Bubble bursting???

[skier]

In response to Bob on property flippers thread--

I hope you aren't betting your life savings on the up, up and up theory. I agree wth pg0178. The demographiscs and prices and inventory don't add up to any more growth. In fact, all the signs point to a nasty fall. Any historical runup in stocks, real estate, bonds, gold, silver, etc. like the current runup in real estate has ALWAYS historically ended in a crash. If you own property, but your life, net worth and living don't depend on these high prices, you will be fine. But, watch out if you're betting the farm.

The market in SoWal isn't just frothy, there is "irrational exuberance" abounding with all of those that don't see the warning signs staring them in the face.

Within 12 months, come back and read these posts by us pessimists (I believe most of us on the pessimistic side are trained financial professionals). I hope you can call me chicken little at that time, but I wouldn't bet on it. 100% appreciation over the course of a year of two is not reasonable. Those that have been in for a couple of years should be okay. those that got in the last 12 to 18 months will get slaughtered if they were counting on flipping at a profit and they don't have the staying power to hold the property (or in the case of some of the developments, heaven forbid that must build a house within 2 to 3 years of purchase).

I remember having these exact same conversations with the stock market Bulls in 1999. They were sure the model had changed forever and that the old ways of looking at the market were no longer valid. They laughed at me for putting my money in money market funds. they weren't laughing in 2000/2001. And, look at the market since the crash. It's basicaly been flat for 5 years. Look at Japan. Stagnant for 20 years after huge runups in real estate and then a crash. The current runup looks too good to be true--so it probably is.

All that said, I still love my home in SoWal.

good luck.

[FoX]

I read this in your other post. You must be doubly pessimistic.


As a financial professional, tell me how much value real estate in SoWal is going to lose in the next 8.5 months?

[Buckhead Rick]

Keep it up Skier, there is nothing like a good panic attack and front page stories in the press to make me feel the real estate market is still fine.

This market had its roots in the 1930's. the children of the depression were the world greatest savers, and they are now making the greatest wealth transfer in history to me (actually to other baby boomers, my Mom and Dad didn't have much), as they die and those baby boomers believe in the Mark Twain quote of " it is not the return ON my money, it is the return OF my money" that I am concerned about. So they invest in T bills and (guess what) real estate.
As I said many months ago, I know nothing about real esate, but as the first baby boomer I cannot think the market on second/retirement homes hit it's top BEFORE I hit 60.
I love the smell of nap... make that panic in the morning. OK what movie is that from?

[Travel2Much]

Hi there--I have been lurking here since after Ivan, but this is my first post. I bought a second house in SoWal last year, and so of course threads like this make me panic. For assorted reasons, I had to buy last year and since I was long term I figured that if I shopped wisely I could avoid the bubble. So, I bought a relatively inexpensive house in the Seacrest area (outrageously expensive by my standards, but inexpensive by SoWal standards), avoided condos, and avoided particularly any property by St. Joe, where there is clearly an outrageous bubble. I still don't know who pays 2.0 million for a "beach house" that is nearly a mile from the beach.

[kurt]

:welcome:


Long term investing is very relaxing.

[BrettMan]

Well said Kurt. That's exactly why I'm switching from a short-term to a long-term view. You have to adjust your style with market conditions and it's definitely time to start thinking long term. From that perspective, nothing on 30-A is a bad deal - even at today's prices - because if you plan on living in it, or renting it (and you can handle any negative cash flow as an investment) over the long term, you'll be in great shape.

Long term being 10+ years...

[kurt]

Last year, long term in SoWal was 6-12 months. :shock:

[skier]

Fox,

I hope I am wrong on my predictions. To answer your question about falling prices, it depends on which prices you are talking about. Are you asking about the current prices people are asking and not getting or are you asking about the prices actually paid for property 6 months ago?

I would say if the average home along 30A sold for $750k one year ago, I would bet that within 12 to 18 months the average price will be 20 to 40 percent less than that. For those in the higher end places like watercolor, seaside, etc., I would bet that those currently asking $1000 plus will not be aboe to sell for over $700 per square foot.

Again, I hope I am wrong

[FoX]

Asking prices should be disregarded in a real analysis. As a financial services professional, I would imagine none of them are on your balance sheets.

[skier]

Fox,

If you will notice in my post, I mentioned that the price for homes actually purchased (ie: real cash changed hands if you don't understand that financial concept) 12 months ago will likely go down by 20 to 40% over the next 12 to 18 months. However, that will only be for those that choose to sell and convert back to cash (a difficult financial concept I know). For those that choose to hold after values fall, they might make their initial investment back in the long term. But, as seen in many previous bubble bursts (Japan, Houston, etc) it can take decades to recoup the initial investment.

I did mention that for folks in the higher end communities "asking" prices will not be met and to sell, most will have to lower prices in the short term by 30% plus. Hope this helps explain my comments.

You can argue all you like. Bottom line, no one knows for sure. we are all speculating aobut a bubble or a continued bull market. Time will tell. Lets chat again in 12 months. Hope you didn't invest your nest egg in the market over the last 12 months or so.

[Travel2Much]

Forgive me for chiming in again, here, but I do not understand skier's logic. While I tend to feel there is a bubble going on (and do not have my life savings invested in SoWal), like everywhere in the country, I can't see why houses not in high end communities are predicted to drop 20-40% from LAST YEAR's actually selling prices, but those in high end communties might have to lower prices 30% from THIS YEAR's asking prices (which probably have gone up 40% from last year's asking prices), in the short term at that. There's this house at Seaside that goes up several hundred thousand dollars every quarter, from the advertisement.

I would actually think it might be the other way around or at least equal, since few ordinary people, the bread and butter of real estate markets, can afford anything in the high end communities anymore, so that's where the major speculation by investors, realtors, and builders is. I came real close twice to buying in one of those, but since I was buying for real live personal use couldn't stomach having my neighbors be a limited liability company, a real estate development group, and a local realtor flipping the property. My neighbors/fellow owners in where I eventually bought appear to be real live human beings, and that makes me happy and cozy.

That said, I shall shut up and return to my corner.

[SoWalSally]

Travel - from the attempts at sarcasm in skier's post - me thinks there is either fear of loss at play, or bitterness from being on the outside. If I'm wrong, feel free to bash away.

There are sensible people here I've been listening to for a long time. No one expected the rapid rise of prices to continue forever. "Irrational exuberance" is a tired phrase. Sure some people got caught up with dollar signs and wanted to cash in. And no doubt a few people might have made some questionable moves.

Bubble is another term that is a little out of place in real estate. Bubble is associated with burst. In real estate, balloon might be a better word. As the balloon expands to a larger size, the market has to take a breath.

No one here now is talking much about buying and flipping. They expect some asking prices to become more realistic, and sales prices to grow steadily. If prices were to dip a little in the short term, who's going to really care?

[Paula]

If one buys in SoWal as a quick investment, then this investment is as risky as any other quick investment and requires significant due diligence and the stomach and financial slack to ride whatever happens.

As for me, I'm glad we bought our two little cottages not as investments but as places our family and friends can grow to love and spend time at over several decades. The investment has turned out to be excellent so far and having the rental income doesn't hurt at all. But, I don't know what I would do if I were thinking about SoWal as a short-term investment right now. I'd do a lot of homework first. But I suppose that's what people said 3 years ago, 2 years ago, 1 year ago. We bought our second cottage next door to our first cottage just a little over a year ago for about $65,000 more than we paid for pretty much the same thing 2 years ago. That hurt quite a bit at the time, but the pain has been relieved. It has done very well as an investment already even though we thought the price was high then. But, as with the first cottage, we bought it as a place to enjoy for a long time, so the short-term returns weren't important.

Also, just as a suggestion, rather than buy one big place, it has worked out very well to have two small places next door to each other. If we ran into financial difficulty, we could sell one without losing our "home" in SoWal. If we come down there and don't need both cottages for family/friends, we can just use one and continue to rent out the other.

[OnMackBayou]

Gee, it really is easy to tell the haves, (not me) from the have nots (me). The fact that there is even a message board such as this with so many active contributors, and lurkers (again me) so hyped about the SoWal real estate market tells me one big thing. All of us reading this are also scouring the real estate sections every week, and we're looking on the internet to try and decipher a trend.

I predict that at the first sign of a decrease there will be no shortage of buyers trying to get in on what they consider to be a good deal, and any fall in asking prices will be short lived. Too many people want to live here, for good reason. Where are they going to go? :idontno:

[kurt]

Gee, it really is easy to tell the haves, (not me) from the have nots (me). The fact that there is even a message board such as this with so many active contributors, and lurkers (again me) so hyped about the SoWal real estate market tells me one big thing. All of us reading this are also scouring the real estate sections every week, and we're looking on the internet to try and decipher a trend.

I predict that at the first sign of a decrease there will be no shortage of buyers trying to get in on what they consider to be a good deal, and any fall in asking prices will be short lived. Too many people want to live here, for good reason. Where are they going to go? :idontno:

:welcome:

Good post!

Don't be such a lurker. :lol:

[Georgian]

Skier,
To be successful in Real Estate you"ll have to forget everything you have read or learned from the equity markets including all those sound bites.

When did California's bubble burst?

On Your comment "Any runup in stocks, real estate,... has ALWAYS ended in a crash"

Perhaps you should read more non-fiction. Or at least visit a different library.

And when the Real Estate market did experience a period of slight decline or low growth where were the interest rates compared to where they are now?

[njackie]

This is a great response and thanks for educating others on the board as to this philosphy!

[beachmouse]

California had a serious real estate crash in the late 80s. It took some areas quite a while to regain pre-crash values.

Florida had a major real estate crash during the Great Depression. If you look at the lending practices then and now, there are some interesting parallels. (though I think the market is in way better shape now than it was then)

[SHELLY]

Does anyone think the present "unattractive" state of the SoWal beaches will slow the market down a bit (or result in price reductions by motivated sellers)?

[chrisv]

Does anyone think the present "unattractive" state of the SoWal beaches will slow the market down a bit (or result in price reductions by motivated sellers)?

I'd say it depends on what is "motivating" them.

Florida also felt a hurtin' from the weak market in the 80's. Look, no locale is immune from a "bubble", but I'll put my waterfront up against any investment of any kind...

[RiverOtter]

Does anyone think the present "unattractive" state of the SoWal beaches will slow the market down a bit (or result in price reductions by motivated sellers)?


Nope, Florida had 4 hurricanes last year and if anything the market got stronger.

[skier]

Dee plane boss, dee plane---Some folks are living on fantasy island in terms of their continued bullishness in face of all the current bearish indicators (see my post under property flippers thread).

Bash away. Sorry that I have offended so many folks. I am only stating my opinion--I assume we are all entitled to them. Not challenging anyones manhood or womanhood.

SoWalSally--I do own a home and actually bought several years ago. So, I should be safe if the market falls. Fortunately, my personally solvency does not depend on the value of this home going up or going down. We love our home and will continue to visit the area often. That said, if someone is willing to offer me a crazy price for my house, I will sell and go back to renting until another opportunity presents itself.

Cheers.

[Wu]

That said, if someone is willing to offer me a crazy price for my house, I will sell and go back to renting until another opportunity presents itself.

Cheers.

Man who is not part of solution is part of problem. :biggrin:

[Travel2Much]

I am not offended, skier, and you have not offended my manhood. I think you would be real surprised how much I know about real estate finance. We actually agree on much. Calling people "crazy" and suggesting that they live in fantasy worlds simply because they want to live in SoWal is a bit odd, particularly for someone whose admittedly overpriced house is in the market to offload on the delusional crazy people. :confused:

Now, if people think their property is going to double in a year or two or even three, that's ridiculous. I am glad that things are finally settling down, to get the speculators out of the market, and perhaps the real estate agent market will clean up its act up too. That was one of the things that I found real off-putting when buying here. I would trade 100s of thou in equity simply to have that occur, quite frankly.

The real interesting thing on 30A in the next few years is going to be the build out at Watercolor and at Watersound. I have always seen that as a real hurdle.

The beach in Seacrest/Camp Creek/Watersound was amazing yesterday. Bright green warm water, but crystal clear. Lots of shells, and periodically you would pass little groups of people lazing in their private little beach worlds. Worth every penny I ever earned, in my view, just to be able to be there yesterday.

[OnMackBayou]

Many of us looked long and hard before deciding to buy property here. Most of us were excited to own here before the prices spiked. And I bet we'll really be happy if we're here for the long run.

Real estate prices tend to be very sticky. Once people have it in their heads that their property has a certain value, they tend to resist any downward shift in their thinking.

I believe that is especially true for South Walton. Once this area gets in your DNA it is hard to imagine being anywhere else, and it's obvious many people feel the same way, and are willing to pay a premium to be here.

[pete0735]

As with the stock market of the 90's, when all the news media is talking about the Realestate craze and quick ways to make a fast buck, the party is over. The curent prices at Watercolor and other coastal locations reflects this craze.

Originally St. Joe had reasonable prices on lots, 200K or better. People started buying. Then the "flippers" (day traders) decided to make a living out of this. So when St. Joe recognized that there was money on the table, why not get their hands in the pie and ask 4 times their original plan (similar to IPO's in the 90's)? Well what about the builder? Surely this hipe is big enough that he can carve out a life times worth of earnings in a few short years.

With all these mark ups we need to have a higher selling prices.The end result is the last one holding the pie will get burnt. And in my opinion the overall community will suffer. A run up with a pending crash will slow down overall development and progress. If WaterColor sales slow to a crawl because of high prices, there will be a lot of inventory on the market. With large amounts of inventory, building will slow. If building slows there will be fewer residents to buy the goods to keep the shops and stores thriving. If the area isn't thriving who will want to pay $4K a week to rent a place a mile from the beach? Which the owner needs becasue he paid $1.5M to be a mile from the beach.

I don't believe there to be gloom and doom for the overall realesate market. The increase in average housing although high, is at a much smaller percentage than the rise in coastal property such as Watercolor. Also there are a lot more people buying houses to live in, than to vacation in.

And for those that use the long term approach as a safe haven for irrational purchasing behavior. How did you handle your broker when he recommended stocks such as Lucent at $60 a share, now under $3. Long term view is all relavant to when you got in. If you bought a $250K lot and put a 2500 square foot house on it and your at $1M in cost, congratulations, you are goingto sleep well. If your blinded by pure hype and you got a 800K lot a 1/2 mile from the beach and put a 2100 sq ft house at 1.5M. I'm sorry, I lost money in the stock market as well.

St. Joe please do us a favor. Real the builders in and have them charge a respectable building price. And let's scratch your 4 times mark up. Go to your original plan with a modest increase by phase. And don't let any flippers in the game. How about a contractual clause staing that if you buy a lot, you must build and own for at least 24 months.

I believe in the end you will have a community unlike any other and the forsight to protect Watercolor from price and quality erosion.

[FoX]

St. Joe will sell for what the market will bear. If a buyer is paying cash, so be it. If financed, appraislas are required, which reflect comparable sales. Do you think taht someone paying $1.5 million for a house a mile from the beach is counting on rentals to pay their mortgage?

Classic and timeless beach homes, while prices may seem outrageous to many of us, are much more than numbers on the sheet for those that will end up owning them for many years. And many of them will end up being owned by people who will value them for generations, with wonderful memories that are difficult to put a dollar value on.

There are a lot of folks here that are out of my league, and many more I've yet to see.

Such has been the case with Ono Island, Star Island, Marco Island, Sea Island, Malibu, Hilton Head, The Hamptons, Seaside, Rosemary Beach, and is soon to be the case at WaterColor, WaterSound, Alys Beach, etc . . .

They come, they stay, they buy. They care little whether a couple of folks have flipped their beach home. They care little what the developer or builder made. They want their beach home.

If you are simplifying the real estate market here all the way to the point of comparing it to the stock market, then you just don't get it.

What is your real issue? You lost money in stocks and now you want to watch others suffer?

[OnMackBayou]

Very well put.

When successful experts talk about the stock market, they talk about the fundementals.

The fundementals of SoWal are extraordinary. We are blessed with a location between a beautiful bay and a beautiful beach. That will not change until the next Ice Age, or until global warming takes the beach to Freeport.

[pete0735]

We all know that anyone selling anything, will sell what the market will bear. My opinions are based on the unrealistic value of remote beach property. Not the poreperty in the first few rows, but the high prices further away. It just becomes unrealistic.

This isn't to remove the family value of having a wondferful vacation getaway, where memories are made. It's the realistic opinion of a market that has gotten to fat to quick, Which has many comparisons to the stock market or any investment vehicle that has had a run up. My view is simple, what goes up, will come down. It's only a matter of how far and quick.

I believe a lot of good people try to build their dreams in places like Watercolor. However at these prices dreams may become nightmares.I feel you will find whether someone has more money or not, they care about the value of what their hard earned money was spent on. And if you are someone who keeps the property, lower values have their advantage. A tax bill alone can go from a projection of 10K when purchasing a property to 20K at closing.


So finding this informative board, I thought I'd throw in an opinion.

As for my "issue", I feel blessed. I jumped out of the market before the crash and bought realestate. I am now holding my realestate and now buying stocks again. I'm not a flipper or day trader, just someone who reads the paper. And when I see what everyone is doing, I assume it's to risky for me. Sort of flying under the radar.

[Bob]

:welcome:


Long term investing is very relaxing.Skier, Remember please that I said long term is up. Long term,long term longtermlongtermlongterm...as said by DeCaprio in "The Aviator". Sure, there may be a correction, as in California,but last I checked, you can't purchase resort property anywhere at 70's,80's,90's prices. And stop comparing SoWal w/ tech stocks and the Japanese. As I told Buckhead Rick, that's like apples and oranges/sushi.

[Seasider]

Most real estate busts are caused by excessive lending practices. My sense is that significant equity is being invested in most of the SoWal single family transactions. Wealthy individuals have been unable to earn adequate yields in either stocks or the bond market, so many have turned to real estate. If you can't make a decent return in the stock market, why not invest in a second home? At least the investment can be enjoyed. If the stock market takes off again, capital will be pulled away from additional real estate investment, but I would not expect a wholesale selloff. I think demographic trends are good for the area and continued improvements in the transportation infrastructure such as the new airport will be positive for values. That being said, PCB condos may be a different story.

[skier]

Bob--

We are not talking apples and oranges here. What makes all these markets that crashed similar is the SPECULATION that created the boom and then the bust. The real estate market runup on the panhandle has been created by a huge amount of speculation. When the speculators eventually have to sell to pay down debt (ie:margin loans of the 90's) or because they can't afford to build a house on the lot they bought solely to flip, the market will tank just like the stock market.

Rampant overspeculation in the real estate market is what will cause the price decreases. I know too many folks that bought 2, 3 and as many as 10 properties. Yes, some of these folks are very wealthy and won't get hurt desperately by a fall. However, many of them financed these purchases through interest only loans and never intend to build or hold the homes/condos long term. They are leveraging themselves to the hilt and with short term rates going up, their interest payments (many are tied to LIBOR and adjustment monthly) are going up, up and away. They are trying to sell or will be soon.

Pete and I agree--if you got in two or three years ago. Your investment is probably safe. But, if you got in recently and you can't afford to take a hit, look out.

[Kim Smith]

Skier,

Did you know interest only, which are connected to LIBOR offer a 3 and 5 year fixed rate?

[skier]

Actually, some lenders will design all kinds of loans including 3, 5, 7, 10 and 15 year interest only loans. However, a large chunk of the interest only market (especially the high end) is taken up by the shorter term loans with adjustment periods of 1, 6 and 12 months. Also, some are tied to LIBOR, some are tied to treasuries and others are tied creatively to other market indices.

[Travel2Much]

Boy, these Watercolor folk really begin to unravel when their overinflated prices go down and their friends discover "hey, maybe this wasn't such a smart idea to buy 10 lots to flip with adjustable interest only loans in a rising interest rate environment". Next time I am at the Watercolor market, I am telling them to offer only decaf.

[RiverOtter]

Boy, these Watercolor folk really begin to unravel when their overinflated prices go down and their friends discover "hey, maybe this wasn't such a smart idea to buy 10 lots to flip with adjustable interest only loans in a rising interest rate environment". Next time I am at the Watercolor market, I am telling them to offer only decaf.

Not arguing for the Watercolor crowd. I don't and won't own anything in there but the interest rates just went down again. :cool:

[Travel2Much]

Hmmm, time to refinance my nerdy boring 30 year fixed rate mortgage, maybe.

I will confess to considering buying in Watercolor, although I doubt if I could afford it now (what with doubling prices every six months or so) and to this day have mixed views about my choice. Lots good about the place for my needs, lots bad for my needs. When the salesperson told me I could "get in" to use skier's term, for a modest amount, less than the credit limit on my visa card, together with an interest only loan I was probably the only one ever in their office to say "that's crazy" (two years in the late 1980s where part of my job was helping to pick up the pieces from the S&L debacle makes me gunshy). Plus, I didn't want to get in, I wanted a second house.

Skier's possible doomsday scenario has some reality to it, and I considered it myself when evaluating Watercolor, but unlike tech stocks there is inherent value in built out 30A properties and developments that are attractive to real families. Always has been, always will be. My view has always been that St. Joe has way way too much riding on that property to let skier's endgame scenario happen. But, who knows?

[SHELLY]

Realtors raise prices so they can then drop them at advertise the property as "Price Reduced!" I'm seeing lots more of that lately. :floor:

[RiverOtter]

Realtors raise prices so they can then drop them at advertise the property as "Price Reduced!" I'm seeing lots more of that lately. :floor:

Is this to make people "feel" like they got a good deal?

[FoX]

Realtors raise prices so they can then drop them at advertise the property as "Price Reduced!" I'm seeing lots more of that lately. :floor:

I haven't seen that. I've seen some real price drops and some token ones. A $5k price drop on a $1.25m dollar property is probably a gimmick.

[Bob]

Bob--

We are not talking apples and oranges here. What makes all these markets that crashed similar is the SPECULATION that created the boom and then the bust. The real estate market runup on the panhandle has been created by a huge amount of speculation. When the speculators eventually have to sell to pay down debt (ie:margin loans of the 90's) or because they can't afford to build a house on the lot they bought solely to flip, the market will tank just like the stock market.

Rampant overspeculation in the real estate market is what will cause the price decreases. I know too many folks that bought 2, 3 and as many as 10 properties. Yes, some of these folks are very wealthy and won't get hurt desperately by a fall. However, many of them financed these purchases through interest only loans and never intend to build or hold the homes/condos long term. They are leveraging themselves to the hilt and with short term rates going up, their interest payments (many are tied to LIBOR and adjustment monthly) are going up, up and away. They are trying to sell or will be soon.

Pete and I agree--if you got in two or three years ago. Your investment is probably safe. But, if you got in recently and you can't afford to take a hit, look out. Skier, You are hyper-ventilating. Inflation is under control, the economy is anything but overheated and 10 year Treasury yields are in the 4.0-4.2 range. This scenario keeps long-term rates low. Well qualified buyers can refi and grab a second teaser rate easily because of recent appreciation. The up, up and away you are refering to is the rise between the teaser rate and current LIBOR Treasury rates, which, by the way, are still LOW..Not everyone is on one month adjustables, many went 3-5 years.

[skier]

Florida Real Estate Bubble :bang:

The 1920’s, in America, were a time of great prosperity. Skilled and educated working Americans had jobs providing numerous fringe benefits, paid vacations and pensions. In addition, automobiles were becoming commonplace for the wealthy and middle class allowing cross country travel. This good fortune set the stage for the Florida real estate bubble.

Starting in 1920, many Americans became enamored by the materialistic and prosperous lifestyle of the time. During this time, the stock market was moving forward at an extremely fast pace. Many investors were becoming quite wealthy. Florida became a hot spot for these newly rich people, who didn’t enjoy the cold. Many whole families took vacations to Florida. It was at this point that tourism started booming and land prices were skyrocketing. Many astute investors took notice and started buying Florida real estate. The population in Florida was growing exponentially and housing couldn’t meet the demand. Florida became the “playground of the rich and famous”. Illegal casinos and drinking parlors became widespread in Miami.

At this point, almost anybody could invest in Florida, even without much money. Credit was plentiful and soon everybody in Florida was either a real estate investor or a real estate agent. In 1922, the Miami Herald became the heaviest newspaper in the world as a result of its humongous real estate advertisements. People in the North heard about the real estate prices “doubling and tripling”, causing a snowball effect. Capital was rapidly pumped into the real estate market. Whole golf communities were developed, such as Temple Terrace. Resorts and retirement communities were developed almost overnight. Mansions were sprawling in every area, as were swimming pools. As always, waterfront property was the most desirable. Florida was seen as a veritable Utopia.

Real estate prices quadrupled in less than one year. An elderly man invested $1,700 in property and by 1925 the property was worth over $300,000! It seemed you could do no wrong by just buying any property in Florida and become a millionaire. By 1925, real estate prices had become so exorbitant that buying land wasn’t affordable any longer. New investors failed to arrive and old investors started to sell. Panic arrived, as it always does, and the real estate market crashed. Prices kept moving downwards as heavily indebted investors tried to sell to avoid bankruptcy. In most cases, no buyers arrived, and the investors were bankrupt from the enormous mortgages.

To make matters even worse, a highly destructive hurricane ravaged South Florida in September 1926. The 125 mile an hour winds eventually turned Palm Beach County into swamp lands. After the storm, a huge tidal wave crashed upon the towns of Belle Glade and Moore Haven. Due to these horrible turn of events, over 13,000 homes were destroyed and 415 people died. Additionally, the arrival of the Mediterranean fruit fly obliterated the large citrus industry. It took years for Florida to fully recover, even through the highly prosperous time from 1925 to 1929. Florida was barely affected in the stock market crash of 1929 and the Great Depression, because of its poor financial state from the start.

Market crashes always occur in the same manner. Regardless of the market, the same simple psychological underpinnings are always at work. People who are caught up in a bubble never look back for historical examples. For this folly, they become paupers.

“Those who cannot remember the past are condemned to repeat it.”

[skier]

STILL NOT CONVINCED THERE'S A REAL ESTATE BUBBLE, READ THIS!
by Peter Schiff
Euro Pacific Capital
April 20, 2005


As the debate over the existence of a real estate bubble rages, the most persuasive case in favor continues to be made by those firmly committed to the opposite point of view. Such was the case with several recent articles that should give even the most ardent real estate bulls cause for concern.

A New York Times article of April 17, 2005 entitled "Seeking Nest Eggs Investors Buy Nests," chronicles the recent deals of several New York actual, and wannabe, real estate moguls. Although the figures profiled varied largely in terms of wealth and experience, two threads that united them are their a) confidence that real estate prices have no where to go but up, and b) willingness to accept low rental returns, or even negative cash flows, as trade offs for expected appreciation.

Several individuals admitted to being attracted to real estate because they had either lost money in the stock market, or knew of others who had. What these "investors" fail to realize is that they are making the same foolish mistakes with real estate that they or others made with stocks. Stocks per say are not bad investments. Neither is real estate. It’s over paying for either that makes for a bad investment. In the 1990s investors over-paid for stocks by ignoring the fundamental measurement of a stock’s value, its dividend yield, simply because they expected its price to rise. By ignoring rents, today’s real estate "investors" are making exactly the same mistake.

The following quotes taken directly from the Times article provide more evidence than any academic study could in support of the existence of a real estate bubble:

One investor seeks simply to "cover her monthly costs, even if rents are low" and admits that "if there is a little money left over after mortgage payments, taxes, and other expenses, so much the better, but enhancing cash flow is not the goal." How can cash flow not be the goal of an investor in rental property? The fact that she describes minimal positive cash flow as "so much the better" implies that even negative cash flow is acceptable

A second aspiring tycoon who turned to real estate because "he watched his friends lose money on stocks" and feels "real estate is safer," is happy to buy rental property if he can break even. "I’m not looking for positive cash flow because we both work and have good incomes." His goal is "to get as many apartments as I can, even with a mortgage, and break even-I do not want any negative cash flow-and when my retirement comes, sell everything." Sell to whom? Apparently a greater fool for whom negative cash flow will not be an obstacle.

A third individual boasts about having paid $70,000 for a rental condo last year that is worth $115,000 today. Though she admits to "not making much money in rents," she looks forward to making up the difference in appreciation. She claims to have no interest in selling now but ‘When I’m ready to liquidate I will have the money there, it’s better than the stock market." How does she know the condo is worth $115,000? Is it because a greater fool purchased a similar one at that price? How does that affect her if she is not the one who sold? Remember all those "paper profits" in the stock market? What good are they now to those who did not sell?

The fact that so many novice real estate investors are confidently buying property with nominal or negative cash flow is not completely lost on the New York Times reporter, but even in pointing this out, he provides still more fodder for my argument. One "expert" consulted commented that in the past real estate investors expected annual rental returns of 8% to 10%, and that such a "historical perspective" is actual a negative in today‘s market, as it results in experienced investors passing on properties that investors with "fresh prospective" routinely buy. "They’re not being foolish; they’re looking at it differently than people who have been in the market for a long time." In other words, this time it’s different, a new era. I’ve seen this movie before, and I know how it ends. Remember all the novice stock market day-traders ridiculing Warren Buffet for his failure to grasp the new reality.

A second "expert" remarked that "A break even investment is O.K.," but cautioned others to "never buy a negative return." So even today’s supposed experts see nothing wrong with buying rental property that produces no net rental income.

Similarly, a local magazine in Connecticut recently featured a cover-story titled "Annual Real Estate Market Survey -- How High Can It Go?" in which an expert commented "The only problem with real-estate investing in this area is when you approach it strictly as an investor." In other words, consider the fundamental investment value of the property. "Yes a house in Darien or New Canaan will appreciate, and turn a handsome profit when sold, but the greatest interim benefit comes from actually making your home there rather than renting it out and waiting for the optimal selling point." (Not for my wife and me, who are enjoying the area along with the benefits of cheap rent while waiting for prices to collapse.) Notice how appreciation is seen as given, despite the low rental retunes available at today’s already high prices.

Another agent commented that "Homes have been very difficult to rent. I’ve seen rental listings sit for numerous months." A third added "Even transferees who are coming her for a year or two are buying and then selling after they leave. It’s great to buy a house for investing because the value will increase, but don’t expect to get an enormous amount of rent."

In another article in the same magazine ironically titled "The Realities of Real Estate" a Q and A with a local realtor included the following: Question, "Are condominiums good investments," Answer, "They’re an OK investment, but not as good as a single-family home where you can double or triple every dime you put into it." By that she means that if you spend 25K remodeling your kitchen, expect to get an extra 50K to 75K at resale. Remember the olden days, like 5 years ago, when at best, a remolded kitchen could recoup only about 50% of its cost.

Finally, an article which appeared in the April 10 New York Times, entitled "The Hunt, Becoming a Mogul Slowly," which should have been entitled "A Bankruptcy in the Making," chronicles the real estate deals of a 25 year old New Yorker, who began his investment career at the ripe age of 22, using money borrowed form his proud parents for the down-payment. This young man's advice to those potential investors who might be worried about real estate is "What are you worried about? Take a risk with real estate, its less risky than the stock market." It is! Well he’s 25 years old, so I guess he should know.

The young mogul also advises against shying away from bidding wars. "An apartment is more attractive to me when other people want it. While the price might seem expensive now, it might not be expensive six months to a year form now. We overbid to capture the opportunity." Basically, his real estate wisdom boils down to the following: Don’t worry about the price you pay, just buy, because the price will be higher in six to twelve months.

Meanwhile his success has inspired six of his young, former-renter friends, to follow in his experienced footsteps. Initially, some were put off because "they thought buying was scary or complicated, especially if they weren’t sure they would settle in New York, but that when they saw that I wasn’t completely frazzled and was doing it fairly easily and came out with a profit, they saw it was fairly simple. I made it seem like a very cool thing to do."

I don't think there has ever been a greater "can't lose" consensus than the one which exists among today's real estate "investors." Combine this "irrational exuberance" with unprecedented access to cheep credit, and its no wonder that the Fed has succeeded in creating the "mother of all bubbles." In fact, it's the sheer size of this mega-bubble which makes it so hard to detect, as so many observers are themselves trapped within it. But the simple fact that a 25 year old kid, with three years of experience, is the subject of a series article about real estate investing in The New York Times, itself is perhaps the best anecdotal evidence that today's real estate market is a bubble. When a self-described computer geek, proclaims real estate investing to be cool, you can bet the trend is nearing its end.

[skier]

Y'all like my new profile pic??? :laughing1

[RiverOtter]

Y'all like my new profile pic??? :laughing1

:confused: What is it?

[Advance The Man]

Skier, when will the bubble burst? What will happen? How much of a discount will I be able to buy along 30A? Partly joking, partly not. It's easy to say there won't or will be a RE bust. What are the ramifications if there is?

[FoX]

So much for the lighter subjects you were going to tackle. Skier says SoWal will lose 1/2 its value in . . . what was it? 12 months?

I'm beginning to think you are on this board so that you can come back and say "I told you so". And you're the type of poster that if you turn out to be wrong, we'll never hear from you again. :roll:

[thumper]

At the risk of over stepping my bounds as a new forum member, I'm going to call this one as I see it:

When Skier was asked some intelligent rebuttal questions in recents threads, asking him to elaborate, he responded with sarcasm and avoided the questions completely. Until then he was helping drive an interesting debate, but he dropped the ball once he was challenged directly. I stopped reading his posts with interest after that, I'm afraid. Started to sound like someone who is baiting for pointless debate.

Skier, we get your point. Yes, there are definitely some over inflated properties out there. Some. Humans are greedy, it's guaranteed to happen in a market like this. I'm glad you are providing food for thought, but please, if you want to retain credibility, have the courtesy to respond to those who have different opinions without resorting to sarcasm.

Respect, Thumper

[Advance The Man]

I keep looking for a real estate expert to discuss the bubble. Everything I've read is from economists or a financial expert. Real Estate is unlike the stock market, it doesn't implode. During a slow down it let's air out slowly and typically stabilizes. I've bought and sold scores of property and scores of stocks. I've lost money in stocks, some more than others. I've never lost a nickel in real estate.

[Beachlover2]

About a month ago - I saw something on CNN about real estate bubble bursting. I wish I could remember more of the figures - but they brought up cases such as California and Boston - where in the past real estate had risen like 300% over a few years - when the bubble burst - values fell 10-15%. Not that I want to lose 10-15% - but if I have increased 300% - then 10-15 doesn't sound so bad. Did anyone else see this that remembers more about it than I do?

[Buckhead Rick]

Current Barron's mag. has three interesting articles. One by a Yale prof who says the R/E bubble is nationwide and we could see a drop of 50%, latter he says it could be only 2.6%-that's why he is at Yale and I'm not, he covers all bases.
Two, Alan Albelson writes that he feels all the popular mags are right this time in calling for a bubble burst, though he admits they have never been before.
Last, Ryan Beck & co. stock analyst boosts her target price on JOE to $92, because of the projected 80% population increase in the next 10 years. Maybe they'll all be right, I sure do not know.

[beachmouse]

A short article from the National Review:

http://www.nationalreview.com/kudlow/kudlow200506201040.asp

The Housing Bears Are Wrong Again

"None of this is to argue that low mortgage rates haven’t been a plus in the housing picture. Of course they have. But the imbalance between excess demand over limited supply, resulting from tax factors and land-use restrictions, has made home buying even more profitable in recent years than has been the case in the past. "

As for South Walton, I can see some moderate/modest price drops in the next year or two. But in the end, the amount of land south of the bay is pretty limited, as is the total number of allowed units.

It's Panama City Beach that's in trouble. Major surplus and not scarcity situation coming up when those new buildings start coming online in 2006/07. How many people who would have bought in SoWal end up buying foreclosed condos in PCB instead because it's cheap? In theory, you're probably talking two very different groups of buyers, but when something starts looking dirt cheap compared to SoWal prices, it's tempting to buy low if you're willing to wait for ten years for PCB to redevelop itself and for the market to turn around.

[Philip_Atlanta]

At the risk of over stepping my bounds as a new forum member, I'm going to call this one as I see it:

When Skier was asked some intelligent rebuttal questions in recents threads, asking him to elaborate, he responded with sarcasm and avoided the questions completely. Until then he was helping drive an interesting debate, but he dropped the ball once he was challenged directly. I stopped reading his posts with interest after that, I'm afraid. Started to sound like someone who is baiting for pointless debate.

Skier, we get your point. Yes, there are definitely some over inflated properties out there. Some. Humans are greedy, it's guaranteed to happen in a market like this. I'm glad you are providing food for thought, but please, if you want to retain credibility, have the courtesy to respond to those who have different opinions without resorting to sarcasm.

Respect, Thumper

I agree. I LIKE to see a counter-point and certainly those predicting a bubble burst are in abundance. However; sarcasm lessens an argument significantly.

Regarding the two articles Skier put out, they seem to correlate crashes and market indicators of stock markets in comparison to a real estate market. Apples and oranges in my opinion. The article on the 20's Miami market was quite interesting and will prode me to reasearch that market some more to see if there are some lessons - thanks for the heads up, Skier.

[Smiling JOe]

Florida Real Estate Bubble :bang:

The 1920’s, in America, were a time of great prosperity. Skilled and educated working Americans had jobs providing numerous fringe benefits, paid vacations and pensions. In addition, automobiles were becoming commonplace for the wealthy and middle class allowing cross country travel. This good fortune set the stage for the Florida real estate bubble.

Starting in 1920, many Americans became enamored by the materialistic and prosperous lifestyle of the time. During this time, the stock market was moving forward at an extremely fast pace. Many investors were becoming quite wealthy. Florida became a hot spot for these newly rich people, who didn’t enjoy the cold. Many whole families took vacations to Florida. It was at this point that tourism started booming and land prices were skyrocketing. Many astute investors took notice and started buying Florida real estate. The population in Florida was growing exponentially and housing couldn’t meet the demand. Florida became the “playground of the rich and famous”. Illegal casinos and drinking parlors became widespread in Miami.

At this point, almost anybody could invest in Florida, even without much money. Credit was plentiful and soon everybody in Florida was either a real estate investor or a real estate agent. In 1922, the Miami Herald became the heaviest newspaper in the world as a result of its humongous real estate advertisements. People in the North heard about the real estate prices “doubling and tripling”, causing a snowball effect. Capital was rapidly pumped into the real estate market. Whole golf communities were developed, such as Temple Terrace. Resorts and retirement communities were developed almost overnight. Mansions were sprawling in every area, as were swimming pools. As always, waterfront property was the most desirable. Florida was seen as a veritable Utopia.

Real estate prices quadrupled in less than one year. An elderly man invested $1,700 in property and by 1925 the property was worth over $300,000! It seemed you could do no wrong by just buying any property in Florida and become a millionaire. By 1925, real estate prices had become so exorbitant that buying land wasn’t affordable any longer. New investors failed to arrive and old investors started to sell. Panic arrived, as it always does, and the real estate market crashed. Prices kept moving downwards as heavily indebted investors tried to sell to avoid bankruptcy. In most cases, no buyers arrived, and the investors were bankrupt from the enormous mortgages.

To make matters even worse, a highly destructive hurricane ravaged South Florida in September 1926. The 125 mile an hour winds eventually turned Palm Beach County into swamp lands. After the storm, a huge tidal wave crashed upon the towns of Belle Glade and Moore Haven. Due to these horrible turn of events, over 13,000 homes were destroyed and 415 people died. Additionally, the arrival of the Mediterranean fruit fly obliterated the large citrus industry. It took years for Florida to fully recover, even through the highly prosperous time from 1925 to 1929. Florida was barely affected in the stock market crash of 1929 and the Great Depression, because of its poor financial state from the start.

Market crashes always occur in the same manner. Regardless of the market, the same simple psychological underpinnings are always at work. People who are caught up in a bubble never look back for historical examples. For this folly, they become paupers.

“Those who cannot remember the past are condemned to repeat it.”


Are these your words, Skier? If not, please quote your source and author.

[Smiling JOe]

I will remind everyone, that during this country's economic downturn following Sept 11, 2001, this area's businesses were booming. We are not the norm. We are the exception. Sure, there is some cause for caution, and buyers should rely on trustworthy folks who know this market. We have come to the point where not every listing is a bargain. However, there are plenty of bargains available right now.

[GVM]

Joe:
Send us to a few MLS listings that you consider bargains, unless, of course, you're bidding for them! I would genuinely appreciate your opinion. I expect, indeed, there are a few bargains...but there's a lot of junk...overpriced junk...on the market currently.
I've been very fortunate with South Walton real estate transactions in the past 24 months...but I declared myself out of the game 4 or 5 months ago. Maybe too soon. Whether or not the bubble bursts will be determined by the strength of the borrowers. It's the loosey-goosey lending practices (which I took full advantage of) that have me concerned. What percentage of the borrowers won't be able to 'tote the note' in the face of the current 'flattening' of the market, plus the approaching time limits for build out in some developments. There are a gah-zillion lots currently in South Walton MLS between $400,000 and $550,000. The folks holding 3, 4, 5 or 6 of those lots might be feeling a little queasy. Also, I'm skeptical that the market for vacation rentals will be able to absorb the available inventory over the next couple of years. After all, lots of folks got in the game with the notion that rentals are assured. We shall see.

[phdphay]

Joe:
Send us to a few MLS listings that you consider bargains, unless, of course, you're bidding for them! I would genuinely appreciate your opinion. I expect, indeed, there are a few bargains...but there's a lot of junk...overpriced junk...on the market currently.
I've been very fortunate with South Walton real estate transactions in the past 24 months...but I declared myself out of the game 4 or 5 months ago. Maybe too soon. Whether or not the bubble bursts will be determined by the strength of the borrowers. It's the loosey-goosey lending practices (which I took full advantage of) that have me concerned. What percentage of the borrowers won't be able to 'tote the note' in the face of the current 'flattening' of the market, plus the approaching time limits for build out in some developments. There are a gah-zillion lots currently in South Walton MLS between $400,000 and $550,000. The folks holding 3, 4, 5 or 6 of those lots might be feeling a little queasy. Also, I'm skeptical that the market for vacation rentals will be able to absorb the available inventory over the next couple of years. After all, lots of folks got in the game with the notion that rentals are assured. We shall see.
So, neighbor, does that mean we shouldn't raise our rental prices for next summer? Our place got rented up so fast that we can hardly even use it. So we were considering increasing our rental rates. I mean, if it rents at x dollars per week and fills up in a week, why not tack on another 10-20%?

Things *will* slow down. Those people who have bought recently have discovered that construction costs are too high for them to have any confidence that they can get their money out. I think you know who I'm talking about.

[Smiling JOe]

So, neighbor, does that mean we shouldn't raise our rental prices for next summer? Our place got rented up so fast that we can hardly even use it. So we were considering increasing our rental rates. I mean, if it rents at x dollars per week and fills up in a week, why not tack on another 10-20%?

It is all about supply and demand. Remember, we are seeing numerous people, whom we have not seen before, vacationing in this area. These folks are have been vacationing in other Florida areas that were trambled by the Hurricanes of '04, especially the areas between Destin and AL. When those places are rebuilt, we may lose those folks. However, they may find this area much more attractive, and you may keep the renters for life. It is just something to consider.

[skier]

Are these your words, Skier? If not, please quote your source and author.

Joe,

Those were not my words. Sorry for being unclear on that point. Unfortunately, the author of this article I found on the net did not put his or her name on the site or the article. It did not appear to be copyrighted so I simply did a cut and paste of the article.

[skier]

:confused: What is it?
River,

The picture is of a balloon with a dart about to hit it. A poor attempt at humor :laughing1

[Smiling JOe]

Skier, since the bubble is about to pop, why are you asking a high price for your property instead of getting out while the money is good and buying your house back later at a cheaper price? That is what I would do if I "knew" the "bubble was bursting."

[pete0735]

In reality I think it is quite simple, but I can only speak from Watercolor experience. Is a 50% reduction possible? I'm not sure but I wouldn't be surprised. If you bought a lot for 225K 3 years ago, it now has a "paper" value of 800K. That's over 3 times. Now let's say there is a 50% drop, you didn't lose money, however your gain is shy of double. Not a bad return in 3 years.

The problem is never a fair or premium value, it's the unrealistic price that is put on SoWAl land. Not beach front but down the road. That was a 225K lot in 2002, Today it's 800K. With builder prices you may not be able to put a house on your over inflated land and pay your over inflated tax bill.

For those who believe it can only go up, ask yourself would you have bought at 2005 prices?

Now on to rents, can't figure this one out. I vacation in Florida and Hilton Head and can get a house or condo on the beach for 2K to 5K. At WaterColor I can get one a 1/2 mile from the beach for 4K. Doesn't sound right. However everyone I bump into is either renting for vacation becasue their building in Watercolor or are interested in buying becasue of the hype but haven't done anything yet because of the prices. Now I admit this is not an actual survey, it's just folks I've bumped into.

I plan on treading lightly, but if you bought your lot at 2002 prices and want to double your money look me up. But if your looking at 3 times, can't help you there.

[skier]

Good question--

Here is my answer--

1. I will pay a significant amount of long term capital gains tax reducing the amount I have to reinvest (I don't qualify for 1031 exchange).

2. There are fairly significant closing costs both on the selling, buying and borrowing sides.

3. The amount of time involved in selling then buying again is significant, especially if you are coming from afar.

4. We looked for a long time and finally decided to build because we couldn't find a resale home we really liked. If I knew I could repurchase my current house, this might be an option.

5. I bought long enough ago that prices would have to fall over 50%, and stay there, for me to be in the red.

6. I can afford the home we have even if things go south and interest rates rise.

7. We REALLY like our home and the area.

For all of those reasons, I am only going to sell if I can get a price that makes it worth it to sell. I'll then take the money and build another home sometime down the road.

If I don't sell, no big deal. We didn't buy the home as an investment. We bought it as a place for us and our kids to build memories. But, if we get lucky (I did not buy the house thinking prices would skyrocket) and the house commands a large enough price, I'll take the money and go on some really nice memory building vacations off the interest I will earn on the gain. For me, I see no real downside either way.

[BrettMan]

Skier - there are two points in your earlier post that bother me and I have to respond to:

1 - "In the 1990s investors over-paid for stocks by ignoring the fundamental measurement of a stock’s value, its dividend yield, simply because they expected its price to rise."

What?! Dividend yield is NOT the only way to measure a stock's value. In fact, an awful lot of stocks don't even pay dividends! I'd say most investors do and should continue buying stock because they expect it to rise in price. That's kinda the point. P/E ratios, expected earnings, industry growth, etc. are all very valid reasons to invest in a stock. The same ideas apply to real estate.

2 - "How can cash flow not be the goal of an investor in rental property?"

Well, here's the deal. If someone really wants to invest in rentals and is willing to float a negative cash flow, it can, and probably will be, a great investment as long as they are in it for the long-term. The monthly cash flow might be negative at first, but over time, rents will rise and your mortgage will not (assuming 30 yr fixed - which is what you should be doing for long term investing at today's rates). At some point, the rent will catch up with the mortgage payment, and the value of the home will go up as well. Using the rule of 72 and assuming a modest average annual appreciation of 6%, you can expect the value to double about every 12 years, so if you hold the property for 24 yrs, it should be wourth four times what you paid and somewhere along the line your cash flow probably went positive (again, because of rising rents). Not to mention all the tax benefits along the way.

Obviously, none of this applies if you are only looking at the short-term. But be careful with blanket statements like the ones above. You'll just lose credibility...

Having said all of that - I do think real estate prices are high, and we will see some corrections in specific markets. I don't think the sky is falling. The only ones that need to worry are the folks that just got in and are not going to be able to hold on long enough for prices to come back. Of course, how long that takes is anyone's guess. It could be next year, or it could be a decade from now. I think it's closer to the former...

[OnMackBayou]

This was on the real estate page of AOL tonight. Do not know the source other than the page is "Powered by RealtyTrac".

Neighborhood Profile: 32459
Zip Code 32459

Year 2005 Median Loan Amount $276,000
Month May Median Loan to Sales Price Ratio 0.47%
Median Sale Price $585,000
Median Assessed Value $129,666
Median Square Feet 1970
Median Sale Price to Assessed Value Ratio 4.51%
Median Price Per Sq. Ft. $297
Median Number of Beds N/A
Number of Sales 11
Median Price Per Bedroom N/A
Last Recording Date N/A
Price Index 363.35
Change in Price from
Previous Month 38.04%

[kurt]

Good question--

Here is my answer--

1. I will pay a significant amount of long term capital gains tax reducing the amount I have to reinvest (I don't qualify for 1031 exchange).

2. There are fairly significant closing costs both on the selling, buying and borrowing sides.

3. The amount of time involved in selling then buying again is significant, especially if you are coming from afar.

4. We looked for a long time and finally decided to build because we couldn't find a resale home we really liked. If I knew I could repurchase my current house, this might be an option.

5. I bought long enough ago that prices would have to fall over 50%, and stay there, for me to be in the red.

6. I can afford the home we have even if things go south and interest rates rise.

7. We REALLY like our home and the area.

For all of those reasons, I am only going to sell if I can get a price that makes it worth it to sell. I'll then take the money and build another home sometime down the road.

If I don't sell, no big deal. We didn't buy the home as an investment. We bought it as a place for us and our kids to build memories. But, if we get lucky (I did not buy the house thinking prices would skyrocket) and the house commands a large enough price, I'll take the money and go on some really nice memory building vacations off the interest I will earn on the gain. For me, I see no real downside either way.

I detect a paradox.

[Bob]

I detect a paradox.bingo

[FoX]

In the absence of a substantial cash flow, a good rental is one that shows no net gain on paper at the end of the year, if that makes sense for your overall picture. A negative cash flow might be desired.

It is often desireable to enter into a situation that might have zero or negative flow, in order to acquire a desired property which is expected to increase in value, and/or feature rents that will rise in good measure.

There are many property owners in SoWal, who easily afford to buy property with a substantial amount down (if not all cash), and have rents only cover a portion of expenses.

[Philip_Atlanta]

This was on the real estate page of AOL tonight. Do not know the source other than the page is "Powered by RealtyTrac".

Neighborhood Profile: 32459
Zip Code 32459

Year 2005 Median Loan Amount $276,000
Month May Median Loan to Sales Price Ratio 0.47%
Median Sale Price $585,000
Median Assessed Value $129,666
Median Square Feet 1970
Median Sale Price to Assessed Value Ratio 4.51%
Median Price Per Sq. Ft. $297
Median Number of Beds N/A
Number of Sales 11
Median Price Per Bedroom N/A
Last Recording Date N/A
Price Index 363.35
Change in Price from
Previous Month 38.04%

I find the "Median Loan to Sales Price Ratio" a very interesting number - 47% (a sample of 11 sales, I know :) ).

I've always assumed that one of the major drivers of investment/2nd homes is those individuals moving cash from the markets to real estate. This 47% would support that happening. Thus, a predictor of the future would be watching the ratio and watching the ebb and flow of money pouring in and out of the markets.

What do you guys think? Where can we get this stat in a broader sense (tracking it's history would be interesting).

[SHELLY]

What actually is the consequences for people holding vacant lots and who don't build a home in the time specified? Is the punishment tar and feathers or just a sharp smack on the snoot with a rolled up newspaper. :confused:

[Philip_Atlanta]

What actually is the consequences for people holding vacant lots and who don't build a home in the time specified? Is the punishment tar and feathers or just a sharp smack on the snoot with a rolled up newspaper. :confused:

$$$ - fines from the developer/HOA.

[OnMackBayou]

For our brothers (and sisters) to the east:

Neighborhood Profile: 32413
Zip Code 32413

Year 2005 Median Loan Amount $213,960
Month May Median Loan to Sales Price Ratio 0.72%
Median Sale Price $298,350
Median Assessed Value $83,112
Median Square Feet 1308
Median Sale Price to Assessed Value Ratio 3.59%
Median Price Per Sq. Ft. $228 Median Number of Beds 3
Number of Sales 22
Median Price Per Bedroom $99,450
Last Recording Date N/A
Price Index 259.43
Change in Price from
Previous Month 40.51%

[skier]

I detect a paradox.


Par-a-dox
Pronunciation: 'par-&-"däks
Function: noun
1: a tenet contrary to received opinion. 2: a statement that is seemingly contradictory or opposed to common sense and yet is perhaps true.
(From Merriam-Webster)

Not sure how you defined paradox in relation to my statements. But, no doubt, they stand true for us. I don't think of my situation as a paradox as much as I do a no lose situation for me and my family.

A sale at a high price reaps a huge windfall--enough to finance lots of cool trips, part of retirement, etc. and allows us to rent a palace in SoWal anytime we like. If it doesn't sell at a high price, we are right back to where we started when we originally bought the house-- a really great home in a great location where I don't have to worry about making reservations, checking in, checking out, hauling bikes on the back of my car, packing clothes, etc. I can just pick up and go to the beach anytime I like.

No lose!! :clap_1:

[WaltonUndercurrent]

Comparing square footage costs is difficult. You almost have to look at streets rather than neighborhoods and certainly the entire area for comparisons. Someone may not be willing to pay 1200 a square foot for a house on Indian Woman while the cost may be a deal in Seaside or on the Gulf or Burnt Pine. While demand has been strong in South Walton, it's been even stronger than reported averages in some neighborhoods and communities. I think there are still too many broad generalizations being made about the market. Investers need to think narrower, not broader, and that requires some thought and research which may be a new concept to investors since location hasn't seemed to matter in the last few years.

[FoX]

Par-a-dox
Pronunciation: 'par-&-"däks
Function: noun
1: a tenet contrary to received opinion. 2: a statement that is seemingly contradictory or opposed to common sense and yet is perhaps true. 3: a situation in which a poster continually beats a dead horse, upon which he is riding.
(From Merriam-Webster)


I believe he was referring to the fact that your reasons for not selling are in part, precisely what many of us have tried to relay to you as the reason why things might be a little different here.

A house on the north side of Seaside priced at over $1,700/sf went under contract today. It did sit on the market for 65 days though. :biggrin:

[Smiling JOe]

What actually is the consequences for people holding vacant lots and who don't build a home in the time specified? Is the punishment tar and feathers or just a sharp smack on the snoot with a rolled up newspaper. :confused:
For some, the developer may get the lot back at cost to sell to someone else.

[skier]

Way cool--I'll take a 29% discount from the $1700 per square foot. Any takers?

[skier]

Boy--these real estate threads sure are a popular place to hang out these days. Who da thunk so many messages would be traded on one or two threads. This is fun stuff. Never really done much posting on the web. But, I'm having fun here. I like the banter. :clap_1:

[Cavallino]

--------------------------------------------------------------------------------

After hearing the results of the recent Aly's Beach sealed bid offering, I am not so sure the bubble is bursting. Here are the results of the Aly's Beach Offering from a reliable source...

Fact #1 - It was a sellout
All Lots were sold during the sealed bid process

Fat #2 - Premium
The Lots were sold at an average 4% premium over minimum bid price.

Since the minimum bids on these lots were priced at a highest level to begin with......it appears to me that this result is indeed evidence that the upward trend is continuing.

I hope this is helpful.

Doug

[Bob]

Boy--these real estate threads sure are a popular place to hang out these days. Who da thunk so many messages would be traded on one or two threads. This is fun stuff. Never really done much posting on the web. But, I'm having fun here. I like the banter. :clap_1: Skier, Try "The World is Flat" byThomas l. Friedman. I think you might see how international buyers may just be the next wave. P.C. airport may be just the kickstart. In today's headlines, Chinese firm bids for UNOCAL oil. There's so much capital out there. Most foreign buyers bring cash!

[Franny]

I'm not sure what you guys have been arguing about over the last few days but I have a few things to say, As for as Skier the last thing the real estate market needs is negativity. You and other skepics scare the hell out of people wishing to invest. Point one the problem with our market today is we have investors (once buiders) flippin land. I, for one have strongly encouraged to BUILD on the lots they have purchased rather than resale. There has been a lot of "talk' in the last few days about Realtors decreasing the prices of real estate for the sake of a "good buy". We don't decrease the price with out the owners permission..so give me a break...By the way I have a lot of happy buyers and sellers!!!!!

[Franny]

Realtors raise prices so they can then drop them at advertise the property as "Price Reduced!" I'm seeing lots more of that lately. :floor:
Let me just note that Realtors don't determine the prices..the seller does this remarkable work

[SHELLY]

Bob wrote: >I think you might see how international buyers may just be the next wave. In today's headlines, Chinese firm bids for UNOCAL oil. There's so much capital out there. Most foreign buyers bring cash!<

The European economy is in the ditch, the Austrialian economy is in the ditch, the American economy is heading for the ditch---that essentially leaves the Chinese to buy up the Panhandle properties. Just means we're going to have to get a helluvalot more American All-You-Can-Eat Buffets in the area--problem is, with the housing prices promising double digit increases every quarter, where are the $6.15 per hour workers going to live? :idontno:

Just another "conundrum" to figure out.

[Franny]

Hmmmmm....where's Joe I always love hgis input... :clap_1:

[Franny]

For some, the developer may get the lot back at cost to sell to someone else.
Hi Joe,
yes in our experience in Watercolor if you dd not build wthin a specifid time we were fined Actualy that happened months ago. However we have seen where other lot owners or Arvida lot owners are not fined . Anyway da da da we are happy building..hope to see you soon

[alongfortheride]

I'm not sure what you guys have been arguing about over the last few days but I have a few things to say, As for as Skier the last thing the real estate market needs is negativity. You and other skepics scare the hell out of people wishing to invest. Point one the problem with our market today is we have investors (once buiders) flippin land. I, for one have strongly encouraged to BUILD on the lots they have purchased rather than resale. There has been a lot of "talk' in the last few days about Realtors decreasing the prices of real estate for the sake of a "good buy". We don't decrease the price with out the owners permission..so give me a break...By the way I have a lot of happy buyers and sellers!!!!!

What do have to say about the realtors speculation? I hear that up to one third of the recent real estate purchases were made by realtors. Obviously, this was for speculative purposes. Many were investors that became realtors to save on transaction costs. Unfortunately, I think the realtors are part of the problem with the flattening or decreasing of the prices recently in a more fundamental way.

[Smiling JOe]

Here is a snapshot of statistical data from yesterday. Out of the 69 listings in this area that changed price yesterday, 64 of the listings dropped in price, while only 5 increased. These price changes are only a snapshot of one day, but the trend began over the last two weeks. As I stated before, I don't think this indicates anything more than people put such high prices on their property that it could not sell. How many times can you sell the same property for 100% returns? - A few, but it sure slows down after you get out of most people's price range. Someone else mentioned new things coming on line such as the PCB airport. This will definitely open the area up to new investors from outside the South East. Compared to other warm-climate, beautiful coastal areas around the world, SoWal is still a good buy.

Just my thoughts.

[SoWalSally]

Good point about realtors holding stuff. They've been snapping up preconstruction like popcorn the last few years. I'm sure many have fat bank accounts but I'll bet many are overextended.

If general sales go flat then the realtors are not getting cash flow. My guess is that we'll see a lot of this stuff come on the market in a short period of time, which in itself is not that big a deal, but it might start other folks to worrying.

[sunshine]

A house on the north side of Seaside priced at over $1,700/sf went under contract today. It did sit on the market for 65 days though. :biggrin:

I believe that the listing square footage was for the main house only - 1600 sq ft. If you look at the description there's a 650 sq ft guest house also. That brings the price per ft to a meager $1,222 (if the contract was for the list price of $2,750,000)

[beachmouse]

Skier, Try "The World is Flat" byThomas l. Friedman. I think you might see how international buyers may just be the next wave. P.C. airport may be just the kickstart. In today's headlines, Chinese firm bids for UNOCAL oil. There's so much capital out there. Most foreign buyers bring cash!

The rumors I've heard are that they're already here, and snapping up a ton of businesses in Destin. Depending on who you talk to, it's the Russians and the Israelis, or maybe Jewish Russians. There's even a small Russian internet cafe and grocery in Destin in the Sunsations Plaza. (I keep meaning to go in there and see if they've got any good chocolate)

There's a sandwich shop by me that got bouught by a couple from the UK last year. It's my understanding that there's a big pool of Europeans who would love to own & run a small business in the Florida sun. Great climate, and fewer regulations & rules they have to deal with than in the EU. Normally they go for the bigger cities like Orlando/Tampa/Miami, but I think word is starting to get around about this area.

[Bob]

Bob wrote: >I think you might see how international buyers may just be the next wave. In today's headlines, Chinese firm bids for UNOCAL oil. There's so much capital out there. Most foreign buyers bring cash!<

The European economy is in the ditch, the Austrialian economy is in the ditch, the American economy is heading for the ditch---that essentially leaves the Chinese to buy up the Panhandle properties. Just means we're going to have to get a helluvalot more American All-You-Can-Eat Buffets in the area--problem is, with the housing prices promising double digit increases every quarter, where are the $6.15 per hour workers going to live? :idontno:

Just another "conundrum" to figure out. Huge problem. Most resort areas go begging for help.

[beachmouse]

The Taco Bell/KFC by the outlet mall was advertising that they were willing to pay $10/hour.

[kurt]

Cracker Barrel has a $400 sign on bonus. :shock:

[Smiling JOe]

The rumors I've heard are that they're already here, and snapping up a ton of businesses in Destin. Depending on who you talk to, it's the Russians and the Israelis, or maybe Jewish Russians. There's even a small Russian internet cafe and grocery in Destin in the Sunsations Plaza. (I keep meaning to go in there and see if they've got any good chocolate)

There's a sandwich shop by me that got bouught by a couple from the UK last year. It's my understanding that there's a big pool of Europeans who would love to own & run a small business in the Florida sun. Great climate, and fewer regulations & rules they have to deal with than in the EU. Normally they go for the bigger cities like Orlando/Tampa/Miami, but I think word is starting to get around about this area.

In the last few months, I have personally met with Russians and Germans seeking large tracks of land in this area, and I know of other people who have met with other Russians who were also on the hunt.

Two days ago, I met with a Korean gentleman looking to build dorms north of the Bay. He plans to import contract labor from other countries for a fee, house them for a fee, and deliver them to work locations. Look all across America and you will find this being done. He already is doing this in other areas, and if he comes to this area, he will be extremely successful in that business.

[beachmouse]

Though the Germans have always (or at least for the past 20 years or so) been something of a slow trickle into the area. A decent number of them seem to be friends or business aquaintances of Raimund Hernden, the German businessman who bought and developed Bluewater Bay.

I would be concerned about the Korean businessman's model. I've seen this in other places where it has turned out to be illegal immigrants who end up making $3/hour, and living in conditions that are very, very poor.

[Smiling JOe]

Though the Germans have always (or at least for the past 20 years or so) been something of a slow trickle into the area. A decent number of them seem to be friends or business aquaintances of Raimund Hernden, the German businessman who bought and developed Bluewater Bay.

I would be concerned about the Korean businessman's model. I've seen this in other places where it has turned out to be illegal immigrants who end up making $3/hour, and living in conditions that are very, very poor.

I can assure you that the business model you refer to is not the type business this particular person is operates.

[SHELLY]

>>There's a sandwich shop by me that got bouught by a couple from the UK last year.<<

Anyone whose been to the UK and have seen their "idea" of a sandwich will know this place ain't gonna make it. For those who haven't been across the pond, a British sandwich is essentially a piece of bread, a thin pink line (which is 1 thin slice of ham), salad (i.e. lettuce), a schmeer of butter, and another piece of bread. :blink:

Give me some goomba from NY who REALLY knows their way around a sandwich--now you're talkin'!! :clap_1:

[SHELLY]

>>Two days ago, I met with a Korean gentleman looking to build dorms north of the Bay. He plans to import contract labor from other countries for a fee, house them for a fee, and deliver them to work locations. Look all across America and you will find this being done. He already is doing this in other areas, and if he comes to this area, he will be extremely successful in that business.<<

So this is what all this development is leading up to....sounds as if we may have to dust off our copy of the Emancipation Proclamation. :(

[Cork On the Ocean]

Holy Cow, I'm gone for a week and our real estate market is crashing :eek: . Someone should have told all the buyers that I've been working with because I haven't had time to breathe!

With all due respect Mack, I think these reported figures are off a bit. From the Emerald Coast MLS, it looks like from 1/1/05 to present, 230 residences went under contract in zip code 32413. The average price was $768,004 and the average sq foot price was $491.45. Median price was $614,500.

Total230$768,004$491.45$614,500$125,000$4,300,0009 2

Also, I read recently that this zip code is a poor sampling because the zip code actually runs from Seacrest Beach on 30 A to past Tidewater on Panama City Beach and there's such a vast difference in property values that it's not even close to being indicative of property values on 30A. For instance, looking at just the part of 30A that is in this zip code, there were 83 pendings for the same price (pretty good percentage of the zip since we don't have 29 stories per 200 running feet) The Average Price Pending in the 30A portion was $1,007,952, the median price was $842,500 and the average price per sq foot was $551.81.

2005 (jAN-jUNE)

Total82$1,007,952$555.81$842,500$234,500$4,300,000 88

Just wanted to clear those prices up since this board is for people with interest in South Walton and the area code apparently includes areas of Bay County which skews the values downward significantly.

Also, for those grim reapers out there, during the same time frame in 2004, There were about 33% more sales (not a crash in my opinion) which may be due to the fact that the Alexander went under contract in that time frame and there really was no new preconstruction going to hard contract during those months this year. I do think that there has been a reduction in sales since last year. Of course last year was the hottest since Lord knows so we're still cool in my opinion. Don't have a calculator handy but looks like the appreciation in the 30A section of 32413 has been slightly over 50% in the past year which is still higher than most areas of the country. :clap_1:

2004 (jAN-jUNE)

Total122$626,445$348.99$600,000$99,500$3,115,00091


I popped onto the board tonight because I received an email about the board stating:

"I have been reading all the doom-and-gloom prophecies about condos in the South Walton area" " the fallout is that a lot of people who are considering investments in the South Walton area think there's a dark cloud overhead".

My first question after reading this thread would be to ask Skier if he owns property here or is he just trying to drive the prices down so he can purchase some :) (this was the inference in the email I received). Also, has he ever spent enough time here to REALLY know the area and it's assets. I have been all over the world and south walton is truly unique. It has become the prototype design for urban sprawl as anyone familiar with new urbanism will agree. Does this mean we are immune to changes in the economy. Absolutely not. But lets get real.

1) The baby boomers have 20 years to go before they've peaked and the trend has ALWAYS been for people to retire in Florida.

2) The state's population is predicated to be 100 million by 2050. "Roughly every 20 years since 1830, Florida's population has doubled, and doubled, and doubled again," said Allen Overman, a professor in the Agricultural and Biological Engineering Department at the University of Florida in Gainesville."

3) We are the 2nd most driven to location in the state next to Disney.

4) The new airport will expose many people from all over to our area.

The list goes on and on. This is not Deluth, Montana nor is this Miami Beach or even Cape Coral. Generalizations just can't be made and people should look more closely at what's really happening here. My personal experiences are that people LOVE this area and want to purchase once they experience it's beauty.:wub: The only question is whether they can afford it or not. It sometimes seems almost like a caste system regarding our real estate.

While our beaches have gotten pricey, they are still much less than comparable coastal Florida areas. Inland (15 minutes to the beach) is still very affordable. When I compare Freeport to Clearwater which is essentially the same relationship to the beach area, I know that there is so much growth to come to this area and the people that are "naysaying" remind me of my parents when they hit Clearwater in 1968 and didn't buy the "woods" along US 19. In the short term anything can happen but when we're gone, our children will certainly be happy that we found the Florida Panhandle.

Numerous news articles within the past 24 hours show continuing increases in real estate values: El Paso - up 17%, Real estate surge continues: South Tahoe median home price hits $460,000, Florida Today - House prices jump $7000.....

Will there be a downturn? I'm sure there will but with a 50% increase this year, I'll be happy with a downturn to 25% or even 15% next year. Sure beats my money market. And then there's always the impending upturn that follows the downturn. I'm here for the long haul and what a place to be! :biggrin:


For our brothers (and sisters) to the east:

Neighborhood Profile: 32413
Zip Code 32413

Year 2005 Median Loan Amount $213,960
Month May Median Loan to Sales Price Ratio 0.72%
Median Sale Price $298,350
Median Assessed Value $83,112
Median Square Feet 1308
Median Sale Price to Assessed Value Ratio 3.59%
Median Price Per Sq. Ft. $228 Median Number of Beds 3
Number of Sales 22
Median Price Per Bedroom $99,450
Last Recording Date N/A
Price Index 259.43
Change in Price from
Previous Month 40.51%

[Cork On the Ocean]

Skier, I apologize. :oops: After reading other threads, I found that you do own property in the area. It would therefore not be in your best interest for you to be trying to drive the demand down for this area with your posts of doom for 30A.

Your post about Watercolor decreasing in price seems to overinflate one instance. Overall, Watercolor lots are way up from last year. I saw a couple of people significantly reducing prices in Rosemary last year to beat the buildout time but this didn't mean that the market was crashing. Just the opposite - we were stronger than ever and the people dumping their real estate just sold quicker.

There are many circumstances why someone might need to liquidate property and without a trend (which would be more than 1 or 2), I certainly wouldn't be making drastic predictions. The facts are that the appreciation continues to rise on 30A. In fact Seacrest Beach has risen about $10/sq ft every week since the season started. :biggrin:

[Smiling JOe]

Anyone whose been to the UK and have seen their "idea" of a sandwich will know this place ain't gonna make it. For those who haven't been across the pond, a British sandwich is essentially a piece of bread, a thin pink line (which is 1 thin slice of ham), salad (i.e. lettuce), a schmeer of butter, and another piece of bread. :blink:

Give me some goomba from NY who REALLY knows their way around a sandwich--now you're talkin'!! :clap_1:
AMEN! Our special today is a Bland Sandwich with Chips (which really means fries)

[SoWalSally]

Walton Sun:
BY PASHA CARROLL SUN REPORTER

While South Walton is still a hot spot for real estate, the market seems to be softening ever so slightly.
Homes are taking a few weeks longer to sell and prices, still astronomically high compared to undiscovered South Walton, have leveled and are hovering.
“What we saw last year was really amazing, I doubt it will happen again,” local Realtor Associate Bobby Johnson said. “It overshot itself. Now it is just backtracking and simply readjusting.”
“We defiantly inflated our prices on this peninsula, because we could,” local real estate developer John King said.
Just because prices have stabilized does not mean the bubble has burst, as national reports have eluded. It just means Realtors will have to work a little harder, Johnson said.
“This is the real deal. We made crazy money, now we just have to work for it,” Johnson said.
“We are making hay while the sun shines,” King said.
And the sun is still shining brightly over South Walton. Only now a few clouds might offer minutes of shade.
“When people talk about slowing down, they are talking about sales time,” King said. “It used to take 30 days to sell, now it might take 90 days.”
“Typically it takes six months to sell a home,” Johnson said. “Realtors were doing it in hours. We got a little spoiled.”
Johnson does not think however, that County Road 30A will ever see a decrease in sales. If anything he says the road will become more elite.
“I believe in 30A. That’s what it is all about,” Johnson said.
He said he continuously sees celebrities enjoying 30A’s beauty. King said for the 240 lots he has platted and under construction, there are still 500 people on the waiting list.
With the market a little slower, Johnson hopes life will return to normal and the South Walton real estate market will be more realistic.
“If it kept up like that, I couldn’t have kept up,” Johnson said. “The stress level was too much.”
He said now selling real estate will be more like it was when he got in the business four years ago, hard work and the craft of handling an ever changing market.
“Now we can get back to living a normal life,” Johnson said.

[SoWalSally]

:lolabove: SoWal Sally's interpretation of the above article:

We have no idea what's going on and we're too busy counting our money to care.

[ecopal]

hi,
I am impressed by such great a great intelligent discussion: very interesting.
Based on my observations-I do not claim any expertise-I would rather be a buyer than a seller right now.
In comparison to other years the real esazte market seems to be taking a breather and if someone has to sell for what ever reason a buyer maybe able to get a "bargain price".
I won't worry about a bubble burst here until the California market slows which it isn' yet.

Based on my travels 30a offers the best coastal area south of New England and east of california/oregon. where else can you get high elevation property with beautiful lakes and forests and park land.
I would not want to buy or own in such cookie cutter highrise areas such as PCB or Destin which are not as unique as 30A.

If I was buying here I would buy vacant lots on 30A in walking distance of the beach( except possibly some
St. Joe over priced property a mile from the beach) with no build out time. Why no build out time?-so that if skier happens to be right my overhead would be minimal. The risk of not buying on 30a now to take advantage of some bargains maybe the greater risk if you want to retire and live here sometime.

[Camp Creek Kid]

Some advice needed:

To build a permanant house (for a family with small children), but wanting to make the best investment possible would you

a) buy a 75x142 on 30A within walking distance to beach (small yard, smallish house (perhaps w/ a gulf view), no amenities but a backyard pool and beach)

or

b) buy a much larger lot for the same price at Wild Heron (large yard, 4000 to 5000 sq. ft. house, golf course, tennis, lake access, etc. but it is Bay County and you have to take a shuttle to the beach).

Large houses at Wild Heron and mid-sized houses on non-development streets of eastern 30A are selling for same price per square foot.

Just wondering what y'all thought. Thanks

[kurt]

Some advice needed:

To build a permanant house (for a family with small children), but wanting to make the best investment possible would you

a) buy a 75x142 on 30A within walking distance to beach (small yard, smallish house (perhaps w/ a gulf view), no amenities but a backyard pool and beach)

or

b) buy a much larger lot for the same price at Wild Heron (large yard, 4000 to 5000 sq. ft. house, golf course, tennis, lake access, etc. but it is Bay County and you have to take a shuttle to the beach).

Large houses at Wild Heron and mid-sized houses on non-development streets of eastern 30A are selling for same price per square foot.

Just wondering what y'all thought. Thanks

The amenities and type of lifestyle are quite different so go where you are more comfortable. The former would make a much better rental if you ever want to do that.

Some people would give anything to be able to walk to the beach or have a view. The market will always be strong for that.

As far as the actual appreciation, that's up in the air. I believe Wild Heron will be very exclusive and hard to buy in one day when it gets filled up with rich retirees and young professionals.

[STL Don]

If it is a primary residence for a family with young children, don't you have to take into account differences in school districts and proximity to other children for after school and weekend fun? How many young families will you find at Wild Heron?

[beachmouse]

The flip side is that if you've got small children do you want to be living next to a short term rental where the crowd may get a bit rowdy from time to time.

[Smiling JOe]

The risk of not buying on 30a now to take advantage of some bargains maybe the greater risk if you want to retire and live here sometime.
Interesting point of view. :clap_1: If looking to hold for the long term, I could not agree more. Well said.

[Camp Creek Kid]

If it is a primary residence for a family with young children, don't you have to take into account differences in school districts and proximity to other children for after school and weekend fun? How many young families will you find at Wild Heron?

Not many young families at Wild Heron or any part of 30A for that matter--we're all pretty scattered around. We already live in a rental community and SOME renters can be annoying and loud. I'm just wondering, all other things being equal, what y'all think the better long-term investment would be.

[kurt]

I think it's pretty close CCK. My gut says that if you can get a gulf view you're golden. If it turns out the other way, well then being able to walk down to the beach with your kids in the evening is something money won't be able to replace for you or them.


Whatever the case, if you think it's a toss up too, then go with your instinct.

[Camp Creek Kid]

You're right, Kurt. Our instinct says to stay on 30A. We've lived in the area for 4 years and it feels like home. While the amenities at Wild Heron would be very nice, I don't think I could take the bugs! We're planning to build and live in the house awhile so as a long-term investment you're right that either would be fine.

Thanks

[kurt]

You're right, Kurt. Our instinct says to stay on 30A. We've lived in the area for 4 years and it feels like home. While the amenities at Wild Heron would be very nice, I don't think I could take the bugs! We're planning to build and live in the house awhile so as a long-term investment you're right that either would be fine.

Thanks

Make sure you have an outdoor shower and plenty of storage for beach toys. ;-)

BTW - I don't know if bugs are allowed in Wild Heron. :lol:

[Camp Creek Kid]

Make sure you have an outdoor shower and plenty of storage for beach toys. ;-)

BTW - I don't know if bugs are allowed in Wild Heron. :lol:

What about kids and all their beach toys, bikes, scooters, trampolines (can't have one anyway because of homeowner's insurance), skim boards, etc. Our house in Wild Heron would look like the Clampett's. Although they had a very nice house, there were critters swimming in the pool!

[kurt]

What about kids and all their beach toys, bikes, scooters, trampolines (can't have one anyway because of homeowner's insurance), skim boards, etc. Our house in Wild Heron would look like the Clampett's. Although they had a very nice house, there were critters swimming in the pool!

Cement pond. :floor:

[RiverOtter]

What about kids and all their beach toys, bikes, scooters, trampolines (can't have one anyway because of homeowner's insurance), skim boards, etc. Our house in Wild Heron would look like the Clampett's. Although they had a very nice house, there were critters swimming in the pool!

One of my biggest problems finding a house down there is one with storage (read garage). Where do people store bikes, and other toys that the salty air would destroy?

[Camp Creek Kid]

We have 3 bikes in a corner of our great room.

[RiverOtter]

We have 3 bikes in a corner of our great room.

Where do you store, roller blades, scooters, skateboards? :biggrin:

[Camp Creek Kid]

We store almost everything in the house, but we have a lot of closets. We put all the sports equipment in the closet under the stairs. If your house is on pilings (even short ones) there is enough crawl space underneath to store things like shovels, ladders, etc. Stuff rusts, but it would rust in a garage or shed too. We have our plywood for hurricanes sitting on 2x4 "shelves" under the house. We use our attic a lot, but we have air conditioned storage room up there.

The first thing you'll learn when you move to the beach is that we Americans have too much stuff. It is easier to get rid of things when you don't have room to store them. And you're more careful about what you buy. It is actually quite liberating. Part of the simplified lifestyle of living at the beach is that you don't have a house full of junk.

[RiverOtter]

The first thing you'll learn when you move to the beach is that we Americans have too much stuff. It is easier to get rid of things when you don't have room to store them. And you're more careful about what you buy. It is actually quite liberating. Part of the simplified lifestyle of living at the beach is that you don't have a house full of junk.

Amen that... Preach on ... :biggrin:

[FoX]

http://www.affluenza.com/images/heads/small/about-sympt.gif


A loss of personal and professional productivity
A loss of future motivation
An inability to delay gratification or tolerate frustration

A false sense of entitlement
Low self-esteem

Low self-worth
Loss of self-confidence

Preocupation with externals
Depression
Self-absorption

High regard for outer self/low regard for inner self
"Survivor's" guilt/shame
Sudden wealth syndrome
Sudden poverty syndrome
Workaholism
Addictions
Other compulsive-addictive behaviors: i.e. rampant materialism and consumerism





The psychological dynamics of affluenza are more complex, and more harmful, than one popularized definition of affluenza as merely "a rich person's disease." People across all socio-economic levels buy into the overriding value within our culture that money solves all problems, thus denial of money-related difficulties is supported by society. Many sufferers of affluenza hesitate to seek help.

[Coast is Clear]

As a message board 'virgin' and content lurker, I wanted to add some storage comments.

We have three teens who generate more storable junk than you can shake a stick at. It probably does not help I am a bit of a storer of do-it-yourself products. We just finished a house in Seaside and a KEY part of the plan was putting an outside storage closet on the house that accessed under the staircase. 3 bikes, beach chairs, umbrellas, tools, etc. all fit in a tightly sealed area.

Best move I ever made.

[FoX]

:welcome:

[Just_In_Thyme]

We had the same problem it seems. We looked and looked, and none of the houses had storage space. We finally found one that had storage for the owner under the stairs. We converted another closet. Couldn't do without them. Too much junk to haul back and forth from Atlanta.

[hutch]

If you are building a new house. Ask your builder how much room is above the garage for storage. Most of the time there is a great deal of space that is closed off and never used. You may be able lay a sub floor and have a walk up stair case built in your garage. Another idea in under stairs to finish in as a closet.

[yorkshireman]

AMEN! Our special today is a Bland Sandwich with Chips (which really means fries)

As someone who lives in the UK who bought a lot in Rosemary last year with the intention to build a vacation home I am hoping that my fellow countrymen and the Eurotrash don't discover South Walton any time soon.

I like it the way it is. :razz:

Very unfair libel on our food by the way. You will be saying we don't have dentists next...

[kurt]

As someone who lives in the UK who bought a lot in Rosemary last year with the intention to build a vacation home I am hoping that my fellow countrymen and the Eurotrash don't discover South Walton any time soon.

I like it the way it is. :razz:

Very unfair libel on our food by the way. You will be saying we don't have dentists next...

:lolabove:

Good beer. ;-)