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While we may have seen a couple of examples that show a home sold for less than replacement cost, the real answer lies in the general market not just onesies and twosies. What got me started on this is the listing in Grove for a relatively modest home, x distance from the beach listed for $800k. What counts are sold prices but I don't have access to sold homes/lots data. I do not have the ambition to tackle Walton County's database.

As a general question, how much would a lot cost that is an "easy" walk to the beach, say less than five minutes? Add to the cost of the lot, say $300k for a 2,000 SF home and you have the central question: can I buy an existing home for less than ($300,000 + cost of the five-minute-walk-to-the-beach lot)?

My mother has a brand new home in Cypress Breeze Plantation. It's 2,200 sq. ft., 4 Beds, 3 Baths, 12' ceilings, granite everywhere, stainless professional series appliances. In addition, it comes with a 2 story carriage house that is 968 square feet.

Cypress Breeze Plantation is a 5 minute walk to the gulf. Cypress Breeze has the largest pool in Walton County. To children, the pool is like Disney World.

Her home is listed in the low 400's. I thought it couldn't be beat, but there is potential to buy the right vacant lot and build the same home for 10% less. It depends on your construction costs and time frame.
 

Miss Critter

Beach Fanatic
Mar 8, 2008
3,419
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My perfect beach
Pardon my tangent, AA, but how is the maintenance of that pool being paid for? Are all those lot owners still paying dues?
 
Pardon my tangent, AA, but how is the maintenance of that pool being paid for? Are all those lot owners still paying dues?

Good question. The dues are very small, but the community is still keeping up the pool. I know they turn off the biggest of the waterfalls when there are no guests at the pool. They keep it locked over there as well. This has to help keep it somewhat members only. I looked at the pool yesterday and everything seems to be in order. The water is clean and the restrooms and elevator are like brand new.

We are 3 1/2 years into the crash and everything looks o.k. over there to me.
 

Bobby J

Beach Fanatic
Apr 18, 2005
4,043
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Blue Mountain beach
www.lifeonshore.com
With all due respect (as you appear to be a nice person and good realtor), you haven't yet shown a house that sold for below replacement cost. In addition, the argument that Cassine somehow holds more value than Cypress Dunes and The Preserve doesn't pass the sniff test.

One question, which subdivision out of those three has seen the lowest sales price (both in terms of real dollars and dollars per square foot) over the last year or so? You got it, Cassine.

That's why we started talking about some of these other things, to use some facts to analyze the "lower than replacement cost" theory. So, far, no facts to back it up the lower than replacement cost theory.

I guess we can agree to disagree. I base my experience on buyers as far as Cassine goes. I have tried to sell lots in The Preserve and Cypress and buyers always say too far to the water. My buyers have leaned toward Cassine as you can tell by my vacant land sales in Cassine. I feel every home sale that has been brought up in this thread are fine examples of good sales that could not be reproduced. If you base your value of $75,000 maybe not but my sales this year tend to have been in areas that are not saturated with vacant lots. So maybe in some ways we are both correct.:dunno: Thanks for the debate and I mean no disrespect as I find these exchanges very helpful. My experience with buyers this year could change next year. I guess that is why I love this business!
 

traderx

Beach Fanatic
Mar 25, 2008
2,133
467
Bobby, how much does a lot in Watersound Beach or Watersound West sell for?
 

30ashopper

SoWal Insider
Apr 30, 2008
6,852
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Right here!
Bobby, how much does a lot in Watersound Beach or Watersound West sell for?

200K-500K & 100K-200K according the county records. WB appears to be doing well on sales this year as discounts off 2005 prices are pushing 45%. Everyone in there that purchased between 2003-2007 lost money. (But hey, they can probably afford it. :D)
 
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200K-500K & 100K-200K according the county records. WB appears to be doing well on sales this year as discounts off 2005 prices are pushing 45%. Everyone in there that purchased between 2003-2007 lost money. (But hey, they can probably afford it. :D)

C'mon guy,,,,You know Chambers Street Builders, Inc. went into Watersound West Beach, built a model and earned a good return post haste in 2007.
 

traderx

Beach Fanatic
Mar 25, 2008
2,133
467
200K-500K & 100K-200K according the county records. WB appears to be doing well on sales this year as discounts off 2005 prices are pushing 45%. Everyone in there that purchased between 2003-2007 lost money. (But hey, they can probably afford it. :D)

So, if I buy a $100k lot in Watersound West and build a 2,000 SF home on it for $300k, I have a $400k package. Does the resale market generally offer a 2,000 SF home for $400k located south of 30a in a top notch development?

This is a moving target because lot prices seem to still be in decline and we are currently experiencing deflationary commodity prices so the cost of lumber, shingles, sheetrock, etc should continue to decrease. Given the ugliness in labor markets, one could conclude that there will be decreases in labor rates. It does not appear that a 30a rally is around the corner.
 
So, if I buy a $100k lot in Watersound West and build a 2,000 SF home on it for $300k, I have a $400k package. Does the resale market generally offer a 2,000 SF home for $400k located south of 30a in a top notch development?

This is a moving target because lot prices seem to still be in decline and we are currently experiencing deflationary commodity prices so the cost of lumber, shingles, sheetrock, etc should continue to decrease. Given the ugliness in labor markets, one could conclude that there will be decreases in labor rates. It does not appear that a 30a rally is around the corner.

We built in Watersound West Beach so I think we're qualified to say that a person could buy a lot in the Cottage District from JOE. Maybe Lot 100 or 104 for + or - $290,000 with gulf and lake views. You may get approved plans for $5,000. You may get a Watersound Beach Club Membership for $5,000. You may get some Golf Priveleges for Origins, Camp Creek and Wild Heron. You may get a certificate to be used to pay your HOA dues for 2 years. You could build a beautiful pre-approved Dungan Nequette home with 4 beds, 2400 sq. ft. for $375,000. The whole process from Lot purchase to move in could take less than 4 months. Most appraisers would more than likely say the home is worth $835,000 on either of those lots.

A person could buy a lot in the Cottage District of Watersound West Beach, say 31 or 32, 43 or 44, 53 or 54, 65 or 66 for about $165,000. They may get all the same perks as above. Maybe they'd build the pre-approved Cooper Robertson plans with 4 beds, 4 baths and 2,400 square feet. That home would cost about the same and takes 4 months start to finish.

I think it's a fascinating transaction in this most strange point in the cycle.
 

traderx

Beach Fanatic
Mar 25, 2008
2,133
467
The Bureau of Labor Statistics produces the PPI which is a good source of commodity price trends. Link is to page that allows you to select lumber, or whatever and then you can select a table and graph of lumber prices.

http://data.bls.gov/cgi-bin/surveymost?wp
 
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