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Real estate for Dummies

Discussion in 'Real Estate' started by Mermaid, Sep 15, 2005.

  1. Mermaid

    Mermaid picky

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    Dummy in this case being me. I look at this page every day and think it's pretty interesting. There are more than a few of you who are very well-informed and intelligent, so if you could answer this in layman's terms, I'd be so happy!

    Since when did our beach get so expensive? What was the deciding factor that made the prices go through the roof?

    We've been coming to the beach for about 18 years or so. I know beach prices the world over go at a premium, but I remember when you could buy a lot at Seaside on Forest Street for $125K. Back then, you could also buy a nice house to live in for the same money, so you know that Seaside--in the 1980s--, though expensive, was not out of the reach for those who saved long and hard.

    Currently, houses at Seaside are in excess of $1 million, and you know most of our population (including those who save long and hard) DON'T live in houses that expensive. The prices on 30-A are astronomically high.

    Is it just that 30-A is popular and desireable because of the upscale nature of Seaside, Watercolor, and Rosemary Beach? Are they what's driven prices up? I have to admit I'm not familiar with Pensacola, Gulf Shores or other Panhandle towns; have their real estate values escalated at a similar rate, too?

    And finally, who on earth's buying these million dollar plus properties? My parents, who live in Naples, sent me an article about their real estate, and down there, it's Europeans driven by the strong Euro who are buying up properties like hot cakes. Is it the same case on 30-A?
     
  2. Miss Kitty

    Miss Kitty Meow

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    My husband and I ask the same question...our answer...Drug $$$!!!! Makes us feel better some how. I remember looking at those prices in Seaside as well from the '80's on. We were way too cautious with two young ones to put through private school to invest....but in the end it's all been good.
     
  3. Mermaid

    Mermaid picky

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    Sueshore, same here. I remember looking at that lot in the mid-eighties, two babies in tow, thinking that that same $125K for an empty lot in Seaside was the same price as our comfortable 3 bedroom home in Atlanta...and I shook my head at the $$ they were asking! Now almost two decades later I shake my head again but for a different reason. (But like you, I wouldn't have changed a thing, anyway.)
     
  4. Camp Creek Kid

    Camp Creek Kid Christini Zambini

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    Actually, there is a rumor that a prominent developer was involved with cocaine smuggling. So you never know . . .
     
  5. Robert

    Robert Beach Comber

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  6. DBOldford

    DBOldford Beach Fanatic

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    I suspect that the popularity of the area, which translates into ever escalating real estate values, may be partly emotional and partly real value. I grew up in South Walton County and never expected to have a home back there, my life and career on the opposite coast. But with family in the area and fond memories of the beaches, we decided to purchase a home to enjoy on our trips back there. That's the emotional part. The real value part is that the price we paid at Grayton was a small fraction of what we would pay for the same home on a beach in Southern CA (where the beaches are more hospitable than on our northern coast and, therefore, more comparable to Florida's Gulf Coast). In short, the properties were extremely undervalued for coastal real estate and it would be only a matter of time before others realized this, along with the charms and easy lifestyle of the area. As difficult as it may be to imagine, prices will take another breathtaking turn upwards when the new airport is a reality. Even at its present value, our FL home is about one-fourth what we would have to pay for a home by the sea here.

    Major resort operators are watching the area: Fairmont, Hyatt, Four Seasons, and Ritz Carlton with an eye on new five star resorts and fractionalized ownership of homes associated with the resorts. They need improved accessibility, adequate infrastructure, quality of life, and an adequate labor pool in order to make capital commitments. This could be good or bad for the character of the area, but will definitely be good for real estate values of existing owners. These major names in the resort and leisure industry will focus worldwide interest on our beaches.

    As the area becomes more sophisticated and more accessible, it will attract people from even more affluent areas. The real estate will still seem an incredible bargain to them and these are market segments that economic recessions typically do not adversely effect. I foresee the area attracting a growing number of people from New York, Chicago, and European capitals. The big unknown factor will be how well Walton County manages the growth and quality of life as development progresses. Seaside set the tone for what we see now. I think we are still waiting for the next bellweather. Who knows?...maybe it is "cracker chic." The really fascinating stories will be the gentrification of Freeport and DeFuniak Springs. Stay tuned...
     
  7. wetwilly

    wetwilly Beach Fanatic

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    Donna you nailed it. Great post. It seems you frequently put into words what I am thinking but have a hard time articulating. The other piece of the puzzle is that even at the prices some see as "over the top" SoWal is still not at or exceeding other coastal areas as far as price is concerned. Some would argue (and will in the thread) that lot sizes in SoWal don't compare to Hilton Head ocean front etc but the beauty of the dunes, beaches, water, and communities is unmatched on HHI IMO. The piece is that SoWal is so accessable via car from many points in the southeast, southwest, and even central US that it is a fairly easy (some not so easy) "drive to" destination with a 5.5-12 hour drive time. Due to the beauty and charm of the area, others drive far longer, fly, or do whatever it takes to get to SoWal. I have not talked to anyone that has ever been to SoWal that does not 1) love it, 2) want to go back, 3) want to own there (if they can scrape the $$ together), and 4) go back home and tell everyone about it.

    With the prospective airport coming into west PCB area, Joe and other developers doing all they can to develop beautiful communities, the big dogs (beer makers, big haired lady/singer, the mouse, and other resort chains) looking at property north of 98, the area should continue to be a great place and appreciate. As said, the unknown factors that will help or hurt this continued appreciating are the county handling the growth, planning, and making sure the infrastructure is in place, the northern US and foreign investors attraction and putting their money into the area, and companies and others relocating to DeFuniak and Freeport.

    All this is to say that the area is good IMO for the long term. Most real estate markets that have "legs" for the long run go thru several waves of cycles (ups, flats, ups etc) and have some correction points. But in the end the ones that have alot of the factors above sustain value indefinitely (even if not at 100% cumulative increase year over year). :cool:
     
    Last edited: Sep 16, 2005
  8. wetwilly

    wetwilly Beach Fanatic

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    Just a few weeks ago on the radio here in Atlanta, I heard that Atlanta is now home to a record 49,000 millionaires!!!! That is just Atlanta. We are 6 hours from SoWal and with Birmingham, Charlotte, Orlando, other cities within 10-12 hrs or less with their millionaires Sowal is the drive to destination that everyone has or is finding out about. Like the results or not. It is show me the money and I live in Atlanta and there is no shortage of it up here, people from here as owners or renters love to come to SoWal and spend it, and the appetite to spend is healthy here from what I see everyday. :cool:
     
  9. pat3797

    pat3797 Beach Comber

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    I hate to use the Tech bubble analysis because I agree that these two items are apples and oranges in comparison. But the runup in prices is similar and don't think for a minute that when the stock market declined and started showing signs of long term returns being mid single digits, investors didn't start looking elsewhere for "larger" returns.

    It may take some more time, but eventually the $$$ will follow the big returns and even if 30A goes back to nice annual increases of 8-12%, this will drive the investor and flippers somewhere else.
     
  10. Cil

    Cil Beach Fanatic

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    Not *quite* as bad over there, but yes, prices have definitely jumped.
    We are looking for a place to live in Port St Joe, and it ain't easy.
    Isn't Lockheed moving to Alabama?
    I think the information technology industry is still going fairly well.
    Here in Denver, I know several people, some of them awfully young, who made it big, really big, in software--they are multimillionaires and retired.
    They aren't living in teeny little houses, nor do they own just one home.
     
  11. Miss Kitty

    Miss Kitty Meow

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    Okay, I understand that there are more and more million and gagillionaires out there everyday. I am curious...are these mostly people making money from investments/inheritances vs. people just plain ol' working hard and saving wisely? I guess I would call that fast money vs. slow money.
     
  12. Robert

    Robert Beach Comber

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    I don't agree with this. As folks have said, the market is a little soft right now but real estate goes in cycles. It's my belief the cycles in SoWal will be shorter than most locations because of the proximity to the Gulf. People want to be by water and SoWal has lots of water. IMHO, there were external factors that led the the market slowdown in SoWal, namely: Iraq War (hopefully will be winding down), Dip in the econmy (due to oil prices, should stablize soon), Tropical storms coming 2 months early (hope it ends early) and Bad press such as shark attacks (gotta hate that) to name a few. As these things get corrected or fall off the radar, the race will be back on. There is no shortage of people that can afford the higher market. I think even with the devastation that Katrina caused. Because of Katrina even more people will have their arrows pointed towards SoWal and the Gulf. If you own property here, hold on to it. If you don't, buy some.

    As stated earlier, the "big boys" are coming too. I know of 5 different residential developments that are in the works, all north od 98 but close by and all over 1,200 acres in size. One, west of us, is 2,700 acres and is projected to contain 10,000 lots, 3 18-hole golf courses, 12 private lakes, 30 acres of community area and 30 acres of commercial area. Just to purchase the dirt was over 30,000,000. Too much money for them not to promote the area. "If you build it, they will come." (I love that movie.) SoWal is the diamond amonst the rubies.

    SoWal may have been due a market correction but prices will not drop significantly and then they will start to rise again in the very near future.

    Nostrodamus speaks..... :D
     
  13. Mermaid

    Mermaid picky

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    Donna and wetwilly, beautifully said, the both of you. It makes sense to me. :clap_1:
     
  14. Smiling JOe

    Smiling JOe SoWal Expert

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    What the heck are you talking about? Where is "west of us?"
     
  15. Robert

    Robert Beach Comber

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    <---- That way.

    I can't be specific right now because of my business.. It is true though. Ten year project that one is slated. I can tell you that if you look on the Walton County Appraiser's web site you can find the ones in Walton county easily. Search 800 acres and up. A lot of these properties are being assembled.

    EDIT: A giant one in Bay county too. And I just heard it's also going to start down in Mexico Beach area too, here shortly.
     
    Last edited: Sep 16, 2005
  16. wetwilly

    wetwilly Beach Fanatic

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    Thanks :D Robert makes some very good points too!!! There is a correction happening right now IMO for whatever the reasons but again I think it will be shortlived, not cause prices to fall or drop below prices paid a year ago, and the "positive" factors that Donna, Robert, and others have pointed out will allow this market to sustain any correction and continue to appreciate if the variables (Walton Co and others) plan and keep the eye on the ball. :D :cool:

    Also, while this potential corrction is happening for supply/demand and other reasons (Iraq war, Hurricanes, economy/oil, shark attacks), the market is always traditionally slower in May-Jan. I said slower and these are cycles and can't always be explained. :idontno:
     
    Last edited: Sep 16, 2005
  17. Mermaid

    Mermaid picky

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    Sorry, Robert, hit the Post button too quickly. That's a mouthful of info you wrote. Thanks! In some ways it makes me sad, though. All that development can only significantly change the character of 30-A and its enivrons. :sosad:
     
  18. Cork On the Ocean

    Cork On the Ocean directionally challenged

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    Ditto (and robert too) :clap_1::clap_1:

    Based on my personal experience, most of them are new money. Early retirees under 60 and professionals in their 40's. Also some locals that have made it on their own in our real estate market. I see very little old money but I'm sure it's here too.
     
  19. hutch

    hutch Beach Lover

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    When I need more money, I just print more or raise your taxes.
    Uncle Sam :floor:
     

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