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?
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.
.....I am obvoiusly in the minority in this forum!!
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...
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.
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...
Can anyone come up with sales at pre-'04 pricing?