Watercolor driving market along 30A?

I'm betting some foreclosure stats would explain a lot more as well.

The ECAR MLS data show 46 home sales closed in WaterColor from 1/1 through 6/30/09.

Note that 16 of those 46 were in the Ph 4 Turtle Ridge neighborhood, the St. Joe-built spec homes south of Publix, and were all sold at under $250 per sq ft ..... whereas the median price per sq ft for the rest of what sold in WaterColor during that period was about $385K.

I agree, though, that WaterColor is in some ways driving the sales activity along 30-A at present. Prices have come down markedly over several years' time, and a number of buyers now perceive the value there. It's fundamentally a very attractive, well-planned & enjoyable community, and is a great fit for a lot of the SoWal demographic group.

Please PM me for more data or analysis.

I think it is more of a sheer volume/firesale issue.

You can't begin to build for what they are unloading some places for in WC and Watersound.

I think it is more of a sheer volume/firesale issue.

You can't begin to build for what they are unloading some places for in WC and Watersound.

Sure you can. Lot prices continue to fall. You can now pick up a few nice lots in WC or WS for under $200k and there will be plenty more of those in the future. Put a 2000-2500 square foot house at $200/sq ft on these lots and you have a really nice, brand new place for $600-$700k total. That is a very reasonable price for a brand new home compared to even most of the foreclosures.

There have been very few, if any, houses that have sold for less than replacement cost in WS or WC.

At the time when you can grab a 2000-2500 square foot house (not talking about Phase IV) in WS or WC for $500k'ish, then you will clearly be below replacement cost.

Sure you can. Lot prices continue to fall. You can now pick up a few nice lots in WC or WS for under $200k and there will be plenty more of those in the future. Put a 2000-2500 square foot house at $200/sq ft on these lots and you have a really nice, brand new place for $600-$700k total. That is a very reasonable price for a brand new home compared to even most of the foreclosures.

There have been very few, if any, houses that have sold for less than replacement cost in WS or WC.

At the time when you can grab a 2000-2500 square foot house (not talking about Phase IV) in WS or WC for $500k'ish, then you will clearly be below replacement cost.

I agree. At least that is what my husband and I are finding. Just a curious question. Why are existing homes above new home prices? Not that I have lived all over, but I've been in my fair share of towns. This is the only area I have seen existing home sales MORE than building... what gives? My point being, I often hear, "Boy you can't build for that price!" Like it's a deal. Isn't that the way it usually is? An existing home costing less than a new build?

I agree. At least that is what my husband and I are finding. Just a curious question. Why are existing homes above new home prices? Not that I have lived all over, but I've been in my fair share of towns. This is the only area I have seen existing home sales MORE than building... what gives? My point being, I often hear, "Boy you can't build for that price!" Like it's a deal. Isn't that the way it usually is? An existing home costing less than a new build?

They were built during the boom on lots that had been flipped several times and were greatly inflated. Add on top of that the fact that some contractors charged a premium for answering your phone call and you've got tons of people still trying to get out of upside down mortgages.

I agree. At least that is what my husband and I are finding. Just a curious question. Why are existing homes above new home prices? Not that I have lived all over, but I've been in my fair share of towns. This is the only area I have seen existing home sales MORE than building... what gives? My point being, I often hear, "Boy you can't build for that price!" Like it's a deal. Isn't that the way it usually is? An existing home costing less than a new build?

Just give it some more time. Reality has taken a while to set in along 30A but it is happening. The trend in prices is still down and there is nothing in the economy as a whole or in the local inventory that would indicate that the trend will trend up any time in the foreseeable future.

If three months makes a trend, median prices for detached homes sold in South Walton is trending up slightly.

June 2009 -- $395,000
July 2009 -- $406,274
Aug 2009 -- $425,000

Personally, I don' t think three months is enough to make a trend. However, using a 6-month moving average we begin to see a leveling off of median prices for single family detached homes in South Walton according to ECAR. I'll attach a graph.

To your question if sales in WaterColor are driving the market. I would say that WaterColor has shown fairly strong sales during the last 18 months in general. To throw a few numbers at you:

WaterColor Single Family Home Sales YTD (through Sept 3) (again from ECAR)
2008 -- 44 home sales (12% of the 378 home sales in South Walton)
2009 -- 59 home sales ( 13% of the 438 home sales in South Walton)

Hey, did anyone notice that? For 2009, we have seen 60 more detached single family home sales in South Walton compared to 2008, Year to Date. That is a 16% increase in quantity of sales.

If three months makes a trend, median prices for detached homes sold in South Walton is trending up slightly.

June 2009 -- $395,000
July 2009 -- $406,274
Aug 2009 -- $425,000

Personally, I don' t think three months is enough to make a trend. However, using a 6-month moving average we begin to see a leveling off of median prices for single family detached homes in South Walton according to ECAR. I'll attach a graph.

To your question if sales in WaterColor are driving the market. I would say that WaterColor has shown fairly strong sales during the last 18 months in general. To throw a few numbers at you:

WaterColor Single Family Home Sales YTD (through Sept 3) (again from ECAR)
2008 -- 44 home sales (12% of the 378 home sales in South Walton)
2009 -- 59 home sales ( 13% of the 438 home sales in South Walton)

Hey, did anyone notice that? For 2009, we have seen 60 more detached single family home sales in South Walton compared to 2008, Year to Date. That is a 16% increase in quantity of sales.

Thanks for the data. Definitely a lot of sales in Watercolor relative to the entire market. Were the Walton County stats pretty accurate directionally for Seaside, Watersound, Alys and Rosemary. Or, were there lots of unrecorded sales in Rosemary and Alys. Basically, it appears that the middle part of 30A--Watercolor and Seaside--are faring well while the eastern end--Alys and Rosemary--are not (Seacrest is faring pretty well at a much lower price point).

I think something has changed in this market. We have had a hard time putting specific clients in properties and have found in certain areas some of the lower price points and deals are gone!

I am sure we will have another wave of these deals but they sure get gobbled up fast. With that said, we have begun to sell the low hanging lots. Cash buyers seem to be interested in snagging a few of those as the cheaper homes are leaving the 30A market. I predict over the next 6 months a few stable builders will begin to break ground on inexpensive lots.

I think something has changed in this market. We have had a hard time putting specific clients in properties and have found in certain areas some of the lower price points and deals are gone!

I am sure we will have another wave of these deals but they sure get gobbled up fast. With that said, we have begun to sell the low hanging lots. Cash buyers seem to be interested in snagging a few of those as the cheaper homes are leaving the 30A market. I predict over the next 6 months a few stable builders will begin to break ground on inexpensive lots.

I see the same thing as far as price points. My question is, "Won't the deals that have been recently sold drive the market price down on the existing homes for sale?" I would guess they won't appraise at a higher sale price. My theory... and it's just that... is the current sellers are wiping their brow thinking, "o.k., now all the fire sale homes are gone and I can keep asking my price for my home." Isn't that unrealistic? I keep thinking they will have to drop their prices to meet the price point of the homes that have actually sold. At any rate, we're currently landing on the lot side of things.

My theory... and it's just that... is the current sellers are wiping their brow thinking, "o.k., now all the fire sale homes are gone and I can keep asking my price for my home." Isn't that unrealistic?

Yes, that is unrealistic, melscuba. Good point. If selling price of bank owned houses in a particular area are $500,000, yet the regular sale listings are priced at $750,000, after all the $500,000 priced homes are sold, there will be a separation between buyers and sellers, and we won't see homes selling until the prices come down to meet the buyers' level of perception of value. Also, if all the comps are at $500,000, you won't find appraisers (which are needed if there is a lender involved) putting a value of $750,000 on the property.

I still say that 90% of the current inventory is overpriced. The good stuff, as Bobby J has pointed out, is getting snatched up as quickly as it comes on the market, and often with multiple offers. On the good values, we are seeing very strong sales to list price ratios, and I know of some selling above list price, because of multiple offers driving the buyers to compete.

It is not the same market is was 6 months ago folks! Next phase are the lots....

You are right, Bobby J, about the lots. Mostly cash buyers will be looking for the best deals, and when you can buy lots located south of 30A for $65,000 and just north of 30A for $35,000, and inventory is twice as high as it should be, buyers will begin to take notice and buy and hold. For those of you who don't keep track of prices, those prices I give above are real examples of what I'm seeing right now. In the Lakewood area of Seagrove, two lots went pending two days ago, listed at $65,000. Also, earlier this week, a lot sold in Lakeside at Blue Mtn for $35,000 and a new one came on the market in there for $35,000. (These are not my listings and are not to be mistaken as advertising for these particular properties. Just using real examples.)

It is not the same market is was 6 months ago folks! Next phase are the lots....

No doubt.

I think lots in Phase II and III of Watercolor and non waterfront lots in Watersound will fall into the $100k to $150k range over the next 2 years. Alys will realize that they will need to drop prices considerably in order to move inventory. Lots in there will need to go to the $200k range to really begin selling at a reasonable pace.

Here are some charts for you Fisher.

Watercolor Report

Here are some charts for you Fisher.

Watercolor Report

Thanks for the info Josh. Much appreciated.