Real Estate Supply

Shelly, dead link.

spinDrAtl...I'm assuming "Atl" is Atlanta; down here you hear many realtors stating that the boomers will bail out the market and it's just around the corner. I think that was what Shelly was referring to and I agree with Shelly; I personally consider it to be wishful thinking by many realtors here.

If you are in Atlanta, are you experiencing the overbuilding and boomer hype up there?

I agree with that. In no way do I think any boomer bailout is coming next year or even in the next couple. I believe it will be a slow migration over some longer period of time.

Technically I am a boomer by the media definition of the birth years. Praise be that I already have my 30A property. Is it for retirement? That is TBD.

As to your question regarding the Atlanta market, it seems that the overbuilding segment is now the trendy downtown condo towers. Atlantic Station is a very successful project and so everyone is now being a copycat. There are so many condo towers (plus a number of loft projects as well) on the drawing board that I don't see how they will sell them all. There is some migration from suburbs to the city due to traffic nightmares every day but not enough to fill every project I see in the Sunday real estate section. If you want a city condo in a year or two, I think you may see prices dive and flippers caught in Atlanta as well.

Houses in the suburbs seem to be selling but slowly and I don't think prices are taking too much of a dive. The slowdown seems to be days on the market, but then again, we are in the slow season at the moment.

I'm curious to know which r/e agents on this website you believe have been the most dishonest...Red

redfisher...I don't know any RE agent that has been dishonest.

I agree with that. In no way do I think any boomer bailout is coming next year or even in the next couple. I believe it will be a slow migration over some longer period of time.

Technically I am a boomer by the media definition of the birth years. Praise be that I already have my 30A property. Is it for retirement? That is TBD.

As to your question regarding the Atlanta market, it seems that the overbuilding segment is now the trendy downtown condo towers. Atlantic Station is a very successful project and so everyone is now being a copycat. There are so many condo towers (plus a number of loft projects as well) on the drawing board that I don't see how they will sell them all. There is some migration from suburbs to the city due to traffic nightmares every day but not enough to fill every project I see in the Sunday real estate section. If you want a city condo in a year or two, I think you may see prices dive and flippers caught in Atlanta as well.

Houses in the suburbs seem to be selling but slowly and I don't think prices are taking too much of a dive. The slowdown seems to be days on the market, but then again, we are in the slow season at the moment.

spinDrAtl...thanks for the info...I hear the Related Group is starting a large build-out around Lenox Square. Should be interesting!

Guys-n-Gals, there are a lot of jealous people who lacked the courage to ever buy a piece of property at the beach, and nothing is going to ever fix those folks way of thinking. They just try to spin their negative thinking on everyone else. My father always told me that you will always have people who will tell you can't do something, because they lack the courage to do it themselves. The beach real estate market down goes up and down. You get the occasional hurricane adjustment, the market slows down and people with money take advantage of these slow times, while they skeptics sit back and throw darts at everyone else.

During an up market your RE agent will tell you how great of investment you are making but during a down market, they tell you should lower the price so they can make an living. In a couple of months the media will announce RE is hot, and investors will be back to drive the market up again and agents will again be singing the investment song-n-dance.

To win in the long run, you must consider real estate as a long term investment. My father purchased a lot in western Panama City one mile from the beach for three hundred dollars in 1960's and sold it in 1998 for forty five thousand dollars. If he had waited until 2004, he could have even doubled that amount. As a child, I remember my mother telling him how stupid he was to invest in a piece of sand one mile from the beach during a time when we were doing good to buy new school cloths. Still today, it was the best investment he ever made!

I have flown up and down the east and west coast of Florida, and one thing is for certain, there is no place such as this piece of paradise! It's not just the property, but the people who have an absolute love for the beaches and community. People fight against over development, seawalls, paved roads, etc.. Nothing like it anywhere in this country, and that is why it's so unique and valuable. The people who realize this are still buying today, because the record shows, hurricanes come and go, but the bottom line is that there is less than 5% of Florida beaches that have beautiful white sand and high elevations above sea level.

So find you a piece of paradise and just hang on to it for 5-10 years, maybe longer. In the long run, it will be the best investment you will have ever made!

Guys-n-Gals, there are a lot of jealous people who lacked the courage to ever buy a piece of property at the beach, and nothing is going to ever fix those folks way of thinking. They just try to spin their negative thinking on everyone else. My father always told me that you will always have people who will tell you can't do something, because they lack the courage to do it themselves. The beach real estate market down goes up and down. You get the occasional hurricane adjustment, the market slows down and people with money take advantage of these slow times, while they skeptics sit back and throw darts at everyone else.

During an up market your RE agent will tell you how great of investment you are making but during a down market, they tell you should lower the price so they can make an living. In a couple of months the media will announce RE is hot, and investors will be back to drive the market up again and agents will again be singing the investment song-n-dance.

To win in the long run, you must consider real estate as a long term investment. My father purchased a lot in western Panama City one mile from the beach for three hundred dollars in 1960's and sold it in 1998 for one hundred and ten thousand dollars. If he had waited until 2004, he could have even doubled that amount. As a child, I remember my mother telling him how stupid he was to invest in a piece of sand one mile from the beach during a time when we were doing good to buy new school cloths. Still today, it was the best investment he ever made!

I have flown up and down the east and west coast of Florida, and one thing is for certain, there is no place such as this piece of paradise! It's not just the property, but the people who have an absolute love for the beaches and community. People fight against over development, seawalls, paved roads, etc.. Nothing like it anywhere in this country, and that is why it's so unique and valuable. The people who realize this are still buying today, because the record shows, hurricanes come and go, but the bottom line is that there is less than 5% of Florida beaches that have beautiful white sand and high elevations above sea level.

So find you a piece of paradise and just hang on to it for 5-10 years, maybe longer. In the long run, it will be the best investment you will have ever made!

FFF...no problem with your long term projections...what is your 12 to 24 month projection for sales in this area?

BTW, experienced mortgage brokers here speak of an eight percent average historical appreciation rate when discussing the last 10 to 15 years of sales; 2003/2004/2005 spiked prices skew this somewhat. Also, where are these people with money taking advantage of the slow times? They don't seem to be on BMB; realtor signs seem to stay up forever. I guess these smart purchasers are in developments whose names begin with Water.

FFF...no problem with your long term projections...what is your 12 to 24 month projection for sales in this area?

BTW, experienced mortgage brokers here speak of an eight percent average historical appreciation rate when discussing the last 10 to 15 years of sales; 2003/2004/2005 spiked prices skew this somewhat. Also, where are these people with money taking advantage of the slow times? They don't seem to be on BMB; realtor signs seem to stay up forever. I guess these smart purchasers are in developments whose names begin with Water.

We are in the slowest period for real estate sales and all the real estate agents I know (who are still working) are getting busy. Serious investors are in the market now, trying to take advantage of people who over leveraged themselves. Prices will level off 1st quarter of 2007 and will begin to increase during 2nd and 3rd quarter of 07. By 4th quarter 2007 the insurance and tax issues will have been resolved, so if we can have another mild hurricane season, completion of SW beach renurishment, and further airport development, then I anticipate a very strong 2008 year. Still the people who can not run with the big dogs will stay on the porch and growl at everyone else for having the courage to take a little risk.

We are in the slowest period for real estate sales and all the real estate agents I know (who are still working) are getting busy. Serious investors are in the market now, trying to take advantage of people who over leveraged themselves. Prices will level off 1st quarter of 2007 and will begin to increase during 2nd and 3rd quarter of 07. By 4th quarter 2007 the insurance and tax issues will have been resolved, so if we can have another mild hurricane season, completion of SW beach renurishment, and further airport development, then I anticipate a very strong 2008 year. Still the people who can not run with the big dogs will stay on the porch and growl at everyone else for having the courage to take a little risk.

Fly--

You need to add about 5 to 8 years to your predictions above. There is way, way too much inventory on the market plus lots more to come on the market in the next few years for the market to go into a serious uptick. Seeing "investors" in the market will not help at all. We need serious END USERS, and lots of them to come into the market and buy up all the inventory before the market will turn. Serious investors will simply try to buy distressed properties and them put them right back on the market. That won't help anyone.

Fly--

You need to add about 5 to 8 years to your predictions above. There is way, way too much inventory on the market plus lots more to come on the market in the next few years for the market to go into a serious uptick. Seeing "investors" in the market will not help at all. We need serious END USERS, and lots of them to come into the market and buy up all the inventory before the market will turn. Serious investors will simply try to buy distressed properties and them put them right back on the market. That won't help anyone.

Prime example of what the "big dogs" are doing. There is a very successful developer/investor in Seagrove with initials of DH. Controversial at times but successful, and has been investing at the beach a very long time. What has he done during this time, but buy every piece of beach front property he can get his hands on. He demolished about 5 rental homes right on the beach! Do you think he believes there is a 5-8 years for the market to return? Probably not! Now he is not buying property blocks from the beach either, but RE that is beach front! I know of another developer who is using his own money (not the banks) to build more condo's near Topsol state park. Look what the big players are doing, and then ask yourself again if you really believe its going to be 5-8 years. There have always been a mix of end users and investors at the beach. Unfortunately, way to may people have discovered paradise, and this little slump will not last for long. I have never known anyone who has been to our beach along 30-A and not said they wished they had a beach home or condo there.

We are in the slowest period for real estate sales and all the real estate agents I know (who are still working) are getting busy. Serious investors are in the market now, trying to take advantage of people who over leveraged themselves. Prices will level off 1st quarter of 2007 and will begin to increase during 2nd and 3rd quarter of 07. By 4th quarter 2007 the insurance and tax issues will have been resolved, so if we can have another mild hurricane season, completion of SW beach renurishment, and further airport development, then I anticipate a very strong 2008 year. Still the people who can not run with the big dogs will stay on the porch and growl at everyone else for having the courage to take a little risk.

FFF...I know a lot of "big dogs" under the front porch whining right now!

Thanks for the projection. You might be right about 2008!

I had to change my avatar to this biggest dog I can find. Her name is Florida, by the way. I have been a Realtor in Michigan for 14 years, invested here, moved here, have told everyone I know in Michigan about SoWal, and have gone back to work here. I have been in the business long enough to have experienced 13% interest rates, the Gulf War, buyers and sellers markets and lots of inventory. Not as much inventory as what we have right now, I'll admit. All Northeners are not bad either! They will actually bring fresh blood (probably not the best choice of words) to the market. I agree with FFF. If we are all doom and gloom, what hope do we have? I'm having an open house Saturday. I know there is nothing else like what we have here and I am STILL excited to call a little piece of it MINE! Here is to an AWESOME 2007!

Shelly, dead link.

Try this:

MILLION DOLLAR CONDOS WITH SOUP KITCHENS BELOW

Prime example of what the "big dogs" are doing. There is a very successful developer/investor in Seagrove with initials of DH. Controversial at times but successful, and has been investing at the beach a very long time. What has he done during this time, but buy every piece of beach front property he can get his hands on. He demolished about 5 rental homes right on the beach! Do you think he believes there is a 5-8 years for the market to return? Probably not! Now he is not buying property blocks from the beach either, but RE that is beach front! I know of another developer who is using his own money (not the banks) to build more condo's near Topsol state park. Look what the big players are doing, and then ask yourself again if you really believe its going to be 5-8 years. There have always been a mix of end users and investors at the beach. Unfortunately, way to may people have discovered paradise, and this little slump will not last for long. I have never known anyone who has been to our beach along 30-A and not said they wished they had a beach home or condo there.

Just because one investor has bought up lots of property on either side of 30A and then put signs up saying Harris Family and Friends in front of each one of them does not mean the market is turning. Nor does it mean that Harris Family and Friends will actually be successful investing in all of those properties. Past success does not guarantee future success anymore than past failures insure no future successes. Again, we need end users, not investors, buying property. If HFF bought 6 or 8 properties, they will need to find 6 to 8 multimillionaires to buy the properties from among and whole host of similar properties up and down 30A. The inventory is the problem. Investors will not solve the problem. Only end users will correct the situation and there just aren't nearly enough of them interested in the market to solve the inventory problem anytime in the foreseeable future. The laws of supply and demand are in control here---too much supply, very little demand.

We are in the slowest period for real estate sales and all the real estate agents I know (who are still working) are getting busy. Serious investors are in the market now, trying to take advantage of people who over leveraged themselves. Prices will level off 1st quarter of 2007 and will begin to increase during 2nd and 3rd quarter of 07. By 4th quarter 2007 the insurance and tax issues will have been resolved, so if we can have another mild hurricane season, completion of SW beach renurishment, and further airport development, then I anticipate a very strong 2008 year. Still the people who can not run with the big dogs will stay on the porch and growl at everyone else for having the courage to take a little risk.

Am interested in hearing your scenario for how RE is going to start to turn around by April 2007.

How are the insurance and tax issues going to be resolved? What do you see happening in the next 3 months? Is insurance going to get cheaper? Is the congress going to call a special session and order State Farm to lower their prices, or else? Is Florida going to scrap the SOH program and lower taxes for all homeowners--making up for the shortfall by reusing paperclips and ordering documents to be printed on the "draft" setting to cut down on ink cartridge use?

What do you see happening to the folks who "invested" in RE in 2005/2006 (and are now trying to sell). Are they going to make a profit (after all carrying costs and expenses are figured in?)

Who are these people who will be buying up all the condos, houses and lots that are now for sale (and those that are waiting in the wings to flood the market come the "Big Spring Selling Season?") Won't many of the boomers find they'll have trouble selling their properties up North (or drawing out equity to finance)? Or is all RE (not just beach properties) going to pull out of the slump together.

If the economy is as strong as the government would like us to believe, wouldn't lowering interest rates be the very last thing the Fed would want to do? (It would spark hyper-inflation and send the dollar straight to hell.)

FFF, walk me through the steps of this quick RE recovery. Real estate does go through booms and busts; I find it hard to believe that the record-shattering RE boom we've just experienced over the past few years (helped along by cheap money and mass speculation) is going to exit this "soft landing" in a couple of months and start heading up again where it left off.

Here is my latest prediction. I vow to keep my optimistic a#@ from this Real Estate section. You can find me on the corner of 30A and 83. This is where I will be writing contracts and having a great 2007. I am sorry many of you find that hard to believe but properties are selling. If you would like to look at the "daily" hotsheets you are welcome to come by my office. Heck, I will even leave them at the door for you. 2006 was a weird year. Not a banner year but not as bad as many on the boards talk about. Much of the quoted info comes from sources that have nothing to do with SOWAL. I resign...

Am interested in hearing your scenario for how RE is going to start to turn around by April 2007.

How are the insurance and tax issues going to be resolved? What do you see happening in the next 3 months? Is insurance going to get cheaper? Is the congress going to call a special session and order State Farm to lower their prices, or else? Is Florida going to scrap the SOH program and lower taxes for all homeowners--making up for the shortfall by reusing paperclips and ordering documents to be printed on the "draft" setting to cut down on ink cartridge use?

What do you see happening to the folks who "invested" in RE in 2005/2006 (and are now trying to sell). Are they going to make a profit (after all carrying costs and expenses are figured in?)

Who are these people who will be buying up all the condos, houses and lots that are now for sale (and those that are waiting in the wings to flood the market come the "Big Spring Selling Season?") Won't many of the boomers find they'll have trouble selling their properties up North (or drawing out equity to finance)? Or is all RE (not just beach properties) going to pull out of the slump together.

If the economy is as strong as the government would like us to believe, wouldn't lowering interest rates be the very last thing the Fed would want to do? (It would spark hyper-inflation and send the dollar straight to hell.)

FFF, walk me through the steps of this quick RE recovery. Real estate does go through booms and busts; I find it hard to believe that the record-shattering RE boom we've just experienced over the past few years (helped along by cheap money and mass speculation) is going to exit this "soft landing" in a couple of months and start heading up again where it left off.

Shelly, I do not profess to understand economics as well as you at all, but I am curious how you think that a drop in the Fed rate would cause hyper-inflation and send the dollar straight to he!!?
I was always under the understanding that the drop in the value of the dollar had more to do with with a drop in foreign investment in part because of the tax implications and the difficulty for foreigners due to the Patriot Act and one other Bush induced Act.

As far as properties in the North, I can say in the Northeast, although they are taking a little longer to sell, they are still selling, and the prices have not dropped nearly as sharply as Floriduh. Homes anywhere near the water in 1MM plus range are still selling well in New Jersey to end users. Coops and condos in NYC are selling with no huge price drops.

.........and as far as some comments made about "Northerners" (not you Shelly) perhaps you would see more of us buying homes as end users if you toss aside the prejudice. I know that I adore all my SoWal friends no matter where they came from.

Am interested in hearing your scenario for how RE is going to start to turn around by April 2007.

How are the insurance and tax issues going to be resolved? What do you see happening in the next 3 months? Is insurance going to get cheaper? Is the congress going to call a special session and order State Farm to lower their prices, or else? Is Florida going to scrap the SOH program and lower taxes for all homeowners--making up for the shortfall by reusing paperclips and ordering documents to be printed on the "draft" setting to cut down on ink cartridge use?

What do you see happening to the folks who "invested" in RE in 2005/2006 (and are now trying to sell). Are they going to make a profit (after all carrying costs and expenses are figured in?)

Who are these people who will be buying up all the condos, houses and lots that are now for sale (and those that are waiting in the wings to flood the market come the "Big Spring Selling Season?") Won't many of the boomers find they'll have trouble selling their properties up North (or drawing out equity to finance)? Or is all RE (not just beach properties) going to pull out of the slump together.

If the economy is as strong as the government would like us to believe, wouldn't lowering interest rates be the very last thing the Fed would want to do? (It would spark hyper-inflation and send the dollar straight to hell.)

FFF, walk me through the steps of this quick RE recovery. Real estate does go through booms and busts; I find it hard to believe that the record-shattering RE boom we've just experienced over the past few years (helped along by cheap money and mass speculation) is going to exit this "soft landing" in a couple of months and start heading up again where it left off.

Shelly, talk to anyone who has lived at the beach through a couple of huricane season's, and they will all tell you story's whereby the insurance industry raises rates. In time they drop or level off. Same goes with taxes. I am confident the Florida legistature is going to address the above mention problems head-on because they have too! The entire Florida economy depends on it! The worst nation wide real estate decline I have ever experienced in my life time occured after some major tax reshuffling back in the early 1990's. High leverage investor's took a beating much worse than what we are experiencing now, and many lost everything. Still within 18-24 months things turned rebound. Many agents in this area are doing good, and that is because they work and market their properties instead of sitting around waiting for a phone call. All the easy gimmic money deals you mentioned, only helped unexperienced flippers. Some of these people will disappear forever and others will become smarter RE investors. BTW, I have never meet a "end user" who did not consider their beach property as an investment.

I can't see SOH changing much in terms of tax relief for non-homestead properties. There are just way too many voters (including myself) who like the present system just fine.

And if youu look at the set up of the Florida tax codes, it's almost always been that the tourists, second home owners and newcomers that take the hit with the implication that the longer you're a resident in the state, the better the tax set up becomes for you. SOH is consistent with that attitude.

:clap_1: :clap_1: :clap_1: I vote for a good year also......(with a little help from up above) ;-)

Here is my latest prediction. I vow to keep my optimistic a#@ from this Real Estate section. You can find me on the corner of 30A and 83. This is where I will be writing contracts and having a great 2007. I am sorry many of you find that hard to believe but properties are selling. If you would like to look at the "daily" hotsheets you are welcome to come by my office. Heck, I will even leave them at the door for you. 2006 was a weird year. Not a banner year but not as bad as many on the boards talk about. Much of the quoted info comes from sources that have nothing to do with SOWAL. I resign...

Can someone explain this huge descrepancy to a non RE math guy...

In the NWF Daily news today... ECAR said how residential sales in '06 were down about 20 percent from '05, but sugar coated it with the positive news that Novemeber 06 sales were up 33 percent from November 05 sales in the Okaloosa, Walton, Santa Rosa, and Bay counties... as to hint we are starting to reach bottom and here comes the rebound....

Well if you look at the data from FAR and look at the MSA's that make up these counties... ie Pensacola, FWB, and Panama City... You get the following data for residential sales from Nov 05 to Nov 06...


SFH Condo
FWB -37% -8%
Panama City -15% -7%
Pensacola -27% 21%


Doesnt seem to add up to the 33% increase that ECAR is using in the paper...

Can someone explain this huge descrepancy to a non RE math guy...

In the NWF Daily news today... ECAR said how residential sales in '06 were down about 20 percent from '05, but sugar coated it with the positive news that Novemeber 06 sales were up 33 percent from November 05 sales in the Okaloosa, Walton, Santa Rosa, and Bay counties... as to hint we are starting to reach bottom and here comes the rebound....

Well if you look at the data from FAR and look at the MSA's that make up these counties... ie Pensacola, FWB, and Panama City... You get the following data for residential sales from Nov 05 to Nov 06...


SFH Condo
FWB -37% -8%
Panama City -15% -7%
Pensacola -27% 21%


Doesnt seem to add up to the 33% increase that ECAR is using in the paper...

ECAR doesn't include Panama City or Pensacola data. It Includes Walton and Okaloosa Counties. Although ECAR users have access to data in other areas in NW FL, that is not used in our data for the ECAR region. As I have stated many times before, we are a fairly unique market, and not always typical of the Florida or National Avg. Although the drive from 30A to PCB is fairly short, it is a different market, with different end users as buyers. Ask most people who own property east of Camp Creek Rd (which includes a Panama City Beach mailing address, unless you live in a s/d with a gourmet Post Office, like Rosemary Beach), and you will find that they hate having a PCB mailing address.

EDIT:

I don't usually run Destin data, but I will in the following data for comparing nov 06 to nov 05. The data will include all MLS sales data for the area from and including Destin through all of SoWal. This is not the same data which ECAR would use for their entire area, but I think this is the most active area of our market.

sfd (single family detached homes) - sales, both quantity and total dollar volume were down in nov 06 compared to nov 05.
total $ volume for nov 06 = -66.03%
quantity of sales for nov 06 = -86.11%

condos -- sales for nov 06 were substatially up over 05, both in quantity and tot dollar volume.
total $ volume for nov 06 = +32.19%
quantity of sales for nov 06 = +43.14%

Attached Single Family (townhomes) -- sales were up tremendously in nov 06 vs nov 05.
total $ volume for nov 06 = +87.36%
quantity of sales for nov 06 = +77.78%

I can't see SOH changing much in terms of tax relief for non-homestead properties. There are just way too many voters (including myself) who like the present system just fine.

And if youu look at the set up of the Florida tax codes, it's almost always been that the tourists, second home owners and newcomers that take the hit with the implication that the longer you're a resident in the state, the better the tax set up becomes for you. SOH is consistent with that attitude.

Watch for changes in taxation that will provide relief for second home owners via the Florida Legislature.

ECAR doesn't include Panama City or Pensacola data. It Includes Walton and Okaloosa Counties. Although ECAR users have access to data in other areas in NW FL, that is not used in our data for the ECAR region. As I have stated many times before, we are a fairly unique market, and not always typical of the Florida or National Avg. Although the drive from 30A to PCB is fairly short, it is a different market, with different end users as buyers. Ask most people who own property east of Camp Creek Rd (which includes a Panama City Beach mailing address, unless you live in a s/d with a gourmet Post Office, like Rosemary Beach), and you will find that they hate having a PCB mailing address.

I will quote the 2 paragraphs directly from the newspaper...
-----
"In 2006, residential sales in Santa Roas, Okaloosa, Walton, and Bay Counties - including condos and townhomes - were down by about 20 percent from 2005, according to recent Association of Realtors statistics.

However, those same numbers show that residential sales in the four-county area in November were up 33 percent from November 2005.

"It looks like things are coming back to a stronger pace," Stafford siad."
----

Okay I added a third paragraph to make my point... They show data that does not even come close to what the MSA data shows on FAR's website to try and drum up some demand...

Again my question will be asked... HOW are sales of every MSA in the counties mentioned down considerably from Nov 05 to Nov 06, but yet in the paper they say they are up 33%...

destinsm, read my edit in post 222. I pulled some stats which may help you better understand their numbers. Remember, they are just stats.

destinsm, read my edit in post 222. I pulled some stats which may help you better understand their numbers. Remember, they are just stats.

Thanks for the data Smiling Joe, very appreciated...

Looks like some people are bitting on the price declings in the condo and townhome markets...

Following a few of them I would expect so... for example a new townhome development in Destin (Quail Lake) had units for sale all above $300,000 in '05... end of this year there are a number for sale in the $180,000 range...

Another, Diamond Lakes, was asking over $400,000 in '05... now selling for about $295,000....

Problem is even with people bitting on these supposed deals on the way down, there is still TONS more supply out there to be soaked up... So really they are just resetting the market downward to go even further down in the near future, imo... but somebody has to do it