Monthly Market Update – Mexico Beach to Cape San Blas, FL- April 2014

I tried to keep the April market update short and sweet, but it kept growing with information I felt was important.  Sales are continuing at a fairly brisk pace.  There have been 65 closings since March 1st which makes a  total of 143 sales for 2014 with combined selling prices of $23,740,320.   There are also another 90 properties currently under contract.  Overall, buyers have still been able to find relatively low priced properties or sellers that have been willing to negotiate.  Buyers seem to be confident paying somewhere in the 10%-15% range over bottom of the market prices, but not much more than that.    Everything is pointing to 2014 being a healthy year for the market with moderate gains in property values.  For a comparison to last year, there were 155 sales closed at this time totaling $24,667,608.  Most of us predicted slightly less sales this year as values rise and the number of distressed properties decreases.  There are certainly some areas of the market hotter than others, and some buyers are getting much better deals than others.

There’s another reason that buyers who want a nice single family home won’t pay but a certain price for an existing home.  The availability of quality and drastically reduced vacant lots has led many potential homebuyers to build new homes instead of buying existing homes.  There aren’t as many of these great lot deals left, but 725 vacant lots have been purchased since 2011.  In comparison to peak prices, lots have been and are still discounted much more than existing homes.  The amount of building going on is a big positive factor that’s not immediately raising home prices, but it’s great for improving the quality of our homes in the area.  The number of people building is near an all time high rivaled only by the boom of 2004 and 2005.  Most builders are currently building more or as many homes than they have ever been building at one time.  In certain cases, it makes a lot more sense to buy and build exactly what they want when it costs less to do that than to buy a comparable 10-20 year old house.

The Cape San Blas market seems to have the most momentum right now followed by Mexico Beach.  The Cape had a drastic fall in vacant lot prices and is now red hot with building activity.  WindMark has also seen a good amount of building on lots that people have been able to purchase at 60-90% discounts from what they sold for in 2004-2005.  I received the Gulf County building statistics dating back to 1/1/13.  The statistics for Gulf County do not include the City of Port St. Joe, Mexico Beach, or Phase I of WindMark Beach.  Just for Gulf County, there have been 91 new homes to start construction since 1/1/13 and there are 49 homes currently under construction.

I’ve been preaching for years how the vacation rental market somehow keeps getting better and better and has been driving sales.  CNBC had an article about the improving vacation rental market and how sales on vacation homes have been improving.  Cape San Blas was noted as one of 3 markets where owners are able to increase rates and the three markets mentioned that are seeing more demand were Mexico Beach, FL, Point Pleasant, N.J. and Manteo, N.C.  I thought that was great press for us that 2 of the 6 markets mentioned were located right here.  The potential of high rental income makes investing in certain properties a much better financial decision to many buyers.  Here’s another article recently published on Yahoo that highlights the spike in vacation home sales.

There was a pretty neat online contest with a March Madness theme that picked 64 pet friendly areas and let people vote on their favorites to move on in the competition.  Cape San Blas was matched up and beat a number of much larger areas including the following:  Asheville, North Carolina; Ocean City, Maryland; Myrtle Beach, South Carolina; Woodstock, Vermont and Bar Harbor, Maine.  Cape San Blas made it all the way down to the final 2 areas and lost by only 12 votes to Portland, Oregon.

It’s that time of year when the fishing starts to get good.  The Mexico Beach Artificial Reef Association is ensuring that we are going to have some of the best public fishing sites in the world.  This all volunteer group deployed another $183,000 worth of artificial reefs at the beginning of this month.  I’ve only been  able to go fishing twice this year.   Below is a picture from a great first trip.

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Beachside property in Mexico Beach is unique to the Mexico Beach and St. Joe Beach market.  Hwy 98 runs through this area and the highway runs next to the beach in St. Joe Beach and until about 25th Street in Mexico Beach.  In those areas, you’re either on the beach and have a highway directly behind you or you are on the other side of the highway and have to cross to get to the beach.  Property located between the highway and the beach is extremely desirable.  The St. Joe Company spent tens of millions of dollars to move the Hwy where WindMark is located so they would have more beachside property.  The area from around 25th Street to 42nd Street is the only area in Mexico Beach or St. Joe Beach that has beachside properties that aren’t just Gulf Front.  A family has owned the one mostly undeveloped block in this area for many years.  They decided this month to offer the lots they own individually for the first time.  Below is a picture of these lot and prices.  This link will show more details.
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We are continuing to produce results for our customers.  I closed on 2 houses on Wednesday and have 2 more set to close this Monday.  I’d love to help if you’re interested in buying or selling.
Cheers,
Zach Childs
Broker/Owner
98 Real Estate Group
zachchilds@gmail.com