Sales on 30A for July/Aug 2005

[skier]

Guess I should do houses:


Watercolor 05/01/04-09/08/04 - 24 homes went pending for an average sq ft price of $599.38

Watercolor 05/01/05-09/08/05 - 10 homes went pending (58% decrease in the number of sales) and the ave sq ft price was $752.96 (25.6% increase in value)

These are facts. It's from the Emerald Coast MLS. FSBO's and in-house sales may not be in the MLS but these are the closest to facts that we have to go on.

Cork,

You are posting general sales data. Not specifics. Here is a specific example of market prices falling rather drastically from a year ago or so. This is a quote from a post on another thread regarding some lots that sold in Watersound last year and this year. The prices have dropped dramatically.

Doug,

In terms of comps, lot 61 in passages (two lots down from lot 63 you mention above) is for sale for $650k (mls 394250). They are identical in all respects. Please don't try to tell me this is a biased comparison. It's $249k lower than the "market price" for lot 63 when it sold in an arms length transaction last September. It hasn't been snatched up yet. As I said in the message that started this thread, if you believe in the market and where prices have been over the last 8 to 12 months, then there are some real deals to be had.

The owners basis in lot 61 is $317k. He will obviously have a nice ROI. However, what does that say for the current ROI on lot 63 which has a basis of $899k.

I understand you want to pick apart everything I say because you disagree with my opinions. But, I think your original message about me being misleading was a bit over the top. The comps were not exact, but they were close enough to show that the market is softening. This most recent lot for sale seems to back up my original position. Again, if you believe in the market, these two lots could be a steal.

Another example is the recent lot release by Watercolor of the lots behind Publix. These are the least desirable lots in Watercolor (farther from the beach, behind a shopping center, less amenities, etc.). They sold in June at an average of around $575k. There are now several lots for sale in Phase II for less than the average for Phase IV just 2 months ago. One of the lots is for sale for $450k!!!!!! This is a very specific fact. Not an average generalization. The best place to look for facts on closings is the Walton County website. Not the MLS.

My point is not that the AVERAGE price for lots or homes has increased or decreased. But, that specific and very comparable properties are selling at lower prices than last year and in some case just a couple of months ago. In order to sell, current sellers will be required to sell at lower prices than those paid for comparable properties last year in order to rise above the crowded market. I'm giving specifics, not averages. These are the specific facts. Not the average, generic facts.

Many of these sellers will still make money if they bought a 18, 24, 36, etc months ago. But, the lower prices will put many recent buyers underwater. Whether they can hold out and take no losses will depend on their staying power.

Yep, the overcrowded market, swamped with investors will continue to cause the market to fall.

 

[skier]

Skier,

Are you really an owner? Your repetitive messages appears to hope values decrease dramatically. If you really are an owner, state the MLS listing of your property....like many other's have requested!

Doug

Oops I'm busted. I am an investor sitting on the sideline with millions of dollars just waiting for the chance to pounce. By posting fabrications on this board, I know that I can create a panic. Then, I can swoop down and take my pick of the beautiful houses and lots. You got me. Dagnabit.

 

[Paula]

Certainly, buying in SoWal isn't for everyone, but it still remains a good choice for many people. Top reasons many people will still want to buy in SoWal:

1. They want to be near a beach with white sand, sunsets, and dunes but at a higher elevation (it's nice to be near a beach and not be in a flood zone -- you can find many communities like this in SoWal).

2. They want weather that is fine year round (e.g., warm enough in the winter but not horribly hot in the summer for extended periods of time).

3. They want to be in a beach area without high-rises, McDonalds, malls, etc. -- and are unlikely to ever have these things, yet be close to areas like Panama City and Destin that have these resources (OK, McDonalds wouldn't be considered a resource...).

4. They want to be in an area that protects wildlife and the environment better than many areas do (isn't it about 40% of 30A that can't be built on and must remain natural?).

5. They have perspective about living near the ocean and are not devastated by storms that change the look of the dunes, sand, etc. They respect the fact that sealife is in the ocean. They think Mother Nature is awesome and realize she's in charge.

6. They want to be within a reasonable drive of their homes or within a reasonable drive from an airport (and with the new airport coming in...)

7. They like the architecture (the colorful beach house look).

8. They like the lifestyle ("tea time" at sunset at the beach; going to fine or casual restaurants without having to dress up; living for weeks at a time in flip flops if you want; having people of all ages around; having music/art/movies/theatre/fishing nearby and sometimes next door).

9. They want a place they will come to regularly with family/friends, and they may be looking for a nice place to retire to someday that has services (e.g., hospitals, airport nearby).

10. They have some extra income because they managed their money well and feel (most likely rightly so) that investing in SoWal is a good place to see some appreciation of their investment over time. Investing in property is a good way to avoid wasting money on things that don't matter (an idea from the books "The Millionaire Next Door" and "Rich Dad/Poor Dad" -- the main idea is that millionaires often don't make more money than non-millionaires, but they spend their money much more wisely). They may have to pass on buying new cars regularly to own property, but we all know cars decrease in value pretty quickly.

11. They inherited some money and have their main home expenses under control (and maybe mortgage paid off) and can invest in a second home (e.g., baby boomers).

12. They believe they can offset some of their expenses with rentals. Although, as our accountant says, you should never count on rental income to pay your bills -- the value of property is appreciation over time. That said, our rentals have paid a lot of our bills, but not all of them. In addition, the hurricanes certainly put a damper on rentals last fall and a little bit this summer - so it's good we weren't depending on rentals to pay the bills.

13. There are many condos and land condos (non-attached homes that are based on commonly managed land). Many people like living in these types of communities because these areas are managed and they won't have to worry about taking care of the land around their property (but they are fine paying association fees to have this done for them). And, if they don't like managed communites, there are plenty of regular homes to in the area.

14. They know investing in anything requires some risk, but they feel the benefits of investing in SoWal outweigh the risks. They think long-term so they're not significantly affected by market bubbles, hurricanes (unless their property gets a direct hit in which case their savings and insurance are needed), etc. And they set up their lives (e.g., savings, other investments) so that they can afford the risk, especially any short-term problems.

I assume there are a lot of people out there who fit this profile. I don't think this list is overly "romantic" or "out-of-touch". It feels pretty real and reasonable to me. It doesn't fit everyone's profile, but it does fit many people's profile.

Can anyone add more reasons people may still want to buy property in SoWal?

 

[Smiling JOe]

Another example is the recent lot release by Watercolor of the lots behind Publix. These are the least desirable lots in Watercolor (farther from the beach, behind a shopping center, less amenities, etc.).

I didn't realize that property was owned by St Joe. I had been thinking that was also a part of Nature Walk. You are refering to the property where roads have recently been cut in behind and to the south of Publix, right? Who wants to live across from a loading dock? I guess the same type of peeps that would want to live across the street from a brand new airport? If Joe sells those, they are really smooth sellers.

 

[Joe Complete]

Here is the phase 4 map. I believe Cedar Woods is the section that was sold this year.

http://www.arvida.com/watercolor/phase4.asp

 

[Smiling JOe]

...
3. They want to be in a beach area without high-rises, McDonalds, malls, etc. -- and are unlikely to ever have these things, yet be close to areas like Panama City and Destin that have these resources (OK, McDonalds wouldn't be considered a resource...). Our first Subway sandwich shop sign was posted last week, in Blue Mtn Beach. The flood gates are now open. ( You will never, ever find me eating there.)

4. They want to be in an area that protects wildlife and the environment better than many areas do (isn't it about 40% of 30A that can't be built on and must remain natural?). Yes, unless the State sells the land.

5. They have perspective about living near the ocean and are not devastated by storms that change the look of the dunes, sand, etc. They respect the fact that sealife is in the ocean. They think Mother Nature is awesome and realize she's in charge.

6. They want to be within a reasonable drive of their homes or within a reasonable drive from an airport (and with the new airport coming in...)

7. They like the architecture (the colorful beach house look).

8. They like the lifestyle ("tea time" at sunset at the beach; going to fine or casual restaurants without having to dress up; living for weeks at a time in flip flops if you want; having people of all ages around; having music/art/movies/theatre/fishing nearby and sometimes next door). This is me!

9. They want a place they will come to regularly with family/friends, and they may be looking for a nice place to retire to someday that has services (e.g., hospitals, airport nearby).

10. They have some extra income because they managed their money well and feel (most likely rightly so) that investing in SoWal is a good place to see some appreciation of their investment over time. Investing in property is a good way to avoid wasting money on things that don't matter (an idea from the books "The Millionaire Next Door" and "Rich Dad/Poor Dad" -- the main idea is that millionaires often don't make more money than non-millionaires, but they spend their money much more wisely). They may have to pass on buying new cars regularly to own property, but we all know cars decrease in value pretty quickly.

11. They inherited some money and have their main home expenses under control (and maybe mortgage paid off) and can invest in a second home (e.g., baby boomers). I am looking for a rich parent to adopt. Anyone interested?

12. They believe they can offset some of their expenses with rentals. Although, as our accountant says, you should never count on rental income to pay your bills -- the value of property is appreciation over time. That said, our rentals have paid a lot of our bills, but not all of them. In addition, the hurricanes certainly put a damper on rentals last fall and a little bit this summer - so it's good we weren't depending on rentals to pay the bills.

13. There are many condos and land condos (non-attached homes that are based on commonly managed land). Many people like living in these types of communities because these areas are managed and they won't have to worry about taking care of the land around their property (but they are fine paying association fees to have this done for them). And, if they don't like managed communites, there are plenty of regular homes to in the area.

14. They know investing in anything requires some risk, but they feel the benefits of investing in SoWal outweigh the risks. They think long-term so they're not significantly affected by market bubbles, hurricanes (unless their property gets a direct hit in which case their savings and insurance are needed), etc. And they set up their lives (e.g., savings, other investments) so that they can afford the risk, especially any short-term problems.

I assume there are a lot of people out there who fit this profile. I don't think this list is overly "romantic" or "out-of-touch". It feels pretty real and reasonable to me. It doesn't fit everyone's profile, but it does fit many people's profile.

Can anyone add more reasons people may still want to buy property in SoWal?

Yes, to get away from the boring 9-5, hectic pace of corporate America, live footloose and fancy-free.

 

[Smiling JOe]

Here is the phase 4 map. I believe Cedar Woods is the section that was sold this year.

http://www.arvida.com/watercolor/phase4.asp

Not as close to the loading doc as I was envisioning. Thanks for the plat.

BTW, most of these lots may be farther from the amenities, but they are closer to the beach than the lots located north of Camp Kids, or whatever that park is called.

 

[Elvis]

Skier,

Are you really an owner? Your repetitive messages appears to hope values decrease dramatically. If you really are an owner, state the MLS listing of your property....like many other's have requested!

Doug

I have stated many times I have a house in Seaside.

"Independence Day" at 726 Forest Street in Seaside, MLS# 379539. 1600 sf for $1,800,000 ($1,125/sf). Listed 1/26/05. Bought in $430,000 in 1997. I would be willing to take $980,000 for it just to prove my points about the dire market in SoWal.

Skier's SoWal rule: the more equity you have the more smug you become.

 

[wetwilly]

Seems like on this board we get a good balance of pure optimism (me sometimes), pure pessimism with some facts (skier), and good facts without any bias (cork), and good perspectives (SJ). As an owner, investor, and long time lover of the SoWal area, I believe the wild land grab and crazy speculative buying is subsiding (good for the market to settle), overdevelopment in some areas is causing large increases in the inventory levels of lots and spec homes north of 30-A in the big "planned" communities, and the speculators "knee jerking" or cashing out is happening now. Like most things in life, do your homework, buy smart and in the "right" place for the right reasons, and if/when you sell then you stand to make a profit. Buy blindly, sight unseen, no homework, all on highly leveraged credit, just for speculation purposes expecting a 100+% return in a year and you may get hurt when the flux and adjustment year(s) happen.

This is a uniquely beautiful area with low height restrictions for building and (no high rise/high density multifamily properties ie 30 story condos) in this environment with the increase in large developments north of 30-A, supply has outpaced the demand. IMO, the shark attack, hurricane, economy, interest rates, and talk/theory of a bubble will have little or no effect on this market because these things have been in existence in some form or another forever. Real estate and its value is based on alot of factors but the supply and demand is the biggest (or lack of one with too much of the other). I believe that more and more people are finding out about the area, vacationing here, and buying here. This is because of most of the things stated in Paula's post. The supply/demand side of this will flux and will cause prices to flux but I do not believe that the market will crash horribly. Like many of you fellow owners/investors that love this area for more than just the $$, I have been to no less than 12 or more beach areas (DE, RI, Va, Md, NC, SC, Al, Ga, Fl, Burmuda, Mexico, Ca) in my travels and although I like many of them for different reasons and will likely go back to some, we will come to SoWal every year (for the AHHHH factor) to see the high pines over Grayton State Park, stroll thru Seaside, and walk the beaches, fish, and swim in the gulf and enjoy all the area uniquely provides.

Yes, I too believe at this point and time that this is a buyers market for many reasons stated by many and above but I do not think that this is the start of a major crash in SoWal. Depending on what you bought/own and where, you will experience ebbs and flows in prices, DOM, etc. IMO prices will stablize, adjust, appreciation %s will flatten some (10-25% yr over yr is still very good), and prices will flatten some and they should. Again, IMO wild, rampant, mass selling at below the fair market prices is not happening. Some folks wanting or needed to sell asap for various reasons will sell below listed prices due to their situation and that is the nature of many real estate markets.

These are just my opinions and I am not a real estate expert but I have been in and following this market for 15+ years. Like the tides and the sand on the beach, real estate markets ebb and flow and go up and down. I think this is a great debate and am glad that we debating the issue of a 10/25% year over year appreciation level vs a 100+%. This is really a great area and market and will be this year and for many years to come.

As they say, "they ain't making anymore after this is all gone....."

I may be wrong but that is my RANT and I'm sticking to it.

 

[Smiling JOe]

I have stated many times I have a house in Seaside.

"Independence Day" at 726 Forest Street in Seaside, MLS# 379539. 1600 sf for $1,800,000 ($1,125/sf). Listed 1/26/05. Bought in $430,000 in 1997. I would be willing to take $980,000 for it just to prove my points about the dire market in SoWal.

Skier's SoWal rule: the more equity you have the more smug you become.

Who is Skieir? Everyone knows Skier's house is in WaterColor. Nice try though. You must be like one of those guys raising money for the Red Crosss.