Nationally, nearly half of 2006 buyers are upside down

[Little Fish]

AAbsolute:

Thanks for the info. Looks to me like these two lots were owned by St. Joe. Do you know if these were inventory lots that were finally released?

Also, I agree with your comment regarding lot loan renewals. I suspect some lot owners will run into difficulties with comps when it comes to renewing loans. Banks aren't offering the same types of products they did a few years ago. 3 yr. IO lot loans are harder to find. Banks now want aggressive amortization.

Little Fish

 

[fisher]

AAbsolute:

Thanks for the info. Looks to me like these two lots were owned by St. Joe. Do you know if these were inventory lots that were finally released?

Also, I agree with your comment regarding lot loan renewals. I suspect some lot owners will run into difficulties with comps when it comes to renewing loans. Banks aren't offering the same types of products they did a few years ago. 3 yr. IO lot loans are harder to find. Banks now want aggressive amortization.

Little Fish

Joe has been slowly working off remaining lot inventory (not talking about Phase IV in WC and WS West Beach) over the last few years in Watersound and Watercolor. The interesting thing I have noted on many of these occasional sales is that the prices folks are paying to Joe are actually higher than where some similar/nearby resale lots are listed for and much higher than recent sales prices in some cases. I don't get it. Maybe these buyers are relying only on the Joe sales agents to show them property and not doing any real research on their own. Throwing money down the drain in most of these cases--could have had just as nice a property for less money.

 

[Little Fish]

Fisher:

I've noted the same regarding Joe lots selling at prices higher than close comparables. One reason why some buyers might pay higher prices could have everything to do with longer build-out dates relative to current listings.

Little Fish

 

[Miss Critter]

Fisher:

I've noted the same regarding Joe lots selling at prices higher than close comparables. One reason why some buyers might pay higher prices could have everything to do with longer build-out dates relative to current listings.

Little Fish

I thought the consensus on a related thread is that it would be very difficult for those could be enforced.

 

[SHELLY]

Joe has been slowly working off remaining lot inventory (not talking about Phase IV in WC and WS West Beach) over the last few years in Watersound and Watercolor. The interesting thing I have noted on many of these occasional sales is that the prices folks are paying to Joe are actually higher than where some similar/nearby resale lots are listed for and much higher than recent sales prices in some cases. I don't get it. Maybe these buyers are relying only on the Joe sales agents to show them property and not doing any real research on their own. Throwing money down the drain in most of these cases--could have had just as nice a property for less money.

...proof positive that the "Greater Fool" isn't an extinct species afterall.


.

 

[Little Fish]

MissCritter:

Yes, I am also of the opinion that it would be difficult to enforce the build-outs; however, it's still a risk and Joe probably knows they can charge extra for that risk. I wouldn't pay the premium, but I guess others have.

Little Fish

 

[TheSheep]

It's probably bad for my health to agree with you Sheep,

:shock:

but I should say wasn't there an article in the Wall Street Journal or the New York times at the start of the downturn where a Watersound salesperson was quoted as saying that St. Joe has the financial wherewithal to support its existing customers by holding prices steady? I could build homes and deliver them below market rate for the rest of my days and not dessimate pricing like the developer just did.

I am uncertain what financial capacity JOE actually has as so much of the value of the company is in real estate, in the ability of JOE to fully transition from manufacturing/agri and bleat bleat bleat. Regardless, how JOE uses that capacity, or lack thereof, is proved in their pudding. Which you have kindly and publicly notified us.

I'm a Watersound Beach owner twice over and it's o.k. with me if JOE wants to reduce lot prices 300%, but the group who owns the lot next door are very much repeat customers and that can't be good when they have to renew their $982,000 lot loan.

I would expect that they will need to insert cash in a big way unless they are very financially stable. Banks are calling in loans for cash infusions, at least down here even with long standing customers with financial wherewithal.

I would ask what this lot lowering does to your rent=mortgage valuations. It would seem to favor the Lessee and, in turn, the Lessor of a newly built property on the less expensive lots. Overall, the rental mkt should take a downturn in rent prices, I would think, hurting those who are "in" at the higher land costs. Eh?

 

[TheSheep]

Why didn't you stop while I was still agreeing with you?

I didn't hear you screech.

Those idiots who bought into Watersound Beach, Rosemary Beach, Watercolor on opening day did extremely well. It was just the crowd that followed them in later who are now upside down as much as $650,000 on their lot purchase alone.

Imagine that, folks who bought in at a rate where they could cash flow off rental are o.k.

Poor choice of words, let me rephrase, the Opening Bells of 2005 +/-. True, many times the first pigs in the barn, and the stragglers, avoig the slaughter and the BBQ pit.;-)

 

[AAbsolute]

Not an assumption, it's a fact...

AAbsolute:

Thanks for the info. Looks to me like these two lots were owned by St. Joe. Do you know if these were inventory lots that were finally released?

Also, I agree with your comment regarding lot loan renewals. I suspect some lot owners will run into difficulties with comps when it comes to renewing loans. Banks aren't offering the same types of products they did a few years ago. 3 yr. IO lot loans are harder to find. Banks now want aggressive amortization.

Little Fish

This is not an assumption, it's a fact. People who bought a lot for 950,000 from JOE in '05 next to a lot sold by JOE in '08 for 1/3 the price are going to have to bring hundreds of thousands of dollars to their loan renewals or post other personal property equal to hundreds of thousands of dollars which will be locked down as security.

I know there are about 20 vacant lots JOE sold in '05 adjacent to these new sales that are in this boat. I don't blame JOE. It is the problem of those who paid $950,000. I doubt anyone at JOE ever really guaranteed these folks anything. Such is life.

 

[AAbsolute]

Fisher:

I've noted the same regarding Joe lots selling at prices higher than close comparables. One reason why some buyers might pay higher prices could have everything to do with longer build-out dates relative to current listings.

Little Fish

Sorry Little Fish, but I can't agree this time. Everything JOE sold around these lots in the past was way more expensive (About $670,000 more = 200%). Further, if you check out JOE's own resale customers lists you will find that they even undercut them to sell these new lots.

I know it sounds cruel, but you can't blame them. They have property to sell and competitive advantage. They'll continue to pummel the competition for at least 4 more years.