Let the bidding begin...Alys Beach

[Joe Complete]

I received an information package from Alys Beach. I found it interesting that they are using a sealed bidding process rather than lottery to sell the lots. They specify a minimum amount that they will accept on each lot and then you can bid a higher number to "win" the lot purchase. It will be interesting to see how high the prices are bid.

 

[Smiling JOe]

Re: Let the bidding begin...

Just reminded me of a particular Real Estate Broker's offices in Port St. Joe. He asked the interior decorator to copy the color green from a dollar bill for his interior wall color choice. It looks terrible. He calls it "dollar bill green," and he is laughing all the way to the bank.

 

[Georgian]

Re: Let the bidding begin...

And now lets see what is behind dollar sign number one ...........

The min. price on the north side of 30A $785K and 1.4M for the south side

Again these are just the minimums

Hey, the one positive note I can think of is you won't have to wait to get your exterior color scheme approved. You can choose any color you want as long as its white.

 

[skier]

Re: Let the bidding begin...

I got the package too. WIth all the inventory on the market in Watercolor, Seaside, Rosemary, Seacrest, Seagrove, Blue Mountain, etc, etc. I can't imagine investors getting in on this round of bidding at ALys. I think the gravy train may have ended for the developers. I talked with a few folks that "won" the lottery in Phase 4 in watercolor (these are flippers never intending to own long term) and they passed on the opportunity. My gut tells me for the short termers, prices will come down from the lofty listing prices now in evidence at these developments. Prices per square foot in many non beach front homes in the "premier" developments are approaching and exceeding $1,000 per square foot. And, lot prices are $250 to $400 per square foot. The supply and demand is too screwed up in the short term to support these prices. Sales have slowed to a crawl from breakneck pace 8 to 12 months ago. Prices are so high that there are very few folks that can afford the prices.

I hope the prices are real because I have my home in Watercolor for sale hoping to cash in if the craze is real. But, I don't think it is. I think the runup in prices was caused by a huge amount of speculation that cannot be supported once the speculators have to sell 2, 3, 4 or more properties to "real" long term owners. I remember having similar discussions with friends in the late 90's regarding a speculative bubble in the stock market. None of them believed me until their portfolios crumbled with lots of tech stocks.

If my home in Watercolor does not sell at a high price, I will be perfectly content to be a long term home owner. However, many, many of the current owners of lots and condos in SoWal will not be content to own long term. That's why there is a glut of stuff on the market. At some point, many of these investors will be forced to sell for cash flow purposes (how many of these properties are financed with interest only loans????).

Hope I'm wrong. Time will tell.

 

[Smiling JOe]

Re: Let the bidding begin...

If my home in Watercolor does not sell at a high price, I will be perfectly content to be a long term home owner. However, many, many of the current owners of lots and condos in SoWal will not be content to own long term. That's why there is a glut of stuff on the market.

In my opinion, there are too many people, who don't care if they sell, placing ridiculous prices on their property. Doing so, causes greater supply that just sits on the market, untouched. Personally, I think that repels many potential buyers. I see plenty of examples of similar type properties for sale with prices fluctating 50%. There is no justification for some of these prices listed. The agents taking these listings will do whatever it takes (regarding listing price) just to get the listing. By not pricing the property correctly (market price), they are doing their customers, and other property owners a great disservice. Then, when a neighbor sees this ridiculous price, they say, "well if he can get that for his property, I will sell mine too." The problem is that nobody sells when this happens. Inventory of listings increases and sales decrease.
I think everyone around here could use a basic economics class.

 

[skier]

Smiling Joe--I agree 100% with your conclusion. I am one of those folks pricing my house high--about $1100 per square foot. However, there have been a few "greater fools" paying these prices recently. I think they are crazy, but if mine will sell at that price, I'll take it. If not, no problem for me. The folks that get smitten are the ones that don't understand basic economics and came in with the herd mentality over the last 6 to 12 months and paid unreasonable prices hoping to flip at a profit. These hogs will get slaughtered in my opinion when prices get back to "market" per your message.

 

[Rita]

Re: Let the bidding begin...

In my opinion, there are too many people, who don't care if they sell, placing ridiculous prices on their property. Doing so, causes greater supply that just sits on the market, untouched. Personally, I think that repels many potential buyers. I see plenty of examples of similar type properties for sale with prices fluctating 50%. There is no justification for some of these prices listed. The agents taking these listings will do whatever it takes (regarding listing price) just to get the listing. By not pricing the property correctly (market price), they are doing their customers, and other property owners a great disservice. Then, when a neighbor sees this ridiculous price, they say, "well if he can get that for his property, I will sell mine too." The problem is that nobody sells when this happens. Inventory of listings increases and sales decrease.
I think everyone around here could use a basic economics class.

So True!

 

[GVM]

An email quote today from a Realtor who knows the market very well:

"The market is slowing (your prediction but later!) because there is so much coming on the market with folks trying to cash in. Looks like asking prices will come down, not sure how much."

As someone observed on this board several weeks ago: "The good money has already gone out the back door."

The coming months will be very, very interesting.

 

[Cork On the Ocean]

I've had concerns when watching the MLS Hot sheet this year. I felt that I was seeing many more price reductions this year than last year (which were minimal on 30A). This thread stimulated me to run some numbers:

Price Decreases: Each ratio=#price changes/#price drops/%of changes down

March April May June to date
2004 98 /5/5% 88/12/13.6% 78/16/20.5% 34/7/20.6%
2005 142/43/30.3% 113/45/39.8% 161/111/68.9% 87/63/72.4%

Looks like more Price Changes-probably more listings. More price decreases-Overinflated list prices.


Pending Sales:

#Pending Ave Pend Sales Price Ave Pend SqFt Price
3/04 140 $755,547 $449.82
4/04 143 $739,405 $421.12
5/04 111 $864,489 $457.79
6/04 To date 48 $857,934 $460.24

3/05 111 (-21%) $1,179,530 (+56%) $599.92 (+33%)
4/05 75 (-48%) $1,231,393 (+66%) $624.08 (+48%)
5/05 74 (-33%) $1,099,248 (+27%) $592.98 (+29%)
6/05 to date 35 (-27%) $1,227,977 (+43%) $671.67 (+46%)

#Sales are down but moving back up from spring. Ave Sales price still way up as is the sq ft price :clap_1:. March and April 05, Ave Price increased significantly more that the sq ft price which makes me think that homes are larger (more sq ft for the money) The trend changed in May and June 05 which looks like as the sq ft price is increasing, people are taking less square feet than spring. Seems to be confirmed by the average sq ft of pending sales for 2005 (Price/sq ft price)

3/05 - Ave Sq Ft = 1966
4/05 - Ave Sq Ft = 1973
5/05 - Ave Sq Ft = 1854
6/05 - Ave Sq Ft = 1828

This data is strictly for 30A properties south of 98. Seems like we're still experiencing great returns but the decrease in #sales tell me less buyers for this area and maybe the trend in decreased sq ft could mean that we are approaching the cap on what people will pay for paradise. Of course, people overpricing their list prices doesn't help the trend. Apparently, there's still people out there to buy this market but will potential buyers feel they are priced out of this market and move on to other areas - N. Santa Rosa, Freeport, Mexco Bch? Will developers sense this trend and move on to other areas? Were already seeing moves into those areas. Any input would be appreciated.

Good? Bad? Depends on your perspective, I guess, but for those looking for strictly profit on quicker turns, there's probably going to better locales this year. Of course a 50% increase on property purchased at $400K is a $200K profit while a 25% increase on $1.1 million is a $275K profit so people who can afford 30A may still do better than higher appreciating, lower end markets.

Will be running similiar data on Freeport and North Santa Rosa for my mailing list. Will be happy to post on board for those interested or can add anyone interested to my mailing list - just email.

 

[Cork On the Ocean]

Re: Let the bidding begin...

Couldn't agree more Joe. Don't think I've seen anyone greedier to date. I know there's all sorts of thoughts and experiences with realtors but I work real hard at this business. Last year, Alys reps said that they would be working with area realtors. After sending out info on the upcoming community for months, I called to get an update, saying that I had a very large mailing list of interested parties and was told that they've decided to keep everything in-house but they'd be happy to take my list of people and contact them. When I told them that I pay a lot in advertising and asked why in the world I should do that? I was told that I would always be able to pick up the resales. .

From my perspective, they are isolating local realtors which will bite them in the end. As you said, there's lots of beautiful property to sell here and realtors sell what they are familiar with. After 2 years of not showing Alys, will they all of a sudden flock there when the resales start?

I try to educate my customers regarding all areas to help them choose the best location for their situation. Hopefully buyers (especially those out-of state) realize that these "inhouse" agents provide very limited, "forward looking" information on that one community. They will not be receiving info about Water's edge, Gulf place, 1st tier in Inlet for the same price or any other options. If buyers know the area and still want Alys, great, but by all means, people should do their homework and not just flock to another marketing scheme. Personally, I'd rather be sandwiched between Alys and Rosemary Beach at half the sq ft price and use their shops, activities and walkovers, unless they decide to make them private too!
$$$$$

Now this sealed bid thing. It will be interesting to see if people go for it.