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Bob

SoWal Insider
Nov 16, 2004
10,469
1,347
O'Wal
Many saw the peak when it was occurring. Many will note the bottom as it occurs. We aren't there yet--but we are closer than we were a year ago. ;-)

As for Kurt's example, if you need to sell when it drops to $275k, not only did the house drop in value by $25k, but you also lost your closing costs of 2-3% of the original purchase price, plus you paid 6% commission to sell the house. So, the 10% or so drop in value actually results in about a 17% plus loss of cash.

In addition, in Kurt's example, the $325k price in five years assumes appreciation (which is unlikely in this market for quite some time) and even with such appreciation, you would still only be close to breakeven after considering real estate commissions on a sale in five years.

Only buy if you have enough money to take a big cash loss ast the bottom is not in sight.

your characterizations of sowal real estate lend me to believe you would be calculating opportunity cost in the middle of your vacation....
 

Bobby J

Beach Fanatic
Apr 18, 2005
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Blue Mountain beach
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This has been my point SJ. We don't show the 33 months worth of inventory. Only the good stuff. An example of what you are talking about would be Lakeside at Blue Mountain. The lots range from $55,000 on up. The bottom seems to be from the $55,000 to $60,000 and we begin to see some contracts. The ones listed higher are a waste of time and probably make up 95% of the listings in the neighborhood.

I also think that a $55,000 lot that you can walk to the beach is a deal and a steal. In many areas the market is over correcting.
 

Kurt Lischka

Admin
Staff member
Oct 15, 2004
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mooncreek.com
This has been my point SJ. We don't show the 33 months worth of inventory. Only the good stuff. An example of what you are talking about would be Lakeside at Blue Mountain. The lots range from $55,000 on up. The bottom seems to be from the $55,000 to $60,000 and we begin to see some contracts. The ones listed higher are a waste of time and probably make up 95% of the listings in the neighborhood.

I also think that a $55,000 lot that you can walk to the beach is a deal and a steal. In many areas the market is over correcting.

Sounds right to me.
 

30ashopper

SoWal Insider
Apr 30, 2008
6,853
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Right here!
This has been my point SJ. We don't show the 33 months worth of inventory. Only the good stuff. An example of what you are talking about would be Lakeside at Blue Mountain. The lots range from $55,000 on up. The bottom seems to be from the $55,000 to $60,000 and we begin to see some contracts. The ones listed higher are a waste of time and probably make up 95% of the listings in the neighborhood.

I also think that a $55,000 lot that you can walk to the beach is a deal and a steal. In many areas the market is over correcting.

Didn't a lot in Lakeside recently close for around 45K or less? I seem to remember seeing one on a hotlist someplace that went under contract. The list was around 45K I believe so I would assume it was neg'd down a bit for the sale.
 

Bobby J

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Apr 18, 2005
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Blue Mountain beach
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The lowest closing I see right now without going to the tax card is $60,000. There are 4 under contract from $64,000 to $55,000. There is an active short sale listed for $49,000(actually just came back on the market 4 days ago). This looks to be a really good buy if the bank will take it. There was actually a lot that sold for $175,000 in July 2008. Ouch on that one.
This neighborhood sure has proved the theory about price. Dead in the water until the reductions and now it has activity. The only one that is not a short sale is one under contract at $64,900.00 I am sure that one will probably close. So right now, lowest sale to date is $60,000. I just looked over the tax roll. This lot had really good elevations and backed up to the bike path. The buyer will be able to walk to the beach.
 

30ashopper

SoWal Insider
Apr 30, 2008
6,853
3,468
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Right here!
The lowest closing I see right now without going to the tax card is $60,000. There are 4 under contract from $64,000 to $55,000. There is an active short sale listed for $49,000(actually just came back on the market 4 days ago). This looks to be a really good buy if the bank will take it. There was actually a lot that sold for $175,000 in July 2008. Ouch on that one.
This neighborhood sure has proved the theory about price. Dead in the water until the reductions and now it has activity. The only one that is not a short sale is one under contract at $64,900.00 I am sure that one will probably close. So right now, lowest sale to date is $60,000. I just looked over the tax roll. This lot had really good elevations and backed up to the bike path. The buyer will be able to walk to the beach.

70% reduction off peak price will do that sometimes. :lol:
 
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beachbliss48

Beach Comber
Jun 30, 2008
25
0
33 months of inventory but how many months of good stuff. The stuff that sells the week it hits the market. You are looking at the market in a general sense. You really have to look at pockets and values. You can look at an area and see 100 homes for sale. I may look at it and see only 5 that are of market value and a good buy. I would not call it Risky Behavior at all. A builder still builds. An investor still invest. A flipper still flips. There will always be risk in any type of market. Most of the buyers we deal with today are extremely sophisticated and are able to be buyers because they did not get caught up in the herd mentality of 2003-2005. These buyers are approaching the market sensibly. The majority of our sales this year I would feel confident putting back in todays market and selling for a profit. When I sell today I always tell the buyer this needs to be a long term hold to feel the value but it does not mean we don't try to buy properties they could get right back out of if they need to. The buyers understand the market. Basically, the purchase could compete the day they buy. That to me is not risky but just good business. You make money in life when you buy. Not when you sell.

there are still flippers out there? what are they flipping? in order to make money you eventually have to sell don't you?
 

Bobby J

Beach Fanatic
Apr 18, 2005
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Blue Mountain beach
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there are still flippers out there? what are they flipping? in order to make money you eventually have to sell don't you?

Yes, they are selling. There will always be flippers. Todays flipper has to add value to the property though. These are buyers that know the market very, very well.
 
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fisher

Beach Fanatic
Sep 19, 2005
822
76
33 months of inventory but how many months of good stuff. The stuff that sells the week it hits the market. You are looking at the market in a general sense. You really have to look at pockets and values. You can look at an area and see 100 homes for sale. I may look at it and see only 5 that are of market value and a good buy. I would not call it Risky Behavior at all. A builder still builds. An investor still invest. A flipper still flips. There will always be risk in any type of market. Most of the buyers we deal with today are extremely sophisticated and are able to be buyers because they did not get caught up in the herd mentality of 2003-2005. These buyers are approaching the market sensibly. The majority of our sales this year I would feel confident putting back in todays market and selling for a profit. When I sell today I always tell the buyer this needs to be a long term hold to feel the value but it does not mean we don't try to buy properties they could get right back out of if they need to. The buyers understand the market. Basically, the purchase could compete the day they buy. That to me is not risky but just good business. You make money in life when you buy. Not when you sell.

The problem is that most of that overpriced inventory is held by folks that need to get out and they are hoping for a miracle sale so they don't have to bring any money to the closing table. Eventually, a good chunk of that inventory will hit the short sale/foreclosure list and the prices will drop drastically. There aren't enough buyers to absorb all of that inventory for many, many years. That's why what looked like a good deal several months ago, doesn't look like such a good deal anymore. A good example is those Sanc at Redfish condos that auctioned off around $400k last year (I believe the buyers premium took the actual prices to mid $400's to around $500k--but I am not certain). There are now two shorts listed below $400k and they aren't selling. There are similar examples in areas up and down 30A.
 
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