The
Summer of 2014 is setting up to be a showdown that those wanting to see
prices rise have wanted for years. This showdown will be between buyers
that want to buy near prices that are in effect the lowest they were since
2001 and sellers that aren't willing to sell for these prices. I
thought this showdown where either buyers would have to pay more or sales
would slow down would have happened in 2012 or 2013 and it did
not. Post-boom buyers are smart, well researched and
have been buying up the best deals. There have been over 1,600 sales
since the start of 2011 from Cape San Blas to Mexico Beach. I was
wrong in thinking that we were through the majority of short sales and
foreclosures. There have been 523 properties sell since 2011 that were
either listed as short sales or foreclosures. In hindsight, it's clear
that a high volume of distressed properties holds prices
down. When over 500 properties are being sold at basically
whatever price the market would pay in a relatively quick timeframe, it is
not good for rising values even if hundreds of people a year are
buying.
It
looks like we are finally through the bulk of the low priced short sales and
foreclosures that have held prices down. We are starting to have
sellers that would like to sell, but aren't in a position where they have
to. There are only 3 homes listed
as foreclosures on the RAFGC MLS with one in Mexico Beach, 2 in the Port St.
Joe Area, and zero on Cape San Blas or Indian Pass. There are still 27 vacant lots
listed as foreclosures. Twenty-seven is way down from where
we've seen it over the past couple of years. The majority of these
vacant lot foreclosures on the market are held by banks with rather
unaggressive policies on selling their foreclosures. For example,
Capital City Bank owns 9 of the 27 vacant lots. It's amazing that all
but one of their 9 foreclosures has now been listed for over 1,085 days.
The number of foreclosures has been going down for a couple years and
the market is very happy to see that the number of short sales is also
finally down significantly. Only 14 properties are currently
listed as short sales- (The number of short sales on the
market was closer to 100 at times in the past few years.)
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We are
still finding people great deals, but it's taking patience and even some luck
at this point. The national lenders don't use a lot of common sense
with how they've been handling short sales. This is where I say you
sometimes need both patience and luck. Short sales can take years to
get approved and the seller's banks won't negotiate with the seller in
most cases until they have found a buyer and signed a contract. This is
terrible for values and forces sellers of short sales to list at aggressive
prices so they can get a contract and then go negotiate with their
bank. This process can take years and often the 2nd or 3rd
buyer that signs a contract is the one that's still around once the seller's
bank has approved terms. I worked with the buyers who
purchased this awesome house last month for $700,000. There
was a buyer that had a contract for months that didn't close and these buyers
stepped in and had a relatively short wait to close on a short sale at only 3
months. I've had 2 other sets of buyers find out about this sale and
ask me to find them something comparable. I can't come close to
anything like this for the price at this time. This home originally
sold for $1,390,000 in 08'.
The
number of properties on the market has crept up from 623 last month to 629 as
of March 16. A fair number of the new listings are from owners that
have heard the market has improved. They are trying to sell for prices
higher than properties have closed for in the past 2 years. These
include a handful of sellers that bought in the last 2-3 years that are
trying to sell for profit. I've listed 6 properties since my February
market update and already have 3 of these properties under contract. Each
of these sellers have contract prices that are slightly higher than they
could have reasonably expected last year. I feel like we've had more
snowbirds than normal looking to buy this year and that's also helped the
market more than it has the past couple of years. There are now 85 properties
currently under contract vs the 68 properties that were under
contract when I sent out my February update.
Coastal
real estate prices have been on a wild and crazy ride over the last
decade. A good example is of a listing I sold last month for
considerably more than the sellers paid in 2009. In 2005, the vacant
lot this home sits on sold for $625,000. Four years later in 2009, the
3,000 plus sq ft home that was built on it was foreclosed on and sold for
$475,000. It closed on 2/28/14 for $150,000
more than it sold for in 2009, but also the same exact $625,000 the vacant
lot sold for in 05'. The owners that sold it last month had
made some improvements and sold it furnished with a very impressive rental
history that helped justify the increase in selling price.
Another
sign of improving values and a scarcity of deals is evident with the amount
of backup contracts being used. I don't think I used a backup contract
from 2006 through 2010 and might have done one or two a year the past couple
of years. There wasn't a big need for backup contracts as buyers could
usually find a comparable deal on a different property. A backup
contract is used on a property that is already under contract with a buyer
and the 2nd buyer is hoping the first one doesn't close or defaults on their
contract. We now have so few of the aggressively priced listings
that backups are becoming more common. Buyers are looking for other
properties and finding that in many cases they can't get close to what some
of the properties are selling for and they are willing to put in backups and
are hoping the first buyers can't close. I am currently working with 5
properties that are under contract that have active backup contracts.
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I've
been updating my top 25 picks on www.mexicobeachsales.com
at least every Wednesday and more often
than that if there is a hot new listing or big price reduction. Most of
my picks in the top 10 haven't made it more than a few weeks before they've
gone under contract. I usually don't have a number 1 or 2 pick and if I
say something is that good of a deal, it's usually under contract in a few days,
if not hours. There are still a few very good deals and somebody is
going to end up with great deal on the Waterside Village foreclosure at
$145,000, the Key West House at $287,000, the WindMark House at $399,000, and
the 4BR in Ocean Plantation at $259,000. Everything ranked higher than
those have sold or is under contract. Here's a link to see these and my
other picks.
Here
are my favorite listings for Cape San Blas:
Here
are my favorite listings for Port St. Joe:
2014
Sales Breakdown- There have been 91 sales from Mexico Beach to Cape San Blas
from 1/1/14 to 3/15/14. The two sales I made pictured above at $625,000
and $700,000 are the two highest sales for 2014 in the Mexico Beach to
WindMark market as well as the Cape San Blas/Indian Pass market.
Average selling prices in Port St. Joe remain lower than the beaches and the
high sale for 2014 is only $183,000. Of the 91 sales, 53 of these were
residences, 37 were vacant lots, and the lone commercial sale was in Mexico
Beach for $113,000. Here's a link to all of the sales on MLS for 2014
through March 15th.
Mexico
Beach/St. Joe Beach/Windmark- 42 Sales
Cape
San Blas/Indian Pass- 34 Sales
Port
St. Joe-15 Sales
I've
been very fortunate and continue to have the opportunity to work with a
number of great buyers and sellers. I remain the top producing
individual Realtor in sales volume since 1/1/2013. I'm actively trying
to list properties and would love to talk to anyone that wants to sell.
Of course I love working with buyers as well and am proud to say that 98 Real
Estate Group is also the top company since 1/1/13 for the Mexico Beach to
WindMark market and is among the top companies for the Port St. Joe and Cape
San Blas markets. Below are some of my favorite recent pictures I've taken
in the past month. The bald eagle has been hanging out on the dedicated
beach and the other was at Toucan's.
It looks
like there is some big relief coming to offset some of the negative outcomes
that resulted from the Biggert-Waters Act. Here's an article about the
bill that the House of Representatives passed last week. http://www.miamiherald.com/2014/03/10/3985641/proposed-new-house-bill-to-refund.html
I hope
you are enjoying the monthly newsletters that are finally being sent
monthly. Please let me know if I can help you in any way or answer any
question you may have. See you next month!
Cheers,
Zach
Childs
Broker/Owner 98 Real Estate Group
zachchilds@gmail.com
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