Real Estate Supply

This is probably an ignorant question, but what is the situation with gambling in the state of Florida? (I am not big on gambling/casinos so have not made it my business to find out.)

BTW
Did y'all know Gulf County is completely dry on Sundays? I mean, you can't even buy a drink in a restaurant. Our neck of the woods should be called "American Never-On-Sunday Riviera."

This past week I have seen three different cars with Michigan plates. They are making their way down here and I am glad our weather is nice for them.

Girl, there is not a County or Parish in the United States that is completely dry, even on Sundays. You just have to learn who to ask to get a drink. ;-)

The only gambling I do is getting in my car or on my bike and riding down the road, and, living in Hurricane Alley, so I too, don't keep up with the gambling ins and outs. Gambling is available in Ebro, located 15 miles north of PCB. At the Dog Track, you can bet on the dog races, or in the Texas Holdem' tournaments, and probably some more things too, although I don't know if all of them are legal. I think the northern Miami area was approved for gambling last year. In the past (not sure about the present), gambling was allowed in certain venues in Daytona. There maybe other areas in FL, too, where gambling is legal. Kurt is probably right, with the tax revenue generated from gambling, we will probably see big casinos push to get in the PC/PCB area.

I'm familiar with a lot of the homes you talked about in Rosemary and you can't compare them only by price per square footage. There is a lot more to it than that. The house on Spanish Town is magnficent and is 1 lot back from the gulf, the one on Rosemary Avenue is a carriage house and is north of 30A. Your stats also don't take in to account build-out times, need of owner to sale, etc. Your comparisons are too simplistic.

FYI--Get a realtor and do some more research. The house that sold at 177 Rosemary is not a carriage house and it is not North of 30A. It is about 3 houses back from the ocean and has almost 3000 square feet.

In terms of comparisons, you are right and you are wrong. While it is easy to compare lots that sit side by side or very near each other as I did in my post, it is difficult to compare houses based on price per square square foot. However, what measure is appropriate???? I contend that in some cases it is a very easy way to guage the market. When lot size is fairly comparable (the value of the underlying land is pretty close), the size of the house on the lot is relatively comparable, the lot location is relatively comparable, the construction quality is similar, it is a reasonable comparison. In the case of the house that sold on Spanish Town, and the one that sold on Rosemary and the one for sale on Rosemary Avenue, the lots are similar in size, the homes are all magnificent, both have carriage houses, both have a view of the ocean, etc, etc. It is quite reasonable to compare the cost per square foot. If the market was stable, you would expect the price per square foot of these three homes to be close. However, the price on the home for sale is 30% to 40% less per square foot than the home that sold. There is no reason that the price should be that much lower other than the fact that the market has fallen..Plus the house is not selling so the market must be even lower than the current listing price.

I am still waiting to see the listings offered at 60% the last sale price -- apples for apples. CCK is dead on as for the sq ftg. That alone tells me nothing more than half of the picture.

Go take a look at the houses in Rosemary that I described. You will find a pretty good comparison. No way you can explain such a drastic difference in cost per square foot other than the market.

the lot comparisons on the other hand cannot be argued, they are 100% apples to apples. You can get the data from a qualified realtor in the market and then go make some offers if you are so inclined. I prefer to wait for the bottom of the market.

In my post I actually said lots were listed at 60% of X (previous market high prices) not 60% below X. Several of my examples of lots show that neighboring lots are listing for 60% of previous highs in the market. In fact, one lot is over 50% below what an almost exact replica sold for at the market peak.

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In my post I actually said lots were listed at 60% of X (previous market high prices) not 60% below X. Several of my examples of lots show that neighboring lots are listing for 60% of previous highs in the market. In fact, one lot is over 50% below what an almost exact replica sold for at the market peak.

I am confused.

Go take a look at the houses in Rosemary that I described. You will find a pretty good comparison. No way you can explain such a drastic difference in cost per square foot other than the market.

the lot comparisons on the other hand cannot be argued, they are 100% apples to apples. You can get the data from a qualified realtor in the market and then go make some offers if you are so inclined. I prefer to wait for the bottom of the market.

In my post I actually said lots were listed at 60% of X (previous market high prices) not 60% below X. Several of my examples of lots show that neighboring lots are listing for 60% of previous highs in the market. In fact, one lot is over 50% below what an almost exact replica sold for at the market peak.

The drastic difference in price per foot is due to the entry cost of the sellers when they purchased and the need to sell. I've done a ton of buying and selling in SoWal as have most of my friends. It's simple, if you have lots of product and need to move something for cash flow, it doesn't make a damn what the neighbor has his listed for. You price it to sell and move on. I'm sitting on several lots and houses now that were purchased 2.5 to 3 years ago before the drastic run up in prices. They will be priced to suit my needs, not the needs of the guy who bought last year. This is going on right now. There are many properties listed for sale by people who really do not care if they sell or not. These are usually priced high. On the other end of the spectrum, you have would be flippers who do not want to build and builders who want to free up their construction lines, hence the low prices.

Santiago I appreciate you posting that because it shows why our market is weird. Basic principles apply, but it is not normal here. It seems that a few posters try to compare SoWal to what is happening in their own sphere, or what they read about as "normal" or expected.

The truth is that every property, and every buyer and seller here has their own story. And many of those stories are unusual.

the home that is mentioned at 49 Rosemary ave is owned by Exclusive Resorts. Exclusive Resorts is a private club with homes all over the world. They purchased 2 homes in Rosemary Beach early in 2004. They are both for sale now. This is most likely a business decision to better utilize their assets. The one on rosemary ave was purchased in feb 02 for 2.25 million. It is now listed for 3.1 mil. this is not a bad return on your money for 24 months time. even though the cost sq/ft may not be equal to others it is still a good sale for them if it moves quick. The other home mentioned in the post at 67 dunmoretown lane is not 3400 sq/ft. I know who built it and the house is not even close to that size even if you consider the carriage house. look it up in the county records. The main house is closer to 2500. So this house is not listed at a discount. The two homes that Exclusive Resorts are selling will probably be some of the first to move in Rosemary. They reflect a price that is more realistic than the other homes being offered. There are approx 80 homes for sale in Rosemary right now. At this time last year there was less than half this number. The home at 177 Rosemary that sold last year for around 3.6 mil is centered on the eastern green with nothing between it and the gulf except a beautiful community green. So this is not a fair comp to the homes above.

Santiago I appreciate you posting that because it shows why our market is weird. Basic principles apply, but it is not normal here. It seems that a few posters try to compare SoWal to what is happening in their own sphere, or what they read about as "normal" or expected.

The truth is that every property, and every buyer and seller here has their own story. And many of those stories are unusual.

There is much truth in these last 2 sentences. RB has touched on this above. There are so many variables that affect pricing even within neighborhoods, not to mention spread out over all of 30A. Having said this, I personally think that Monty is right about the bottom not being hear yet. If you don't care which lot you get within a neighborhood like Watercolor, you will be able to do a little better than now. The unique, premium lots will probably not go down any further. I have a lot in Watercolor that was purchased in August 05, just before the drop in prices, that I can make about a 30% return on in 6 months if I would just say yes, but I'm not selling. Its a unique lot. I also have one purchased at about the same time that I would love to get my money back on but can't right now. Point being, every situation is different.

.....Prices on many lots and homes are well below the peak of late 2004 and early 2005. Asking prices for lots that sold for X a year or so ago are sitting right next door to lots on the market today that are listed for 60% of X (and they aren't selling at these drastically reduced prices). Houses that sold for $X per square foot 12 to 18 months ago are sitting next to similar houses that are listed today at prices 10 to 25% less per square foot (and these aren't selling either).

Too much x = %y + $ for me.

Thanks Santiago and all for sharing your first hand knowledge with us of some of these properties being compared. It helps.

Get ready for the delete button Kurt.......

I'm sitting on several lots and houses now that were purchased 2.5 to 3 years ago before the drastic run up in prices. They will be priced to suit my needs, not the needs of the guy who bought last year. This is going on right now.

I read a quote (in Florida Realtor mag) from a local real estate agent who said that folks are buying up properties in the panhandle and using them like CDs. It's a good strategy in your case, but for those who've started last year...IMO...they're screwed.

I read a quote (in Florida Realtor mag) from a local real estate agent who said that folks are buying up properties in the panhandle and using them like CDs. It's a good strategy in your case, but for those who've started last year...IMO...they're screwed.

Again, in some cases you are right but in many cases they will do fine. If their plan was to buy just any lot with no intention of building, and to flip it in the short term, you are dead on. If the lot has no build out, even at this past year's prices, and they are investing for the long term, they will still do great in my opinion.

With sincerity and respects Shelly, you SO frequently and SO aggressively give your opinion... "IMO" people think less and less of it everyday...I can't believe this thread has lasted this long...

With sincerity and respects Shelly, you SO frequently and SO aggressively give your opinion... "IMO" people think less and less of it everyday...I can't believe this thread has lasted this long...

And all the people are certainly entitled to their opinions too...I don't have a problem with that.

As far as I'm concerned, a discussion board that lacks diverse opinions gets pretty boring pretty quickly.

In fringe area news, (geography, not opinions) the Bay Beason reports that Ruckel family has apparently approached the city of Niceville about annexing 1,000 acres north of the N'ville airport and east of OWC. Their plans are to finish building out Swift Creek, and then develop the new land as a mix of middle class to upscale housing and commercial, and possibly put a golf course somewhere in the area.

Exclusive Resorts is being sued by our town for operating a home as a timeshare property. They were foolish enough to place a big article in the NY Times Travel section, with photos. The home was instantly recognized as the party house next to our public park. The owners have not paid a 12.5% bed tax required of any rental property since it was built, but the town also has an ordinance prohibiting timeshare properties. The owners are apparently a very nice couple of guys from San Francisco, who had no idea and heard the Exclusive Resorts siren song without looking into the constraints of local ordinances. Their exposure and liability is now huge.

I absolutely agree with the point that every owner has their own exit strategy and needs and that isn't necessarily compatible with the more recent buyers/investors or especially with the speculative investors in lots and pre-construction condos. Add to that the fact that rental properties in highly desirable areas have no strong incentive to sell just before the rental season begins = revenue flow. What the area needs is a summer without catastrophic hurricane damage and news coverage, combined with lots of press about the advantages the new airport will bring and a stable situation relative to interest rates. (Although I am advised that most of the sales in our area and for our type of product are cash sales, probably 1031 exchanges.)

I also think that South Walton has somewhat missed the boat in not advertising the fact that very little damage was done to properties in our immediate area as a result of the storms. Pensacola and the Ft. Walton/Destin areas were hard hit, but the extent of our major damage seemed beach erosion and its attenuate grasp (dune walkovers). Living so far away from South Walton, I am amazed at how many well-informed people think that Hurricane Katrina itself did the major damage to New Orleans, instead of the condition of their levees in combination with a dismal performance on the evacuation. South Walton has been very effective with its evacuation plans, with rare exception, and I see them continuing to do road plans to improve this for the future. Not that long ago, there was no mandatory evacuation required for a storm of any intensity. (Or maybe I'm older than I think... :roll:

I agree, Donna, about the lack of advertising outside SoWal. The area is nicely advertised (even has articles written about it) in Southern Living and Coastal Living. But I don't see anything about it advertised to people in the midwest, even though we'd be a prime target for rentals and buyers. People from Michigan, for example, are so grateful for 60 degree weather in the winter -- even 50 degree weather -- sometimes 40 degree weather... I think we could get a lot of winter rentals from retirees from the midwest if we advertised more. Another off-season market would be academics on sabbatical who have grown children. SoWal would be a beautiful place to write one's articles or books while on sabbatical.

We live in the Chicago area. I was surprised a few weeks ago to get a St. Joe insert in the Chicago Tribune! They are starting to try to raise interest in the Midwest. I would say only one in ten people here tell me they know about SoWal and almost always they reference Destin. We are trying for word of mouth renters for our place in WaterSound from networking here in the 'burbs...and it's working! A retired couple have rented for two weeks in February.
Great idea about professors. I'll get the word out to my friends at our local college and see if it works.

I am confused.

The math is very simple sixth grade algebra.

An example of one of the lot comparisons above is as follows:

X represents the market peak price paid for a lot in a specific area and 60% of X is the same as .6 times X.

In the case of lot 18 in the Windrose Section of Watersound which sold for $969k, X would be $969k in the algebraic equation. Although several nearby lots sold for similarly high prices, this particular lot sale represents the absolute market peak in this small area of Watersound. 60% of X equals about $582k. Lot 17 right next door is now listed for $475k. Lot 17 is listed, and not selling, at a price that is actually lower than 60% of the market high. In fact, it is listed for less than 50% of the market high.

If you want to find a good deal in the market, enlist the help of an agent who can do the digging for you. Then keep your eyes peeled, find a place you like and make an aggressive offer.

We live in the Chicago area. I was surprised a few weeks ago to get a St. Joe insert in the Chicago Tribune! They are starting to try to raise interest in the Midwest. I would say only one in ten people here tell me they know about SoWal and almost always they reference Destin.

The reason St Joe didn't advertise in the past was they didn't need to advertise. There were no end to the number of investors in the immediate area. All JOE had to do was fire out a fax to a couple Realtors about their property-du-jour and thousands would come flocking--LOC in hand--to glom around the jumbo shrimp bowl and sign contracts.

JOE had a near-zero advertising budget in those heady days of the real estate boom. Things have changed--expect to see more advertisements farther afield.

Did you not believe that there are many, many lots out there listed well below market highs? Again, any of your friends can find a good realtor that will show them many more properties than I listed above at prices far, far below market highs.

You said the following:

Asking prices for lots that sold for X a year or so ago are sitting right next door to lots on the market today that are listed for 60% of X (and they aren't selling at these drastically reduced prices).

Post a lot that has an asking price 40% lower than the one next door sold for 12 months ago and I believe there are thousands of people on this board who would buy it. Assuming that the lots are truly comparable and the sale was at market value. A lot that has 4 months left before the required build out date instead of 16 months is not comparable.

I agree, Donna, about the lack of advertising outside SoWal. The area is nicely advertised (even has articles written about it) in Southern Living and Coastal Living. But I don't see anything about it advertised to people in the midwest, even though we'd be a prime target for rentals and buyers. People from Michigan, for example, are so grateful for 60 degree weather in the winter -- even 50 degree weather -- sometimes 40 degree weather... I think we could get a lot of winter rentals from retirees from the midwest if we advertised more.

Funny you should mention this. I thought it would be a good idea for a group of rental owners to get a little "cartel" together (10-12 homes or condos) and settle on an affordable (think lower-middle class) 3-month winter rate, then market it as a package to an up-north retirement village. If it works out, it could be a win-win situation: the owners would have their places rented out for a solid block of time during off-season and the "gang" from the retirement community would still be able to hang out together.

As this market becomes glutted with vacation rentals, the owners are going to have to think "outside the box" if they (at least) want to break even.

The reason St Joe didn't advertise in the past was they didn't need to advertise. There were no end to the number of investors in the immediate area. All JOE had to do was fire out a fax to a couple Realtors about their property-du-jour and thousands would come flocking--LOC in hand--to glom around the jumbo shrimp bowl and sign contracts.

JOE had a near-zero advertising budget in those heady days of the real estate boom. Things have changed--expect to see more advertisements farther afield.

I understand your point but St. Joe has spent a lot of advertising money in recent years, probably in the millions per year. They have also benefited from tons of free publicity.

You said the following:



Post a lot that has an asking price 40% lower than the one next door sold for 12 months ago and I believe there are thousands of people on this board who would buy it. Assuming that the lots are truly comparable and the sale was at market value. A lot that has 4 months left before the required build out date instead of 16 months is not comparable.

Many of these lots for sale at well below market highs have been on the market for quite some time and haven't moved. More are hitting the market every day. If people really want to buy, there are lots of properties out there to be had at prices way below market highs. In addition, many of the sellers would likely entertain offers below asking price which would make the deal even better.

Your point about the build out date is right on target--I agree completely. Prices will continue to fall as build out dates quickly approach.

Your point about "the lot being truly comparable and the sale was at market" is strange. Are you implying that all the frenzied buying at high prices was not done at market prices? The market is the amount a willing buyer will pay a willing seller. I would say that most of the properties sold is this market were sold at market prices. Finally, the lots in my post were all comparable to each other in terms of size and location. However, I agree again that there are no perfect comps. The primary point of the post is that prices are falling and they are likely to continue to fall. The deals will continue to get better until supply and demand even out.

The reason St Joe didn't advertise in the past was they didn't need to advertise. There were no end to the number of investors in the immediate area. All JOE had to do was fire out a fax to a couple Realtors about their property-du-jour and thousands would come flocking--LOC in hand--to glom around the jumbo shrimp bowl and sign contracts.

JOE had a near-zero advertising budget in those heady days of the real estate boom. Things have changed--expect to see more advertisements farther afield.

Joe has been buying big ads in the Wall Street Journal, Womens mags, etc. for the first time in many years in an attempt to revive the market.

Many of these lots for sale at well below market highs have been on the market for quite some time and haven't moved. More are hitting the market every day. If people really want to buy, there are lots of properties out there to be had at prices way below market highs. In addition, many of the sellers would likely entertain offers below asking price which would make the deal even better.

Your point about the build out date is right on target--I agree completely. Prices will continue to fall as build out dates quickly approach.

Your point about "the lot being truly comparable and the sale was at market" is strange. Are you implying that all the frenzied buying at high prices was not done at market prices? The market is the amount a willing buyer will pay a willing seller. I would say that most of the properties sold is this market were sold at market prices. Finally, the lots in my post were all comparable to each other in terms of size and location. However, I agree again that there are no perfect comps. The primary point of the post is that prices are falling and they are likely to continue to fall. The deals will continue to get better until supply and demand even out.

Why didn't you just say that in the first place? It took you a long way round to state a reasonable point that most everyone here would agree with. No reason to post examples that you don't have all the details for.

Many lots on the market have build out times left that make it impossible to buy now and meet requirements. I was told the one in WS you mentioned is one of them. So what does that make it worth? I don't know but you can't use it to prove your point.

I understand market value. I'm not implying that most properties were not sold for market value. You pointed out specific selling prices and you can't be certain they were at market value unless you have full knowledge of the transaction.