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jimmyp5

Beach Lover
Mar 1, 2006
104
0
Seagrove
This is a very thoughtful analysis, well based on historical patterns of resort-area real estate market behavior.

That investor with the 25-yr timeframe and a bunch of cash may not have to wait the 18 months you predicted, though ... foreclosures aren't a factor (yet?) but many actual selling prices have begun to decline significantly from the late '04/ early '05 peak you accurately cite.
 

DBOldford

Beach Fanatic
Jan 25, 2005
990
15
Napa Valley, CA
There will always be people who jump onto a real estate boom wagon when they shouldn't. Rule of thumb is that you shouldn't buy it if you can't carry it. Or...as ye live by the sword, etc. Coastal real estate was long overdue for a correction, lull, whatever you want to call it, before the storms of 2004/2005. The storms definitely exacerbated the problem, as many people are not well informed as to how South Walton fared, relatively speaking. If one more person asks "how much damage we sustained" last summer, I will scream. The answer is none, in fact, a net positive for the Grayton beach. And for the record, we have had reasonable increases in the rental rates on our home every single year and continue to book it pretty solidly for the spring and summer seasons, with the shoulder season rentals increasing.

No one is happy about increases in property taxes (even though they're still underassessed) or increases in insurance, but no one was particularly surprised, either. And at least in FL, everyone shares the pain, not just coastal properties. As for interest rates, over 80 percent of properties valued at over $1M are cash sales in our areas (largely 1031 exchanges, I would assume). Interest rates are not really a factor in such cases.

I follow the listings and closings in the area pretty regularly and they do not support the claims of cynics. Some properties are overpriced, with most owners not caring whether they move or not. Other properties are listing lower because owners just want out now and can still see a considerable profit with the lower listing. Many properties are closing at very close to the listing price, especially if they are well located.

All goes to say that "location, location, location" still means a lot and so does thinking of real estate as a long-term investment. Well located real property will always offer the best return for one's dollar, assuming one can afford the capital outlay and carrying costs. But if the rule of thumb for stocks is that you should play only if you could afford to lose half of your investment, real property stacks up pretty well against that.

I would like to see some perspective in these threads, meaning...real estate dynamics are not usually boom-or-bust. It is a cyclical industry. Day traders need not apply.
 

Kurt

Admin
Staff member
Oct 15, 2004
2,233
4,925
SoWal
mooncreek.com
Thanks for more words of wisdom Donna.

I still say the next 20 years are going to make the last 20 in SoWal seem sleepy, with giant commercial and residential construction along the 98, 331, and 20 corridors. Over a 40 year timeline we are still in the beginning stages of development.
 

Unplugged

Beach Fanatic
Jul 31, 2005
519
0
kurt said:
Thanks for more words of wisdom Donna.

I still say the next 20 years are going to make the last 20 in SoWal seem sleepy, with giant commercial and residential construction along the 98, 331, and 20 corridors. Over a 40 year timeline we are still in the beginning stages of development.
Kurt: I couldn't agree with you more - and you have a wonderful knack for keeping it pithy :clap_1:
 

ecopal

Beach Fanatic
Apr 26, 2005
261
7
Prices seem to be about 20% lower than last year on many properties.

Is it time to buy or to wait for prices to drop more?

There are some desperate sellers out there; some flippers who got caught holding the bag. So I am inclined to think that there are more bargains to be had in certain classes of property if you are patient.

Desperate sellers will tend to be primarily in condos and vacant homes with big overheads and vacant lots with build out times. The question is how fast will these bargains be bought up?

The longterm outlook for 30A maybe one of the best in the coastal south.
30A has constraints on amount of potential devleopment. Currently the supply is ahead of the demand but that is only a temporary phemomenon.

So as some wise posters have already said: if you don't need to sell now don't or you could be sorry.Also, if you really like 30A and want to have a place here now maybe a good time to do some bargain hunting.

Future developable property on 30A is finite and it will become even more valuable as 30A becomes discovered as the most exclusive area to live in the region.


In addition global warming will only help 30A. In fact, go help the cause and go buy a big gas guzzeling SUV to help speed up the process - just kidding.

With more hurricanes and rising sea levels the higher elevation of many 30A properties (although I would be less interested in riskier water frontage property than property close to but a lot or two away from the Gulf/ocean/bay.) may make them more desirable than most Florida property.

Why pay higher prices for low elevation,and more hurricane and flood prone property in grid locked southern Florida when winters here are becoming warmer?
 

Coast is Clear

Beach Lover
Jun 26, 2005
83
0
Atlanta/Seaside
While there is definite softness in the Gulf Coast market, as with most investments, the smartest investors are the ones who make their move when things look their worst, and get out when things look their best. That is something very counter to human nature.

Those that invest when all the news is bad will look brilliant when things turn. Are we there yet?

Once good news starts to come in it is too late.
 

Smiling JOe

SoWal Expert
Nov 18, 2004
31,648
1,773
Coast is Clear said:
While there is definite softness in the Gulf Coast market, as with most investments, the smartest investors are the ones who make their move when things look their worst, and get out when things look their best. That is something very counter to human nature.

Those that invest when all the news is bad will look brilliant when things turn. Are we there yet?

Once good news starts to come in it is too late.

Not all properties are bargain deals yet, nor will all of them ever be, but there are plenty of good buys on the market now, and many of those are negotiable. If you see something you like, you should make an offer at the price you feel is right for you. Much truth is written in your statement above, Coast is Clear. People should not be looking for quick flips, but longer term investments. Quick flips, even if sales pick up somewhat, are very risky presently, and in my opinion, will be for a while.

Many people are waiting for the bottom to hit and the curve to begin an upswing. The problem is that the "zone" (See author, Barry Sears) only last for a split second. Once it is recognized, the zone vanishes.
 

Advance The Man

Beach Lover
May 19, 2005
54
0
GaltsGulch said:
...cognisenti in South Walton had realized the real estate values had stopped rising. Yes folks real estate peaked...

It took the cognisenti on Wall Street, who don't have their finger on the pulse of South Walton real estate as closely as you all do, several weeks, maybe 12 weeks, to figure this out and start selling their holdings down, but there is much more downside to go, should valuations plumet an additional 20% in the area, as I expect is a good possibility and not extreme at all, given the multiple 100% increase in valuations over the past few years...

Nice post, but why the big word (and using it twice! :dunno: ) Any rate, you mispelled it. Here is the correct spelling of cognoscente and definition for the less cognoscenti. :cool:

Correct either with an e or i at the end. :blush:
 
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