Wednesday, March 12, 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 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 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 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. 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:
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:
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 @ before they went under contract. Here’s a link to see all 23: . (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 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

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