Mexico Beach to Cape San Blas Market Update – 1Q 2022

Our hot real estate market has continued with values rising substantially from Mexico Beach to Cape San Blas. We saw a steady rise in values from the lows in the early 2010’s until a much more rapid increase in the last 2 years. It’s a strong seller’s market with buyers having to settle for what they can if they want to make a purchase. The graph below shows how much prices have increased over the last 10 years and just the last 2 years. I’m pretty conservative, and it’s hard to see that things can keep going up, but most market factors keep pointing up. There are enough buyers actively trying to buy right now that it’s clear prices will rise through the summer unless something drastic happens to the national economy. For every buyer that leaves the market due to feeling prices are too high, there seem to be two behind them that feel this area is a great value compared to markets like 30A/Destin. I recently read a market report where average home prices in Rosemary Beach had passed $4 million and passed $5 million in Alys Beach. That makes $453K sound a lot better. We are meeting multiple new buyers each week that want to be a part of this area. When you combine this much demand with a near all time low supply, it’s hard see prices not continuing to go up. The Cape market simply has more high end homes and the North Cape market remains on fire and a popular 30A alternative. There were 58 sales of a million dollars or more on Cape San Blas/Indian Pass, 10 from Mexico Beach to WindMark, and none in Port St. Joe. The North Cape had 3 homes sell for over $3 Million, which is a price never seen before 2021.

Cash buyers were prevalent once again with over half of the sales reported on MLS as being cash purchases. The high percentage of cash buyers traditionally translates to a market being less impacted by interest rate increases. The averages days on market in 2021 was 77 with many sales happening in a day or two. Most sellers didn’t need to negotiate much with sales prices averaging 97% of their asking prices.

Vacation rentals remain strong with many owners continuing to increase and achieve bookings at higher weekly rates. I don’t have a way to track how many buyers will rent their homes out, but it’s a large percentage and rental rates are a huge driver in these price increases. I don’t see why rental rates would go down and they’ve gone up each year for at least the last 15 years, but the one thing that makes me a little nervous with this market is the number of buyers that are counting on high rental income for their purchases to make financial sense. We’ve seen values in neighborhoods that don’t allow vacation rentals increase less than those that do. The amount of people that want to buy and that want to vacation here continues to steadily increase with more homes selling in 2021 than ever before. 

98 Real Estate Group had a record year closing over $93 Million in sales and finished as the 1^st place brokerage for the Mexico Beach to WindMark Beach market for the 9^th year in a row. Mexico Beach is still very much in the rebuilding phase from Hurricane Michael. It was big news that Subway opened in a gas station last week. Buyers haven’t minded what’s not here right now and are buying now with a vision of what Mexico Beach will be be in the future.

We are looking forward to the Mexico Beach Gumbo Festival which will be on February 19 and raises money for the 4^th of July fireworks.  Michelle and the boys are doing great, and I’m still bad at golf. Life is good, and we’re looking forward to warmer beach and fishing weather.

Cheers,
Zach Childs
Broker/Owner 98 Real Estate Group
#1 Producing Real Estate Company Located in Mexico Beach2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020 & 2021
Voted #1 Agent on The Forgotten Coast- 2013 and 2015
Cell: 850-819-0833
Fax: 888-382-9608
WWW.MEXICOBEACHSALES.COM
WWW.98RealEstateGroup.com