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Name:	John C -	Reply
Subject:	When will real estate prices rise again?
Date:	3/18/2010 10:29:28 PM

Hey all. I posted another study on my blog about the waterfront real estate sales in 2009. I don't like overkill but I think that 09 was such a critical year.

I am convinced now that 2008 was "the bottom" (at least from a seller's perspective) based on the # of homes sold, which have been on the rise since mid 2008.

The next question is, when will prices follow? I attempt to answer.

If any of you have any other theories, or other angles I need to consider, please comment on my blog. I would really interested in your thoughts.

Thanks!

Name:	John C -	Reply
Subject:	oops, here's the link
Date:	3/18/2010 10:30:50 PM

sorry about that. See the link below.

URL: Lake Martin Real Estate Sales - 2009 - Further Study

Name:	Maverick -	Reply
Subject:	When will real estate prices rise again?
Date:	3/19/2010 12:13:12 AM

John great article as always.

Anyway to breakdown the stats by market segment such as lots, condos, homes and show the average median price by sector. Would be interesting to see if such market segmentation might provide even a better insight into market price trending.

If a big deal do not worry about it, still a very interesting analysis.

Name:	John C -	Reply
Subject:	this graph shows average home prices
Date:	3/19/2010 9:32:42 AM

Hey Mav, thanks!

Great questions. I have done one for average home sale prices. See the link below. Scroll down to the 4th graph. I break it down to price segments, and in 2009 the most popular segment was $200,000 - $299,999. Interestingly enough, that is the same level as 2005. I did this for every home sold through the MLS, that reported a price. Sometimes (for one reason or another) the sellers do not wish that their home sale price be published and so a price of 0 is entered. I don't want that to mess up the graph so I take those out. Historically it has been about 5% of sales so I don't think it skews things too badly.

I have not done it for lots or condos, but that is a good idea. I can give it a shot!

URL: Lake Martin Real Estate Sales - 2009 Year In Review

Name:	lucky67 -	Reply
Subject:	When will real estate prices rise again?
Date:	3/19/2010 9:39:07 AM

I posted my financing comments on your blog; I think I have a good perspective, both being a full time dweller of the lake, & having been financing properties here for 34 years; my opinion? buyers better get properties @ lake NOW--while interest rates are still low ! phil@capitallendingal.com

Name:	wix -	Reply
Subject:	Distress sales??
Date:	3/19/2010 10:23:55 AM

Without knowing how many of the sales are distress sales such as condos at Crowne Point the 2009 sales you project don't really reflect what is happening in the lake market. If you can take out those distress sales, we'll have a better feel for the market. With an ASP of 200K to 300K as your highest selling cateogry it appears that condos were a large factor. Weren't there something like 40+ condos at CP unloaded?

Name:	lakngulf -	Reply
Subject:	Sorta related...
Date:	3/19/2010 12:09:52 PM

I wonder if any other spot as nice as the Stillwater area has had so many downturns in development. Seems like every attempt has been met with economic and developement failure, with the common facilities changing hands over and over again.

Seems that part of it was a time share, may still be. I hated to see the old golf course go. It had character.

Why has that area had so many problems? And can we throw in Crowne Point as a similar happening that did not happpen?

Name:	wix -	Reply
Subject:	Graphs are not downloading.
Date:	3/19/2010 12:53:38 PM

Name:	solvacc -	Reply
Subject:	Real estate prices rise? Nope, they're gonna fall.
Date:	3/19/2010 2:06:02 PM

I know most homeowner's don't want to hear it, but I don't think prices have stabilized yet. I think last years distressed sales have artificially made volumes look like they are on the way up. In contrast, every single person in the biz that I have spoken to has given a glum outlook for the year based on evidence that rentals & sales are very slow.

Don't get me wrong, John makes a great point in comparing sale volumes/prices and concludes the market has reset to 2005. However, a couple of things should be remembered. In 05, unemployment was 1/2 what it is now, flexible loans and lending practices were in effect, and, the beach communities were recovering from hurricanes. Today, from a sellers perspective, there is more competition to lure a scarcer number of buyers to the lake. Just my humble opinion.

Name:	wix -	Reply
Subject:	Hmmmm. No response from John C.
Date:	3/19/2010 7:48:54 PM

Name:	John C -	Reply
Subject:	my response
Date:	3/19/2010 8:11:45 PM

sorry for the slow reply, Wix, but I have been at the lake outside and away from the computer. I usually only check this forum once every couple of days anyway. Please never interpret my lack of response as anything but that..

As to home prices AT LAKE MARTIN dropping more, hey, who knows. There may be more of a lag than 24 or 30 months from the time numbers of sales increased to when prices increase. I don't think they will increase this year. I think it will take until 2011.

Unemployment is up, sure. But so is the stock market. I can point to a lot of macroeconomic data on either side of the argument, so therefore I don't focus on macro issues - I go micro.

The fact is, the numbers of lake homes sold have been beating the prior year **** since July of 08 ***. Not just a little bit, but by 40%. A whooping. These sales figures are undeniable facts.

Believe me, prices will follow. Just as I told people in 2006 that they could not sustain 30% gains every year, I am here to tell you, the price drops will stop and we will return to gains. Fact. The only question is when? What factors should we consider when attempting to predict? If we don't consider # of sales a factor, what do we consider? This is the same data (basically) that I used when I went on record to call the end of the seller's market. A lot of people in my industry called me a fool and couldn't believe I refused to paint a rosy picture that I didn't see. So now I am calling it the other way. Both times, based on the #s.

Does anyone remember July of 2007, or whenever the lake was like 16 feet down and it was downright depressing? I seriously wondered how long it would take to fill back up. Years, maybe. Does anyone remember that it took about 2 weeks in February of 08 to fill up?

I guess my point is, when things (home prices, stock market, water level, college football teams) are on roll (in either direction), it's hard to imagine a change. It's hard to reckon the short term reality, and that the long term results will inevitably bend to market cycles and bell curves.

My other point is that I am human and therefore imperfect, flawed, and foolish. I very well could be wrong about what will happen to prices ** in the short term ** but I know I will be right long term. If I am wrong, at least it will be based on some numbers and not witchcraft. Don't worry, I will notice that I am wrong long before anyone else, and I will be the first to point it out.

Name:	John C -	Reply
Subject:	the crowne pointe effect
Date:	3/19/2010 8:26:15 PM

Good question Wix. This is the topic for another blog post that I will write in a week or so. But the short answer is - no, Crowne Point was not the cause of 2009 being such a good year in terms of homes sold or prices dropping.

In 2009, about 35% of all waterfront sales were non single family homes (not only CP, all condos and townhomes) let's call it NSFs. If you look at sales in the 4 years from 1-1-06 to 12-31-09 our market averages about 21% of sales being NSFs.

It would be erroneous to remove CP completely because in a normal year we have about 1/5 of sales as NSFs. So I normalized the sales, that is, I removed about 30 sales from $100k - 299k to get the total sales back to 21%. To my surprise, it did not affect the bell curve of average sales prices at all. In other words, prices still decrease, regardless of the influence of Crowne Pointe condo sales.

Another way to normalize it would have been to spread those sales back to prior years, arguing that they * should * have been sold in 07 and 08, if they would have been completed, and sales were normal, etc. But to me that is hard to estimate or justify. My method seemed to try and isolate it as much as possible.

I must admit, I was expecting to see at least modest effect. But the bell curve was pretty much the same, retreating back to 2005 price levels. I will post the link here eventually.

Name:	John C -	Reply
Subject:	try updating your internet browser
Date:	3/19/2010 8:35:10 PM

I checked and it's looking OK.

Are you using Microsoft's Internet Explorer to browse the web? Be sure that you check for updates and install them and related stuff like java, etc.

I recommend to everyone to use Mozilla's Firefox web browser. It is SO MUCH better than Microsoft's Internet Explorer. Faster, smoother, pages look much more readable, less errors, everything.

Also memo to everyone - if you are reading this and don't know what web browser program you use, I can guarantee you it's Microsoft's Internet Explorer.

Go to the below link, and download Firefox. It's FREE and so much less frustrating.

Or if you are a gmail / Google person, download Google's Chrome browser, also free and very reliable.

URL: Mozilla's Firefox web browser.

Name:	wix -	Reply
Subject:	updated my internet browser to Chrome
Date:	3/21/2010 2:57:38 PM

Yes, I have been using IE, but kinda like Chrome. It'll take some getting used to, but I was able to download the graphs. I still would like to see more detail as to distress vs normal sales. I know many of the condos were unloaded by developers or their banks and I have a good feeling the influence on your numbers is greater than indicated. Hope 2010 proves my wrong. Thanks for the Chrome advice.

Name:	John C -	Reply
Subject:	no doubt about it, distressed sales
Date:	3/22/2010 2:32:45 PM

affected our market in 09 and continue to do so.

They added to the influx of supply and were a contributing factor in the decrease in prices.

But if you look at our market as a whole, right now (as far as I can tell) there are about 9 foreclosures on the market - aka having an "Active" status on the MLS - for sale right now. See my foreclosure list, linked below (read the article and send an email to that account and you will receive a reply email with the link to the list) shows that.

The total # of waterfront residences for sale right now is about 429. 9 / 429 = 2%.

Contrast this to the national average - according to the Wall St Journal about 25% of closings are distressed sales. I talked to a broker in Birmingham today who is with the largest company in the area and they counted 32% of their closings (I think he said in 2009) were "distressed."

This is why I say that while yes, distressed closings have certainly taken an effect at Lake Martin up to this point, that effect is considerably less, by orders of magnitude, than in other markets.

Could the lake # go up considerably in the future? Sure. It could. Or, it could not. It's hard to quantify that. Rather than pontificate in writing here or on my blog, I stick to the facts. The facts tell me that thus far, we have fared well and in 09 had a great year.

URL: Lake Martin Waterfront Foreclosure List

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