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Just invested a bit of $ in JOE. Any Predictions?

Discussion in 'Real Estate' started by Paula, May 26, 2005.

  1. Paula

    Paula Beach Fanatic

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    Hi:

    After seeing St. Joe's development plans for the Panhandle (the St. Joe execs renamed the Panhandle "The Great Northwest" by the way), as well as reading the book Green Empire" (cautiously optimistic book about St. Joe), I invested a little $ in St. Joe. Any predictions on how it will do? Of course, it would have been great to have invested in St. Joe a few years ago, but I'm assuming it has room (I hope plenty) to grow. Any thoughts?

    Thanks.
     
  2. Smiling JOe

    Smiling JOe SoWal Expert

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    Well, JOE is cheaper than real estate in South Walton. I predict you will see JOE continue to grow. St Joe has recently been buying very large tracks of timberland and river front property in SW Georgia. I have a feeling that they have some very long term plans. The SW Georgia properties are probably a great place to reinvest some of there profits.
     
  3. BrettMan

    BrettMan Beach Comber

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    I own their stock and I'm in for the long haul - unless I need the cash to buy their land....
     
  4. landlord

    landlord Beach Lover

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    I own JOE also, and intend to continue to add to my position. I expect it to outperform over time. Go Joe Go !
     
  5. Bob

    Bob SoWal Insider

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    St. Joe is the best. They are selling land bought for near nothing for a fortune and reinvesting, tax free, via 1031 law, for more land that is dirt cheap. What a beautiful business model.
     
  6. Wildernester

    Wildernester Beach Lover

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    If you review the financial statements in the current annual report, you will see that for several years a large percentage of JOE's profit has come from Watercolor. For those of us who own JOE, let's hope that it can find another gold mine like like WC. I hope P.T. Barnum was right.
     
  7. kurt

    kurt Admin Staff Member

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    No offense - but if you think the money earned is coming from suckers... :roll:

    Hopefully, you're one of those suckers that bought a lot in WaterColor for $150,000. :D
     
  8. Cork On the Ocean

    Cork On the Ocean directionally challenged

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    Hi Paula,

    I wrote an article a couple of months ago outlining future growth indicators for the Florida Panhandle and it's Real Estate Market. It has quite a bit about JOE in it. It's located at:

    http://www.uniquepanhandleproperties.com/florida_real_estate_investments.htm

    Also, did some numbers on watercolor for a client: Looks like lots appreciated at about 57.75% while homes only appreciated at 19.8%. Of course lots of variables but gives us an idea of trends and demand. Sorry if the colums are running into each other but couldnt copy tables. Can email if you'd like.


    Watercolor Lot Sales from Pendings in each month

    # Pending Low High Ave Price
    5/01/04-5/31/04 20 $375,000 $895,000 $545,900
    6/01/04-6/30/04 17 $365,000 $1,730,000 $605,412
    7/01/04-7/31/04 32 $495,000 $2,500,000 $719,125
    8/01/04-8/31/04 22 $580,000 $1,700,000 $717,432
    9/01/04-9/30/04 4 $585,000 $1,425,000 $810,000
    10/01/04-10/31/04 10 $598,000 $975,000 $732,550
    11/01/04-11/30/04 2 $750,000 $750,000 $750,000
    12/01/04-12/31/04 1 $815,000 $815,000 $815,000
    01/01/05-01/31/05 5 $618,000 $820,000 $762,600
    02/01/05-02/28/05 10 $615,000 $832,500 $707,750
    03/01/05-03/31/05 14 $635,000 $1,550,000 $858,929
    04/01/05-04/30/05 15 $585,000 $1,500,000 $835,000
    05/01/05-05/29/05 11 $663,000 $1,200,000 $861,182

    Active lots in Watercolor
    72 $615,000 $2,650,000 $991,860


    Watercolor Home Sales from Pendings in each month

    #Pending Low High Ave Price/ft2
    5/01/04-5/31/04 8 $849,000 $2,695,000 $568.25
    6/01/04-6/30/04 5 $925,000 $1,900,000 $505.78
    7/01/04-7/31/04 6 $1,225,000 $2,100,000 $594.94
    8/01/04-8/31/04 4 $1,350,000 $2,250,000 $783.87
    9/01/04-9/30/04 5 $1,225,000 $2,650,000 $667.50
    10/01/04-10/31/04 3 $1,400,000 $1,500,000 $683.53
    11/01/04-11/30/04 1 $1,390,000 $1,390,000 $581.59
    12/01/04-012/31/04 0
    01/01/05-01/31/05 6 $1,250,000 $3,600,000 $744.70
    02/01/05-02/28/05 2 $1,350,000 $1,490,000 $658.31
    03/01/05-03/31/05 5 $1,440,000 $1,895,000 $724.61
    04/01/05-04/31/05 5 $1,595,000 $2,395,000 $782.79
    05/01/05-05/22/05 1 $1,995,000 $1,995,000 $680.88

    Active homes in Watercolor
    39 $1,675,000 $4,200,000 $945.33
     
  9. kurt

    kurt Admin Staff Member

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    Thanks for the info Debbie - I noticed you wrote:


    The Forgotten Coast of Florida is but a portion of the Panhandle. It is bounded on the West by Mexico Beach, St. Joe Beach and Port St. Joe. Going East you come to Simmons Bayou, Cape San Blas, Indian Pass, Apalachicola, St. George Island, Eastpoint, Carrabelle, Ochlockonee Bay, and Panacea.


    Panama City and west to Pensacola has long been known as the Emerald Coast, or the miracle strip.
     
  10. Cork On the Ocean

    Cork On the Ocean directionally challenged

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    Hi Kurt,

    Oops. You're absolutely right. Wish I had you proof it a month ago. It was picked up by New Construction Magazine whose reprinting it in June but I think it's too late to change. Maybe they can do a correction. Thanks again. If you have time, take a look at an article theyre publishing in the fall edition about preconstruction :

    http://www.uniquepanhandleproperties.com/real_estate_investing_preconstruction_florida.htm

    If you don't mind, I'll post future articles to the board for your guys comments since this is the most knowledgeable group about the area that I've seen. Thanks again.

    Debbie :clap_1:
     
  11. kurt

    kurt Admin Staff Member

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    Good stuff. :clap_1:


    I've heard a few people say that around here that some developers are adding some appreciation in to their sales prices, and the margins are getting thinner.
     
  12. Cork On the Ocean

    Cork On the Ocean directionally challenged

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    I kinda agree with them that the developers are getting greedy. There's been several precons recently where the developers have raised reservation prices significantly at contract time. 2 years ago I would have said that's the kiss of death for a developer but they're just sucking up the drop outs and reselling. The problem with that is that when the buyer sits for a year on his "reservation" for something that's his top end price of say $500K he's priced out of the market when the developer raises the price to 700K a year later and everything else has gone up. Had that happen to a lady and she could have had a DSF when she signed the reservation for a 500K condo but when the developer raised the price to 700K, all the DSF homes as well as comparable condos had gone up proportionately and she just couldn't afford more than 500K. Not much on 30A for 500K now. :eek: She should have just bought when that was the price. I try to tell people all the time that the market is gonna go up uniformly, old or new construction, doesnt matter - just get in while you can.

    I've got a client that just went to contract on a home in seacrest beach for 949K but the beauty is that the seller can't close until September. :floor: How sweet. My guy has an assignment clause, has it relisted for $1.299 which is what comps are listed at now plus he has the whole summer's appreciation to sell it. His investment - 10K Earnest Money. :D What a return! Actually have 2 of them with similar deals. The other only had only 2 months to sell so he may need to close but still got a good price and sat on 2 months appreciation for 10K. I'm pretty much over the preconstruction hullabaloo. Didn't Redfish condos break at 900K? Get out of here when I can get still get nice 900K condos like High Pointe ON THE BEACH. Go figure.

    Now I'm seeing people trying to sell reservations. Do you believe this? Who would pay 20K for an bilaterally NON-BINDING agreement that somebody who can GET HIS MONEY BACK paid 10K for. I'd never let a client buy or sell that. Sounds like a can of worms. Same for those selling contracts on precons and they are wanting their 100K profit prior to the CO. Who's gonna lend somebody money to buy that? And what if the developer busts and you gave 100K to somebody thats riding around in a snappy new car with your money and you're stuck with a useless contract?

    The best yet is a guy who called me up 2 weeks ago. He's been approached to purchase a "preconstruction tour" where he pays $300 dollars for a seat on a bus which takes him around to different Florida preconstruction offerings. No room, no food, nothing but a seat on the bus. I told him I'd take him around for $200K and it includes lunch :). This is getting crazy




     
    Last edited: May 28, 2005
  13. Paula

    Paula Beach Fanatic

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    Debbie:

    Thanks for the information on St. Joe. I think their biggest challenges (which I'm betting that they'll succeed at) are to (1) convince people to purchase high-end properties inland in the Panhandle (or Great Northwest as they call it); (2) preserve the natural beauty; (3) build infrastructure; and (4) encourage businesses to take root in the "Great Northwest" so that people who want to live inland also have plenty of resources. Joe is in it for the long-term, so they have time to plan out the future of the Great Northwest. Let's hope they do it well and beautifully.

    Best,
    Paula
     
  14. Cork On the Ocean

    Cork On the Ocean directionally challenged

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    Hi Paula,

    I'm also betting on Joe. I thinks they know what they're doing. I can only tell you that everything they've done here has turned to gold. There doesn't seem to be any shortage of high end investors in this area. Every year I'm amazed at how many people continue to flock to these communities in spite of the exorbitantly rising prices. From what I hear, we are still priced less than comparable communities around the state. One of my realtors from Boynton told me that homes that are 6 million here would cost 25 million in the Miami area so it looks like we still have room.

    Regarding on the preservation of our beauty, I'm relying on our county planners who have done a pretty good job so far. Also it seems like JOE communities do appear to be doing a pretty good job so far from not turning us into miles of pavement. Lots of trees and natural vegetation in both Watercolor and Watersound.

    Their donation of the land for the airport and the development of pier park, while certainly not benevolent, seems to indicate an awareness of the need for infrastructure. I know we're all worried about the infrastructure but their communities so far seem to be following new urbanistic principles which will hopefully keep our roads from becoming the mess that 98 is in west Destin.

    Not sure about the whole Great Northwest thing but people sure know and appear to love the Panhandle. We're making news everyday and the experts are projecting expansive growth from the beaches to I-10. When I compare Freeport to other bayside cities through the state, I cant believe that it's still so undeveloped, at least for now. Nobody ever knows for sure but it looks like you've made a good choice.

    Take care,

    Debbie

     
  15. Paula

    Paula Beach Fanatic

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    Hi Debbie:

    I think so, too. I may increase the amount I invested a bit...

    Other things to consider:

    St. Joe's is politically in good relationships with Bush in Florida -- if the state ever goes democrat then that may have an impact on St. Joe and development (although my guess is their ready for any changes in political parties -- they seem pretty smart).

    Another risk would be any unethical behavior at the top in St. Joes -- but that's hard to predict.

    Another risk is that I've read that some of the bigger homes (regular bigger homes, not the bigger homes on the beach) may have reached their peak and that consumers are looking for slightly smaller homes. So, I hope St. Joe's is investing in the middle-range homes as well (which would now be considered those selling for $500-$1,000,000) on 30A and the nearby areas (as strange as that sounds). Someone on this board (you?) mentioned that there's a shortage of those types of properties for sale.

    Best,
    Paula
     
  16. Cork On the Ocean

    Cork On the Ocean directionally challenged

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    Hi Paula,

    Funny you mention the political alignments as I've wondered the very same thing. I'm sure if you and I have considered this issue, their paid strategists have already been there.

    Ethics in the ranks? I doubt if one or two bad apples could make a difference in such a megacorp unless they compromise laws. In a different life I was a pharmacist who investigated drug companies for the state. It seemed the only thing that could touch the big boys was bad legal problems. Even then, if they were too litigious or expensive to prosecute, I saw many cases "settled" or "dismissed" without litigation so being a megaplayer has it's benefits I guess even when there is corruption.

    They do seem to be addressing mid-price needs with developments such as Palmetto Trace in PC. It wasn't me that mentioned the shortage of mid-range homes but I agree. There are still some very nice homes on 30A from 500-1 mil but there won't be for long. Since Joe had plans for west bay area once the airport is approved, I suspect we're going to see some mid-range homes in that area by them. There's a finite number of high end investors (albeit a large number apparently) and Im sure JOE is aware of that.

    Take care,

    Debbie
     
  17. beachmouse

    beachmouse Beach Fanatic

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    I don't think there will be a political question down the road. Politicians come and go all the time in Tallahassee, especially since term limits kicked in. With the current term limits, you just don't get a handful of politicians developing their own little fiefdoms anymore like they could when they could dig in and stay in office for 20+ years. The homebuilders and home builder association lobbyists are there permanently, and know how to get what they want from the politicians, no matter which party is in charge.
     
  18. Paula

    Paula Beach Fanatic

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    Useful comments. Yup, I'll invest a little more in St. Joe's. My sister just invested some money in Joe as well because they've visited the area and seen all the development and did their own research as well. It's an interesting stock to watch anyway, especially for those of us who love the area and follow what's going on in the Panhandle (oh, "Great Northwest").
     
  19. Philip_Atlanta

    Philip_Atlanta Beach Lover

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    Where is JOE "reinvesting for more land that is dirt cheap"? Just curious where they are heading down the road..

    Oh, and "Cork On the Ocean", great information - thank you.
     
  20. Smiling JOe

    Smiling JOe SoWal Expert

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    I know that JOE has been buying huge acerage in SW Georgia, some river-front but mostly interior.
     

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