PCB Update

[flyguy]

A cold week at the beach but had some great sunsets and lots of good food and drink.

Condo market is still in a word, dismal.

It was surreal. We have some buildings we like and the prices in several of them fell to new lows the week of our stay.

Worst story I heard (and there is no shortage of horror storys all down the strip). A fellow bought a couple of condos as an investment in 2004. He had made over $100,000 (on paper) by 2005 and thought he had found a sure fire way to make money. He bought 13 condos in 2005. He is of course hoplessly underwater and all 15 condos are on the market. I got all this from the realtor listing all his condos.

I looked at one he bought for $635,000 in 2005 and is now listed for $325,000. The last two sales in his building for the same unit were for $275,000. Ouch!

Unfortunately for PCB, there is still a large number of new condos in the pipline coming online later this year. They have got a HUGE inventory already.

JMHO,
Flyguy

[SHELLY]

A cold week at the beach but had some great sunsets and lots of good food and drink.

Condo market is still in a word, dismal.

It was surreal. We have some buildings we like and the prices in several of them fell to new lows the week of our stay.

Worst story I heard (and there is no shortage of horror storys all down the strip). A fellow bought a couple of condos as an investment in 2004. He had made over $100,000 (on paper) by 2005 and thought he had found a sure fire way to make money. He bought 13 condos in 2005. He is of course hoplessly underwater and all 15 condos are on the market. I got all this from the realtor listing all his condos.

I looked at one he bought for $635,000 in 2005 and is now listed for $325,000. The last two sales in his building for the same unit were for $275,000. Ouch!

Unfortunately for PCB, there is still a large number of new condos in the pipline coming online later this year. They have got a HUGE inventory already.

JMHO,
Flyguy

Is this guy paying mortgages, taxes, insurance & condo fees on all 15 condos? :blink:

Surely his "on paper $100,000 profit" vaporized about 2 years ago.


.

[Smiling JOe]

other PCB updates, Pier Park is moving along quickly. The County Pier, located to Pier Park's south, has been ordered removed, by the DEP, and a new one will be built in its place. FEMA is picking up most of the tab, $7+million, and the new pier is expected to open in Spring '09.

[TooFarTampa]

Flyguy why PCB? That market IMHO is entirely different from SoWal.

[chrisv]

Flyguy why PCB? That market IMHO is entirely different from SoWal.

But too close to ignore.

[TooFarTampa]

But too close to ignore.

Very true. I wouldn't say there is no correlation. But PCB is like many coastal areas all over Florida; SoWal is not.

[SHELLY]

Flyguy why PCB? That market IMHO is entirely different from SoWal.

From a pure "investment" standpoint, once those PCB condos start hitting the markets at 40-cents and lower on the dollar, I think they'll provide a better return than anything on 30A.


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[TooFarTampa]

From a pure "investment" standpoint, once those PCB condos start hitting the markets at 40-cents and lower on the dollar, I think they'll provide a better return than anything on 30A.

Possibly ... if you are just about investment. But don't you also think that it's going to take longer for things to shake out in PCB, simply because of the masive inventory?

[SHELLY]

Possibly ... if you are just about investment. But don't you also think that it's going to take longer for things to shake out in PCB, simply because of the masive inventory?

Oh yeah, it's gonna take at least a couple of years. Now is NOT the time to buy.


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[sowalgayboi]

Oh yeah, it's gonna take at least a couple of years. Now is NOT the time to buy.


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Amen to that, I know there is another thread for it, but the bottom is no where near.

[kurt]

It will be interesting to see the rental numbers crunched for a low end purchase, assuming a lowest case rent because of all the competition.

[flyguy]

Shelly, Yes he is paying all the carrying costs on the condos. He apparently has too many other assets to walk away from these. But all of his condos are listed as "short sales".

ToofarTampa, I think PCB will be the best buy for what I want. Full frontal gulf front for use in Sep/Oct and Apr/May. Rent in the summer. I know the SoWal crowd mostly has a different opinion but I like PCB. Always have.

SmilingJoe, You are correct in that it is never as bad as you think or as good as you think. There are always pluses and minuses.

JMHO,
Flyguy

[TooFarTampa]

Shelly, Yes he is paying all the carrying costs on the condos. He apparently has too many other assets to walk away from these. But all of his condos are listed as "short sales".

ToofarTampa, I think PCB will be the best buy for what I want. Full frontal gulf front for use in Sep/Oct and Apr/May. Rent in the summer. I know the SoWal crowd mostly has a different opinion but I like PCB. Always have.

SmilingJoe, You are correct in that it is never as bad as you think or as good as you think. There are always pluses and minuses.

JMHO,
Flyguy

I wasn't trying to slam PCB, I just was thinking that SoWal will probably stabilize before PCB does. And since SoWal hasn't yet, I would agree with SHELLY that now is NOT the time, unless you find one of those aforementioned properties at 40 cents on the dollar. Good luck!

[Smiling JOe]

Now the PCB condo market is one thing, but do you guys really see prices of detached homes in SoWal, on average, coming down in price, 60% off the highs of 2005? If they did, I'd be buying a new house, but I'm not holding my breath on that one.

[spinDrAtl]

Oh yeah, it's gonna take at least a couple of years. Now is NOT the time to buy.


.


August 2006 was the time to buy. :blink:

[TooFarTampa]

Now the PCB condo market is one thing, but do you guys really see prices of detached homes in SoWal, on average, coming down in price, 60% off the highs of 2005? If they did, I'd be buying a new house, but I'm not holding my breath on that one.

No.

[egrp]

a couple of comments...

1. i dont get piers...from p'cola and we have one...whats the point really...fishing? its really just a large obstruction in an otherwise beautiful body of water. i guess people like to walk on them...worthless...just my opinion.

2. opinion: i think the best area to buy is the west end of pcb before u get to 30A so the area south of wild heron and south of 98. it is a beautiful beach there and u are sandwhiched btw 30A and PCB. some decent houses trading pretty cheap...not saying now is the time to buy, i think there is more pain to come and there is no fear of housing prices increasing. but if you had a gun to my head and forced me to buy in the area thats where i would set my sights.

have a good weekend everyone :)

[Ohio Girl]

Too Far,
Why would you possibly think sowal is immune from what's going on in other coastal areas? There will always be a market for ultra high end (Rosemary, Seaside, Alys, Watercolor, etc) but the rest is fair game.

[chrisv]

1. i dont get piers...from p'cola and we have one...whats the point really...fishing? its really just a large obstruction in an otherwise beautiful body of water. i guess people like to walk on them...worthless...just my opinion.

You got it, fishing. Not everyone has a boat, and they are great places to catch ling, kings and sharks. I grew up fishing the piers in SC, so to me they are not worthless. I guess you can walk on them, too.

[beachmouse]

Now the PCB condo market is one thing, but do you guys really see prices of detached homes in SoWal, on average, coming down in price, 60% off the highs of 2005? If they did, I'd be buying a new house, but I'm not holding my breath on that one.

Prices of existing homes in prime locations, no, but I can see some of the bigger property albatrosses having fire sales on lot inventories, or selling out to the McBuilders and offering some very attractive prices on what are essentially tract or semi-custom homes.

In the past, Adams has bought and completed the single family build-out in relatively nice developments like Seascape, Emerald Lakes, and Maravilla. From what I remember, their part of the Emerald Lakes development had homes that were at least 30% cheaper than the truly custom part of that development.

[Smiling JOe]

For that pier in PCB, it will be a big attraction to some of the people shopping at Pier Park. I have been on that pier once, last summer, and I thought it offered good views of the condos next to it. lol.

[Smiling JOe]

Prices of existing homes in prime locations, no, but I can see some of the bigger property albatrosses having fire sales on lot inventories, or selling out to the McBuilders and offering some very attractive prices on what are essentially tract or semi-custom homes.

In the past, Adams has bought and completed the single family build-out in relatively nice developments like Seascape, Emerald Lakes, and Maravilla. From what I remember, their part of the Emerald Lakes development had homes that were at least 30% cheaper than the truly custom part of that development.
But a $400,000 condo is a different thing than a $700,000 condo. (thinking about the Village at Redfish, which originally went for around $1,000,000.)

[TooFarTampa]

Too Far,
Why would you possibly think sowal is immune from what's going on in other coastal areas? There will always be a market for ultra high end (Rosemary, Seaside, Alys, Watercolor, etc) but the rest is fair game.

I never said immune. Not even close. I didn't say it was stable, either, nor did I say that it would be stabilizing next week or this coming rental season. But PCB is absolutely under more pressure than SoWal. SoWal is generally considered more desirable (though not to everyone, obviously) and has less inventory, more single family homes and fewer condos, plus more factors in its favor that will make it an excellent investment 10 years from now. When exactly to make that investment is up in the air. This is JMO as a lifelong Florida resident (okay, except for three years in California). I am not a real estate agent or a seller.

[beachmouse]

But a $400,000 condo is a different thing than a $700,000 condo. (thinking about the Village at Redfish, which originally went for around $1,000,000.)


It definitely is, but there are far more potential buyers at a lower price point. The $175K homes in Emerald Lakes weren't nearly as nice as the $275K homes built earlier there. But they sold far, far quicker than the expensive homes there did, even though they were in all honesty buck-ugly.

[SHELLY]

August 2006 was the time to buy. :blink:

Only if your commission depended on it.

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[SHELLY]

Shelly, Yes he is paying all the carrying costs on the condos. He apparently has too many other assets to walk away from these. But all of his condos are listed as "short sales".


Since you've been crunching the condo numbers for PCB....

So..all inclusive (PITI + condo fees + mi$c costs) what do you reckon this guy is paying out per month to hold on to these 15 condos?

His net worth has gotta be circling the bowl daily.
.

[elgordoboy]

In my microcosm that I follow here on the west end of 30A it seems sales are going in at 70% of the highs. Thats based on a broad sample of 4 properties :biggrin:. It was hard to get an appraisal at all when I bought due to lack of recent sales.

[jamnolfin]

I have 2 units at Calypso in PCB right across from Pier park. They've been renting good, already 4 weekly and 4-5 weekend (3-4day) rentals already for the season and its only Feb 1st. Its been renting since middle of Nov to snowbirds. When pier Park is fully going and the pier gets built, airport is up and running, market turns around, (2-3 years). Put it this way, while you are looking at your big stretch of beach or a parking lot, I will be looking at a big beach next to a new pier across the street from Margaritaville thats going nowhere but up. I was born and raised at Inlet Beach and this is a fact from a local. You have gulf front or you dont and it doesnt matter how much its worth, especially while on vacation. Think about it, no local gives a damn about Rosemary beach or Watercolor. Actually Seaside is the only non waterfront with appeal, gotta love Seaside, everybody loves Seaside.

[goodwitch58]

I have 2 units at Calypso in PCB right across from Pier park. They've been renting good, already 4 weekly and 4-5 weekend (3-4day) rentals already for the season and its only Feb 1st. Its been renting since middle of Nov to snowbirds. When pier Park is fully going and the pier gets built, airport is up and running, market turns around, (2-3 years). Put it this way, while you are looking at your big stretch of beach or a parking lot, I will be looking at a big beach next to a new pier across the street from Margaritaville thats going nowhere but up. I was born and raised at Inlet Beach and this is a fact from a local. You have gulf front or you dont and it doesnt matter how much its worth, especially while on vacation. Think about it, no local gives a damn about Rosemary beach or Watercolor. Actually Seaside is the only non waterfront with appeal, gotta love Seaside, everybody loves Seaside.

Not any more....since they put those big private beach signs up......

[Smiling JOe]

Seaside isn't Gulf Front? I must have totally missed something. You are spot on about Calypso, and I'm sure it will do very well considering it's location to the Pier and Pier Park, but remember, real estate is all about location, location, location. Many other condos on the beach in PCB are going to hurt for a little while.

Just curious, are you renting out your units during spring break?

[sberry123]

Too Far,
Why would you possibly think sowal is immune from what's going on in other coastal areas? There will always be a market for ultra high end (Rosemary, Seaside, Alys, Watercolor, etc) but the rest is fair game.

I agree with Ohio Girl, Yup, problems in Gulf Shores, AL! The owners are in limbo now. They signed over their property to the developer after Ivan ruined the condo, the developer cannot built the new condo because of the market and is now filing bankruptcy! :yikes:

http://www.al.com/business/index.ssf/2008/02/development_firm_with_gulf_sho.html

[jamnolfin]

Just curious, are you renting out your units during spring break?[/quote]

We have snowbirds til March 15 and then a weekly coming in right after that. We dont rent to college spring breakers and their break is usually over by the end of March.

[flyguy]

Since you've been crunching the condo numbers for PCB....

So..all inclusive (PITI + condo fees + mi$c costs) what do you reckon this guy is paying out per month to hold on to these 15 condos?

His net worth has gotta be circling the bowl daily.
.

Not knowing what all condos he has, at what price he paid, and their rental status I don't know the answer. It has to be several hundred thousand a year.

As a side note, no PCB condos are immune. Celadon just had a foreclosure and several short sales hit the MLS. But it is a nice building and one I would consider buying into.

If I had to pick the buildings that are holding up better than others in PCB. It would be the older but nicer condos. Mainly because most owners bought years ago and are still above water and don't have to sell in this market.


JMHO,
Flyguy

[kurt]

I have 2 units at Calypso in PCB right across from Pier park. They've been renting good, already 4 weekly and 4-5 weekend (3-4day) rentals already for the season and its only Feb 1st. Its been renting since middle of Nov to snowbirds. When pier Park is fully going and the pier gets built, airport is up and running, market turns around, (2-3 years). Put it this way, while you are looking at your big stretch of beach or a parking lot, I will be looking at a big beach next to a new pier across the street from Margaritaville thats going nowhere but up. I was born and raised at Inlet Beach and this is a fact from a local. You have gulf front or you dont and it doesnt matter how much its worth, especially while on vacation. Think about it, no local gives a damn about Rosemary beach or Watercolor. Actually Seaside is the only non waterfront with appeal, gotta love Seaside, everybody loves Seaside.

Please explain the parts in bold.

[Pirate]

Please explain the parts in bold.

Maybe it's a speech impediment that carries through to the typing?

[jamnolfin]

Ok

Put it this way, while you are looking at your big stretch of beach or a parking lot.

You are either on a big stretch of beach with nothing to look at but a big stretch of beach which gets old after awhile. Or you are inland looking at a road and neighbors that reminds you of being at home. The big stretch of beach wins here. Throw in a nice brand new pier that people cant build next to and Margaritavillle across the street gives calypso an advantage. I love 30-A, own a house there but it gets old like everything else after awhile.

. I was born and raised at Inlet Beach and this is a fact from a local. You have gulf front or you dont and it doesnt matter how much its worth

It doesnt matter how much its worth while on vacation. You wake up on the beach or in a neighborhood that reminds you of home. Sure watercolor is a great place to live but I dont understand what is so great about vacationing there, its a freaking neighborhood.

no local gives a damn about Rosemary beach or Watercolor

Locals dont give a damn about it, just ask one. Not a transplant but somebody thats lived here there whole life, its just another sub-division.

everybody loves Seaside.

Everybody does, even locals, its the greatest place on earth.`