Reading threads a few years back you see very few people with the courage to voice pessimistic views of the real estate outlook in South Walton. They received scathing responses. Today these people look like oracles. I applaud the dissidents who through careful analysis of the market, not hope or any other irrationality, knew it was and still is falling substantially.
Real estate as an asset class doesn?t turn around in 1-2 years as so many people on these boards purport. Cycles typically run 8-10 years or more. For the next 2 years you will see prices decline as much as 50% off current levels, then flat or gains of 1-3% over the next decade (factoring inflation you will have net losses).
Look at the current institutional community. The last 10 years saw a very large runup of investment allocated to R.E., today you can?t find a CIO who isn?t quickly reducing exposure to R.E. and reallocating into different asset class such as fixed income, private equity or traditionals.
You ask, what does the institutional community have to do with me Joe Citizen? If you study the market over long periods, let?s say 30 years, the residential market trails the institutions by 12 ? 18 months and follows the trend line quite remarkably.
Analyzing macroeconomic factors such as defaults in subprimes and now Alt-a?s looming, plus microeconomic factors such as higher insurance, taxes, etc?you see significant losses and erosion of value in real estate over the next 5 to 10 years. Bernanke will try to stave off the hemorrhaging real estate market with adjustments to the money supply but the bubble will burst and burst louder than tech in 2000.
We have had a second home in 30-a since the early 80?s and have heard varying degree?s of commentary on the market but nothing like the current optimistic dogma being spewed today. The reason I posted is to address those giving investment advice to home owners like ?hold on? and ?weather the storm.? You are doing a great disservice to the average home owner (Unless they are prepared to hold on for 10 years).
For those of you that disagree, let?s revisit this post at the end of ?07, ?08 and ?09. The data will speak for itself.
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234
SoWal Insider
It would great if ALL sellers could sit for months and months and hold firm but most of the time, you will have some sellers that NEED or HAVE to sell but you will almost never have buyers that NEED or HAVE to buy.
...then there is the "level-headed actual investor" (seller) who is smart enough to realize it may be good time to take their profits off the table and enjoy them or move on to something else.
/
Beach Fanatic
b2fabian, you are missing two important points:
1. All sellers are not the same (with regard to want/need/don't need to sell)
2. Sellers do not dictate selling price by themselves - there is only a selling price established when a buyer agrees to buy.
It would great if ALL sellers could sit for months and months and hold firm but most of the time, you will have some sellers that NEED or HAVE to sell but you will almost never have buyers that NEED or HAVE to buy.
:clap_1:
Beach Fanatic
Please someone in the know please post the APPROVED development orders for both large and small parcels in South walton and the land use changes that allow 8 or 10 per acre(infill). I just would love to know just how many lots there are waiting in the wings...My guess is 10,000 give or take a few. Add those to your inventory already on the market and then ask what does that pressure put on declining prices? While I agree the government does not regulate sales they are doing there best to establish a bottom price in Freeport and indirectly are regulating a lack of sales due to increased taxes.
SoWal Insider
Did I just Hear you say the bottom was hit. and what happened?
March happened...existing homes sales figures just released this morning.
.
Beach Lover
I agree with Shelly regarding supply and demand.
When we first moved her over 10 years ago the most sought after prime property on 30A was either on the beach or in walking distance (within 1/4 mile) to a beach access. It is only in the ?bubble years? that land further from the beach was worth developing -or so developers thought.
Now we seem to be ?returning to the basics? for 30A property.
I am curious about the current supply of what was originally (in the good ole days) thought of as the prime 30A property.
Based on my ?long? experiences here with storms and insurance I would add other important criteria.
This ?prime property? would also have to be at least approximately 30 ft. above sea level and also qualify for Federal Flood insurance at the minimal cost of about $300.
And if considering a house it would have to built to 2001(or newer) Florida Building Code Compliance (needed for 34% insurance discount) with a hip roof (needed for 15 % insurance discount) and window door protection ( up to 20% insurance discount).
What is the 30A supply of property that meets this "updated good ole days? prime property definition?
When we first moved her over 10 years ago the most sought after prime property on 30A was either on the beach or in walking distance (within 1/4 mile) to a beach access. It is only in the ?bubble years? that land further from the beach was worth developing -or so developers thought.
Now we seem to be ?returning to the basics? for 30A property.
I am curious about the current supply of what was originally (in the good ole days) thought of as the prime 30A property.
Based on my ?long? experiences here with storms and insurance I would add other important criteria.
This ?prime property? would also have to be at least approximately 30 ft. above sea level and also qualify for Federal Flood insurance at the minimal cost of about $300.
And if considering a house it would have to built to 2001(or newer) Florida Building Code Compliance (needed for 34% insurance discount) with a hip roof (needed for 15 % insurance discount) and window door protection ( up to 20% insurance discount).
What is the 30A supply of property that meets this "updated good ole days? prime property definition?
Beach Fanatic
While everyone's blabbing their best supply and demand definition, did anyone notice that for the last 4 consecutive months that Single Family Sales in Walton County rose..........? Congrats to all the agents out there that are closin' em...Red
Edited
SoWal Expert
Redfisher, according to my numbers that is not correct, but it is close. I will say that my data was compiled on April 01, and it is possible that numbers for Feb have changed slightly as agents may have entered the Feb closed sales very late.
According to the numbers I ran, in Feb, the sales dropped from Jan, but in Mar, the number more than doubled Feb's sales of Single Family Detached (homes), with Mar having 54 closings
My numbers show:
Dec '06 -- 32 closed
Jan '07 -- 37
Feb -- 26
Mar -- 54
However, Condo sales have increased over each month for the last four months with sales being:
Dec '06 - 14
Jan '07 - 30
Feb - 47
Mar - 121
According to the numbers I ran, in Feb, the sales dropped from Jan, but in Mar, the number more than doubled Feb's sales of Single Family Detached (homes), with Mar having 54 closings
My numbers show:
Dec '06 -- 32 closed
Jan '07 -- 37
Feb -- 26
Mar -- 54
However, Condo sales have increased over each month for the last four months with sales being:
Dec '06 - 14
Jan '07 - 30
Feb - 47
Mar - 121
Beach Fanatic
Redfisher, according to my numbers that is not correct, but it is close. I will say that my data was compiled on April 01, and it is possible that numbers for Feb have changed slightly as agents may have entered the Feb closed sales very late.
According to the numbers I ran, in Feb, the sales dropped from Jan, but in Mar, the number more than doubled Feb's sales of Single Family Detached (homes), with Mar having 54 closings
My numbers show:
Dec '06 -- 32 closed
Jan '07 -- 37
Feb -- 26
Mar -- 54
However, Condo sales have increased over each month for the last four months with sales being:
Dec '06 - 14
Jan '07 - 30
Feb - 47
Mar - 121
SJ,
I believe Mar-121 was Aerial Dunes closing? Correct?
Beach Fanatic
While everyone's blabbing their best supply and demand definition, did anyone notice that for the last 4 consecutive months that Single Family Sales in Walton County rose..........? Congrats to all the agents out there that are closin' em...Red
This is really great news but I will be real stoked when I see 4 months of sales dominating "new" inventory.
SoWal Expert
SJ,Correct. They had a few sales in Feb, too, if I correctly recall, but yes, the majority of the closing were due to the completion of Aerial Dunes, not just an uptrend in the market.
I believe Mar-121 was Aerial Dunes closing? Correct?
Beach Fanatic
I don't know Joe, I'm not a r/e agent...I'm just looking at Metro Mkt #'s in Sat. Walton Sun...Looks like a rise for 4 months in total SFH's to me...But I'll take 3 out of 4 if your right...Red
P.S... I'm like Rutger, I really "admire" the naysayers too, I just think they're wrong...
P.S... I'm like Rutger, I really "admire" the naysayers too, I just think they're wrong...
Edited
SoWal Expert
I don't know Joe, I'm just looking at Metro Mkt #'s in Sat. Walton Sun...Looks like a rise for 4 months in total SFH's to me...Red
Well that would answer question of difference in numbers. I haven't seen Market Trends numbers. I am using the reported sales in the Emerald Coast Association of Realtors database, which, by the way, doesn't account for ForSaleByOwners, unless a Realtor was involved in the transaction. I believe Market Trends use the sales recorded in the Clerk of Courts. Out of curiosity, what is the total number of sales shown for Feb in MMTrends? Or, are you just looking at the graph?
Beach Fanatic
...then there is the "level-headed actual investor" (seller) who is smart enough to realize it may be good time to take their profits off the table and enjoy them or move on to something else.
/
Shelly, are you trying to get me to like you or something? :roll: Wow...a Shelly statement I can agree with! :clap_1:
Beach Fanatic
I agree with Shelly regarding supply and demand.
When we first moved her over 10 years ago the most sought after prime property on 30A was either on the beach or in walking distance (within 1/4 mile) to a beach access. It is only in the ?bubble years? that land further from the beach was worth developing -or so developers thought.
Now we seem to be ?returning to the basics? for 30A property.
I am curious about the current supply of what was originally (in the good ole days) thought of as the prime 30A property.
Based on my ?long? experiences here with storms and insurance I would add other important criteria.
This ?prime property? would also have to be at least approximately 30 ft. above sea level and also qualify for Federal Flood insurance at the minimal cost of about $300.
And if considering a house it would have to built to 2001(or newer) Florida Building Code Compliance (needed for 34% insurance discount) with a hip roof (needed for 15 % insurance discount) and window door protection ( up to 20% insurance discount).
What is the 30A supply of property that meets this "updated good ole days? prime property definition?
You are missing one critical factor that new buyers need to be familiar with, and that is who constructed the home you are interested in purchasing. If your primary residence is out of state, you can't yell across the fence to ask who is best or worst in the construction business. Well myflorida.com has the answer.
You can type in Myflorida.com, or go directly to this link at https://www.myfloridalicense.com . Lots of ways to skate around the Walton County building codes and you need to find out who has a reputation of attempting to do it. Always check this site regardless if you are buying or building a home in Florida. If its a condo, find out as much as you can about the contractors and or developers. Being an informed consumer and using this site correctly will more than likely save yourself some headaches and money.
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