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TooFarTampa

SoWal Insider
SHELLY said:
An interesting article from Sunday's NY Times. For all those who used to remember what a "home" really used to be (and now what it has become): The Way We Live Now

The pendulum will swing back Shelly. It has to. With the shortage of construction materials and the astronomical cost of building a home, paired with the increase in interest rates to historically reasonable levels (making it more expensive to borrow against the equity) it is going to be too expensive for middle to upper-middle income people to remodel their kitchens or baths or especially build custom homes. I don't think the next cycle is going to look good for remodelers and home builders, just like it is going to be hard for fly-by-night realtors (and I don't mean the true pros) across the country to make a living.

We spent 1996 to 2003 buying, living in and remodeling several older homes, and did very well by taking advantage of tax laws, serving as our own general contractors and learning to make some of our own improvements. When we sold our last "investment" home in 2003 and bought this one (with a 5.5 fixed rate mortgage, thank you) I told my husband that we better plan on sticking where we are because the housing gravy train is over. Yet the value on our current home has continued to rise to a ridiculous level. I just don't see how it's sustainable. The market in Tampa seems to be in balance but the major gains are definitely over. I would not be surprised to see a 10 percent or so correction.

I'm looking forward to the day when nobody wants to buy and fix up older homes, because that's when we'll start doing it again. Meantime, we turned our attentions to 30-A, because three years ago the fundamentals were amazing. They continue to amaze me. I do believe the correction that is occuring is justified and will take awhile to level out, but I have lived in Florida almost all my life, in areas that have been far more overrun, and the beauty of the area -- and believe it or not, the restrictions on development -- is almost unmatched. We love Sanibel/Captiva too but there is no way we could afford it when we bought along 30-A. And unless you own gulf front along the narrow strip of Captiva, is just not as beautiful.

Combine that with the higher elevations, and 30-A absolutely comes out a winner. My dad the architect, who used to do a lot of work near the beach around here, drilled it into my head from a very early age that we must be respectful of hurricanes when building. Imagine my surprise when, on my first visit to 30-A, I learned that most places were not required to have flood insurance because of the high elevation. Sold! Of COURSE we bought flood insurance, but I'd rather be 30 feet up than five. And while I know many locals are upset with all the development along 30-A, it sure as heck doesn't compare to the raping of the beaches that has happened along other coastal areas in Florida. 30-A is paradise, plain and simple.
 

Paula

Beach Fanatic
Jan 25, 2005
3,747
442
Michigan but someday in SoWal as well
I think the good thing about a "shake out" is that contractors and other service people who focus on quality, dependability, and service will come out ahead because of word of mouth recommendations. Those that don't will be the first to go.
 

Rita

margarita brocolia
Dec 1, 2004
5,209
1,634
Dune Allen Beach
Cork On the Ocean said:
.................. Boy guys, I understand! I can only take this in small doses. Thank God I have a life. After a couple of days of this, I feel like offing myself to put me out of my misery.:bang: Incomprehensible to me.

I need a little therapy. :lol: :rotfl: :rotfl: :funn: :clap_1: :rofl: :rotfl: :rotfl: :funn: :lol: :D :rotfl:

OK. Feel much better. Can hang on for another day.

>>>>>>>> scoot right over to the lounge and we'll give Camp Creek Kid, our resident therapist, a jingle! We'll all be fine in no time! :D
 

Bob

SoWal Insider
Nov 16, 2004
10,364
1,391
O'Wal
GaltsGulch said:
- Bank of Japan's decision is going to force Fed's hand.

- JOE stock off nearly 40% from its highs.... Real Estate is not a liquid/efficient market, and takes longer to adjust that stocks.... but I believe it is dialed in now.

Back to January 2004 pricing in South Walton - that is where we are headed -It will look simply like what is known as a 'retracement' on a stock chart. Real Estate in South Walton is now worth 30-40% less than it was at the very peak. No more, no less. It will only take time to bear out.

St. Joe's company stock has taken about 7 months to fall 40%. Real estate will take twice as long, let's say 14 months. By next May, real estate may stop declining. 40% folks. give or take 5 %, and depending on how high interest rates go. Last nights decision by the Bank of Japan now gives us an incredibly good tip, that rates are going to be rising more than we thought just yesterday.

If you like South Walton long term, don't buy real estate at asking prices (because as the weekend auction showed, ask and offer are a long way apart)... buy St. Joe stock (JOE) which has already taken the appropriate hit discounting what has started to happen, and what the market things is going to happen (down) already.

If you love SoWal, and are worried about "waiting" to buy real estate, that you may miss out, just simply buy some JOE stock which has already taken the hit.

It is now time to cover the short play on JOE here in the mid 50's. Consider buying JOE now instead of real estate, as JOE is reflecting the bid prices (which were not accepted for the most part) at recent So Wal real estate auction, not the ask prices.

Man this game is simple.
If SoWal real estate has yet to take the full 40 percent hit, why would this not reflect poorly on future St, Joe profits. Are not many of St Joe's premier developments right here on 30A? What flavor bug juice are you drinking?
 

dsilvar

Beach Fanatic
Jan 12, 2006
307
0
66
Miramar beach
Methinks there are too many people long on St Joe and 30-A, spinning away their blues!
And Shelly the short is looking for an entry point.
 

Cork On the Ocean

directionally challenged
Rita said:
>>>>>>>> scoot right over to the lounge and we'll give Camp Creek Kid, our resident therapist, a jingle! We'll all be fine in no time! :D

Ah just what we need a shrink. Thank heaven cause this board could really use one. :rotfl:

" The statewide median sales price for existing single-family homes is $248,600, up 21 percent from a year ago, the Florida Association of Realtors reports."

In south walton, from SJ's data, the average home as $1.5 million up from $950K a year ago, up nearly 58% :eek: :lolabove:

"In 2001, the statewide median sales price was $115,800. That's a gain of 114.6 percent over the past five years, according to the association's records. The average cost of a home in Tallahassee is now more than $232,000."

Full article at:
http://www.tallahassee.com/apps/pbcs.dll/article?AID=/20060310/COLUMNIST01/603100330/1006/OPINION

And just to keep things rolling:
http://rismedia.com/index.php/article/articleview/13781/1/1/
 

monty

Beach Comber
Nov 23, 2005
48
0
This market (along 30A--not necessarily Freeport, Defuniak and other parts of Walton County) is falling and falling fast. It has already hit the raw lot market where actual sales prices are at least 30 to 40% less than they were 18 to 24 months ago. Anyone that tries to dispute this fact in light of actual recent SALES of lots in Rosemary, Watersound, the Preserve, Cypress Dunes and Watercolor, etc. is drinking the bug juice referred to above. Listing prices are going even further below these actual SALES prices. Good example is a lot that went under contract in Watercolor that was listed at $399k--it probably sold for less. Last time ANY lot in Watercolor sold for under $400k was 18 months ago or more. Average price in Watercolor 12 to 18 months ago near the lot that sold was $600k plus--that's a decrease of at least 33%. Another lot nearby is now listed for $399k. Don't try to say it has anything to do with build out dates. The developer is offering grace for a relatively small price relative to sales prices so build out deadlines are irrelevant for people that really want to build a home to enjoy. An investor looking to flip would pay attention to the build out date--but the savvy investors are no longer buying. 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.

Condos are falling too with sales and listing prices in these same areas 10% to 20% less than market highs. Homes haven't taken the full hit yet, but they will. There is just too much inventory on the market.

Yes 30A is a wonderful and desirable place and if you have a home there I bet you love it. I will probably buy a lot and build in the market when it appears to have hit bottom. But, regardless of how much you love the market, I find it hard to believe that anyone believes this market isn't in the midst of a freefall. The laws of supply and demand apply here no matter how beautiful and desirable it is, and there is a huge overabundance of inventory on the market. Until equilibrium is reached, prices will continue to fall. It's been happening for quite some time even though many on this board refuse to accept it as reality.
 

monty

Beach Comber
Nov 23, 2005
48
0
GaltsGulch said:
I know its not easy.... just seems like it in hindsight. It's not. How do I know it has not been easy? Because 6-10 months ago, when there were two or three posters to these boards basically screaming "sell now", the vast and overwhelming majority of people thought that was the wrong call, and let them know it. So it is tough, not easy. "Real estate goes up", "Boomers are retiring", "West Palm is more expensive", "An airport approval is coming", "

It isn't easy to see at the beginning of a boom or bust cycle. But, it should be plain as day when you are smack dab in the middle of a cycle like right now.
 

monty

Beach Comber
Nov 23, 2005
48
0
Cork On the Ocean said:
Get the popcorn out Joe. :lol:

Tyler, There's no intent to attack anyone as you are doing. First point was that using list prices is not the indicia that value is based on. Do you disagree with that point?

The article that Shelly linked was interesting and certainly a consideration but it relates to the overall market in the US and one investor moving his holdings to casinos which are still real estate holdings. I never said that the market is booming in the US and wouldn't because frankly I don't know that much about every market in the US.

A quick search on the same magazine produced other articles related specifically to the Florida market and more specifically the Florida Panhandle.

http://money.cnn.com/magazines/fortune/fortune_archive/2005/10/17/8358067/index.htm


All realtors are worried and sales have fallen dramatically. I know and am close friends with several reputable realtors who have seen their commissions plummet - decline by triple digits over the same time last year.

No Tyler, you don't know. Not all realtors are worried. Being reputable doesn't equate to success in today's world. Many reputable realtors believe that they can be sucessful using yesterday's approaches. The fact is that the internet has forever changed their profession beyond their ability to comprehend. The last couple of years when they were making triple digits, customers were basically flopping into their laps. Now they have to work harder. The average realtor's lack of technological acumen severely impacts their ability to be successful today. While 86% of realtors have websites, only 12% of them get 25% or more of their business from it. The average realtor is at the mercy of a bevy of webmasters, software distibutors, marketing services and even the search engines promising an effective internet presence and it's just not that easy. The cost of internet promotion will become cost prohibited for many realtors as the online competition gets stiffer and with the number of sales as low as they are, they are going to continue to have a very difficult time.

right now and at least several, several months and possible a few years to come, there's little money or return to be made here.

If you expect to make money in several months, that's why people are in trouble. If you read my post carefully, you will note that I sited the ability to be flexible and adapt to the environment as an important factor to success in investing. Regarding South Walton, I have maintained on many threads that many people can no longer afford 30A and despite many peoples' hope that it will become affordable again, I think those days are gone forever. When you say there's little money to be made "here", if you are speaking of the Beaches of South Walton, I would tend to agree with you. If you read my post in the manner in which it was intended, you will also note that I said that I'm looking towards affordable housing on longterm rentals - that's not 30A.

Today I was working with a client who purchased about 9 acres in Callaway slightly over a year ago for $495K which is surrounded by 5000 acres owned by JOE . There have been 11 sales in the last year along a 3-5 mile stretch that comp it out at about $1.1-$1.2 million. We're also looking into whether he'd be wiser to put in streets and parcel it out into the 15 units/acre allowed and sell them for $100K-200K each depending on the amenities he'd put in. That's $13 -27 million dollars less expenses on a $495K investment just about a year ago. Open minded and flexible people are making money in this market. They didn't get stars in their eyes about Watercolor or Alys beach. They make sound business decisions based on what they saw, not what they were told.

You can't spin the facts,

There are no spins here. Only people that have their minds made up. Maybe they own, maybe they don't even own here. You're assaulting me and telling me to forget what I see and trust someone that I don't even know, that apparently isn't making money (perhaps losing it), or possibly hasn't even invested in this market?

Tony Robbins, (a very positive person) and mentor to many successful people says that if you continue to do the same things you've been doing, expect to get the same results. And yes, Paula, isn't it great to feel good. :lol:


You and SJ seem to be agents with lots of data at their fingertips. Can you post some sales data for November thru February that indicates a robust or even a stable market in the major developments along 30A versus using market wide averages or things occurring in Callaway, Freeport, Defuniak, etc? Give some very specific examples of lots selling for more than nearby parcels that sold a year or so ago, resale condos too. Not interested in areas north, east or west of 30A.
 

Smiling JOe

SoWal Expert
Nov 18, 2004
31,648
1,773
monty said:
You and SJ seem to be agents with lots of data at their fingertips. Can you post some sales data for November thru February that indicates a robust or even a stable market in the major developments along 30A versus using market wide averages or things occurring in Callaway, Freeport, Defuniak, etc? Give some very specific examples of lots selling for more than nearby parcels that sold a year or so ago, resale condos too. Not interested in areas north, east or west of 30A.

monty said:
This market (along 30A--not necessarily Freeport, Defuniak and other parts of Walton County) is falling and falling fast. It has already hit the raw lot market where actual sales prices are at least 30 to 40% less than they were 18 to 24 months ago.

If you want to pay me for my services, I will gladly assist you. You are asking for some extremely time consuming data (and I am not cheap). Not once, have I stated that we are in a "robust" market. What I can do is present you with data to confirm that you are incorrect about sales prices for lots in the 30A area being less today than two years ago. In fact, the avg lot with size less than 1 acre, located south of Hwy 98, has increased from $334,910 in Feb '04 to $858,846 in Feb '06 equalling a 156.4% increase in the past two years.

See attachment.

That is quite different from the 30-40% drop in sales prices you mention over that same period of time.
 
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