2009 Nov — South Walton Sales (Homes, Condo, Townhomes)

by Murray Balkcom, GRI, Realtor
murraybalkcom@yahoo.com
www.dreamBIGproperties.com

In our area, everything typically comes to a halt in the winter time. Long pants and shoes replace swimsuits and flip flops. After all, we are mostly a seasonal beach community. It should be no surpirse that real estate sales also decrease as winter approaches. Thanksgiving week tends to throw everyone off schedule and out of routine for a week. Then, Christmas season hits, with similar results. People simply have other things on their minds than buying real estate. While November sales are somewhat down as we expect, the real surprise we’ve had this year comes in the way of higher sales in August, September and October, when typically, real estate sales have been slow.

2009 vs 2008 Comparison (Quantity)
2009 vs 2008 Comparison (Quantity)

For the first time since July, sales for Homes, Condos, and Town Homes in South Walton, actually decreased in November, compared to the previous month. However, sales for November 2009 still appear to be strong compared to Nov 2008, as indicated in the charts above and below, and some buyers continue to look for good buys, even during the slow season. The chart above shows the number of monthly sales, while the chart below shows the monthly total dollar volume of sold properties, not including residential lots.

2009 vs 2008 Comparison (Dollar Volume)
2009 vs 2008 Comparison (Dollar Volume)

Making up 53% of that sales dollar volume are detached homes, with condos representing 43%, and town homes being only 4% of those sales. Inventory continues to slowly decrease as many over-priced listings fall off the market.

Nov 2009 Median Sold Price -- Homes, Condos, Town Homes
Nov 2009 Median Sold Price -- Homes, Condos, Town Homes - South Walton

Median Sold Price, the best indicator of prices, has continued to hold steady at $350,000 for the months of October and November. (Median Sold Price is the middle number where half of the sales are above that number, and half are below that number.) It is good to see some stabilization in that price over the last seven months. You will notice the six-month moving average (trend) line indicates a fairly level median price and maybe even an ever so slightly tick upward. This is something we haven’t seen since the end of 2002. The chart below is a bit tight, but it gives you a better historical perspective of the median sold price in our area, showing that earlier period from 2000-2003 with more stability market.

Nov 2009 Median Sold Price - Homes, Condos and Town homes - South Walton
Nov 2009 Median Sold Price - Homes, Condos and Town homes - South Walton

Happy Holidays!!!

Year to Year Comparison of Pending/Contingent Contracts

Murray Balkcom is a Realtor with Coldwell Banker United, Realtors in Seagrove Beach, FL. Murray can be reached at murraybalkcom@yahoo.com. To subscribe to Murray’s real estate updates, go to www.dreamBIGproperties.com and in the upper right corner, submit your email address.

The majority of the data used in the above report is derived from Emerald Coast Association of Realtors and is believed to be reliable but not guaranteed.

0 thoughts on “2009 Nov — South Walton Sales (Homes, Condo, Townhomes)

  • December 12, 2009 at 11:47 am
    Permalink

    The following question was posed on SoWal.com message board:

    “murray what % of the total sales in south walton in 2009 have been foreclosures or short sales?i’m willing to bet its well over 50%.this is also happening in cities like phoenix and vegas as speculators rush in to buy distressed properties.here lies the problem long term.just as americans have got addicted to 0% auto financing or 70% off of clothes what happens in the next yr or so when many of the distressed properties are worked threw?in the above examples of auto’s and clothes once the public gets addicted to a deal they refuse to pay up for more normal pricing.thats why i think housing is in for a long hard struggle. once the foreclosures are worked threw i think the public will resist paying up for homes and sales will stay very sluggish for years.”

    Murray’s answer:
    “I’ll have to further research the answer to your question, but from what I’ve seen, I’d guess that your “bet” is accurate on the percentage being REO and short sales. Those are typically the majority of listings where the buyers are willing to pay. The vast majority of listings are over-priced, and they won’t sell until the sellers come down on price. A listing priced at $1 million will not sell at $1 million, or even $900,000 to a buyer who is getting a loan to purchase, if the appraisal comes in at $ 800,000.

    There are many cases where comparable sales are difficult at best to find, making pricing the property to sell, very difficult. We see quite a bit of this, and most often, the first price doesn’t draw much attention. However, I see many properties which have good and recent comparable sales, come onto the market, priced well above the comps, and if you study the statistics, you will see that they don’t sell. I don’t have my charts in front of me, but I can tell you that the median price of the new listings is much higher than the median price of the sold homes, and the listings which are pending and or contingent. The listings which are expiring and being withdrawn, also have a median price much higher than those sold, pending, or contingent. I’ll post the real numbers showing that data next week.

    You bring up a great topic of concern about what will happen when all of the REOs (bank-owned) and short sales are “worked through” (sold). I have my guesses, but they are pure guesses and carry no weight. I think one or more of several things could happen:

    1) We have a stand off between buyers and sellers, and they do not meet on common ground, and sales will be stagnant.

    2) Owners hold onto the property and wait. Many can afford it, or have already paid for it. Not everyone bought property with the idea of selling. Many bought with the idea of moving here in the future, having a beach home, or simply living in it as a primary residence. Others have inherited their property.

    3) Owners will negotiate with their lenders (or maybe have Federal Gov’t incentives) to reduce principle or interest rates, or both, or something else, which will make their monthly payments possible, and they will hold on to their property.

    4) If the banks won’t help out, nor the gov’t, owners will sit down with a calculator, accountant, tax attorney, and put the numbers to task. Let’s look at the following example, since I often hear owners who want to sell, saying that they don’t want to take a loss. They are willing to let go of their down-payment, but they don’t want to sell for less than the payoff.

    I’ll use round numbers to keep it simply.

    Owner paid $1,000,000 for property in market peak, putting down 20% plus a note of $800,000 at 6% interest for a 30 year fixed rate mortgage. (chances are the down-payment wasn’t that high, so the note is likely for more money.)

    Today, comparable sales are at selling at $400,000. Owner still owes bank $750,000 on the note.

    We’ll also say the local market returns to moderate to level historical growth of doubling every 8-10 years. (Just using this for the example. We don’t know the future.)

    So, the seller won’t sell for the going rate of $400,000, because he or she isn’t willing to write a check for $350,000 to pay off the note. The seller lists the property for sale at $850,000, leaving room for negotiation and payment of brokerage fee. (we see this happening, and it inflates the inventory, but in my opinion, it isn’t really for sale if their are other comparable listings listed and selling at $400,000.) Not having any showings for two years, the owner pulls the property from the market, and says he will wait it out, until the value of his property returns to the payoff amount of $750,000. (current value is $400,000, so he needs an increase in value of 87.5% (about 6.5 years worth at the rate we talked about above).

    Using the numbers above, the owner is paying 4,800/ month in principle and interest ($57,600 per year). We won’t even bother with adding in the insurance and taxes to keep it simple, but they would be additional expenses. At $57,600 per year for 6.5 years of waiting, the owner will be paying $374,400 during that time (plus taxes and insurance).

    Essentially, the seller will spend $374,400 + taxes and insurance, to hold the property long enough (in our example) to increase in value $350,000 so that he won’t have to write a check to pay off the bank at the closing table!!! (and there is no guarantee of what the future price will be. It may be higher, or it may be lower.

    When owners who would like to sell start doing that math, there is a strong chance that they may opt to look at stopping payments, taking a huge hit on their credit, and try to run from the monthly payments. There could be some obstacles in the way, such as the owner having other assets which the lender could persue, so it won’t be as easy as I describe above. However, it could lead to the banks taking back more property, and more REOs coming onto the market, priced to sell, keeping sales activity on the move.”

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