Season's Greetings, Foreclosures and Eagles on the Beach

Season’s Greetings,

National banks and mortgage companies have started selling their inventory of foreclosed properties and providing incredible opportunities for buyers. Sales volume has remained steady as bargain hunters purchase these and other properties that individual sellers have reduced to stay competitive with the foreclosure listings. At one time a few weeks ago, Port St. Joe Realty had 8 properties under contract. (All 8 are still on track to close or have already closed) I helped two sets of buyers this month purchase two of the best deals in the last five years. In my last newsletter, I talked about my #1 pick on http://www.mexicobeachsales.com/ . It was a large, 2nd tier, gulf view, newer, 4 BR/4BA, single family home w/ over 4000 total sq ft that the sellers purchased for $835K. I told everyone last month that the sellers thought their bank may take a very low offer. The buyers purchased this home that sold for $835K on 10/04/2005 for $350,000. It also came completely furnished and equipped.

These buyers are good friends of mine that I met while helping them purchase their first property here two years ago. They had been patiently waiting to purchase a 2nd property to place on the rental market. I knew what they were looking for and after they looked once at this house, they made an offer. As I have been saying about rental income potential, it is possible when marketed properly. Their rental company is projecting this home to gross $45,000 in rental income for 2009. (It grossed $35K this year and wasn’t placed on a rental program until April)

A misconception about this market is that the cost of property insurance is extremely high. It was higher in 2005, but has come down substantially. I would give Andy Smith at Hannon Insurance a call if your policy hasn’t come down (850-258-5128). The home above was insured for around $1500/year and the next home I’m going to tell you about was insured for under 900/year. Taxes are also way down due to assessed values coming down with the market.

The other home I sold this month had been foreclosed on earlier this year. It’s a very neat house built in 2005 that’s a short walk to the beach and it’s pictured below. This home had 3 offers made on it within 3 days of it hitting the market. The buyers I was working with ended up purchasing it for $244,000. There is not an abundance of deals with low asking prices on the market. When one is listed at a great price, it’s selling fast and usually getting multiple offers. Both of these homes had relatively quick closings and were both financed through Amber Lowery at Vision Bank. Amber did a wonderful job and had great rates (850-227-4492). Speaking of great rates, I’ve been emailed quotes this week as low as 4.5% for a 30 year fixed mortgage.



I have been working along with Steve Newman on listing a number of foreclosures. We listed a vacant lot on Cape San Blas for $99,000 that was purchased in 2005 for $380,000. It quickly received multiple offers and went under contract. We also listed a lot in Highland View for $24,999 that was purchased in 2005 for $205,000!!! The deals are coming and you need to be ready. I am doing the paperwork and pre-market analysis for a number of other foreclosures. Since they usually sell quickly, I need to know what you are looking for if you want me to contact you when they are listed.

Another Great Deal that recently closed is the Gulf front home below that had an asking price of $800,000. It ended up selling for $520,000. It’s was built in 1980 and needs some work/updating. However, it’s the first Gulf Front home in this area on MLS to close under $800,000 in at least 4 years. Two Gulf front homes both listed at $1,500,000 went under contract as I was writing this. It will be interesting to see what these 2 homes rumored to be going into foreclosure end up selling for.

With the number of foreclosures in the pipeline to hit the market, there are going to continue to be tremendous values for buyers. The best new deal on the market is a great beach house that sits right across the street from the beach in St. Joe Beach. Vacant lots similar to the one this house sits on sold for over $600,000. It is now listed for $329,000. There are two foreclosure homes that I think someone may get a very good deal on. One is a home in phase 1 of Windmark Beach that was purchased for $1,400,000. It’s now on the market at $559,000. For comparison to other properties in Windmark Beach, it’s the only home listed under $1,000,000. The second home is located across from the dedicated beach in Mexico Beach. The previous buyers paid $1,100,000 and now it is on the market for $649,000. Both of these are owned by National banks that are motivated to sell. I am very curious to see what the banks would actually take for them. There is also a great lot in the Casuna Subdivision on the market for $59,000. Possibly the best long term investment is the 3 acres of commercial land available in Mexico Beach for $449,000. (An identical piece sold for $1,600,000 in 2006)

Best Deals in Port St. Joe
Best Deals on Homes in Indian Pass and Cape San Blas
Best Deals on Vacant lots in Indian Pass and Cape San Blas


Below are the sales that have taken place in the last 90 days as well as the properties that are currently under contract.

Mexico Beach 30: http://rafsg.net/RAFSGReports/listings.asp?ID=1206191089
Cape San Blas 21: http://rafsg.net/RAFSGReports/listings.asp?ID=1206190551
Port St. Joe 9: http://rafsg.net/RAFSGReports/listings.asp?ID=1206190553
North Gulf County 12: http://rafsg.net/RAFSGReports/listings.asp?ID=1206190554
St. George Island 26: http://rafsg.net/RAFSGReports/listings.asp?ID=1206190555
Apalachicola 10: http://rafsg.net/RAFSGReports/listings.asp?ID=1206190556
Carrabelle: 16: http://rafsg.net/RAFSGReports/listings.asp?ID=1206190557

I will be sending out a thorough analysis recapping the market in 2008 and giving my projection for 2009 in the coming weeks.

Occasionally I’ve been taking a small camera with me while I jog in the morning. I was lucky enough to have my camera the morning this bald eagle was out cruising the beach

Fall Market Update

Of course our market is affected by the mortgage/financial crisis. The cheapest properties on the market in 2005 sold for $200,000. Some of these same properties are now available in the high $50’s. I have spoken with real estate professionals in other areas and some of them report almost no sales. Their sellers have only reduced 10%-20% and they feel they are giving it away. Our market has taken the huge reductions necessary to move properties. This has rapidly driven prices down 25 to 70% over the past three years. You’ll see some these tremendous reductions on my new Top 25.

From July 1st to October 5th of this year, 32 properties have sold and another 10 are currently under contract in the Mexico Beach Area. In comparison to the same time period in previous years: 43 sold in 07’, 33 in 06’, and only 53 at the top of the market in 2005. My point is that in spite of horrible news, people are buying. Port St. Joe Realty has been very fortunate and had 9 closings during this time. It takes guts to buy when the market is down and confidence low, but fundamentally this is the time to buy. It’s ironic how we are all comfortable paying more than the last guy in a good market and scared to pay less in a bad one.

My advice remains the same. There are too many opportunities on the horizon to purchase a marginal deal. Be patient with the market, understand you may have to offer on numerous properties, and you will find what you are looking for. Just remember, you are not the only one looking for these great deals. They will go fast once people know about them and you need to be ready to act.

There are deals too good to pass up. A single family home in a nice area sold for $87,000. It needed a lot of work, but that was solid. Especially considering that a non-mobile single family home has not sold for less than $175,000 in the last few years. Check out my maybe #1 pick. It’s a short/sale foreclosure that the buyers purchased for $825K. There is a rumor that their bank is willing to take in the low $400’s. Furthermore, check back for a development opportunity that should hit the market next week. It’s a 3 acre commercial/high density (18 units/acre) tract with huge development potential. An identical tract was purchased in 2006 for $1,600,000. This tract may hit the market under $450K. It would be a great one to buy and hold until the market recovers. We also placed 1 of our 4 offices on the market. This office/house is priced right and located in the peaceful Beacon Hill area better suited for residential use. We plan to move to a higher traffic location in Mexico Beach.

I watch the news and hear how tough loans are to obtain. However, the majority of people I am dealing with are not having that much trouble borrowing for primary or secondary homes. I have seen regular borrowers get 30 year mortgages in the 5.5% range lately. With 20% down on a $250,000 house, principal and interest payments would only be $1,135/month. That’s awesome. (I added a great new mortgage calculator to http://www.mexicobeachsales.com/) Lot and mobile home loans seem to be a little tougher to obtain and owner financing is remaining attractive to buyers. Three of my listings that recently sold offered owner financing and the sellers were able to charge an interest rate over 7%.

In hindsight, banks see that lots were a more speculative investment than homes. If the average single family home is down 30%, then the average lot is down 60%. More borrowers have stopped paying on lot loans. In these cases, the banks are way upside down on a non-income producing investment if they have to foreclose. I am working with 2 different couples right now looking for nice single family homes 2-3 blocks from the beach. There is one brand new competitively priced home in this area that hit the market last week. With an exception to it, they will be able to buy a lot and build exactly what they want for $25K-$75K less than they would spend if they purchased the best deal at listing price for an existing resale home. Normally the opposite is true.

Building costs (labor and materials) are down substantially and this is another variable that is making building such and attractive option. These factors and great customer service are two of the reasons that Big Fish Construction is continuing to build a number of new homes for their clients. Bo and Steve are easy and fun to work with. If you have any questions about building, give these guys a call and you may be pleasantly surprised at your options. Steve Newman 850-527-5117 or Bo Spring 850-527-0194.

In the midst of the banking failures, I am asked almost daily about the strength of the local banks. I don’t know the complete financial situation of any banks. I will share what I know and who I enjoy working with. To start with, you need to understand that banks sell a large portion of the loans they originate. Many of the bad loans are the “bad paper” you hear about in the news. I’m saying this to address the concerns that the local banks have all of the loans on foreclosed coastal properties. That’s not true. I also remember during 2005 that many people were using mortgage brokers who shopped hundreds of national programs. For example, the lot loans I remember most people using were from Royal Bank of Canada.

Sure, all of the local banks have their share of bad loans. Vision Bank has a solid community presence. I regularly work with and highly recommend Jim Norton, Johanna White, Kyle Adkison, and Karen Fontaine as top notch bankers. Vision is owned by the conservative Park National Corp out of Ohio. Their stock (PRK) is trading at $77/share as I write this and they have over a BILLION dollar market cap. The other banker that I enjoy working with is Sam Tyus at Superior. Superior operates in the Southeast and they have a good common sense approach at the local level. They are also publicly traded. (SUPR).

Discussions abound whether the volatility and losses in the stock market and banking concerns help or hurt real estate. One side of the argument is that as people lose money in the stock market, they have less to spend on real estate. The other side to the argument is that as the stock market struggles, people move money into real estate for a safer investment. There are properties selling for a low as $.30 on the dollar that are generating solid returns from rental income. There are listings that are safely grossing 8-10% of their purchase prices in yearly rental income. 24 out of the 83 buyers in the Mexico Beach Area this year have paid cash. After the owners take advantage of the expenses and depreciation allowed as income tax deductions, the properties are yielding an effective return over 10% in some situations. That sure beats 3.5% in a bank and seems less risky than the stock market in times of financial uncertainty. Check out a few of the potential high income properties currently on the market.

I’m not sure anybody has all of the answers right now. I can tell you that this fall has been absolutely beautiful. I hope you have been able to come and enjoy this wonderful place that I’m lucky enough to call home. We don’t have a traffic light and the only crowds this time of year are seagulls and seashells. I don’t think you can find a more relaxing place. If you need an excuse to visit, the Art and Wine Festival is October 18th.

Below are links to see the closings for other areas that have occurred since July 1st. The Mexico Beach Area remained the most popular choice with buyers and had almost twice the number of closings compared to all of the other areas.
Cape San Blas 18: http://rafsg.net/RAFSGReports/listings.asp?ID=1206172106
Carrabelle 16: http://rafsg.net/RAFSGReports/listings.asp?ID=1206172110
Port St. Joe 10: http://rafsg.net/RAFSGReports/listings.asp?ID=1206172107
St. George Island 10: http://rafsg.net/RAFSGReports/listings.asp?ID=1206172108
Apalachicola 8: http://rafsg.net/RAFSGReports/listings.asp?ID=1206172109
North Gulf County 7: http://rafsg.net/RAFSGReports/listings.asp?ID=1206172111



Take Care,

Sacred Heart Hospital Update

FOR IMMEDIATE RELEASE Contact: Mike Burke
September 12, 2008 850-969-1319

Construction Proceeding on Target for New Hospital
In Port St. Joe

Construction is continuing on the new $35 million Sacred Heart Hospital being built along Highway 98 in Port St. Joe. The new hospital and adjacent medical office building will bring quality healthcare to Gulf and Franklin counties and will provide as many as 150 new jobs.
"The construction is progressing nicely, and we have been fortunate not to be impacted by any inclement weather, which could delay the project. We are still on target to open the hospital in the fall of 2009,” said Brian Matson, vice president of strategic planning for Sacred Heart Health System.
Work on the foundation and excavation of retention ponds on the 27-acre site is now complete. Installation of underground electrical and plumbing infrastructures is underway, and vertical construction of the building is slated to begin the first week in October. Construction of the adjacent medical office building is anticipated to begin in the next 60 days, and is scheduled to open with the new hospital.
“Offering a medical office building on the hospital campus will provide patients convenient access both to physicians and any required diagnostic services,” said Peter Heckathorn, executive vice president, Sacred Heart Health System.
Sacred Heart has provided radiology services in local area for more than a year and recently began offering rehabilitation services in both the Port St. Joe and Beacon Hill communities. "Sacred Heart is pleased to show our commitment to the local community by offering these services in advance of our hospital opening," said Sidney Scarborough, vice president of ambulatory care, Sacred Heart Heath System. "Response to the rehab clinics and radiology services has been encouraging, and the physicians have been extremely supportive." The new Sacred Heart Hospital will provide residents of Gulf and Franklin counties with healthcare facilities that include:
A community hospital with private rooms, an 24-hour emergency department and operating rooms
A full complement of diagnostic and laboratory services
A medical office building with space for primary care and specialty physicians, as well as various outpatient services
A helipad to be used by Sacred Heart's AirHeart helicopter, providing rapid transport for trauma patients and other critically-ill patients
For more information about Sacred Heart Health System, visit www.sacred-heart.org.

Gustav- No Damage, Cool Surfers

Thanks to Denise Nichols for taking these pictures from my deck. It's rare we have waves big enough for surfers and this was a treat for all of us. We couldn't believe it, but surfers had flown in all the way from Hawaii. We had a photographer for Surfer Magazine taking pictures in front of the house.

Fay and Market Update

We boarded up windows and got ready for a storm that luckily decided to skip us over. I’m getting lots of calls from people with damage in South Georgia and other areas of Florida. There is no damage in our direct area. We had a little bit of wind and maybe 1-2 inches of rain. I took a jog down the beach this morning and could not tell there had been a storm. It’s a beautiful day and kids are playing on the beach. If you are worried about your property, I will be glad to check it out and send you a picture if you would like one.

The biggest impact the storm had on Mexico Beach was the rescheduling of the MBARA Kingfish Tournament that my father puts on every year. The new date is September 13th. The tournament is a lot of fun for everyone and brings a big crowd to the area with nearly 200 boats entering each year.

The Mexico Beach Market has quietly been active the last 30 days. There are 36 properties that have sold or that are currently under contract! The main sellers have been interior (2-3 blocks from the beach) single family homes for under $300K. There were starting to be a lot of good deals in this category and I predicted last month that these would start selling. There has also been a run on the single family lots 1.5-3 blocks from the beach priced under $75,000. This link will show you all 36 properties: http://rafsg.net/RAFSGReports/listings.asp?ID=1206160066 .

Top Picks #3, #4, #7, #10, and #17 went under contract in the last few weeks. All 6 of the lots that have sold or gone under contract recently were featured on my Top 15 lots. Last month, I talked about an unobstructed gulf view lot being reduced from $385K to $200K. It received 3 offers in a matter of days and ended up closing above asking price at $205K. The 2 lots I talked about being such a great deal in Mexico Beach that were purchased for $125K each were resold for $160K and $170K.

The Cape and Port St. Joe haven’t seen as big of a spike in activity over the last 30 days, but they are seeing activity. The Cape has had 14 properties and Port St. Joe 11 properties that have sold or are currently under contract.
Cape San Blas 14: http://rafsg.net/RAFSGReports/listings.asp?ID=1206160067
Port St. Joe 11: http://rafsg.net/RAFSGReports/listings.asp?ID=1206160068

Be sure to check out www.mexicobeachsales.com . I updated the Top 25 this morning. I’ve added a few foreclosures, short sales, and other aggressively priced properties including; a newer gulf front home for $750,000, the lowest priced Surfside unit EVER, 4 Apartments bringing in $31,000/year for $299K, and a newer gulf view beach house reduced from $549K to $349K.

Take Care,

Zach

Mid Summer Market Report

Be sure to check out www.mexicobeachsales.com. After many requests, I have gone back to ranking the Top 25 deals on the Market. You can also click the “what’s selling?” button to see the last 50 properties that have sold in the Mexico Beach/ St. Joe Beach/Windmark Beach Area.

I think we had the largest crowd ever in Mexico Beach on The 4th of July. The beach looked great and the weather was perfect. Every motel room and vacation rental, including the many new units now on rental programs were rented. Most of these are also rented for the majority of July and lots of people are looking at property. The message I am trying to communicate this month is that there will be a low number of sales this year despite the increase in numbers of people looking to purchase. There are more people looking than in 2006 or 2007.

Closings comparisons for May 1st to July 12th from 2003 to 2008.
Mexico Beach Area
Currently Under Contract 15: http://rafsg.net/RAFSGReports/listings.asp?ID=1206152034
Number of Properties on the Market: 528
Number of Closings
5/1/08-7/12/08 24: http://rafsg.net/RAFSGReports/listings.asp?ID=1206152047
5/1/07-7/12/07 36: http://rafsg.net/RAFSGReports/listings.asp?ID=1206152046
5/1/06-7/12/06 20: http://rafsg.net/RAFSGReports/listings.asp?ID=1206152041
5/1/05-7/12/05 52: http://rafsg.net/RAFSGReports/listings.asp?ID=1206152040
5/1/04-7/12/04 89
5/1/03-7/12/03 76

Cape San Blas
Currently Under Contract 4: http://rafsg.net/RAFSGReports/listings.asp?ID=1206152031
Number of Properties on the Market: 481
Number of Closings
5/1/08-7/12/08 10 http://rafsg.net/RAFSGReports/listings.asp?ID=1206152048
5/1/07-7/12/07 17 http://rafsg.net/RAFSGReports/listings.asp?ID=1206152045
5/1/06-7/12/06 8: http://rafsg.net/RAFSGReports/listings.asp?ID=1206149180
5/1/05-7/12/05 72: http://rafsg.net/RAFSGReports/listings.asp?ID=1206152039
5/1/04-7/12/04 116
5/1/03-7/12/03 76

Port St. Joe
Currently Under Contract 8: http://rafsg.net/RAFSGReports/listings.asp?ID=1206152030
Number of Properties on the Market: 213
Number of Closings
5/1/08-7/12/08 4 http://rafsg.net/RAFSGReports/listings.asp?ID=1206152049
5/1/07-7/12/07 10 http://rafsg.net/RAFSGReports/listings.asp?ID=1206152044
5/1/06-7/12/06 14: http://rafsg.net/RAFSGReports/listings.asp?ID=1206152043
5/1/05-7/12/05 37: http://rafsg.net/RAFSGReports/listings.asp?ID=1206152036
5/1/04-7/12/04 68
5/1/03-7/12/03 43

Here’s my simple theory on the current market and explanation as to why there are so few properties selling this season. To get a feeling for the market, put yourself in the shoes of a prospective buyer. You love the beach and want a place to enjoy. You understand this is a big investment and prices have been falling since the summer of 2005. You and every other buyer want to make sure you get the best deal in the last 5 years. You are an educated buyer and know that the last property like the one you are looking for sold for $200,000 three months ago. 9 out of 10 buyers in this market have a mindset that they are not buying unless they can get a better deal than the last guy. Even though this $200,000 property was worth $400,000 3 years ago, your thinking is to not pay more than $175,000. The bottom line is that these potential buyers are hesitant to buy. They only purchase if they feel like they are getting a great deal.

This has been the mindset of buyers since the market started coming down in 2005. The market is running out of sellers that can afford to sell for less. While I do not think that we are at the bottom of the market, this is a good sign that we are getting closer to the bottom. With so many properties on the market, there will be a few sellers that have to sell quickly. Individuals forced to sell for whatever they can get quickly and banks that have to sell foreclosed properties will continue to result in low sale prices. There are not many of these stand out deals. Do not pass them up if they are what you’re looking for.

Earlier this year there were 8 Gulf-side townhouses that stood out from the other similar properties as solid deals. There were multiple buyers sitting back waiting on them to reduce more. Once one of them went under contract all 8 of them sold within 2 ½ months. The result is not that people have paid more; rather not one unit like these 8 has sold since May. There are 4 other similar units that are short sales that have been under contract for a while. These short sales often take a few months to get the terms worked out with the banks. (Short sales are sales where the seller is trying to get the bank to allow him to sell for less than is owed on the mortgage) There is a similar situation to the townhouses right now with a number of single family homes with asking prices from the $180’s to $400’s. http://rafsg.net/RAFSGReports/listings.asp?ID=1206150826 A few of these listings are getting shown 4 and 5 times a week. That is a ton of activity.

I think once one of these goes under contract that at least 4 or 5 of them will sell before summer is over. There are a few townhouses that have started to see activity after reducing their prices as well. One of the eight units that was purchased earlier this year for a very good price was put back on the market with a new asking price over $100,000 more than was paid a few months ago. It went under contract while I was writing this report. Not many people know the market well enough to successfully flip property. The key to being successful is to purchase it for such a good deal that you can resell it for a great deal to the next guy and still make a profit. (Minutes before I sent this the $125K lot in the next paragraph looks like it went under contract for considerably more than the buyer paid a few weeks ago)

It’s ironic with so many more sellers than buyers that buyers are starting to become frustrated because they can’t find what they consider a super deal. I could probably sell 10 of the beachside lots looking down the canal that had an asking price of $375K and sold for $125K. That’s the kind of deals people are looking for but now they can’t find anything comparable under $215K. With the $125K lot in the back of their minds, the other lots on the market seem overpriced and the result is no sales. There was a lot in St. Joe Beach just reduced from $385K to $200K. It sits right across from the beach with unobstructed views and I know that there were 3 offers submitted within 24 hours of it being reduced. Similar lots to this one start at $350K. I truly believe that the buyer will be getting a great deal. http://rafsg.net/RAFSGReports/listings.asp?ID=1206152035

The negative side to this is that it makes every other similar lot look severely overpriced. The result will again be very few sales. There will be 10 people that want a lot like this for $200K, but these lots sold for $600-$700K three years ago. There aren’t many sellers that can afford to sell that low. I don’t know if you consider it helping or hurting the overall market, but that’s how these very good deals reduce the number properties that sell. If the current rate of sales continues, I estimate that less than 1 out of 9 properties on the market will sell this year.

We have not been exempt from the foreclosures and it has forced banks into raising their lending requirements. This makes it harder and harder for people that want to buy to get loans. This has started leading to more sellers offering owner financing. It’s not as easy and clean as a quick close, but it seems to be a win/win in many situations for the buyer and seller. I was not involved in 1 owner financing transaction from 2005-2007 and I heard of very few. I was involved in one earlier this year and I am currently in negotiations with 2 other sellers that have attracted buyers by offering owner financing. Owner financing looks like a trend that will become more common. I am now advising sellers to at least consider offering this to attract buyers.

I have no doubt that properties purchased between 2004 and 2006 will continue to be foreclosed on through this year and into 2009. Port St. Joe Realty is very connected with local banks and has national connections as well that enable us to quickly get information about foreclosures to our clients. The majority of banks are continuing to ask more for their foreclosed inventory than they can sell for in the current market. However, there have been 6 or 7 foreclosed properties have been great deals this year and sold in a matter of days. Our 4 offices continue to perform well despite the market conditions. This link will show you some of our recent sales including 3 properties that we currently have under contract. http://rafsg.net/RAFSGReports/listings.asp?ID=1206149385

I often get calls from people asking me to refer them to attorneys and appraisers. I’d like to tell you about 2 friends that have recently opened their own businesses. Jeremy Novak has experience as a Realtor and in property management. He has recently opened his own law firm in Port St. Joe located next to our Port St. Joe Realty office on 7th Street. Jeremy offers great personal service for real estate closings and other legal matters. Matt Terry has recently started The Appraisal Group of North Florida and can help with any of your appraisal needs. Another trustworthy appraiser is Greg Norris. Jeremy Novak: 850-527-9121, Matt Terry: 850-227-6478, Greg Norris: 850-596-6505.


Total 2008 Sales:
Mexico Beach 54 (43 Residences and 11 Vacant Lots)
43 Residences http://rafsg.net/RAFSGReports/listings.asp?ID=1206152057
11 Vacant lots http://rafsg.net/RAFSGReports/listings.asp?ID=1206152058
Port St. Joe 13: http://rafsg.net/RAFSGReports/listings.asp?ID=1206152055
Cape San Blas: 35 http://rafsg.net/RAFSGReports/listings.asp?ID=1206152056
Carrabelle: 41: http://rafsg.net/RAFSGReports/listings.asp?ID=1206152050
St. George Island: 39: http://rafsg.net/RAFSGReports/listings.asp?ID=1206152051
Apalachicola 21: http://rafsg.net/RAFSGReports/listings.asp?ID=1206152052
North Gulf County 12: http://rafsg.net/RAFSGReports/listings.asp?ID=1206152054
Eastpoint: 13 http://rafsg.net/RAFSGReports/listings.asp?ID=1206152053

Take care,

Zach Childs

Market Update and AJC Article

I wanted to give a quick update on the market and share an article that appeared recently in The Atlanta Journal Constitution.
It’s getting to be Summer and that means that more and more people are at the beach and looking at property. So far this year, we’ve had 32 closings in the Mexico Beach/St. Joe Beach Area. There are an additional 15 properties under contract at this time. I need to point out that 9 residences are selling for every 1 vacant lot that sells. Gulf front and beachside townhouses were the hot sellers over the last 2 months with 12 selling or going under contract. I showed one group of potential buyers 4 of these units. In the following 2 weeks while they were considering their options, all 4 sold. With those 12 properties off the market, asking prices for similar units start $70,000 higher. That’s created a similar situation to what happened earlier this year when the 4 top deals on Gulf Front houses sold and asking prices now start $100,000 higher.
We are seeing more and more foreclosures. Six out of the Twelve townhouses I mentioned earlier were either foreclosures or some kind of short sale. On the positive side, there are a number of buyers looking for these good deals and foreclosures. There have been very good deals on foreclosures and properties that people needed to sell. There was a foreclosed beachside townhouse that hit the market at $180,000 last week. This unit was at one time worth over $500,000. This particular unit could be in great shape with about $50,000 of repairs/updating. It would then be able to sell for around $325,000. There were 8 people that made offers within 3 days of it hitting the market!
You’ve got to be ready to move on the best deals. Call me and let me know what you’re looking for anytime on my cell at 850-819-0833. Let me work for you. I can keep you updated on the best deals and help you find the property that is right for you.
There have continued to be a few sellers that have accepted offers way less than their asking prices. The way to find out about these is to make offers. A great lot had an asking price over $350,000. I would say it’s worth around $225,000 and I didn’t think much about it because it was overpriced. Somebody made an offer last week and the rumor is that the seller accepted $250,000 less than their asking price! The buyer got a great deal by making offers. I don’t understand why the seller wouldn’t try asking less, but this happens time and time again. I’ve helped 2 buyers this year find properties where the sellers each accepted more than $400,000 less than their asking prices. Just tell me what you’re looking for and what you’d like to pay. I can probably find it. I enjoy finding buyers the absolute best deals available.
Port St. Joe Realty is continuing to be a top producing real estate company in the Mexico Beach Area as well as Port St. Joe and Cape San Blas. We had 2 agents work very hard and close 3 Gulf front properties last week for $1,600,000. We’ve also updated www.psjrealty.com and added a 4th office that is located in Barrier Dunes on Cape San Blas. I recently listed 3 great places and have some other bargains listed as well. Take your pick of the Mexico Beach Canal, a very peaceful setting on St. Joe Bay, or a Gulf Front Home in St. Joe Beach. http://rafsg.net/RAFSGReports/listings.asp?ID=1206133039
Additional 2008 Sales Information
20 Cape San Blas Sales: http://rafsg.net/RAFSGReports/listings.asp?ID=1206133067
5 Cape San Blas under contract: http://rafsg.net/RAFSGReports/listings.asp?ID=1206132854
9 Port St. Joe Sales: http://rafsg.net/RAFSGReports/listings.asp?ID=1206132851
2 Port St. Joe under contract: http://rafsg.net/RAFSGReports/listings.asp?ID=1206132855
22 St. George Island Sales: http://rafsg.net/RAFSGReports/listings.asp?ID=1206132852
15 St. George Island under contract: http://rafsg.net/RAFSGReports/listings.asp?ID=1206133106
Next, read the article from The Atlanta Journal Constitution.
New airport could put Florida's Forgotten Coast on mapBy MELISSA NELSONAssociated PressPublished on: 04/27/08
Mexico Beach, Fla. — Marilyn Theus peddles costume jewelry, chipped china plates and other "junktiques" on the roadside between Port St. Joe and Mexico Beach. On Tuesdays she's joined by a friend who markets fresh shrimp from the site overlooking the turquoise waters of St. Josephs Bay.
The vendors are part of the local charm of Florida's Forgotten Coast, which stretches along the Gulf of Mexico from Mexico Beach to about 100 miles east to St. Marks. Mom and pop motels, bait shops and undeveloped beaches dot the coast south of the Apalachicola National Forest.
But a new $330 million international airport, scheduled to open in early 2010 on a 4,000-acre site north of Panama City, could mean big changes for these quiet oyster and shrimping towns, long bypassed by tourists.
Political leaders and the St. Joe Co., formed by the du Pont family to harvest timber for paper products in the 1930s, pushed for the airport and the access it would bring to the an area known as "Florida's Forgotten Coast."
The St. Joe Co. is now a developer and owns some 700,000 acres of undeveloped Florida land mostly in the Panhandle, making it the state's largest private landowner.
St. Joe donated the 4,000 acres to relocate Panama City's existing airport and owns 78,000 acres of undeveloped property surrounding the new airport.
The state, with the help of a land donation from the St. Joe Co., recently rerouted four miles of U.S. 98, the major east-west coastal highway, to improve the traffic flow in the area and make way for development. High-end vacation homes began replacing motels and recreational vehicle parks a decade ago. In sleepy Port St. Joe, trendy interior decorating stores have opened near the local Piggly Wiggly.
"We aren't forgotten anymore," said Brad Hart, a commercial painter who has lived in the area for 30 years. The national mortgage crisis has slowed the bulldozers and construction cranes, but building continues.
The airport has withstood legal challenges from environmentalists, a local pilots group and others who have argued it is unnecessary and will destroy environmentally sensitive wetlands. The lawsuits continue, but the future of the new airport — the first since Sept. 11, 2001 — appears increasingly certain to both supporters and opponents.

"We did our battle and we were unsuccessful," said Fred Werner, a Panama City pharmacist and amateur pilot whose organization, Friends of PFN — the FAA's designation for the existing Panama City airport — sued to block the new airport.
Werner objects to the airport as a "corporate welfare scheme," which he says will benefit the company in future decades by ensuring tourists easy access to the region. The project will also force tax dollars to be spent extending roads, sewer lines and other infrastructure to St. Joe-owned properties surrounding the airport, he said.
Proponents of the airport relocation, including the St. Joe Co., argue the existing airport's runways are restricted by St. Andrews Bay, that it's vulnerable to flooding in tropical storms and hurricanes, and that the area needs a larger, regional airport capable of handling international flights for long-term growth.
St. Joe Chairman Peter Rummell said the airport is key in the company's long-term strategy to maximize the potential of its vast northwest Florida land holdings.
On a recent Friday afternoon, campers played horseshoes at the El Governor RV Park in Mexico Beach. Their motor homes were parked on a vacant lot overlooking the white-sand beach and turquoise waters stretching below the nearby El Governor Hotel. But campground manager Jerry Metz fears beachfront camping is part of a bygone era.
"You never know what the economy is going to do, but I'm assuming it will go up and then all of this stuff is going to sell," he said, sweeping his hand toward nearby vacation home and condominium projects.
These aren't the high-rise condos of Panama City Beach.
They are homier and built in the local architectural style using a clapboard design with brick driveways and white picket fences. They are designed to appeal to a wealthier market than the traditional Panama City Beach crowd.
Finding a place to park an RV along the Forgotten Coast isn't as easy as it used to be, said Metz, who estimates there are only two or three such places left in the region.
Camper Walter Pumphrey enjoyed riding his Harley-Davidson along the winding beach front highway with breathtaking ocean views. But the highway has been rerouted around Windmark, a vacation home development under construction by the St. Joe Co.
Motorists now drive through a thick pine forest until they reach the town of Port St. Joe, but plans call for an additional section of highway to be rerouted and bypass Mexico Beach.
"Right now, only 8 percent of the people that come to these beautiful beaches are flying, St. Joe Co. spokesman Jerry Ray said. "Millions of people come down here every year, but most of them drive. What [the airport] means over the long, long term is that this is a marketplace that will broaden."
Take Care,

Zach Childs

CNN Money-Beach House Bargains

Beach-house bargains - Mar. 13, 2008

*

There's Activity in the Market

The News is full of stories about the troubled economy, inflation, recession, and falling housing prices. It is very impressive to see how many people are taking this “bad” time in the economy to buy coastal property. There are 139 properties from Mexico Beach to St. George Island that have already closed in 2008 or are under contract. Even more impressive is how active the high-end market has been. 41 of these properties have been over $500,000 and 16 are over $1,000,000 http://rafsg.net/RAFSGReports/listings.asp?ID=1206120588. Yes, people are purchasing $1,000,000 houses that were once worth close to $2,000,000. It’s still a lot of people investing a lot of money right now in this market. It’s shaping up to be the most active year since prices started declining in late 2005.
I’m not saying the market is going to fly back up. I am saying that if you can get a good deal on a property that you like and want to use, it’s time to buy. I was interested in purchasing 3 of the different properties on the market this year. All 3 went under contract while I was hoping they would go a little lower http://rafsg.net/RAFSGReports/listings.asp?ID=1206120596. Those of you looking for a good deal on a Gulf front home between Mexico Beach and Windmark know that there were only 4 good deals coming into the year. Now all 4 have sold or are under contract http://rafsg.net/RAFSGReports/listings.asp?ID=1206120589. The next best deals start $200,000 higher and both of the gulf front homes available in Windmark will be off the market. I’m actively involved in the Gulf front market and I or another agent at Port St. Joe Realty have sold or listed 4 out the 6 Gulf front homes that have sold. http://rafsg.net/RAFSGReports/listings.asp?ID=1206120594. I’m interested to see what the next buyer has to pay in this niche market. I had to write that. The next day the house I am living in went on the market at a great price: http://rafsg.net/RAFSGReports/listings.asp?ID=1206120821
Interest rates on a 30-year mortgage are down in the upper 5% range. This lower cost of borrowing already has more people looking at properties. Many are looking from an investment standpoint and want high rental potential. Their thinking is to buy while the market is down and rent aggressively-short term, then sell when the market goes back up.
We are also getting a boost from cash buyers due to the interest rate cuts. With new CD’s only paying 3.5% and a stock market that could scare anyone, people are looking at depressed real estate prices as a good investment option. We are starting to see very conservative cash buyers that have known the market through the ups and downs buying again.
Are we starting to see foreclosures? Yes. Are the best deals properties that have been foreclosed on? Sometimes. Most of the foreclosed properties have balances owed to the banks that are much higher than they can sell for. A few banks have taken sizeable losses and a handful of foreclosed properties have turned out to be great deals for the buyers. What we are seeing more of than foreclosures, are “short sales”. Sellers are selling for less than they owe on their mortgages and are working out terms with their banks that allow them to sell. Of the 23 properties that have sold this year or are under contract in the Mexico Beach/St. Joe Beach area, at least 9 have been foreclosures or some type of short sale: http://rafsg.net/RAFSGReports/listings.asp?ID=1206120591
I need to be clear; there aren’t a ton of great deals on the market based on asking prices. Only a few of the sellers are willing to ask these lower prices. That makes it easy to pick the best deals and 16 out of the 23 properties that have sold or are under contract were featured in my top 25 @ mexicobeachsales.com before they went under contract. Here’s a link to see all 23: http://rafsg.net/RAFSGReports/listings.asp?ID=1206120592 . (Notice only 3 vacant lots have sold or gone under contract) The only way to find out what the sellers will take is to make an offer. I helped a set of Gulf Front buyers find a great place this year. They were able to be patient and negotiate with the seller who ended up taking $470,000 less than his asking price! The lesson here is to not be scared of a big asking price. It’s a great market to make offers on the property you want. I updated my Top 25 picks today and have added new info to mexicobeachsales.com this morning.
Sellers: There’s no question it’s a tough market and you have a lot of other properties to compete against. People are looking to buy the deals and there will be 50, 60, 70, maybe 80 properties that sell this season. If you are looking to sell, you need to have your property on the market from March through August. This is the time of year that the most people are here and the market is most active. If you would like to discuss your situation, call or email me anytime. The full blown marketing campaign for Port St. Joe Realty’s listings is very impressive and starts April 1st.
You missed a good time if you missed the Gumbo Festival. The weather was perfect and there was a grand turnout. I can’t take any of the credit, but Port St. Joe Realty won the non-restaurant division beating out 25 tasty gumbos. Thanks to our team and everyone that helped to put on another great event in Mexico Beach.

Take care,

Zach Childs

St. Joe CEO Video from CNBC

I thought this was a good interview of Peter Rummell. He takes questions about the Florida Real Estate Market.

http://www.cnbc.com/id/15840232?video=656229452&play=1

Thank you for 2007

I sent this out in early January. Please email me if you would like to be added to my monthly e-newletter.

I hope everyone enjoyed the Holiday Season and shares my excitement about 2008. The market was great for buyers with a huge selection at reduced prices. I’m preparing a thorough summary of the market in 2007 that I will send out on Monday.
I’d like to say “Thank you” to everyone that worked with me in 2007. I was helped by a number of people and can’t thank everyone enough for their assistance during the year. I have a great team of co-workers, closing agents, bankers, attorneys, appraisers, insurance agents, and problem solvers at Garlick Environmental that work very hard to provide great service and results.
It was a tough year for most Realtors and I was extremely fortunate to have a productive year. I had 21 closings in 2007 totaling just under $6,000,000. ($47,500, $59,000, $81,500, $81,500, $81,500, $81,500, $81,500, $81,500, $81,500, $81,500, $81,500, $81,500, $81,500, $83,000, $175,000, $375,000, $450,000, $651,000, $899,000, $1,060,000, and $1,200,000)(Not all on MLS) I’m very proud that only one other agent closed more deals in the Mexico Beach Area.
I’ve stayed honest and realistic with sellers and did not promise more than I thought I could deliver for them. I did not get nearly as many listings as my competitors, but a higher percentage of my listings closed in 2007 than any other agent. My strong commitment to finding new buyers allowed me to have the 2nd highest number of closings even though 30 Realtors have more listings than I do. My personal marketing along with Port St. Joe Realty’s marketing is as effective and thorough as anybody’s in the business. If you are serious about selling, please talk with me.
My fellow agents at Port St. Joe Realty have the most extensive knowledge of the market and it is a pleasure working with them. We have a lot of new, exciting ideas for 2008 and are already off to a good start with well over $4,000,000 already under contract. I look forward to improving and working with you in the future.
Thanks again and Happy New Year,

Zach Childs
Port St. Joe Realty
850-819-0833

2007 Market Report: The Year of Educated Buyers and Price Reductions

I send out a monthly newletter. The property links in these emails only work for a few weeks. I sent this out on January 3rd. Please let me know if you would like to be added to my newsletter list.

2007 was the year of educated buyers and price reductions. It became clear to sellers that they would not be able to sell for the high prices of 2005. Sellers had to reduce fast enough to be one of the best deals on the market. They competed against a high number of other sellers for the limited number of buyers in the market. Only about 1 out of 6 properties on the market sold in 2007. Buyers were doing their homework and forced sellers to negotiate. I did pick over 50% of the properties that sold and featured them on my http://www.mexicobeachsales.com/ before they sold.

The reductions were enough to make buyers act. The number of sales was up 67% from 86 sales in 2006 to 144 sales in 2007. Many buyers had been watching a particular property be steadily reduced since August of 2005 and they purchased at huge discounts in 2007. The biggest reductions were definitely seen on vacant lots. Lots that once sold for $2,000,000 were sold in the $600’s and lots that sold in the low $200’s went as low as $59,000. Windmark Beach lots have had to take the largest reductions. Residences did not have to reduce as much, but 30% to 40% reductions were not uncommon. It was a typical year with the Summer having the most sales; the exception was a large number of new condos that closed in February when they were completed.


What Sold?

Vacant Lots: 39 Sold, 189 are still on the market.
16 of the sales were for under $100,000
Only 7 sales were for over $200,000, all of which were located in Windmark Beach.
All Sold Lots: http://rafsg.net/RAFSGReports/listings.asp?ID=1206110014

Residences: 104 Sold, 318 are still on the market.
38 Single family homes sold from $120K, including 4 gulf front homes from $850K
Single Family Solds: http://rafsg.net/RAFSGReports/listings.asp?ID=1206110017
12 Mobile Homes: http://rafsg.net/RAFSGReports/listings.asp?ID=1206110016
45 New Condos: The majority of these had been under contract since as early as 2003.
Condos Closed in 2007: http://rafsg.net/RAFSGReports/listings.asp?ID=1206110018
Townhouses, other: http://rafsg.net/RAFSGReports/listings.asp?ID=1206110019

12 properties are under contract: http://rafsg.net/RAFSGReports/listings.asp?ID=1206110068

Other Areas
Cape San Blas:
20 Lots Sold: http://rafsg.net/RAFSGReports/listings.asp?ID=1206110025
35 Residences Sold: http://rafsg.net/RAFSGReports/listings.asp?ID=1206110026

St. George Island:
17 Lots Sold: http://rafsg.net/RAFSGReports/listings.asp?ID=1206110072
33 Residences sold: http://rafsg.net/RAFSGReports/listings.asp?ID=1206110077


Port St. Joe:
11 Lots Sold: http://rafsg.net/RAFSGReports/listings.asp?ID=1206110071
32 Residences sold: http://rafsg.net/RAFSGReports/listings.asp?ID=1206110079

Carrabelle:
20 Lots Sold: http://rafsg.net/RAFSGReports/listings.asp?ID=1206110073
30 Residences Sold: http://rafsg.net/RAFSGReports/listings.asp?ID=1206110076

Apalachicola:
11 Lots Sold: http://rafsg.net/RAFSGReports/listings.asp?ID=1206110074
22 Residences Sold: http://rafsg.net/RAFSGReports/listings.asp?ID=1206110075



PSJ Realty agents had over $15,000,000 in sales for 2007!


Take care,

10th Annual Gumbo Festival- Feb 16th

I plan to use the blog to let people know about the fun events in Mexico Beach. The Gumbo Festival is one of my favorites. It's a fun gathering in Mexico Beachd at Sunset Park. Sunset Park is right next to the El Governor.

There were 25 plus teams that made some of the best gumbo I've ever eaten last year. Hundreds of visitors enjoyed live music, great gumbo, and cold beer. This year should be better than ever.

This link will you to a page to see pictures from last years event:
http://www.mexicobeach.com/cdc/PhotoAlbumDisplay.cfm?Category_ID=25#cat

Starting a Blog.......

Here we go. I've had a number of people ask me to start a blog about the real estate market. I will do my best and welcome all comments and suggestions.