Great Depression II

[robertsondavies]

D2.0

If So Wal dirt has not bottomed here in 2009, then it will be because we're headed for Great Depression II - in such case we're probably headed 50-70% lower roughly speaking.

IMHO there is maybe a 1/3 chance we're headed for such a depression. (i.e. we can't fool the people into believing things are better)

Since I think there is a better chance we're headed for a surge in global growth I'd start buying early, if you like to gamble only, as I do.

I think what we're going to see in 2010 is that prices head back up much quicker than the 30ashoppers are currently anticipating. Buyers won't have months and months to sop up still low priced desperation inventory. Due to the lightning quick flow of information, the twittering effect, boards like this, plugged in sellers, plugged in agents, and the fact that no one really wants to retire in Montgomery or Atlanta - my prediction is for a 20% across the board spike in 2010 from current realistic REO values today.

South Walton real estate peaked at least 12 if not 18 months earlier than the national peak. South Walton peaked around March/April of 2005. The rest of Florida peaked very shortly thereafter, but nationally speaking, real estate in California, and the Northeastern Seaboard peaked in late 2006.

Truman Show II will be an allegory to re-educate America to feel good again about real estate. A depressed Truman's house appreciates wildly from the depths, and Truman does a cash out refi and invests in the new Bailey Savings and Loan with the surplus, after setting aside a few dollars for his wife to get an augmentation.

 

[Kurt]

D2.0

 

[30ashopper]

Time will tell.

 

[beachbliss48]

If So Wal dirt has not bottomed here in 2009, then it will be because we're headed for Great Depression II - in such case we're probably headed 50-70% lower roughly speaking.

IMHO there is maybe a 1/3 chance we're headed for such a depression. (i.e. we can't fool the people into believing things are better)

Since I think there is a better chance we're headed for a surge in global growth I'd start buying early, if you like to gamble only, as I do.

I think what we're going to see in 2010 is that prices head back up much quicker than the 30ashoppers are currently anticipating. Buyers won't have months and months to sop up still low priced desperation inventory. Due to the lightning quick flow of information, the twittering effect, boards like this, plugged in sellers, plugged in agents, and the fact that no one really wants to retire in Montgomery or Atlanta - my prediction is for a 20% across the board spike in 2010 from current realistic REO values today.

South Walton real estate peaked at least 12 if not 18 months earlier than the national peak. South Walton peaked around March/April of 2005. The rest of Florida peaked very shortly thereafter, but nationally speaking, real estate in California, and the Northeastern Seaboard peaked in late 2006.

Truman Show II will be an allegory to re-educate America to feel good again about real estate. A depressed Truman's house appreciates wildly from the depths, and Truman does a cash out refi and invests in the new Bailey Savings and Loan with the surplus, after setting aside a few dollars for his wife to get an augmentation.

so since you sound so confident what are you buying now?

 

[Bobby J]

I think in certain areas the market has over corrected and in other others we will continue to see corrections. Once the great bottom bell goes off the areas that have over corrected will hit a bump back up to a more stable number. Just my two cents. It could be the "time to buy" but you better do your homework so you buy in the area that has over corrected.

 

[fisher]

If So Wal dirt has not bottomed here in 2009, then it will be because we're headed for Great Depression II - in such case we're probably headed 50-70% lower roughly speaking.

IMHO there is maybe a 1/3 chance we're headed for such a depression. (i.e. we can't fool the people into believing things are better)

Since I think there is a better chance we're headed for a surge in global growth I'd start buying early, if you like to gamble only, as I do.

I think what we're going to see in 2010 is that prices head back up much quicker than the 30ashoppers are currently anticipating. Buyers won't have months and months to sop up still low priced desperation inventory. Due to the lightning quick flow of information, the twittering effect, boards like this, plugged in sellers, plugged in agents, and the fact that no one really wants to retire in Montgomery or Atlanta - my prediction is for a 20% across the board spike in 2010 from current realistic REO values today.

South Walton real estate peaked at least 12 if not 18 months earlier than the national peak. South Walton peaked around March/April of 2005. The rest of Florida peaked very shortly thereafter, but nationally speaking, real estate in California, and the Northeastern Seaboard peaked in late 2006.

Truman Show II will be an allegory to re-educate America to feel good again about real estate. A depressed Truman's house appreciates wildly from the depths, and Truman does a cash out refi and invests in the new Bailey Savings and Loan with the surplus, after setting aside a few dollars for his wife to get an augmentation.

I sure hope you are right about the surge versus depression II.

Regardless, there is way too much inventory on the market for a quick rebound in prices even if the global economy starts to turn around. And, that is just the inventory currently for sale. IF the economy turns around, wait to see how much more inventory gets dumped in the market hoping to take advantage of better times. That additional inventory will simply continue to weigh down the market.

Look at how many lots are waiting on the sidelines in Alys, the former Nature Walk, PH IV of Watercolor, Watersound West Beach, etc. Once we hit bottom, it will be a flat ride for a long, long time.

 

[Paula]

I wonder what the price range is for the types of homes/condos/areas that have over-corrected. I've been very surprised at the deals in the homes that were selling at $400,000 - $600,000 range at the peak. Some are under or around $200,000. For people who aren't in the high-end range and who are looking for that second home at the beach (or home at the beach), and who can afford it if the market goes down a bit more (since we don't know where the bottom is) this seems pretty good to me.

 

[robertsondavies]

so since you sound so confident what are you buying now?

So you think I sound 'so confident' when i assign a 1/3 risk of Great Depression II (D2.0 as Kurt put it so modernly) and further 70% losses?

I'm treading very carefully, one foot in the water. I bot a REO lot from a bank fairly recently between Camp Creek and Seacrest. I like it because of its low carrying costs, (NO HOA dues etc), its elevation, and its location between Watersound and Alys Beach. Secondarly, without being in a controlled subdivision you can actually build down the road without all the b.s., and without the exorbitant rates charged by "approved" builders etc. etc. I believe the lot I bot was down 80% from peak values in 2005 based on comps on same street in same proximity to access.

I think the best deal around now is if you can get a discount bid accepted on one of the Bungalows at Seagrove (i.e. if you can get one for 180k) - not sure bank would not 15K off or not, but I'm thinking about asking.

What do you think are the best deals ? or are there any good deals in your view?

 

[robertsondavies]

I wonder what the price range is for the types of homes/condos/areas that have over-corrected. I've been very surprised at the deals in the homes that were selling at $400,000 - $600,000 range at the peak. Some are under or around $200,000. For people who aren't in the high-end range and who are looking for that second home at the beach (or home at the beach), and who can afford it if the market goes down a bit more (since we don't know where the bottom is) this seems pretty good to me.

I'm interested in this question too, and would consider myself on the low end of price interest. That's why I think just as an example those Bungalows of Seagrove houses are of interest to me, if they get even a bit cheaper. I think they're for sale now for 195k or so, so figure you could probably get one for 185k. If things get worse this year, I'm thinking this fall a bank might take a check for 160k on one of those, and I hope to be the guy writing said check, as that's a price at which I won't worry about the properties value, but simply use it and rent it as much as possible and let the chips fall where they may on valuation.

 

[30ashopper]

I'm interested in this question too, and would consider myself on the low end of price interest. That's why I think just as an example those Bungalows of Seagrove houses are of interest to me, if they get even a bit cheaper. I think they're for sale now for 195k or so, so figure you could probably get one for 185k. If things get worse this year, I'm thinking this fall a bank might take a check for 160k on one of those, and I hope to be the guy writing said check, as that's a price at which I won't worry about the properties value, but simply use it and rent it as much as possible and let the chips fall where they may on valuation.

I wish AAbsolute were still around so he could tell us what the base replacement costs would be.