MILLION $ SALES BECOMING ENDANGERED SPECIES

by Patrick Anderson, St. Simons Island, GA. There are currently 185 residential listings priced at $1 million or more on the Golden Isles MLS. Can you guess how many in that price range have sold during the last three months? Twelve to be exact. One was a bulk sale of condominiums and almost all the rest were sold by Sea Island Company. None were listed on the MLS.

Even more troubling is the overall decline of sales in the $1 million + price point. (Bear in mind the chart shows only MLS listed sales which do not include Sea Island Company sales nor other transactions that were not listed with a Realtor). When comparing the 1st quarter 2009 with the same quarter in previous years, we see the numbers peak at 18 in 2006 and drop all the way to zero in just three years.

Of course all price points have dropped precipitously since 2006. But it's clear from the numbers that lower price points are somewhat less affected by today's real estate slump than higher price points.To illustrate the impact of losing the top end of the market, we need to look beyond the units sold and measure the decline in dollar sales.

The next table shows 1st quarter sales in dollar sales broken down by the various Glynn County geographic areas. Again, you see the dramatic decline from 1Q 2006 to 1Q 2009. The Glynn County market has lost $116,000,000 in quarterly sales since 1Q 2005.

It's interesting to note that the Mainland had a stunning increase from 1Q 2005 to 1Q 2006, while the Islands had already started their decline during that period.

It stands to reason that the resort/second home character of the Islands would cause those areas to decline first. When money gets tight, discretionary spending is the first to go. And what could be more discretionary than a second home?

Another way to look at it is by isolating South St Simons (the beach area) where we have lost over $37 million in quarterly sales from 1Q 2005 vs. 1Q 2009. Back in 1Q 2005, the beach area accounted for over 33% of county wide sales. But in 2009, the number has dropped to only 16%.

It's clear that higher price points and second homes are the hardest hit segments of Glynn County's real estate picture. Predicting when the market might return to normal is a matter of conjecture tied to other factors in the economy.

It is the goal of this publication to reward subscribers with the earliest possible indications of market recovery. the ST SIMONS letter monitors local transactions, inventory, market conditions, and other key real estate indicators on a monthly basis. Our subscribers will be among the first to recognize "the bottom" and in the best position to invest in the next up cycle for St. Simons and Glynn County real estate.