I work a lot of WaterColor (30A's most popular community by sales), Rosemary Beach, Grayton, Seacrest Beach, etc. What I am observing is this...
Sales are strong.
-WaterColor, for example, is on track to sell even more houses this year than last year. Meanwhile, homes on the market in the community are about 70% of what its needed for healthy inventory. And, leading up to this year, there had been a fair amount of shadow inventory that we no longer have... (Builder product: where you could walk into a model home and buy a house that wasn't on the MLS because it had yet to be built.) Not having the shadow inventory further strains supply.
-Inventory is also very tight in Rosemary Beach, where I hear the principal complaint is that "There's nothing to buy" rather than "prices are too high."
The underlying value of the real estate along 30A is there.
-Recently, I ran some models to calculate the utility of a vacation home here to the buyer. Essentially, "Is it worth it to buy here at these prices?" And the answer is "yes!" The bargain days are gone. But, return on investment -especially when things like owner stays are accounted for- is at a healthy level. Thankfully, we are not to a point where you would have to factor in "pride of ownership" or "speculation of continued increases in prices" to get to this conclusion. I think we are getting closer to that level. But, we haven't seen runaway pricing on the bulk of inventory.
We have seen some properties- particularly newly built and nicely decorated homes- sell, maybe, for more than they should.
By contrast, homes which were built and decorated over 8 years ago are staying on the market longer. Basically, it's really hard to sell a house when its full of furniture from Tuskers. Buyers don't like brown furniture or tropical design. They don't like dark granite or galley kitchens. So, many of these homes will find their buyers after the newly-built or renovated homes have sold. Sometimes, unless a seller elects to redecorate, these houses have to sell at a reasonable discount to get the buyer.
What I don't see, to answer the OP, is an opportunity for a massive correction. Where this market has stumbled in the past has been when, statistically speaking, we have experienced third standard of deviation events. When do you expect there to be back-to-back hurricanes? How often should you plan for the worst oil spill ever in the Gulf of Mexico? How many times in our lives will we experience an economic downturn so bad that it is referred to as a proper noun with a capital letter? I would hope to think the worst is behind us in terms of threats to market value here.
Where I do see opportunity for correction is when interest rates rise. But, what I anticipate- rather than prices dropping- is a tailing off of volume sold. That's because this crop of buyers, since 2010, have been really strong financially speaking. I have yet to work a buyer in this cycle that will NEED to sell for less than he paid for a home. That's just not going to happen. LTV on these mortgages is nowhere near what it was in 2008.
This market is in good shape.
If anyone reading is interested in selling their home, you can DM me. I have an article in the next issue of Thirty-A Review detailing how to prepare you home for listing. Should be a good read.
R
