The buildout extensions will only prolong the agony for the real estate speculators. There aren't enough high demo end users flocking to the area to swallow even a fraction of the over 3200 available properties along 30A. The speculators will simply leave their lots on the market at the inflated prices hoping that a greater fool will come along in the next two years. It won't happen. Joe will be in the same boat two years from now.
Asking prices are way too high. If asking prices fall to where actual sales prices were in 2003, some inventory might start moving. However, if speculators believe that houses in the high end developments will fetch $1000 per square foot, they are dreaming. The same for 40X100 lots that are a quarter of a mile or more from the beach priced at $500k to $1.5 million. Those prices are simply crazy. Some speculators caught in the frenzy paid those crazy prices for a very short period of time. You will find very few, if any, end users that paid those kind of prices. The real estate market in the area looks just like the NASDAQ did in the late 1990's.
Rising interest rates, hurricane risks, falling housing values across the country, increasing insurance rates will all ensure that the market stays in the tank for quite some time. Only those owners willing to drastically lower prices to 2003 or before levels will sell their properties in the crowded market.
Joe did not do the right thing. Joe should have stuck to its guns and started buying back a few properties to put fear in the hearts of speculators. The prices would have dropped significantly, lots would have sold to end users and the communities would have been finished in a reasonable amount of time. This move has only prolonged the inevitable crash. Smart speculators will drop prices and get out as quickly as they can. Others will hope for a recovery that will not come. One more hurricane and even these predictions will seem rosy.
And, Joe stock will continue to tank. They will miss earnings by a mile. They have seen virtually no sales in any of the developments along 30A in all of 2006 and the rest of their developments are suffering too. Joe needs to sell about 5000 memberships to the Watersound beach club by June 30 to turn things around.
Alys Beach is also suffering. No sales in the development from Feb to April. Cypress Dunes, The Preserve, Highlands, Village at Blue Mountain, Adagio, Bella Vita, and others seeing virtually no sales activity. Interesting to see what happens when all those speculators on Sanctuary and Redfish Village condos are required to close on those condos because they can find no one to assume their contracts prior to closing. Joe is getting no interest in all those spec houses being built in Phase 4 in Watercolor, Watersound, or Watersound West and the new Compass Point 3 condo offering will be a bust. This scenario actually looks good compared to the condo glut in Panama City. The panhandle is definitely in for a rough ride for the foreseeable future.