Panhandle real estate boom just starting

[SHELLY]

WiLe, you state that you don't know of anyone abandoning condo living as a result of the hurricanes.....just one look at the ever-growing list of condos for sale all along the panhandle tells an entirely different story. Portofino only had a few windows blown out, most of the water damage in the condos was caused by wind-driven water through the patio doors and water that poured down the walls, elevator shafts, and conduit when the a/c units were ripped from the roof (hurricane force winds get pretty fierce 22 stories up!).

Bob: You're correct...the domehome made it through the storm OK, so why aren't there crowds of people lining up to have them built?? My guess is that they (a) don't comply with HOA rules, (b) are too expensive, or (c) are just too darn ugly.

With all the talk of steel, concrete, rebar, high-rises etc, etc, it kind of ruins one's dream of what a "beachside" home should be....clapboard siding, wooden shutters, banging screen door and a porch that is dusted with white sand and littered with seashells from an early walk along the beach.

Beachfront living now means a row of high-rise concrete bunkers surrounded by steel-reinforced seawalls....certainly nothing that memories are made of--unless you have fond recollections of the Gulag.

 

[ecopal]

to SHELLY: You sure turn a pretty phrase - you can be a fun read.

Sounds like those Portofino condos in Pensacola Beach are a real disaster.

I agree that most of those waterfront concrete bunker high rises are quite hideous. I am happy that we only have 2 on 30A and only one of those is really ugly.

I too am nostalgic for as you so eloquently describe as
" clapboard siding, wooden shutters, banging screen door and a porch that is dusted with white sand and littered with seashells from an early walk along the beach." Fortunately many of the cottages on 30A could fit that colorful description.

Even many of the reinforced concrete houses on 30A are actually very attractive and do not look anything like a "bunker". This would include the Alys Beach buildings and many in Rosemary Beach and in many other areas along 30A.

The more traditonal looking wood frame 30A cottage style with metal roofs and "clapboard siding" also are no push over in a hurricane (especially if built under the new codes since 2002). Essentially they are steel reinforced wood structures with a multitude of high tensile reinforcing rods running from foundation to top plate, and brackets, braces, and steel strapping on the studs, and on all window/door openings and roof rafters. Screw down metal roofing and concrete siding are also used instead of the more wind vulnerable shingles and vinyl siding. Windows are rated for hurricane force winds well in excess of 100mph and some are actually made of thick laminated glass which are virtually bullet proof.

You combine that with a locaton at least 30 feet above sea level(I agree with WiLe that I wouldn't want to sit my house on top of a high exposed hill where the wind exposure would be stronger than at ground level) and you are adapting reasonably and rationally to what can be a very harsh environment at times.

At least hurricanes give you a warning which is more than you get with an earthquake, tornado, terrorist attack, tsunami, or
criminal attacks like a break in or home invasion.

 

[Bob]

WiLe, you state that you don't know of anyone abandoning condo living as a result of the hurricanes.....just one look at the ever-growing list of condos for sale all along the panhandle tells an entirely different story. Portofino only had a few windows blown out, most of the water damage in the condos was caused by wind-driven water through the patio doors and water that poured down the walls, elevator shafts, and conduit when the a/c units were ripped from the roof (hurricane force winds get pretty fierce 22 stories up!).

Bob: You're correct...the domehome made it through the storm OK, so why aren't there crowds of people lining up to have them built?? My guess is that they (a) don't comply with HOA rules, (b) are too expensive, or (c) are just too darn ugly.

With all the talk of steel, concrete, rebar, high-rises etc, etc, it kind of ruins one's dream of what a "beachside" home should be....clapboard siding, wooden shutters, banging screen door and a porch that is dusted with white sand and littered with seashells from an early walk along the beach.

Beachfront living now means a row of high-rise concrete bunkers surrounded by steel-reinforced seawalls....certainly nothing that memories are made of--unless you have fond recollections of the Gulag.

monolithic dome homes will become more popular, but knowledgeable builders are few and concrete ain't cheap thanks to China. I personally have never understood why all along the Gulf Coast stick built homes are the rule. You would think folks would enjoy the beauty of not having to rebuild.

 

[WiLe]

WiLe, you state that you don't know of anyone abandoning condo living as a result of the hurricanes.....just one look at the ever-growing list of condos for sale all along the panhandle tells an entirely different story. Portofino only had a few windows blown out, most of the water damage in the condos was caused by wind-driven water through the patio doors and water that poured down the walls, elevator shafts, and conduit when the a/c units were ripped from the roof (hurricane force winds get pretty fierce 22 stories up!).:

Shelly, all of the condos that you see "up for sale" is a function of supply and demand. From Gulf Shores, Alabama to Mexico Beach, Florida there are thousands of NEW condos available each year. If there was a net loss, there would be abandoned condos - if they are all occupied that should tell is that more people are moving into condos. I didn't see anybody abandon condo living here after Ivan. The reverse is true, actually. I could show you a stretch where, before Ivan, there were 6 beach homes - now there's two condo towers in the same space that will have over 300 condos - and all of them will be sold before they are finished. There's no reason to think that they want be sold, since everything else is selling preconstruction. Here we've got 12,000 condos going up on the Intercoastal Canal. That's 12,000 from NOTHING. Another example. This one where I own a condo: A stick built condo development of 5 buildings, 75 units across from the beach. The buildings were well-built and did well through all the hurricanes until Ivan. Ivan did massive damage to many of the units (not mine, luckily). A developer is going to demolish all five buildings and trade us out new units in the high rise of 360 Units in two towers. That's a net gain of 285 units on that one property. There were many people who didn't want to lose the low density, but over time they saw the futility in repairing something that is temporary.... That's a lot of new condos isn't it? If there was net loss from people selling and leaving, the building will stop. I believe it will stop when all the land is gone. Yes, there will be a leveling of of price gains. We're already seeing that. However, if there was a leveling of of demand, you'd see the construction stop.

If the Portofino were built today, it would be built better. Ivan re-wrote the book. It takes the devloper about a year to get out of the hole and BEGIN building. Compare that to the wood condo that I own built on a pad.

I hope you don't think that had rather see condos instead of homes. or, even better, sand dunes on the beach. Ivans and Katrinas change minds. That's certain.

 

[ecopal]

WiLe:
Was your stick built condo primarily damaged by storm surge?

 

[SHELLY]

WilE,

Portofino is STILL building towers--2 more to be exact--and they are beating the fields trying to find buyers. Meanwhile, folks in the other towers are trying to sellout. Some are having a difficult time renting out their units (trying to cover their increased assessment, insurance and tax costs no doubt).

The condo boom will soon die a terrible death which will send speculators running for the exits. Tons of folks have only a $10,000 down payment tied up in these pre-construction beauties and have absolutely no intention of closing on them (nor could they afford to ). Old retirees who lived in these 22-story concrete towers in South Florida and spent 2 weeks without power (or elevators or A/C) after Wilma hit will be sharing their tales of woe with fellow passengers on their upcoming Christmas/Hanukah cruises.

In-the-know savvy real estate folks have cashed out of real estate over the past several months, what's left in the condo market are those hoping to find "bigger fools" who will be few and far between.

With the GLUT of beach side condos, some vacationers will be scared off (not wanting to spend their holidays in the shadows of concrete monstrosities). Those who will want to come to the beach won't be able to pay the condo owners enough to cover their carrying costs. Demand will diminish, supply will increase....prices will drop.

I've been watching the rise of the condo market for some time--I've been seeing lots of chinks in its armor lately and I believe in 2006 the condo market will start to unwind. And if the upcoming hurricane season is a repeat (or worse) than last year, the fall will be much, much quicker.

 

[WiLe]

WiLe:
Was your stick built condo primarily damaged by storm surge?

No, since I had a ground floor unit I fully expected to have my unit flooded. Not any of the 5 buildings flooded. We were on higher ground than I thought there. (My home a good bit further from the beach got 18 inches) I have an end unit and got a little water in around my windows and under the doors. Other units weren't so lucky and got a lot of wind damage. Some had to be totally gutted and still to this day haven't been repaired. A few months back a decision (and not a unanimously popular one) was made to patch up and wait on the developer to start demolishing. Its really the only thing that makes sense.

 

[WiLe]

WilE,

Portofino is STILL building towers--2 more to be exact--and they are beating the fields trying to find buyers. Meanwhile, folks in the other towers are trying to sellout. Some are having a difficult time renting out their units (trying to cover their increased assessment, insurance and tax costs no doubt)..

When condos get impossible to sell, you won't see them being built. Until that time the condo market is healthy, maybe less so right now for the end user than the developer, but if they're all eventually sold, how is that a sign of anything unhealthy? The "folks in the other towers trying to sell out": how many are trying to sell out to trade up and how many are trying to sell out at a killer profit? I'd suspect that if someone got in early at Portofino, they've doubled or triped their money. I bought a preconstruction condo in Orange Beach in 1993 for $169,900 - that condo (which I no longer own) would list in the high 7's now. Maybe, right this minute, it would be a slow sell in the high 7's, but how fast do you think it would sell in the high 5's - and those owners (assuming its the same owner would still double their money at 5+, plus if they rented it they had the rental, plus they could have used it all that time. Point I'm trying to make is maybe Portofinos shouldn't be listing for what they do - that doesn't necessarily make them bad investments. I'll say it this way: I wish I could have bought the whole condo complex for what they sold for preconstruction and I wish I could sell them for 20% less than then the average one lists today.

I see lots of listings for 5 year old condos that are about the same price as a comparable preconstruction. If prices for older condos adjusted down, it would probably be a good thing.

The condo boom will soon die a terrible death which will send speculators running for the exits. Tons of folks have only a $10,000 down payment tied up in these pre-construction beauties and have absolutely no intention of closing on them (nor could they afford to ). Old retirees who lived in these 22-story concrete towers in South Florida and spent 2 weeks without power (or elevators or A/C) after Wilma hit will be sharing their tales of woe with fellow passengers on their upcoming Christmas/Hanukah cruises.)..

Someone correct me if I'm wrong, but I don't think that its possible to make a $10,000 down payment on a $800,000 condo. In Florida, I think its a required 20% with 10% of that in hard cash, and the other 10% with a letter of credit. Not very many people will willingly walk away from a 20% loss - in this case $160,000.

Regarding the "Wilma woes," all it would take is one season without hurricanes and Wilma will be forgotten. Most people that weren't in it have already forgotten it. After Andrew, thousands of people left the area - a few years later they were more than replaced. People have short memories - and I don't believe that people will ever abandon the coast - if anything, they will gravitate away from homes into condos because of maintenance and shared responsibility issues. I think we're already seeing it, waterfront anyway. I know that that's not what you'd like.

In-the-know savvy real estate folks have cashed out of real estate over the past several months, what's left in the condo market are those hoping to find "bigger fools" who will be few and far between.)

Its a great thing to be savvy enough to move in and out of markets at just the right time and get rich in the process. I saw a TV show a couple nights ago about the Kennedys and that's what Old Man Joe did. Most people can't do that. For most people everything makes sense backwards, but that's not the case forward. I don't know anybody who EXPECTED real estate to do what it did the last 3 years. They thought they were making reasonable investments and many probably didn't even think about making money. It was fortunate timing.

With the GLUT of beach side condos, some vacationers will be scared off (not wanting to spend their holidays in the shadows of concrete monstrosities). Those who will want to come to the beach won't be able to pay the condo owners enough to cover their carrying costs. Demand will diminish, supply will increase....prices will drop.

I've been watching the rise of the condo market for some time--I've been seeing lots of chinks in its armor lately and I believe in 2006 the condo market will start to unwind. And if the upcoming hurricane season is a repeat (or worse) than last year, the fall will be much, much quicker.

According to your scenario, the coast is done for. I don't believe that's the case. Those "concrete montrosities" that you speak of, are dreams for millions. I'd venture a guess that in today's world, there are MORE people who'd like to spend a week in a new beach condo, with all the amenities and service, than there are who'd like to spend a week in a beach house, with nothing but sand and water. I'm not knocking beach homes - you just shouldn't discount the popularity of condos. Some of the newer ones are really resorts. There always has been and always will be a demand for this type of vacation.

Certainly, hurricanes are not good for coastal real estate. Its not even good for the ones who never have any intention of doing anything with it, but use it. But seriously, if you're thinking that hurricanes will drive people from the coast, you're talking about ALL coastal real estate - maybe especially homes.

Regarding condos, I believe that prices might level off - the older ones might regress a little, but long term, they will be good investments. Beach property, as a whole, is the rarest property in the world. At some point, there will be ZERO left. Add that to the area's growth - Pier Park and the new airport in PCB, for example. And St Joe's plans. Alabama has had nothing to offer except the beach - up until now. We're got an aquarium, a new water park, an amphitheatre, a Rave theatre, just to name of few of the things coming. Its projected that withing 3 years, the number of restaurants will double. We're getting an expressway all the way to Highway 10. The state park system is building a convention center. There are planned "towns" coming on the Intercostal. Sure, it will be bumpy and look "glutty," but long term, real estate can't do anything but go up and what looks expensive today will look cheap later. Isn't that ALWAYS the case?

Building begats more building. There will be bumps and gluts. All temporary.

And don't think that there aren't true bargains left on the coast. You can still get a beach condo (or as close to beach as condos get there) in Mexico Beach for $350 a square foot. That's a bargain and it's never going to be any cheaper than it is now. Height restrictions are four stories, so they'll never be that many condos there. Land is limiited so there will never be that many of anything there. Five years from now, lots of people who don't see that now will be wishing they had. It'll all make perfectly good sense then.

 

[Rita]

WiLe!

Enjoyed your rebuttals.

 

[beachmouse]

And steel and concrete construction can actually be very attractive. I've seen some goregeous insulating concrete form (ICF) homes around here, and would probably go with ICF construction if we were ever planning on building. Granted, traditional beach shack doesn't quite work, but there are a lot of styles that do- Spanish/Mediterranian, Florida contemporary, modern, Art Deco, etc.

The problem isn't the steel and concrete, it's that there's pressure to build as cheaply as possible, so you don't get all the pretty Art Deco and Spanish style detailing that you could get with those materials.