Calling The Bottom

[scooterbug44]

Question: If a potential buyer sees "pre-foreclosure" won't he assume foreclosure is imminent and wait until that happens so he can get a better deal?

All changing the language does is give a false impression - they still have to go through the process that is turning buyers off! IMO this tactic will create more nibbles, but also more frustration and false hope.

 

[Joe Mammy]

Question: If a potential buyer sees "pre-foreclosure" won't he assume foreclosure is imminent and wait until that happens so he can get a better deal?

I have buyers contacting me because they are targeting short sales or pre-foreclosures. I sift through the data on the property and then advise them as to our chances of closing and a time frame.

Many factors to consider are if there are more than one mortgage, who the lender(s) are, mortgage payoff to market value difference, if lis pendens has been filed, seller's financial status and the listing agent's short sale experience.

Some are worth pursuing in "pre" status while others you can get an accurate read that they are a long shot to close before foreclosure and it is better to wait on the foreclosure and then the REO listing.

 

[traderx]

Gosh, and I was hoping that the bottom would wait until this fall...

It seems that the greater SoWal market is factored upon vacation rentals. This may not be as true as it was, say, ten years ago because so many permanent residents have relocated to the area but, assuming my assumption is valid, how does the vacation rental market look? Gasoline appears to be headed to $4.00 + per gallon. Any odds on how this will affect vacation plans?

 

[Smiling JOe]

people will continue to take vacations, and more will likely select drive-to destinations, rather than flying, so SoWal should continue to have it's share of visitors. The average visitor to SoWal is coming from a 500mi radius, so for math purposes, let's give them a 1000 mile, round trip to get to SoWal and back home. Gas prices last year were around $2.50 per gallon, and we will use your $4 per gallon for this year. The average SUV gets around 15 mpg, so 1000miles divided by 15mpg gives us a total fuel usage of 66 gallons for the round trip. Last summer, that would cost $165. This year, $266. I don't think $100 difference for a family of four will stop visitors. To help offset that $100, I have seen the price of rental units falling slightly as there is now more competition.

 

[SHELLY]

people will continue to take vacations, and more will likely select drive-to destinations, rather than flying, so SoWal should continue to have it's share of visitors. The average visitor to SoWal is coming from a 500mi radius, so for math purposes, let's give them a 1000 mile, round trip to get to SoWal and back home. Gas prices last year were around $2.50 per gallon, and we will use your $4 per gallon for this year. The average SUV gets around 15 mpg, so 1000miles divided by 15mpg gives us a total fuel usage of 66 gallons for the round trip. Last summer, that would cost $165. This year, $266. I don't think $100 difference for a family of four will stop visitors. To help offset that $100, I have seen the price of rental units falling slightly as there is now more competition.

If gas prices were the only problem.....

I think overall inflation and rising unemployment are going to be the driving forces. Increases in not only fuel but also food, education, medical care, utilities, financial services, etc., are now just starting to be felt by consumers.

I think people will still come down for vacations, but I predict the vacations will be shorter and folks will economize more by eating in the condo rather than going out every day for one or two meals. Additionally, I think short-stay hotels and motels will do much better than condos and houses that require a full 7-day stay.

Moreover, I believe more people will be holding out for last-minute booking for four reasons
(1) To ensure they don't 'waste' a deposit if the weather happens to suck;
(2) to hopefully snag a last-minute cut-rate deal from desperate condo owners;
(3) to ensure they're still employed when vacation time rolls around;
(4) to ensure they've got money to cover the costs since credit is getting tighter and more expensive and HELOCs are being shut down.

 

[Smiling JOe]

I agree that there are factors other than gas, which will affect people's vacationing habits. I think you are right about people changing their eating choices, which is probably the second most expensive part of the their costs for vacation, but I think they will not likely cut short their week vacation in order to save a little money. Maybe they come off-season when the rates are cheaper, or they stay further off the beach, or negotiate with a VRBO.

 

[Bob]

[ame]http://en.wikipedia.org/wiki/List_of_amusement_park_attendance_figures[/ame] things are going full tilt here in Orlando with several factory outlet expansions underway.

 

[traderx]

people will continue to take vacations, and more will likely select drive-to destinations, rather than flying, so SoWal should continue to have it's share of visitors. The average visitor to SoWal is coming from a 500mi radius, so for math purposes, let's give them a 1000 mile, round trip to get to SoWal and back home. Gas prices last year were around $2.50 per gallon, and we will use your $4 per gallon for this year. The average SUV gets around 15 mpg, so 1000miles divided by 15mpg gives us a total fuel usage of 66 gallons for the round trip. Last summer, that would cost $165. This year, $266. I don't think $100 difference for a family of four will stop visitors. To help offset that $100, I have seen the price of rental units falling slightly as there is now more competition.

When you analyze the incremental cost, it seems palty. But there has to be a point where demand for gasoline is no longer inelastic. I have no idea whether that is the delta from $3.50 to $4.00 or $5.00 to $5.50 but somewhere lurks the proverbial straw...

I normally go down for a week about this time and a month in the winter. I am cutting this year's Spring trip to three days but admittedly, it has nothing to do with gasoline. When I look at various vacation listings, I don't see a rental rate reduction but you are closer to the market so I will take your word. I am in fact, waiting for the last minute to book.

I read somewhere that forty percent of the cost of food is attributable to fuel. We are a distribution economy after all. Items like vacations, computers and appliances represent discretionary purchases. As gasoline creeps up and food prices continue their upward march and the price of many items subject to mass distrubution increase there has to be a change in behavior.

 

[Bob]

I believe, in the short term, we will become less wasteful of crude like the Europeans. I suspect the internal combustion engine may be modified to combust something more easily obtainable, and if it takes 5 dollar gas to accelerate our overdue technological adjustment, in the words of the Dummy-in-Chief, "bring it on".

 

[30A Skunkape]

I have no idea what the occupancy numbers are like but I was talking to a guy at work today about gas prices, wages, etc. and he made an interesting observation. He lives in Navarre and drives to Miramar Beach and noted that his drive home used to take at least 45 minutes to an hour whereas now the trip has been cut by about 15 minutes due to fewer tourists puttering around HWY 98. Take from that what you will.

I also wonder how much longer service industry workers will be able to swing a daily trip from Defuniak, Freeport, Niceville, Crestview and Panama City into SOWAL without a substantial raise. Of course the raise would have to be recouped from the tourists who may be going 'on the cheap' if they elect to visit in the first place. That is a mighty slippery slope...