Price Drops and Inventory

I am not overly worried about a 38% price reduction because I took a second and thought about how overinflated prices have gotten in the last couple of years.

I have been looking for an affordable piece of property in Sowal for years and my idea of a reasonable offer (1.5-2x their purchase price a few years ago for vacant unimproved land) vs. the seller's idea (typically 4-50x) are finally getting close to each other.

IMO it's a much needed price and fiscal management readjustment that is unfortunately affecting many hard working and responsible people.

... Every reasonable person I know thinks we're at the low end of the spectrum and whether it drops another 10% or goes up 10% from here is of little concern.

I'm not sure about that. I mean, 10% decline off a $750,000.00 purchase on a beach house is $75,000.00. That's a lot of money to just throw away. Plus, 10% on some properties is overly optimistic. If sale prices haven't dropped much off 2005-2006 comps, the property hasn't corrected yet. I see that right now in areas here. It's due to a lack of shake-out of the speculative buyers who are still holding on but are seriously underwater. When those folks finally get flushed out of the market through whatever means (that foreclosure graph is indicative of one exit strategy) we're going to see additional depreciation in price more in line with the rest of the Florida market. I think a 30-40% number is reasonable to expect off 2005 comps. Maybe even more.

Not to be too down beat though, I do see property selling. But most of it was purchased pre-2003. The sellers are listing at reasonable prices for today (not next year IMHO) and throwing in things like all the furniture to move the sale.

WATERCOLOR
1352 WESTERN LAKE DR
SANTA ROSA BEACH, FL $1,300,000 --> $840,000 -35%
SHORT SALE

The shake-out continues... beautiful house too.

WATERCOLOR
1352 WESTERN LAKE DR
SANTA ROSA BEACH, FL $1,300,000 --> $840,000 -35%
SHORT SALE

The shake-out continues... beautiful house too.

At $420 per square foot, it is still priced much higher than several recent sales. Under $400 per square foot is where that one will sell.

A little larger, brand new home just sold in Phase III for $695k.

What if the average asking price drops another 40%?

Let's see a show of hands from people that think that today's 30a prices across the board are due for a 40% decline so that we can confirm persistent rumors that this message board is full of fools. And for the amateurs here, a 40% decline in asking price does not equate to a 40% decline in value nor does a property whose value has declined 40% since purchase equate with an across the board decline of 40% from today's prices. Anyone ... anyone?

Watercolor bottom

I predicted the bottom to be at about $300 per square foot. You can get a decent lot for $300k and can build for about $150 per square foot (on the low end by WC standards). 2000 square foot home would cost $600k to build. There is your bottom. Even the short sales haven't gotten that low yet.

Let's see a show of hands from people that think that today's 30a prices across the board are due for a 40% decline so that we can confirm persistent rumors that this message board is full of fools. And for the amateurs here, a 40% decline in asking price does not equate to a 40% decline in value nor does a property whose value has declined 40% since purchase equate with an across the board decline of 40% from today's prices. Anyone ... anyone?

How does assessed value factor into this? We looked at a place yesterday with a sticker price in the upper 800s, purchased price (pre-boom) 300s, county's assesment in the low 600s

I predicted the bottom to be at about $300 per square foot. You can get a decent lot for $300k and can build for about $150 per square foot (on the low end by WC standards). 2000 square foot home would cost $600k to build. There is your bottom. Even the short sales haven't gotten that low yet.

Inhale deeply ..... uhmmmmmm, feels good.

Let's see a show of hands from people that think that today's 30a prices across the board are due for a 40% decline so that we can confirm persistent rumors that this message board is full of fools. And for the amateurs here, a 40% decline in asking price does not equate to a 40% decline in value nor does a property whose value has declined 40% since purchase equate with an across the board decline of 40% from today's prices. Anyone ... anyone?

Today -
30%-50% off 2005
20%-30% off 2004
5% - 15% off 2003

Next year is totally up in the air, no way of knowing.

I understand what your saying though, "across the board" is not implied. You have to look at every property individually.

A quick update on that foreclosure graph I posted. I was in today trying to see if the actual numbers were accurate or if there were dupes in the data. There are dupes but not the kind you would expect. What I see are dupes across a month or two time frame. My guess is banks are filing Lis Pendens and then cancel when the owner catches up. The next month the owner doesn’t pay up and they file another one the next month. There are also a few amendments to existing filings that show up in my numbers as new filings. So the graph should be taken more as an indicator of foreclosure activity rather than a accurate representation of the number of active foreclosures.

Today -
30%-50% off 2005
20%-30% off 2004
5% - 15% off 2003

Next year is totally up in the air, no way of knowing.

I understand what your saying though, "across the board" is not implied. You have to look at every property individually.

Generalizing, your numbers are pretty close for single family homes. Lot prices have fallen harder than homes. As long as lot prices continue to fall so will home prices (the cost to build won't change drastically).

I agree that there is still a ways to go on prices. Saw a recent sale in Rosemary south of 30A that was just over $500 per square foot. Rosemary still has a good way to fall. Alys will eventually freefall from recent purchase prices. Recent sales in Watersound and Watercolor seem to be moving closer to a bottom, but still have room to fall. Seaside has held up well but that won't last with prices everywhere else falling.

Prices will not stabilize until inventory resolves.

Who thinks Watercolor will be the first to hit bottom and then start a rise again ? A good develop. in a good area with too much inventory and speculation. There is a lot of money sitting on the sideline waiting for this develop. to bottom. Looks like some think bottom is now but not just yet. Maybe ?????? We shall see.

Let's see a show of hands from people that think that today's 30a prices across the board are due for a 40% decline so that we can confirm persistent rumors that this message board is full of fools. And for the amateurs here, a 40% decline in asking price does not equate to a 40% decline in value nor does a property whose value has declined 40% since purchase equate with an across the board decline of 40% from today's prices. Anyone ... anyone?

I've never met a reasonable person that didn't care about a hundred grand (10%) here or there but if you know them, I guess they exist. Unless nothing was selling at the initial asking prices, a 40% decline in asking prices across the board should equate to more than a 40% drop in value in a normal market, what math are you using? Buyers rarely pay asking price, and never do in this market. Some properties are being sold off the bottom right now but the whole thing is moving downward. Very little is selling and even that at 10-20% below asking at the peak of the year. There is almost 10 years of inventory listed for sale, cut it by half for the dreamer listings and it is still a huge buyers market. My "amateur" opinion is that same property sales as an average will slide at least an additional 25%. In your "professional" view, what statistic are you seeing that indicates differently?

How does assessed value factor into this? We looked at a place yesterday with a sticker price in the upper 800s, purchased price (pre-boom) 300s, county's assesment in the low 600s

I think you would see a correction in assessed value based on your purchase price and comps. You can also file a greivance once you purchase with the assessor to have them re-assess the property to a more reasonable level. You can email Pilcher too if you have questions. He's pretty good about answering email.

Maybe someone who understands the assessor process better can comment. I still don't see any savings since they passed that property tax legislation a year or so ago on my house. I thought taxes were supposed to fall but I haven't seen it.

update - I guess I should have just checked the appraiser's site. Benefits to come next year.

Home sales in WC have picked up nicely this year vs last, if you can believe the RE people. Have a lot there which I have been trying to sell and have recently reduced price to $268. In Camp Dist. near Camp Watercolor, Mere Ridge, on a small street with just 12 lots and conservation area behind. House just sold in MR for >$1M. Seems like you could make money at this price. Any interested parties please PM me.

Home sales in WC have picked up nicely this year vs last, if you can believe the RE people. Have a lot there which I have been trying to sell and have recently reduced price to $268. In Camp Dist. near Camp Watercolor, Mere Ridge, on a small street with just 12 lots and conservation area behind. House just sold in MR for >$1M. Seems like you could make money at this price. Any interested parties please PM me.

Smoooooth

.

Especially since (if it's the WC house I'm thinking of) they lost money selling at that price! :rofl:

Home sales in WC have picked up nicely this year vs last, if you can believe the RE people. Have a lot there which I have been trying to sell and have recently reduced price to $268. In Camp Dist. near Camp Watercolor, Mere Ridge, on a small street with just 12 lots and conservation area behind. House just sold in MR for >$1M. Seems like you could make money at this price. Any interested parties please PM me.

Especially since (if it's the WC house I'm thinking of) they lost money selling at that price! :rofl:

Funny, if it's the one I'm thinking of they built it in under a year.

tsuli, you might generate more interest if you start a separate thread about selling your property.

The rest of y'all know the rules about comments when a property is listed for sale.

Funny, if it's the one I'm thinking of they built it in under a year.

Is it better quality if the construction is drug out?

No, someone didn't believe that you can build a house in less than a year in another thread about build-outs.

Oh, well that was silly. I guess if you hire a contractor that's at the beach all day and drinking all night you probably can't!

Value is a science

In neighborhoods that feature a large percentage of vacation rentals a person should take the probable weekly rental rate in season (which is not that hard to figure when you get a little educated) and use the rental income approach against the carry cost. Add what you feel is fair for some logical future appreciation and determine your own value from that.

It seems most of the time we're talking about neighborhoods that feature short term rentals. I've never seen anyone get upside down in any downturn when they bought property like this. Take off your rose colored glasses when your shopping for property.

I'm not a financial adviser or a realtor and have only limited formal education in appraisals so please do your own research.;-)

In neighborhoods that feature a large percentage of vacation rentals a person should take the probable weekly rental rate in season (which is not that hard to figure when you get a little educated) and use the rental income approach against the carry cost. Add what you feel is fair for some logical future appreciation and determine your own value from that.

It seems most of the time we're talking about neighborhoods that feature short term rentals. I've never seen anyone get upside down in any downturn when they bought property like this. Take off your rose colored glasses when your shopping for property.

I'm not a financial adviser or a realtor and have only limited formal education in appraisals so please do your own research.;-)

These areas haven't cash flowed with any sizeable loan in years.

In neighborhoods that feature a large percentage of vacation rentals a person should take the probable weekly rental rate in season (which is not that hard to figure when you get a little educated) and use the rental income approach against the carry cost. Add what you feel is fair for some logical future appreciation and determine your own value from that.

It seems most of the time we're talking about neighborhoods that feature short term rentals. I've never seen anyone get upside down in any downturn when they bought property like this. Take off your rose colored glasses when your shopping for property.

I'm not a financial adviser or a realtor and have only limited formal education in appraisals so please do your own research.;-)

These areas haven't cash flowed with any sizeable loan in years.

Not only are they not cash flowing, but many, many, many people are way upside down with actual and paper losses of hundreds of thousands of dollars.