GoToby.com Introduces the GINNdex, a New Measurement Tool
The GINNdex measures current real estate market activity by looking at both inventory and pending contracts; The GINNdex does not lag the market as does the absorption rate.
Palm Coast, Florida – April 4, 2009 – Real estate news website GoToby.com initiates the GINNdex as a new measure of real estate market activity. The GINNdex name was chosen for two reasons; because it will be easy to remember and because it’s an emotionally neutral tribute to real estate developer Bobby Ginn.
Love him or hate him, Bobby Ginn has had a greater affect on Palm Coast and Flagler County than any other residential real estate developer since ITT planned the community. Bobby’s GINNdom (another GoToby created word), like the empires of so many other over-leveraged developers, is unraveling. Three properties were recently sold as a result of Ginn’s default of the $675 Credit Suisse loan. Management of his two major resorts, Hammock Beach and Reunion, has been outsourced and the Ginn name will soon disappear from these luxury resorts.
The Ginn name is remembered in South Carolina for Bobby Ginn’s 1980’s failures. Twenty-five years later, people still talk about bumper stickers which said "Honk if Bobby owes you money." But there are at least two sides to the complex Bobby Ginn. Unquestionably he has built some incredible resorts in Hammock Beach and Reunion. His conservation and charity efforts are well documented. But like Icarus of Greek mythology, who flew too close to the sun, Bobby is apparently driven to test the limits with increasing risks, his ambition outpacing market realities with ever more opulent creations, putting himself into positions in which he will ultimately fail. The GINNdex is created out of respect for his successes. Hopefully, it will live at least as long as the bumper stickers. Those who know Bobby well say he will be back.The GINNdex is derived by dividing the number of units available for sale (inventory) by the number of Pending and Contingent sales contracts. Like the absorption rate, the lower the number, the stronger the market. The GINNdex is a better measure of the current market than absorption rate because it uses pending sales data (signed contracts) rather than sales data (closed sales). Pending sales are posted when a sales contract is signed while actual sales data is not reported until the sale closes weeks or months later. The GINNdex can be parsed into meaningful market segments (under $200 thousand, condos, building lots, etc.). As it changes over time, it can serve as a strong indicator of the direction of the real estate market. Side-by-side comparisons will highlight the segments of the market that are doing well and those that are not.
For instance, the single-family home market in Flagler County is holding fairly steady with only slight price declines but consistently increasing unit sales and declining inventory. But the strength is limited to the under $200 thousand market which is in turn dominated by lender-owned (foreclosed) and short sales.
|
Segment |
GINNdex |
|
Short Sales |
1.48 |
|
Lender-Owned |
1.27 |
|
All Others |
16.36 |
|
All Flagler County |
3.78 |
|
Price |
GINNdex |
|
Under $200K |
2.01 |
|
$200K – $299.9K |
6.93 |
|
$300K – $499.9K |
18.53 |
|
Over $500K |
28.6 |
Keep in mind that real estate numbers seldom show the complete picture. Short-sale contracts are less likely to close than others, skewing that category. Also, the only available pending sales data comes from MLS, which does not include For Sale by Owner (FSBO) or direct from developer sales.
Other developments
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For the fourth consecutive quarter, more single-family homes were sold than in the same quarter the previous year, albeit at slightly lower prices.
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The Palm Coast City Council opened the city up to expensive litigation by effectively denying a property owner’s right to build on a platted Palm Coast lot. This is an unprecedented and ill conceived move. (story)
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Food Lion is closing its Flagler Beach store on SR100 by April 15. (Food Lion/Publix story)
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Publix will open its new store in Beach Village (SR100 at Roberts Road) in late April or early May.
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Ginn’s remaining holdings at Tesoro in Port St. Lucie and Quail West near Naples were sold at a chapter 7 bankruptcy liquidation sale. (story)
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Ginn announced that management of the Hammock Beach and Reunion Resorts were being turned over to two outside firms. (story)
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The number of high value properties hitting the foreclosure mill continues to increase, indicating that this market segment may soon approach bottom. (story)
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Building lot sales have picked up slightly as Palm Coast lots returned to more normal pricing. Lot sales can be simply land banking, buying at today’s low prices for future development, but building lot sales usually indicate new construction is coming soon.
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Mortgage rates are at record lows.
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The number of single-family homes listed for sale on MLS is 1,627. This compares to approximately 2,600 in late 2006.
Ginn
I wonder what you will have to cover once the news on Ginn is gone??