D2.0
If So Wal dirt has not bottomed here in 2009, then it will be because we're headed for Great Depression II - in such case we're probably headed 50-70% lower roughly speaking.
IMHO there is maybe a 1/3 chance we're headed for such a depression. (i.e. we can't fool the people into believing things are better)
Since I think there is a better chance we're headed for a surge in global growth I'd start buying early, if you like to gamble only, as I do.
I think what we're going to see in 2010 is that prices head back up much quicker than the 30ashoppers are currently anticipating. Buyers won't have months and months to sop up still low priced desperation inventory. Due to the lightning quick flow of information, the twittering effect, boards like this, plugged in sellers, plugged in agents, and the fact that no one really wants to retire in Montgomery or Atlanta - my prediction is for a 20% across the board spike in 2010 from current realistic REO values today.
South Walton real estate peaked at least 12 if not 18 months earlier than the national peak. South Walton peaked around March/April of 2005. The rest of Florida peaked very shortly thereafter, but nationally speaking, real estate in California, and the Northeastern Seaboard peaked in late 2006.
Truman Show II will be an allegory to re-educate America to feel good again about real estate. A depressed Truman's house appreciates wildly from the depths, and Truman does a cash out refi and invests in the new Bailey Savings and Loan with the surplus, after setting aside a few dollars for his wife to get an augmentation.
Replies
28
Admin
D2.0
SoWal Insider
Time will tell.
Beach Comber
If So Wal dirt has not bottomed here in 2009, then it will be because we're headed for Great Depression II - in such case we're probably headed 50-70% lower roughly speaking.
IMHO there is maybe a 1/3 chance we're headed for such a depression. (i.e. we can't fool the people into believing things are better)
Since I think there is a better chance we're headed for a surge in global growth I'd start buying early, if you like to gamble only, as I do.
I think what we're going to see in 2010 is that prices head back up much quicker than the 30ashoppers are currently anticipating. Buyers won't have months and months to sop up still low priced desperation inventory. Due to the lightning quick flow of information, the twittering effect, boards like this, plugged in sellers, plugged in agents, and the fact that no one really wants to retire in Montgomery or Atlanta - my prediction is for a 20% across the board spike in 2010 from current realistic REO values today.
South Walton real estate peaked at least 12 if not 18 months earlier than the national peak. South Walton peaked around March/April of 2005. The rest of Florida peaked very shortly thereafter, but nationally speaking, real estate in California, and the Northeastern Seaboard peaked in late 2006.
Truman Show II will be an allegory to re-educate America to feel good again about real estate. A depressed Truman's house appreciates wildly from the depths, and Truman does a cash out refi and invests in the new Bailey Savings and Loan with the surplus, after setting aside a few dollars for his wife to get an augmentation.
so since you sound so confident what are you buying now?
Beach Fanatic
I think in certain areas the market has over corrected and in other others we will continue to see corrections. Once the great bottom bell goes off the areas that have over corrected will hit a bump back up to a more stable number. Just my two cents. It could be the "time to buy" but you better do your homework so you buy in the area that has over corrected.
Beach Fanatic
If So Wal dirt has not bottomed here in 2009, then it will be because we're headed for Great Depression II - in such case we're probably headed 50-70% lower roughly speaking.
IMHO there is maybe a 1/3 chance we're headed for such a depression. (i.e. we can't fool the people into believing things are better)
Since I think there is a better chance we're headed for a surge in global growth I'd start buying early, if you like to gamble only, as I do.
I think what we're going to see in 2010 is that prices head back up much quicker than the 30ashoppers are currently anticipating. Buyers won't have months and months to sop up still low priced desperation inventory. Due to the lightning quick flow of information, the twittering effect, boards like this, plugged in sellers, plugged in agents, and the fact that no one really wants to retire in Montgomery or Atlanta - my prediction is for a 20% across the board spike in 2010 from current realistic REO values today.
South Walton real estate peaked at least 12 if not 18 months earlier than the national peak. South Walton peaked around March/April of 2005. The rest of Florida peaked very shortly thereafter, but nationally speaking, real estate in California, and the Northeastern Seaboard peaked in late 2006.
Truman Show II will be an allegory to re-educate America to feel good again about real estate. A depressed Truman's house appreciates wildly from the depths, and Truman does a cash out refi and invests in the new Bailey Savings and Loan with the surplus, after setting aside a few dollars for his wife to get an augmentation.
I sure hope you are right about the surge versus depression II.
Regardless, there is way too much inventory on the market for a quick rebound in prices even if the global economy starts to turn around. And, that is just the inventory currently for sale. IF the economy turns around, wait to see how much more inventory gets dumped in the market hoping to take advantage of better times. That additional inventory will simply continue to weigh down the market.
Look at how many lots are waiting on the sidelines in Alys, the former Nature Walk, PH IV of Watercolor, Watersound West Beach, etc. Once we hit bottom, it will be a flat ride for a long, long time.
Beach Fanatic
I wonder what the price range is for the types of homes/condos/areas that have over-corrected. I've been very surprised at the deals in the homes that were selling at $400,000 - $600,000 range at the peak. Some are under or around $200,000. For people who aren't in the high-end range and who are looking for that second home at the beach (or home at the beach), and who can afford it if the market goes down a bit more (since we don't know where the bottom is) this seems pretty good to me.
Beach FanaticAuthor
so since you sound so confident what are you buying now?
So you think I sound 'so confident' when i assign a 1/3 risk of Great Depression II (D2.0 as Kurt put it so modernly) and further 70% losses?
I'm treading very carefully, one foot in the water. I bot a REO lot from a bank fairly recently between Camp Creek and Seacrest. I like it because of its low carrying costs, (NO HOA dues etc), its elevation, and its location between Watersound and Alys Beach. Secondarly, without being in a controlled subdivision you can actually build down the road without all the b.s., and without the exorbitant rates charged by "approved" builders etc. etc. I believe the lot I bot was down 80% from peak values in 2005 based on comps on same street in same proximity to access.
I think the best deal around now is if you can get a discount bid accepted on one of the Bungalows at Seagrove (i.e. if you can get one for 180k) - not sure bank would not 15K off or not, but I'm thinking about asking.
What do you think are the best deals ? or are there any good deals in your view?
Beach FanaticAuthor
I wonder what the price range is for the types of homes/condos/areas that have over-corrected. I've been very surprised at the deals in the homes that were selling at $400,000 - $600,000 range at the peak. Some are under or around $200,000. For people who aren't in the high-end range and who are looking for that second home at the beach (or home at the beach), and who can afford it if the market goes down a bit more (since we don't know where the bottom is) this seems pretty good to me.
I'm interested in this question too, and would consider myself on the low end of price interest. That's why I think just as an example those Bungalows of Seagrove houses are of interest to me, if they get even a bit cheaper. I think they're for sale now for 195k or so, so figure you could probably get one for 185k. If things get worse this year, I'm thinking this fall a bank might take a check for 160k on one of those, and I hope to be the guy writing said check, as that's a price at which I won't worry about the properties value, but simply use it and rent it as much as possible and let the chips fall where they may on valuation.
SoWal Insider
I'm interested in this question too, and would consider myself on the low end of price interest. That's why I think just as an example those Bungalows of Seagrove houses are of interest to me, if they get even a bit cheaper. I think they're for sale now for 195k or so, so figure you could probably get one for 185k. If things get worse this year, I'm thinking this fall a bank might take a check for 160k on one of those, and I hope to be the guy writing said check, as that's a price at which I won't worry about the properties value, but simply use it and rent it as much as possible and let the chips fall where they may on valuation.
I wish AAbsolute were still around so he could tell us what the base replacement costs would be.
SoWal Expert
I wish AAbsolute were still around so he could tell us what the base replacement costs would be.And then we could multiply that number by 3 to find out what the replacement cost w/ a decent contractor would be! :roll:
Beach Comber
I wish AAbsolute were still around so he could tell us what the base replacement costs would be.
Me too.
Beach Comber
And then we could multiply that number by 3 to find out what the replacement cost w/ a decent contractor would be! :roll:
That sure seems unfair. I'm not trying to be mean, I just don't think it's right ScooterBug.
Beach Fanatic
I'm interested in this question too, and would consider myself on the low end of price interest. That's why I think just as an example those Bungalows of Seagrove houses are of interest to me, if they get even a bit cheaper. I think they're for sale now for 195k or so, so figure you could probably get one for 185k. If things get worse this year, I'm thinking this fall a bank might take a check for 160k on one of those, and I hope to be the guy writing said check, as that's a price at which I won't worry about the properties value, but simply use it and rent it as much as possible and let the chips fall where they may on valuation.
I agree about the Bungalows. I'm not in the market for anything (already got my happy place on 30A, not at the Bungalows). But I like the Bungalows. Wish they had bigger porches (and I think they're 2 bedroom), but if I were getting one there, I'd get one that was near some of the greener areas of the Bungalows so I'd have a sense of green space around me. I'd ask what the homeowner dues are each month because those never go away (though they sure make it easier to maintain the place from from away). And I'd check to make sure the association is really invested in keeping the place nice. If I were looking for something in the relatively inexpensive price range, the Bungalows would be on my list.
SWGB
And then we could multiply that number by 3 to find out what the replacement cost w/ a decent contractor would be! :roll:
I thinks he's resurfaced.
Beach Fanatic
I think what we're going to see in 2010 is that prices head back up much quicker than the 30ashoppers are currently anticipating. Buyers won't have months and months to sop up still low priced desperation inventory. Due to the lightning quick flow of information, the twittering effect, boards like this, plugged in sellers, plugged in agents, and the fact that no one really wants to retire in Montgomery or Atlanta - my prediction is for a 20% across the board spike in 2010 from current realistic REO values today.
robertsondavies,
Almost a year has gone by since you originally posted -so I am curious as to what your current prediction would be.
SWGB
Holy crap look who's back!
Beach FanaticAuthor
robertsondavies,
Almost a year has gone by since you originally posted -so I am curious as to what your current prediction would be.[/QUOT
Hi there!! Yeah, I have no significant change to my prediction. I stand by it generally with minor adjustments. I have a slightly higher degree of confidence in the chance for a positive 20% surge in 2010, I stil stand behind that prediction. Since last April (2009) , the stock market has surged 60% (the biggest surge higher in 80 years), and real estate in South Walton has probably gone nowhere yet, as it goes through a consolidation, shake out phase with the majority of transactions continuing to be non arms length (REO/Short/etc)
Right now as opposed to 6 months ago, there is a dearth of available bank owned property for sale, mortgage rates are ridiculously low, baby boomers 401K's have swelled as compared to April 09, and SoWal is as pretty as ever. No one wants to retire in Atlanta, or Montgomery - that has not changed either. There is a tidal wave of people wanting to retire on 30A, and negativity has probably gotten way out of hand among the natives on 30A, as there are too many reasons to focus on the negative.
What sayeth you ?
SoWal Expert
I think SWGB was referring to Uncle Timmy being back, since he has been MIA for a while. Welcome back, Uncle Timmy!
I hear people talk about inventory, and I continue to point out that much of that so-called inventory isn't really property which is for sale. So much is so over-priced, that we may as well put every property in existance on the market, because everything is for sale for the right price, isn't it?
When there are 100 homesites for sale in a subdivision, and four are priced at $50,000, and recent REO sales for similar lots is $45,000, and the remaining 96 of those homesites are priced at $175,000 +, "REAL inventory" is 4, not 100. If you look at the median price of pendings and solds, vs median price of actively listed and expired listings, you will see quite a difference in price. Actively listed and expired listings are pretty close, and they are typically about 20% higher than the median price of the pendings, which is fairly close to the median selling prices. If sellers become realistic with the amount buyers are willing to pay, we will see many sales. If not, I suspect many of those properties will go back to the banks and the banks will have to get realistic with their prices, enough to spark buyers. Either way, (and this is no prediction, just a EWAG) I think we will continue to see strong sales and price stabilization of lots.
As others mention, only time will tell. Today, one can buy a Gulf front lot for $850,000 which would have cost about $3 million in 2006. For the end-user buyer or long term investor, today's ready-to-sell properties look like a steal.
I hear people talk about inventory, and I continue to point out that much of that so-called inventory isn't really property which is for sale. So much is so over-priced, that we may as well put every property in existance on the market, because everything is for sale for the right price, isn't it?
When there are 100 homesites for sale in a subdivision, and four are priced at $50,000, and recent REO sales for similar lots is $45,000, and the remaining 96 of those homesites are priced at $175,000 +, "REAL inventory" is 4, not 100. If you look at the median price of pendings and solds, vs median price of actively listed and expired listings, you will see quite a difference in price. Actively listed and expired listings are pretty close, and they are typically about 20% higher than the median price of the pendings, which is fairly close to the median selling prices. If sellers become realistic with the amount buyers are willing to pay, we will see many sales. If not, I suspect many of those properties will go back to the banks and the banks will have to get realistic with their prices, enough to spark buyers. Either way, (and this is no prediction, just a EWAG) I think we will continue to see strong sales and price stabilization of lots.
As others mention, only time will tell. Today, one can buy a Gulf front lot for $850,000 which would have cost about $3 million in 2006. For the end-user buyer or long term investor, today's ready-to-sell properties look like a steal.
Beach FanaticAuthor
I think SWGB was referring to Uncle Timmy being back, since he has been MIA for a while. Welcome back, Uncle Timmy!
my bad.. i thought he was trying to say I was AAbsolute re-incarnated somehow.
SoWal Expert
now that would be funny!
Beach FanaticAuthor
I think SWGB was referring to Uncle Timmy being back, since he has been MIA for a while. Welcome back, Uncle Timmy!
I hear people talk about inventory, and I continue to point out that much of that so-called inventory isn't really property which is for sale. So much is so over-priced, that we may as well put every property in existance on the market, because everything is for sale for the right price, isn't it?
When there are 100 homesites for sale in a subdivision, and four are priced at $50,000, and recent REO sales for similar lots is $45,000, and the remaining 96 of those homesites are priced at $175,000 +, "REAL inventory" is 4, not 100. If you look at the median price of pendings and solds, vs median price of actively listed and expired listings, you will see quite a difference in price. Actively listed and expired listings are pretty close, and they are typically about 20% higher than the median price of the pendings, which is fairly close to the median selling prices. If sellers become realistic with the amount buyers are willing to pay, we will see many sales. If not, I suspect many of those properties will go back to the banks and the banks will have to get realistic with their prices, enough to spark buyers. Either way, (and this is no prediction, just a EWAG) I think we will continue to see strong sales and price stabilization of lots.
As others mention, only time will tell. Today, one can buy a Gulf front lot for $850,000 which would have cost about $3 million in 2006. For the end-user buyer or long term investor, today's ready-to-sell properties look like a steal.
anecdotaly, I know an astute investment manager, who normally has just invested in stocks/bonds in his personal portfolio, just bought a REO lot for investment purposes in South Walton last month, and his reasoning was one I agree with wholeheartedly, and was actually phrased in the form of an open question. He said "where else in the world" can I buy an attractive asset that's off 80% from its peak, in nominal terms, and adjusted for the decline of the US Dollar, is off closer to 90% in global value terms?" Time will tell... we'll see how the place looks in 15 years.
SoWal Expert
The investment side is indeed about having a place to park money. I think long-term, if you buy at the right price, South Walton will be a great place to park money. 15 years may not seem like a long time in some respects, but when you think about Seaside being founded only 28 years ago, there is much that can change in 15 years. I watched Destin grow from not having any restaurants back in 1985, to having almost every store imaginable today. We don't yet know what growth will be in South Walton. If you look at the long-term plans of the extension of Hwy 388 (I think) from the new airport to WaterSound, St Joe's plans for commercial development at hwy 98/WaterSound, and all of the other potential developments on hwy 98, you will see that there is much potential for growth in the future. SoWal is basically a baby, and PCB and Destin are only pre-teens.
Beach Fanatic
What sayeth you ?
Not sure I have a firm take on this market right now so just seeing what other's opinions are. It's hard to get a read -from an amateur's perspective like mine but I do agree that the local pessimism seems to have grown out of proportion to reality.
SoWal Expert
I can't tell if people are being overly optimistic or overly pessimistic.
Think a lot of it has to do with one's personal situation and geographic location and how that affects your perception.
All I know is that I know a lot of people having a rough time right now - and that those ripples in the pond are continuing to spread.
Think a lot of it has to do with one's personal situation and geographic location and how that affects your perception.
All I know is that I know a lot of people having a rough time right now - and that those ripples in the pond are continuing to spread.
Beach Fanatic
I think SWGB was referring to Uncle Timmy being back, since he has been MIA for a while. Welcome back, Uncle Timmy!
Why thank you, SJ - I have been MIA for a while. I've been trying to get a business launched in the middle of the Great Depression II, and that doesn't leave much time for Sowalling. Ha.
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