Price Drops and Inventory

[fisher]

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.

 

[AAbsolute]

Cash Flow

It sounds like people who bought property that is not cash flowing were buying on speculation alone that prices would increase. I wouldn't recommend that anyone would do that. It sounds very risky and is a business I'm not sophisticated enough to be involved in.

The house we sold in Watersound West Beach this past year for $750,000 had a number of interested buyers and closed 1 day after C.O. If you look at the buyers VRBO listing you will see the type of rental return versus monthly carry I'm talking about. It's all public info.

I think people should keep it simple. I'm no genius and never will be. I do know that JOE sold us a lot at a price I thought was fair, we built a home in 110 days that met the finishes and need that buyers wanted, we received a contract that was fair to everyone, the bank felt they were secure with the mortgage, the home closed properly and is being used and enjoyed regularly.

No voodoo, no hidden agenda just old fashioned business 101.

:roll:

 

[fisher]

real trend report for july

Real trend report for June--

SFH Volume down 20% and average price down 23%

Condos volume down 48% and average price down 44%

Lots volume down 30% and average price down 59%

Worst month we've seen in a long time.

 

[Miss Critter]

Real trend report for July--

SFH Volume down 20% and average price down 23%

Condos volume down 48% and average price down 44%

Lots volume down 30% and average price down 59%

Worst month we've seen in a long time.

Price down compared with what, same month last year? Or last month?

 

[TooFarTampa]

Here's a link to a recent blog post, with inventory info and lots of other analysis of the numbers. Thanks Murray!

http://www.sowal.com/bb/blog.php?b=135

 

[fisher]

Price down compared with what, same month last year? Or last month?

Compared to same month last year.

 

[fisher]

Here's a link to a recent blog post, with inventory info and lots of other analysis of the numbers. Thanks Murray!

http://www.sowal.com/bb/blog.php?b=135

Not sure if Murray has his numbers quite right. He is a realtor and should be trying to spin a nice story. Unfortunately he doesn't do much analysis--like comparing year over year trends. He is only selectively pulling numbers versus the complete walco raw data noted above from the real trend report.

Murray's numbers don't jive with the numbers in the real trend report so someone has bad data. Also, Murray fails to compare numbers to the same month in 2007.

According to the real trend report (can't vouch for its accuracy), there were 143 homes sold in all of WalCo in June 2007 and only 115 in June 2008.

Murrays numbers indicate that the total dollar volume for the 98 sales in sowal was about $72 million. Real trend shows dollar volume for the 115 sales in all of walco at just $68 million.

Murrays numbers show 98 sold in Sowal and 14 in Freeport for a total of 112 in those two markets alone. Real trend shows 115 sales in ALL of walco.

Who has the correct data???? Maybe someone in the know can figure out which source is correct.

 

[Em]

Real trend report for July--

SFH Volume down 20% and average price down 23%

Condos volume down 48% and average price down 44%

Lots volume down 30% and average price down 59%

Worst month we've seen in a long time.

First, let me say that the latest "Real Trend" report was for June 2008, not July.

Don't mistake all of Walton County with sales in South Walton from Mack Bayou Rd to Inlet Beach. For that particular area, it was somewhere in the middle comparing each month to 2007, with Jan, Feb and April being better than June. However, June 2008 sales volume ($) was the highest month, year to date, with total sales of $42,414,148, which is 17% higher than our second best month this year (April).

For that area, the following are the numbers for June 2008:
SFD (single family detached homes)
34 % increase in qty of sales over 2007 (51 sales in June 2008)
13 % decrease in total dollar volume compared to 2007

If you review the last 24 months, you will see that June 2007 was the highest $ volume month we had, with sales volume of $48,169,400. Our second highest month in that same 24 month period was June 2008, with $42,414,148. By asking the question, "why?," you would know that in June of 2007, the Gulf Front home in Rosemary Beach sold for $7.88 million, only to be torn down to build a "nicer" home. That one home is one of the highest recorded home sales in Walton County and boosted the numbers greatly for June 2007. If that home hadn't sold, June 2008 would be the highest $volume month in the last 24 months and June 2008 would have been an increase over June 2007.

It is important to remember that stats have real numbers behind them, and if something looks "off," ask yourself, "what is the reason," do a little research, and discover the entire picture. One really high priced or low priced sale will skew the numbers quickly. As for lots in that same area, yes, sales ($) were very low, but they have been all year long. However, I can tell you that it was our second best month this year, falling only behind January sales.

If you want to know what areas are doing well, you need to break down the numbers, and if you want to know the real story of real estate, take the "Real Trend" report with a grain of salt. You can read the "Real Trend" report, but don't consider it the real news story for all the areas, since it doesn't show the numbers month by month, and fails to break down sales by area. Comparing North Walton with South Walton real estate, and using those numbers as a guide for either area, is like comparing apples and blueberries.

I encourage people to search out the entire truth and not rely on some total market report, like the "Real Trend" report. I post a brief monthly summary in the Blog section of SoWal.com and if you would like to see the actual numbers for the last ten years on a spread sheet, simply ask to subscribe by email to my monthly reports. It may help you locate hot and cold spots in the market, and find sales data which better relates to your own property, or property of interest to you.

 

[fisher]

First, let me say that the latest "Real Trend" report was for June 2008, not July.

My typographical mistake.


Don't mistake all of Walton County with sales in South Walton from Mack Bayou Rd to Inlet Beach.

(I don't make that mistake, but I only have access to the real trend report. thanks for posting additional data, it is very revealing. see below).

For that particular area, it was somewhere in the middle comparing each month to 2007, with Jan, Feb and April being better than June. However, June 2008 sales volume ($) was the highest month, year to date, with total sales of $42,414,148, which is 17% higher than our second best month this year (April).



For that area, the following are the numbers for June 2008:
SFD (single family detached homes)
34 % increase in qty of sales over 2007 (51 sales in June 2007)

(If I do the math correctly, that means there were about 68 sales in that area in 2008, correct? Making the average sales price in 2008 about $625k +/-, correct? doing the same math for 2007, the average price was about $940k, correct? That equates to an average year over year price decrease of about 34%, correct? now that is an interesting piece of information. we do need to dig a little deeper. The price decrease in Sowal is HUGE compared to all of walco.)

13 % decrease in total dollar volume compared to 2007

If you review the last 24 months, you will see that June 2007 was the highest $ volume month we had, with sales volume of $48,169,400. Our second highest month in that same 24 month period was June 2008, with $42,414,148.

[B](certainly not surprising, haven't the spring months historically been the best in terms of real estate sales?)[/B]

As for lots in that same area, yes, sales ($) were very low, but they have been all year long. However, I can tell you that it was our second best month this year, falling only behind January sales.

If you want to know what areas are doing well, you need to break down the numbers, and if you want to know the real story of real estate, take the "Real Trend" report with a grain of salt.

(No doubt. But, I will take yours with a grain of salt too. Your analysis stops short of telling the whole story as noted in the average price comparison noted above.)

You can read the "Real Trend" report, but don't consider it the real news story for all the areas, since it doesn't show the numbers month by month, and fails to break down sales by area. Comparing North Walton with South Walton real estate, and using those numbers as a guide for either area, is like comparing apples and blueberries.

(you are absolutely right. as noted above, the average sales price for homes in the specific area you quoted is down much, much more than for all of Walco--see notes above.)
I encourage people to search out the entire truth

(I also encourage people to get the rest of the story when reviewing any data. In the real trend data I post, I am simply relaying the only info I have access to. Please continue to feed us data on sowal and include year over year comparisons in your post. This info can be very revealing as noted above. Simply stating that June sales were better than January sales in the same calendar year doesn't tell us much.)

and not rely on some total market report, like the "Real Trend" report. I post a brief monthly summary in the Blog section of SoWal.com and if you would like to see the actual numbers for the last ten years on a spread sheet, simply ask to subscribe by email to my monthly reports. It may help you locate hot and cold spots in the market, and find sales data which better relates to your own property, or property of interest to you.

See comments above.

 

[Em]

Not sure if Murray has his numbers quite right. He is a realtor and should be trying to spin a nice story. Unfortunately he doesn't do much analysis--like comparing year over year trends. He is only selectively pulling numbers versus the complete walco raw data noted above from the real trend report.

Murray's numbers don't jive with the numbers in the real trend report so someone has bad data. Also, Murray fails to compare numbers to the same month in 2007.

According to the real trend report (can't vouch for its accuracy), there were 143 homes sold in all of WalCo in June 2007 and only 115 in June 2008.

First of all, I shouldn't be trying to "spin" any story. My goal is to accurately report information to people who care.

I don't have bad numbers, unless Realtors are reporting incorrectly. I state my source for the numbers comes from Realtor assisted sales, and I break them down by area. Foreclosures sold on the Court House steps, and For Sale by Owners, which don't involve a Realtor on the buyer's side, will also not be included in my numbers. I also don't run numbers for areas in north Walton outside of the Freeport area. Real Trend report includes all transactions in Walton County, including transactions which are not "arms-length" transactions.

As for not comparing this year over last year, that is just not true. I just keep my summary's simple, and ask that anyone wanting more information in specific to ask. I include month by month reports dating back to 1998, for anyone subscribing (FREE) to my monthly emails. Perhaps you should sign up to see, before speaking incorrectly. I would post my spreadsheets on SoWal.com for everyone to see for themselves, but the file size is much too large to upload, seeing that it includes 13 different worksheets of analysis with multiple pages on each worksheet.

Murrays numbers indicate that the total dollar volume for the 98 sales in sowal was about $72 million. Real trend shows dollar volume for the 115 sales in all of walco at just $68 million.

As noted in my summary, those 98 sales were for combined residential, which includes homes, townhomes, and condos. If you want the break down, you should subscribe to my emails with spreadsheets.

Murrays numbers show 98 sold in Sowal and 14 in Freeport for a total of 112 in those two markets alone. Real trend shows 115 sales in ALL of walco.

Again, you are misreading my summary. The 98 sales is combined residential for South Walton.

Who has the correct data???? Maybe someone in the know can figure out which source is correct.