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Smiling JOe

SoWal Expert
Nov 18, 2004
31,648
1,773
monty said:
... In addition, there are many, many lots and homes for sale along 30A that are listed at below the original purchase price--people are beginning to lose money. I hate to see this happen to people, but it is a reality. If you don't believe me, ask one of the realtors on this board to verify.


Even if there are a handful, they were most likely purchased by someone who could not afford them and were hoping to assign the contract or do a quick flip. I have seen that happen, but to say this is the case for "many, many lots and homes" is stretching it from my daily observation of the market. ...But, who knows, maybe I have been asleep for the last six months. Could you please give us the parcel id, listing number, address, or any other identifier for just 10 of the many, many properties to which you refer? :dunno: If ten is too many, how about starting with 5? :dunno:

In the previous post, I show you a broader picture. I don't dispute that on a small level, very small, this may be happening, but your focus is extremely narrow and not true of the total market.
 

DuneDog

Beach Lover
Feb 4, 2006
56
0
Has anybody been around long enough to remember what the market was like in the early 1980's. It got pretty ugly for a couple of years but eventually came around very nicely. In Perdido Key, in those days you could buy almost new condo's that cost 85K a couple of years before for 45K. I know a few people that bought multiple units, held for a few years and sold for over double. Maybe the same type thing is about to happen again on 30A?
 

Smiling JOe

SoWal Expert
Nov 18, 2004
31,648
1,773
DuneDog said:
Has anybody been around long enough to remember what the market was like in the early 1980's. It got pretty ugly for a couple of years but eventually came around very nicely. In Perdido Key, in those days you could buy almost new condo's that cost 85K a couple of years before for 45K. I know a few people that bought multiple units, held for a few years and sold for over double. Maybe the same type thing is about to happen again on 30A?
I was not here then, but I know people who had bought condos in Destin, and at the time they were very frustrated when the condo market tanked. If the PCB market repeats a little Panhandle history in the next few years, I think there is a likely chance that it too, will come back around strong. I wish a hurrican on no one, but if one hits PCB on the west end, and knocks out all of the mobile homes and older homes, the real estate market over there will see major price changes.
 

Cork On the Ocean

directionally challenged
Smiling JOe said:
I am not cheap.

That's not what I've heard! :rotfl: :funn: Sorry Joe, you left yourself open for that one.

Do we have the famous Monty from Let's Make a Deal on this board? (sorry, couldn't resist just in fun :lol: ) Well come on down Monty and show us your data. I'm afraid that you will find that there's no deals here where you're gonna get a million dollar property for nothing. Rather than seeing 5 or 10 instances, I would rather see you provide info that indicates that over 2% or even 1% of total sales are these fire sale prices. That would provide meaningful information for us.

When any of the realtors post sales data on the board their not guessing at it, it's been pulled from actual sales and not subjective feelings about the market nor is it isolated data of a few instances of extremely motivated sellers. If you truly are interested in buying here, you may want to take the average sales price of the type of property that you're looking for, muliply that by .85 which would be 85% of the average recent sales prices and ask your realtor to autonotify you of property in your target area which is under that price. I've done this for clients and to be honest, there are very few listings at 85% of recent sales. To find such deals is like a needle in a haystack. Yes, they do happen, they have always happened in every market that I know when a seller has hit real problems but they aren't widely available as your post infers.

That's how you will get a deal and find those motivated people. As of yet, we've seen only increases in all sectors over last years prices in spite of signicantly slower sales. For this reason, I personally don't think that you're going to see free falling prices. Are there deals, yes. Some sellers have dropped their prices. I know of only one case where the seller sold for less than they paid which doesn't mean that there aren't more but they are isolated cases but wilthout seeing the data, I believe that you're grossly overstating and I don't see a trend yet in falling prices just number of sales. If I did, I would tell my clients that because there's many people like you that want to buy low. If you want to buy here and decide to wait, then the question is ...."Do you feel lucky?" If so, wait because nobody really knows.

I believe that Joe spent many hours preparing sales data by month over the last 3 years and posted them on the board. If you are interested on sales from November to JFebruary 2006, you should review the data at:

[ame="http://www.sowal.com/bb/showthread.php?t=4142"]http://www.sowal.com/bb/showthread.php?t=4142[/ame]
 
I still think condo is the way to go on the beach. It was helpful to have other owners pay for a seawall and pay for damages of hurricanes. I thought I once wanted a house but it would have cost way to much. The rentals are good and no hurricanes this year. We are making the payments, soon to own forever. Go seagrove!
 

Babyblue

Beach Fanatic
Mar 1, 2006
528
6
Seagrove Beach
Unfortunately it appears the real estate boom, called for by ecopal's linked article from a tallahasee real estate conference, missed the direction of their call.

Smiling Joe has posted the October real trends #'s for Sowal, and it really looks like to me the y-o-y trends are worse than they even look like on paper (and on paper they look bad) and November it can be taken as a given, will surely be even worse.

Why do I say they look even worse then the data bears out on paper??? Let's look at dollar value of sales year over year.. Oct. 2004 520M, vs. 347M for Oct. 2005. Residential lots sales - $226M in Oct. 2004, vs. 82M in 2005. Contrast these substantial declines, with the part anecdotal, part emperical fact that listings of lots and residential homes for sale in Oct. 2005 is much much more than was for sale in 2004 on a total dollar basis, and we have the makings of a downswing that has only started, not a boom starting. It will take months and months to bear itself out, as sellers of real estate historically do not aggressively reduce their asking prices, until it's much too late. Some don't have to sell at all, particularly in South Walton. Then there are another group that probably should sell, but hang on anyway, and weather the storm. Then, unfortunately, even in South Walton you have speculators and people who stretched, who have to sell if they bought in 2004-05, because they can't afford a prospectively large capital loss, can't afford to carry the dramtically higher insurance and tax rates, in the face of rents that have been VIRTUALLY stagnant for 6 years, compared to valuations. It is these marginal buyers, who will become the marginally aggressive sellers - and there is no way around it, even in South Walton where the beaches are beautiful. To be sure, some sellers never "have" to sell and this is true of This will be doubly problematic in an area like SOWAL, where much of the activity from 2000 to 2005 has been purchases by speculators, who don't have to live there: i.e. it's an investment.

It is clear when the bulls on SoWal real estate now use phrases like "longer term" and cite the wonderful qualities of SoWal that attracted them to the place in the first instance, that the writing is on the wall.

However, having said all that, although I expect real estate values to resume a normalized annual appreciation rate of 7-9 % per year, after the next 12-18 month downturn, which I would ballpark at roughly 15-25% depending on the kind of property and location.

For those looking to hedge their exposure to South Walton real estate, but don't want to compete with all of the listings that are growing dramatically, by owner, by broker, unofficially and otherwise, the only liquid mechanism available to do so at this time is public trading equity of St. Joe Company, JOE. The perfect time to start shorting JOE however was about 4 months ago in June or July, which was as one might expect 2-4 months after the cognisenti in South Walton had realized the real estate values had stopped rising. Yes folks real estate peaked in SouthWalton somewhere between Thanksgiving of 2004 and March of 2005. It didn't go down, but it didn't continue to rise. Dentists in Birmingham, and Proctoligists in Atlanta starting reading magazine articles this spring about a pending potential real estate bubble, and they were the marginal buyers/speculators. It took the cognisenti on Wall Street, who don't have their finger on the pulse of South Walton real estate as closely as you all do, several weeks, maybe 12 weeks, to figure this out and start selling their holdings down, but there is much more downside to go, should valuations plumet an additional 20% in the area, as I expect is a good possibility and not extreme at all, given the multiple 100% increase in valuations over the past few years...

If you're someone who truly has a 25 year time horizon and have a bunch of cash, get ready to be a buyer, but don't be silly and buy the first significant dip we're about to see born out by the data soon... hold your powder until you see significantly large scales of foreclosures, probably not for 18 months or more, when interest rates on Adjustable Mortgages are back to normalized levels of between 7.5-8.5% - and payments on those mortgages rise 60% as a result, putting the final squeeze on the unfortunate marginal segment of owners.

Purchased my digs in 95 for 200k. Last year it was 2.M:clap_1: So having said that the market is soft now yes but.....It ant going back to 95:nono1: never! So no need to cry now. If it was worth 2 last year it might be worth one this year:dunno: but if you bought long ago you are fine. If not then you own a million dollar piece of heaven!
 
Last edited:
Very Prophetic

Unfortunately it appears the real estate boom, called for by ecopal's linked article from a tallahasee real estate conference, missed the direction of their call.

Smiling Joe has posted the October real trends #'s for Sowal, and it really looks like to me the y-o-y trends are worse than they even look like on paper (and on paper they look bad) and November it can be taken as a given, will surely be even worse.

Why do I say they look even worse then the data bears out on paper??? Let's look at dollar value of sales year over year.. Oct. 2004 520M, vs. 347M for Oct. 2005. Residential lots sales - $226M in Oct. 2004, vs. 82M in 2005. Contrast these substantial declines, with the part anecdotal, part emperical fact that listings of lots and residential homes for sale in Oct. 2005 is much much more than was for sale in 2004 on a total dollar basis, and we have the makings of a downswing that has only started, not a boom starting. It will take months and months to bear itself out, as sellers of real estate historically do not aggressively reduce their asking prices, until it's much too late. Some don't have to sell at all, particularly in South Walton. Then there are another group that probably should sell, but hang on anyway, and weather the storm. Then, unfortunately, even in South Walton you have speculators and people who stretched, who have to sell if they bought in 2004-05, because they can't afford a prospectively large capital loss, can't afford to carry the dramtically higher insurance and tax rates, in the face of rents that have been VIRTUALLY stagnant for 6 years, compared to valuations. It is these marginal buyers, who will become the marginally aggressive sellers - and there is no way around it, even in South Walton where the beaches are beautiful. To be sure, some sellers never "have" to sell and this is true of This will be doubly problematic in an area like SOWAL, where much of the activity from 2000 to 2005 has been purchases by speculators, who don't have to live there: i.e. it's an investment.

It is clear when the bulls on SoWal real estate now use phrases like "longer term" and cite the wonderful qualities of SoWal that attracted them to the place in the first instance, that the writing is on the wall.

However, having said all that, although I expect real estate values to resume a normalized annual appreciation rate of 7-9 % per year, after the next 12-18 month downturn, which I would ballpark at roughly 15-25% depending on the kind of property and location.

For those looking to hedge their exposure to South Walton real estate, but don't want to compete with all of the listings that are growing dramatically, by owner, by broker, unofficially and otherwise, the only liquid mechanism available to do so at this time is public trading equity of St. Joe Company, JOE. The perfect time to start shorting JOE however was about 4 months ago in June or July, which was as one might expect 2-4 months after the cognisenti in South Walton had realized the real estate values had stopped rising. Yes folks real estate peaked in SouthWalton somewhere between Thanksgiving of 2004 and March of 2005. It didn't go down, but it didn't continue to rise. Dentists in Birmingham, and Proctoligists in Atlanta starting reading magazine articles this spring about a pending potential real estate bubble, and they were the marginal buyers/speculators. It took the cognisenti on Wall Street, who don't have their finger on the pulse of South Walton real estate as closely as you all do, several weeks, maybe 12 weeks, to figure this out and start selling their holdings down, but there is much more downside to go, should valuations plumet an additional 20% in the area, as I expect is a good possibility and not extreme at all, given the multiple 100% increase in valuations over the past few years...

If you're someone who truly has a 25 year time horizon and have a bunch of cash, get ready to be a buyer, but don't be silly and buy the first significant dip we're about to see born out by the data soon... hold your powder until you see significantly large scales of foreclosures, probably not for 18 months or more, when interest rates on Adjustable Mortgages are back to normalized levels of between 7.5-8.5% - and payments on those mortgages rise 60% as a result, putting the final squeeze on the unfortunate marginal segment of owners.



I remember like yesterday '02, '03, '04, '05 when values significantly left rental rates and professionals in Real Estate were advising people to buy now anyway. Professionals were discrediting and pummeling anyone who would try and keep it real.

Hindsite is now available, was the residential housing product that was being introduced and offered really worth what the commissioned pro's were advising? I saw an awful lot of big smiles, drinks, food and laughter back then by people who weren't creators of anything.
 

Bob

SoWal Insider
Nov 16, 2004
10,463
1,344
O'Wal
I remember like yesterday '02, '03, '04, '05 when values significantly left rental rates and professionals in Real Estate were advising people to buy now anyway. Professionals were discrediting and pummeling anyone who would try and keep it real.

Hindsite is now available, was the residential housing product that was being introduced and offered really worth what the commissioned pro's were advising? I saw an awful lot of big smiles, drinks, food and laughter back then by people who weren't creators of anything.
and the creators weren't pushing the envelope per sq/ft?
 
and the creators weren't pushing the envelope per sq/ft?


I've heard it said at least 50 times from visitors that they could get comparable residential product in their hometown for 1/2 what people were charging here. I've never heard one credible argument that explained construction costs over $200 per square foot on total square footage under roof on an average sized home.
 
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