Real Estate Sales Summaries, CY 2009
See the attachments at the very bottom of the REAL ESTATE NEWS page for summaries of the beachfront condominium sales in the area for 2009, as compared with 2008 and 2007, as well as the 1998-2009 summaries for sales specific to the condos at the Gulf Shores Plantation development.
As you would expect, while beachfront cond sales volume saw considerable increases in Gulf Shores and Orange Beach, their prices came down accordingly. As the old adage goes: “Everything will sell….at the right price.”
The interesting news is that beach condo sales in Ft. Morgan, while decreasing in volume by over a third, seem to have achieved a plateau in pricing…what we may hope could be a “bottom” if we were so bold. $288/sq ft in 2008, and 288.14/sq ft in 2009. In looking at the sales, it appears this is the result of two main variables: 1)Beach Club and Plantation have “held tough” on their pricing. 2)the ‘mix’ of sales at GSP was enriched by an decrease in lower-priced (foreclosure) sales, and an increase in higher priced units. Here are those mixes:
Complex 2008 Sales 2009 Sales
GSP 27 3
RGBRC 2 5
RCC 13 6
Palms 2 6
It is our hope that 2010 will not see any further erosion in pricing, but credit has become increasingly difficult, and numerous short-sales and foreclosures have been priced for “cash” sales. This will play a significant role in property values if credit becomes unavailable to buyers trying to purchase a condo in the Gulf Shores Plantation development. Keep your fingers crossed!
TO RENOVATE or NOT TO RENOVATE?
Recently, several owners (who were contemplating selling their units) asked me about renovating and updating their units. Specifically, they asked if I thought it would be worth it, given what has happened to the market of late. My response was a hearty “YES!” Here is my rationale: 1)Many of the purchasers of the recent “lender sales” here at Plantation are using the money they saved on the purchase to turn their new units into little “showpieces,” and should those become competitors in the market, now or later, they will have a significant edge due to their interior condition. 2)There are many, many condos for sale out there, many built in just the last 10 years, which would also be competing for the vacation-home dollar. A unit without serious updates and upgrades will simply not be able to compete anywhere in the market other than in the “fixer-upper” category, and buyers looking for those are also looking for serious bargains…thus, the possibility of getting top-dollar for such a property has been effectively ruled out. Finally, even if you don’t sell right away, you and your guests get to enjoy the updates and renovations in the interim!
As the exclusive onsite brokerage at Plantation, Mandoki Realty is familiar with the types and qualities of renovations that have the biggest impact on buyers here at the resort. Further, we can show owners who are considering upgrades some examples of different updates and upgrades performed in other units so that owner can get a “feel” of what such renovations will be like in his/her own unit.
UPDATES AND UPGRADES THAT MAKE A UNIT MEMORABLE
General: PAINT! Nothing perks up a unit like a fresh coat of paint…use semi-gloss for easy wipe-downs and a finish that lasts. Yellow is a great color, and it seems to sell condos. Lowe’s Valspar © has a “Seaside Collection” which contains “beach-y” colors but with a touch of class. Get some six-panel doors to replace those old slab doors, and replace those old bi-fold doors on the closets with some sliding mirror doors.
Flooring: tile either throughout, or in the living areas. There are some new “wood-like” laminate flooring products that are pretty durable, too.
Kitchen: Lose the “island” if you are in East…or at least make it “mobile.’ There are some great rolling cutting-block units out there that will do the job without screaming "1983!" (Wet Bars and Kitchen Islands were all the rage in the '80's, eh?) New Appliances…they don’t have to be stainless steel, but if you still have that original Almond fridge, dishwasher and range combo, nothing says “dated” like those babies. Over-the-range microwave (call me to talk about swapping out a couple of wall cabinets to make this a great upgrade!) New cabinets, or new cabinet doors (call me about this less-expensive option)…and don’t forget the wetbar, too. This from Mike and Vickie Moore: If you own in West and are considering new kitchen cabinets, move the bar/sink/dishwasher cabinets out about 4-6” to enlarge the galley area of the kitchen...you won't even notice the loss in the living room. If you are in the highrise, consider building a second level on the counter separating the kitchen from the living room, and turning that into a breakfast bar that will also hide the dirty dishes and any cooking mess in the kitchen! Solid surface (think: Corian), granite or tile counter tops...there just isn't that much counter to replace! New faucets and sinks. Indirect (rope?) lighting above the cabinets. Tile backsplashes for a real flourish!
Living Room: That Entertainment Center with the big CRT television has just got to go! Flat panel (LCD or Plasma) TV’s have so fallen in price, it just doesn’t make sense to continue to surrender those square feet of living space taken up by that big old TV and its étagère/shelving unit/armoire! Hang a 32” flat panel on the wall with a good, secure mount. You can even buy them with DVD players built in, or just put one on a small shelf below the TV…hide the wires and cables with paintable surface conduit from Lowe’s © or Home Depot ©. Voila! You’ve reclaimed a passle of floorspace AND gone “leading-edge!” If you are considering new furniture, hook up with an interior designer to work the furnishings, accessories and paint together. Consider a mirror wall on the NORTH wall…run the cable to the SOUTH wall and put the TV there. That way the sofa will be oriented to look out and south towards the GULF, and the mirror will do two things: 1)make the room feel bigger, and 2)bring the gulf “into the unit.” If you are in the highrise, and haven’t moved the TV from beneath the kitchen sink…DO IT! Put it over on the exterior wall next to the sliding glass door, for heaven’s sake.
Bathrooms: How about a cute-and-classy pedestal sink, with a shelving unit over the commode to hold towels, extra toilet tissue, and your or your guests' HABA’s (Health And Beauty Aids)? A hung, framed mirror? New light fixture? Tile splash over the tub unit (they even make some vinyl paneling that “looks” like tile, but can be cut to size with a handsaw and put up with Liquid Nail © and sealed in with caulk.)
THE LITTLE THINGS THAT PEOPLE NOTICE, BUT DON’T KNOW IT
Many is the time I have taken a prospective buyer into several units, which may be very similar in price, location, view and general condition…only to have the buyer say he liked one over the othesr. When asked why, the buyer can’t put their finger on it, they just like the”feel” of one over the other. Obviously, the more current the colors and décor, the better…but when those are roughly equal, there are some small things that hide out in the periphery of the consciousness. Here are some of those things:
Crown molding…you see it but you don’t see it…and it is a great way to finish off a room.
Chair railing…ditto.
Tile installed on the diagonal.
Large (18”) tile
Nice pulls on the cabinet doors and drawers.
Those six-panel doors I mentioned above.
Beadboard wainscoting (now they’re making it in 30” high sheets so you don’t even have to cut it!
New bathroom fixtures that match the plumbing fixtures (faucet,etc)
PINCHING YOUR PENNIES
Here are some ideas to help you accomplish your upgrades more economically:
I got this from Harold Crumpton: Consider just replacing the doors and drawer faces on your cabinets. If the cabinet “boxes” are in good shape, and you don’t want to re-design your kitchen geometry, you may be able to just buy new doors from the Big Box stores (Lowe’s, Home Depot) of their ‘house brand’ cabinets. Nice, white, glossy thermofoil doors can change the entire feel of the kitchen area…and besides the doors, you just have to paint the box exteriors the same high white to match (have the paint guys blend a white color custom-matched to the doors..no, all whites are not the same!)
If you mirror a wall in the living room, consider only mirroring the top ‘half’ of the wall, terminating the top with the ceiling or molding, and the bottom with a chair rail that you can extend around the room for an added dimension of class. This way, you are paying for half the glass and none of the expensive cutouts for power outlets that are in the bottom half of the wall.
Well, that’s it for now. I'm not proposing that you do each and every one of these, but hopefully, this will give you some ideas of what you can do that will improve your unit...your investment...in a meaningful way. I will be adding new items as I discover them. Got an idea? Share it with everyone by sending me an email and I will post it here as your contribution!
DETAILED SUMMARY OF SALES AT GSP RESORT
FOR PERIOD 1/1/2008 THRU 12/31/2008
I recently had an owner tell me he “…didn’t trust statistics…they can be manipulated.” Well, truth be told, the only way statistics can be manipulated is if you falsify the data used to produce them. Rather, we “manipulate” raw data usefully to produce statistics that help us understand the world and events around us…just like we “manipulate” our forks usefully to get the salad from our plates to our mouths. For example, if I were to just tell you that Mandoki Realty brokered 13 owner (non-foreclosure) sales at Plantation last year, what would that mean? Is it good, or bad, or neither? If I were to place that in context relative to ALL of the non-foreclosure sales…”Mandoki Realty brokered over 80%--13 of 16--of all non-foreclosure sales in 2009.” Now we know that the 13 sales is “very good,” at least as it relates to the performance of Mandoki Realty relative to other brokerages in selling Plantation condos. Now we can understand the real estate market a little better. So when I use statistics in my articles, it is to aid you in understanding that market a little better…there is so much raw data out there that we must “distill” it, if you will, to try to make sense of it so we can USE it in our daily lives and decision-making.
So, too, when independent (MLS) data show that 81%...13 of 16… of the owner (non-foreclosure) sales of Plantation units were brokered by Mandoki Realty, such knowledge should help consumers understand the local market better and aid in their selection of a listing brokerage to sell their property at Plantation. Performance should always be a leading consideration in the selection of a broker, and such a statistic as this speaks more directly to OUTCOME performance than does the “number of agents,” “number of ads,” “number of signs,” or “number of offices” a brokerage has. These latter numbers are merely "process" or "activity" measures, whereas the NUMBER OF SALES is a measure of outcome. ...and while no one can guarantee the future....On what should one base such a decision: activities, or OUTCOMES?
So as to keep you fully informed, below are the detailed sales data for 2008 here at GSP resort, as taken directly from the Baldwin County Multiple Listing Service. The yellow-shaded areas are those sales brokered by Mandoki Realty; all are noted as to whether they were a lender sale (foreclosure) or an OWNER sale. While you can see that Mandoki Realty brokered its share of foreclosures, it did not ignore its listing clients in doing so...in fact, someone may have been shopping for a foreclosure, and we were often able to find them one of our listing clients’ units!
Joe Savage, Associate Broker
Mandoki Realty
251-609-1213 (cell)
251-540-6015 (desk)
2008 REAL ESTATE SUMMARY
From Joe Savage, Associate Broker, Mandoki Realty
As promised in January’s Sandpiper II, the following is the detailed analysis of real estate sales in the Alabama beach condo market in 2008.
All fractional numbers expressed below are rounded to the nearest whole percentage.
METHOD: Data were obtained from the Baldwin County Multiple Listing Service (MLS.) The market studied is comprised of condos in Ft. Morgan, Gulf Shores (GS,) and Orange Beach (OB.) Only those condos designated as “Gulf Front” or “Beachside” in the MLS were included in the analysis for OB and GS. Known Ft. Morgan properties (Plantation, Beach Club, etc) were de-selected from the GS analysis if they were inaccurately marked as being in Gulf Shores. Actual sales counts in the 9 known condos on Ft. Morgan (the 4 at GS Plantation, The Beach Club, Martinique, Kiva, Dunes, Indies) were used directly, as any mis-labeled sales had been excluded from the GS analysis. Sales in Phoenix West, Phoenix West 2 and Turquoise were excluded from the OB analysis, as these units were likely pre-sold or “flipped” well before this sales year.
FINDINGS: Referring to Figure 1 below, we find that there were 359 beach condo sales across the entire “beach market” in 2008; this constitutes a 24% increase in volume of units sold over 2007. In 2008, Orange Beach saw a contraction in its sales volume of beach condos by 9%, as sales went from 149 units in 2007 down to 136 in 2008. Gulf Shores saw its sales volume increase by 46%, from 84 sales in 2007 to 123 sales in 2008. Likewise, Ft. Morgan’s condos saw a 75% increase in sales volume, from 57 sales in 2007 to 100 sales in 2008.
As I predicted in last year’s summary, we saw the pricing adjustments in 2008, both from lender (foreclosure) sales, as well as owner sales. “Price per square foot” (the most commonly cited “unit-cost” measure for condos) across this year’s beach market averaged $323 in 2008, down from $390 in 2007, a 17% overall decrease in unit price. Orange Beach’s contraction in their sales volume may be due to the fact that their price per square foot only decreased by 7%. Whereas, Gulf Shores’ beach condos saw their unit pricing decrease 22%, and Ft. Morgan’s unit pricing decreased by 29%.
Figure 1.
Closer to home, the Plantation saw over a 200% increase in sales volume--44 sales vs. only 14 sales in 2007. Neighboring Beach Club saw a 31% increase in its 2008 sales volume--46 sales (vs. 35 sales in 2007.) Of the 44 sales at Plantation, Mandoki Realty(MR) brokered 21 with yours truly as its sole active agent; the next-highest agency’s performance was 8 sales by 5 different agents…just a little over 1/3 of MR’s production with 5 times the staffing contingent. Further, of those 44 sales at Plantation, 16 were regular (non-foreclosure) sales, and Mandoki Realty brokered all but 3 of those—almost 60% of our sales this year were of our clients’ units…NOT lender foreclosures. Impressive statistics, again supporting the claim that Mandoki Realty takes care of its listing clients, and is still the best choice to market and sell your property at Gulf Shores Plantation Resort.
LOOKING FORWARD: We are all waiting to see what the current economic environment will bring, as the evolution of the current banking/credit/economic crisis began about the same time that our real estate market has traditionally cooled in years’ past…mid-October. That makes it difficult to “tweak out” the true impact this economy has had on our market at this time, and the winter is for snowbirds, who are usually non-buyers. Spring will tell, I suspect.
On the up-side, we were again blessed to have the big Gulf storms of 2008 (Gustav and Ike) “take a pass” on our little patch of beach. It appears hurricane amnesia has begun to set in, and the storm hysteria that followed the tragedy and fiasco of Katrina is subsiding. We are hoping to find that the insurance market for beach condos will continue to soften, which will also contribute to making beach condos more affordable again. Unlike primary residences, beach property has a significant discretionary element to it, and typically does not require the prior sale of the principal residence in order to proceed…that can be to a seller’s advantage in this market. Likewise, a stock market with the volatility of the current one does not invite investment therein…and that may prove another advantage for real estate in the coming months.
Again, my best wishes to you and yours for a safe, prosperous 2009!
Joe Savage
Associate Broker
Mandoki Realty
The Exclusive ONSITE Brokerage at
Gulf Shores Plantation.
