Is the Real Estate Market Changing? Good Question. From my daily observation, I noticed from about Feb thru May, I was seeing about 70 new listings each day in Walton Co. This wasn't an average number, but I was litterally seeing about 68-75 new listings everyday. (interesting how the number was so close each day) Much inventory built up. Some properties had listing agreements extended, some people allowed their listings to expire. The net number of properties continued to rise.
Since the beginning of June, I have noticed the number of daily new listings has decreased to about 50 per day. Talking with many Realtors, I understand that most of them are now getting more serious about their listings. They are not accepting any price from the seller. They realize that these overpriced listings are costing the agents money in advertising, when they know they won't sell. I think we are beginning to see some changes of the inventory, in part, due to the listing agents.
I talk to many sellers who tell me that they do not have to sell and are not flexible on price. Some of these "sellers" are receiving low ball offers and they call them "insulting." (I call it an offer.) Bottom line is that the majority of listings are are attached to unmotivated sellers. They just put up a sign and don't see themselves as doing any harm to the R.E. Market in the area.
I think in the immediate future, we will see more Realtors getting closer to realistic prices on listings. In the past, Realtors could put ridiculus, unjustified prices on a listing, and it would sell. The buyers have caused this crazy market, not the sellers nor the Realtors. Today, Realtors must educate their sellers on this market and the basics of Economics 101. I think we will see many of the over-priced listings expire in the future, and not get picked up by another agent, unless it is at a realistic listing price.
In my opinion, at least 85% of today's listings are overpriced. If these listings belong to unmotivated sellers, and they pull them off the market, inventory would decrease so much that we would see sales, and the market will be set. Imagine if the 2500 ish lots for sale in Walton Co decreased to the realistically priced listings totalling only about 375 in number. :scratch: Right now, no buyers seem to know what price is real. Illiminate the unmotivated sellers, and you will see the real price for properties.
Just my $.02 😀
Feed back???
Smiling JOeSmiling JOeSoWal Expert31,643 postsJoined View profileMessageSoWal Expert
Smiling JOeSoWal Expert31,643 postsJoined View profileMessageSoWal Expert5,393 views
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aquaticbiologyaquaticbiologyfishlipsredneck heaven799 postsJoined View profileMessagefishlips
aquaticbiologyfishlipsredneck heaven799 postsJoined View profileMessagefishlipsthat's what happens when overbuilding occurs!
economics 101 - demand is dynamic, supply is not
but its really all about perception
everybody wanted a piece of the action and they built little drivit boxes to sell at the highest price possible - location, location, location! view, view, view!
the newest solution - convince the buyers that the supply is dynamic, a.k.a. pre-construction sales on a vacant lot with nary a brick laid..., then stop the build and say the supply is drying up!
economics 101 - demand is dynamic, supply is not
but its really all about perception
everybody wanted a piece of the action and they built little drivit boxes to sell at the highest price possible - location, location, location! view, view, view!
the newest solution - convince the buyers that the supply is dynamic, a.k.a. pre-construction sales on a vacant lot with nary a brick laid..., then stop the build and say the supply is drying up!
dsilvardsilvarBeach FanaticMiramar beach307 postsJoined View profileMessageBeach Fanatic
dsilvarBeach FanaticMiramar beach307 postsJoined View profileMessageBeach FanaticAnother well spoken dissertation SJ..market mechanics will always rule! Just a matter of time before we reach homeostasis in the realestate market.
Its upwards from there.
Its upwards from there.
KurtKurtAdminSoWal2,471 postsJoined View profileMessageAdmin
KurtAdminSoWal2,471 postsJoined View profileMessageAdminI've been hearing similar things from other realtors this year.
Over the last 10 years or so I've heard many instances of an investor buying a property and putting it right back on the market for a "ridiculous" price at a 50-100% increase, and just waiting until the market caught up. The wait varied from a year or more, to hours in some cases after 2000. Sometimes the market caught up and it still didn't sell so they raised prices again and sometimes again, but eventually the property would sell.
Apparently there are still many sellers here who are willing to wait awhile before getting the price they want. Some will adjust down to speed the process but I doubt many will remove their properties from the market, with the mentality of, "you can't catch a fish if your hook isn't in the water". And some will simply have to sell.
Over the last 10 years or so I've heard many instances of an investor buying a property and putting it right back on the market for a "ridiculous" price at a 50-100% increase, and just waiting until the market caught up. The wait varied from a year or more, to hours in some cases after 2000. Sometimes the market caught up and it still didn't sell so they raised prices again and sometimes again, but eventually the property would sell.
Apparently there are still many sellers here who are willing to wait awhile before getting the price they want. Some will adjust down to speed the process but I doubt many will remove their properties from the market, with the mentality of, "you can't catch a fish if your hook isn't in the water". And some will simply have to sell.
redfisherredfisherBeach Fanatic374 postsJoined View profileMessageBeach Fanatic
redfisherBeach Fanatic374 postsJoined View profileMessageBeach FanaticI'm a little surprised its taken realtors so long to realize that "unmotivated" sellers are just wasting their time...Now that being said, this is part of the process...Motivated sellers and realtors setting reasonable expectations are exactly what's necessary to set a floor on comps and give buyers an idea where parity is...The sooner you get these junk listings out of the way, the quicker you find buyers and sellers ready to do some business
pgurneypgurneyBeach FanaticATL & Seacrest586 postsJoined View profileMessageBeach Fanatic
pgurneyBeach FanaticATL & Seacrest586 postsJoined View profileMessageBeach FanaticSomebody asked me the other day, "Do you think $xxx,xxx is a good value for this property?" I responded that I didn't know and I didn't think that anyone knows right now. I wouldn't be a buyer in this market for that exact reason and it may be why there are few buyers right now. I've also heard recently about realtors refusing listings that they think are overpriced. I'm happy to hear it's happening because it's what I think will bring the end-users back to the market. Hopefully, the speculators will stay away (at least en masse).
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Apparently there are still many sellers here who are willing to wait awhile before getting the price they want. Some will adjust down to speed the process but I doubt many will remove their properties from the market, with the mentality of, "you can't catch a fish if your hook isn't in the water". And some will simply have to sell.
If agents do not accept the listings at the elevated prices, they will have to find another way -For Sale By Owner.
I have a lot listed right now priced at $159K. The adjacent lot, similar in most every way is For Sale by Owner - $325K. Go figure. Price for FSBO is marked on sign and mine is on a flyer sheet at property. Spoke with the seller of the FSBO the other day and he said he didn't have to sell. My question is, "what the heck is he thinking?" I spoke at length with him about his overpriced properties, another which is just down the street. I still don't think he gets it.
redfisherredfisherBeach Fanatic374 postsJoined View profileMessageBeach Fanatic
redfisherBeach Fanatic374 postsJoined View profileMessageBeach FanaticI think they do it to make themselves feel better about inaction... As if they're taking some sort of action (not just sittin around on their hands) when in reality they're are doing more harm than good...
goofergooferBeach Fanatic1,165 postsJoined View profileMessageBeach Fanatic
gooferBeach Fanatic1,165 postsJoined View profileMessageBeach FanaticI think we really began to see this process start with st. joe's pricing of watersound north. they have priced it very realistically and this should create actual sales which will guage what the market values truly are. i agree that realtors need to filter out the unrealistic sellers so that the market reflects the true picture.
DBOldfordDBOldfordBeach FanaticNapa Valley, CA990 postsJoined View profileMessageBeach Fanatic
From my limited knowledge of real estate dynamics and as a property owner, I agree with the points on this post. The overpriced properties languish on the market and have to be confusing to potential buyers. As long as there is this much inventory on the market and so few potential buyers, there will not be an upswing in activity. Everyone is waiting to see where the ball will bounce from. As I have said before, I think what this market needs is a summer without so many storms as last year, a culling-out of the P.T. Barnum listings, and a resulting more reliable basis for credible appraisal. Just because many of these properties are cash sales does not mean that savvy buyers are not looking at appraised value.
Pigs get fat...hogs get slaughtered. :bang:
Pigs get fat...hogs get slaughtered. :bang:
SHELLYSHELLYSoWal Insider5,763 postsJoined View profileMessageSoWal Insider
SHELLYSoWal Insider5,763 postsJoined View profileMessageSoWal InsiderAs I see it (no surprises here):
(1) Sellers proclaim in their ads how their properties are listed at "below market price"...I say "market price" of a house or property that no one wants to buy is $0
(2) There is not a property inventory glut...there is an overpriced property inventory glut
(3) Five Emotional Stages of Housing Boom and Bust: Euphoria, Doubt, Denial, Disillusion, Realism. Judging from the increase in inventory and "last year's" asking prices, I say we're swinging back and forth from Doubt to Denial at this point. There's still a while for this thing to play out.
(4) In the past, RE markets were regional--this time it IS different with almost every major city in the nation caught up in the RE boom. This means that folks in LA can't unload their ranch house to buy a McMansion in NJ; old folks in NJ can't unload their McMansion to buy a beach condo in Florida, and folks in Atlanta who tapped out their home's equity to buy pre-construction condos they were hoping to flip are finding they may have to walk away from a $30,000 deposit because they can't find someone (the folks from NJ?) to buy the beach condo.
(5) Investulators were THE key players in Florida's RE Boom--if you take them out of the equation, who is going to buy? Many people who "invested" in property in the first place were hoping to get a 15% y-o-y return on their investment. Now they can see that's not going to happen anymore--in fact the best case scenario is that the value will "plateau" for years to come or possibly crank out single-digit returns close to inflation. Subtract carrying costs and 6% sales commission and the "investment" is a loser--far too much risk for buyers of any ilk to jump in at this point so all are staying away.
(6) High insurance and taxes, and low wages in Florida are deal breakers. Ditto for an active hurricane season.
(7) This is only the beginning...unwinding this mess will take years, not months.
(1) Sellers proclaim in their ads how their properties are listed at "below market price"...I say "market price" of a house or property that no one wants to buy is $0
(2) There is not a property inventory glut...there is an overpriced property inventory glut
(3) Five Emotional Stages of Housing Boom and Bust: Euphoria, Doubt, Denial, Disillusion, Realism. Judging from the increase in inventory and "last year's" asking prices, I say we're swinging back and forth from Doubt to Denial at this point. There's still a while for this thing to play out.
(4) In the past, RE markets were regional--this time it IS different with almost every major city in the nation caught up in the RE boom. This means that folks in LA can't unload their ranch house to buy a McMansion in NJ; old folks in NJ can't unload their McMansion to buy a beach condo in Florida, and folks in Atlanta who tapped out their home's equity to buy pre-construction condos they were hoping to flip are finding they may have to walk away from a $30,000 deposit because they can't find someone (the folks from NJ?) to buy the beach condo.
(5) Investulators were THE key players in Florida's RE Boom--if you take them out of the equation, who is going to buy? Many people who "invested" in property in the first place were hoping to get a 15% y-o-y return on their investment. Now they can see that's not going to happen anymore--in fact the best case scenario is that the value will "plateau" for years to come or possibly crank out single-digit returns close to inflation. Subtract carrying costs and 6% sales commission and the "investment" is a loser--far too much risk for buyers of any ilk to jump in at this point so all are staying away.
(6) High insurance and taxes, and low wages in Florida are deal breakers. Ditto for an active hurricane season.
(7) This is only the beginning...unwinding this mess will take years, not months.
KurtKurtAdminSoWal2,471 postsJoined View profileMessageAdmin
KurtAdminSoWal2,471 postsJoined View profileMessageAdminIf agents do not accept the listings at the elevated prices, they will have to find another way -For Sale By Owner.
I have a lot listed right now priced at $159K. The adjacent lot, similar in most every way is For Sale by Owner - $325K. Go figure. Price for FSBO is marked on sign and mine is on a flyer sheet at property. Spoke with the seller of the FSBO the other day and he said he didn't have to sell. My question is, "what the heck is he thinking?" I spoke at length with him about his overpriced properties, another which is just down the street. I still don't think he gets it.
There are always realtors willing to take listings at whatever price the seller requests.
SHELLYSHELLYSoWal Insider5,763 postsJoined View profileMessageSoWal Insider
SHELLYSoWal Insider5,763 postsJoined View profileMessageSoWal InsiderIf agents do not accept the listings at the elevated prices, they will have to find another way -For Sale By Owner.
In light of the changing RE markets, an article in Saturday's WSJ addresses the old "traditional vs. discount broker" war:
"With house prices surging in recent years, a number of people are seeking ways to cut commission costs, which are based on a percentage of a home's selling price. More home buyers are turning to discount brokers that offer to rebate a portion of the commission if you are willing to do much of the work in finding a home. And sellers are hiring discounters who, for a flat fee of a few hundred dollars, will include your home in a multiple-listing service, a database on houses for sale used by agents.
About 11% of home sellers last year used "alternative" brokers (ones offering flat fees or other forms of discounting), up from less than 2% in 2002, according to surveys by Real Trends, a publishing and consulting firm.
The competition from discounters has prompted some traditional brokers to use a variety of tactics to fight back, and this can end up hurting consumers. The controversy will get a public airing Monday (June 19) when the Consumer Federation of America, a nonprofit research and advocacy group, releases a report on "how the real estate brokerage industry functions as a price-setting cartel."
As I see it (no surprises here):Shelly, you are close, but not quite on target. Market price is the price a buyer is willing to pay for a particular property. Even for a property which no one wants, if offered at the right price, the property changes in appeal to buyers who would otherwise not be interested. Therefore, the market price is not $zero, but somewhere between zero and asking price. ;-)
(1) Sellers proclaim in their ads how their properties are listed at "below market price"...I say "market price" of a house or property that no one wants to buy is $0
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redfisherredfisherBeach Fanatic374 postsJoined View profileMessageBeach Fanatic
redfisherBeach Fanatic374 postsJoined View profileMessageBeach FanaticOnce again Shelly's points are knee jerk, knuckleheaded overreactions to get a reaction...Mmm, which point to dispel first...
SHELLYSHELLYSoWal Insider5,763 postsJoined View profileMessageSoWal Insider
SHELLYSoWal Insider5,763 postsJoined View profileMessageSoWal InsiderTherefore, the market price is not $zero, but somewhere between zero and asking price. ;-)
OK, I'll give you partial credit... but the market price can be between $0 and the "selling" price.
But there is no "market" price for THAT PROPERTY until the $$$ transfer from buyer to seller. Therefore the "asking" price is simply that.
(If I put a For Sale sign on my '65 Rambler and "ask" $50,000, that does not make the market price $50,000.)
My biggest fan Redfisher can probably quote my "melting snowflake in your hand" market price analogy if you ask nice. 😀
OK, I'll give you partial credit... but the market price can be between $0 and the "selling" price.I think we both understand what each other is stating. Going back to that ad to which you refer, the seller is wrong stating his price is below market price. Not much different from stating an asking price is below appraised value. Give me three appraisals on one particular property, and I will show you three different appraised values. Who's will you use?
But there is no "market" price for THAT PROPERTY until the $$$ transfer from buyer to seller. Therefore the "asking" price is simply that.
(If I put a For Sale sign on my '65 Rambler and "ask" $50,000, that does not make the market price $50,000.)
My biggest fan Redfisher can probably quote my "melting snowflake in your hand" market price analogy if you ask nice. 😀
beclareesqbeclareesqBeach Comber12 postsJoined View profileMessageBeach Comber
I may be the lonely voice on the planet, but I agree with most of what Shelly argues on this board. However, I don't think that the market stays relatively flat for years, though. The market is reestablishing itself. The sellers that have need to sell are doing that. Those that want the big payday, but don't have cash flow crunches, will ultimately pull back and off the market. That will help to shore things up. Then demand will return to creep up and appreciation will occur, keeping pace with other coastal areas that offer the same amenities. I think as recently as four to five years ago SOWAL was relatively undervalued. At least those areas outside of the Seasides and Watercolors were very competitive. The area is supporting year round rentals more so than North, South Carolina and Georgia. The pace, the restaurants, the fresh water, the arts culture, the close proximity to so many large southern metropolitan areas will continue to make the 30A stretch unique and desirable. I think if you can buy at 75% of the spring of 05 prices then that's buying on the dip. Like Charles Barkley says: I could be wrong but I doubt it! The hedge is I wouldn't rather be any[place else.
SHELLYSHELLYSoWal Insider5,763 postsJoined View profileMessageSoWal Insider
SHELLYSoWal Insider5,763 postsJoined View profileMessageSoWal InsiderGive me three appraisals on one particular property, and I will show you three different appraised values. Who's will you use?
I'd use the one that was the predetermined target number I paid the appraiser to hit?
MangoMangoSoWal InsiderNew York/ Santa Rosa Beach9,699 postsJoined View profileMessageSoWal Insider
MangoSoWal InsiderNew York/ Santa Rosa Beach9,699 postsJoined View profileMessageSoWal InsiderI'd use the one that was the predetermined target number I paid the appraiser to hit?
Shelly:
I agree with quite a bit you have to say in your threads about the market, but I have to disagree with what you state above.
Appraisers have a license to protect, and it's high risk for them to be "bought" to bring in a price. I am sure there are some unscrupulous ones out there, but eventually, if they start bringing prices over-valued, they get banned from lists that banks use as approved appraisers.
I work with appraisers in the New York market in my business, and most of them tend to err to the conservative side.
That being said, yes, SJ is correct in that you can have 3 different values from 3 different appraisers, and depending on the purchase price, you could have as a 5-10% difference. It's also a very different market to appraise.
Appraisers use sales that have occured within the last 6 months, the more recent the better. They only go past that in my area if a property that sold 8 months ago is on the same street, then may make possible time adjustments to value if warranted.
Out there, its been such a roller-coaster ride and it isn't helping that people have listings out there at over-inflated values just to see if some lugnut will bite.
Hopefully the seasoned professional realtors who have come back to earth will just take listings that they feel will sell. I was shocked when I was looking at property when a realtor who had "hip pocket" listings told me they would sell me a property and then re-list for $100K more or so immediately. I thought their job was to get the best possible price for their buyer! In New York, a realtor could lose their license for that.
I wound up keeping the couple of properties I bought, and wound up buying them from a professional realtor who priced the properties at the correct market values for that time. Seemed like everyone from their cousin to their grandmother had a realtors license looking to cash in on referral fees. Now I hear they are all waiting tables.
The ones who have been around will hopefully contribute to correcting the excessive listings, price properties based on what people are willing to pay, and then we may possibly see a return to more purchasers entering the market.
All in all, I think SoWal is still a good value compared to other coastal communites nationwide and a place with a feel unlike others.
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