Please get out and vote! This is an important election. Forget about the polls and vote your conscience. For months, I have listened to the media (good and bad). I have listened to the debates. And I have made up my mind who to vote for. My choice for President may or may not win the election, but I will have the satisfaction of knowing that I can still freely give my choice on the candidates. And after the election, I will do my part to support the President of the United States. This is a great country, and I would not want to live anywhere else. I only hope that our country can come together after the election. We have tough issues to tackle. No one seems to even remember what normal really is anymore. I will also make it my resolution to pray for our new President. He will need it.
As I approach my 50th Birthday, I have a wonderful memory of getting my Dad to stop along the Gulf Coast in this magical city of Panama City Beach, Florida. And 30 years ago, having my Dad pay $100 for one night's stay was truly amazing by itself! It has always been my desire to retire and live right on the coastline. Now, I am certainly thinking of at least "snowbirding" there for a couple of months after Christmas.
For those of you that don't know, DYERSBURG, TENNESSEE is north of Memphis, TN and is nowhere near the ocean or gulf coast. It is a lovely vacation spot anywhere in the Panhandle of Florida when we can go, and we try to make it every year.
But look at what the condo market in Panama City Beach is doing. So many unsold units. So many OPPORTUNITIES!!
This is a great article by Sam Portman on the Condo Market in Panama City. I was at this auction and it was very exciting to see so many units sold at one time. Much to my advice not to do so, my buyer tried to negotiate a lower price after the auction on BULK units in a closed door meeting and the developer was less then pleased. He would not even discuss it. I do think if you have the money, now is the time to buy.
Posted August 11, 2008 @ 6:01 pm by Sam Portman, Filed under: Real Estate Market
The Palazzo condo building had a successful auction Saturday, August 2, 2008, with around 50 units selling. Some have heralded the event as an indication that the bottom of the condo real estate market is finally here. However, a closer analysis may have a much more sinister conclusion.
Let's analyze the current market value of the Palazzo 2BR/2Ba units the day before the auction. The current market value defined as the highest price that would attract a buyer, given a defined marketing period.
The 2BR/2Ba Palazzo units have 1,345 SF with beach-front master bedrooms. Similar, large 2BR/2Ba units with beach-front master bedrooms over at the Calypso and Splash buildings have had recent re-sales in the high $300,000s, say around $380,000 furnished. Calypso and Splash have overall superior buyer appeal because they are established and have superior amenities.
A Majestic Beach Towers II 2BR/2Ba 1,180 SF unit with beach-front master bedroom sold recently at $340,000 furnished.
Let's look at an inferior development, the Emerald Isle building. Emerald Isle has overall inferior appeal. The 2BR/2Ba units are smaller at 1,146 SF and have somewhat inferior interior quality. These units have been selling around $300,000 furnished.
Ignoring typical appraisal style adjustments, it is reasonable to assume that a buyer of a superior Splash/Calypso unit would pay something less than $380,000 for a Palazzo unit. It is reasonable to assume that a buyer of an inferior Emerald Isle unit would pay more than $300,000 for a Palazzo unit. That leaves us with a roughly estimated current market value for a Palazzo 2BR/2Ba unit the day before the auction somewhere between $300,000 and $380,000, say $330,000 (just a rough estimate to establish the trend).
The Palazzo 2BR/2Ba units sold at auction for $295,000 (including the 10% auctioneer's commission). That is fully 10% less than the current market value on the day before the auction. For those who say the bottom has been established, the current market value for every Panama City Beach condo just decreased by 10%. That is not an unreasonable conclusion. However, that was the bottom as of Saturday, August 2, 2008.
Is there are large, pent-up demand by buyers that are willing and financially able and just waiting to jump into the market? The Palazzo auction indicated that there were at least 50 buyers willing to buy at a 10% discount. However, there is no evidence that there are enough qualified buyers out there willing to buy to turn the market around.
As of July 29, 2008, Bay County public records indicated 1,203 unsold developer units at Aqua, Seahaven, Shores of Panama, Tidewater, Emerald Beach, Grand Panama, Sterling Breeze, and Ocean Reef. Add the 17 remaining developer units at Palazzo for a total of 1,220 unsold developer condo units along Thomas Drive and Front Beach Road. That is not counting the 2,000 or so unsold units at new, off-beach developments (Laketown Wharf, Marina Landing, etc.).
Some have said that the developers will just keep their remaining units until the market turns around. Let's look at the Sterling Breeze building. Sterling Breeze has a total of 145 units of which 83 remain unsold (four closings since 6/1/2008). Sterling Breeze paid off half of their $55,000,000 construction loan and extended the remaining $27,000,000 until September 30, 2008. That's somewhere around $325,000 per remaining unit. Interest only at 7% is around $1,900 per month per unit. HOA, taxes, insurance, and utilities add another $1,000 per month per unit. The total cost to hold is around $34,800 per year per unit. That is 10% of the value of each unit. In a declining market, the sale price may go down another 10% over the next year. If the developer holds his units hoping the market will turn around, he risks losing 20% of the current market value over the next year. That's a lot of money. The pressure to sell sooner rather than later is enormous. And that does not count the pressure from the bank (see September 30th above).
The auction process appears to be a good way to sell unsold units if a developer and his bank are willing to sell at what ever the current market value is as of the day of the auction. However, it is reasonable to assume that the current market value established by an auction will be something less than the current market value established by the previous auction. That sounds good for potential buyers but would be disastrous for would-be sellers of existing condos. The auctions would suck up most of the financially able and willing buyers that may have purchased re-sale condos.
An individual condo owner who needs to sell would be well advised to sell sooner rather than later. The caveat is that if there is a stampede to sell it will tend to accelerate the rate of price decline.
The Panama City Beach condo market will not hit bottom until most if not all of the unsold developer units are transferred to private ownership. The condo market will not hit bottom until most of the condo units whose owners are significantly upside down, with high "loan-to-purchase price" mortgages and who do not have the financial horsepower to hang on are sold at current market values.
There is no logical scenario that will stop this runaway train in the near term. That is the bad news. The good news is that most of South Florida is in worse shape than Panama City Beach.
Everywhere I look, farmers are gathering in their crops. It's HARVEST TIME in Dyersburg, Tennessee!! Wow! I'm a city boy, but the farmers must look forward to the day when they can cash in their crops!
And it applies to real estate too! Buy an investment property today. Fix it up. Really fix it up and put some suprises in it that buyers might not expect. And then wait for the HARVEST TIME!! The markets are a bit crazy right now, I know. But the election will be over soon, and things will get back on track. There is still time to look around, do your due diligence, and buy properties for less than 50 cents on the dollar. Shucks, I just offered 20 cents on the dollar for a really UGLY property! And I will probably get it, too!
One piece of advice: Don't do it alone. Get with a REALTOR professional that can coach you through the process. We would not want you to get burned. And always ask a Realtor: Do YOU own investment property? How long have you been an investor?
Here's my answers: YES, I own investment property, residential and commercial. I started buying houses 20 years ago and built my way up to commercial properties. And I still look for deals today!
There are three kind of people. Which one are you?
1) People that MAKE it HAPPEN!
2) People that WATCH it HAPPEN!
and 3) People that Wonder What Happenned!!!
Make it happen for yourself! See ya out there!
GO VOLS! Tough game against Florida this Saturday!
I want you to know what a University of Tennessee professor taught us long ago. He preached "Go with what you know!" Now I admit that my purchase and sale of stocks in the market has been limited. My purchase and sale of real estate properties have been constant for almost 20 years!!
Real estate investments have always been better for me than any stock purchase. And if I recall, I used all of MY MONEY to buy stocks, and I used OTHER PEOPLE'S MONEY to buy real estate. You do the math. Isn't that a better return on your equity?
I've heard a few comments from would-be investors sitting on the sidelines that indicated that they were "waiting for the bottom." How low can it go? It reminds me of the limbo dance. Some people are more skilled at manuevering around the pole when it gets real low. But the majority fall on their butt. It would be better if I got into the game and got myself under the limbo pole, and got out on the other side. I might even have a chance to go around and get back in line to GO AGAIN!!
So here's my thought: I know what you are going to make by sitting on the sideline and waiting for the bottom. Wait. Here it is: $0000000.00 !! So listen to this: GET UP AND GET IN THE GAME! Find a property with a Realtor and buy it for your new home or buy it for an investment! Smart investors are buying up a lot of property right now while they can.
If you want to go with a pro, call me and let's tour the REO and HUD properties for sale in and about Dyersburg, TN! I'm Jimmy Cooper, and you can reach me at cooperj@ecsis.net
Oh, by the way, we are now DYERSBURG REALTY! Same office . . Same hometown folks . . Same place!
I will be traveling to CLARKSVILLE, TN with my best friends. He has just accepted a new position in the Hopkinsville, TN area. We will be in your area this weekend (Sept. 5 and 6). After putting their house on the Dyersburg market on Friday, we now have an all cash/no contingency contract for closing by the end of September.
Here is what we are looking for: Mature trees in established subdivision fit for an executive. Master Bedroom downstairs (possibly two bedrooms downstairs), Upstairs Bedrooms, Dining Room, Attached Garage for 2 vehicles, Pool-Maybe. Up to $260,000. He wants a close commute to Hopkinsville. She stated that she wants to be close to the Mall Area.
So, if you have a listing that you would like for us to consider seeing THIS WEEKEND, please e-mail to me at cooperj@cableone.net or fax to Dyersburg Realty 731-285-3266. No calls please. I have three offers on my desk tonight, two BPO's to get done, and a closing to be at on Thursday afternoon.
These are serious buyers. If you have serious sellers that have already moved out or that can by month's end, I will be looking for your reply.
An e-mail from a California client today reminded me that investors are finding it a bit harder to finance new acquisitions. HELOC's are being frozen. Down payments are being raised. Now I know what Armondo M. tells you on the TV show. So where are you getting your SEED money these days?
Hard money loans. Someone please enlighten me here. From what I know about these, you find a guy that has more money than you, borrow some from him, and use that cash to put down on other property. How is that better than loan sharks? Seriously, I don't want to have some guy chase me down an alley and break my arm cause I don't have the weekly payment this time. Maybe you have some experience here. I admit I don't. So help me out. Share with us all.
I knew it was going to be a good week when I closed on the sale of my former residence last Friday. (Thanks, Mike!) But I went in today to find out that I was now looking at three new folders on my desk. What is going on? I'll tell you. Business goes on. Life goes on. Situations do change and this economy requires expertise in buying and selling properties.
A good friend told me today that her daughter had purchased a FSBO. I had worked with her on a couple of possibilities before, but she had passed on everything so far. But as I looked at my notes, she is 7 miles further out than she wanted to be. Yes, she saved a commission. But statistics have proven Dyer County values to be holding their own. As she bought outside of Dyer County, our neighboring county to the south has not been as fortunate. Still, she purchased her first house and wasn't at all intimidated by the economy "bumps". Good for her!!
Here's my point: If you are going to stay put in an area: BUY A HOME! and make it yours!! Renting only will make sense in DYERSBURG, TN if you are not planning to stay around here! And DYERSBURG, TN is a great place to live, work, and worship!
If you are planning a move to the area, call us! And there are those who transfer out of Dyersburg. Soon, we will have an lovely executive home on Pioneer Lakes at the Farms (Golf Course and Country Club) ready for the market. We were fortunate to have helped this family when they moved to Dyersburg, and have been called on again to assist them as they transfer to another town with a new job. They have made even more upgrades to the home since they purchased it, so I can't wait until I can show the pictures to you. Lovely lakefront view and golf course across the street right out your front door. LOCATION, LOCATION, LOCATION!! Values are still increasing in this area of Dyersburg because of similar properties in the neighborhood and new construction underway in the current phase of the development at the Farms!
Just listed a BIG BOX just right for a grocery operation! In fact, this one-of-a-kind shopping center was designed for Kroger and a Pharmacy that later combined into a single 25,000 sq. ft. unit in Downtown Dyersburg, TN. Here is the opportunity for an hometown grocery store to start operations right across from City Hall! I remember several grocery stores in the Downtown area when I grew up - K.W. Rogers, Foodtown, Hayes Warehouse Foods, and Kroger of course! As time went by, they moved towards the city limits. But in these days of higher gas prices, everyone is shopping closer to their home and work than ever before. This location at 125 King Avenue in Dyersburg, TN is within walking distance of several businesses and neighborhoods.
Now, we aren't just looking for a grocery! In fact, the last tenant sold off-price home improvement materials. Anyone that is set up for a large showroom, on-site warehouse areas with three loading docks, and plenty of FREE parking right at the front door would need to look at this space. E-mail me today for more information on the Downtown Dyersburg (TN) shopping center.
Wow! As I watched Fannie Mae and Freddie Mac fall from grace on Friday, I wondered if the sky was falling for just a minute. Then I realized, they can't fail. There is too much at stake for the government not to step in and prop these institutions up. Of course hearing Jim Cramer agree with those thoughts helped ease my mind. All eyes will be on Fannie and Freddie in the coming weeks!
But you know, people always panic when things change. I can guarantee one thing for you. Someone . . . somewhere is already looking at making money by creating an alternative to Fannie Mae and Freddie Mac. There will always be a visionary that looks at a PROBLEM and sees it as an OPPORTUNITY! That's what makes America great! It is truly a land of OPPORTUNITY!!
I have taken a short leave of absence from Dyersburg and the real estate business. Here's my theory. When you are stuck in a rut, GET OUT as quick as you can!!! When my mind doesn't work from the heavy burdens that surround my life, I try to change my life. I hope that traveling throughout the United States of America will renew my energy and give me new thoughts and ideas to help my business back in West Tennessee.
So right now, I am in New Mexico. I am visiting with new friends that I have made through other acquaintances. They had a family tragedy that led them to a choice to dissolve their family business. When I got the call from my friends telling me of this tragic event, I accepted the assignment immediately to help out in whatever way I could. Let me quote Zig Ziglar: "You will get all you want in life if you help enough other people get what they want." It is so true. By helping this family in need, they have already ministered to my needs as well.
It works like that in the real estate business too, doesn't it? Sales professionals HELP other people get what they want. And in return, sales has its own rewards. Soon I will return to my hometown ready to help the sellers and buyers in West Tennessee get what they want.
Jimmy Cooper
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