What's up with the market in the grayton beach area

When coming to the area over the last few years, I have been looking at real estate but figured it was just way too expensive to buy in the area. Last time we came down it seemed some prices were way down from a year or so ago but others were sky high. Is anything selling? There was also a lot of inventory on the market. Am I correct? Are prices falling? Is now a good time to buy or would it be a good idea to wait. Any good sources of information to research price trends?

Welcome. You might want to start by perusing the other threads here in the Real Estate section. Smiling JOe posts some really good info each month on previous month sales.

Then, sharpen your #2 pencil and take a seat … Professor Shelly will be in any moment.

Welcome. You might want to start by perusing the other threads here in the Real Estate section. Smiling JOe posts some really good info each month on previous month sales.

Then, sharpen your #2 pencil and take a seat ? Professor Shelly will be in any moment.

:clap_1: :clap_1: :floor:

:welcome: billyjoe:

I saw a very good seemingly well-balanced article about second home ownership in the recent issue of Money Magazine this past weekend. I recommend that you look at that (I couldn't find it online but if I could I would put up the link). And then figure out how to get some good information about the SoWal market and talk to your accountant. Also, factor in taxes, insurance, etc., because they are expensive and the more expensive the house, the higher they will be.

We love our places (we bought two smaller cottages rather than one bigger one) and being able to come to our second home in SoWal when we want to (which is never often enough). When I'm working away or otherwise stressed in Michigan, I can think of the beach across the street and quickly calm down and get perspective.

We rent them out when we're not here, though you can't count on rentals as a significant source of income (even though the rentals certainly help, they aren't dependable given possible hurricanes, economic trends, overbuilding in the area for now, etc.). We bought (when the prices were lower) for the long-term, as places to enjoy and as reasonable investments over the long-term. So, short term economic cycles don't worry us. We're not in Grayton Beach, though, so others who are have a better sense of that beach (we're in the Seacrest Beach area).

I'm no expert, but you will probably be hearing from them soon. In my opinion the Grayton Beach market is too small for much meaningful analysis, as there have been few transactions this year. The south Walton market, particularly along Hwy30-A, is what to look at. This includes Grayton and the other "villages" along the beach.

Try this link for one analysis.

http://www.davisprop.com/newsinfo.asp?id=1001

Here's my opinion, for what it's worth: Lots of stuff for sale. Probably a good time to buy if you are an end-user, not a flipper/investor, and have a three-plus year minimum time frame before selling.

I'm no expert, but you will probably be hearing from them soon. In my opinion the Grayton Beach market is too small for much meaningful analysis, as there have been few transactions this year. The south Walton market, particularly along Hwy30-A, is what to look at. This includes Grayton and the other "villages" along the beach.

Try this link for one analysis.

http://www.davisprop.com/newsinfo.asp?id=1001

Here's my opinion, for what it's worth: Lots of stuff for sale. Probably a good time to buy if you are an end-user, not a flipper/investor, and have a three-plus year minimum time frame before selling.

That is some scary data from your link... I have a question for you though...

You mention that if you are an end-user you would go ahead and buy, but if you are a flipper/investor... you should wait...

How do you come to this logic that a end user should sign up to lose money, but yet a flipper/investor should stay away... Shouldn't they both stay away from buying in that time frame if the current rental rates are 50% if not less of the cost of ownership at todays rates???

I just don't get the logic of telling an end user he should sign up today when all market indications point to a major correction of prices over the next few years...

I don't think anyone will lose money in a three or more year time frame, if they purchase today at a fair price. (Crikey, is that a topic...). This is a desireable area and will remain so. The white sand and clear water that we have here is found from about Orange Beach (on a good day) to Tyndal AFB. So, it's a limited supply. Additionally, over 40% of land in SoWal is state-owned or otherwise public land. Again, ultimately limiting supply. Yes, we have tons of inventory to choose from and lots of bargaining room. Is this the very bottom? Who knows? Market timing, both in real estate and financial markets, is difficult at best.

So I don't think it's a bad time to "buy and hold", assuming minimal leverage. Where else does one put cash these days?

That is some scary data from your link... I have a question for you though...

You mention that if you are an end-user you would go ahead and buy, but if you are a flipper/investor... you should wait...

How do you come to this logic that a end user should sign up to lose money, but yet a flipper/investor should stay away... Shouldn't they both stay away from buying in that time frame if the current rental rates are 50% if not less of the cost of ownership at todays rates???

I just don't get the logic of telling an end user he should sign up today when all market indications point to a major correction of prices over the next few years...

I believe what he/she is saying is an end user in all probability will keep the property as a long term investment vs a flipper wishing to resell quickly, which we all know isn't going to happen in this market in the "immediate" future. There are buyers desiring a second home because they LOVE SoWalton and are in a situation to buy now rather than the next few years. I also believe our market will readjust much sooner than in a few years.

From the Davis Properties link above... Market Data...

SFR
48 Months Supply

Res. Land
63.5 Months Supply

Condos
52.5 Months Supply

TH
25 Months Supply

All residential property on market compared to current month sales rate gives a whooping (using June data).... 51 months supply...

How can this not end ugly???

Where else does one put cash these days?

In "cash."

In "cash."

How 'bout those bond yields?

How 'bout those bond yields?

cd's are paying 5.3% with 100% preservation of principle ... I've certainly done better than 5.3% in both real estate and the stock market, but in the current precarious economic environment, it's that 100% preservation of principle that has me plowing money into cash (be it cds, swiss francs, or gold coins)

Cash is king.

OK OK Cash is king. It's great. I never knew anybody who went broke with cash in the bank. I sleep well at night because of cash and liquidity in these uncertain times. You guys/girls slapped me good and I needed it.

If we take away my last stupid sentence, do you agree or not with the main point? That is, if one has a three plus year time frame, the SoWal real estate market will show a better return than cash?

We may be receiving 5% on short-term cash, but isn't inflation over 3%? After taxes, we're not far from even. Of course, I do acknowledge ( and sleep well because of) the no-downside aspect of these accounts.

Real estate has traditionally been for patient investors. Our frenzied market defied all logic for a while, as we all know. But I predict that long-range investors will do well if purchasing today.

Maybe it all boils down to risk tolerance.

Lively discussion encouraged.

When coming to the area over the last few years, I have been looking at real estate but figured it was just way too expensive to buy in the area. Last time we came down it seemed some prices were way down from a year or so ago but others were sky high. Is anything selling? There was also a lot of inventory on the market. Am I correct? Are prices falling? Is now a good time to buy or would it be a good idea to wait. Any good sources of information to research price trends?

I think some areas will be a great investment and others will be not so good. I was showing property today and looked at several homes that were great buys. Fixed up they could even be flipped for a profit. Yes, even in this market... Billyjoe, find an agent with good local history and track record that you can trust. You will be fine in the right area. Prices have leveled off in certain areas and still too high in others. Just do your homework with your agent. Too pretty around here and too much state land for it to completely dump.

This is just my $.02 worth. It?s a boring evening in Tallahassee.

CDs paying 5.3% are fine, but they do lock you in. If you buy a 5-year CD you?ll probably wind up paying a penalty equivalent to 9 month?s interest if you withdraw the cash early. If you buy a shorter term CD, you could take a significant income hit if the Fed reduces rates and you?re left reinvesting at 3.5%, etc.

Bonds are just as ?bad.? What maturities do you buy? If rates increase, the value of your bonds will fall. Of course, you?ll always get the par value of the bond at maturity (you hope). Maybe you?ll buy long-term bonds and rates will fall ? then you?ll be looking good until rates increase again.:idontno:

Money market rates change constantly, so you can?t count on them to significantly increase your wealth over time.

Stocks might not be a bad choice, but can believe the financial statements of the companies you?re buying?

I believe that the supply/demand imbalance in the real estate market will correct itself and the market will return to ?normal.? However, I see two major risk factors that will have to be addressed before that happens. One is the propensity of local governments to spend enormous amounts of the taxpayer?s money. The other is the extreme uncertainty over the cost and availability of insurance. I wonder how many mortgages will be in default if wind insurance premiums increase to 10%/year of the value insured ? this could happen in Florida. That would create a downward spiral that would cause lenders across the country to collapse.

I guess I?m a proponent of a diversified portfolio. If you don?t own real estate, buy some. If you don?t own bonds, buy some. Etc.,etc. Just don?t put all of your eggs I one basket and DON?T FINANCE the basket.😀

We may be receiving 5% on short-term cash, but isn't inflation over 3%? After taxes, we're not far from even. Of course, I do acknowledge ( and sleep well because of) the no-downside aspect of these accounts.

Real estate has traditionally been for patient investors. Our frenzied market defied all logic for a while, as we all know. But I predict that long-range investors will do well if purchasing today.

Maybe it all boils down to risk tolerance.

Lively discussion encouraged.

One way of deciding what housing prices might do in the future is to look at history. And what we find is that since the late 1960's, median home prices have been on a very consistent tend line with a consistent slope ... until of course 2002/03. So if you believe (as I do) that there has been no "game changer" event that would permanently move median home pricing off of its trend line, then you could conclude that prices would drop back down to the line ... and this would give you the "should" cost of the median home.

When I do it, I get a 20% price drop in the median US home price -- I don't think that it is terribly unreasonable to extrapolate this across the rest of the market since median home prices rose at similiar rates to the rest of the market during the boom period (could be less in under-heated markets, and more in overheated markets).

And, to determine how long it will take to get back to the peak market pricing of last year, draw the two lines out (diagonal slope line and horizontal line from peak) and see where they meet ... looks like about 2014 to me.

Of course if you throw in a souring economy, bad loan and debt situations, and deteriorating consumer confidence, pricing could drop below the tend line for awhile.


So, to answer the question posed, I do indeed believe that cash is a better investment than real estate for the next 3 year period. Having said that though, when I see the market conditions that I am looking for that indicate a bottom, I will DEFINATELY be a buyer (with the cash that I have that's earning 5.3%;-)).

What if you are an end user, moving here? Would you just rent?

What if you are an end user, moving here? Would you just rent?

I would.

What if you are an end user, moving here? Would you just rent?

I would recommend you rent as well...especially if you're going to be here during the Fall and Winter months, you'll be able to get a REALLY good rental deal on a house or condo--the pick of the litter! Take your time, look around, burn up the Realtors' gas, crunch the numbers (insurance & taxes). If you've got a pre-approved mortgage in your hip pocket and some cash to put down, you're going to be treated like a Rock Star.