Time to Buy South Walton

[robertsondavies]

i think we're in the clear, Shelly has hopefully changed his mind now, after further reflection, that now is the early innings of being bullish again, unless the Federal Reserve changes course soon, which just aint happening. Sincerely wish good luck to all. There is not much vitreol on the board anymore, I think it is game over for the bears, of which I was one.
P.S. I don't particularly like Real Estate, as an asset class, but I have got to say that South Walton is the most undervalued spot in the country that I am aware of, and that's both subjective, and a guess about the future.

Good Luck to all.

[homeboy]

i think we're in the clear, Shelly has hopefully changed his mind now, after further reflection, that now is the early innings of being bullish again, unless the Federal Reserve changes course soon, which just aint happening. Sincerely wish good luck to all. There is not much vitreol on the board anymore, I think it is game over for the bears, of which I was one.
P.S. I don't particularly like Real Estate, as an asset class, but I have got to say that South Walton is the most undervalued spot in the country that I am aware of, and that's both subjective, and a guess about the future.

Good Luck to all.

I agree and disagree at the same time. I believe it depends on where you are looking. For instance, getting an almost brand new 2/2 condo at Redfish Village in the $150k range is a reasonable deal. Getting a nice house in a good location in Watercolor or Watersound in the range of $225 to 250 per square foot is a reasonable deal. However, paying over $325 or $350 per square foot as some people continue to do is not a great deal. Those types of prices will continue to fall for a while. Buying in Alys at $600 per square foot is a bad deal. When cost per square foot falls to below $400 in Alys, then you might be in the right range. Rosemary, like WC and WS, should be a good deal below $300 per square foot.

Lot prices in all those areas are still too high and will continue to fall.

[robertsondavies]

I agree and disagree at the same time. I believe it depends on where you are looking. For instance, getting an almost brand new 2/2 condo at Redfish Village in the $150k range is a reasonable deal. Getting a nice house in a good location in Watercolor or Watersound in the range of $225 to 250 per square foot is a reasonable deal. However, paying over $325 or $350 per square foot as some people continue to do is not a great deal. Those types of prices will continue to fall for a while. Buying in Alys at $600 per square foot is a bad deal. When cost per square foot falls to below $400 in Alys, then you might be in the right range. Rosemary, like WC and WS, should be a good deal below $300 per square foot.

Lot prices in all those areas are still too high and will continue to fall.

agreed completely. Alys should be around $400 a foot at best right now, depending of course on distance from the beach. Seaside should be a smidge higher than that, and Watercolor and Rosemary should both be around $275 a foot, depending again on finishes, and distance to beach/location within each 'makeplace'. Foreclosure pricing outside of these 'makeplaces' in Seagrove, Seacrest and similar are where the deals are that are reasonable, and offer the potential, IMHO, for significant appreciation over even the near term. Like $120 per sq foot type deals - THERE ARE VERY FEW OF THESE LEFT by the way. When they are gone, , then prices will start "stabilizing" ; I think these remaining $120per ft deals in places like Seagrove are going to be snapped up, not this spring, but in the next 60 days.

good luck

[scooterbug44]

I do think now is a great time for anyone (who can afford to do so) to be shopping for real estate. Prices are much more reasonable and actually affordable for people who live/work here.

But I don't think there is only a small window of opportunity - more foreclosures are going to be coming into the market and IMO prices will be slow to go up as the economy slowly recovers.

[robertsondavies]

I do think now is a great time for anyone (who can afford to do so) to be shopping for real estate. Prices are much more reasonable and actually affordable for people who live/work here.

But I don't think there is only a small window of opportunity - more foreclosures are going to be coming into the market and IMO prices will be slow to go up as the economy slowly recovers.

Sounds like the mirror image of what people told me in 2005, about why Real Estate in South Walton, even it it were to go down, could never take any real appreciable or quick dive in value, due to X Y and Z factors, we're all familiar with.
I simply don't think the REO inventory on 30A South Walton is nearly high enough(unlike other areas in Florida or even neighboring areas on the Emerald Coast) to suppress a rapid price bump,after a few weeks of intense buying interest that will quickly devour what remains. One of the bull**** lines that people threw out there in 2004 to assure folks that prices could not drop, was that South Walton's buyers were "Cash buyers", the wealthy folks from the list of feeder cities you are all familiar with that come to South Walton. That turned out to be a total exaggeration, much of the "Cash" was coming from Financiers (aka Securitization Trusts), and so it was a total exaggeration.. but when you peel back the onion now, you find that South Walton buyers, are the rich folks from those cities, and while they hit the panic button in 2008 like everyone else, particularly when their stock investments dropped 60%, now that those investments have come ROARING back, they're acting more like themselves again. wait and see.

No one really wants to retire in Atlanta

[scooterbug44]

We didn't run out of inventory during the boom, so I think we've got some wiggle room coming out of the bust.

Especially with a record year of foreclosures scheduled to add to the inventory.

I agree that Sowal is an attractive area to live (hence my current location), but I think you are overestimating the speed at which the local real estate market will return to the earlier frenzy AND at which the banks will sort out all the paperwork.

[melscuba]

Just some quick thoughts. Really.... who wants to even live in Atlanta, much less retire here? Now... don't bite my head off. I've lived here ten years and see more years in the future. We are raising our family here, etc., etc..... but really?? It's a fine place to live, but SoWal is a lifestyle. To be honest, I am grateful to live in Atlanta.... it led me to 30-A. There are 7 million of us here.... plenty of potential buyers for future retirement from this city alone. However, I think it is too difficult to predict where the real estate market is headed in the near future... for SoWal or anywhere else in the U.S.. SoWal will always be desirable, but that doesn't mean buyers are plentiful... or will be in the near future. I can speak from experience, it feels like the banks are checking your DNA for any genetic faults you may have. I have concerns over rising interest rates, continued tightened lending practices, etc. I feel certain SoWal will not be immune to the upcoming foreclosures.... it hasn't been so far. 2011 is proving to be an interesting ride. IMHO, and that's all it is, SoWal will continue to bounce along the bottom without a whole lot of change for the near term. That's not so bad. A steady rise from there will only be good for the community. Here's to looking up!

[robertsondavies]

We didn't run out of inventory during the boom, so I think we've got some wiggle room coming out of the bust.

Especially with a record year of foreclosures scheduled to add to the inventory.

I agree that Sowal is an attractive area to live (hence my current location), but I think you are overestimating the speed at which the local real estate market will return to the earlier frenzy AND at which the banks will sort out all the paperwork.

well, no where on earth has really ever run out of inventory, I never said South Walton will either. When Inventory however gets tight, when buyers overwhelm demand, you see rapid price appreciation, there have been periods of this in Hong Kong, to Naples FL, to California, to NYC, and even to a much lesser extent South Walton. I'm talking about REO Inventory. You're running out of it now, and the desirably priced REO inventory will be gone BEFORE spring.

I frankly hope you basically all agree there is NO hope for a nice bump up, and evaporation of REO supply. IT echoes the late 2004 early 2005 messages chains on this very board, except everyone was on the other side of the boat, so you're really giving me more confidence in my theorum here.

[robertsondavies]

Just some quick thoughts. Really.... who wants to even live in Atlanta, much less retire here?

when I wrote, no one wants to retire in Atlanta, I guess I should have went even one better, but you beat me to it. I don't like the fact that you forecast a steady rise for South Walton now, that scares me a bit, but I think you're rigth nonetheless, and your first observation above about ATLANTA, is priceless, on point, and why demand here will be going ONE WAY, in the coming 10 years - UP

Good luck all. Have fun buying up South Walton

[jeffreyb_30319]

Nice discussion. IMO, the RE market puts a floor in when a investor can buy something with an 8 or 10 cap rate renting to vacationers. In other words, it's a good investment. I don't think you will see that in Watercolor, the lowest priced homes are $800K and no way they are going to cash flow $80K, at least I don't think they will, but I am seeing deals every now and then along 30A that will pay for themselves in 15 years or less especially if you live here and and manage them yourself. Most are snapped up pretty quick with multiple offers, that tells me where the bottom is and what any bank REO's/ short sales will sell for in the future. When the rent pays the note, buyers will step in.

[robertsondavies]

Nice discussion. IMO, the RE market puts a floor in when a investor can buy something with an 8 or 10 cap rate renting to vacationers. In other words, it's a good investment. I don't think you will see that in Watercolor, the lowest priced homes are $800K and no way they are going to cash flow $80K, at least I don't think they will, but I am seeing deals every now and then along 30A that will pay for themselves in 15 years or less especially if you live here and and manage them yourself. Most are snapped up pretty quick with multiple offers, that tells me where the bottom is and what any bank REO's/ short sales will sell for in the future. When the rent pays the note, buyers will step in.

Cheers, it is a good discussion. The really encouraging sign is that the board is completely absent of the boosters that were here in droves in 2004/2005. eyeball counts for this specific Real Estate section are way way down by my observation, and posts on these threads that discuss PRICE DIRECTION of south walton appear to be a fraction of what they were from 2004 to 2008.

I agree with you only partially. I think there are some steals, that are being snapped up, outside of the 'make believe' communities on 30A, that will pay for themselves. To me, that makes them steals, because it has always been and may well continue to be that Cap Rates in resort communities don't reach the kind of Cap Rate you'd see in a multi-family or section 8 apartment complex in Jackson, MS.,.. I think expecting a Cap Rate of 3.5% or so, is more realistic, and I agree I don't think you can even get there with a Watercolor home at 275 a foot... I think even those distress sales need to be 10% cheaper to achieve any cap rate at all, and only after a couple years of marketing effort. but alas in a deflationary or near zero inflationary environemnt, with helicopter Ben Bernanke at the helm and money becoming less valuable everday, a 3.5% cap rate aint all that bad, especially if that doesn't account for personal enjoyment and expense savings of a few weeks a year at the property for the owner themselves.

I don't know WHY the irrationality between investments persists for centuries sometimes. I'm open to hearing why the irrationality exists, and if you see it changing this century.

I'm so bulled up on South Walton now, because I think that the only people benefiting from the recovery so far, are folks with investable assets, and those aren't really the Panama City or Destin crowd, those are the South Walton buyers - PCB buyers are largely like 80% of Americans in that they have ZERO investable assets, outside of what they thought they had in home equity on their first home, and the 50K they have tied up in their 401K plan at work, that they contribute half the max to per year.

Then you take a look at the fact that 30A supply is SEVERELY limited as compared to outlying comparable areas all along the gulf coast. Why? well its simple, its b/c of the height restrictions on building beach condo's, and you have a recipe to see immediate stabilization this spring, and then . . . a moderate (not slow) price aclivity over the next two decades, as a large fraction of the well heeled in an 8 or 9 state area from Texas to Georgia, up to Tennessee and Missourri, descend on the Emerald Coast and realize what a lot of you already know... that you just "have to be" on 30A, and then anywhere else is not a substitute. It's irrational to some extent too, but that's the way people who have the money will think about the decision IMHO.

[ASH]

I agree with Scooterbug.
Beware when all the hype is coming from a realtor. It's what they do....

[robertsondavies]

I agree with Scooterbug.
Beware when all the hype is coming from a realtor. It's what they do....

that's great, I hope everyone down there, agrees with Scooterbug seriously.

Are there any other investments that most of you agree will NOT work out? I'm always looking out for opportunities.

[scooterbug44]

Exactly what part do you have such a problem with?

Hell, I even said "now is a good time to buy."

Is it that I don't think someone who fails to buy this week severely misses out?

[Smiling JOe]

Beware when all the hype is coming from a realtor. It's what they do....

Shame on you, ASH for saying something that. Perhaps you've just been working with an agent who was less than professional.

[robertsondavies]

Exactly what part do you have such a problem with?

Hell, I even said "now is a good time to buy."

Is it that I don't think someone who fails to buy this week severely misses out?

don't misquote me, I'm saying you have 6 weeks, not one. :)

i only disagree with the negative parts of your posts above, but for the record, I sincerely wish everyone was full negative, not just a little negative like some of your posts indicate.

For instance I disagree when you say:

"We didn't run out of inventory during the boom, so I think we've got some wiggle room coming out of the bust.

Especially with a record year of foreclosures scheduled to add to the inventory."

[GatlsGulch2]

I'm thinking the juicy REO inventory is contracted for in 4 weeks, and the public will know about it when it all becomes public record within 6 or 7.

[Smiling JOe]

agreed completely. Alys should be around $400 a foot at best right now, depending of course on distance from the beach. Seaside should be a smidge higher than that, and Watercolor and Rosemary should both be around $275 a foot, depending again on finishes, and distance to beach/location within each 'makeplace'. Foreclosure pricing outside of these 'makeplaces' in Seagrove, Seacrest and similar are where the deals are that are reasonable, and offer the potential, IMHO, for significant appreciation over even the near term. Like $120 per sq foot type deals - THERE ARE VERY FEW OF THESE LEFT by the way. When they are gone, , then prices will start "stabilizing" ; I think these remaining $120per ft deals in places like Seagrove are going to be snapped up, not this spring, but in the next 60 days.

good luck

So I guess the 2nd tier home sale on Friday in Rosemary Beach for $765/sf was way off the map, based on what you guys are saying is too much to pay for a property. What price/sf do you think it should have sold for?

[texnicole]

So Walton a wonderful place to visit but a better place to call home. It's a great time to buy in a beautiful gated community with amazing amenities. Check out the ICF energy efficient home at 133 Cypress Passage phase II at "Cypress Dunes". This home is listed for less than $200 per sq ft. Follow the building of this home on FB at "Cedar Tree Homes LLC".

[melscuba]

So I guess the 2nd tier home sale on Friday in Rosemary Beach for $765/sf was way off the map, based on what you guys are saying is too much to pay for a property. What price/sf do you think it should have sold for?

What!!!It may be under contract, but how will it appraise? I know the usual come back to that is.... "They are paying cash.... it doesn't have to appraise.". Well, if someone has that kind of money to spend, don't you think its from hard work? I don't think they'd just fork it over on pure emotion. It has to make some sense for goodness sake. A realtor could give the current price per square.... but I'd venture a guess that it's less than half of that. The only way I can dream of someone putting in an offer like that is complete misinformation, or no information, on current comps. They just don't know the area. IDK

[robertsondavies]

So I guess the 2nd tier home sale on Friday in Rosemary Beach for $765/sf was way off the map, based on what you guys are saying is too much to pay for a property. What price/sf do you think it should have sold for?

thanks for pointing that out SJ. this reminds me that the wealthy are back. i was way off the map, the prices I was talking about are steal prices, and in the places like rosemary, are as far away from beach as possible, and REO's and discount to REO offer px. Those will be gone in the next few weeks.
SJ, the 2nd tier home was probably a good deal for the buyer. I invite anyone to look at homes elsewhere around the country and decide where the relative value is. I just looked at a bunch of listings of crappy homes in Park City Utah, and a run down shack is a couple million dollars there, and that's walking a quarter mile to the lifts or main st. ... that's not necessarily unreal, whats unreal is South Walton px.ing... but then again, South Walton was actually one of the first little pockets of real estate in America to take a hit in 2005 due to the insurance re-ratings following two storms in mid 04 and then again in mid 05.

Rosemary Beach is going to shock people how it bounces back. In 10 years, people are going to think Alys was under priced.

[Smiling JOe]

melscuba, that rosemary sale closed on Friday, and that was the closing price per sq foot. It was a cash buyer. Rosemary Beach has been finding its feet in 2010 and off to a great start in 2011. The last 14 home sales in Rosemary have sold as low as $252/sf up to $1,026/sf (over $3 million for second tier home & a cash sale). I make no judgments on people's justification for spending money on luxury items. For some, money comes from hard work and for others, money rolls in easily.

[4beachn]

So Walton a wonderful place to visit but a better place to call home. It's a great time to buy in a beautiful gated community with amazing amenities. Check out the ICF energy efficient home at 133 Cypress Passage phase II at "Cypress Dunes". This home is listed for less than $200 per sq ft. Follow the building of this home on FB at "Cedar Tree Homes LLC".

Went by and took a look very nice.

[beachmouse]

I guess I'm waiting for spec homes to start to get snapped up before I'm really bullish about the market again. Even with all the conservation areas, there are still a whole lot of vacant lots out there in active (Watersound north) semi-active (Prominence) and REO-owned (Naturewalk, Chateau de Rebar) developments.

I'm inclinded to almost define a return to 'good times' as seeing more than one home at Naturewalk reach certificate of occupancy stage.

[robertsondavies]

I guess I'm waiting for spec homes to start to get snapped up before I'm really bullish about the market again. Even with all the conservation areas, there are still a whole lot of vacant lots out there in active (Watersound north) semi-active (Prominence) and REO-owned (Naturewalk, Chateau de Rebar) developments.

I'm inclinded to almost define a return to 'good times' as seeing more than one home at Naturewalk reach certificate of occupancy stage.

sounds like you're possibly defining good times, as good times for builders. spec homes are built in the 7th inning of bullish cycles, when builders/bankers plunk down cash in advance, just knowing they'll find a buyer. Good luck finding the 7th inning first. In any event, good luck to you.

[robertsondavies]

Sounds like the mirror image of what people told me in 2005, about why Real Estate in South Walton, even it it were to go down, could never take any real appreciable or quick dive in value, due to X Y and Z factors, we're all familiar with.
I simply don't think the REO inventory on 30A South Walton is nearly high enough(unlike other areas in Florida or even neighboring areas on the Emerald Coast) to suppress a rapid price bump,after a few weeks of intense buying interest that will quickly devour what remains. One of the bull**** lines that people threw out there in 2004 to assure folks that prices could not drop, was that South Walton's buyers were "Cash buyers", the wealthy folks from the list of feeder cities you are all familiar with that come to South Walton. That turned out to be a total exaggeration, much of the "Cash" was coming from Financiers (aka Securitization Trusts), and so it was a total exaggeration.. but when you peel back the onion now, you find that South Walton buyers, are the rich folks from those cities, and while they hit the panic button in 2008 like everyone else, particularly when their stock investments dropped 60%, now that those investments have come ROARING back, they're acting more like themselves again. wait and see.

No one really wants to retire in Atlanta

Again, no one really wants to retire in Atlanta. BUY