Real Estate News by Joe Savage, Associate Broker

Here we are at the end of the year…wow, did 2012 just race past? Sales in the last couple of months have been slow area-wide, as most of our market focuses on holidays, family, travel, and the like. We continue to have regular traffic at the Mandoki Realty Sales Office, being so well located right on property. It’s usually people “exploring” Ft. Morgan…finding their way down the drive and then into our building after they make that quick U-turn on seeing the guardhouse. They may not be buyers on that first pass…but they find out we’re here, and they get a great overview of all the Plantation has to offer when they stop by to chat. Many, many times have I pulled a subsequent buyer’s name up from my contact database when they finally do come to buy.

Next month, after 2012 has officially closed out, I will begin my Annual Summary of Real Estate Sales at the Plantation and the local area. I hope to see some uptick in property values as most of the “distress sales” (foreclosures and shortsales) were largely shook-out by the time 2012’s buying season unfolded. But the process of improving property values is likely going to be more protracted than in past cycles, largely due to two factors: 1) the difficulty in securing financing with the 2008-09 collapse of the more liberal “shadow lending market;” and 2) the increased competition posed by all of those contemporary properties that were built-out from 2000-2007 (who are, of course, subject to the same financing problems and so whose pricing advances are likewise suppressed by them.) Thus, the most important things owners and their HOA’s can do is to keep their units and the complexes as fresh, up-to-date and well-maintained as they can, and to ensure that the HOA’s remain strictly compliant with the guidelines of the two largest lenders in the secondary market: Fannie Mae and Freddie Mac. In short, if you want prices to go up, people have to want to buy here, and they have to be able to finance their purchase…it’s just that simple.

Wishing you and yours a safe and glorious 2012 Holiday Season!

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DRESSIN’ UP THE MLS

I have recently been contacted by several owners inquiring about listing their properties. It seems they had received a “farming” postcard in the mail from another agent describing a unit in their complex he had recently listed. This listing was at an unusually high price, and the folks inquiring were hoping to sell theirs at a comparably high price. Now, I never enjoy being the bearer of bad tidings, but I had to explain to them that the price being touted was not realistic in the current market. Even if someone agreed to pay that price, it would likely not appraise. The reason it would not appraise is because there were no recent comparable sales (“comps”) to support that price level. I had to explain that this list price was merely “dressing up the MLS” and not realistic pricing.

It is a violation of the Realtor Code of Ethics © for a Realtor to inflate a seller’s expectations of a likely sales price in order to procure that listing, so I must assume that this seller simply chose to ignore his agent’s pricing advice and the data the agent must surely have provided to assist in setting the price.

It should be the seller who sets the price, and their agent is there to provide them with as much information and data as possible to ensure it is set so that the property sells as promptly as possible, and at its highest and best value. If you are considering selling your Plantation property, be sure to confer with an agent who is familiar with your property, who has a successful track record of selling similar properties, and who provides you with sufficient recent sales data and other information to help you make an informed decision. When considering an agent to sell your property, ask them:

• how many like it they have sold in the past year?
• how many are currently for sale?
• how many units are there in the complex?
• how many have sold in the past year, total?
• how does your property compare with others that have sold?
• where is their office located relative to your property?
• how often are they at the Plantation?

Mandoki Realty is the only onsite brokerage at Plantation, and I have personally owned and lived here, so I know Plantation. Just this year, I have personally brokered more sales at Plantation than the next-best performing real estate company! If you are considering the sale of your unit, you need look no further than Mandoki Realty for the best results!

Real Estate News by Joe Savage, Associate Broker

It's the peak of the “real” hurricane season, and so far we have been incredibly lucky. It is also the end of high season, and time to look over how condo sales have been during the year so far as compared to last year, this time. Amazingly, as of mid-September of both years, 23 condo units had sold across the resort. Here's the breakout:

These numbers are a mix of all types and sizes, but the lion's share of these sales are 2-bedroom units.

While the number of sales has remained flat overall, the 2-bedroom unit still remains the dominant seller. Given that, it appears that the "array" of units sold is relatively consistent from 2011 to 2012. In general, we find a mild, general increase in the price per square foot across the resort in general. The price per square foot is the "lowest common denominator" metric for evaluating value in the market. Below are the average sales price per square foot for the entire resort, as well as by each HOA:

We see mild decreases in two of the four HOA's, an increase in another, and new data in the fourth (Palms.)

The most recent past shows prices trending upward, with Mandoki Realty having bro-kered the highest-priced sales in all four HOA's -- three of those closing this summer. If you are interested in getting the best price for your Plantation condo, you've no better choice than Mandoki Realty.

Real Estate News by Joe Savage, Associate Broker

As of this writing, we have had 19 sales year-to-date at the Plantation, and there are currently 4 units under contract or pending sale to close by the end of August. In 2011, there were also a total of 23 sales during the first 8 months of the year, and in 2010, there were 27. However, the average price per square foot for a 2-bedroom unit (the most common sale) went from $142.96 in 2010, to $143.48 in 2011 and now to $162.95 in 2012. However, the number of sales remains sluggish when compared to the activity seen in the beach market in general, which continues to increase in number of sales from 2010 to 2011, and again to 2012.

There could be a number of factors contributing to this, but the big three are likely: a) age and condition of the property, b) recent history of low-priced duress sales suppressing comps and c) lean rental histories. This has been a banner year in rentals throughout the area and at the Plantation, therefore we expect improvements in rental histories for 2012. Whether you rent your unit or not, it is imperative that the whole property be renter-friendly in order to improve rental histories for those units that do rent, as that ultimately adds value to all properties.

It is also imperative to maintain the grounds, buildings and unit interiors in top condition in order to compete with the thousands of new units put online during the construction boom of 2003-2007…those properties are not even 10 years old yet. This is a partnership between the homeowners’ association--responsible for exteriors, landscaping and amenities, and the individual owners--responsible for keeping their interiors as up-todate as possible.

We cannot do much about how the housing bubble and financial crisis took its toll on pricing at the Plantation. However, on the bright side…an anecdote on a recent pending sale brokered by Mandoki Realty: A sale price was agreed upon by both buyer and seller which would have been the highest price a 2 BR unit that had sold for in that particular phase since mid-2009. However, the appraisal came in short. The buyer, sensing the value, agreed to “split the difference” and pay around $8,000 over appraisal to make the deal work. This is very good news and this is an excellent example of how Mandoki Realty works on behalf of its listing clients to get them the highest and best sales possible. We have brokered 11 of the 23 sales closed or pending in 2012. (Oh, and by the way…that 2BR unit described above? It’s still going to be the highest-priced sale in that phase since 2009!)

CONDO BUYER’S CHALLENGE

Financing is always a challenge and most recently some purchasers have had financing problems because their lenders consider the condominiums at the Plantation as a “condotel” or “condohotel.” However, if the information provided to the lender by the association management is inaccurate or provided in a manner that allows misinterpretation, a sale could be voided due to financing problems.

The major source of confusion is the definition of “second homes” versus “rental units” as it relates to the determination of what is a condotel.

The source of the confusion is how the owner uses his unit. Does the owner use it as a second home but rents it to help offset some of the expenses? If this is the case and, as long as the owner occupies the unit for a minimum period of time annually, it can be classified as a second home. On the other hand, if the unit owner is an investor where the owner is limited or excluded from use of the property by the homeowners association covenants, it puts him in a different status with the lender.

MHI has always considered all of the units at the Plantation as independent entities unto themselves without any revenue sharing among them or having any commercial operations within the condominium complex itself that is operated by the association.

There are many other fine points which must be made to ensure that there is financing available for purchasers. If a condo is not warrantable by Fannie Mae or Freddie Mac, a mortgage broker or lender will not make the loan and will make it more expensive to obtain financing. This has a direct impact on the value of the condominiums.

Real estate activity is picking up!

The phone is ringing and the emails keep coming, with requests for showings, information on the property and questions about condo ownership.

If Spring was a hint of what’s ahead for the 2012 real estate market, sales and prices should continue to recover. Two of the six sales in March received multiple offers and one of those closed above its list price. This suggests that sellers are beginning to hold out for the “right” price and that buyers may have to make two or three offers to get a unit they want.

Summer always brings increased traffic in the form of rental guests, “walk-ins” and “lookers.” With our office located right in the middle of the activity, Mandoki Realty is perfectly poised to capture this traffic and turn potential buyers into Plantation owners. Look at our record since January 2011, when the market began to recover:

The sixteen Mandoki Realty-listed units averaged 313 days on the market. The overall average was 405 days.

Price: The average sales price for the forty-one units sold since January 2011 was 95% of the listing price; Mandoki Realty listings averaged 96.3% of the asking price.

If you are considering selling your unit, give me a call at            1.800.305.8885      . Inventory is lower than it’s been in years andwe need listings. Put the brokerage that specializes in Gulf Shores Plantation to work for you.

WOW! What a difference a month makes!

For the past two weeks, things have been scrambling here at the real estate office. We’ve had two sales where there were multiple offers, one of which closed above its list price! There was only one sale in January and February, but then March exploded with six sales (with one closing on April 2) and Mandoki Realty has three more sales under contract or pending as I write.

There are only thirty-two condos and two duplexes listed for sale at the Plantation. That is all listings, not just Mandoki Realty listings. This is an unusually low inventory; Pedro Mandoki says he’s never seen this few units for sale in his time at the Plantation and he’s been here since 1986.

This should help prices, but it will be a step-by-step process because the past several years of “fire sales” have lulled the buying public into thinking that prices for shortsales and foreclosed units are the new norm. So, it will likely take a touch of buyeramnesia to get past this mindset.

Here is a breakdown of listings by complex:

• Plantation East—10 Two-Bedroom

• Plantation Dunes—1 Two-Bedroom, 2 Sunsuites

• Plantation West—6 Two-Bedroom, 1 Two-Bedroom/Loft, 1 Sunsuite, 1 Sunsuite/Loft

• Plantation Palms—2 One-Bedroom, 5 Two-Bedroom

• PUD—2 Duplexes

If you’re considering selling your unit, you might want to consider getting in listing it now, as there is very little competition out there compared to times past.

You can find no better brokerage to sell your Gulf Shores Plantation unit than the one right on property...Mandoki Realty! We can answer buyers’ questions and we can show your unit by just walking across the parking lot!

From the Desk of Joe Savage

by Joe Savage, On-site Associate Broker

Happy New Year! Have you heard about Disney World? They were turning people away during Christmas break because there were too many! Could this be an omen? Will we have to turn people away during spring and summer because we can’t accommodate them?

Although I’m not an economist, the Disney situation seems to indicate that the American consumer is ready to spend again...notably on family leisure. Let’s hope this means higher occupancy rates in 2012 because more vacationers mean more (and higher priced) sales in two ways:

1. A certain percentage of vacationers are interested in purchasing a unit, so more visitors mean more potential buyers.

2. Higher occupancies mean more impressive rental histories. As a rule, buyers in this market plan to rent their units when they aren’t using them and some buyers purchase units primarily for their rental potential.

Rental histories strongly influence whether a unit gets offers or sells at, or near, the asking price, and that affects everyone’s property values.

And again, it is critical that a property be well-maintained and “renter-friendly” to improve property values through higher occupancy.

Mandoki Realty maintains rental histories of units it lists for sale and if the unit has limited or no rental history, we use rental histories of comparable units. In 2011, thirty-one condominiums sold and Mandoki Realty brokered fifteen of them, selling four times more than the next best agent. Mandoki Realty has a contractual obligation to its listing clients to promote, market, show and sell their units and that is evident in our performance.