2024 Mid Year Market Recap Mexico Beach to Cape San Blas FL

 

I am happy to report that the popularity of this area remains strong overall, but is seeing a definite shift from an extreme seller’s market a few years ago to more of a moderate buyer’s market. The crowds were possibly the largest ever seen during the 4th of July and more and more people continue to want to live or own a 2nd home in the area. The market is not on fire by any means, but there remains a steady amount of purchasers and positive buzz for the area. I have heard people talking about how much is for sale, and there is more available than we’ve seen in years. Combine sales signs with vacation rental signs and what seems like a million political signs for local elections, and there’s almost a sign in every yard. Presidential election years are always a cause of some buyer jitters. Many buyers are either on the fence or have paused their searches hoping for interest rates to come down. This has probably been the biggest factor in slowing down the market. The stats below for the last 4 years show the shift from a surplus of buyers to more sellers than buyers in '24.

Sales Volume vs. Active Listings

Sales 1/1-6/30 Active Listings 7/1 2021 780 249 2022 533 376 2023 377 407 2024 332 644

There are still a pretty large number of people buying and 322 sales for the first half of the year from Mexico Beach to Cape San Blas/Indian Pass isn’t a historically low number. (I looked back 15 years ago to the recession days and there were 90 sales for reference in '09 and 92 in '08)  The sales pace is slightly down from last year and significantly down from '21 and '22 when almost everything sold saw a bidding war with 3 times more buyers than sellers. There are also these 79 properties under contract currently. Houses remain more popular than vacant lots with 200 of the 322 sales being for homes. (DR Horton remains the big player with 52 of the 200 home sales being new Horton sales. These homes have offered buyers a lot of bang for their buck, particularly in the $300K to $500K range. ) Cash buyers remain a huge part of the market with 173 buyers paying cash. We are also seeing more seller financing and had 11 of those, often with the sellers offering lower interest rates than current bank rates to entice a buyer. Buyers have finally gotten some negotiating power, and sellers are having to stand out to sell in this market. Properties either need to have features that make them uniquely desirable or they’ll have to stand out by outpricing their competition. Below are the average home selling prices for the first half of the last 4 years. The Mexico Beach market includes St. Joe Beach and WindMark and Cape San Blas includes Indian Pass. These markets have seen some declines from end of 2023 values when Mexico Beach was over $610K and the Cape at $1,129,000. Port St Joe saw an increase from last year's average of $374,217.

Average Sold Prices - January 1 through June 30 - Residential Homes

Port St Joe Mexico Beach Cape San Blas 2021 $286,327 $385,540 $754,091 2022 $332,924 $601,250 $1,117,134 2023 $354,847 $591,008 $993,105 2024 $393,648 $594,888 $1,075,892

98 Real Estate Group finished the first half of '24 as the #1 producing company out of 82 brokerages on our MLS which spans from Mexico Beach to Carrabelle. We are #1 again for the Mexico Beach to WindMark Market for which we’ve finished first for 11 years in a row. We are also #1 in North Gulf County, and are also performing well in Port St Joe and Cape San Blas/Indian Pass. We have a good diverse team of 19 agents all working hard in different aspects of the market.

The retail and restaurant scene in Port St Joe keeps getting better and better with new retail and restaurants continuing to open up. Port St. Joe is thriving from a commercial aspect with lots of options for locals and tourists. Mexico Beach is finally getting some commercial going with Toucan’s starting back this spring and hoping to be open late '25. There is also a 2nd sit down restaurant (Forgotten Coast Brewery Co) that opened about a month ago that has been very good. A t-shirt/souvenir shop is under construction on the corner of 40th Street, and we are making good progress on getting a new grocery store next to Mango Marley’s in the Mexico Beach Shopping Center. It won't be huge, but larger than Gulf Foods that was destroyed in Hurricane Michael. The lack of a grocery store has been the top complaint from visitors we've talked to. (We still need more restaurants and the pier which is still at least a year out in permitting, but MB is going in the right direction) Politics have settled down some in Mexico Beach since the mayor was recalled in April. City Council gave a unanimous preliminary approval for the grocery store on July 9th.

The most common reason that I've seen sellers selling is related to the vacation rental market. I've heard a combination of homes not performing as well as they hoped or not realizing how much work it can be maintaining a beach property. Many homes were bought based off all time high rental numbers in Covid times. They hoped these would continue to rise but instead have seen a settling back to good, but not record rental returns. There are home segments like gulf front single family homes with pools and amenities that are seeing record years in 2024 while most more common condos and townhouses are seeing slight declines. Higher taxes and insurance and not using a home as much as they hoped are the main reasons for sellers selling. Horton is also constantly building new homes and are a factor in keeping the inventory on the higher side with 37 homes currently for sale. They are actively looking for new developments in Mexico Beach and Gulf County and remain very bullish on the area. Available Inventory - as of July 9, 2024

Homes Lots

MB / WMB PSJ CSB MB / WMB PSJ CSB 166 89 138 109 36 119

I had fun coaching the 98 Real Estate Group t-ball team pictured above. The 98 Team also helped put on the Gollywhopper fishing tournament again in Mexico Beach that was huge success in June. Don't forget the MBARA Kingfish Tournament on July 27. My forecast for the future is that we are going to continue on the same trend we are on until interest rates come down significantly. We are seeing loans in the 7-8% range now and need them in the 5-6% range to bring enough buyers back in to shift back to a seller's market. I think you'll see cash buyers getting some nice discounts this offseason from sellers that are ready to sell.

Cheers, Zach Childs Broker/Owner 98 Real Estate Group #1 Producing Real Estate Company Located in Mexico Beach Eleven Years in a Row and Counting Voted #1 Agent on The Forgotten Coast- 2013 and 2015 Cell: 850-819-0833 Fax: 888-382-9608 WWW.MEXICOBEACHSALES.COM WWW.98RealEstateGroup.com

98 Real Estate Group Zach Childs | Broker 101 S. 33rd Street Mexico Beach, FL 32456

Mexico Beach to Cape San Blas FL 2023 Market Recap and Looking to 2024

 

Despite some headwinds, 2023 was another positive year for home sales and values. Interest rates were close to 8% last summer and insurance and taxes are more and more expensive, but the popularity of the area offset the negatives, and home values saw additional increases in 2023. National and even local projections pointed to either a flat housing market or slight declines for last year and demand instead remained strong enough that we saw a solid year for property values. Overall, fewer properties were sold than in the previous 3 years, but those that sold averaged higher values. I wasn’t predicting a great year for real estate sales and was more than pleasantly surprised that 98 Real Estate Group had it’s best year ever selling $103 million. I’m even prouder that we finished as the top sales company from Mexico Beach to WindMark Beach for the 11th year in a row! We finished #1 as well in the North Gulf County area. We also did well in the Port St. Joe and Cape San Blas market. We have a strong group of 18 agents with 6 selling $9 million or more in 2023.  We ended up #2 overall on MLS which covers from Mexico Beach all the way through Franklin County. National real estate forecasts are much rosier for '24 than they were for '23. Average rates on a 30 year mortgage have dropped from around 8% in October to the 6.7% range which has put some buyers back in the market. There seems to also be a large number of buyers watching and planning to jump back in if rates get cut in '24 as the FED currently forecasts. Between New Years and late February is typically the slowest time of the year for real estate sales and there are still 81 properties under contract right now.

Homes

2019 2020 2021 2022 2023 MB-SJB-WMB $270,806 $350,534 $453,062 $591,665 $610, 606 Port St Joe $184,614 $222,262 $297,116 $341,465 $374,217 CSB-IP $601,725 $658,264 $870,295 $1,118,250 $1,129,083

Available housing inventory is up slightly compared to this time last year. There are currently 229 homes on the market from Mexico Beach to Cape San Blas vs 195 a year ago. With 492 recorded home sales on MLS for these markets in 2023, 229 available is still moderately low and considered less than a 6 month supply. Cash buyers were still a big part of the market with 186 of the 492 or (37%) of home buyers paying cash . A whopping 72% or 164 out of 228 vacant land purchasers paid cash. Vacant lot loans are usually at higher rates than home mortgages and 9+ % loans for vacant lots weren’t really popular as we predicted for '23. There are 210 vacant lots listed. Overall vacant land prices did go up, but it wasn’t as significant as housing prices. Interior lots in the beaches area with no water view did seem to go down in the beaches area, and most with gulf view lots did not. Supply and demand is the explanation here with far more interior lots for sale than there are of the more premium lots. Take Mexico Beach to St. Joe Beach for example, there are 62 single family lots for sale. 5 are gulf front, about another 10 have some kind of view and then that leaves 47 interior lots. In 2023, the average days on market for vacant lots from MB to Cape San Blas was 96 days. Final sales prices averaged 92% of original list prices. Homes averaged 87 days on market with sales prices being slightly over 96% of their starting list prices.

Lots

2019 2020 2021 2022 2023 MB- SJB-WMB $175,137 $159,968 $228,866 $278,205 $274,272 Port St Joe $60,251 $87,468 $110,658 $116,065 $146,164 CSB -IP $201,053 $174,542 $191,655 $282,264 $302,033

Mix in 7 commercial sales and the year ended with 727 sales for '23 compared to 912 in '22. The stats back up the feeling here on the ground that we felt since last summer. It was a little slower than the year before, but busy enough and values were still going up slightly. We didn’t see the big increases and borderline crazy numbers of buyers that we saw during the Covid boom that was also fueled by sub 3% rates and led to 1328 sales in '21. 2023 was more like the normal year with a slight price increase that we saw for the 5 years before Hurricane Michael.

Mexico Beach to WindMark- The housing market and desire to be in Mexico Beach remains extremely strong. There are new high end houses being built all over the place. The lack of restaurants and amenities like a grocery store remains a negative. The only commercial building built in '23 was Bracewell Flooring which was built in the old civic center location. The former Bracewell Flooring building located at 4101 Hwy 98 has been undergoing renovations and is set to open in the next month or two as Forgotten Coast Brewing Company. This will be a full restaurant that also brews its own beer. I spoke with the Toucan’s owners last week, and they are getting ready to start construction to meet an April deadline that is required to take advantage of being grandfathered into their previous footprint.  There are still lots of buyers believing in the future of Mexico Beach and prices have continued to rise. WindMark has been a bright spot in regard to commercial development with 9 businesses plus a church now operating out of the Town Center. The View Restaurant is under new ownership and management and has been fantastic. You’ve also got the popular Bruno’s Pizza, The Mill Mercantile and Social (a cool bar and candy shop on the other side). and a newly opened Sunrise Cafe. I’m working hard to try and bring some restaurants to these areas. I helped get an ordinance changed this month in Gulf County where I’m on the Planning and Zoning Board. Mexico Beach also listened to suggestions and changed an ordinance in '22 to try and make it more feasible to build a restaurant. In doing some research for a presentation I made to Mexico Beach City Council last week, I realized that the last built restaurant in Mexico Beach was the former Sharon’s Café, which was built 36 years ago. I hope 2024 is the year this trend changes, and the balance of commercial and residential starts to improve. Here is a link to the 102 houses for sale and 79 vacant lots in Mexico Beach to WindMark Beach area.

Port St Joe - This market remains very popular and sees the most purchases for primary residences. The commercial scene is thriving with 20 plus restaurants on or within 2 blocks of Reid Ave. DR Horton purchased Truland Homebuilding last year, and Horton remains bullish on the area. The population is growing due that the homes they are building in Phase II of WindMark Beach combined with their new subdivisions in Port St. Joe. It’s not cheap, but $374K for an average home is a relatively low price for a coastal home in a family friendly town with great schools in the state of Florida. Here is a link to the 44 houses and 30 vacant lots for sale in Port St. Joe. North Gulf County/Wewahitchka remains far more affordable with average home prices under $200K. We have been the top company in this market for the last 7 years, mainly due to having Miranda Rollins working with us. She has been the top individual agent for this market and is who I can highly recommend. We have held that spot, mainly due to Miranda Rollins, since 2017. Home sale prices for this market still averaged under $200K counting mobile homes with solid single family home options starting in the $250K range.

Cape San Blas to Indian Pass - This is a hot 2nd home market that continues to increase in popularity and is becoming a more and more popular alternative to the crowded areas like Destin and 30A. This area is mostly single family homes, and the North Cape remains most popular with the average single family home selling for $1,438,988 with only 42 days on market in '23. This whole area through Indian Pass is a hot market and averages significantly higher values than Port St. Joe and Mexico Beach. (If you compare apples to apples, values are similar to Mexico Beach. Mexico Beach also has a number of interior properties including townhouses, condos, and mobile homes that don't exist as much on the cape and this brings the averages down). Here's a link to the 83 houses for sale and 100 vacant lots in the Cape San Blas area.

How are rentals performing?  I've talked with 3 large property management companies, and 2 of them are up on '24 bookings compared to this time last year, and one is flat. Many new properties have come on the rental market in recent years creating more competition. I'm being told the higher end properties with less competition are renting better than interior homes/condos. As one said, it's easier to rent a $12K/week beachfront single family with a pool than a $2K/week condo right now. Rental rates increased in '21 and '22 as much as home prices. With so much new competition, homes had to stand out to do as well last year as the previous year. (Keep in mind with the stats below that Michael hit in 2018 and MB had 760 rentals before the hurricane.) While there aren't as many homes as pre-hurricane in Mexico Beach, there are more vacationers than ever as the new homes are much larger than those destroyed. 2023 saw all time high bed tax collections in both Gulf County and Mexico Beach.

Number of Rental Homes

2019 2020 2021 2022 2023 Gulf County 1348 1395 1450 1570 1680 Mexico Beach 132 183 366 466 641 Total 1,480 1,578 1,816 2,036 2,321

Bed Tax Collection

2019 2020 2021 2022 2023 Gulf County $1,754,261 $2,326,707 $3,931,027 $4,474,146 $4,742,396 Mexico Beach $33,559 $128,238 $433,205 $620,989 $808,382 Total $1,787,820 $2,454,945 $4,364,232 $5,095,135 $5,550,778

The family is doing great. The boys are 3 and 6 and full of life. We celebrated my parent's 50th anniversary, and my father-in laws 70th birthday earlier this year in the pic below. Life's getting busier, and busier, and I'm enjoying coaching them in soccer, basketball and t-ball.

It's Cookoff/fundraising season, and we enjoyed competing in the Chilli Cookoff in Port St. Joe last weekend. We are looking forward to competing in the Mexico Beach Gumbo Festival on February 17th.

Cheers, Zach Childs Broker/Owner 98 Real Estate Group #1 Producing Real Estate Company Located in Mexico Beach Eleven Years in a Row and Counting Voted #1 Agent on The Forgotten Coast- 2013 and 2015 Cell: 850-819-0833 Fax: 888-382-9608 WWW.MEXICOBEACHSALES.COM WWW.98RealEstateGroup.com

98 Real Estate Group Zach Childs | Broker 101 S. 33rd Street Mexico Beach, FL 32456 Phone (850) 819-0833 Email zach