HelloBeach

I'm in search of a seller in Watercolor who wants to sell there home in the $300's/sq/ft range. I'm seeing more and more deals at this price point. Please reply if you know of something.

steyou

HB- I sent u an email.

Smiling JOe

What do you mean you are seeing deals at this price point? If you are seeing them, why are you not buying them?
I have seen four homes in WC which closed around $410/sf in the last six months, but none under $400/sf, and certainly not any near $300/sf. If by $300's you mean, $399.99/sf, you might find something, but if you really mean low 300s, buy some lottery tickets.

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scooterbug44

You may be seeing deals at that price point in Sowal, but that is below cost in Watercolor and many other local developments. Low 300s is either St. Joe having a fire sale or folks selling at a loss.

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"I hate to break it to you, but this year (and probably the next few) was going to suck even if Jesus himself was president. These problems were not created overnight and they aren't going away overnight." -Jdarg

beachnut1

Hello Beach -

I am a recent buyer who was shopping for a deal. I made over 15 offers until one said yes. You would be surprised what prices sellers in Watercolor are willing to accept regardless of their starting price. There are better deals out there than the prices the recent auction generated.

Personally I would like to see prices come down even after I bought so we can get back to a normal market, once these distress properties are eliminated, then the market should normalize. email me if your still looking and I'll put you in touch with the realitor I used and he can tell you the great deals out there. mid 300's is very realistic.

Smiling JOe

even though no sales are showing in WaterColor for under $400/sf? are you predicting into the future, or do you have evidence of homes in WC selling at that price?

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heathernken

Two sales in MLS this year under 400, one for 380 and one for 389.

Smiling JOe

Sorry for the confusion. I was referring to homes sold in the last six months. In the last 6 months, avg selling price per sq ft is $530, with the high being $743 and the low being $404/sf.

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heathernken

So that must mean we touched the bottom in may with the sale at 389 a foot.

Smiling JOe

Didn't say that. I even asked beachnut1 if he was predicting prices to go down, hence the phishing in the $300's /sf.

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heathernken

I bet the Joe house on crossvine circle could be had in the mid 300's per foot. On the market for 391 per foot now. Two others on the market under 400- one for 390 as well and one for 375.

Smiling JOe

Never know until you throw an offer at them. Just write it on the back of your business card.

I know someone who will sell you a real cheap lot in WC, on the east side of hwy 395, and you could build on it. Of course, if you dig about 8" down, you'll hit watery soil.

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Smiling JOe

Just checked the listings and surprise, surprise, there are five listed in WC under $400/sf. You can even by a pre-construction one priced at $337/sf. There you go.

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heathernken

So there you go!!

beachnut1

Joe - Have evidence. Anyone who wants a home in the 320-325/sq ft range in Phase 2 or 3 email me and I can tell them of at least two. The current asking price is several hundred thousand over this currently, but I know firsthand what they are willing to accept. I am not a realitor, just a very recent buyer.

I'm not predicting anything, but I do know that some of these homes cannot be re-built for this price on any lot in Watercolor. How long can the market stay irrational like this? Longer than the owners can stay solvent unfortunately - remember LTCM? at the end of the day, markets did converge, but the owners werent able to stay solvent to see that day.

Currently a savvy buyer can buy an existing home in Watercolor cheaper than they can buy a lot and build on it, pick a lot any lot. Eventually these price must converge and correlate, but they do not now. The market is irrational which creates buying opportunites for existing homes.

This principle does NOT apply to condos, price convergence is irrelevant because the average buyer cannot go out and built a condo.

Some sellers are currently willing to sell for a loss, but your going to have a hard time getting a builder to build on any lot for a loss down the road so If your waiting for CNN to tell you that the bottom has hit, you will be 12 months behind the curve.

fisher

Your post assumes that the cost of construction does not fall and that the cost of lots doesn't fall. In actuality, the cost of construction is falling due to slackening demand for labor and materials. In addition, the price of lots has been falling for a couple of years now with no end in sight. If prices of lots and the cost of construction continue to fall, it will still be cheaper to build than to buy a resale. Finally, only a small fraction of the homes for sale in Watercolor, Watersound, Rosemary, etc. are priced below what it would currently take to buy a lot and build your own home. Most are priced well above replacement cost.

beachnut1

Yes, labor costs have come down 25% because contractors need the work, but material costs continue to go up. Lot prices are almost back to original Joe release price when you cost adjust them for inflation. So Your saying there's more pressure on lots and labor costs moving those prices down further, then there is to have a existing house sell for cheaper than it can currently be rebuilt.

I disagree with you. Even if your assume you can buy a lot today in the 100k price range, which you cannot, its still cheaper to buy an existing home. NOT all existing homes, but the ones priced aggressively

fisher

If you are talking about the select few homes that are at or nearing foreclosure in Watercolor, you are correct. But, we are only talking about 4 or 5 homes out of 135 for sale.

On a broader basis, its still cheaper to buy a lot and then build than to buy a resale or new construction. Although there have been a few fire sales, most of the homes being sold in WC are going for well over $400 per square foot and some are over $500 per square foot (most recent two closings were at $564 and $620 per square foot). My contractor friends actually tell me that the cost of lumber, concrete and other materials are falling. So, longer term, it should still be cheaper to build (in general excluding fire sales). That said, building is also a major hassle, so many people are willing to pay a premium to buy a resale.

steyou

MLS 477188 just closed at $318 sq ft.

Smiling JOe

and 72 Thicket Cir went under contract today, list price at $849,000. This is the one which is located next to 62 Thicket Cir, which went to auction unsold. I bet it didn't go for less than around $400/sf since it was one of the least expensive homes listed in WaterColor.

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scooterbug44

Can you post the MLS listing for it please?

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"I hate to break it to you, but this year (and probably the next few) was going to suck even if Jesus himself was president. These problems were not created overnight and they aren't going away overnight." -Jdarg

steyou

http://ecarmls.com/EmeraldReports/Li..._id=9312138257

This ID's me but that's OK.

scooterbug44

Thank you! I was wanting to see if it was a St. Joe firesale etc. because that number was crazy to me.

The notation I was looking for was: "Please do not use as a comp, this was a low sale from builder inventory."

BIG OUCH, it sold for $120 a square foot LESS than the listing price.

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"I hate to break it to you, but this year (and probably the next few) was going to suck even if Jesus himself was president. These problems were not created overnight and they aren't going away overnight." -Jdarg

SHELLY

Interesting note: "Please do not use as a comp, this was a low sale from builder's inventory."

J & T Investments is the builder--not! Can't believe they're still trying to manipulate the market...tsk, tsk, tsk.

(Contrats on your sale though.)

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But hey...Top Ramen tastes a whole lot better when you eat it off of a Granite Countertop. (Mr & Mrs Too Much Homebuyer)

Florida State Flower

steyou

Actually, this was not my contract. I just keep up with happenings. Not my note either. I believe that some folks may say that it could certainly be used as a comp.

scooterbug44

I am sure that people will or will not want to use it as a comp depending which side they are on, and other sellers are now saying "Thank you St. Joe, may I have another!"

Based on my math, they built that house for $31.70 a sqr ft. after you take out the lot costs.

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"I hate to break it to you, but this year (and probably the next few) was going to suck even if Jesus himself was president. These problems were not created overnight and they aren't going away overnight." -Jdarg

Smiling JOe

That particular note is not allowed, according to the MLS Rules.

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Smiling JOe

I happen to know the seller, J & T Investments, LLC, and your math is a bit off on the cost per sf, just a weeeeeeeeeeeeeeeeeeeeeeeeeeee bit. I like the house, though. I could live in the carriage house.

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heathernken

That note about not using it as a comp sounded a little like a prayer to a higher power, rather than a note in MLS. Must be an agent with a lot of listings!!

Smiling JOe

You should see some of the notes which agents write, like: "good job Jane. Thanks for the smooth transaction." These notes are supposed to be factual information, rather than subjective, to inform other agents and appraisers of the transaction. Was the sale an arms' length sale? some correct examples might be: Seller paid for buyers closing costs and home was sold furnished, with the furniture estimated at $50,000 (truthfully, and furniture or cars being included in the sale, should be an outside contract), buyer paid cash for a quick close, etc.

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scooterbug44

I know they didn't actually build it for that price.

Just to break even building a 2,600 sqr ft house on a $770,000 lot and selling if for $855,000, you'd have to have a construction cost of $31.70 - about a 1/10th of normal costs, so someone lost some $.

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"I hate to break it to you, but this year (and probably the next few) was going to suck even if Jesus himself was president. These problems were not created overnight and they aren't going away overnight." -Jdarg

fisher

Don't forget to back out the commission of $50k or so. They basically got back the cost of the lot and gave the house for free.

livingiSoWal

This being sold on PropertyFiresale.com, I can give you bit of reasoning to the note.

After speaking with an appraiser I work closely with he said they would not use the sale as a comp because out of the recent activity in WaterColor this doesn’t meet the typical numbers we have been seeing. Most of this is paraphrased but in short that is where it came from.

steyou

Would this appriaser use this as a comp if another home sold at this price per sq ft? Propertyfire sale.com has nothing to do with it. Are homes that sell at auction exempt from being used as a comp? I think maybe.......... a sale is a sale is a sale.

livingiSoWal

I agree and from my Realtor® stand point I would go into watercolor and list at that range. Reason being we have another preconstruction home that’s priced already in that range. If more homes go for this price in WC the comp would defiantly be supported, but at this point in time it is not. It is so low, and out of the ordinary, that it wouldn’t be used by an appraiser. That is how it has been explained to me.

Smiling JOe

However, whether the sale should be used as a comp is not up to the listing agent who entered the note. That is up to the appraiser and other Realtors who choose to look at it as a potential comp.

Steyou, my guess is that auctioned sales are not typically used as a comp because they are not arms' length transactions. Currently, most are forced sales. However, so many areas don't have enough sold properties to use as comps, so an appraiser may take an auctioned property into consideration to use as a comp.

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livingiSoWal

I agree SJ

scooterbug44

Ditto.

Why don't auctioned sales count?

They are becoming more prevalent and it's definitely a sale that shows what the property can be sold for.

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"I hate to break it to you, but this year (and probably the next few) was going to suck even if Jesus himself was president. These problems were not created overnight and they aren't going away overnight." -Jdarg

Smiling JOe

I'm not saying that all auctions wouldn't be Arms' Length, but in the case of the ones going to auction in today's market, there is typically pressure to sell, thereby making them not Arms' Length transactions, and not useful for comp purposes for appraisals.

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SHELLY

Are lenders going to overlook these "comps" when they put their money on the line....not!

Game over.
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But hey...Top Ramen tastes a whole lot better when you eat it off of a Granite Countertop. (Mr & Mrs Too Much Homebuyer)

Florida State Flower

Smiling JOe

Shelly, the lender is not looking for comps outside of those on the Appraisal. Whether or not to use a low priced sale as a comp, would be up to the Appraiser, not the lender. A decent Appraiser will make a phone call to the listing and or selling agent to find out more details of the sale, including whether it was an Arms' Length sale. If it is a non-Arms' Length sale, and there are other sales to use for comps, that particular sale would likely not be used to determine value for another property. Of course you know this and are just trying to stir the pudding, but I wanted to try and better explain it to others who are unaware.

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destinsm

Are these "decent" appraisers the same ones that colluded with the banks and lenders to run up home prices over 20% a year for 5 straight years??? Any sensible person, let alone a sensible person whos job it is to appraise houses, would know that the values being "appraised" in 2004-2005 were complete pipe dreams...

I personally would much rather base my buying experience on a SALE... no matter it being Arms' Length or not (could be better referred to as ARM's length possibly)... than some coo coo appraiser that thought the same house was worth twice as much just two years ago...

livingiSoWal

Destin,I would have to think the buyers ran the prices up...

SHELLY

Appraisers are under the gun to actually do the work and stop relying on folks with a vested interest in hitting the number; and lenders are at the mercy of gun-shy investors and tighter requirements by Fannie & Freddie to offload their mortgages. A new day has dawned in the credit markets that supply cash to purchase assets.


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But hey...Top Ramen tastes a whole lot better when you eat it off of a Granite Countertop. (Mr & Mrs Too Much Homebuyer)

Florida State Flower

Smiling JOe

Sounds like you have some resentment. Let me remind you that buyers were the ones who ran up the prices in 2004 and 2005, not appraisers. Also, since a "sensible person" without the title of "appraiser" is not able to calculate appraisals for lenders, we will have to stick with the appraisers calculating the appraised value on sales.

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Smiling JOe

Originally Posted by Smiling JOe A decent Appraiser will make a phone call to the listing and or selling agent to find out more details of the sale, including whether it was an Arms' Length sale.

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Reading back through my post, I can see how I miscommunicated. I was referring to the appraiser calling the listing agent and or selling agent on a property which would be potential used as a comp, rather than calling the listing or selling agent on the property which is under contract, for which the appraiser is calculating the value. Sorry for the miscommunication. I think your statement above is very true.

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SHELLY

Appraisers were nothing but the market's Biyatches according to their testimony before the Senate Banking Committee in June 2007:

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Appraiser coercion

Appraiser pressure has received a great deal of media attention in recent months, and it was the subject of an independent study conducted earlier this year by the October Research Corporation. This study found that 90 percent of appraisers were pressured by mortgage brokers, lenders, realty agents, consumers and others to raise property valuations to enable deals to go through. This was nearly double the abuse findings of a similar study three years ago.

Moreover, the survey found that 75 percent of appraisers reported “negative ramifications” if they did not cooperate, alter their appraisal, to provide an artificial valuation. The prime culprits of pressure, according to the survey, were mortgage brokers (71 percent), real estate agents/brokers (56 percent), consumers (35 percent), lenders (33 percent), and appraisal management companies (25 percent). Pressure comes from every direction.

We must do everything we can to ensure an independent appraisal process in mortgage transactions. We cannot do that in a market halfregulated.
Pressure is especially strong when appraisals are delivered to parties whose
compensation depends on getting people to the closing table to complete the sale and mortgage. If the loan doesn’t close, these parties don’t get paid. They do what they can to be sure they get paid.

Unfortunately, these parties with a vested interest in the transaction are often the same people managing the appraisal process within many financial institutions, and therein is a terrible conflict of interest. In this situation our members experience systemic problems with coercion. Appraisers are ordered to doctor their reports or else never see work from those parties again.

http://banking.senate.gov/_files/hummel1.pdf

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But hey...Top Ramen tastes a whole lot better when you eat it off of a Granite Countertop. (Mr & Mrs Too Much Homebuyer)

Florida State Flower

Smiling JOe

So maybe you can explain to us how real estate agents and brokers hold a carrot on a stick above the appraisers' heads, since we are not the ones ordering the appraisals and are not the ones referring business to appraisers. We truly have no influence over the appraiser, and typically don't even know who the appraiser is until after we see the appraisal. I find it difficult to believe that 56% of all brokers and real estate agents influence an appraiser's decisions. Now, if you want to talk about the lenders having some influence, that could be a different story.

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Busta Hustle

to borrow a phrase from the early 1900's which might be called the buyer's lament: "In 04-05 we trusted in 07-08 we busted."

destinsm

Should I not have some resentment toward the entire RE complex... The collusion, fraud, and anything to get a buck mentality is exactly what put us in this situation...

Sure the buyers bought the property... but they needed someone to loan them the money... someone to hit the number of the forever increasing 20% per year real estate always goes up number... and the beat went on... they couldn't afford the loan but your industry just wanted their cut... then the banks can just repackage the crap and pass it to someone else... maybe even your oh so safe money market retirement fund... yea I have resentment and I think well deserved.

If you fed the frenzy your part of it... and because you fed it we hear about bail outs every single day in the market... eventually those bailouts will be looking for those people that didn't actually buy into the crap that your industry was selling and actually have some money in the bank for the day a purchase of property actually makes sense beyond speculation... maybe to live in!