Was that a thud I heard?

OK…how many of you heard the thud? If you didn’t it’s because you’re too far away from St Augustine to hear it. That thud was prices hitting the bottom at about where they were before the run-away run-up in prices started in 2004. I’ve personally had bottom-feeders, or as they see themselves: fiscally astute buyers, be recently outbid by 110% on an offer they’ve made on an oceanfront condo.

The real bargains, bank-owned and estate disposals, are going fast to cash buyers. But that doesn’t mean there aren’t great buys that are re-valued by these low-priced sales. An informed seller with input from a knowledgeable Realtor knows that an appraisal will set the sale price regardless of the list price, and the offering price. 

We’re seeing properties come back on the market after being under contract for two or three weeks when the appraisal comes in at less than the offering price. The buyer isn’t going to come to the closing with even more cash than the bank wants as an equity interest, particularly when it might be upwards of another $20,000. And those of you thinking a short sale might be the real deal…think again.

Short sales on premium properties…oceanside condos…are few and far between in St Augustine, unlike other areas in South and West Florida. Short sales increase with distance from the beach with the highest number occurring in the newer subdivisions on the immediate east and west side of I-95, and closer to Jacksonville. Making an offer on a short sale property and expecting it to close is a journey with little hope of a destination.

The primary obstacle in a short sale is that the owner of record, even if they accept the offer, is not the final determiner of the selling price. It is the mortgage holder…and there can be up to six entities, each owning a portion of the 30 year term…that accepts or rejects the offer amount, terms and conditions. The process can take two to three months during which time the property stays on the market in the hope that additional offers will convince the lender that these represent fair market value. The contract for sale entered into by the buyer and seller is totally unenforceable by either party.

So, we’re back to ‘thud’. There are, as I have said, some great buys and the Baby Boomer Snowbirds aren’t here in large enough numbers yet to impact the market.  If you know what you want, it’s time to get serious about looking, and getting while the getting is good. It’s simple Economics 101…as demand increases, so do prices.

Finally, as I’ve said in my early blog, if you think St Augustine is part of the ‘national real estate market’ or the Florida where thousands of condos are going at fire sale prices…good luck. We’re doing much better than either of these media doom and gloom locations.

This blog is the exclusive opinion of Durry Garbutt, an independent self-employed contractor.