Jellyfish said:
All I can say is that I have been vacationing in SoWal for 20 years. I never saw anything so frothy as prices 2002-2004. Just returned from 2 weeks on 30A and now I can say I have never seen so much inventory for sale along 30A
Some of the developments I jogged thru had 75-80% of the lots for resale. Tons of houses that have never been lived in on the mkt, and many 2/3 year old developments with very few starts. All left or right side BS aside, common sense tell you it's going to take several years to clear out all that inventory now that speculators are not selling to other speculators, and prices need to come down given the weak activity. I'm hopefully going to finally buy something in SoWal, and I'm not going to try and hit the absolute nadir of the market, however I believe this is not a one-summer abberation with all the product out there. I think there will be great buys for a while, a slow slide in prices down to where buyers will pick up, not a crash.
Very interesting perspective and well taken. However, I do believe (as a Floridian who until 2003 was an outsider to SoWal) that there is valid reasoning for a good portion of the froth in those two years, maybe 65-75 percent of it. I agree with you that rest is all speculation (ie who was the end user in these transactions?) and that portion of the increased values will have to drop down again and inventory must decline dramatically before we see things proceed normally. Which I agree would take awhile. But I would not look for much more price deflation except among the desperate sellers, and there are a number of them as we know. Here is why.
We came up here for the first time in the fall of 2003 and couldn't believe what we saw. I am more or less a lifelong Floridian and was stunned by the beaches and clear water, which I knew about, but more importantly the building restrictions in place in South Walton and the high elevation on most portions of the area. Those are
incredibly rare folks. People used to 30-A may not remember this. As a result every time I come up here I am struck by how happy I am to be here and how rare this is for a beachfront community. My husband and I always considered owning in quaint Sanibel/Captiva to be the "ultimate" and we pretty much knew that was a pipe dream, but when we came up here and saw what we could buy a gulf view lot for, we bought one immediately, not knowing whether we would flip it, build on it, retire to it or use it as a way to fund our childrens' education. We were hooked and thrilled, and remain so.
About 9 months later we bought into a gulf view house as part of a partnership, and it is clear now that while that was not a slam-dunk investment, I still believe it was a good value and one probably worth holding onto. Most of those who bought after the summer of 2004 seem to have gotten into the thick of the froth because prices went so far beyond the value of the rental market and approached some of the highest priced areas in the state without the necessary infrastructure.
It is going to be shaky for awhile as all this excess inventory clears out, as formerly "undiscovered" 30-A reaches the point of being fully developed, and as issues such as insurance, infrastructure, affordable housing, etc, interest rates, blah blah blah get resolved. I just don't see values going into the toilet. Because the inherent value of the area is obvious, especially to those of us who know what else is out there, and pretty much don't like it. (Now, it can be argued that the entire coastal U.S. is highly overpriced, and while I don't believe so, if that proves to be true all bets are off because SoWal will get a double-whammy.)
Meantime Jellyfish I wish you luck in your search -- I think you will have quite a few things to choose from for awhile!
The buyers are more aggressive then last years sellers. If they hit a bump they will pull out in a heartbeat! Kinda like last year but in reverse....
