2013 Market Update - Mexico Beach to Cape San Blas, FL

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: http://www.rafsg.net/RAFSGReports/ListitLib/show_report.aspx?ID=2062731752 .     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 Houses- http://www.rafsg.net/RAFSGReports/ListitLib/show_report.aspx?ID=2062731756 Vacant Lots- http://www.rafsg.net/RAFSGReports/ListitLib/show_report.aspx?ID=2062734255   Cape San Blas to Indian Pass Deals Houses- http://www.rafsg.net/RAFSGReports/ListitLib/show_report.aspx?ID=2062734256 Lots- http://www.rafsg.net/RAFSGReports/ListitLib/show_report.aspx?ID=2062734258   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.
Cheers,   Zach Childs Broker/Owner 98 Real Estate Group 850.819.0833 zachchilds@gmail.com

 

 

Late Summer Market Update Mexico Beach to Cape San Blas

Greetings from your Favorite Coast,

I hope everyone is having a wonderful year and have been able to enjoy some time down in our little paradise. I have had very little time to sit down with all of the buying activity that we have had this year and therefore I haven't sent a market update out since March. 98 Real Estate Group has its 72nd and 73rd closings for 2013 scheduled this week. I can't tell you I haven't enjoyed some of our wonderful fishing and diving, but I can tell you I'm the number one ranked individual Realtor on our MLS with $12,152,190 closed in 2013. I'm very happy to report that market conditions continue to improve and most prices are seeing slight increases. More and more people are falling in love with the area and the confidence of buyers continues to improve. 2013 has seen people buying at the fastest pace since 2005.

Home values are still recovering/improving much better than vacant land and there are only 5 foreclosed homes on the market from Mexico Beach to Indian Pass as of 8/13/13. We ended 2012 with around 740 listings and are down to 653 properties on the market. This is a huge improvement as inventory continues to be reduced from over 1,700 listings on the market in 2006. Of the 653 properties on the market from Mexico Beach to Cape San Blas/Indian Pass, only 263 of them are homes. We are continuing to see more and more of a shortage for those not wanting to build, especially for those looking for single family homes near the beach. I would argue that 95% of single family homes could sell for more this year than last. We still have an oversupply in interior vacant lots on the market and this is the only segment of the market that hasn't seen consistent improvement. You still have 34 vacant lots listed as foreclosures.(Some vacant land prices have improved. There's a real shortage of Gulf View and beach front lots, which has led to an increase in value.) 

How many closings have there been to this point for 2013 vs 2012? Remember that 2012 saw the most closings since 2005. From 1/1/12 to 8/13/12, there were 373 closings. For the same period in 2013, there have been 378 closings. (You can see all of the 2013 closings by clicking the links below where the closings are broken down by areas). While we have seen the market inch up and certain areas have seen solid gains, we still have enough foreclosures and short sales that they are keeping the market from making a quicker recovery. 102 of the sales this year have either been short sales or foreclosures. 66 of the sales were listed as foreclosures and 36 more were listed as short sales. 

Who are your average buyers? The majority of buyers I'm working with remain people looking for 2nd homes or properties that they plan to use for retirement down the road. I've also sold to 6 or 7 first time visitors this year that are tired of the Panama City and Destin crowds and decided to buy here. The rental market that keeps strengthening has helped many of the purchases make sense from an investment standpoint. I continue to worry that rental owner's income will go down with the addition of the new properties being placed on rental programs, but each owner I've talked to is having at least very close to their best year. These reports correlate with the increases in bed taxes collected so far in 2013. And this is with an unusually cold Spring and rainy Summer. 

Where's the hottest market? This goes back to the last question. Most of these 2nd home buyers and people planning to retire here want to be near the beach. Mexico Beach/ St. Joe Beach/Windmark have led the way with 175 closings. There are a number of beautiful custom homes being built in WindMark this year, but there have only been 6 sales. This isn't that people don't want to buy in WindMark, but many of them are having trouble finding deals for close to what they could pay last year. Cape San Blas/Indian Pass had the second most closings with 144 as of 8/13/13. By far the hottest part of this segment is the North Cape which has recorded 77 sales this year. The demand for vacation rentals continues to help fuel the Mexico Beach and Cape San Blas market as investors are taking advantage of rental income. Port St. Joe has by far the largest full time population and hasn't seen near as much turnover with only 59 closings. 

Are many new homes being built? The number of homes being built remains at the highest levels seen in the last 8 years. The builders I'm talking with are also seeing a large number of homes in the pipeline to start construction in the next 6 months. Most of the newer homes are being built on Gulf view lots on Cape San Blas, Indian Pass, and WindMark Beach. I mentioned in March that we are seeing the first spec houses being built in 7 years. We are now seeing these sell and more being built.

How many properties are under contract? There's a very healthy 110 properties under contract. I'll brag on our team here since we have 22 of these under contract. Here's a link to the 110 properties under contract. 

What are the Best Deals Right Now? Check out the Top 25 at www.mexicobeachsales.com to find out. 

What's going on with The Club at Mexico Beach? Many of you remember me mentioning this project for years. The developers lost their 35 units to the bank and FDIC last year. A group I began working with out of New York purchased it in March. They donated $250,000 dollars to the HOA for needed repairs and also $52,000 to the reserve fund of the Condo Association. Sales have been great with 30 of the 35 units selling or going under contract since April. There are still 5 left and here's a link the website for this project: www.theclubatmexicobeach.com.

 Red Snapper Season Extended - Our Red Snapper fishing is world class in this area. An additional Red Snapper Season was announced for this year to take place from October 1st through 21st. Here are some of the Red Snapper we caught or speared this year.
                       

The 17th Annual Mexico Beach Artificial Reef Association's Annual Kingfish Tournament is coming up on August 23rd. This is a fun event with the Captain's Party being held on the 22nd at the Beacon Hill Memorial Park. Last year had 147 boats in the tournament and has had as many 197 boats. We hope this year is blessed with good weather and we can break 200 boats.

Spring Looks Good- 109 Properties Under Contract! Mexico Beach to Cape San Blas FL Zach Childs, Broker/Owner February 28th, 2013 Greetings from your Favorite Coast, I'm writing this newsletter with as much optimism towards our real estate market as I've seen since 2005. Prices have taken a huge plunge since that time, but it's fun to hear all of the people talk about prices on the rise. I feel too busy to stop and write a newsletter, but I had many people ask after the one I sent out last month to start sending them monthly. I share my optimism with Realtors and buyers I regularly talk to in our neighboring markets of Panama City, St. George Island, and Destin. All of them are reporting the highest interest from buyers since '05 and that prices are going up. Interior vacant lots remain the biggest exception to price increases and generally the closer to the white sandy beaches, the more of an increase you're seeing. Even Port St. Joe is seeing some good signs as the numbers of homes on the market keep getting lower and lower. In last month's newsletter I mentioned the first spec houses in years being built and we've seen some of those go under contract and more are being planned.   If you had a crystal ball, you could look back and see signs of the bottom of the market starting in late 2010 and 2011 after falling since late 2005. The signs of a correction starting were there, but confidence from buyers was low and the market was still fearful of what could come. That seems to be gone now and 90% of people I talk to that are informed on coastal real estate feel we are in for at least a few years of an upward swing. I don't want to sound too optimistic and am by no means saying we will get back to 2005 prices soon. It will take 10-15 years of moderate increases to get back anywhere near 2005 prices on some properties, but at least we've started going in the right direction. Here's an article published by Reuter's on Tuesday titled US Home Sales, Consumer Confidence Soars. Here's another positive article published on Wednesday by CNBC titled "Pending Homes Sales Soar Despite Rough Winter". Our hottest market is the North End of Cape San Blas followed by Mexico Beach. "X" flood zone homes and lots on The North End are being snagged up and there's almost nothing on the market near the market low prices. The majority of well-priced newer inventory is gone in both markets and buyers are begging for more quality homes on the market. Rental income is helping to drive demand and further supports why our greatest demand is for properties near the beach. I've closed a few deals on St. George Island lately and that market is red hot as well. I closed one this month for $1,730,000 which was $335,000 over asking price after multiple offers came in and highest and best counters were given. We are still having some fun along with selling property. Every year the 98 Real Estate Group cooking team participates in the Mexico Beach Gumbo Cook-off that raises money for the 4th of July fireworks show. We've got the Superintendent of Schools, Jim Norton, as our head chef and our team has gotten pretty used to winning. Our run ended this year and all we managed was a 3rd place in the Brunswick Stew category. Here's a cool video we made of the weekend. I told you last month that 2013 was looking like a prosperous year for us and as of this week, 98 Real Estate Group is number two on MLS for 2013. I have a big support team that helps me to be successful and I'm very thankful for all of them. I've recently had some big deals that have taken lots of work and time that have successfully closed for the buyers and sellers I've been working with. Because of them, I'm currently the #1-ranked agent based on sales volume for 2013.   I've been mentioning the lack of newer inventory and want to illustrate this fact. Below is the number of single family homes for each area built in 2005 or newer that are on the market.   Mexico Beach to WindMark Beach -11 Homes Port St. Joe- 7 Homes Cape San Blas to Indian Pass- 8 Homes That's only 26 homes built in the last eight years on the market in a 35 plus mile stretch. What about all of those new condos in Mexico Beach? Well, there were eight gulf view projects completed in 2005 or later totaling 301 units. Of those, there are only 19 units on the market starting with a 2BR at $192,500.   This will be the 3rd year 98 Real Estate Group has presented the Ling Ding Fishing Tournament. Not only does this create activity for visitors but proceeds go towards local causes. We have added Amberjack as a 3rd species this year (in addition to Cobia and Spanish Mackerel) and the tournament will be held each weekend in April. Make plans to attend the kickoff party April 5th at Regan's Oyster Bar and the finale April 27th at Mexico Beach Marina. The subject line of this email is true and there's a whopping 109 properties under contract from Mexico Beach to Cape San Blas. Click here to see the 64 residences and here to see the 45 vacant lots. This link will show the 65 properties that have closed so far in 2013. 98 Real Estate Group is continuing to produce well and we have 24 properties under contract. I'm proud of all of our agents, especially 2nd year agent Grant Terry. He currently has seven properties under contract and is negotiating offers on several other properties.   Don't forget the St. George Island Chili Cook-off is this Saturday. I will be running in the 5K hoping to not finish last. Here's a link to this fun weekend. Quick Links... View the Top 25 Deals in Mexico Beach Testimonials About Zach Childs Zach's Website- MexicoBeachSales.com WWW.98RealEstateGroup.com

Cheers, Zach Childs Broker/Owner 98 Real Estate Group Email: zach@mexicobeachsales.com Cell: 850-819-0833 Fax: 888-382-9608 www.MexicoBeachSales.com www.facebook.com/ZachChilds                                  www.98RealEstateGroup.com