robertsondavies
Beach Fanatic
Cheers, it is a good discussion. The really encouraging sign is that the board is completely absent of the boosters that were here in droves in 2004/2005. eyeball counts for this specific Real Estate section are way way down by my observation, and posts on these threads that discuss PRICE DIRECTION of south walton appear to be a fraction of what they were from 2004 to 2008.
I agree with you only partially. I think there are some steals, that are being snapped up, outside of the 'make believe' communities on 30A, that will pay for themselves. To me, that makes them steals, because it has always been and may well continue to be that Cap Rates in resort communities don't reach the kind of Cap Rate you'd see in a multi-family or section 8 apartment complex in Jackson, MS.,.. I think expecting a Cap Rate of 3.5% or so, is more realistic, and I agree I don't think you can even get there with a Watercolor home at 275 a foot... I think even those distress sales need to be 10% cheaper to achieve any cap rate at all, and only after a couple years of marketing effort. but alas in a deflationary or near zero inflationary environemnt, with helicopter Ben Bernanke at the helm and money becoming less valuable everday, a 3.5% cap rate aint all that bad, especially if that doesn't account for personal enjoyment and expense savings of a few weeks a year at the property for the owner themselves.
I don't know WHY the irrationality between investments persists for centuries sometimes. I'm open to hearing why the irrationality exists, and if you see it changing this century.
I'm so bulled up on South Walton now, because I think that the only people benefiting from the recovery so far, are folks with investable assets, and those aren't really the Panama City or Destin crowd, those are the South Walton buyers - PCB buyers are largely like 80% of Americans in that they have ZERO investable assets, outside of what they thought they had in home equity on their first home, and the 50K they have tied up in their 401K plan at work, that they contribute half the max to per year.
Then you take a look at the fact that 30A supply is SEVERELY limited as compared to outlying comparable areas all along the gulf coast. Why? well its simple, its b/c of the height restrictions on building beach condo's, and you have a recipe to see immediate stabilization this spring, and then . . . a moderate (not slow) price aclivity over the next two decades, as a large fraction of the well heeled in an 8 or 9 state area from Texas to Georgia, up to Tennessee and Missourri, descend on the Emerald Coast and realize what a lot of you already know... that you just "have to be" on 30A, and then anywhere else is not a substitute. It's irrational to some extent too, but that's the way people who have the money will think about the decision IMHO.
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It may be under contract, but how will it appraise? I know the usual come back to that is.... "They are paying cash.... it doesn't have to appraise.". Well, if someone has that kind of money to spend, don't you think its from hard work? I don't think they'd just fork it over on pure emotion. It has to make some sense for goodness sake. A realtor could give the current price per square.... but I'd venture a guess that it's less than half of that. The only way I can dream of someone putting in an offer like that is complete misinformation, or no information, on current comps. They just don't know the area. IDK