Current SoWal Real Estate Sales Trends

If you follow that graph and everything follows accordingly then there's about to be a major uptick for February.

If you follow that graph and everything follows accordingly then there's about to be a major uptick for February.

That uptick didn't materialize, it ticked down. Which seems to be in line with all the negative sales data coming out these days - a double dip in sales this year, is looking like a possibility. Sales are hard to predict though. The back log of pending foreclosures that haven't worked their way through the courts is huge in Florida, it's hard to predict when that will flush out. If it does flush out, it'll increase sales. (I think there's some legislation being considered to expedite this.) On the flip side, MBS purchases by the FED end this month so rates are likely to rise and banks will tighten lending as their cash dries up, that will have a negative impact. It's hard to say what will happen, I will throw out a guess that inventory at the end of the year will be higher than it is now.

Personally, I'm more interested in price trends myself. Average sale price is still trending down, median seems to be trending up a bit. Hard to read anything from that.

February 2010 – Real Estate Sales Summary ? murray balkcom, gri, realtor

February, our shortest month of the year, is also typically our slowest month for real estate sales, and it somewhat holds true for 2010. When looking at the combined category of homes, condos and town homes in all of South Walton, FL, we see that ECAR (Emerald Coast Association of Realtors) reports 81 sales (January had 80 sales) totaling almost $31 million in sales volume. While quantity of sales remained almost constant compared to January 2010, comparing Feb 2010 to Feb 2009, we saw an increase of 16%. Quantity sold is up almost 25% compared to Feb 2008. Remember when the market was booming back in 2007? Well, quantity of sales for Feb 2010 are down only 5% from Feb 2007.

2007 was the second worst year for sales in the last, what, decade or more? If we are 5% below that, it signals possible trouble. That's all I'm saying. Not to mention, in 2007 we were trending up, this year we are trending down. Definitely need to keep an eye on things. Everything is in flux right now.

2010 shows the first couple months as the worst trend line in the whole chart. Every other year was either level or upticking in the first 2-3 months, not free falling like we have here. :shock:

You guys are forgetting that this past fall/winter season, we had extremely positive numbers, which will make avg sales numbers look like a steeper fall in Jan and Feb.

2007 was the second worst year for sales in the last, what, decade or more? If we are 5% below that, it signals possible trouble. That's all I'm saying. Not to mention, in 2007 we were trending up, this year we are trending down. Definitely need to keep an eye on things. Everything is in flux right now.

The data from the Emerald Coast Association of Realtors reports shows differently than you statement above, regarding the referenced drop of 5% from Feb 2007 in quantity of sales. In the last 11 years, looking at only the sales in Feb each year, Feb 2010 is in the middle, with 5 years being better and five years being worse.

To my knowledge, February sales have never been an indicator for good or bad years. I see no alarm bells here.

Bottom line prices on 30-a still seem to be falling.Its a vicious circle were shorts sales and foreclosures keep pressuring the mkt ever lower.people are getting all excited about sales being up but at what loses are these sales going off at? its like saying best buy could sell 10 zillion tvs if they sold them 50% under cost.as prices go lower and lower millions of people nationwide have a business decision to make. i'm underwater 40-50%. do i walk as it could take 10-20 years before my house gets back to 2006 prices or do i continue paying payments on a house very underwateralso nationwide home sales were the some of the lowest every in feb . but i'm not seeing the spring rush this yr

30ashopper, the legislation you are referring to is essentially courtless foreclosures. It's a horrible bill that basically deprives homeowners of their due process.

I agree with Murray that there is no cause for alarm. Numbers are definitely something to keep our eye on but they don't tell the story alone. There are many factors that skew the numbers to look one way or another.

IMHO, interest in the real estate market is definitely picking up. When I look at comps or sales, I always look at the "contract" date, not only the closing date. To me, the day the contract is signed indicates the time of demand. Closing can be many months later and in this volatile market things can change quickly. So that significant drop we are seeing in SFH's in January and February are people who probably went to contract around the holidays when few people are looking for investment real estate. This is very typical.

Regarding price drops or increases. The thing I look at is something called the "hotsheet" which is a 7 days summary. I look at price changes which show red (price drop) or green (price increase). The price changes are still overwhelmingly red or dropping. Below is a link to the hotsheet for the last 7 days.

http://www.uniquepanhandleproperties.com/hotsheet.pdf

You will note that there were 3 increases (except for a couple of clear errors in data input). The changes are still overwhelmingly decreases but a while back there were no increases at all. I'm seeing a couple of increases now and then so I am cautiously optimistic for now.

Again IMHO, 30aShopper is right on the money with impending foreclosures. Many analysts believe that there will be a glut of them this year. There are numerous screw ups by the banks however and numerous defenses to foreclosure if people don't just roll over so the future is definitely uncertain and heavily dependent on our legislators. Florida is a judicial foreclosure state and as SWGB mentions if they remove our due process, it will be a travesty.

Lastly to address Relax's comment about the great losses that people are taking. He/She is correct. Homes are being sold at great losses and as sad as it is, buyer's should not be afraid to make lowball offers. The bottom line is not the list price, it's the recent sales. Many people see a list price and they don't care how low it is, if they can't get the seller down 40%, they aren't happy. This is fine and certainly worth a shot but do your homework and don't let your ego or the need to win get in the way. If the price is listed 20% below recent sales and you can negotiate down another 20%, you've got a hell of a deal.

There is a lot of public information out there to help determine the motivations of a seller. "motivated" on the listing doesn't mean that they are "desperate". Unfortunately, there are many desperate sellers out there and the key is knowing who is and who isn't if you want the deal of a lifetime. They are out there. I am closing one of them in a few hours. Negotiations went over weeks and the seller never thought they'd take the final agreed upon price but when push came to shove, it was clear that if he didn't, he might not sell it for a couple of years or more. So it's all about the situation - finding the motivation, knowing what it's really worth with prices continuing to decline and negotiating an offer that they can't refuse - not because it's so good but because the market is so bad. Today more than ever, agressive negotiation pays off.

Please understand that it doesn't make me happy when sellers lose a boatload of money. It's actually quite sad but I represent the buyer and they come to me to provide a service - which is to help them make the best investment possible. The reality is the reality and if my buyer doesn't buy it, the seller might lose it to the bank anyway. For those that can hold out, you are marketing your home at the wrong time but ethically I can't let my buyer pay more than it's worth or blow smoke telling them that the value will increase in 6 months. Most likely it won't and we need to anticipate that and offer accordingly.

Right now, we have as many interested buyers as we had in 2004 and I suspect it's the same with other realtors. Whether they buy and the numbers reflect the interest is another thing because as we all painfully know, anything can happen tomorrow. There are people still out there with money. I'm being told that many want to move money out of the banks and into hard assets. They are concerned that the banks will go belly up and they will lose their money if they don't move it. Just my 2 cents.

Just curious about what areas we are really talking about here. Seems like South Walton real estate from Sandestin and Miramar Beach 98 corridor through 30-A would be split out from Destin/FWB over in Okaloosa County. However, guess our real estate numbers were rolled into the Ft. Walton Beach metropolitan statistical area in the past. With the new airport coming in over in Bay County, seems like there might be a difference to be noted over the next few years between South Walton real estate and Okaloosa/Destin real estate. Does Josh call the Sandestin/Miramar Beach area in SoWal/Walton County as Destin/Okaloosa County by mistake?

Just curious about what areas we are really talking about here. Seems like South Walton real estate from Sandestin and Miramar Beach 98 corridor through 30-A would be split out from Destin/FWB over in Okaloosa County. However, guess our real estate numbers were rolled into the Ft. Walton Beach metropolitan statistical area in the past. With the new airport coming in over in Bay County, seems like there might be a difference to be noted over the next few years between South Walton real estate and Okaloosa/Destin real estate. Does Josh call the Sandestin/Miramar Beach area in SoWal/Walton County as Destin/Okaloosa County by mistake?

I can't remember the zone numbers, but it's something like 14-17 or something like that.

I cannot speak for other people's areas of inclusion, but my reports noted above are strictly for all areas in South Walton, from the Gullf to the Bay, plus a little beyond the intracoastal in Pt Washington.

If the price is listed 20% below recent sales and you can negotiate down another 20%, you've got a hell of a deal.

Since about 95+% of the market is over priced, it isn't surprising to see sales in the neighborhood of 20% less than list price. However, my buyers are finding out the hard way, that the few select listings which are priced correctly, will sell quickly, and often have competing offers coming in, and in some cases, sell at or above full list. If it is priced right, you are wasting your time coming in 20% low. (Again, most of the inventory is off in pricing.)

Since about 95+% of the market is over priced, it isn't surprising to see sales in the neighborhood of 20% less than list price. However, my buyers are finding out the hard way, that the few select listings which are priced correctly, will sell quickly, and often have competing offers coming in, and in some cases, sell at or above full list. If it is priced right, you are wasting your time coming in 20% low. (Again, most of the inventory is off in pricing.)

Maybe I didn't make my point clear Murray. The point that you make is what I was trying to say - that the list price doesn't mean anything. People can ask what they want and it doesn't mean they'll get it.

What I said was that if the price is listed 20% below recent sales (aka "priced right") and you can negotiate down another 20%, you've got a hell of a deal.

My personal observations have been that in the last couple of years, I've only seen competing offers on lower priced homes (under $250K). We don't have a lot of those on 30A. The Paradise lot that we closed last week was clearly priced right at about 400K less than the comps but my buyer wanted to get a killer deal and the seller still went down another $300K. It was priced right and we didn't wast our time.

Today I closed on a beachfront home in Grayton that was listed at $4,128,000. My opinion was that it was overpriced but the seller had $4.5M into it. We closed it at $3.08M which is well below recent sales. I compted it out at about $3.7 with the most recent sale being a month ago. So my guy got a hell of a deal (about $620K less than what it's worth) albeit over a million less than asking.

Of the 118 sales in areas 17 & 18 in the mls, only 5 sold above asking price. 4 of them were under $100K, one was $275K and one was $625K. Of those 5, three of the buyers paid doc stamps and title and is probably the reason they sold above asking .

All 30a home and condo sales in MLS since 1/1/10

Everyone's personal experiences are different of course but the numbers tell the story and it's not a waste of time if we can save our buyers thousands or tens of thousands of dollars. I make less when they pay less but if I allow a buyer to unknowingly overpay in a declining market, it could destroy them financially and I don't want that on my head.

I totally agree that many properties are overpriced but many of those sellers will come down below market value (as will the ones who are priced right), As I said originally - know a deal when you see it and don't let your ego get in the way. But it's my experience that even properties that are priced right can be bought for less.

That sales link you posted is a nice tool. What I see with each of the ones which sold above list price is a common trend in DOM (Days on Market). 2, 6, 31, 70 DOM for each of those which are "priced right." In the cases of other sales, which aren't priced so right, they finally chased down the price enough to make the sale, but on the long end, they spent 1316 Days on Market. Again, if they are priced right, when you make a low-ball offer, you may miss out on the opportunity to purchase that particular property, because when they are priced right, they tend to sell quickly.

cork on the ocean very impressed with your graphs and knowlege. do you have that stat sheet for houses that you just listed for condos for the year 2010?i bet 80% OF ALL THE SALES THIS YEAR ARE SHORT SALES OR REO'S. now the question becomes what happens to all the people who bought at $500-$1000 a square foot from years ago?do they walk also. the new short sale rules going into affext basically protect the homeowner from 1099's and deficiency judgments if the bank agrrs to it.cork the home you said you sold in grayton was it 544 dufiank street? the big one on the right side of the red bar

I have a question. We have come there for a while and love cruising around and going to an Open House once in a while. Over the years when we have popped into them we have been told by the realtors there that "this is the year to buy." I can remember looking in Watercolor and it was unheard of for anything to be less than 1 million. Quite a few years ago we looked at some houses in Watercolor but off the beaten track of Watercolor. They were charming row house type homes facing a park near the Publix. They were asking maybe a little under 800 and I think they went way down in price. I have heard that the time to buy is now for a long time. What are your opinions? You all seem to know the area so well. Thanks for your advice.

I do think there are some good deals out there and a long overdue reality check on prices is going on.

Can't speak to the benefits of any one area as my criteria/wants/taste/budget are probably quite different from yours. If you could be more specific about your criteria/intended use, it is easier for us to give you feedback.

I believe that part of the reason for the lower prices in the area you mentioned is because of smaller homes and smaller lots, so just make sure you are comparing apples and apples when pricing.

My initial and superficial take is that I think it's a nice little area with some cute homes close to 30-A.

That sales link you posted is a nice tool. What I see with each of the ones which sold above list price is a common trend in DOM (Days on Market). 2, 6, 31, 70 DOM for each of those which are "priced right." In the cases of other sales, which aren't priced so right, they finally chased down the price enough to make the sale, but on the long end, they spent 1316 Days on Market. Again, if they are priced right, when you make a low-ball offer, you may miss out on the opportunity to purchase that particular property, because when they are priced right, they tend to sell quickly.

Absolutely Murray. A buyer has to know a deal and be willing to act when the price drops. I have two clients that we contacted about significant price drops - one in Rosemary Lofts dropped from $479 to $399 and we told her to move but she didn't. Sadly for our values, when those do sell and the buyer misses it, the price has been reset and it gives us negotiating leverage on ones that have been on the market longer. It also means that other listings in the complex may drop their prices. So yes, we might miss a good deal but I believe that there are still MANY good deals to be had out there. As I mentioned below, this could change quickly.

Every offer is different. There's a time to lowball and a time to know when you've got a killer deal. I was called by another agent who wanted to know why my recent buyer chose the Garfield house. The answer is simple, first money. Second aesthetics but money over all. On both the Paradise lot and the Garfield home, we set a price that would be our top offer. This set price was still a very low price compared to list as it was based strictly on a high projected investment return. By lowballing, we got both properties a couple hundred thousand less than our set point. An investor doesn't care if he loses it and just moves onto another. We are currently looking for unsold blocks of beachfront condos if you know of some but he's not paying anywhere near market price. :nono1: LOL

cork on the ocean very impressed with your graphs and knowlege. do you have that stat sheet for houses that you just listed for condos for the year 2010?i bet 80% OF ALL THE SALES THIS YEAR ARE SHORT SALES OR REO'S. now the question becomes what happens to all the people who bought at $500-$1000 a square foot from years ago?do they walk also. the new short sale rules going into affext basically protect the homeowner from 1099's and deficiency judgments if the bank agrrs to it.cork the home you said you sold in grayton was it 544 dufiank street? the big one on the right side of the red bar

Sure I do ;-) Condos Sold in South Walton Beach
I haven't reviewed the report to be honest cuz I've got a real busy day but my gut is that there's no where near 80% short sales/reos. There were a lot of short sale listings a few months back but my experience has been that the banks just aren't that motivated with the seller still in the home. Also, the list price on a short sales often is not the price that the bank has approved or will take. A while back, there was a fabulous beachfront home that was listed as a short sale. The mortgage was $2 or $3 million and the agent had it listed at $10,999 or something like that. I can't tell you how many people thought that was real. The listing agent got activity for sure but I personally don't think it should be allowed. The problem is that often the owner can't even get anybody at the bank to give them a realistic price so they just list what they think the bank might take. IMHO, the banks really aren't that interested in doing short sales. It's the poor owners that are so upside down that want to do them.

The owners that are upside down need to come up with the difference between what they owe and what they sell it for UNLESS the bank agrees to a short sale which means they will transfer title for less than what the current owner owes on the note.

So that's what's happening. The owners owe more than it's worth. Some can't afford to pay their payments due to the economy and bad loans that they've got. Those people are basically SOL if the bank won't do a short sale because they don't have the money to pay the difference btwn the sale price and the note. Many will go into foreclosure but there are tens of thousands of people that haven't paid payments in years and the banks haven't foreclosed yet. The banks may not even have enough info to foreclose because the note has been sold so many times, it's been separated from the mortgage, they haven't got a clue who has the right to foreclose because the note was combined with others and packaged into a securitized financial instrument and sold off in pieces to various investors. It's a mess and smart homeowners shouldn't just roll over.

Then there are people who can afford the home but can walk out and buy the same property for 50-70% of what they owe so they just walk away because it's a bad investment at this point and they make a better one.

The home that we closed on yesterday was 281 Garfield Street, Grayton. It's a perfect example of your question. The home was listed at $6.9 million in May 2006. The seller owed well over a million more than we were willing to pay so he had to pay off or move that debt to another asset to sell the home. Kurt has done a spectacular slide show and virtual tour on the home.

I have a question. We have come there for a while and love cruising around and going to an Open House once in a while. Over the years when we have popped into them we have been told by the realtors there that "this is the year to buy." I can remember looking in Watercolor and it was unheard of for anything to be less than 1 million. Quite a few years ago we looked at some houses in Watercolor but off the beaten track of Watercolor. They were charming row house type homes facing a park near the Publix. They were asking maybe a little under 800 and I think they went way down in price. I have heard that the time to buy is now for a long time. What are your opinions? You all seem to know the area so well. Thanks for your advice.

I can't tell you that this is "the year" to buy sister. I really don't think that this economy is going to be turning around all that quick so I wouldn't make a statement like that. What I will say is that prices continue to decline (you can see that from the hotsheet that I posted a few posts back). We are seeing a couple of increases here and there which is very positive. Also, our inventory has decreased. There is an analysis that can be done which takes the average number of sales against the number of active listings and projects how long our current inventory will take to sell. I haven't done it in a while but I know that a couple of years ago, we had about 5-6 years worth of inventory on the market. I believe the last time I checked, we had about 2 years worth.

My best advice is to have your realtor determine the fair market value based on recent sales and then anticipate further drops in price by paying less than fair market. I can tell you that now is the time that you can get properties for less than market value . I can't say that this is the bottom so be careful and buy right. It could be a very quick shift which may occur after the airport opening. We are all optimistic but really don't know. If that quick shift occurs, then my advise would be different because within a short time, you may not get as much for your money as you are right now.

Regarding the Watercolor phase near the Publix, as Scooter said, watch the land size. They are postage size lots, quite a trek to the beach and in my opinion not as desirable from a resale standpoint as other areas in watercolor or other homes closer to the beach for the same money.

In the end, a lot of it is probably coming down to the typical SoWal price point just being too much for enough buyers given current economic conditions. The counties on either side of it are actually in relatively good shape. Pulling the FAR stats for resales:

Okaloosa County single family:
January 2010- 143 sold; median price of $201,400
December 2009- 203 sold; median price of $195,000
January 2009- 118 sold, median price of $188,300

Okaloosa County condo:
January 2010- 70 sold; median price of $270,800
December 2009-101 sold; median price of $242,000
January 2009- 25 sold; median price of $268,800


Bay County Single family:
January 2010- 71 sold; median price of $158,900
December 2009- 94 sold; $165,700
January 2009- 58 sold; median price of $163,300

Bay County Condo:
January 2010- 40 sold; median price of $200,000
December 2009- 44 sold; median price of $186,000
January 2009- 13 sold; median price of $212,500

cork on the ocean i looked up the house you sold and the guy who just sold had bought it for $4 mil in 2005.it looks like it was bought for $3 mil in 2004 so a 1 yr $1 mil flip. it looks like it was bought for $1.6 mil in 2000.so if the owner took a $1 mil lose did he bring a $1mil check to closing?also you seem very knowledgable so how are all these rich people with assets doing short sales?are they responsible for the differerence in what its sold for and whats owed?will the bank forgive the debt to some of these wealthy people who have assets?its seems tons of people who have money are short selling as they made a bad business decision.

Go figure. In spite of falling prices and high inventory, there are occasional unexplainable anomalies like the house in Watercolor that just sold for $3.1 million!!!

Meet me at Cafe 30A for Martini Night next Tuesday and lets place a $5 martini on the line for who and why that was purchased. I like chocolate. I am not a realtor and have no real estate for sale, btw.

cork on the ocean i looked up the house you sold and the guy who just sold had bought it for $4 mil in 2005.it looks like it was bought for $3 mil in 2004 so a 1 yr $1 mil flip. it looks like it was bought for $1.6 mil in 2000.so if the owner took a $1 mil lose did he bring a $1mil check to closing?also you seem very knowledgable so how are all these rich people with assets doing short sales?are they responsible for the differerence in what its sold for and whats owed?will the bank forgive the debt to some of these wealthy people who have assets?its seems tons of people who have money are short selling as they made a bad business decision.

Hi Ray, Actually after he purchased, he made upgrades of about $450K is my understanding. I believe he actually owed about $1.4M. I didn't represent the seller but I believe he transferred the debt to other assets to close the deal.

Actually when a property is upside down as this one was, there's a couple of ways to sell the property. This was not a short sale.

1) The seller pays the difference outright or transfers the debt to another asset for security. The bank gets all their money or at least something else to attach as security for the difference.

2) Short Sale - The seller does not have to pay the difference to transfer the title. This type of sale is subject to the bank approving it and they are taking less than what the seller owes. Whether the bank forgives the debt or not is another thing. They may require the seller to sign a note for part or all of the deficiency before they release title or they may even go after a deficiency judgement if the seller doesn't get a release. The bank will also report the loss to the IRS and the seller can be taxed on the deficiency, though the government is temporarily not taxing forgiven debt on a primary residence but this doesn't help at all on vacation homes or investment property. Short sales also mess up your credit like a foreclosure does so nobody but the bank and the buyer wins.

Go figure. In spite of falling prices and high inventory, there are occasional unexplainable anomalies like the house in Watercolor that just sold for $3.1 million!!!

I'm still trying to figure that one out.

Meet me at Cafe 30A for Martini Night next Tuesday and lets place a $5 martini on the line for who and why that was purchased. I like chocolate. I am not a realtor and have no real estate for sale, btw.

I don't really care who but I'd like to know why.

That house in Grayton Beach is awesome. What a beautiful spot! Sure wish I had 3mil collecting dust to purchase a home like that.

That house in Grayton Beach is awesome. What a beautiful spot! Sure wish I had 3mil collecting dust to purchase a home like that.

It's the coolest house. Funny thing. Back in 2002, when I put up my first website, I used a photo of me in front of that house on my front page . As soon as my buyer walked in, he say "let's put an offer in on this one." Looks like I will be handling the rentals on it for him and plan on opening up from time to time for open houses. Plan on making it available for events as well as vacation rentals. It's a great party house.