Calling The Bottom

http://latimesblogs.latimes.com/laland/2008/06/in-escondido-bu.html here's the story

Came in late on this thread, but congrats. to you FlyGuy for taking the plunge.

I have been watching the condo. market for a couple of years, and see that in general, prices are getting more realistic but still have some way to go IMO - particularly with our tanking economy, tighter credit, and other financial "shoes" still to be dropped. Lower selling prices are only a small part of the equation.

I think I have come to the conclusion that owning a home in SoWal would make more sense than a condo. Just looking at condos. from $300m to $700m I see condo. fees or assessments of anywhere from $500 to $1,000 a month. Yikes! $6,000 to $12,000 a year and we haven't even touched insurance or R.E. taxes!

From my relatively uneducated point of view as it relates to real estate, it would seem to me that one of the biggest deterrents to sales of condo's. are these monthly fees. I think a lot of would be buyers (including me) could probably enjoy 2-3 months of beachside vacations in May and September on $6-$12,000 a year and not have to worry about the other problems that go with ownership. Don't mean to rain on anyone's parade - just wanted to offer my 2c from this side of the fence.

I think a lot of would be buyers (including me) could probably enjoy 2-3 months of beachside vacations in May and September on $6-$12,000 a year and not have to worry about the other problems that go with ownership. Don't mean to rain on anyone's parade - just wanted to offer my 2c from this side of the fence.

For most people, and until prices come down to earth, this makes absolute sense--both common and financial.

What some people still don't seem to realize is that a huge number of people who bought homes and condos during the bubble, had absolutely no intention of holding on to them this long...they intended to sell them in a year or two, at twice the price they paid, to waves of rich baby boomers. Good luck with that.

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Wow!!! :shock:

For most people, and until prices come down to earth, this makes absolute sense--both common and financial.

What some people still don't seem to realize is that a huge number of people who bought homes and condos during the bubble, had absolutely no intention of holding on to them this long...they intended to sell them in a year or two, at twice the price they paid, to waves of rich baby boomers. Good luck with that.

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This market has been moving slowly downward, but I sense the pace may pick up this year. Nothing I see at this point indicates we are any where near a bottom on price, including the condo market now that I'm paying a bit more attention to it. I'm seeing some low ball REO's finally hit the market in areas where private listings are 150% higher than the REOs. Sales for March and April were way off, foreclosure filings are still increasing, and a very large number of ARM resets still loom on the horizon. I've recently re-adjusted my purchase plans pushing them back by at least a year, well into 2010.

$6,000 to $12,000 a year and we haven't even touched insurance or R.E. taxes!

Actually, almost all of the condo association fees include exterior insurance which is the biggest nut. Many also include water, sewage, trash pickup and basic cable.

You're going to have to pay for insurance one way or another unless you pay cash for a single family home and choose to roll the dice and not buy insurance.

This market has been moving slowly downward, but I sense the pace may pick up this year. Nothing I see at this point indicates we are any where near a bottom on price, including the condo market now that I'm paying a bit more attention to it. I'm seeing some low ball REO's finally hit the market in areas where private listings are 150% higher than the REOs. Sales for March and April were way off, foreclosure filings are still increasing, and a very large number of ARM resets still loom on the horizon. I've recently re-adjusted my purchase plans pushing them back by at least a year, well into 2010.

REOs and short sales are dictating market value. I'm all over them. If the short sales do not close before foreclosure they will just be relisted as REOs post foreclosure- at or 10-20% below market value.

I keep beating the same drum- it's up to the realtors to sell the short sales and REOs before we'll ever see the market appreciate. What is encourageing is the for the second straight month the short sale ratio to active listings has decreased.

REOs and short sales are dictating market value. I'm all over them. If the short sales do not close before foreclosure they will just be relisted as REOs post foreclosure- at or 10-20% below market value.

I keep beating the same drum- it's up to the realtors to sell the short sales and REOs before we'll ever see the market appreciate. What is encourageing is the for the second straight month the short sale ratio to active listings has decreased.

What's the ratio?

What is encourageing is the for the second straight month the short sale ratio to active listings has decreased.

Is that because the short sales are being sold off; or are they dropping into REO; or are the number of non-short-sale active listing increasing?

Can you post the numbers you've used to calculate the ratio starting in Jan 2008? Thanx

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Is that because the short sales are being sold off; or are they dropping into REO; or are the number of non-short-sale active listing increasing?

Can you post the numbers you've used to calculate the ratio starting in Jan 2008? Thanx

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Unfortunately, my short sale revelation which led me to tracking the numbers in only accurate for the last 3 months:

<table width="75%" border="1" cellpadding="5">
<tr>
<td><strong>Destin Single Family Homes</strong></td>
<td><strong>Total Active Listings</strong></td>
<td><strong>Disclosed Short Sales</strong></td>
<td><strong>%</strong></td>
</tr>
<tr>
<td><strong>April 8</strong></td>
<td>1048</td>
<td>74</td>
<td>.07</td>
</tr>
<tr>
<td><strong>May 13</strong></td>
<td>1065</td>
<td>73</td>
<td>.068</td>
</tr>
<tr>
<td><strong>June 4</strong></td>
<td>1047</td>
<td>70</td>
<td>.067</td>
</tr>


</table>

hmmm, I thought you could post HTML here. Try one more time:

<table width="75%" border="1" cellpadding="5">
<tr>
<td><strong>Destin Single Family Homes</strong></td>
<td><strong>Total Active Listings</strong></td>
<td><strong>Disclosed Short Sales</strong></td>
<td><strong>%</strong></td>
</tr>
<tr>
<td><strong>April 8</strong></td>
<td>1048</td>
<td>74</td>
<td>.07</td>
</tr>
<tr>
<td><strong>May 13</strong></td>
<td>1065</td>
<td>73</td>
<td>.068</td>
</tr>
<tr>
<td><strong>June 4</strong></td>
<td>1047</td>
<td>70</td>
<td>.067</td>
</tr>


</table>

Thanks for these details JoeMammy "Actually, almost all of the condo association fees include exterior insurance which is the biggest nut. Many also include water, sewage, trash pickup and basic cable".

What I fail to understand though, is why costs for these "services" seem to increase with the value of the property - or am I missing something? I would think that trash collection, water, cable etc. would cost about the same regardless as to whether or not the property costs $300m or $700m (allowing for occupancy differences in some cases). Obviously, one would expect insurance to increase proportionately.

I may be wrong, and I don't have an axe to grind, but I have a feeling that some "management companies" took "liberties" with charges during the boom times and haven't yet woken up to the real world.

Unfortunately, my short sale revelation which led me to tracking the numbers in only accurate for the last 3 months:

I'd guess they're being foreclosed on, I've seen a few of these myself.

Active listings decreased as they either went under contract or expired. We are currently at .067 short sale listings.

Our office did over $8M last month in closings- our best month in quite some time . We only have 8 full-time agents. We are all doing the hustle.

Active listings decreased as they either went under contract or expired. We are currently at .067 short sale listings.

Our office did over $8M last month in closings- our best month in quite some time . We only have 8 full-time agents. We are all doing the hustle.

It's great to hear that activity has picked up--hard working realtors need to make a living and it's nice that the commissions are coming in again. However, an increase in closings does not signal the bottom has arrived. Sale prices continue to fall up and down 30A on homes, lots and condos and I agree with 30Ashopper that the bottom on prices is still a ways down the road.

I think that many good deals are getting gobbled up and you will not see similar opportunities. I just closed on a home 3Br., 2bath, pool, gulf views, good rental numbers, etc. The home closed for $394,000. You can wait all you want but I do not see these deals popping back up. BTW, if you do see one please call because I have buyers for more deals like this. I think you may see some more great deals on vacant land but some of these home prices are getting too good for buyers to pass on. The bottom may be a ways away but I think we can now get a clearer picture in certain areas where the actually bottom is. Remember, the market is very local in nature and can change every few miles.

It's great to hear that activity has picked up--hard working realtors need to make a living and it's nice that the commissions are coming in again. However, an increase in closings does not signal the bottom has arrived. Sale prices continue to fall up and down 30A on homes, lots and condos and I agree with 30Ashopper that the bottom on prices is still a ways down the road.

Me thinks that there are still a bunch of hold-outs who are white-knuckling it through the summer, praying that the boomers will ride to the rescue this year. They'll hang in there through the summer vacation rentals and/or use it for one last summer fling with family and friends then eventually throw in the towel.

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Me thinks that there are still a bunch of hold-outs who are white-knuckling it through the summer, praying that the boomers will ride to the rescue this year. They'll hang in there through the summer vacation rentals and/or use it for one last summer fling with family and friends then eventually throw in the towel.

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Probably very true but me thinks these white-knuckles will get contracts if they price it right. The buyer never left this market. The perceived value did. As prices drop back down buyers are getting back on board. I have a sold and pending drawer to prove it.

I may be wrong, and I don't have an axe to grind, but I have a feeling that some "management companies" took "liberties" with charges during the boom times and haven't yet woken up to the real world.
[/QUOTE]

As someone who works for one of these management companies I can tell you it would be tough to take liberties - look at the budget - we get a flat fee for handling the management - unless the managers are getting a kickback from the suppliers (which I don't) - Before planning a budget for the year we call all the suppliers and try to get them locked in for the next year - including ourself. Insurance is one of those huge factors that is tough to read. One complex we manage insurance is half of the total association fees collected every month. Besides that they have to pay cable - pool service - trash collection - water and sewer - outside electric - landscaping etc. I believe if you are complaing about association fees - look at the insurance bills. I hear all the time we have to cut the quarterly association fees - how can you - the numbers are what they are - if you don't pay it monthly (or quarterly) you will end up paying it in special assessments.

I may be wrong, and I don't have an axe to grind, but I have a feeling that some "management companies" took "liberties" with charges during the boom times and haven't yet woken up to the real world.

As someone who works for one of these management companies I can tell you it would be tough to take liberties - look at the budget - we get a flat fee for handling the management - unless the managers are getting a kickback from the suppliers (which I don't) - Before planning a budget for the year we call all the suppliers and try to get them locked in for the next year - including ourself. Insurance is one of those huge factors that is tough to read. One complex we manage insurance is half of the total association fees collected every month. Besides that they have to pay cable - pool service - trash collection - water and sewer - outside electric - landscaping etc. I believe if you are complaing about association fees - look at the insurance bills. I hear all the time we have to cut the quarterly association fees - how can you - the numbers are what they are - if you don't pay it monthly (or quarterly) you will end up paying it in special assessments.

....and then there is the increased charges to cover the folks who've opted to buy food and gas and forego the association fees on their "investment" condos.


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Probably very true but me thinks these white-knuckles will get contracts if they price it right.

.....But first they've gotta scrape together the cash to pay off the difference between the "right price" and the money they owe the lenders.


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.....But first they've gotta scrape together the cash to pay off the difference between the "right price" and the money they owe the lenders.

Seriously, for all the sales I have knowledge of the seller is taking a loss.

.....But first they've gotta scrape together the cash to pay off the difference between the "right price" and the money they owe the lenders.


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Closed three of those last month.... If you want it to go away you can get creative and make it happen. Just depends on how you look at it.

Seriously, for all the sales I have knowledge of the seller is taking a loss.

Not true. It depends on when they bought it.

Closed three of those last month.... If you want it to go away you can get creative and make it happen. Just depends on how you look at it.

How much did they each bring to the table?

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