Pricing graphs

Here's a little local data that seems to back that up. I think pirce depreciation is in full swing right now. It will be interesting to see where we are at the end of the year.

Wow! Great information.

Here's a little local data that seems to back that up. I think pirce depreciation is in full swing right now. It will be interesting to see where we are at the end of the year.

This could be my EKG!

This could be my EKG!

Thanks for the Friday laugh, Miss K.

That downturn in avg sales price may have something to do with so many of the sales lately, being the entry-priced homes. I have been showing many homes priced under $300K, to people looking for primary residences. In all of South Walton, looking at single family detached homes, the price range of SOLD properties, which is ruling the market, are those homes priced between $300,000 - $349,999, with 35 sales, making up 8.51 percent of the market.


Avg sales price can be useful to see trends, and median sales price will help you a little more. I agree that the trend has been downward for 2008, with the avg sales price of $717K. The median price is also lower for 2008, and it is $468K (for detached homes in South Walton).

Avg Sales price (detached homes in SoWal)
2005 $830k
2006 $900k
2007 $914k
2008 $738K (through sept 26)


Median Sales price (detached homes in SoWal)
2005 $581k
2006 $582k
2007 $562k
2008 $468k (through sept 26)

Here's a little local data that seems to back that up. I think pirce depreciation is in full swing right now. It will be interesting to see where we are at the end of the year.

Can you chart this back to 1999?

.

Here's a little local data that seems to back that up. I think pirce depreciation is in full swing right now. It will be interesting to see where we are at the end of the year.

This doesn't make sense to me. In the national graph from CR, we see 2005 as the peak, which, from what I have heard, was the peak in SoWal. But this ECAR graph shows prices averaging $800,000 in 2005, $850,000 in 2007, and only going below that to $700,000 in mid-2008.

Seems to me the SJ might be onto something. Maybe a different mix of properties selling at these times is skewing the results?

You fail to take into account the replacement value of a home which will never go back to 1999 values and, therefore, homes will never go back to 1999 prices. Right now we are nearing replacement value per square foot on homes that are not in the large developments (Rosemary, Watercolor, etc.). Excluding land, a builder is looking at around $150.00 per square foots in just costs (materials, labor) in an averagely finished home. This does not figure in the builder's profit (salary). Using these figures and taking into account that the houses that are selling are under $349,999, a modestly sized home of 2,300 square feet could be BUILT for $150.00 per square foot of COST and be at the price point to sell. However, this does not include land or builder's salary. So, it is very unlikely that prices will continue to fall.

This doesn't make sense to me. In the national graph from CR, we see 2005 as the peak, which, from what I have heard, was the peak in SoWal. But this ECAR graph shows prices averaging $800,000 in 2005, $850,000 in 2007, and only going below that to $700,000 in mid-2008.

Seems to me the SJ might be onto something. Maybe a different mix of properties selling at these times is skewing the results?

The CR graph is taken from the Case-Shilling series and depicts price to income ratio. That appears to be an affordability index as opposed to the ECAR graph which is "average" - I assume mean - home sale prices. Two different animals.

dunefrog, I'm going from memory regarding the following. Peak sales in SoWal was June 2005. In particular, that refers to the quantity of sales, but the avg sales price trends to that month, too. In 2007, the quantity of sales was down from the peak by roughly half, so while a month or two of unusually high priced homes, will skew the avg sales price. Remember the home in The Retreat selling at around $13 million? Rosemary Beach Gulf-front home selling for $8+ million, which they tore down? Same buyer bought a $4million home two lots away in the same down market? Sales like that shift the average sales price, so sometimes, when you see numbers out of the norm, you need to look up the specific sales, and you will usually find the answer to why the numbers looked out of whack.

Good points, CCK. On that note, I will chime in and say that I do think that some prices of properties are at the bottom. However, I think the majority of homes are over-priced for today's market, and those prices will come down to replacement levels.

The CR graph is taken from the Case-Shilling series and depicts price to income ratio. That appears to be an affordability index as opposed to the ECAR graph which is "average" - I assume mean - home sale prices. Two different animals.

No doubt the two graphs are "two different animals," but 30aShopper implied that the two graphs are comparable in some way. My point was that one graph does not support the other, as he implied.

I think if we want to see how far the market has fallen from the peak, we need to first determine the proper way to measure these things. As SJ said, a small number of sales and a few extremely expensive homes within that dataset will skew the average numbers upward. So I don't think the average sales price (in such a small area with so few sales) is a good way to measure the peak or bottom.

I think a better way would be to look at properties that sold in 2005 that ALSO sold in 2007 or 2008. Get the percent decline on each property. Then average that. Is that data available in the ECAR MLS?

No doubt the two graphs are "two different animals," but 30aShopper implied that the two graphs are comparable in some way. My point was that one graph does not support the other, as he implied.

I think if we want to see how far the market has fallen from the peak, we need to first determine the proper way to measure these things. As SJ said, a small number of sales and a few extremely expensive homes within that dataset will skew the average numbers upward. So I don't think the average sales price (in such a small area with so few sales) is a good way to measure the peak or bottom.

I think a better way would be to look at properties that sold in 2005 that ALSO sold in 2007 or 2008. Get the percent decline on each property. Then average that. Is that data available in the ECAR MLS?

That is one of the methodologies used by Case-Shiller but they only have data sets for the original 10 MSA's and the later added 20 SMA's. It would be great to see such data for SoWal.

No doubt the two graphs are "two different animals," but 30aShopper implied that the two graphs are comparable in some way. My point was that one graph does not support the other, as he implied.

I didn't mean to imply they were the same graph, I just found the income to price one the most interesting. CS's sales graph from the same post is more in line with the local data I posted -

I think if we want to see how far the market has fallen from the peak, we need to first determine the proper way to measure these things. As SJ said, a small number of sales and a few extremely expensive homes within that dataset will skew the average numbers upward. So I don't think the average sales price (in such a small area with so few sales) is a good way to measure the peak or bottom.

It does reflect what people are paying for homes around here. If it's skewed because higher priced homes aren't selling, I think that implies two things - people are not buying high priced homes (over priced homes maybe?), and people are not able to get credit to purchase higher priced homes. This implies there is downward pressure on price, so I think it's relevent.

I think a better way would be to look at properties that sold in 2005 that ALSO sold in 2007 or 2008. Get the percent decline on each property. Then average that. Is that data available in the ECAR MLS?

You could pull that out of walton with a lot of manual labor, but it wouldn't be fun. That graph, if we could see it, would probably reflect a very large decrease in sale price, based on what I've seen from poking around in there over the last year or so.

You fail to take into account the replacement value of a home which will never go back to 1999 values and, therefore, homes will never go back to 1999 prices. Right now we are nearing replacement value per square foot on homes that are not in the large developments (Rosemary, Watercolor, etc.). Excluding land, a builder is looking at around $150.00 per square foots in just costs (materials, labor) in an averagely finished home. This does not figure in the builder's profit (salary). Using these figures and taking into account that the houses that are selling are under $349,999, a modestly sized home of 2,300 square feet could be BUILT for $150.00 per square foot of COST and be at the price point to sell. However, this does not include land or builder's salary. So, it is very unlikely that prices will continue to fall.

I wonder what the average price per square foot was in 1999? Take that, apply a standard inflationary appreciation to it to get to what it should cost today, and that is where I think we will end up, or slightly below it, since it's likely to overshoot as builders struggle to get sales moving again.

Can you chart this back to 1999?

.

No I can't, the data comes from Josh's blog, he only goes back to 2005.

My data wasn't just for South Walton either. It included everything from Destin through South Walton.

No I can't, the data comes from Josh's blog, he only goes back to 2005.

I just sent you an email with data since 1999. Let me know if you don't get it.

I know that 30A is trying to give some useful information, but I don't think those graphs tell us much about our area. I think you are much better comparing graphs using average sales price, total sales, and inventory in this area. It would give a more clear view in my opinion.

More graphs on the way once I'm done munging the data. Thanks Josh!

I just sent you an email with data since 1999. Let me know if you don't get it.

I wonder what the average price per square foot was in 1999? Take that, apply a standard inflationary appreciation to it to get to what it should cost today, and that is where I think we will end up, or slightly below it, since it's likely to overshoot as builders struggle to get sales moving again.

Costs have increased at least 50% since 2002. Lumber is low right now, but labor, steel, concrete, and petroleum-based materials such as asphalt and PVC (which is now used for most plumbing) are way up. I don't think a "standard rate of inflation" would be an accurate indicator in this case because these items are commodities that trade independent of the rate of inflation. Bottom Line: You simply cannot build now for what you could 10 years ago. Add to that the fact that the building codes now require hurricane-related costs such as wind-rated glass, which is extremely expensive, and huge amounts of hurricane strapping that you won't find in 1999 homes. You are comparing apples and oranges.

Costs have increased at least 50% since 2002. Lumber is low right now, but labor, steel, concrete, and petroleum-based materials such as asphalt and PVC (which is now used for most plumbing) are way up. I don't think a "standard rate of inflation" would be an accurate indicator in this case because these items are commodities that trade independent of the rate of inflation. Bottom Line: You simply cannot build now for what you could 10 years ago. Add to that the fact that the building codes now require hurricane-related costs such as wind-rated glass, which is extremely expensive, and huge amounts of hurricane strapping that you won't find in 1999 homes. You are comparing apples and oranges.

CCK, I am not in SoWal now but do you think that labor is up, as in they are wanting more pay? (or were you just talking about labor across the USA) Many of the subs that we know are here in LA doing work from after Gustav b/c they can't find any work in SoWal that pays or pays well.

CCK, I am not in SoWal now but do you think that labor is up, as in they are wanting more pay? (or were you just talking about labor across the USA) Many of the subs that we know are here in LA doing work from after Gustav b/c they can't find any work in SoWal that pays or pays well.

There is very little work. Period. Subs got used to making decent money and now they won't settle for less. Doesn't make sense.

30ashopper, regarding how people are purchasing these days, I found the following regarding single family detached home sales including all areas of South Walton, only.

2004 cash sales as a percentage of total sales (from Jan 1 thru Sept 26) 52%
2005 cash sales as a percentage of total sales (from Jan 1 thru Sept 26) 57%
2006 cash sales as a percentage of total sales (from Jan 1 thru Sept 26) 52.2%
2007 cash sales as a percentage of total sales (from Jan 1 thru Sept 26) 56.1%
2008 cash sales as a percentage of total sales (from Jan 1 thru Sept 26) 25.2%

There is very little work. Period. Subs got used to making decent money and now they won't settle for less. Doesn't make sense.

If you look at it from the perspective that consumer costs to put gas in the truck and groceries on the table, if labor costs are staying the same, they have really gone down, since everything else has increased with inflation.