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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: tdl4138 who wrote (59801)	8/11/2006 9:06:07 PM
From: XoFruitCake	Respond to of 306849

"I sincerely doubt many of these will actually finally close when the tower is co'd in the spring" The rub is that WCI has been bragging about their low default rate for the last 2 to 3 conference call. I think that is the reason that make the 6 default stand out so much and get everyone's attention. WCI always count on the 20% deposit bringing buyers to the closing table. I think the decline we are experiencing now is going to be a long one (at least another couple more years to go) and the 20% deposit is not enough to bring everyone to the closing table. The 20% deposit also guarantee that their new sales in the coming quarters will continue to be 80-90% off of 05 pace. As you mentioned there is a lot of resell units out there, why would someone want to lock in with 20% non-refundable money for 2 years if they are not certain that price will be higher. One last note is that they still have a lot of tower unit being constructed but not sold yet. For those unit, they are looking to move it with 0-10% incentive. Another poster calculated that it is about 450M worth from the buildout value and inventory receivable. They are going to be stuck with these units until the tower complete and all buyer close. They can not discount those unit too deeply now since it will drive away the existing buyer. But the resell market clearly offer better alternative. After the completion and all the buyer (er. bagholder) close their sales then WCI can move the unit with big discount and destroy the comp in the process.... Who say buying condo in Florida is fun?

To: tdl4138 who wrote (59801)	8/11/2006 9:40:24 PM
From: Think4Yourself	Read Replies (1) \| Respond to of 306849

I bicycled up the Intercoastal Waterway of Florida a few years back. They were building high rise condo's everywhere from Miami to Cape Canaveral. Sometimes the high rise was the only building higher than one story for many miles, or the only building for miles. No signs of life at most, nor was there any infrastructure other than the road and maybe a mom/pop convenience store a half mile away.

To: tdl4138 who wrote (59801)	8/12/2006 12:49:20 PM
From: Ramsey Su	Respond to of 306849

I had dinner last night with a homebuilder analyst, in town to kick some tires. He did same in Florida during the recent past. Being in California, I am not aware that Fl is taking as much as 20% in deposits. He was shocked by the $5,000 deposit in California for homes over half a million in price. It may be worth a visit to Fl to watching the next WCI's closing event and see how many "buyers" show up at the closing table.