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Mango

SoWal Insider
Apr 7, 2006
9,712
1,360
New York/ Santa Rosa Beach
OOPs- see post below.
 
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destinsm

Beach Lover
May 23, 2006
92
1
In 2002, the house for which I paid $170K in SoWal was priced at $100 per square foot (including the lot). Today, find me a builder who can build at $100 per square foot, then give me a free lot, and I will take you to the bank every time. How is that for stating a case?

There are builders who are currently building and selling in NW FL for less than $100/sq ft... Adams Homes, DR Horton, Key Lime...

I am sure that you would agree with me that during boom times construction costs increase, and in the lean years construction costs (and materials) decrease... For instance the price of lumber http://www.nahb.org/generic.aspx?genericContentID=527

And likewise as demand dwindles for RE the price of land will dwindle on down with it... As is shown by the HB's writing of their land holdings referred in this article...http://www.sptimes.com/2006/09/09/Business/St_Joe_to_stop_buildi.shtml

So will you be able to build a house in 2007 or beyond for $170k in SoWal, maybe not...

But as I have stated above, I do believe we have a few downward years before we go back up again in the NW FL markets...
 

Mango

SoWal Insider
Apr 7, 2006
9,712
1,360
New York/ Santa Rosa Beach
I know very little about Destin or PCB or the inherent values of either area, but I can tell you that the specific 30-A market is different and special. I'm a Florida native and frankly long ago tired of the high rises and the fact that you can't see the water from the road in most places anymore. I know a lot of "locals" or natives are disgusted by all the development in SoWal in recent years, but compared to most of the other beaches along the Florida coast, even a fully developed SoWal (within the current Walton County Land Development Code) is absolute heaven. SoWal (and its beautiful white beaches, teal water and stricter development codes) is special. Add in the higher elevation and the protection from storm surge for pretty much everyone but but the first- or second-tier properties, plus an unusually good rental market for owners, and you have a place that is going to continue to be attractive long-term, RE bear market or not.

When friends of ours first bought into the area in late 2002, early 2003, it was ridiculously inexpensive by any Florida resort standards. By late 2003 values had already begun to rise significantly, but hubby and I came to visit, looked around for a day, and bought property immediately because whether or not we built or sold, retired there or just held on for a couple years, we thought it was a phenomenal opportunity. It was a great move.

I think if values have risen by 300 percent in recent years, maybe 2/3 of that is justified because the area has been maturing and the word has gotten out. The rest was similar to speculation that fueled the bubble nationwide. Probably sometime in mid-to-late 2004 in SoWal things got well out of hand. Prices have come down to earth, and may well continue to as we see how things play out locally and nationally, but I don't think there is any way that in SoWal we are going to see 2001, 2002 and probably not much 2003 pricing again except among the desperate. The area was simply undervalued back then, and now more infrastructure is there to support the pricing.

And by the way, the Northeast boom started before the California boom, which started before the Florida boom ... nothing happened in all places all at once. Even in a down cycle, all real estate is local.

TFT, I couldn't have said it any better if I had the time this morning to post. Even though currently it takes me 8 hrs of traveling via airplane to get there, I wouldn't have bought anywhere else. Even though I bought my first 2 properties before the run up, the land lot I bought to build on in 2004 I may have overpaid for, but it was exactly where I wanted to live. So like all things cyclical, one day it will be back up again, and will I want to sell it? probably not, so who cares what the market is doing? Psychology of markets do not concern me. People still need a place to live, and I like many others in the future will choose SoWal.
 

BlueMtnBeachVagrant

Beach Fanatic
Jun 20, 2005
1,289
375
.....I am obvoiusly in the minority in this forum!! :D

Not if SHELLEY joins in and has her way!!:lol:

Honestly, I believe many people got caught up in the moment with all their friends making "big bucks" with their beach investments along with rediculously low interest rates (interest only loans).

Heck, I almost bit at the $750,00 condo I used as an example on my last post (and I'm a conservative investor). I too was somewhat enamored with the idea of another gulf front property. Luckily my wife was more nervous than me. Also luckily there was someone else even more enamored than I was with the $750,000 unit. This was the asking price and what was actually paid by them.

Anyone who bought in 2005 is probably under water right now with their investment. Pre-construction is probably no exception.

We're all starting to learn not to follow the pack when it comes to stock and real estate. Right now there is a lot of negative news on real estate. I agree with goofer44 who said "When the mass psychology leans in one direction, it is time for you to go in the OTHER direction...".

I just wish I had the discipline to follow this advice in 2000 with stocks and 2005 with real estate. But I'm still OK as I wasn't the last one "on board" in either situation.
 

Smiling JOe

SoWal Expert
Nov 18, 2004
31,648
1,773
There are builders who are currently building and selling in NW FL for less than $100/sq ft... Adams Homes, DR Horton, Key Lime...

I am sure that you would agree with me that during boom times construction costs increase, and in the lean years construction costs (and materials) decrease... For instance the price of lumber http://www.nahb.org/generic.aspx?genericContentID=527

And likewise as demand dwindles for RE the price of land will dwindle on down with it... As is shown by the HB's writing of their land holdings referred in this article...http://www.sptimes.com/2006/09/09/Business/St_Joe_to_stop_buildi.shtml

So will you be able to build a house in 2007 or beyond for $170k in SoWal, maybe not...

But as I have stated above, I do believe we have a few downward years before we go back up again in the NW FL markets...


I do agree that the building costs can fluctuate as you state. However, I don't think the prices of building materials in SoWal will revert back to 2002 prices anytime in the near future, unless of course, we see gasoline get closer to the 2002 prices. Who knows, maybe it will happen.

Let me state that I don't disagree with many of your comments regarding many prices being currently "over-priced." I think you make some valid points.

Also, when I asked you to find me a "builder" who will charge me $100 per sq ft, I meant to say, "a good builder." Let's not talk about D.R Horton or Adams homes. ;-) I don't have 300 homes for them to duplicate on my street. :rotfl:Now about that free lot you want to give me...

destinsm, please keep posting. It is good to see another side of the conversation. ;-)
 

Pirate

Beach Fanatic
Jan 2, 2006
331
29
Curious number....
120 times the month rent = property value. Do I have this right?

If so, do you think this applies to ALL properties (beach front being the same as Freeport)? In other words, when the western most property at the Retreat was recently sold for over $9,000,000, does this mean the owner would HAVE to be able to find a renter that is willing to pay $75,000 per month to substantiate it's value?

I think you might understand my point here that there IS a limited supply of "unique" properties in our area. A property located one or two blocks from the beach is not as unique and your 120 factor may be more legit. Gulf front, bay front and beach first tier properties with really good views are definitely more unique. When someone WANTS to live here full or part-time, they'll pay a premium for a unique property. To solely base property values based on rental potential may not be entirely accurate depending on the property.

Perhaps I'm looking at it too simply.

The area is primarily rental property. Most real estate investors (not investulators) expect their property to return a reasonable rate on their investment, generally through rental with a modest increase in value figured in. The properties in SoWal currently do not. With no upside for some time on pricing the investment value is not there. The area is certianly beautiful but when I visit in the spring and fall all the homes around mine are empty and they all have rental company signs in the front. If you are saying the property there is all for second homes or primary residences then your theory of value makes sense. The homes aren't used in that way but the theory is interesting.

If anyone who owns a coastal home on this board can honestly say they haven't said it was a "great investment" I'll pucker up. I bet you can rent that 7 million dollar house in Rosemary. After all it was also an investment:funn: . I would guess someone who paid that for a house there in this climate really could care less about the return. I asked months ago if anyone has ever figured a cap rate on a rental property there, a t-bill returns better.

"Perception is reality" is a term my partner used to use and I never thought much of the idea until I saw what the real estate market has done in the past few years. I don't think the concept applies to solid long term planning but in a world where people keep houses for 2-3 years and sell stocks every 6weeks it works.
 

Bobby J

Beach Fanatic
Apr 18, 2005
4,043
599
Blue Mountain beach
www.lifeonshore.com
As expected... Perma bulls cheering perma bulls with no said "case" stated...

What do you have that shows a support for prices going up 200-300% over a 3-5 year period... other than pure speculation and greed by investors???

Are we running out of land like you Realtors have spouted off about the last few years... Hmmm seems to be over 3500 vacant lots for sale between Destin and Panama City Beach (just along the coast)...

Am I going to be priced out forever like you Realtors spouted off about the last few years... Hmmm, who would be your next buyer if we are all going to get priced out forever???

Are we different and special like all the Realtors have been saying for the past few years... I guess that means all of Florida, Califonia, the North East, Pheonix, Las Vegas, Pacific NW, and others have all gotten special at the exact same times... how convenient...

I am by no means saying that housing is a bad long term investment to have and in most cases is a good one... just pointing out that at this point in time it is waaaaayyyy overpriced at current price points, and we most likely have a long way to go down...

Oh by the way, it is hard to live in your 2nd, 3rd, and 4th spec properties as well... An illiquid negative cash producing alligator, sign me up for two...



As expected...Doomsayer response.

My case is simple. "I" like to be able to touch and feel or walk on my investment. That is just me. You are correct it is hard to live in your 2nd, 3rd and 4th spec properties but at least you have a choice. My problem when the stock drops you are stuck waiting or just doomed. In real estate I feel like I have options. Trade/build/refinance/sell, etc.

What proof other then greed and speculation made our prices go up 300-500%? We were just under priced. In some areas we shot right pass the real value but overall our market was way under value. Have you traveled and looked at real estate prices? We were cheaper then Costa Rico. In some areas we still are.

Yes, there is allot of land for sale. Have you seen how much state land is here? It is pretty clear we are in the downside of the market but signs show we will not be here long. Do keep in mind we are selling property everyday. It did slow down but has not stopped. People want to live here. Your view of the market may have stopped but others are looking at it allot different.

I am sorry you have had such horrible real estate experiences. I personally would never sell someone on the fact they are going to be priced out. I think the insurance companies will handle that...:sosad:

Not everywhere got special at the same time. I will stick with my feelings that the 30A area is special and I think time will show that. Yes prices will drop but your thread comes off generalizing the whole market. Some areas will probably go up!

IMO, real estate can change dramatically per area in the same county. Be careful to judge the whole market because of what you read in Newsweek!
 

JohnnyB

Beach Comber
Sep 17, 2006
40
0
In 2003,2004 there was very little inventory of lots south of 30a and adjacent north. Couldn't get em'. We built a house and did really well on it. But, what if we had made half of that or a third. We still would have made a good return.

Investors were sellig to investors with large gains... maybe 30a needed to go through an adjustment to get prices up to where they belong. If things level out and I think they will what is wrong with netting a 15 to 20 % per year return on an investment. On a 500k lot that is 75k to 100k. Take some risk and build a house that is doubled. So what if someone else made larger returns.

Why would you complain about taking a beach front property with a basis of less than a mil and selling it for 1.5 instead of 2.5... geez?

As it was said, there are still buyers, the savy people are still selling. You can buy here for what a piece of crap sells for in some parts of the country.

"Poor, poor pitiful me....." Waren Zevon

j
 

Pirate

Beach Fanatic
Jan 2, 2006
331
29
Can anyone come up with sales at pre-'04 pricing?


A gulf front house (dump) closed for 1.6m in Dune Allen. Does that qualify? There is gulf front under 2m presently listed that isn't selling.
 
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