Sarasota is the 6th most overvalued housing market in FL (Naples: foreclosure, rental)

[AaronDavidSchultz]

Originally Posted by joshan

This... Most every reason people are giving are emotional reason s.

Yep, you're probably right about that.




The salient, overarching point is that probably over 60% of ALL PURCHASES are made because of 'emotion', NOT rationality. That has been proven time over time.


For instance:


An old 70 yr old doesn't *need* that Red Corvette Convertible, but always wanted one.


A truck buyer doesn't really need that shiny F250 diesel when a lightly used F150 Crew will do fine.


That guy getting married can't really afford that 3-carat VVS1 for his bride but he's under the emotional gun, lol


A house buyer doesn't need that 2MM dollar condo with a partial view of the bay when he could buy the identical floor plan across the hall for 1.5, but it has a view of DT, lol


Women don't *need* that pair of those high heel Louboutins when she could buy an almost identical pair of Sesto Muecci's for a fraction of the price....she picks Louboutin....lol.


I don't *need* 2 rolexs for keeping time....they sorta suck, Seiko keeps better "time", or I kind see what time it is on my phone. (Just sold one because the secondary market was stupid high...took the profit).


Get it?

[jean_ji]

Originally Posted by JPrzybylski07

Well said, I agree but where did I say anything about the beach being cooler in the summer? Haha… you’re just assuming that’s what I meant, all good…. What I said specifically was referencing the nice sunsets in the summer at the Gulf. You’re right though the water and beach is no reprieve between July-most of August but taking a dip during dawn or dusk still beats swimming in any chlorinated pool.

Dawn and dusk are when sharks feed, no thanks. I’ll take my chance with a chlorinated pool. I swim in the pool when red tide is present or the beaches are over-crowded during the day when I like to swim in the Gulf. Dawn and dusk are used for walks.

[Trying941]

Originally Posted by Trying941

Overvalued and overpriced are over used terms in real estate. They suggest that transactions are taking place among buyers and sellers at above some mythical "true" or "intrinsic" value. In fact, the true value in a liquid and free market is whatever the agreed upon price was without undue influence or external factors. In other words, the free market does not lie. It tells you today's value.

For those who are looking to buy in this region, please look at the number of sales and the number of listings in a given week or month. When listings exceed sales in a given period, it is an indication the market may be turning. That has not happened yet. When this happens for a month or two, and inventory meaningfully increases, then you have a stronger indicator of a market leveling off or correction. That has not happened yet either.

It is possible that rising interest rates and declining Covid rates will cause the housing market here to level or decline locally. But, it is also possible that this will be offset by a fundamental shift in the home/office work model - freeing more people to move here and work remotely rather than being forced to commute to a large city.

I am going to give potential home buyers here my current bell-weather for market conditions. It is the asking price by a large local builder, Neal Homes, in Grand Park for the Kiawah model. Over time it is as follows:

576990 5/11/21
578990 5/15/21
605990 5/25/21
625990 8/5/21
635990 8/17/21
655990 8/30/21
661990 9/13/21
666990 9/30/21
682990 11/3/21
684990 11/30/21
694990 12/22/21
704990 1/5/23
719990 1/13/23
729990 2/3/22

When you see the price increases stop, slow, or the price decline, you will know what this one builder with skin in the game is seeing on the ground in the real world of real estate where price matters, and not the opinion of self proclaimed Internet experts. It is just one indicator I use, but a damn good one.

For those following local builders and the direction of prices, Kolter just raised the "Palmer" model at Artistry, a comparable model in a very nice development, from 718990 to 733990. The up trend has not abated.

[AaronDavidSchultz]

Originally Posted by Trying941

For those following local builders and the direction of prices, Kolter just raised the "Palmer" model at Artistry, a comparable model in a very nice development, from 718990 to 733990. The up trend has not abated.

Agreed.


But so has the rate/depth of irrational exuberance, and the ratio of stupid buyers (moving here).


Not surprised at all. They went to the "school of Neal pricing" as well.


Just freakin' stooopid. Sell it.

[Trying941]

Originally Posted by AaronDavidSchultz

Agreed.


But so has the rate/depth of irrational exuberance, and the ratio of stupid buyers (moving here).


Not surprised at all. They went to the "school of Neal pricing" as well.


Just freakin' stooopid. Sell it.

For those who are enjoying the repartee, allow me to add one more factor to your consideration. It cuts both ways.

The large publicly traded national and privately owned mid-sized regional builders are limiting the number of contracts they are signing for the future delivery of homes in 2023 (if you build now, it will be 2023 when done) because they do not want to take the market risk of inflation on the future cost of labor and materials.

If you think that inflation will continue to escalate, buying now is a good hedge against that. You put down 10% on a commodity that might go up 15-30%. That is 150-300% leverage. $50,000 down on a $500,000 house last year would have given you a $650,000-$750,000 house this year.

If you think that inflation will not continue, and we are heading into a recession that will cause inflation and real estate prices to decline, don't buy now.

If you are looking to move here and can afford to buy now, ask yourself if you can afford to buy 15-30% from now. If yes, then what is the greater risk to you? Buying now at a price you know, or playing the market? If you cannot afford it now, hopefully it will be less and you can. If you cannot afford another 15% or more, buying now is the only way to avoid the market risk.

No one knows where the market will be next year. But, builders who can build 10 houses a month next year but selling only 3 are betting on the market going up.

[Trying941]

Originally Posted by Trying941

For those who are enjoying the repartee, allow me to add one more factor to your consideration. It cuts both ways.

The large publicly traded national and privately owned mid-sized regional builders are limiting the number of contracts they are signing for the future delivery of homes in 2023 (if you build now, it will be 2023 when done) because they do not want to take the market risk of inflation on the future cost of labor and materials.

If you think that inflation will continue to escalate, buying now is a good hedge against that. You put down 10% on a commodity that might go up 15-30%. That is 150-300% leverage. $50,000 down on a $500,000 house last year would have given you a $650,000-$750,000 house this year.

If you think that inflation will not continue, and we are heading into a recession that will cause inflation and real estate prices to decline, don't buy now.

If you are looking to move here and can afford to buy now, ask yourself if you can afford to buy 15-30% from now. If yes, then what is the greater risk to you? Buying now at a price you know, or playing the market? If you cannot afford it now, hopefully it will be less and you can. If you cannot afford another 15% or more, buying now is the only way to avoid the market risk.

No one knows where the market will be next year. But, builders who can build 10 houses a month next year but selling only 3 are betting on the market going up.

And Taylor Morrison today pulled their offerings from Zillow in Sarasota, Ft. Meyers and Naples after the Fed inflation report. They too think the market is going up.

[AaronDavidSchultz]

What I know is that from a historical perspective and an academic perspective, when the Street recommends (in concert) a company like THHC as a "buy" in the face of inflationary pressures and a set of complete unknowns affecting this sector for 2022, I'll sit on the sidelines or short it.


Too many unknowns - nay, smart folks are SELLERS at this point - never ever buy in a toppy market like this - to some degree, we've ALREADY had that "breakout" to the upside.


Sell the rumor. Sell the house. Book the profit. Live to fight another day. Is there 'pricing risk'? yes. Is there 'opportunity risk'?? yes indeedy. Can you lose munny taking a big profit? NO.


Take the munny - as Monty Hall suggests - maybe you shouldn't take Door #2 or Dooe #3


Taje the munnyhunny. Don't ever believe a "rocket ship market". Never listen to CNN, MSNBC, Bloomer-berger, or Fox Business.


Listen to your own common sense. There's always another bus or train to catch to get to where you might want to go.


SELL IT. Back slowly out the door, and go count your munny and have a good laugh at others while having a cold beer or cocktail.


Never get in a hurry to get screwed - that's likely going to happen anyway....lol....one way or the other.


BTW, THHC is actually thinking it's average price on houses in 2022 will be "at least 600k"....ok...fine..maybe yes, maybe NO. God Bless that lousy builder.

[Trying941]

Originally Posted by Trying941

Overvalued and overpriced are over used terms in real estate. They suggest that transactions are taking place among buyers and sellers at above some mythical "true" or "intrinsic" value. In fact, the true value in a liquid and free market is whatever the agreed upon price was without undue influence or external factors. In other words, the free market does not lie. It tells you today's value.

For those who are looking to buy in this region, please look at the number of sales and the number of listings in a given week or month. When listings exceed sales in a given period, it is an indication the market may be turning. That has not happened yet. When this happens for a month or two, and inventory meaningfully increases, then you have a stronger indicator of a market leveling off or correction. That has not happened yet either.

It is possible that rising interest rates and declining Covid rates will cause the housing market here to level or decline locally. But, it is also possible that this will be offset by a fundamental shift in the home/office work model - freeing more people to move here and work remotely rather than being forced to commute to a large city.

I am going to give potential home buyers here my current bell-weather for market conditions. It is the asking price by a large local builder, Neal Homes, in Grand Park for the Kiawah model. Over time it is as follows:

576990 5/11/21
578990 5/15/21
605990 5/25/21
625990 8/5/21
635990 8/17/21
655990 8/30/21
661990 9/13/21
666990 9/30/21
682990 11/3/21
684990 11/30/21
694990 12/22/21
704990 1/5/22
719990 1/13/22
729990 2/3/22

When you see the price increases stop, slow, or the price decline, you will know what this one builder with skin in the game is seeing on the ground in the real world of real estate where price matters, and not the opinion of self proclaimed Internet experts. It is just one indicator I use, but a damn good one.

I wrote the above a week ago. Today ..

739990 2/11/22

In the first six weeks of this year, this model has increased from 694990 to 739990, or 6.5%

I am not suggesting that price increases will continue. I am not suggesting anyone buy or sell. I am simply noting what is happening in the real world.

[MOforthewin]

Originally Posted by jean_ji

Dawn and dusk are when sharks feed, no thanks. I’ll take my chance with a chlorinated pool. I swim in the pool when red tide is present or the beaches are over-crowded during the day when I like to swim in the Gulf. Dawn and dusk are used for walks.

Why not? I don't see very many swimming in the Gulf right now. No one was when I was at the beach. Then again the water temp was 63 degrees just a few days ago!

[kramco]

quick diversion from the interesting and relevant for me discussion of home prices, since I'm currently looking, but.....
One of the reasons I want to be here, as opposed to the SF bay area, is the ability to swim in the gulf at least when it's warmer than 75F (got in a few weeks ago at 64F wearing a shorty wetsuit and that was doable but not that enjoyable). The mention of sharks catches my eye though. A quick search gives me the impression that it is quite rare here. How often are there shark attacks and are they consistently at dawn or at dusk and less so during daylight? I can time things to avoid that.