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Smiling JOe

SoWal Expert
Nov 18, 2004
31,648
1,773
Babyblue said:
Joe, then the last 5 years here were not normal. You could not get a counter offer back fast enough to the seller before they raised the selling price.

Franny, you speak much truth. Fear of not getting into the market was pressuring buyers.
 

Camp Creek Kid

Christini Zambini
Feb 20, 2005
1,270
118
49
Seacrest Beach
John R said:
c'mon joe, you know sowal is really only the property below 98 :roll:

Someone needs to tell that to Kurt because he lives NORTH of 98 in Point Washington. So is it NoWal.com?
 

Bob

SoWal Insider
Nov 16, 2004
10,452
1,343
O'Wal
One of the better phrases I've heard "you make your money when you buy, not when you sell'.....thanks for reminding us Highbidder
 

Smiling JOe

SoWal Expert
Nov 18, 2004
31,648
1,773
Bob said:
One of the better phrases I've heard "you make your money when you buy, not when you sell'.....thanks for reminding us Highbidder
:shock: I think I missed that line. Interesting twist, but far from true in my opinion. ;-)
 

SHELLY

SoWal Insider
Jun 13, 2005
5,775
802
Smiling JOe said:
I have not been to their website, but I can tell you that purchases made under pressure, or in a frenzied environment are not recognized as normal conditions and therefore, do not classify as true "market value."

If you use that line of reasoning, then real estate price run-ups of the past few years (goaded on by frenzied developers, realtors, the press and sellers) do not reflect "true market value" either.

"True market value" is a gimmicky phrase. In reality, true market value is unique and only applies to a single property and then, only for a fleeting second--when a payment is passed from buyer to seller--then it's gone (like a single snowflake--that melts in your hand). :love:
 

Smiling JOe

SoWal Expert
Nov 18, 2004
31,648
1,773
SHELLY said:
If you use that line of reasoning, then real estate price run-ups of the past few years (goaded on by frenzied developers, realtors, the press and sellers) do not reflect "true market value" either.

"True market value" is a gimmicky phrase. In reality, true market value is unique and only applies to a single property and then, only for a fleeting second--when a payment is passed from buyer to seller--then it's gone (like a single snowflake--that melts in your hand). :love:
True. Wrong word choice on my part. I was really thinking of "normal market conditions" as it relates to pressured selling / buying, and your statement holds much truth to the recent few years where Buyers bought out of fear. However, that was the normal market for a broad range of time and location, so it could also be said that those were normal market conditions.
 

Cork On the Ocean

directionally challenged
SHELLY said:
If you use that line of reasoning, then real estate price run-ups of the past few years (goaded on by frenzied developers, realtors, the press and sellers) do not reflect "true market value" either.

"True market value" is a gimmicky phrase. In reality, true market value is unique and only applies to a single property and then, only for a fleeting second--when a payment is passed from buyer to seller--then it's gone (like a single snowflake--that melts in your hand). :love:

I think that the point was that pressured sales are generally not considered qualified sales for the purposes of assessing market value.
 
Cork On the Ocean said:
I think that the point was that pressured sales are generally not considered qualified sales for the purposes of assessing market value.


Cork, et al.,

All sales are qualified with the possible exception of family (non arms-length) transactions.

Our "pressure" as you like to dwell on so, doesn't involve anything more than you advising your buyers that they "...may not want to miss this opportunity. Better get in now. At the rate property values are escalating you may not have this opportunity again."

There are many ways to apply the pressure you are so quick to criticize. If you have never said anything of this nature to a buyer then you are positively without reproach and free to cast all the stones you wish.
If you had been at our auction Saturday March 4th you would have been able to see us conduct our auction, and therefore able to speak more knowledgably.

It is also wrong to attempt to convince sellers that they should not sell because their property is worth more or due to the fact that it would devalue nearby properties. Each seller should be advised in a manner that is consistent with their own best interest. Unless you are privy to their personal financial condition you are probably not qualified to make this judgement. As a professional auction firm, we work with attorneys and accountants and are more than occasionally privy to that confidential financial information.

As far as "frenzied environment" is concerned, you will often see that sort of energy in auctions where the demand exceeds the supply. Watch the Barrett-Jackson Classic Auto Auction on Speed Channel in a few weeks. You'll see a very energized group of buyers eager to own some incredible automobiles. Much like real estate buyers, car buyers are experienced, knowledgeable, and savvy in both the car values and the auction process. It is exciting and energetic, but they will bid according to their level of interest in each respective item. Unfortunately, SoWal (and all of Florida, Alabama, & Mississippi) has an excessive supply of available Gulf Coast properties and at today's prices, very little demand. Regardless of the method of marketing, you're not likely to see any frenzied buying for quite some time. Translation: It's a buyers market.

Why is this occurring? Supply & demand. Sellers in the market expect to reap the benefit of the previous market escalations. The challenge is that, at the seller's expected values, buyers just aren't interested. The bubble is rapidly leaking, maybe even burst.

The auction process is not the problem here, but part of the solution. With properly motivated sellers we can bring the buyers to the table and reestablish market values while bringing the highest & best dollar for each individual seller. Read my earlier posts. Anyone who bought more than 5 years ago should be in fine shape if they haven't refinanced to the hilt. Purchases 3-5 years ago should be in decent shape and should not need to sell if they bought on an FRM or can afford the ARM payment as it increases or adjusts from interest only to P&I. IMO, anyone who bought in the last 2-3 years had better be able to hold their property for a while if they don't want to take a hit. Those that bought recently with the intent to flip are now holding the proverbial "Hot Potato". We're getting those calls every day now. Sometimes we can help, sometimes not. We don't have a magic wand. We can only provide the buyers. They set their own spending limits.

Demand=Supply divided by Market Conditions.

Right now market conditions include increasing interest rates, increasing insurance rates, increasing cost of travel, record high property listing prices, and record numbers of properties listed for sale. Oh yeah, don't forget the hurricane fear factor. It's a buyers market.

Once reality sets in, property values adjust, and properties start to change hands again, then property value appreciation will begin again, though probably at a more moderate and sustainable level (for a while).

Read Shelly's posts in this and other threads. She is a realist and probably has a better understanding of what is happening than most do. It's not the end of the world, just an adjustment.

Due to the nature of the real estate auction business and the professionalism of our firm in particular, we probably conduct more successful sales (closings) in any given time period than any other R/E marketing firm in the US. This allows us to keep our finger on the pulse of the R/E industry nationwide. Trends are much more apparent to us than to many other people. Not pessimistic, just realisitic. I don't mean to ruffle anyone's feathers, but the times they are a changin'.
 
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