beach Fanatic
Lots in off beach, north of 30A developments such as the Preserve, Cypress Dunes, etc. cannot be dumped for $100k. I would guess that would also be the case for Cassine. I believe there are two lots now for sale in Cassine for over $200k and they are dead in the water. Last sales in there were about 1.5 years ago and ranged from $190k to $247k, but in 2002 rices in Cassine were around $75k and many prices are headed way south of 2002 values. So, I would say that the rough current value of a lot in Cassine IS in the range of $75k or even LESS.
Therefore, looks like the house you reference could be replaced at the $462k sales price.
Like I said Fisher... If anyone can bring me a lot in Cassine for $75,000 I would make a phone call to sell it. I can not do that in the other hoods you mentioned. Preserve, Cypress, etc. are dead because it is a long walk to the beach and there is far to many lots on the market in those areas. RE changes every mile. BTW, I sold those lots in Cassine as well.😀 Also many folks don't want to wait a year or go through the hassle of building when they can buy a home under the replacement cost. BTW, I would rather see people building. My step father is a builder and it is real slow right now.
Edited
Beach Fanatic
Like I said Fisher... If anyone can bring me a lot in Cassine for $75,000 I would make a phone call to sell it. I can not do that in the other hoods you mentioned. Preserve, Cypress, etc. are dead because it is a long walk to the beach and there is far to many lots on the market in those areas. RE changes every mile. BTW, I sold those lots in Cassine as well.😀 Also many folks don't want to wait a year or go through the hassle of building when they can buy a home under the replacement cost. BTW, I would rather see people building. My step father is a builder and it is real slow right now.
Let us know when those two other vacant lots sell in Cassine, then we can figure out who was right. Until then, I guess we can agree to disagree.
BTW, which house in Cassine is for sale for $462k. I didn't see one for that price on the MLS.
Beach Fanatic
Let us know when those two other vacant lots sell in Cassine, then we can figure out who was right. Until then, I guess we can agree to disagree.
BTW, which house in Cassine is for sale for $462k. I didn't see one for that price on the MLS.
Big difference between 200's and $75,000. Not sure what you are talking about on the home in Cassine for $462,000? I sold one for $462,000. It is no longer active in the MLS because it is sold. Lets not even bother disagreeing. Just know that I am correct! :funn:
SWGB
Lots in off beach, north of 30A developments such as the Preserve, Cypress Dunes, etc. cannot be dumped for $100k. I would guess that would also be the case for Cassine. I believe there are two lots now for sale in Cassine for over $200k and they are dead in the water. Last sales in there were about 1.5 years ago and ranged from $190k to $247k, but in 2002 rices in Cassine were around $75k and many prices are headed way south of 2002 values. So, I would say that the rough current value of a lot in Cassine IS in the range of $75k or even LESS.
Therefore, looks like the house you reference could be replaced at the $462k sales price.
Cypress Dunes isn't North of 30A at any point. It's more of a western approach. Once again those apples and oranges don't just come out to an average. Cypress Dunes is a further to the beach than the Preserve, however it has a shuttle bus and much nicer amenities. In addition there are some lots in Cypress Dunes with unobstructed Gulf views over state owned land that will never be developed. The only way you're getting Gulf views from the Preserve is if the condo blows down.
Beach Fanatic
Cypress Dunes isn't North of 30A at any point. It's more of a western approach. Once again those apples and oranges don't just come out to an average. Cypress Dunes is a further to the beach than the Preserve, however it has a shuttle bus and much nicer amenities. In addition there are some lots in Cypress Dunes with unobstructed Gulf views over state owned land that will never be developed. The only way you're getting Gulf views from the Preserve is if the condo blows down.
I agree with you. But, the point I was trying to make is that prices for raw lots are plummeting. BOTH of these developments now have lots going for $100k and lower. And, yes Cypress has much, much nicer homes and amenities than Cassine, but a longer distance to the beach. Bottom line, lot prices (and soon home prices too) are falling to 2000ish levels with farther to go.
Beach Fanatic
Big difference between 200's and $75,000. Not sure what you are talking about on the home in Cassine for $462,000? I sold one for $462,000. It is no longer active in the MLS because it is sold. Lets not even bother disagreeing. Just know that I am correct! :funn:
We shall see. I haven't been too far off yet on the real estate meltdown.;-)
Edited
Beach Fanatic
We shall see. I haven't been too far off yet on the real estate meltdown.;-)
I think the ultimate big difference is Cassine is almost built out where Cypress and The Preserve, etc are saturated with vacant lots.
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