New Sales Contracts - September Vs. October

[AtTheBeach]

Out of curiosity, I went to an online pending list in Destin to see how many new contracts were written in Sept. vs. Oct. in all price ranges. This is what I found: (This is not 100% accurate but at least gave me a general idea of what?s happening in the market right now)

September Contracts
Destin Single Family Homes - 28
Destin Condos - 30

October Contracts
Destin Single Family Homes - 7
Destin Condos - 3

It looks like the deals have indeed been gobbled up and maybe what?s left buyers aren?t willing to pay or can?t afford and sellers aren?t willing to come down. It is possible that buyers will eventually come around (assuming they can truly afford it) if the sellers can hold off long enough but as a potential buyer that?s been teetering on the edge, we would rather rent than buy right now, it makes more sense for us.

When we toured the area last month, we returned home deflated that prices were still out of our range even with some of the ?deals?. We have seen some great deals out there this past year and maybe we have missed the boat, but with the current prices, it?s a boat we are willing to miss. We also missed the boat in 2005, 2006 and 2007~

If the above numbers are way off the mark, please chime in as it?s not my intention to be putting out inaccurate info and I don?t have access to official statistics.

Anyone have some South Walton new contracts stats for October that they'd be willing to share?

 

[Kurt]

Not sure if they are accurate, but there is always a big dropoff when school starts back.

 

[AtTheBeach]

Is this a typical back to school reduction in new contracts for the September vs. October period?

 

[Kurt]

Is this a typical back to school reduction in new contracts for the September vs. October period?

I really don't know. But I do know that nothing is really typical in a resort market, especially the last few years. But most properties are sold in the summer around here.

 

[30ashopper]

September Contracts
Destin Single Family Homes - 28
Destin Condos - 30

October Contracts
Destin Single Family Homes - 7
Destin Condos - 3

If those translate into the same number of sales, it would be signifigant. Looking back about 10 years, Setember and October tend to be about the same for single family home sales. I honestly have no idea why we would experience such a drop, the government purchase incentives don't expire till November.

Is there any chance October is under reported?

 

[Tom Curlin]

I think you should consider how many of the transactions are short sales or REO situations. I suspect the ratio is high, and if so, then perhaps you are seeing the banks decide how many properties they are willing to liquidate at quarter end, ie September.

In my view the banks will string out their distressed residential sales to smooth their earnings results over the next 18 months. That means they get to the end of a quarter, look at current comps, decide how much they are willing to write off the balance sheet for the current quarter, and then decide how many they will liquidate.

Just a thought...

 

[AtTheBeach]

I'll bet the actual sales number for October will be high since it appears there is a lot of contingent/pending contracts out there from the spring and summer months that will have closed in October.

 

[30ashopper]

I think you should consider how many of the transactions are short sales or REO situations. I suspect the ratio is high, and if so, then perhaps you are seeing the banks decide how many properties they are willing to liquidate at quarter end, ie September.

In my view the banks will string out their distressed residential sales to smooth their earnings results over the next 18 months. That means they get to the end of a quarter, look at current comps, decide how much they are willing to write off the balance sheet for the current quarter, and then decide how many they will liquidate.

Just a thought...

End of quarter bumps in REO sales - very interesting!

 

[30ashopper]

Looking over the home buyer credits for 2009, not sure if they would have any effect on sales. They target first time families earning 75K or less, first time buyers with 150K or less. There might be a little pop in there for the local market but it's probably pretty small.

So if these numbers do reflect sales, I really don't have any ideas on why we'd see such a drop. (Although I like horton's theory.)