Happy New Year,
The market along the Forgotten Coast in 2013 continued to trend upward and continues a slow recovery that started sometime in 2011 or early 2012. The values of most properties have continued to slightly rise and the number of properties for sale has steadily gone down. There weren't huge value increases and I'd agree with somewhere in the middle of most people's opinions with somewhere from 3-6% on average. I don't find anybody who is informed and involved in the industry that doesn't feel there was at least some overall increase in 2013. There are areas as well as particular neighborhoods and developments that have taken off more than others and some owners have certainly seen increases of 10-15%. Like 2012, 2013 had the most sales of any year since 2005. There has been no shortage of buyers with 1160 properties selling on MLS over the last 2 years in the Mexico Beach/Port St. Joe/Cape San Blas market. 2013 saw 606 closings and I'll give a breakdown further down in this report.
We had an awesome year at 98 Real Estate Group. I remember writing up the 2012 market recap and stating that we had a good opportunity to be the #1 company in the area for 2013. I'm pleased to say that we beat every other company based out of Gulf County or Mexico Beach and broke $30 Million in sales. I was able to finish as the top producing agent on the entire MLS and am very proud of that accomplishment. We appreciate every opportunity we are given and hope we are fortunate to work with more wonderful people in 2014.
Let's pick an average most people would agree on and say the market overall went up 4% last year. I completely understand that many owners are disappointed and want to see a larger increase. This usually depends on your perspective and when you invested in the area or if you're still looking to buy. Properties are still selling for a significant amount less than they did at the peak of the market in 2005. Many people are still extremely upside down and frustrated with current selling prices. If properties on average fell 50-60% from 2005 to 2011, then a 7% increase over the last 2 years doesn't have us near back to the top. It's worse for most vacant lot owners that bought near 2005 as the majority of lot prices crashed and fell 60-90% from peak prices. Many of these have seen little to no recovery especially if there still aren't new homes being built where they are located. Activity is a good thing and neighborhoods that are seeing building and condos/townhouses that are full of people with an interest in the areas are doing the best and seeing the largest upswing in values.
The flip side to a "terrible" market is that buyers see it as a great buying opportunity. The feeling buyers had of not knowing how much more the market would fall that existed from 2006 to 2011 seems a distant memory. I'm not alone in my thinking that real estate was selling for way more than was ever justified at the top of the market, but that it's fallen more than necessary and there have been some great values over recent years. Prices remain in the favor of the buyers even though most have accepted that they didn't time to bottom of the market perfectly if they are still looking. Most understand they are still purchasing close to the bottom of the market. Buyers of homes today are paying about the same somebody in 2001 would have paid for most properties. This is about half of what people paid from 2004-2006. Almost 1200 buyers for this small area in 2 years is a lot of demand. These buyers have bought the best deals and entering my 10th year of real estate, it's harder than ever to find buyers "deals".
One reason that 2012 and 2013 have had so many sales is that more and more new people are continuing to find our area and fall in love with the laid back lifestyle and uncrowded beaches. Visitor and bed tax revenues from vacation rentals and motels continue to be at all-time highs. This is a big help for two reasons. More vacationers mean higher investment returns for owners with homes on the rental market and makes many of these properties solid investment opportunities as income producing properties with appreciation upside. Another positive in regard to more vacationers is that a small percentage that visit will end up buying. I sold at least 4 homes last year to buyers that had never been to the area prior to 2013. They purchased the same year that they vacationed here for the first time.
We averaged 880 properties on the market in 2012 and there are 617 actively listed properties as of 1/15/2014. This is down significantly from over 1,700 on the market in 2009. Everything keeps pointing to values continuing to recover, but at what rate is much harder to predict. It's our slowest season of the year and there are still 63 properties under contract that you can see from clicking here: http://www.rafsg.net/RAFSGReports/ListitLib/show_report.aspx?ID=2062731751.
There are only 4 homes from Cape San Blas to Mexico Beach listed as foreclosures vs. 21 vacant lots. Here's a link to the 25 listed foreclosures:
We're also way down on the number of short sales listed with only 20: http://www.rafsg.net/RAFSGReports/ListitLib/show_report.aspx?ID=2062731753
Getting loans has gotten easier over the past couple of years. Banks are lending to most people that apply that have documented income and not huge debt ratios that are looking for primary or secondary homes. We have even started seeing banks lending on vacant lots again, but expect tougher criteria and more of a down payment required on investment homes or vacant lots. Interest rates have gone up and here are the most recent terms I've received from Centennial Bank on conventional mortgages: 30yr = 4.625%, 20yr = 4.5%, 15yr = 3.75%. Significant rate increases could certainly slow down or stop the recovery, but these are still historically great rates. I've not seen anyone decide not to buy at this point because the rates have gone up slightly.
The largest potential negative factor that I see impacting prices right now are the proposed changes in flood insurance rates related to the Biggert Waters Flood Act. There are people that have been grandfathered into rates for decades and they are facing potential huge increases. I'm hearing owners with some potential increases over 500% in Port St. Joe. There are repeals being talked about in Congress, but you need to pay attention to this if you're considered purchasing in a flood zone. Your insurance company should be able to quote you with the current rates and what they will be if all of the new rules go into effect. The only positive related to this will be the increase in demand that X-Zone properties aka properties not in the flood zone will see.
Our homebuilders are staying as busy as they have been since 2005. There is considerable new construction going on and many buyers are finding that their best option for a quality single family home is to find a lot and build. Lot values have recovered less than any other property type and deals can still be found. Beachfront and lots with good views are getting harder and harder to find and are seeing a recovery much more than properties that aren't close to the beach. I mentioned in the last newsletter that we have seen the first "spec" homes being built since 2005. All but one of them that was built in 2013 that I'm aware of has sold or is under contract. There are still 358 vacant lots listed vs. 137 single family homes. Only 6 homes on the market have been built since 2010. http://www.rafsg.net/RAFSGReports/ListitLib/show_report.aspx?ID=2062734271
I'm going to refer to "vacation homes" as properties that can see the water or are in walking distance to the beach. These have had the most demand and seem poised for the largest price increases moving forward. The interior homes are fueled more by people moving here full time or people buying with the intention of moving here when they retire one day. (Or that want a single family home near $200K instead of a 2BR townhouse, but that's not my point here.) Quality jobs remain what would help this interior market the most as our full time population has actually shrunk since the boom.
The Port of Port St. Joe has made more strides with permits and potential suitors, but it remains non-operational at this point. There's a lot of optimism that all of the hard work put into The Port finally results in new jobs in 2014. We did get some awesome news early this year when the new F-22 Raptors showed up at Tyndall Air Force Base on January 6th, 2014. These fighter jets will be part of the new 95th fighter squadron that will bring an estimated 1100 new jobs to Tyndall. This has been talked about for the past couple of years and it's been delayed multiple times. We always hoped it would happen but understood that nothing is certain when the government is in charge. My sister works on base and we know that many of the people stationed there love the Mexico Beach/St. Joe laid back lifestyle. Even if we get 5% of the new people stationed here, that's 50 new families in a small community that will help everything from real estate values to all of our locally owned small businesses.
Below are dates of some upcoming events that are always fun to attend -
Mexico Beach Gumbo Cook Off -February 15
Junior Service League of PSJ Mardi Gras Gala February 22
Gulf County Annual Chamber of Commerce Dinner- February 27th
St. George Island Chili Cook Off- March 1st
Best Deals Right Now- My Top 25 Houses and Top 15 Lots in the Mexico Beach to WindMark Beach Area was just updated and is now being updated weekly at www.mexicobeachsales.com
Port St. Joe Deals
Cape San Blas to Indian Pass Deals
Here's a breakdown of what sold in 2013
606 Total Sales
340 Residences- 257 Vacant Lots & 9 Commercial Properties
Mexico Beach to WindMark- 270 Closings
Cape San Blas to Indian Pass- 242 Closings
Port St. Joe-94
We've relocated to what we feel is the busiest spot in Mexico Beach. Come see us at our new office located at 900C Highway 98, adjacent to Gulf Foods in Mexico Beach.