OK it's time to rumble!!! I didn't do a Poinciana market report for May, so instead of going backwards, this month, I decided to do a report for the first 6 months of 2008 compared to the same period last year. First let's start with a little chart then I'll add my commentary.
This data was pulled from the Mid-Florida Regional Multiple Listing Service and is deemed to be reliable. I'm using the data for zip codes 34758 and 34759, Poinciana Neighborhoods. It does not include Solivita, Cypress Woods, Crescent Lakes or Lake Marion. Jan 1-June 30.
|
|
Number Of Sales |
REOs And SSs |
Average Price |
Price Per Sq Ft |
Current Inventory |
|
2007 |
241 |
17(7%) |
$202,408 |
$119.82 |
na |
|
2008 |
205 |
143(70%) |
$132,796 |
$ 74.25 |
1182 |
|
Change |
-15% |
+ 88% |
- 34% |
- 38% |
|
So what does this all mean? Well, the first thing, that stuck out like a sore thumb, is that 70% of the sales this year were either REOs(bank owned) or short sale (SSs) properties. Compared with only 7% for last year. Now the 7% figure may be a little low since our MLS did not have a field to reflect short sales last year. So lets just double it for the sake of this post. The fact remains that the REOs and SSs are WAY up and are now making up the bulk of the real estate market in Poinciana Fl.
Now according to this chart prices are only down 34% BUT let's adjust that one too. In January of 2007 the average sales price was $221,968. In June of this year it was $123,720. That means that in the last 18 months values have plummeted 45%!! That sounds about right.
At the peak of the market, late 2006, properties were selling on average for $130 per sq ft. Now they are at $67 for a decline of 48%. I was a little surprised by this as I actually thought we were down about 55%. But hey, in this case, I'm glad I was wrong.
Inventory has been about the same all year. There were 50 sales in May and 49 in June so sales are up about 20% for the last couple of months.
Here's the lowest recent sale. A 2078 sq ft home with a pool built in 1983 sold on May 16th for........$83,800. It was a REO.
Here's a 2818 sq ft home built in 2006 that sold May 23rd for $136,500. This was also a REO and was purchased new in 2006 for $256,400.
How about a 3008 sq ft home built in 2005 that just sold May 23rd for $150,000? That's $48 per sq ft if you are counting.
My opinion, for the future, is that we still have a ways to go until things start leveling out a little. Price per sq ft is going to have to hit $55, maybe even $50. Out of the last 100 sales, 17 were at less than $55 per sq ft. YIKES!!
So there you have it, Broker Bryant's Poinciana Market Report. Any questions?
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I don't want to know. It's a holiday and it's not my area :)
Just show me the money. Over :)
TLW...ROAR!
My gosh. And folks thought it couldn't get any worse. You have got to do a volume business to make a living in that market.
Goodness, even without referrals, I could do fine on 4-5 sales a year at our prices. But, not those prices.
Holy Crap!! I admire that your attitude always remains positive.
You clearly have a handle on the ugliness of your market. As Linda says, you have a great attitude...of course a bad one woul dnot allow you to be the expert you are in Poinciana. HOpe things start to improve before TOO long.
Jeff
As long as the bank owned properties dominate the market we are going to be in decline. Our sales have started to rise (2-3 percent) but average sale prices are falling by double digits. Some people spin this into a market recovery but I don't think anyone is buying that.
Lenn, I know. It's very difficult. Even when values were way up I had to sell 50 properties just to hit 10mil. My best year in 2005 I sold 62. That's a lot of selling for one man!!! I won't be anywhere near that this year unless things improve drastically. I have placed 9 under contract in the last 30 days so it's getting better. What do you think of that 3000 sq ft home that sold for $150,000? In your area that would be what.....$450,000+? One of the builders dumped a spec home earlier ths year that had 4000 sq ft, 6 beds 4 baths and 3 car garage for $125,000!!!!
Jeff and Linda, Positive attitude is something I must have to survive in my market. Luckily I have no shortage of that!!
Terry, I agree completely.
I forgot to point out. When you see 205 sales for the year you have to remember Poinciana has 72,500 people(with room for 200,000) and over 20,000 houses. According to some reports 15% of the properties are in foreclosure. That's 3,000 houses!!!
Broker Bryant, most of your numbers I kind of expected except that falling avg sales price. THAT is staggering. That has got to hurt your business and all those homeowners there. You had mentioned earlier the surge in REOs but that price figure in a year declining takes your breath away.
Holy Cow! I don't have sound numbers to back it up (at the moment) but the average $/sqft in Avon Park and Sebring (Highlands County / Heartland MLS)still goes between $75 and $80. Not sure about Lake Placid because their pricing is completely out of whack.
Gary, The biggest issue for me, right now, is finding sellable listings. My market has always been a working class neighborhood and most folks bought with no down or very low down. As you can tell by those numbers that even if they purchased 5-7 years ago with 5%- 10% down and NEVER refinanced they are still upside down. If they have to sell for any reason they are more than likely screwed. I turn down about 90% of the sellers I speak with. Even with that, some of my listings are still over priced. They're close but close won't cut it. Let's say it's worth $100,000 but I have to price it at $105,000 just so they can break even. If it doesn't sell in the first 30 days it's now worth $95,000 and their window of opportunity is gone. Eventually they get behind on the payments and it becomes a short sale. Now we can sell it. But how sad is that?
Sellers in Poinciana know what the market value and are not disputing it in anyway. They just aren't able to price low enough. That 70% figure for REOs and SSs is going to go much higher. And that of course will bring prices down even further.
WOW!...that's an eye opener for sure! and I don't think we're done yet, not by a long shot.
ARDELL, If you ever have sellers complaining about market conditions in your area.....just send them over to this post. They'll feel blessed!!!!
BB those are some awesome listings!
BB, Your market really took a beating. In general, I think you are right. Some markets here are firming up a little but these markets have always had constraints on new construction. But other markets here have a long way to go to recover. A friend of mine is known as the king of REOs has suggested 2012 as the peak of foreclosures. I hope he is wrong. But I do not have much faith in the Gov't or Banks who say they are working to help those caught up in this fall out. Hope you had a good 4th. AJ
Holy crap! I hear all of the complaints from other markets, but this is one of the first times that I've seen them detailed like this. Louisville never had a bubble (5% growth rate from 2002-2006). So, we are not having much of a downturn. Depending on whose numbers you look at, sales price is still up 1-3% although volume is off 15-20%. Closing 9 in 30 days is impressive under any circumstances, but under those it is amazing.
I'll be very interested to see where those numbers fall by year end.
We have seen a large slow down in sales volume in our market. I am grateful we have not seen the extreme price drops and the huge numbers of bank involved sales. In your market clients need the best agents possible to help them navigate through the rough waters.
Which is why I wrote this post...Enough of these unrealistic blog posts..., only to get crucified...Maybe they should try to live in our area!
It's tough out there for the Florida market...sorry...you can delete this connection if you want,..,the rest of the US just doesn't understand us.
Wow, I don't think the builders can build them at those prices. What a market we are in.
Bryant- WOW, I like those square footage prices! If you had a beach nearby I would be tempted to move:) But how in the heck do you make a living at those prices? Don't you have any luxury properties?
Amazing! I did not realize the impact of REOs and short sales on your market. The prices do look good now!
Bryant, I am seeing the same thing here as far as the REO, short sales selling the most and with multiple offers. That has forced average sellers to compete at very low prices and sometimes it is just not possible.
BB
For the homes that you've listed, what would be the range of rents in your city?
I'm curious as I like to buy and hold for 5-10 years, sometimes longer, and with that inventory and those price points, I'm seeing homes I can hold onto for a long time.
Happy Independence Day Weekend to you and the lovely wife.
Hi Bill, Rents in my area will run from $650 to a high of about $1200. A 4/2 with 1800 sq ft would rent for about $900.