Trends

[TooScared]

I post on the board sometime, but I've created a new name because I don't have Shelly's backbone and I don't want to be harrassed.

Most everything I here are real estate horror stories. Foreclosures, dropping housing prices, huge inventories, but by far most of the posts in the forum are positive - with the exception of Shelly who gets pounded by most everyone for being, in my opinion, too much of a realists.

My thing is that it seems to me most everyone who posts regularly in this section, most often, most positive, etc. have stake in the real estate game, either investors, realtors, developers, business owners all of which have strong personal interests in a strong real estate market or at least of the perception of an improving market.

I am leary these days of asking investing advice of anyone who makes a living in the real estate market. Car salesmen will always tell you its a great time to buy.

Hey. The market is AWFUL. It's the worst real estate market since the great depression, and how could anyone with straight face say it's a great time to invest in real estate unless you have the money and intention of holding on to it for many years.

So, my question is this, by a show of hands, and in the interest of full self disclosure, how many of the frequent posters on here, including the webmaster, have a personal interest, whether through themselves or there spouses, in real estate to include realtors, developers, homeowners with property currently on the market, marketers that advertise real estate through print or the web so that those of us who are have no interest can know who is being completely unbiased and who may have other motivations for constantly wearing their rose colored sunglasses at night.

[elgordoboy]

I post on the board sometime, but I've created a new name because I don't have Shelly's backbone and I don't want to be harrassed.

Most everything I here are real estate horror stories. Foreclosures, dropping housing prices, huge inventories, but by far most of the posts in the forum are positive - with the exception of Shelly who gets pounded by most everyone for being, in my opinion, too much of a realists.

My thing is that it seems to me most everyone who posts regularly in this section, most often, most positive, etc. have stake in the real estate game, either investors, realtors, developers, business owners all of which have strong personal interests in a strong real estate market or at least of the perception of an improving market.

I am leary these days of asking investing advice of anyone who makes a living in the real estate market. Car salesmen will always tell you its a great time to buy.

Hey. The market is AWFUL. It's the worst real estate market since the great depression, and how could anyone with straight face say it's a great time to invest in real estate unless you have the money and intention of holding on to it for many years.

So, my question is this, by a show of hands, and in the interest of full self disclosure, how many of the frequent posters on here, including the webmaster, have a personal interest, whether through themselves or there spouses, in real estate to include realtors, developers, homeowners with property currently on the market, marketers that advertise real estate through print or the web so that those of us who are have no interest can know who is being completely unbiased and who may have other motivations for constantly wearing their rose colored sunglasses at night.

Don't be a sissy..post it under your regular ID.

[Bob]

What's your point? Don't buy anything. Put your money in a cd, and rent when at the beach. Wear sunscreen and double deadbolt your doors while wearing latex gloves to protect you from germs.......pssst here's a secret.....everyone's biased whether they make their living from real estate or not. Right Shelly?

[SHELLY]

What's your point? Don't buy anything. Put your money in a cd, and rent when at the beach. Wear sunscreen and double deadbolt your doors while wearing latex gloves to protect you from germs.......pssst here's a secret.....everyone's biased whether they make their living from real estate or not. Right Shelly?

Biased? Why of course!....I own a few thousand shares in the Latex Glove and Tin Foil Hat Factory in China.

BTW TooScared...are you wanting to ask about Real Estate investing advice? I doubt you'll get a roll call of folks on the board stating their involvement with the RE biz, so don't hold your breath. You sound as if you've got the market pretty much sussed out--I'd leave it at that.

In defense of the folks in the RE biz. It's their job to present a positive spin on the market--real or implied--can't fault them for that. It's up to the viewers and buyers to agree or disagree--can't fault them for that. It is up to the investor/consumer to do the due diligence before making a commitment whether it is purchasing a stock, a used car or a condo. I always keep this saying in the back of my mind, "Never ask a barber if you need a haircut." (Oh! And never ask anyone on a message board for investing advice.) Think about it.


.

[Busta Hustle]

Shelly you may want to diversify from latex and tin hats...follow me here my broker just turned me on to trampoline futures. (tall buildings, places to land, etc.)

[Capricious]

[QUOTE=TooScared;346185]I post on the board sometime, but I've created a new name because I don't have Shelly's backbone and I don't want to be harrassed.



Geez.


What a downer post.


Maybe this will cheer you up:
http://www.whitehouse.gov/news/relea...0040809-9.html


Ben & George are gonna take care of everything.


Cheers !

[Just_In_Thyme]

"Hey. The market is AWFUL. It's the worst real estate market since the great depression, and how could anyone with straight face say it's a great time to invest in real estate unless you have the money and intention of holding on to it for many years."

Maybe you answered your own question.

[Chickpea]

Regardless of the state of the market, most people (I believe) are affected by the current state of affairs, because their principal investments are with real estate - a house (or 2 or 3) will typically be the biggest purchase one makes.

Some people on this board know me and know that my work is tied to RE development but what I say below is truely personal.

Many others who post regularly understand much more than I about the signs in the economy, real estate current woes, sub-prime mortgage mess, etc, etc.. but this is the little I know.....

I LOVE living here, my family and I invested in property in 2005 at the peak of the market - many people may find that really stupid - but all we knew and what we still know is that we loved living here and saw the potential. We invested certainly hoping we would not lose our shirts, but we were/still are committed to this area, believe that like many other businesses, RE has its cycles, have absolutely no idea when things will start to turn around but believe with absolute certainty that this little paradise we live in will continue to grow and prosper in the long run.

I could be sitting with a calculator and depressing myself with the money we MAY have lost OR I could throw myself into my work and work on making this place a little bit more pleasant and beautiful and desirable! And in the meantime, I am going to really enjoy living here, enjoy the new services that seem to pop up with increased frequency and specifically, take advantage of our spectacular nature preserves and enviable beaches!

Thanks and happy weekend.

[beachmouse]

No primary interest- neither me nor Mr. Mouse.

But because the real estate machine takes up such a significant part of the local economy, if you live down here and have to work for a living, you'll feel secondary effects to some degree or another. Which isn't entirely bad if you're talking a market that's becomming affordable to middle income wage earners again.

[Smiling JOe]

Wow, a downer indeed. Are you trying to drive prices further down so that you can buy in? You state the market is the worse since the Not-So-Great Depression. Upon what evidence do you base that? I look at the sales numbers and see that prices in SoWal for Single family homes are around the prices of 2004-2005, which were two of the best years in history for real estate. This is fact based, not just some defensive stand to your post. So again, where do you get your information on this being such a Debbie Downer market? I'm not saying the market is all rosy, but you don't paint a balanced picture -- just a snapshot of one aspect of the market.

You need to remember that many people bought property in SoWal prior to 2003, and most of them will still profit from selling, even if they undercut the people in trouble. As for buyers, there are buyers who thought they were priced out of the market back in 2004-2005, and they are now seeing some cases of prices being lower, so they are tickled pink. These are end-users of property, not speculators. For buyers to be able to come in at major discounts in certain cases, it's a good thing. WaterColor and WaterSound are two areas where prices have decreased more than the broader area of SoWal, and there are some good buys to be had in there. Is it possible that prices could drop more, yes. However, people buying luxury items, like a second home at the beach, cannot time the market. If people could time the market, don't you think that everyone would have sold at the market's peak?

I suggest that you look at the broader picture, rather than the debbie downer segment, which does exist. Every day, I awaken to NPR on the radio, and at least one of the stories is the terrible state of our economy, the mortgage biz, and or the terrible real estate market. If people hear it enough, maybe they begin to believe it. That is what we have seen in the slow number of sales, but it relates only to one segment of the current market. Real Estate is local.

Almost forgot, for full disclosure, I am a Realtor, and people should know that all property is always for sale. Sometimes people like to pretend that a particular piece isn't for sale when a buyer is interested, but it's always for sale.

[Bobby J]

I raise my hand. I am a Real Estate agent! Please don't tell anyone. I try to keep my identity unknown.

[flyguy]

Since I have been reading this board a few people have been constantly saying this could finally be the bottom, activity is picking up, etc. For the most part their lively hood is tied to real estate and they are up front about that fact.

As for me I am a buyer. I am actively seeking beachfront property. And all of the signs I am seeing are that prices have not stopped falling. The only exception possibly being the very high end stuff.

Short sales are now being replaced by forclosures. And until those are worked through the system I don't see much chance of a bounce.

I will be on the beach for a week at the end of this month. I may be making some cash offers, but if I do they will be very very low.


As I have stated before, better to buy a little too late when prices are heading up rather than too soon when the bottom has not been reached.


JMHO,
Flyguy

[Smiling JOe]

As for me I am a buyer. I am actively seeking beachfront property. And all of the signs I am seeing are that prices have not stopped falling. The only exception possibly being the very high end stuff.

GulfFront properties, while included in my sales data for the area, is a different beast from interior property. There are many negative factors of owning Gulf Front, ranging from critical erosion, incorrectly placed seawalls (better read the FAR contracts regarding correct permitting), private vs public, additional maintenance required, etc. Prices of the Gulf Front properties don't reflect the trend of selling prices for the other single family homes in SoWal.

[Beachduck]

If your not a gambler then don't go to the casino. Trust your own instincts and research, research, research. Sometimes you make the right call and sometimes the wrong. I will say that I feel like now is not the time to step in unless you have deep pockets and can afford to ride the waves. You shouldn't buy on an adjustable rate now. I forgot that this is probably part of what got the market here in the first place. It is definately shifted more to a buyers market in housing. The only real estate sector nationwide gaining momentum is farm land. Remember that some day down the road beach property will make a come back. Too many people wanting to retire, visit, and the prestige of a home on the beach. It may be a few years but a good buy now will be worth something down the road in my opinion. I remember staying in a home at Seaside in late 80's and could not believe they were asking 240,00 for it. That would steal make some money now. I am not a real estate agent or investor in the Fl market yet. Maybe a home owner at some point in the future. Near future hopefully.

[beachwanabe]

I hardly ever post, but read and learn a lot from everybody on this board. In all of this I have never heard the word CORRECTION, isn't this part of the downfall. Houses everywhere rose after the stock market CORRECTION when people started investing in real estate. It had to catch up sooner or later. Sure there are other issues with the economy, major thing would be the stability of oil prices. Dreaming - what would the economy do if oil prices dropped and stayed down for a LONG period of time.

[2bohemians]

[TooFarTampa]

I LOVE living here, my family and I invested in property in 2005 at the peak of the market - many people may find that really stupid - but all we knew and what we still know is that we loved living here and saw the potential. We invested certainly hoping we would not lose our shirts, but we were/still are committed to this area, believe that like many other businesses, RE has its cycles, have absolutely no idea when things will start to turn around but believe with absolute certainty that this little paradise we live in will continue to grow and prosper in the long run.

Excellent Chickpea. We do not live there but we are property owners and we feel the same way. We went in as investors but consider ourselves end users. As a native Floridian I have a strong belief that SoWal is very, very special (yes, even after all the development) and that there is a great deal of inherent value in the homes and land within walking distance to the beach. When you take a step back, consider the lack of developable land vs. conservation land, the elevations along almost all of 30-A, and of course the very special beaches and beautiful water, it is hard not to be impressed. Add in the height restrictions and the fact that most of the housing is newer and better suited to withstand storms -- all this makes SoWal extremely unique.

Because of this inherent value, my main concern with the prices in SoWal is not the large inventory, or the major pieces of property either going back to the bank or rumored to be. My concern, and maybe I am not seeing is correctly but I can't help but thinking this way, is more the national perspective -- ie, what is the going rate for homes in Hilton Head? Naples? Cape Cod? Catalina Island? If prices are declining in all these places because coastal real estate prices jumped too far way too fast, then it is hard to say where the bottom will be.

I keep going back to Shawn Tully's excellent 2002 piece in Fortune that declared the housing runup had to be over because any more growth was unsustainable. I also remember back in the mid 90s when 350K was the going rate for a very expensive executive home. My guess is we will level out nationally somewhere around 2001-2002 prices for desirable coastal areas. In SoWal, I don't think they will drop that far because the infrastructure and construction quality is much better than it was in 2001-2002. In other words prices at the time were cheap to begin with, and I don't see how they could get that cheap again.

Of course, it is just my opinion, and I don't have property for sale.

[TooFarTampa]

If you are interested, here is the article I read in 2002. At the time we thought we would probably be relocating, and when we did a couple of months later, Tully's warning influenced us to go for the best buy we could find with a fixed rate mortgage because we figured the gravy train was over.

http://money.cnn.com/magazines/fortu...0962/index.htm

Sound like someone we know?

SHELLY = SHawn TuLLY?

[Capricious]

"...If you are interested, here is the article ..."


A quote from your article:

"..Of course, even if we don't get a housing bubble, we may still wind up with a double-dip recession. An oil shock or a financial implosion could also pulverize the economy and slam housing prices...."


Housing buble?

Oil shock?

"financial implosion" (SIV, subprime, hedge fund)?

Recession?




What's the secret of his crystal ball?

Clairvoyance or common sense?








"Sound like someone we know?...."






Shelly had the same crystal ball.

And a few of the rest of us were not far behind.

[livingiSoWal]

my hands up. Licensed at 18 GRI by 19. I do advertising as well though, you should buy some advertising for me.

[Smiling JOe]

Just so that we are on the same page, I'll share some numbers, from the Emerald Coast Assoc of Realtors, comparing the avg sales in SoWal, in the area between Bay County and Sandestin.

Detached Single Family
2005 compared to 2004
qty of sales, down 25%
price of sales, up 17%

2006 compared to 2005
qty of sales, down 57%
price of sales, up 15%

2007 compared to 2006
qty of sales, up 35%
price of sales, down 7%


The "peak of the market," according to qty of sales was June 05. That is when the Shelly's came out and said that the bubble had burst. However, looking at the statistical data, prices of homes sold, increased another 15%. Maybe Shelly was basing the bubble bursting on the quantity of sales, which decreased substantially, 57%. Avg Sales Prices did decrease in 2007, compared to 2006, but compare those of 2007, to 2005, when the "bubble burst," and you will see the avg sales price increase of 6%. Yes, the quantity of sales is down in 2007, compared to 2005. However, the quantity of sales in 2007, compared to 2006, has increased by 35%.

The avg selling price of homes (detached single family) in this area of SoWal, during 2007 is $937,532, and this is based on 361 sales.

Sure, there are foreclosures coming up, but looking at the recent history, it doesn't appear that has stopped homes from selling at prices which are historically significantly.

[Smiling JOe]

flyguy, here are some numbers for you, regarding sales for single family detached homes which are listed as Gulf Front, in the same area of SoWal, described in previous post.

2005
qty sold - 20
avg sales price - $3,570,167

2006
qty sold - 15
avg sales price - $4,796,296

2007
qty sold - 17
avg sales price - $3,252,738

Inventory in 2007 has remained fairly constant, but is up over the previous years.

[TooFarTampa]

"...If you are interested, here is the article ..."


A quote from your article:

"..Of course, even if we don't get a housing bubble, we may still wind up with a double-dip recession. An oil shock or a financial implosion could also pulverize the economy and slam housing prices...."


Housing buble?

Oil shock?

"financial implosion" (SIV, subprime, hedge fund)?

Recession?




What's the secret of his crystal ball?

Clairvoyance or common sense?








"Sound like someone we know?...."






Shelly had the same crystal ball.

And a few of the rest of us were not far behind.

All very true!

What does the crystal ball say about the economic stimulus package?

[Bobby J]

The Trend I see are the A quaility properties are selling. I think it is pretty obvious that the RE market is hurting. If an agent tells you any different run! I think my rose colored glasses are a way I approach life. Probably why I am in sales. I also think if you work with someone you can trust (remember trust works both ways), you will be fine. As earlier stated, research, research!

[Capricious]

All very true!

What does the crystal ball say about the economic stimulus package?

About as effective as the government stimulus plans for
the recovery from Hurricane Katrina, if it happens at all.

At this point, it's too late for the government to do anything so
it might as well do nothing.

Shelly might have a different take as I know he/she has
immense confidence in the abilities and intellect of our
polititions.

[Smiling JOe]

What does the crystal ball say about the economic stimulus package?

My Magic 8-Ball says that it may help stimulate the economy of China, since everything we buy today, seems to come from China. Don't think that China doesn't feel the hurt.

[SHELLY]

All very true!

What does the crystal ball say about the economic stimulus package?

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

Just where do the people of America think this "extra" money comes from to pay for this economic stimulus? (Hint: Rhymes with "Tinting Messes.")


.

[Busta Hustle]

printing dresses??? no that's not it

[SHELLY]

printing dresses??? no that's not it

Close, but no cigar --Bill Clinton

.

[TooFarTampa]

Minting presses?

[SHELLY]

Minting presses?

Charlie?? Charlie Crist is that you? Sounds like you need a clue.


.

[scooterbug44]

raising taxes?

[Capricious]

"...(Hint: Rhymes with "Tinting Messes.")..."




But that would be inflationary.



As would the Fed cutting the discount rate.

[flyguy]

Joe,
Thanks for the numbers. I am shopping for a gulf front condo as I will be part time and want minimum upkeep. And I do realize it is a different market than single family. The single family beachfront lots have come off the bubble but I don't see any signs of a fire sale. The condo market on the other hand is where the foreclosures seem to be popping up. I suspect because that is where it was easiest to speculate in the market.

Flyguy

flyguy, here are some numbers for you, regarding sales for single family detached homes which are listed as Gulf Front, in the same area of SoWal, described in previous post.

2005
qty sold - 20
avg sales price - $3,570,167

2006
qty sold - 15
avg sales price - $4,796,296

2007
qty sold - 17
avg sales price - $3,252,738

Inventory in 2007 has remained fairly constant, but is up over the previous years.

[TooFarTampa]

"...(Hint: Rhymes with "Tinting Messes.")..."




But that would be inflationary.



As would the Fed cutting the discount rate.

So did I guess right then?

[beachnut1]

I'm not a regular poster but I'm going to give you my position anyway. I have been an owner, investor, investulator, speculator, developer and land swinger in the Destin Area for the last 10 years. I have bought to flip, bought to develop, and bought for my own personal use. I currently have no holdings in the Destin area other than a home I just bought a month ago. I bought because it is my belief that regardless of if its a shortsale, a firesale, or just a extremely motivated seller. I believe that prices will not go too far below the cost to rebuild the exact home, putting a reasonable value on the lot.

Property is valued one of three ways:
1) Income method
2) Replacement cost method
3) Comparable sales or market value method

Throw # 3 out, forget about what it sold for 18 months ago or last month even, comp sale price can and ARE manipulated on every sale so that number is worthless. The quicker we all forget about those unjustifiable prices which were mostly based on the comp sale method with no concern for income or replacement cost, the better off and more healthy the entire market will be.

There will be more foreclosures in the next 24 months than ever before but trust me, there will be investors buying these as well and they will be buying based on replacement cost valuation method and the income valuation method.

[Smiling JOe]

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

Just where do the people of America think this "extra" money comes from to pay for this economic stimulus? (Hint: Rhymes with "Tinting Messes.")


.

printing messes?

[fisher]

I'm not a regular poster but I'm going to give you my position anyway. I have been an owner, investor, investulator, speculator, developer and land swinger in the Destin Area for the last 10 years. I have bought to flip, bought to develop, and bought for my own personal use. I currently have no holdings in the Destin area other than a home I just bought a month ago. I bought because it is my belief that regardless of if its a shortsale, a firesale, or just a extremely motivated seller. I believe that prices will not go too far below the cost to rebuild the exact home, putting a reasonable value on the lot.

Property is valued one of three ways:
1) Income method
2) Replacement cost method
3) Comparable sales or market value method

Throw # 3 out, forget about what it sold for 18 months ago or last month even, comp sale price can and ARE manipulated on every sale so that number is worthless. The quicker we all forget about those unjustifiable prices which were mostly based on the comp sale method with no concern for income or replacement cost, the better off and more healthy the entire market will be.

There will be more foreclosures in the next 24 months than ever before but trust me, there will be investors buying these as well and they will be buying based on replacement cost valuation method and the income valuation method.

And, just how much do you think a 40 X 80 piece of sand 1/2 mile from the beach is worth. Many of the sales occurring now value this land at $100k to $900k depending on the location in SoWal. If raw land prices continue to fall, then the cost valuation method will certainly follow suit for existing homes.

[Smiling JOe]

flyguy, some condo numbers for you follow.
These sales numbers are for condos, listed as Gulf Front, which sold in the area of SoWal, between Bay County and Sandestin. The sales data is from Emerald Coast Assoc. of Realtors (ECAR), and doesn't include any units sold outside of ECAR. Also, the sales reflect new condos as well as resales.

2005
qty sold - 101
avg sold price - $1,563,680

2006
qty sold - 19
avg sold price - $1,076,499

2007
qty sold - 38
avg sold price - $1,109,986

prices and qty have increased in 2007 over 2006. You can see the dramatic drop in prices from 2004, for Gulf Front condos.

As I stated, the Gulf front units have been difficult to sell, especially after the storms of 2004, and the great number of storms predicted in 2005 and 2006. Add to that, the other reasons I mentioned in a previous post, and you will see that the Gulf Front units are not recovering as well as the other condos in the same area.

Below are sales for ALL CONDOS in that same stretch of SoWal, according to ECAR.
You will see that although the qty of sales is down in 2007, compared to 2006, but in that same time period, average prices of units sold have increased by 26%. Compare that to the Gulf Front Units increasing in price in that period, only 3%. (an increase of 3% isn't bad, considering we have been in a "bubble bursting" period, but the non-Gulf Front units have outperformed in that period.) That should be good news to you, since you are looking to buy a Gulf Front unit.

All condos, including Gulf front, located in the same area of SoWal (not including Sandestin):

2005
qty of sales - 358
Avg sales price - $929,362

2006
qty of sales - 151
Avg sales price - $635,055

2007
qty of sales - 136
Avg sales price - $804,636

Remember that part you mentioned about wanting to buy on the upswing? Looking at the annual averages for sale prices of Gulf Front Condos, we are currently 29% off the record highs of 2005, and for 2007, we are up 3% over 2006. Those sales numbers reflect a slight upswing in the Gulf Front Condo Market. I've shown examples of other more substantial upswings in the market for other properties. My question to you as a buyer is, how much of an upswing are you waiting to see, before you are ready to jump in? I hear many people who sound similar to you, in that they are waiting to see upswings, but I think they are really waiting to hear the bottom bell ring, telling them it's okay to buy now. I haven't hidden my thought that you will see more foreclosures in the next year, but that hasn't changed the fact that the average prices of properties selling has increased between 2006 to 2007. None of the buyers who say they are waiting to see the upswing, have identified a buy-in point, and I think they are buying more on gut instinct and emotions, so I'm curious to learn your perspective. Thanks for sharing.

[fisher]

Just so that we are on the same page, I'll share some numbers, from the Emerald Coast Assoc of Realtors, comparing the avg sales in SoWal, in the area between Bay County and Sandestin.

Detached Single Family
2005 compared to 2004
qty of sales, down 25%
price of sales, up 17%

2006 compared to 2005
qty of sales, down 57%
price of sales, up 15%

2007 compared to 2006
qty of sales, up 35%
price of sales, down 7%


The "peak of the market," according to qty of sales was June 05. That is when the Shelly's came out and said that the bubble had burst. However, looking at the statistical data, prices of homes sold, increased another 15%. Maybe Shelly was basing the bubble bursting on the quantity of sales, which decreased substantially, 57%. Avg Sales Prices did decrease in 2007, compared to 2006, but compare those of 2007, to 2005, when the "bubble burst," and you will see the avg sales price increase of 6%. Yes, the quantity of sales is down in 2007, compared to 2005. However, the quantity of sales in 2007, compared to 2006, has increased by 35%.

The avg selling price of homes (detached single family) in this area of SoWal, during 2007 is $937,532, and this is based on 361 sales.

Sure, there are foreclosures coming up, but looking at the recent history, it doesn't appear that has stopped homes from selling at prices which are historically significantly.

Raw land prices have CRASHED and construction costs are falling too. It is cheaper to build than to buy a resale in many cases today which will put further pressure on prices. Foreclosure prices today could very easily be average prices in the next year or so.

[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.

[beachnut1]

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 .

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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