Nationally, nearly half of 2006 buyers are upside down

[Miss Critter]

From the Palm Beach Post via Florida Trend:

During the region's historic housing boom, home ownership was a can't-miss way to build wealth.

How quickly things have changed.


Most area homeowners who jumped on the housing bandwagon during 2005, 2006 and 2007 owe more than their homes are worth, according to a study released this week by Zillow, the Seattle-based Web site best known for its estimates of home values.
Fully 76.2 percent of homes bought in 2006 in Palm Beach, Broward and Miami-Dade counties are now worth less than the balance on the mortgages, the study says.
In the Treasure Coast, a whopping 80.5 percent of borrowers who bought homes in 2006 are upside down.
"It's pretty startling," Zillow spokeswoman Amy Bohutinsky said. "This is what leads to foreclosures."
Not everyone who is upside down on their loan will go into default, of course. Most borrowers can afford to ride out the downturn until the market improves, Bohutinsky said.
But selling now nearly guarantees a loss for those who bought during the boom. In South Florida, 29.2 percent of homes sold during the second quarter of this year fetched less than the seller had paid, Zillow found. In the Treasure Coast, 36.2 percent of homes sold in April, May and June created a loss for the seller.
Nationally, 45 percent of borrowers who bought homes in 2006 owe more than the homes are worth, according to Zillow. Because of the steep rise and fall in home prices in Palm Beach County and the Treasure Coast, higher numbers of borrowers are upside down.
"I'm not surprised by that," Neal Taslitz, a foreclosure attorney in West Palm Beach, said of Zillow's numbers. "This is a tsunami, and it's getting worse."
In a separate study released today, RealtyTrac said Florida foreclosure activity in July increased 14 percent from June and 139 percent from July 2007. The state had 45,884 properties with foreclosure filings, second highest in the nation.
The housing meltdown is hurting not just high-risk borrowers who overreached. Even cautious borrowers are feeling the squeeze, said mortgage banker Bill Davis, head of Private Funding Specialists in Palm Beach Gardens.
"This has gone from subprime to prime," Davis said. "People with 700 credit scores are getting crushed. Those are the ones who break your heart, because they've done everything right."
Davis offers this example: Say you paid $400,000 for a home in 2006 and made a down payment of 10 percent - a hefty sum in those days of loose lending standards. Today, though, the home might be worth only $325,000 - significantly less than your $360,000 mortgage.
If you want to sell your home, you'll have to write a check to the lender. Many homeowners have little choice but to go into foreclosure, Davis said.
Some Realtors questioned the accuracy of Zillow's figures. After all, the company's so-called automated valuations of homes are notorious for making dubious comparisons when calculating home prices.
"I have a very skeptical view of Zillow," said John Mike, chairman of the Realtors Association of the Palm Beaches.
Scott Agran, president of Lang Realty of Boca Raton, also criticized Zillow's numbers. He agreed that the market has been in a deep downturn, but he predicted that home values will come back strong.
"We've been in free-fall since 2005," Agran said. "We're back to 2002 pricing. This is a tremendous buying opportunity."

Shelly. . . . .?

[30ashopper]

Where the heck is Shelly? He/She hasn't posted in a while. Hope he/she is ok.

[AAbsolute]

Does anybody believe in buying property for an amount where its mortage payment should be at or near its rental rate? When, why, and how did we come to consider this aberrant. What were people calculating?

[elgordoboy]

Does anybody believe in buying property for an amount where its mortage payment should be at or near its rental rate? When, why, and how did we come to consider this aberrant. What were people calculating?

Could you rent your house on Coopersmith that you have for sale at $1.5m for $12k a month?

[AAbsolute]

Could you rent your house on Coopersmith that you have for sale at $1.5m for $12k a month?

I would presume that real buyers today do what I do and put 20% as a down payment. With 20% down on 1.5 that house payment would be equal to the rental rate.

Have you seen what those homes are renting for in Watersound Beach? I'm not trying to be a smart a**, I'm serious.

[elgordoboy]

I would presume that real buyers today do what I do and put 20% as a down payment. With 20% down on 1.5 that house payment would be equal to the rental rate.

Have you seen what those homes are renting for in Watersound Beach? I'm not trying to be a smart a**, I'm serious.

No I have not, that is why I asked. Any links to where I can find out?

[AAbsolute]

No I have not, that is why I asked. Any links to where I can find out?

Vacation Rentals By Owner listing # 189244 is one of my homes peers. You can probably check out their rental rate for one example. My home at Coopersmith Lane has a strong gulf view and is pretty large as well.

I think 1.5 with 20% down would make for a payment of about $7950 per month. Maybe someone would do the short term rental plan during season and go winter rental too or use it for personal in the off season.

The one we did in West Beach is being actively rented by the Buyer and I really think it is cash flowing.

Thanks for asking.

So when, why and how did a homes value leave its rental capacity by so much and what were people thinking?

[Miss Critter]

So when, why and how did a homes value leave its rental capacity by so much and what were people thinking?

Flip in hours/days (sometimes pre-closing) for big $$$$$$$.

[30ashopper]

Vacation Rentals By Owner listing # 189244 is one of my homes peers. You can probably check out their rental rate for one example. My home at Coopersmith Lane has a strong gulf view and is pretty large as well.

I think 1.5 with 20% down would make for a payment of about $7950 per month. Maybe someone would do the short term rental plan during season and go winter rental too or use it for personal in the off season.

The one we did in West Beach is being actively rented by the Buyer and I really think it is cash flowing.

Thanks for asking.

So when, why and how did a homes value leave its rental capacity by so much and what were people thinking?

That's $95,000.00 a year in rental income. Your income assumptions are so completely out of whack it's frightning.

[30ashopper]

Vacation Rentals By Owner listing # 189244 is one of my homes peers. You can probably check out their rental rate for one example. My home at Coopersmith Lane has a strong gulf view and is pretty large as well.

I think 1.5 with 20% down would make for a payment of about $7950 per month. Maybe someone would do the short term rental plan during season and go winter rental too or use it for personal in the off season.

The one we did in West Beach is being actively rented by the Buyer and I really think it is cash flowing.

Thanks for asking.

So when, why and how did a homes value leave its rental capacity by so much and what were people thinking?

Just to be sure, did I misinterpret your post? Are you saying presumed income of 95K is reasonable?

[AAbsolute]

Just to be sure, did I misinterpret your post? Are you saying presumed income of 95K is reasonable?

I could see renting a house like mine or the other peer I pointed out in Watersound Beach for 5,8000/month from October through March. I try not to live in homes we build for sale and I rent a great house in Watercolor for 5,200/month.

I know VRBO's that get nearly booked complete during the Spring and Summer. If a person treats it like an important business with discipline and marketing I really think they could book a house in Watersound Beach nearly full. There are a lot of family things to do in Sowal and Watersound Beach has rare nature. Our beaches are never crowded and I don't think they ever will be. Either you come in through the gate or you walk 2 miles to get around them.

[AAbsolute]

Flip in hours/days (sometimes pre-closing) for big $$$$$$$.

There's a word for that, and I'm pretty sure in antiquity it was called one of the seven deadly sins.

[TheSheep]

I could see renting a house like mine or the other peer I pointed out in Watersound Beach for 5,8000/month from October through March. I try not to live in homes we build for sale and I rent a great house in Watercolor for 5,200/month.

I know VRBO's that get nearly booked complete during the Spring and Summer. If a person treats it like an important business with discipline and marketing I really think they could book a house in Watersound Beach nearly full. There are a lot of family things to do in Sowal and Watersound Beach has rare nature. Our beaches are never crowded and I don't think they ever will be. Either you come in through the gate or you walk 2 miles to get around them.

Like a business, well said. Like any business, the ability to think outside the box yet demand certain parameters in a transaction are key, essential especially over time. Or should I bleat, "Times like these".

Baaaaaaaaaaaad timez.

[30ashopper]

I could see renting a house like mine or the other peer I pointed out in Watersound Beach for 5,8000/month from October through March. I try not to live in homes we build for sale and I rent a great house in Watercolor for 5,200/month.

I know VRBO's that get nearly booked complete during the Spring and Summer. If a person treats it like an important business with discipline and marketing I really think they could book a house in Watersound Beach nearly full. There are a lot of family things to do in Sowal and Watersound Beach has rare nature. Our beaches are never crowded and I don't think they ever will be. Either you come in through the gate or you walk 2 miles to get around them.

Wow, I can't believe people have that kind of money to burn on rent.

[TheSheep]

Just to be sure, did I misinterpret your post? Are you (AAbsolute) saying presumed income of 95K is reasonable?

I believe we need to be careful with rental rate presumptions as they are, unlike housing, much more flatulent than housing prices. For instance, in my neck of the barnyard

you are less likely to see long term rentals, those annual rates have a tendoncey and ligamentcy to approach mortgage payments; demand is up but supply hasn't moved in parallel. For that matter new builds in the Bonita/Naples/Ft. Myers area, near beach, are relatively few. Older, (many refinanced) housing dominates.

In SoCal there are barnfuls more beach/at beach properties which allows for a much different market (I believe, locals chime in).

[elgordoboy]

I believe we need to be careful with rental rate presumptions as they are, unlike housing, much more flatulent than housing prices. For instance, in my neck of the barnyard

you are less likely to see long term rentals, those annual rates have a tendoncey and ligamentcy to approach mortgage payments; demand is up but supply hasn't moved in parallel. For that matter new builds in the Bonita/Naples/Ft. Myers area, near beach, are relatively few. Older, (many refinanced) housing dominates.

In SoCal there are barnfuls more beach/at beach properties which allows for a much different market (I believe, locals chime in).

I believe you have gotten your ovine self turned around and are talking/bleating out of the wrong end. Much of what you post always seems to be on the verge of being comprehensible.

[30ashopper]

I believe we need to be careful with rental rate presumptions as they are, unlike housing, much more flatulent than housing prices. For instance, in my neck of the barnyard

you are less likely to see long term rentals, those annual rates have a tendoncey and ligamentcy to approach mortgage payments; demand is up but supply hasn't moved in parallel. For that matter new builds in the Bonita/Naples/Ft. Myers area, near beach, are relatively few. Older, (many refinanced) housing dominates.

In SoCal there are barnfuls more beach/at beach properties which allows for a much different market (I believe, locals chime in).

I don't understand why folks would pay a rent check equal to a mortgage. Why would you rent and basically throw money away when you could be building equity?

[TheSheep]

I don't understand why folks would pay a rent check equal to a mortgage. Why would you rent and basically throw money away when you could be building equity?

In my case, fer instance, equity $$$ are better suited in other real estate investments where I value post-tax $$$ with greater ROIs. Others may not have stored their asspennies, lacking either the credit or cash or both to qualify for a present day mortgage. Developers abhor debt for it creates issues with thei Lenders. Equity building, not in today's market. There are a number of additional reasons, shirley you can come up with many on your own.

[AAbsolute]

Wow, I can't believe people have that kind of money to burn on rent.

Have you investigated Watersound Beach? I think if you really get to know the families that are visiting Watercolor and Watersound you'll become a believer. On its face it seems like a strange waste of funds, but there is something to taking a quality family vacation with friends and children that is not the hustle and bustle of a Disney World trip. I'm really starting to "get it" when I see these families and all their children about sunset living the life in a pedestrian friendly environment.

[AAbsolute]

St. Joe sold 2 lots in Watersound Beach Phase IV last week for $315,000 and $315,000. The last release on those lots in that block they sold the property immediately adjacent for $966,500.00. That was going direct from JOE to their customer with no flip, no spin.

Now that's what I call upside down.

[Miss Kitty]

St. Joe sold 2 lots in Watersound Beach Phase IV last week for $315,000 and $315,000. The last release on those lots in that block they sold the property immediately adjacent for $966,500.00. That was going direct from JOE to their customer with no flip, no spin.

Now that's what I call upside down.

That's what I call sensible.

[Little Fish]

AAbsolute:

Could you provide the address on these two lots? Were they on Salt Box Lane near the entrance of WS, or nearer the beach?

Thanks
Little Fish

[TheSheep]

St. Joe sold 2 lots in Watersound Beach Phase IV last week for $315,000 and $315,000. The last release on those lots in that block they sold the property immediately adjacent for $966,500.00. That was going direct from JOE to their customer with no flip, no spin.

Now that's what I call upside down.

Beautiful Stern development, highly overpriced as common to many, if not all, JOE developments. It's their long term financial model, early in suckers get beat up first at closing and second with land value depreciation.

[SHELLY]

St. Joe sold 2 lots in Watersound Beach Phase IV last week for $315,000 and $315,000. The last release on those lots in that block they sold the property immediately adjacent for $966,500.00. That was going direct from JOE to their customer with no flip, no spin.

What were the salespeople telling the $966K investulators?...wait--let me guess, "Now is a great time to buy!"


.

[AAbsolute]

AAbsolute:

Could you provide the address on these two lots? Were they on Salt Box Lane near the entrance of WS, or nearer the beach?

Thanks
Little Fish

Lot 21 and Lot 22 Watersound Beach Phase IV.

Directions: Go through the Watersound Beach main gate at the Post Office, Cafe, Fitness Center entrance. 3rd and 4th lots on your left. 3 lots North of the Yacht Pond.

[TheSheep]

What were the salespeople telling the $966K investulators?...wait--let me guess, "Now is a great time to buy!"
.

If they are honourable, the Truth. 1) You ROI will need serious adjusting to reflect a longer hold period (which will supress your PV/FVs) and 2) you got snaked by the Developer.

Then, if they were really wooly, 3) Any idiot who buys into a large development at or near Opening Day prices can expect a high probability that he will lose a great deal of value when the inevitable land pricing pendulum swings 4) You let pretty pictures, amenities which are overvalued, and your greed driven by your unbridled emotion to strip your common sense and fleece baaaaaaaaaadly your loosely held pocketbook.

[TheSheep]

Lot 21 and Lot 22 Watersound Beach Phase IV.

Directions: Go through the Watersound Beach main gate at the Post Office, Cafe, Fitness Center entrance. 3rd and 4th lots on your left. 3 lots North of the Yacht Pond.

If one wishes to live among Post Offices, cafes, "fitness centers" (why named? few are fit, or get fit, that go there?) bleat bleat bleat then one should be also willing to cry small tears only when they are rigorously crucified for buying into that scene in the first place.

Although there is no hiding from land valuation, market adjustments (back to reality), if one is willing to travel 5 miles instead of 500 feet to "get fit", mail the rare package or sup a cup, then they may find small enclaves with strict deed and other restrictions which they can exert greater control, quicker full lot sell-offs and some insulation from being, in this case, JOEed.

[AAbsolute]

Beautiful Stern development, highly overpriced as common to many, if not all, JOE developments. It's their long term financial model, early in suckers get beat up first at closing and second with land value depreciation.

It's probably bad for my health to agree with you Sheep, but I should say wasn't there an article in the Wall Street Journal or the New York times at the start of the downturn where a Watersound salesperson was quoted as saying that St. Joe has the financial wherewithal to support its existing customers by holding prices steady? I could build homes and deliver them below market rate for the rest of my days and not dessimate pricing like the developer just did.

I'm a Watersound Beach owner twice over and it's o.k. with me if JOE wants to reduce lot prices 300%, but the group who owns the lot next door are very much repeat customers and that can't be good when they have to renew their $982,000 lot loan.

[AAbsolute]

If they are honourable, the Truth. 1) You ROI will need serious adjusting to reflect a longer hold period (which will supress your PV/FVs) and 2) you got snaked by the Developer.

Then, if they were really wooly, 3) Any idiot who buys into a large development at or near Opening Day prices can expect a high probability that he will lose a great deal of value when the inevitable land pricing pendulum swings 4) You let pretty pictures, amenities which are overvalued, and your greed driven by your unbridled emotion to strip your common sense and fleece baaaaaaaaaadly your loosely held pocketbook.

Why didn't you stop while I was still agreeing with you? Those idiots who bought into Watersound Beach, Rosemary Beach, Watercolor on opening day did extremely well. It was just the crowd that followed them in later who are now upside down as much as $650,000 on their lot purchase alone.

Imagine that, folks who bought in at a rate where they could cash flow off rental are o.k.

[AAbsolute]

HOA meetings are in a month. Watch for quite a bit of misdirection of attention onto buckets full of RED HERRINGS.

[Little Fish]

AAbsolute:

Thanks for the info. Looks to me like these two lots were owned by St. Joe. Do you know if these were inventory lots that were finally released?

Also, I agree with your comment regarding lot loan renewals. I suspect some lot owners will run into difficulties with comps when it comes to renewing loans. Banks aren't offering the same types of products they did a few years ago. 3 yr. IO lot loans are harder to find. Banks now want aggressive amortization.

Little Fish

[fisher]

AAbsolute:

Thanks for the info. Looks to me like these two lots were owned by St. Joe. Do you know if these were inventory lots that were finally released?

Also, I agree with your comment regarding lot loan renewals. I suspect some lot owners will run into difficulties with comps when it comes to renewing loans. Banks aren't offering the same types of products they did a few years ago. 3 yr. IO lot loans are harder to find. Banks now want aggressive amortization.

Little Fish

Joe has been slowly working off remaining lot inventory (not talking about Phase IV in WC and WS West Beach) over the last few years in Watersound and Watercolor. The interesting thing I have noted on many of these occasional sales is that the prices folks are paying to Joe are actually higher than where some similar/nearby resale lots are listed for and much higher than recent sales prices in some cases. I don't get it. Maybe these buyers are relying only on the Joe sales agents to show them property and not doing any real research on their own. Throwing money down the drain in most of these cases--could have had just as nice a property for less money.

[Little Fish]

Fisher:

I've noted the same regarding Joe lots selling at prices higher than close comparables. One reason why some buyers might pay higher prices could have everything to do with longer build-out dates relative to current listings.

Little Fish

[Miss Critter]

Fisher:

I've noted the same regarding Joe lots selling at prices higher than close comparables. One reason why some buyers might pay higher prices could have everything to do with longer build-out dates relative to current listings.

Little Fish

I thought the consensus on a related thread is that it would be very difficult for those could be enforced.

[SHELLY]

Joe has been slowly working off remaining lot inventory (not talking about Phase IV in WC and WS West Beach) over the last few years in Watersound and Watercolor. The interesting thing I have noted on many of these occasional sales is that the prices folks are paying to Joe are actually higher than where some similar/nearby resale lots are listed for and much higher than recent sales prices in some cases. I don't get it. Maybe these buyers are relying only on the Joe sales agents to show them property and not doing any real research on their own. Throwing money down the drain in most of these cases--could have had just as nice a property for less money.

...proof positive that the "Greater Fool" isn't an extinct species afterall.


.

[Little Fish]

MissCritter:

Yes, I am also of the opinion that it would be difficult to enforce the build-outs; however, it's still a risk and Joe probably knows they can charge extra for that risk. I wouldn't pay the premium, but I guess others have.

Little Fish

[TheSheep]

It's probably bad for my health to agree with you Sheep,

but I should say wasn't there an article in the Wall Street Journal or the New York times at the start of the downturn where a Watersound salesperson was quoted as saying that St. Joe has the financial wherewithal to support its existing customers by holding prices steady? I could build homes and deliver them below market rate for the rest of my days and not dessimate pricing like the developer just did.

I am uncertain what financial capacity JOE actually has as so much of the value of the company is in real estate, in the ability of JOE to fully transition from manufacturing/agri and bleat bleat bleat. Regardless, how JOE uses that capacity, or lack thereof, is proved in their pudding. Which you have kindly and publicly notified us.

I'm a Watersound Beach owner twice over and it's o.k. with me if JOE wants to reduce lot prices 300%, but the group who owns the lot next door are very much repeat customers and that can't be good when they have to renew their $982,000 lot loan.

I would expect that they will need to insert cash in a big way unless they are very financially stable. Banks are calling in loans for cash infusions, at least down here even with long standing customers with financial wherewithal.

I would ask what this lot lowering does to your rent=mortgage valuations. It would seem to favor the Lessee and, in turn, the Lessor of a newly built property on the less expensive lots. Overall, the rental mkt should take a downturn in rent prices, I would think, hurting those who are "in" at the higher land costs. Eh?

[TheSheep]

Why didn't you stop while I was still agreeing with you?

I didn't hear you screech.

Those idiots who bought into Watersound Beach, Rosemary Beach, Watercolor on opening day did extremely well. It was just the crowd that followed them in later who are now upside down as much as $650,000 on their lot purchase alone.

Imagine that, folks who bought in at a rate where they could cash flow off rental are o.k.

Poor choice of words, let me rephrase, the Opening Bells of 2005 +/-. True, many times the first pigs in the barn, and the stragglers, avoig the slaughter and the BBQ pit.

[AAbsolute]

AAbsolute:

Thanks for the info. Looks to me like these two lots were owned by St. Joe. Do you know if these were inventory lots that were finally released?

Also, I agree with your comment regarding lot loan renewals. I suspect some lot owners will run into difficulties with comps when it comes to renewing loans. Banks aren't offering the same types of products they did a few years ago. 3 yr. IO lot loans are harder to find. Banks now want aggressive amortization.

Little Fish

This is not an assumption, it's a fact. People who bought a lot for 950,000 from JOE in '05 next to a lot sold by JOE in '08 for 1/3 the price are going to have to bring hundreds of thousands of dollars to their loan renewals or post other personal property equal to hundreds of thousands of dollars which will be locked down as security.

I know there are about 20 vacant lots JOE sold in '05 adjacent to these new sales that are in this boat. I don't blame JOE. It is the problem of those who paid $950,000. I doubt anyone at JOE ever really guaranteed these folks anything. Such is life.

[AAbsolute]

Fisher:

I've noted the same regarding Joe lots selling at prices higher than close comparables. One reason why some buyers might pay higher prices could have everything to do with longer build-out dates relative to current listings.

Little Fish

Sorry Little Fish, but I can't agree this time. Everything JOE sold around these lots in the past was way more expensive (About $670,000 more = 200%). Further, if you check out JOE's own resale customers lists you will find that they even undercut them to sell these new lots.

I know it sounds cruel, but you can't blame them. They have property to sell and competitive advantage. They'll continue to pummel the competition for at least 4 more years.

[hillsatthebeach]

At least in my buyers case the main motivations for purchasing one of those lots for $315k were size, build out, free beach club membership and 2 years dues paid. The beach club and the build outs are still a major part of the buying process in WaterSound right now and because we are dealing with mostly end users they are not willing to take the chance that St Joe may or may not enforce build outs and may or may not allow access to the club at some point. I wish the beach club wasn't such an issue right now because it it hurting a lot of my sellers being able to sell if they don't have the beach club but Joe doesn't seem to be budging when it comes to this issue. I have been on both side of this equation and I can understand both sides so it will be interesting to see how it all plays out.

[AAbsolute]

MissCritter:

Yes, I am also of the opinion that it would be difficult to enforce the build-outs; however, it's still a risk and Joe probably knows they can charge extra for that risk. I wouldn't pay the premium, but I guess others have.

Little Fish

Look a little deeper into the HUD 1's and you'll see that there are quite a number of incentives that JOE has been offering that make the public record look different than it really is. It's not just build out's. When a developer gives extended relief on costs that are fixed for existing owners some might consider it cash back at closing.

I should add that I didn't finish conventional high school and I may be looking at this a little to rudimentary.

[AAbsolute]

At least in my buyers case the main motivations for purchasing one of those lots for $315k were size, build out, free beach club membership and 2 years dues paid. The beach club and the build outs are still a major part of the buying process in WaterSound right now and because we are dealing with mostly end users they are not willing to take the chance that St Joe may or may not enforce build outs and may or may not allow access to the club at some point. I wish the beach club wasn't such an issue right now because it it hurting a lot of my sellers being able to sell if they don't have the beach club but Joe doesn't seem to be budging when it comes to this issue. I have been on both side of this equation and I can understand both sides so it will be interesting to see how it all plays out.

Hills, You were there in '05 when I used to boom up potential buyers for JOE with my bucket truck so they could assess their views before entering the lottery. What did JOE promise or guarantee these folks in Phase IV who were lined up to buy lots at 980,000 to 1,032,000 right next to these for 315,000? People want to know....

[AAbsolute]

[quote=TheSheep;461816]I am uncertain what financial capacity JOE actually has as so much of the value of the company is in real estate, in the ability of JOE to fully transition from manufacturing/agri and bleat bleat bleat. Regardless, how JOE uses that capacity, or lack thereof, is proved in their pudding.

Did you read JOE's most recent quarterly report? It seems they have completely eliminated all debt from their books. I'd say that put's them in a pretty strong position to continue to crush all other developers in this region.

I would ask what this lot lowering does to your rent=mortgage valuations. It would seem to favor the Lessee and, in turn, the Lessor of a newly built property on the less expensive lots.

I was fortunate in that for some reason I got my lot at $300,000 less than the original price set by JOE. I'd say that I share in some of their advantage. Like I said before, I'm scared to death to buy property for more than its rental capacity.

[fisher]

Fisher:

I've noted the same regarding Joe lots selling at prices higher than close comparables. One reason why some buyers might pay higher prices could have everything to do with longer build-out dates relative to current listings.

Little Fish

Could be that the Joe agents are feeding buyers that line. However, I don't think the build out dates will ever, ever be enforced in WC or WS.

[AAbsolute]

I thought the consensus on a related thread is that it would be very difficult for those could be enforced.

I thought we were talking about Watercolor in the previous thread. Maybe in Watersound it is not to late for the developer to uniformly enforce the build out Memorandums which might give them a better chance at law.

Until now you would have to be lucky like say, FlyForFun, in order to have JOE force you on the issue. Very few others have been faced with the prospect.

[TheSheep]

This is not an assumption, it's a fact. People who bought a lot for 950,000 from JOE in '05 next to a lot sold by JOE in '08 for 1/3 the price are going to have to bring hundreds of thousands of dollars to their loan renewals or post other personal property equal to hundreds of thousands of dollars which will be locked down as security.

I know there are about 20 vacant lots JOE sold in '05 adjacent to these new sales that are in this boat. I don't blame JOE. It is the problem of those who paid $950,000. I doubt anyone at JOE ever really guaranteed these folks anything. Such is life.

Don't blame JOE? Caveat Emptor? Is it not a lie to withhold historical fact? What answers were given when lot buyers asked "Will JOE ever become our competitor, the root of a severe devaluation of our land?

There is larceny in the hearts on both sides of the buy-sell equation with JOE. One ignobleness in which we refuse to partake so I can bleat with no hypocrisy attached.

[TheSheep]

[quote=AAbsolute;461910]

I am uncertain what financial capacity JOE actually has as so much of the value of the company is in real estate, in the ability of JOE to fully transition from manufacturing/agri and bleat bleat bleat. Regardless, how JOE uses that capacity, or lack thereof, is proved in their pudding.

Did you read JOE's most recent quarterly report? It seems they have completely eliminated all debt from their books. I'd say that put's them in a pretty strong position to continue to crush all other developers in this region.

The elimination of debt does not make JOE a cash rich company. If they did not require cash, then why drop prices to generate cash flow when the end result is the downgrading of their owned assets.

I would ask what this lot lowering does to your rent=mortgage valuations. It would seem to favor the Lessee and, in turn, the Lessor of a newly built property on the less expensive lots.

I was fortunate in that for some reason I got my lot at $300,000 less than the original price set by JOE. I'd say that I share in some of their advantage. Like I said before, I'm scared to death to buy property for more than its rental capacity.

If you are not a land banker, indeed you should be.

[SHELLY]

Did you read JOE's most recent quarterly report? It seems they have completely eliminated all debt from their books. I'd say that put's them in a pretty strong position to continue to crush all other developers in this region.

Today the CNBC Market Bozo (aka Cramer) had this to say about JOE:

St. Joe [JOE 37.23 -0.04 (-0.11%) ]: The largest individual private landowner in Florida is heavily exposed to what Cramer said would be one of the last real estate markets to recover. For that reason, he said this stock probably won’t be worth buying for three to five years.

[TheSheep]

Today the CNBC Market Bozo (aka Cramer) had this to say about JOE:

St. Joe [JOE 37.23 -0.04 (-0.11%) ]: The largest individual private landowner in Florida is heavily exposed to what Cramer said would be one of the last real estate markets to recover. For that reason, he said this stock probably won’t be worth buying for three to five years.

Anyone who pushes out prognostications 36 to 60 months is a fool looking for fool's to report their foolish prognostications. If the shoe fits......