We've seen a very solid start to the real estate market in 2018. There have already been 166 closings totaling$43,672,039 in sales in the first 3 months of the year. The price of homes is continuing to go up steadily throughout the area. The average selling price of a home in the Cape San Blas area is now almost a 1/2 million dollars. The average Mexico Beach area home has broken $300K, and Port St. Joe homes are still slightly under $200K. Each of these areas is continuing to see steady growth. All indications are pointing towards a positive 2018 with continued price increases. 98 Real Estate Group has had a great start with 66 closings and is the # 1 company for the MB and Gulf County market in the first quarter of 2018.
The amount of new construction going on for single family homes is through the roof. The vast majority of these homes are being custom built for the lot owners and are not on the market. Buying a lot and building remains a very popular option for homeowners, particularly on Cape San Blas and in the higher value areas of the Mexico Beach market. The overall housing quality in the area is greatly improving with all of these new custom homes. There have been 63 lots sold this year.
Insurance - One positive worth pointing out is that there are a number of new insurance providers in the market, including flood insurance companies that are saving people lots of money. I've had many customers recently re-quote their policies and go from paying $8K/year to under $3K on homeowners insurance. The private flood insurance options on the Cape and non FEMA areas have helped people pay $2-$3K/year vs. $7-$10K plus. It might be worth shopping your rates if you're not happy with your current insurance. Many owners are even getting their current companies to shop their policy and are finding big savings.
How's D R Horton doing in WindMark? It seems like their product is being received well, and 7 of their first 10 homes are under contract prior to completion. Horton looks like they are in WindMark to stay and construction will continue on their other 54 lots.
Do I see any negative signs that worry me? Rates have gone up from around 3.75% on a 30 year fixed mortgage to about 4.5%. I haven't seen this stop anyone from buying, and it's gotten others that are on the fence to go ahead and purchase as they believe rates will go higher. However, if rates get to a certain point, it's got to slow down demand at some point.
I get asked a lot what I think could slow the market down. I always say the national economy, particularly the Southeast economies where the majority of our owners live is the biggest factor. If people are making money and doing well, they want to own 2nd homes and take vacations. I hear investors joke that if Atlanta is doing well, Mexico Beach and Cape San Blas are doing well. There's some truth to this as so many people from the Atlanta area choose this area as their preferred place to vacation and own 2nd homes. Another factor that I always consider is the number of people that use vacation rental income to help subsidize the costs of their vacation homes. It's a great fit and works well for many families all over the world. The vacation rental market has remained strong, and I've seen no signs of weakness, but if something does happen, this could negatively hurt the model that so many owners rely on. The long term rental demand remains at all time highs and this does give a very viable 2nd option for rental income for many properties if something does slow down the vacation rental market.
The Port and many groups in Gulf County are still trying hard to land what they hope starts with around 400 jobs in Gulf County. This process has been going on for 10 plus years, and there are hopes that the next year or two will finally start to see the results of all this work and planning. To the west of Mexico Beach, Tyndall Air Force has landed a huge program that's expected to bring 1,600 new Airmen to the base. This is going to further help the Mexico Beach area long term rental market and sales to a smaller degree. The base impacts Panama City much more, but it's a nice boost to the economy of Mexico Beach and some Airmen families choose Port St. Joe as well. Here's more on the "Reaper" program.