Many thanks to everyone who took the time out of their 4th of July festivities in Seaside to take our survey about the South Walton Market. If you missed out, here is your opportunity to take the survey. We will collect all of the data and present it on our Friday July 17th Real Estate Round Up Show at 9am CST.
Click Here to take the REAL ESTATE ROUND UP: SOUTH WALTON MARKET SURVEY
The results of the 4th of July survey and Ipod Shuffle Winner will be announced this morning at 9am CST on Real Estate Round UP 30aradio.org or Live 107.1FM in Seaside. I will also post the results on our websites.
Thanks so much!
Click Here to take the REAL ESTATE ROUND UP: SOUTH WALTON MARKET SURVEY
ciclismociclismoBeach Comber48 postsJoined View profileMessageBeach Comber
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24Many thanks for those that have taken the survey already! 🙂
So far 88% think we have hit the bottom of the market in South Walton
67% of the people that have taken the survey are NOT full time residents
55% are looking to purchase in South Walton Area.
Lot's of great info. Thanks to everyone that has responded. If you have not taken the survey...Please do.
Click Here to take the REAL ESTATE ROUND UP: SOUTH WALTON MARKET SURVEY
67% of the people that have taken the survey are NOT full time residents
55% are looking to purchase in South Walton Area.
Lot's of great info. Thanks to everyone that has responded. If you have not taken the survey...Please do.
Click Here to take the REAL ESTATE ROUND UP: SOUTH WALTON MARKET SURVEY
Busta HustleBusta HustleBeach Fanatic434 postsJoined View profileMessageBeach Fanatic
So far 88% think we have hit the bottom of the market in South Walton
Ciclismo, What is the definition of "the bottom of the market in South Walton?"
Thanks.
Smiling JOeSmiling JOeSoWal Expert31,643 postsJoined View profileMessageSoWal Expert
Smiling JOeSoWal Expert31,643 postsJoined View profileMessageSoWal Expertgood question, busta hustle. is the bottom when the prices drop to lowest level, or number of sales drops to lowest level, or when the total dollar volume drops to lowest level, or something else?
I also wonder if that 88% in the survey are the sellers who still refuse to get realistic on the amounts buyers are willing to pay, hoping that their high prices will soon find a buyer. I'd guess that about 85% of the sellers are unrealistic in their asking prices, though there are some good buys here and there.
I also wonder if that 88% in the survey are the sellers who still refuse to get realistic on the amounts buyers are willing to pay, hoping that their high prices will soon find a buyer. I'd guess that about 85% of the sellers are unrealistic in their asking prices, though there are some good buys here and there.
So far 88% think we have hit the bottom of the market in South Walton
Ciclismo, What is the definition of "the bottom of the market in South Walton?"
Thanks.
Busta - That is a great question. There is not a definitive "bottom" of the market. However, one can look at the trend of sales price vs number of sales transactions and basic economic principles of supply and demand to find an answer.
One quick digression before I answer the question...We are in a buyers market. By its very name it means it is fundamentally the best time to buy. Even though the opportunity to buy right now is at an all time high, buyer urgency is at an all time low.
Ironically when buyers were most excited to buy and had the most urgency to buy it was a sellers market and prices were escalating out of control...and it was perhaps one of the worst times to buy value.
Between each of these markets there is a shift. Sometimes a gradual shift and other times a shift that comes crashing down upon us.
When there is an oversupply prices begin to decrease due to lack of demand. In our market we saw the number of sales transactions drastically reduce over a several year period. We began a price correction in our market in mid 2006, 2007 and 2008. However as we all know we had several economic catastrophes that hindered a normal rebound in the housing market.
Prices continued to drop as we saw sales volume continue to slow. At some point the market shifts and the price reductions begin to stabilize and sales transactions begin to increase. In South Walton we are seeing a increased trend of sales increases year over year between 2008 and 2009.
Fundamentally the numbers are showing that our market correction is beginning a shift and stabilizing. There are buyers at the current price point of our inventory in many areas. We are reducing inventory and sales transactions are up. Look at WaterColor as an example. There is demand for product at or below $999K with 33 of the 46 homes sold to date in this price range for 2009...and sales volume is up 31% from 2008. Single family homes at or below $250K in many subdivisions are selling very strong.
Now to answer your questions on the "bottom of South Walton". This was an opinion I asked everyone. I wanted to see what people's perception of the market is. Again if this is a buyers market and no one is "buying" then the perception is that we have not hit bottom. However, we are in a buyers market and people are beginning to buy in select areas and specific price points...and thus we are seeing a shift in peoples perception that we are either approaching...close to...or at the bottom.
I beleive we still have a long tough road ahead but the shift has begun.
Many thanks for the great question.
Smiling JOeSmiling JOeSoWal Expert31,643 postsJoined View profileMessageSoWal Expert
Smiling JOeSoWal Expert31,643 postsJoined View profileMessageSoWal Expertciclismo,
Would mind being more specific on your analysis? Are you basing your 2008 to 2009 comparison on detached homes, condos, townhomes, residential land, or some combination of the above? Also, are you comparing the total dollar volume, number of transactions, average sold price, median sold price, or something else. Are you looking at month to month comparison, or year to date?
I do see trends of increasing sales comparing month to month in 2009, but for the most part, I think we are still down in dollar volume and median price for most categories, compared to 2008. Quantity of sales in some categories has increased.
Would mind being more specific on your analysis? Are you basing your 2008 to 2009 comparison on detached homes, condos, townhomes, residential land, or some combination of the above? Also, are you comparing the total dollar volume, number of transactions, average sold price, median sold price, or something else. Are you looking at month to month comparison, or year to date?
I do see trends of increasing sales comparing month to month in 2009, but for the most part, I think we are still down in dollar volume and median price for most categories, compared to 2008. Quantity of sales in some categories has increased.
ciclismo,
I do see trends of increasing sales comparing month to month in 2009, but for the most part, I think we are still down in dollar volume and median price for most categories, compared to 2008. Quantity of sales in some categories has increased.
You are absolutely correct with your assessment. Sales transactions are increasing in some categories. Dollar volume and median price are still declining. This is the beginning of the shift. If we were seeing a decrease in the number of sales transactions AND prices were decreasing it would mean we are not close to the bottom.
It is just like the economy you have to tweak a few things and it adjusts slowly and you can overcorrect it. Sometimes they tweak too much and we have inflation and other times it swings the other way and we have a recession. The real estate market acts the same way and it takes a long time for the pendulum to swing.
We will continue to see price declines of over priced inventory. Buyers are stepping back into the market which is positive news. Many areas still need price corrections. For example: land. There is little demand for land right now for the obvious reasons.
At the height of the market we were asking for $800/sf for WaterColor homes. Right now they are in the $320 to $450/sf range depending upon home location. At these price points we have seen WaterColor sales increase 31%. This signifies that we are defining the bottom for that market.
The next biggest questions is how the recovery is going to look. Will it stabalize and stay stagnant for a few years[L shaped recovery], rebound and drop again [W shaped recovery], or rebound and trend upward in a more reasonable gain [V shaped recovery]
My guess it is going to be an "L" or a "W".
Smiling JOeSmiling JOeSoWal Expert31,643 postsJoined View profileMessageSoWal Expert
Smiling JOeSoWal Expert31,643 postsJoined View profileMessageSoWal ExpertThanks for being more specific. With sales stats, it is easy to extract whatever you want to feature, in order to make the market sound down or up.
What do you see as the "obvious reasons?" If I were currently looking for a home, I'd likely find the lot I like and build a brand new home while contractors are hungry and supplies are readily available, and land is cheap. I could build to new building codes and to get the cheapest insurance rates with features such as hip roof vs gable, metal roof vs asphalt, etc.
For example: land. There is little demand for land right now for the obvious reasons.
What do you see as the "obvious reasons?" If I were currently looking for a home, I'd likely find the lot I like and build a brand new home while contractors are hungry and supplies are readily available, and land is cheap. I could build to new building codes and to get the cheapest insurance rates with features such as hip roof vs gable, metal roof vs asphalt, etc.
Thanks for being more specific. With sales stats, it is easy to extract whatever you want to feature, in order to make the market sound down or up.
What do you see as the "obvious reasons?" If I were currently looking for a home, I'd likely find the lot I like and build a brand new home while contractors are hungry and supplies are readily available, and land is cheap. I could build to new building codes and to get the cheapest insurance rates with features such as hip roof vs gable, metal roof vs asphalt, etc.
Excellent points.
The market is far from being "up". However, if you look at every market across the nation, the places that have had the biggest drop in median sales price have had the largest increase in sales transactions. All this means is that there is demand at that price level. If month to month sales transactions continue to increase then you can project a trend that would eventually lead to a stabilization of the median sales price versus a continued downward spiral.
There are some great values right now in land. There are also some great values in single family homes. If you can buy the perfect lot for a steal it is definitely worth it. There some great deals that are less than the buy & build option. Even with aggressive construction pricing.
Looking purely at the big picture and only the numbers...
7,255 single family homes in ECAR inventory
4,506 are active
2,749 are contingent, pending or sold as of 1/1/09
38% of available single family home inventory is either sold or under contract
Vs.
4,765 residential lots in ECAR inventory
4,400 are active
366 are contingent, pending or sold as of 1/1/09
8% of available residential land inventory is either sold or under contract
vs.
4,327 condos in ECAR inventory
3,285 are active
1,042 are contingent, pending or sold as of 1/1/09
24% of available condo inventory is either sold or under contract
Purely from these numbers you could make a safe guess that there is little to no demand for land at this current point in time.
When I ran these numbers back in February 2009 I included December 2008 sales numbers. The single family home ratio was 16% and residential land was 3%. We have seen increases in both, but you can see that single family home transaction comparable to available inventory has greatly improved!
We will all get through this. It will take time and I am hopeful that we will continue to see a positive trend in the number of sales transactions and eventually positive trends with median sales prices.
Smiling JOeSmiling JOeSoWal Expert31,643 postsJoined View profileMessageSoWal Expert
Smiling JOeSoWal Expert31,643 postsJoined View profileMessageSoWal ExpertI can see that little demand exists for residential land. I was curious to know what you thought to be the "obvious reasons" why there is little demand.
There is little demand for land right now for the obvious reasons.
I can see that little demand exists for residential land. I was curious to know what you thought to be the "obvious reasons" why there is little demand.
Most buyers I am working with are true end users or long term investors. With that in mind, the most obvious reason is why would someone buy a lot and build when there is more than enough finished inventory available at an equal or better price point?
Currently...most buyers (not all of them) are very cautious and want minimal risk with their real estate transaction. The perception (right or wrong) is that buying a finished product is much less risky then buying a lot, hiring an architect, dealing with the DRB and hiring a builder...and hoping the home comes at or under budget. You know what you are are getting at the time of the transaction with a finished product.
If you were looking to buy a car and there were 15 cars on the lot that you liked...would you buy one of those cars and drive it off the lot or would you have GM order one for you? Assuming there was not much difference in the price of the cars.
Smiling JOeSmiling JOeSoWal Expert31,643 postsJoined View profileMessageSoWal Expert
Smiling JOeSoWal Expert31,643 postsJoined View profileMessageSoWal ExpertThe car scenario is good. Ordering a car is not much different than ordering a home to be built. If ordering a car could get me discounts on insurance and tax incentives for efficiency, along with higher resale value, the benefits of ordering a car, would likely outweigh buying an existing car. With houses, we are looking at a slightly different scenario because most existing homes were built prior to 2007 building codes and they many are "used" or in the car business, I believe they would say, "previously owned." A new house should have more value than a similar home built five years ago.
You don't have to hire an architect as many coastal cottage plans are available for less than $1000, including some designs which are built in WaterColor. Many lots do not require a building review committee approval. The biggest difference, in my opinion, is that building today, you would be meeting the newest building codes, which should make for a stronger house than many which were built prior to the 2007 changes in the Codes. Also, in the building boom, building supervisors were spread thinly, and weren't able to keep a close eye on all of the homes being built -- that is one reason why we see so many of those homes with the paint peeling off the trim -- they skipped the primer step. Knowing which types of construction finishes give the largest insurance breaks can also be worked into a new build, giving discounts every month you write the check to the insurance company. Also, there are some discounts given for green building technologies, and that can also reduce monthly expenses. One last advantage I'll mention is that you are getting a new home, which will likely have more resell appeal, and you can build exactly what you want to build, rather than having to choose from the existing inventory.
Sure, there can be advantages to buying existing homes, such as not having to decide on what to build, not having to deal with a contractor whom you don't know (although you will be dealing with a contractor's work if you buy an existing home), you know the final cost (or do you? What will need to be replaced or repaired), and of course the most obvious -- you can move in today.
For someone looking to sit and hold (long term), a lot may be a good choice. It is much less expensive, so you will be better off financially compared to buying a house, if you loose your job or some expensive emergency comes up. Also, you don't have to worry with the expense and hassle of maintenance, nor do you have to worry about utility bills, renters' wear and tear, management fees, higher taxes (compared to a lot), etc. With the lack of interest in lots, I think you can find more growth potential from lots than existing homes, at current prices.
You don't have to hire an architect as many coastal cottage plans are available for less than $1000, including some designs which are built in WaterColor. Many lots do not require a building review committee approval. The biggest difference, in my opinion, is that building today, you would be meeting the newest building codes, which should make for a stronger house than many which were built prior to the 2007 changes in the Codes. Also, in the building boom, building supervisors were spread thinly, and weren't able to keep a close eye on all of the homes being built -- that is one reason why we see so many of those homes with the paint peeling off the trim -- they skipped the primer step. Knowing which types of construction finishes give the largest insurance breaks can also be worked into a new build, giving discounts every month you write the check to the insurance company. Also, there are some discounts given for green building technologies, and that can also reduce monthly expenses. One last advantage I'll mention is that you are getting a new home, which will likely have more resell appeal, and you can build exactly what you want to build, rather than having to choose from the existing inventory.
Sure, there can be advantages to buying existing homes, such as not having to decide on what to build, not having to deal with a contractor whom you don't know (although you will be dealing with a contractor's work if you buy an existing home), you know the final cost (or do you? What will need to be replaced or repaired), and of course the most obvious -- you can move in today.
For someone looking to sit and hold (long term), a lot may be a good choice. It is much less expensive, so you will be better off financially compared to buying a house, if you loose your job or some expensive emergency comes up. Also, you don't have to worry with the expense and hassle of maintenance, nor do you have to worry about utility bills, renters' wear and tear, management fees, higher taxes (compared to a lot), etc. With the lack of interest in lots, I think you can find more growth potential from lots than existing homes, at current prices.
jlweathersjlweathersBeach Lover96 postsJoined View profileMessageBeach Lover
I can see that little demand exists for residential land. I was curious to know what you thought to be the "obvious reasons" why there is little demand.
1. b/c you can buy a house for cheaper than you can build it
2. i can't generate revenues from land only (or at least it is difficult)
3. the spouse thinks tents make poor living spaces
4. who wants to live in a ghost s/d
5. you can get a 30 year mortgage on a home but probably only 15 on some dirt (i.e. you monthly payment on dirt may be higher than a home)
6. 10 years of inventory
7. unrealistic prices
8. why buy now when prices are likely to appreciate only negligibly for the next several years
& surely some other reasons
Smiling JOeSmiling JOeSoWal Expert31,643 postsJoined View profileMessageSoWal Expert
Smiling JOeSoWal Expert31,643 postsJoined View profileMessageSoWal Expertdude, several of your examples also apply to homes.
jlweathersjlweathersBeach Lover96 postsJoined View profileMessageBeach Lover
dude, several of your examples also apply to homes.
very true; but the ? was not compare & contrast
ChickpeaChickpeaBeach Fanatic30-A Corridor1,151 postsJoined View profileMessageBeach Fanatic
ChickpeaBeach Fanatic30-A Corridor1,151 postsJoined View profileMessageBeach FanaticWell happily there are still many people who eagerly look forward to working with architects - whilst there certainly exists a high percentage of people who cannot be bothered with the involved design and build process and who are attracted to the idea of immediately finding a house they could live in; there are those people who are entirely engaged by design and who would only purchase raw land IF they can then get the house they are dreaming of.... we need more like them but they do exist!!
Bobby JBobby JBeach FanaticBlue Mountain beach4,041 postsJoined View profileMessageBeach Fanatic
Bobby JBeach FanaticBlue Mountain beach4,041 postsJoined View profileMessageBeach FanaticWe are starting to see a little trend on some sweet raw land deals getting gobbled up. These long term buyers are going to hold and build their dream homes. I recently put 2 lots under contract for $55,000 and $53,000. The original owner paid $450,000 and $600,000! I think these buyers in the $50,s will be ok.;-) Walking distance to the beach!
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SHELLYSHELLYSoWal Insider5,763 postsJoined View profileMessageSoWal Insider
SHELLYSoWal Insider5,763 postsJoined View profileMessageSoWal InsiderI recently put 2 lots under contract for $55,000 and $53,000. The original owner paid $450,000 and $600,000! I think these buyers in the $50,s will be ok.;-)
An 80-90% drop in value--how is ECAR going to doll that up on their sales statistics?
...did the $395,000 and $547,000 differences just disappear--or are our kids going to end up saddled with that debt sometime down the road? Sweet deal for sure--for the folks on both sides of this trade.
.
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Bobby JBobby JBeach FanaticBlue Mountain beach4,041 postsJoined View profileMessageBeach Fanatic
Bobby JBeach FanaticBlue Mountain beach4,041 postsJoined View profileMessageBeach FanaticAn 80-90% drop in value--how is ECAR going to doll that up on their sales statistics?
...did the $395,000 and $547,000 differences just disappear--or are our kids going to end up saddled with that debt sometime down the road? Sweet deal for sure--for the folks on both sides of this trade.
.
Not really sure how the differences played out. These were bank owned foreclosures so I would bet our kids will be saddled with the debt sometime in the future.
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