Dropped price by a million

[Beachlover2]

From the Destin Log




Seller cuts price of house by $1 million
By Jim Wagner
June 27, 2007 4:07 AM

FOR SALE: This sign on Calhoun Avenue shows the seller’s price reduction of $1 million.A Destin doctor who has had his pulse on the Destin real estate scene for more than 30 years has slashed the asking price of his bayfront home by $1 million.
Now, the home that Darlene and Dr. Mike Raim live in carries a listing price of $1.79 million. It was $2.79 million.
“We’re trying to get someone’s attention — shock value,” Raim said in an interview.
Raim bought the house at 619 Calhoun Ave. in 1981 and said he paid $131,000. It was built in 1972 and has undergone a couple of remodels, he said. It’s 2,700 square feet, has three bedrooms, two full baths and sits on 1 acre. There’s 157 feet of waterfront on Choctawhatchee Bay. Pilings from what once was a good-sized pier stick out of the water, the relic of Hurricane Ivan in September 2004.
When the Raims put the house on the market in August 2004, it was listed at $1.9 million. But with the Destin real estate market at the time red hot, with prices shooting up almost by day and some buyers snapping up homes before the for-sale signs even went up in the front yard, Raim fi gured the house and land would fetch more.
In March 2005, he upped it to $2.2 million. In the summer of 2005, to $2.49 million. In the summer of 2006, he asked $2.79 million. It’s listed on the tax rolls today at $1.5 million, he said.
Up to now, Raim said most of their would-be buyers were only “tire kickers.”
Pat Fisher, an independent broker representing the Raims, said they had offers in 2004 and 2005, “but they just didn’t work.”
So after nearly three years on the market, Raim said, he needed to do something to call attention to the property.
He’s hopeful his latest price change will be the dealmaker.
Last year, Raim said, a vacant bayfront lot just south of his home on Calhoun sold for $1.15 million, and it was half the size of his. And today, two vacant lots on Joe’s Bayou, less than a mile from his home, are listed at $950,000 each, he said.
The beauty of his lot, he said, is that it can be split into two nice-sized waterfront properties, each with about 75 feet on the bay.
“I’m selling for the land value, not for the house,” he said.
On a stroll to the water’s edge one recent evening, mullet jumped through the air, splashing in the shallow water. Men zipped by a little further out on personal watercraft. The western sky was turning color with the sunset as bigger boats made their way home out in Choctawhatchee Bay.
Raim says he couldn’t live anywhere else but on the water.
He figures he’ll stick with his $1.79 million price for two months — and then if it does not move, he’ll change his strategy. Plan B may have him building two houses on the property, one for each of his two children, then build a house for him and his wife on a vacant lot he owns on a canal on Holiday Isle. Then there’s a house and land he owns less than a mile away on Calhoun, where he could build.
“Quality pieces of property are hard to come by,” he said. “Everybody wants their lot to be valuable, but nobody wants to pay the taxes.”
Fisher said that at a meeting about commercial real estate a few weeks ago with three bank presidents, “they wanted to let us know they are still lending money but that appraisals are on coming in lower than the contract price.”
She cited an example: “I had a house listed on the bay, $1.75 million, an excellent house. I got a contract, waited two weeks for the appraisal, and it came in 30 percent low. It killed the deal. In my 10 years in real estate, I’ve never had that happen.
“It was frustrating for everybody — the seller wanted to sell, the buyers wanted to buy and the mortgage company was ready to lend,” Fisher said.
Mary Anne Windes, a veteran broker in Destin who has Real Estate Professionals of Destin, said in an e-mail interview, “The trend is that prices are moving to the same level that they were in 2003. As you will recall, 2004 and 2005 saw tremendous and often unrealistic growth. The market has now corrected itself. Many properties doubled in value during that time, so a drop of half the value is not unrealistic right now if a seller needs to sell.”
Raim remembers the 1970s, when he said you could buy waterfront property in Destin, Niceville and Cinco Bayou for a down payment of $100 and then $30 to $35 a month.
“The masses could afford it,” he said.
Today, that’s harder and harder, he said.
Raim traces his roots to the Destin area to his four years as an optometrist in the Air Force; he came to Destin in 1975 and became the community’s first optometrist when he opened his practice in 1977.

[SHELLY]

....Amen.

Pass the gravy please.


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[Johnrudy]

He's an optometrist?? I need to advise my son to drop the cello studies and become an optometrist!

[SHELLY]

He's an optometrist??

He apparently didn't see THAT coming. .
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Needs to change his perscription for rose-colored glasses.

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[scooterbug44]

There was an ocean front house on 30A that dropped its asking price a million months ago. I totally did a double take when I saw that placard on the sign!

[jimbo]

From the Destin Log




Seller cuts price of house by $1 million
By Jim Wagner
June 27, 2007 4:07 AM


He’s hopeful his latest price change will be the dealmaker.
Last year, Raim said, a vacant bayfront lot just south of his home on Calhoun sold for $1.15 million, and it was half the size of his. And today, two vacant lots on Joe’s Bayou, less than a mile from his home, are listed at $950,000 each, he said.

The optometrist needs a lesson in RE. Equating listing prices or selling prices from a year ago to the logic of what his home is worth is ridiculous. Sounds like he was one of the lemmings running off the edge of the cliff during the unrealistic runup in the early to mid 2000's.

[jimbo]

From the Destin Log




She cited an example: “I had a house listed on the bay, $1.75 million, an excellent house. I got a contract, waited two weeks for the appraisal, and it came in 30 percent low. It killed the deal. In my 10 years in real estate, I’ve never had that happen.
“It was frustrating for everybody — the seller wanted to sell, the buyers wanted to buy and the mortgage company was ready to lend,” Fisher said.
Mary Anne Windes, a veteran broker in Destin who has Real Estate Professionals of Destin, said in an e-mail interview, “The trend is that prices are moving to the same level that they were in 2003. As you will recall, 2004 and 2005 saw tremendous and often unrealistic growth. The market has now corrected itself. Many properties doubled in value during that time, so a drop of half the value is not unrealistic right now if a seller needs to sell.”

Prices have quickly fallen to 2003 levels and they are likely to deteriorate further until supply and demand fall into sync which could be 10 years or more.

[Rambunkscious]

asking 2.79 million for that house was a greedy situation. greed is everywhere and it is kind of funny really. compare what people paid to what people want and you kind of get the greed cooefficient which is truly amazing, really makes you laugh...sorry for the sellers? I dont think so, only the ones who paid too much in 05 and 06.

[Rambunkscious]

the guy paid 131k and he's asking 2.79 million????

WTF???????????????

Am I supposed to feel sorry for this guy or what???

[Rambunkscious]

maybe drop the price by another half mil and then that would be a good return vs what he paid for it???????

[Rambunkscious]

drop another half mil and now you have a price of 679k, vs a price he paid of 131k....wow I just dont get this whole deal; that would be a heck of an investment at 679k....about 50% per year...isnt greed lovely??? how many of us get 50% per year on our investment?????

[sberry123]

drop another half mil and now you have a price of 679k, vs a price he paid of 131k....wow I just dont get this whole deal; that would be a heck of an investment at 679k....about 50% per year...isnt greed lovely??? how many of us get 50% per year on our investment?????

Now Now, you have to adjust for inflation. What were salaries back in the 70s, gas prices, gallon of milk.... The real return may not be as great as one would think. Little Robert Shiller thinking going on here.

[Rambunkscious]

Yes agreed! Isn't exaggerating great? Also you got to figure in all those holding costs for all those years and other things so the guys gross return is not his real return.....little tongue in cheek here, sorry.

[elgordoboy]

With a quick calculation using my fingers and toes and the rule of 72--it seems to be around a 10-11% return if it should sell at the lowered price. That's from $131,000 to $1.79 million.

[SHELLY]

With a quick calculation using my fingers and toes and the rule of 72--it seems to be around a 10-11% return if it should sell at the lowered price. That's from $131,000 to $1.79 million.

Keep your shoes off...you still have to subtract the 100K realtor's fee and other carrying costs. While you're at it, turn in your shoelaces and belt if you really believe that this joker is going to unload that property into this market for that price.

P.S. Don't bother calculating the repair costs for the dock that Ivan chewed up and spit out. Apparently he believes that the "Pilings from what once was a good-sized pier--the relic of Hurricane Ivan in September 2004" is an interesting selling point.


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[elgordoboy]

Keep your shoes off...you still have to subtract the 100K realtor's fee and other carrying costs. While you're at it, turn in your shoelaces and belt if you really believe that this joker is going to unload that property into this market for that price.

P.S. Don't bother calculating the repair costs for the dock that Ivan chewed up and spit out. Apparently he believes that the "Pilings from what once was a good-sized pier--the relic of Hurricane Ivan in September 2004" is an interesting selling point.


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Mine was simply an observation in reply more to the %50 percent annual gains (to put it in perspective as a mediocre return at best after all associated costs) . I am neither pro nor con on this guy selling his property or touting real estate like his as an investment. Great board btw.

[spinDrAtl]

So what if this guy is trying to make some money on his property. He may be optimistic on his pricing, but he doesn't sound like some johnny come lately locust flipper. Hasn't he been living in the house for over 25 years?

Yes, he's had carrying costs but it's not investment carrying costs. It's the same carrying costs that everyone who owns a primary residence has.

[BambooBay]

I hope the guy gets every single penny...and a lot more! As the article notes, he's been living here and contributing to our community for over three decades.... It's not like he's one of these people rushing in here at the market's peak and buying up "pre-construction" properties to flip. Since when does trying to sell something that you've owned for 30 years constitute "greed"? You'd think property owners here would be rooting for this guy, and not slamming him! Yikes!

[Rambunkscious]

his gain from what he was originally asking and what he paid 35 yrs ago would have been over 75k per year, plus he lived in the house for free. I dont know if this qualifies as greed or not, more power to this guy, if he can do it, so can I and you and you and you!!!!! (see a problem here?)

[spinDrAtl]

Nope, I don't see a problem. It's called a free market.

[Beachlover2]

his gain from what he was originally asking and what he paid 35 yrs ago would have been over 75k per year, plus he lived in the house for free. I dont know if this qualifies as greed or not, more power to this guy, if he can do it, so can I and you and you and you!!!!! (see a problem here?)

I don't call paying taxes - insurance - utilities - upkeep - new a/c - remodeling during the 35 years etc exactly living for free. My parents bought their house 50 years ago for 18K - today the land is worth 300K - but explain to my mother on her fixed income that she is living for free when she is having a tough time paying taxes. etc. Don't penalize him because he stayed in his home all these years.

[tistheseason]

I wish I had the money to buy it. I grew up visiting some friends on Calhoun Drive every summer. It was basically the only vacations we had as a child. The best was every 4th of july sitting on the dock watching the fireworks displays for every town over the bay. If only I had a $1.79 million. . . .ahhhh nostalgia.

Seriously, I am surprised it wouldn't be gobbled up at that price. An acre on the bay!

[BambooBay]

I know what you're trying to say about greed, Rambunkscious, but I think the large numbers are just playing tricks on your emotions.

Here are the facts:

Even IF the man in that article sells his home for $3 MILLION, his investment will ultimately have been a very poor one.

Why?

Since 1920s, the average annual return in the stock market has been 10.3%. At that rate, if the man in the article had invested his $131,000 in the stock market in 1972 (instead of buying a home in Destin for his family), he would now have amassed $4,049,620... More than DOUBLE his $1.7 million asking price!

Over 35 years, $1.7 million is less than an 8% return on his original $131,000 investment.

Again, there is absolutely NO GREED or wrongdoing WHATSOEVER on behalf this guy. He's just a guy trying to get a fair market value for a home that he's owned for 35 years. If the guy's greedy, he should be asking $5 million for the house. As it turns out though, he's giving someone a heckuva deal. Personally, I hope he gets DOUBLE what he's asking for it now--it will ultimately help every single one of us.

[drsvelte]

[QUOTE][if the man in the article had invested his $131,000 in the stock market in 1972 (instead of buying a home in Destin for his family), he would now have amassed $4,049,620./QUOTE]

I think he purchased the home in 1981-82 not 1972, so your present value of market returns is overestimated.

Hey, he can ASK whatever he wants. That's not greed; that's what's makes a market. Whether he gets a BID is another thing.

[BambooBay]

Well, now you're just being logical...

[Miss Kitty]

Well, now you're just being logical...

...I hate when that happens!!!

[Seabreeze]

If I dropped the price on my house by a mil, I'd owe the bank a ton of money! Must be nice to be listing at a price so high you can afford to reduce it like that. Where, prey tell, does all the money come from? Anyone know?

[fisher]

I know what you're trying to say about greed, Rambunkscious, but I think the large numbers are just playing tricks on your emotions.

Here are the facts:

Even IF the man in that article sells his home for $3 MILLION, his investment will ultimately have been a very poor one.

Why?

Since 1920s, the average annual return in the stock market has been 10.3%. At that rate, if the man in the article had invested his $131,000 in the stock market in 1972 (instead of buying a home in Destin for his family), he would now have amassed $4,049,620... More than DOUBLE his $1.7 million asking price!

Over 35 years, $1.7 million is less than an 8% return on his original $131,000 investment.

Again, there is absolutely NO GREED or wrongdoing WHATSOEVER on behalf this guy. He's just a guy trying to get a fair market value for a home that he's owned for 35 years. If the guy's greedy, he should be asking $5 million for the house. As it turns out though, he's giving someone a heckuva deal. Personally, I hope he gets DOUBLE what he's asking for it now--it will ultimately help every single one of us.

This home wasn't an investment or even a second home. It appears to be his primary residence. I would take 8% (excluding carrying costs) on my primary residence any day of the week. On a second home or a piece of real estate as an investment, I agree that it would have been a lousy investment (return is much, much lower than 8% after considering carrying costs).

[SHELLY]

Here's the key paragraph in this whole story:
---------------------------------------------------

Fisher (Doc's RE Broker) said that at a meeting about commercial real estate a few weeks ago with three bank presidents, “they wanted to let us know they are still lending money but that appraisals are on coming in lower than the contract price.”
She cited an example: “I had a house listed on the bay, $1.75 million, an excellent house. I got a contract, waited two weeks for the appraisal, and it came in 30 percent low. It killed the deal. In my 10 years in real estate, I’ve never had that happen.
-------------------------------------------------------



Never had that happen?....Get used to it Pat.

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[BambooBay]

This truly is a great time to be a Buyer! In 5-10 years, we'll all be saying, "Do you remember when we coulda bought that house on an acre on the Bay for a mere $1.79 million?? Boy, I wish I knew then what I know now!"

[SHELLY]

This truly is a great time to be a Buyer! In 5-10 years, we'll all be saying, "Do you remember when we coulda bought that house on an acre on the Bay for a mere $1.79 million?? Boy, I wish I knew then what I know now!"

Didn't the folks who stretched their finances and snapped up homes, lots and condos in Florida over the past 3 years have the same idea?

They are saying "Boy, I wish I knew then what I know now!" also.


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[BambooBay]

Remember, you only take a loss if you sell now!... Do what Warren Buffett does: Sell when everyone else is buying, and buy when no one else is (like right now)... And if you happen to buy at the wrong time, sit back and wait. In the history of the world, it's always come back (well, except perhaps Atlantis... and maybe Rome ).... Above all though--in the immortal words of Douglas Adams:

DON'T PANIC.

[spinDrAtl]

In the immortal words of Kevin Bacon - 'All is well, All is well'.

I agree in principle about holding, but some folks may not be able to do that - the gamblers, the short term flippers, someone who maybe lost their job, got hit with huge insurance/tax increase, etc.

[SHELLY]

I agree in principle about holding, but some folks may not be able to do that - the gamblers, the short term flippers, someone who maybe lost their job, got hit with huge insurance/tax increase, etc.

That accounts for about 40% of the sales over the last 3-4 years.


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[spinDrAtl]

That accounts for about 40% of the sales over the last 3-4 years.


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If that % is accurate, it reinforces my point - a lot of people can't just sit and hold. Many are panicked and rightly so if they are hemmoraging $$$. It is very easy to point at Warren Buffet, the gazillionaire, and say 'don't panic' but reality is different for many. Nothing against the strategy or Bamboo Bay, but this is not a one size fits all market.

[BambooBay]

Understood and agreed... In my opinion, gamblers and speculators should know--and be willing to accept--those risks going into it. If you own 3 or 4 pieces of property, you're taking a risk that the market will stall for a few years, and you'll be left paying the bills in the meantime. That's just part of it. Hopefully though, if you take that risk, you have the common sense not to over-extend yourself (aka, don't sit down at the slot machines with more coinage than you can afford to lose!!!). Unfortunately, people forget that part of it. They love to take credit for their smarts when all the cash is flowing in, but then they point fingers elsewhere when it dries up. In this case, we're talking about a guy that owned a residence for 30+ years. He wasn't in it to make a quick buck, or to flip a non-existent property. I don't feel sorry for him, but neither do I think he's being greedy for trying to get as much as possible for his family's home. Again, I hope he gets every penny... Heck, I hope he gets DOUBLE!

Really, I think this is all hardest on the realtors, who obviously make a living doing this stuff. They can't control it. But as for property owners, there are risks (and benefits) with everything... You just gotta ride it out... If you're in over your head, it's because you didn't do your homework and/or didn't comprehend the old adage, "what goes up, must come down":

http://photos1.blogger.com/hello/243...0/Newhome3.jpg

[SHELLY]

Really, I think this is all hardest on the realtors, who obviously make a living doing this stuff. They can't control it.

Don't they too know that the market goes up and goes down? Have you EVER heard a Realtor say "Now is NOT a good time to buy?"

Shouldn't they sock the money away in good times to hold them through the not-so-good times?


And as for the "Doc by the Bay"....the article said he had his "pulse on the Destin real estate scene for more than 30 years." Won't be long till he'll be yelling, "PADDLES!!"


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[elgordoboy]

[Rambunkscious]

Shelly,

Paddles like in up the creek without one?

Loved that.

[elgordoboy]

Shelly,

Paddles like in up the creek without one?

Loved that.

The ones they use to get the old ticker going again when a guy dies. Like in the back of an ambulance or in the ER.

[SHELLY]

Both "A" and "B" above will work.


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[Rambunkscious]

I dont believe the theory that buying and holding stocks will beat the return on real estate - this may be good advice - in theory.

In practice, people tend to invest heavily in stocks and then panic and sell during the first market plunge. Thousands of folks in Destin and elsewhere can atttest to how much money they LOST in the last tech debacle. The
posters here do not take this actual fact into account in their analysis.

Buying real estate for your personal home is always the best investment you will ever make.

[scooterbug44]

You'll never go broke buying what you can afford and investing for the long haul.

Fast or easy money in real estate and stocks are both risky for a reason.

I feel sorry for those who are being affected by the current downturn in the real estate market, but have no sympathy for those who were trying to get rich quick who are now "stuck" or overextended.

[SHELLY]

Thousands of folks in Destin and elsewhere can atttest to how much money they LOST in the last tech debacle. The
posters here do not take this actual fact into account in their analysis.

Apparently some didn't learn that it was their "follow the herd to riches" mentality that got them into trouble during the Tech-wreck...and it's the exact same thing that now have them in trouble with their Dot-Condos. It's not the type of market that's the problem, it's their greed coupled with their inability to understand investment risk.

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