July Sales and Inventory Stats

[spinDrAtl]

Interesting thing about these pre-constructions that are now closing out:

...if a number of people in the same condo closed at 2004 prices, let's say $300,000ish, and then a number of people want to try to sell their condo at 2005 prices, let's say $550,000ish, and considering a buyer needs to float a loan--how is the bank's appraiser going to justify a $550,000 loan when almost every comp (the best comps coming from the exact same building) sold for $200,000 less in the last couple of weeks?

Telling the bank that the price includes a 32" plasma TV in the deal isn't going to help--besides, who in their right mind would want to make payments on a TV stretched out over 30 years? :roll:

The appraisers would take into account that the original contracts were written 2 years ago. They would look at the fact that those prices were preconstruction and search for comparable properties that were not preconstruction. It still might be tough though if prices are dropping all around.

If you are talking about the 550k sale being a resale as opposed to a preconstruction (and assuming a loan was needed, which you state), one would hope the buyer had a competent realtor who added a clause regarding the ability to get financing (and possibly an acceptable appraisal for the purchase price) to protect any earnest money. In most cases, the preconstruction type deals are considered 'cash' transactions once they pass a certain commitment date so financing is not part of the contract.

 

[Smiling JOe]

The appraisers would take into account that the original contracts were written 2 years ago. They would look at the fact that those prices were preconstruction and search for comparable properties that were not preconstruction. It still might be tough though if prices are dropping all around.

If you are talking about the 550k sale being a resale as opposed to a preconstruction (and assuming a loan was needed, which you state), one would hope the buyer had a competent realtor who added a clause regarding the ability to get financing (and possibly an acceptable appraisal for the purchase price) to protect any earnest money. In most cases, the preconstruction type deals are considered 'cash' transactions once they pass a certain commitment date so financing is not part of the contract.

We Realtors appreciate the plug, but one would only need a Realtor who uses the FAR contract, which covers the appraisal in par 3 regarding Financing, lines 33 - 37. ;-) Competent or not, the buyer would be covered unless this clause is removed.

 

[spinDrAtl]

We Realtors appreciate the plug, but one would only need a Realtor who uses the FAR contract, which covers the appraisal in par 3 regarding Financing, lines 33 - 37. ;-) Competent or not, the buyer would be covered unless this clause is removed.

I know standard contracts vary state to state and I have seen some that contain sort of a 'drop dead' date where once passed, other clauses are no longer relevant unless the agreement has been amended. I suppose in cases where such dates are included, perhaps the realtor would work to get that changed if the appraisal and/or financing might become an issue.

Also, some buyers without realtors like to write their own contracts or use preprinted ones from an office supply store. I guess at that point we would not be talking competent realtor vs. incompetent realtor. ;-)

 

[lenzoe]

[...]

Answer: Only if they are listed in the MLS. Agents are supposed to report all sales for purposes of comps, even if there was not a listing, however, they don't always do it, and Developer Sold units don't have to be a member of their local chapter of the Association of Realtors, therefore, they do not have to comply with MLS Rules.

FYI- many preconstructions are listed in the MLS. If you are questioning the sales in Arial Dunes, they have been appearing as closed sales in the MLS, and those particular units are part of this data. You probably noticed the spike in closed sales for Condos from Sandestin to Okaloosa Cnty, from June having 22 to July, which posts 159 units closed. You will most likely note that the DOM (Days on Market) for Condos in that area is only 29, which is probably due to many Realtors not entering the listing data in a timely manner -- these units were listed and reserved long ago.

Remember to take this data with a grain of salt.

[...]

I understand. All good points. I was actually interested in the under-reporting possibilities of pre-construction closings. Do you know whether the Cassine Station units in Seagrove were represented in the May, or June, or possibly April figures? There should have been 18 residential units in that building that closed around then.

 

[Smiling JOe]

I understand. All good points. I was actually interested in the under-reporting possibilities of pre-construction closings. Do you know whether the Cassine Station units in Seagrove were represented in the May, or June, or possibly April figures? There should have been 18 residential units in that building that closed around then.

I think Howard, the developer of Cassine, held out a few of the units, ie- did not offer them for sale. 15 units show as closed from the original sales. About half of the sales show at the end of Mar, and the other half show closings in April. All units which were sold are actually entered in the MLS.

 

[fisher]

updated data

Joe, do you have updated stats for the last few years.

 

[TreeFrog]

SJ-

I downloaded DSF SoWal.pdf. It appears to be missing a page - only runs through mid-2006. Could you repost.

Thanks

 

[Suma]

Treefrog,
I thought the same thing until I realized this thread was started in 2006! However, if Smilin Joe has current stats, I would love to see them!

 

[TreeFrog]

Uh oh...

(looking for smiley face of bashing forehead with palm of hand)

 

[Kurt]

Check recent stats for July 2008 here - http://www.sowal.com/bb/blog.php?b=164