St. Joe Sells More Cheap Land

More news from our friend JOE:

Jacksonville, Florida - (December 18, 2008) - The St. Joe Company (NYSE: JOE) today said that it has closed the sales of 19,917 acres of non-strategic rural land in Liberty and Gulf Counties for an aggregate sales price of $28.0 million, or over $1,400 per acre.

"After the termination in October of a previously announced contract for the sale of non-strategic rural conservation land we returned those parcels to the market," said JOE's president and CEO Britt Greene.

Was that the land sale that I blogged about previously, the one for $1,930 per acre? So land prices have fallen substantially just in the last few months?

I'm still short JOE and I love selling JOE calls.

Who is Buying the Stocks I'm Shorting?

Look at this quote from the WSJ:

Legendary fund manager Marty Whitman is pinning the blame squarely on an "irrational" stock market meltdown for this year's hefty losses at his Third Avenue Value fund.

"As far as we are concerned," Mr. Whitman declares in his latest shareholder letter to investors, "the fund's poor 2008 performance is attributable to an irrational stock market, not any fundamental deterioration in the businesses in which [Third Avenue Funds] has invested."

I don't really know what to say. There is no deterioration in MBI's business? ABK? St. Joe?

What I don't like about Third Avenue is they never learned their lesson. Never started giving much weight to the possibility of a global depression (which is what is actually happening).

Although it does look like they are finally getting rid of JOE. Evidently, they sold out of AMAT in the 4th quarter. I am short AMAT and JOE. If Third Avenue is not going to defend the price any longer then it is probably safe for me to pile on the shorts.

St. Joe Buyer Backs Out

Interesting news from St. Joe:

One of the recent mysteries at St. Joe is: What happened to this $130-million land deal earlier this fall for 67,365 acres of conservation land in Liberty, Jefferson, Gulf and Franklin counties? St. Joe terminated the sale but never identified the buyer or why the contract soured. Now the land is back on the market.

Today's enterprise value is 2.27 billion. On September 30, 2008, JOE owned approximately 607,000 acres, concentrated primarily in Northwest Florida. So that values the land at $3740/acre.

But they just lost a deal to sell 11% of their land for $1930/acre (about half of the EV/acre amount). Apparently they also have around 40k paper lots. But lots are a residual function of builder profit margins, which are practically nonexistent right now.

I maintain a small short position in JOE.

Astonishing Inventory in Palm Beach County

From the Palm Beach Post:

In Palm Beach County, the supply of unsold homes - called "inventory" in real estate-speak - has risen to astonishing levels as the housing boom continues to go bust.

"Fifty-five months!" McCabe said.

Actually, there's a 57-month supply - nearly five years - of single-family homes in Palm Beach County, based on the current pace of sales, according to Illustrated Properties Real Estate. The South Florida brokerage tracks listings in the Regional Multiple Listing Service.

Does anyone know what the record is for a market that size?