Correction: Panhandle real estate sell off just starting

[SHELLY]

one question about interest rates (besides the fact that they can only go one of two ways, and they are still impossible to predict.)
What effect will they have on real estate ARMS and R/E prices if the FED stops pushing them up after the next meeting or two as Citigroup is now predicting and feels the FED may well start REDUCING rates in the fall? Could this cause buyers to blink?

Due to events that just happened recently, it will be a bit more tricky for the Fed to stop raising rates at this point. You see, the EU and Japan just started raising their rates. If the Fed stops raising rates when the other countries are raising theirs, that will make the US Treasuries less attractive to investors who'll stop buying them, or worse...sell them off (driving the price of the bonds down and the yield up). The US will be hard-pressed to fund our country's need for greed. The US will be stuck with tons of debt to pay and nothing with which to pay it...so the US will have to make their Treasuries more attractive relative to the rest of the world...and just how do they do that?....why raise the rates of course.

OR...Congress can raise taxes

OR...America can stop living from paycheck to paycheck and get off the credit cards. :funn:

Believe me...if this economy has a meltdown, the very last thing the baby boomers with nest eggs and pension funds tied up in US Treasuries-out-the-wahzoo will be thinking about is buying an overpriced condo on the beach.

It will be interesting to see what the Fed pulls out of its bag of tricks this time. I think Ben is going to find that Al left him holding an empty bag. (Insert Grim Reaper Here: )

 

[GaltsGulch]

- 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.

 

[Smiling JOe]

"Man this game is simple."

If that were true, we would all be retired, living at the beach, including you! ;-)

 

[Jellyfish]

If that were true, we would all be retired, living at the beach, including you!

Most of you on this board ARE living at the beach, so I guess he's right!

OK, maybe not retired, but you are one up on all us dreamers....

 

[Smiling JOe]

Most of you on this board ARE living at the beach, so I guess he's right!

OK, maybe not retired, but you are one up on all us dreamers....

Correct, living at the beach is only half of it. Having enough money to retire is another another ballgame, which most of us are not in at the moment.

Perhaps GaltsGulch is the only one for whom this is "easy." As someone wrote yesterday or the day before, there is way too much info out there for a human to accurately comprehend and process regarding the real estate market. He who says it is easy, is one to take with a note of caution. ;-)

 

[GaltsGulch]

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", "

Comment was tongue in cheek.... I didn't mean to rile anyone who has a vested interest in seeing a very soft landing, instead of the kind of correction that the stock of St. Joe's has experienced (DOWN 40%!!!!). I think stocks react quicker to market changes, than does real estate.

It's not easy. People have to make their own choices, and vote with their feet. Good luck to all.

One year ago, almost to the day, my family doctor was talking about buying pre-construction condo's. Doctor's are notoriously late to parties, according to lore. http://www.bizjournals.com/wichita/stories/1997/07/28/story7.html

 

[Rita]

..... Believe me...if this economy has a meltdown, the very last thing the baby boomers with nest eggs and pension funds tied up in US Treasuries-out-the-wahzoo will be thinking about is buying an overpriced condo on the beach. .........

Could you clarify where you stand on baby boomers and condo sales???
I'm not sure everyone knows yet. ;-)

 

[Miss Kitty]

Could you clarify where you stand on baby boomers and condo sales???
I'm not sure everyone knows yet. ;-)

Brokeback Record! Sorry...sometimes I just cannot resist!!!

 

[Paula]

FYI, I bought JOE at $73 and am watching it decline (and didn't sell or put a stop order on it -- and I haven't lost any sleep over it either). Some of my stocks have gone up and some have gone down over the years because my crystal ball is as cloudy as everyone else's crystal ball (though we have some posters who are very sure of their predictions and their crystal ball so they must be really wealthy by now ).

In my view, diversification is the name of the game so JOE (or the Florida market) is not making or breaking my retirement right now. I'm still on target to be watching sunsets every winter at the beach in about 7 years. And if it doesn't work out, I'll plan on working full-time a little longer (heck, I really like my job and I'm not sure I'd want to leave it early anyway).

 

[SHELLY]

Due to events that just happened recently, it will be a bit more tricky for the Fed to stop raising rates at this point. You see, the EU and Japan just started raising their rates.

The statement above was written while the Bank of Japan was still in meetings about rate hikes. This morning BOJ announced they are not going to raise their rates just yet...but they said they are scrapping their "easy money" policy. This fires a warning shot across the bow for the US economy and money borrowers everywhere.

30-Year Mortgage rates this afternoon hit a 2 1/2 year high, 15-year rates the highest since 2003, and investulator ARMS are up too. So financing a home purchase is essentially back to the point it was before the big boom--and there are more properties (lots, homes, condos, etc.) available on the market now and at prices up to 3x higher.

If you are thinking about getting into real estate (and expect to make double-digit returns on your investment) and are unaware of this "perfect storm" brewing in the economy--there's a serious possibility you are going to lose on your investment. Of course if losing money isn't an issue (and for many on this board it isn't)...then by all means, this is becoming a great time to shop around.