Trends

[Capricious]

",,,average prices of units sold have increased by 26%..."





Does this mean that the average price of any particular unit
has increased?

Or does it mean that the more expensive units are selling
and the cheaper ones are not, causing the average price to
increase while the price of any particular unit may not have?

 

[Smiling JOe]

Capricious, you raise a good question, and one which can be answered only anecdotally on a property by property basis.

 

[flyguy]

Joe,

Thanks for the numbers. Good stuff. As for the 2007 upswing. Could it be due to presells closing in a high end condo building?

I have seen the same argument made with condos in PCB. But you have people closing on units they pre purchased several years ago at what is now an above market price. These new purchases skew the numbers. Current resale listings are still decreasing and are now hitting $250/sq ft in buildings just a few years old. $200/sq ft in the old buildings. And these are full gulf front units.

Granted SoWal prices are still higher, but is the trend the same for resells? I know the MLS price changes in SoWal are still almost exclusively down. The few price increases in listing seem to be more of the high end SFH.

Then again, you may be right and the bottom has already come and gone with no bell ringing. But I also think that even after the official bottom of the market is found, prices will be rather flat (3-5% increase) until the inventory comes down.

My wife thinks it is time to start making offers. So as I stated before, we will start off with some lowballs and see what response we get. Because just as a buyer doesn't know when the market hits bottom, neither does the seller.

Thanks again,
and of course JMHO,
Flyguy

 

[Smiling JOe]

flyguy, looking more closely at the stats, while trying to determine your answer, out of the 38 condos listed as "Gulf Front," 7 of those look to be new sales, and 31 are resales. One other thing which I will point out is that some Realtors list condos as "Gulf Front," when there is question to that. Take Bella Vita for example, which has several buildings. There a few of those being listed as Gulf Front, because of the unobstructed view of the Gulf (should be listed as Gulf View in my opinion), but there are several other buildings between the units being sold and the Gulf. Those units included in these "gulf front" sales, alter the real avg price of gulf front units.

Four units in Park Place did close in 2007, bringing the avg sold price up, as each sold between $2 million - 2.5 million. Park Place is the condo building in Seagrove which was bought, gutted, and rebuilt into luxury condos. There were also three new sales in Andante, which helped to bring up the average. If we remove the 7 new sales units, the average sales price for the condos listed as Gulf Front, drops to $898,645.

Looking at 2006, I don't see any new sales for condos. All are resales.

For 2005, when we get into many of those, they are technically resales, because they were simultaneous closings, and in some cases, assignments of contract. However, they are really new, so I'll call those new sales, and for 2005, there were 46 resales of condos listed as Gulf Front, with the average price of $1,090,288.

Because all of the comparison figures are on the other page, I'll bring some of those forward to here:

the sales reflect new condos as well as resale for condos (listed as Gulf Front).

2005
Total Gulf Front Sales
qty sold - 101
avg sold price - $1,563,680

Resales only
qty sold - 46
avg sold price - $1,090,288

**************
2006
Total Gulf Front Sales
qty sold - 19
avg sold price - $1,076,499

Resales only
qty sold - 19
avg sold price - $1,076,499

(no new construction sales)

*****************

2007
Total Gulf Front Sales
qty sold - 38
avg sold price - $1,109,986

Resales only
qty sold - 31
avg sold price - $898,645

So, looking only at resales, we see a 16% drop in prices in 2007, compared to 2006. However, comparing 2007 to 2005, selling prices are down only 17.5%.

All that said, I'm not so sure that we can completely throw out the new sales as part of the equation. They are sales which occurred, and in many cases, the buyers would have been able to walk away from the table, leaving their deposit, coming out financially better than if they closed. The condos around here seem to be built in ten year cycles. We have the 1985 buildings, the 1995 buildings and the 2005 buildings. Buildings depreciate with time, especially the gulf front buildings. The salt air is tough on them. What we see in the data is a combination of lower land valuations as well as the depreciating buildings.

 

[sell30a]

Fisher -

Again I would use the cost basis to value the dirt. Cost of infrastructure alone (roads, sewer, storm water retention, utilties, etc) in sowal runs about 30k per lot for your basic community, then add the cost for the dirt within 1/2 mile from the beach - thats probably worth 40k per raw lot in todays market in no specific premium location, maybe 30k at rock bottom wholesale price. So a baseline cost of around 60-70k cost with no Amenities. Add Watercolor equivalent amenities and your easily at a lot cost basis of around 250k per lot. A community like old florida village would run about 100k per lot total cost basis.

 

[TreeFrog]

Listed to Dubya & "Stuttering Hank" outline the economic stimulus package today :funn:.

So if we all get a check from the gov for $400, like we did when W took office, and it comes in June, how in the world could that possibly resolve the current mess?

In other words, this is just another empty promise that will be trotted out to say "look, we did something for you".

As SJ says, politricks...

 

[Smiling JOe]

Treefrog, its $800 per person, and it appears that you know exactly what is happening -- poliTRICKS. The same is happening with Amendment 1 on the ballot in FL, and many other programs our gov't creates. If the printing mess, excuse me, if the printing press is broken, I guess we can borrow the $800 per person from the Chinese, at an interest rate of 15%, so that we really stimulate China's economy, when we use that borrowed money to buy more cheap plastic crap from Walmart. Thank God I'm having a good day, otherwise, it would all be rather depressing.

 

[flyguy]

Joe,

I am a numbers guy and I appreciate you taking the time to post those figures.

Thanks very much,
Flyguy

 

[Smiling JOe]

You are welcome, flyguy. Good luck with your purchase/offers.

 

[SHELLY]

So if we all get a check from the gov for $400, like we did when W took office, and it comes in June, how in the world could that possibly resolve the current mess?

In other words, this is just another empty promise that will be trotted out to say "look, we did something for you".

As SJ says, politricks...

It's a desperate attempt to distract the clueless (voting-age) masses who are starting come to the realization that there is something seriously wrong with the economy.

It's like when you have that annoying puppy jumping up and down and being a nuisance, so you throw a "pretend" ball across the room so they'll take off and you can make a quick exit before they realize that you screwed them over. That's what the government is trying to do with the "free money."

The stimulus package is not going to resolve the current mess...it's just going to tack on more debt to the huge debt bubble we (or our children and grandchildren) are going to have to eventually deal with on down the line.


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