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It is a good rule of thumb when investing to watch what the pros do. Warren Buffet comes to mind. So does Carl Icahn who, according to today's Wall Street Journal, is making the ultimate contrarian play: He is trying to buy WCI, a builder and owner of hundreds of Florida condominiums, many of which are stuck in development and/or facing defaults by over-extended owners who, frankly, followed the advice of Mammon, the god of greed, not any expert.
Icahn believes that the baby boomer generation is coming into its peak retirement years and that Florida still holds an attraction for them. After all, you can't argue about the climate, unless you are in Miami in July, and many boomers feel the pull of nostalgia for the Sunshine State since that is where their parents retired. My folks spent a part of their retirement years in Lauderdale Lakes, and sitting in traffic trying to get back to their condo has caused me to have a different opinion of Florida.
But if Carl Icahn is betting on Florida's condo market, who are we to argue?
Zillow.com is a great idea, a site where homeowners and potential buyers, as well as nosy neighbors, can get an up-to-date appraisal of values for most homes in the U.S. In theory, Zillow does what your real estate agent is supposed to do, but without a contract or promise of commission. But how helpful are its estimates?
Our response is "not very," at least not yet.
To arrive at a "Zestimate," or an appraisal of a specific home's value, Zillow incorporates previous selling prices, comparable selling prices in the area and all the niggling little details about individual homes (such as number of rooms, square footage, taxes, etc.). Zillow falls short in that it can't get down to the level of granite kitchen counters vs. formica, or upgraded faucets vs. builders' basics.
We've taken Zillow for test drives before and have found its results inconsistent, sometimes spitting out numbers for our neighbors' (and our) homes that seem realistic, and at other times going off the reality charts. Not every home in America is in Zillow's database, and when we checked on a listing for our condo in Pawleys Island today, it was not there. But our next-door neighbor's home, with the same layout and square footage as our unit but with less of a view, was Zestimated - at a whopping $493,000. That is a good $175,000 more than what local real estate agents say would be a realistic fetching price for such a unit. Mind you, Zillow does cover itself by including a range of values for the unit, in this case from just under $300,000 to the what-are-you-smoking top price of $780,000.
Our advice is to use Zillow just for hoots for now, but if you are planning on selling your house - or buying one, for that matter - you will still get the best estimate from a qualified real estate agent.
Sea Trail opening new neighborhoods; Brunswick offers cheap overnight stays
Tuesday, 03 April 2007 02:01
Note: GolfCommunityReviews has no marketing arrangements with any golf course communities or clubs. We report what strikes our fancy and what we think will be of interest to our readers.
The large golf resort community of Sea Trail in Sunset Beach, NC, just north of the South Carollina state line and North Myrtle Beach, has opened two additional neighborhoods -- SeaHorse Estates and Eastwood Bluff. SeaHorse comprises 1/2 to 1 acre estate-sized lots located on the first three holes of the community's Rees Jones golf course. The Jones course last year played host to a U.S. Open qualifying round. Eastwood Bluff's three-story town homes are situated along the community's Willard Byrd golf course. Byrd's courses typically include generously sized fairways and greens. The town homes feature more than 2,300 square feet and a private elevator and garage.
The courses at Sea Trail are accessible to the public but also accept memberships. Those who maintain second-homes in the community can opt for a set number of rounds annually for a set price. Fifteen rounds are just $510, and 150 rounds are $4,200, or less than $30 per round if you use them all. We are still scratching our heads over Sea Trail's unlimited golf membership dues of $3,900, which represents a better deal than the 150 rounds rate. We will ask about that when we take advantage of Sea Trail's reasonable $99 Real Estate Discovery Package, which includes accommodations and breakfast. Their web site is a little stingy with prices on the new communities so give them a call if you are interested. Contact Sea Trail at 800-338-9672 or visit the web site at www.seatrail.com .
If $99 a night seems reasonable, you might want to visit Brunswick Plantation in Calabash, NC, just down the road from Sea Trail. An overnight stay is just $40 per night per couple (their literature does not indicate how long you can stay, but at that rate it could be cheaper than renting long term). Brunswick's 1,750 acres include waterfront home sites, lakeside condos, furnished golf villas, and town homes with garages. Its 27 holes of golf were designed by Willard Byrd (18) and Clyde Johnston (9). Home sites are available from the $90s, homes from the $300s and town homes from $340,000. The fully furnished condos start at $250,000. The web site is www.BrunswickPlantation.com . Telephone is 800-835-4533.
Go long on sweaters...and the Carolinas: Floridians miss winter
Friday, 26 January 2007 18:00
North Carolina communities like Albemarle Plantation in Hertford are a magnet for Florida residents who miss a little change of seasons.
Wherever we go in the southeast, we hear the same thing from real estate agents: Floridians are "bouncing back" to the Carolinas. In the early years of this decade, the reasons seemed to be storm related; those with expensive homes on the Florida coasts were intimidated by the threat and, in some cases, reality of hurricanes. They were already leaving before Katrina. Others were fed up with New York metro-area-type traffic as local road infrastructures could not keep up with the population explosions in places like Dade County and Naples. What’s the point of trying to save money by eating dinner at 4:30 p.m. at the local Smorgie Board if you are going to sit in traffic and waste gas? Lately, though, Florida residents are moving to Wilmington, Charlottesville, Asheville and other cities in the southeast for another reason: They miss winter.
Ironic, isn't it. The reasons our parents and grandparents left New York and other northern cities decades ago was that they were sick and tired of cold and snow, and that on a fixed income, they felt a wardrobe of a few tee and golf shirts and three pairs of shorts would save money. They never imagined they would miss winter, or a reasonable facsimile of it (winters in the Carolinas are wussy winters). Today, many are trading in their lanais for fireplaces.
Of course, it is never just about the weather as much as it is about economics, loathe as some of us are to admit it. Just as they did decades ago when they cashed in the wild appreciations on their homes in Skokie and Scarsdale for brand new houses in Boca and Boynton Beach, the new refugees, also known as “halfbacks” for how far they’ve come since leaving north for Florida, are doing the same thing, playing the real estate game for all it is worth, pocketing the difference between their wildly appreciated houses in Florida for plenty enough house in the Carolinas. (Of course, if they waited until now in places like Miami and Naples, they won't get the prices they could have gotten a year ago, if they can sell at all.)
Call it creative financing on a fixed income. They no longer need worry quite as much about income tax rates – Florida has none – because their taxable income is no longer a huge factor as they've spent some of their net worth over time. What they make on the sell and buy transaction pays for a lot of firewood and all the sweaters they need for the Carolinas’ mild winters. And North Carolina has no estate tax, so what they don’t spend in their lifetimes the halfbacks can leave substantially to their heirs.
From the macro economic view, this new phenomenon is good news for real estate price stability in the Carolinas; on the other side of the coin, we have to wonder if Floridians who wait too long to follow suit may suffer more winters of discontent.
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