good bets for coastal real estate appreciation - Posted by greg

Posted by Rich[FL] on January 18, 2005 at 18:42:33:

To the west, it’s all being developed. There are spotty areas of growth to the east with lots of plans for future gtowth and investments. Mexico Beach, immediately to the east, is starting to experience the growth in prices but not quite like Panama City Beach, yet. At least no large condo projects.

Further to the east you have Port St. Joe and Cape San Blas. I haven’t been around St Joe lately but it only stands to reason the building boom will eventually reach that area. Cape San Blas is already building up with gobs and gobs of new beach-front housing and lots of beach-front rentals.

Which takes us to Apalachicola, a rather quaint, old fishing village and a stopping off point for St George Island, one of the last barrier islands in the state. Needless to say, building has almost entirely taken over that island.

Further east toward the big bend area, you have sporadic outbreaks of spectacular ocean-front housing communities with lots of wide open spaces in between. No telling how soon these areas will be bought up and developed.

Hope this helps some.

Rich

good bets for coastal real estate appreciation - Posted by greg

Posted by greg on January 17, 2005 at 20:08:06:

Looking for some insight into areas or towns along the U.S. coast (South Carolina south on the east coast - mid California south on the west coast) that would be a good investment for a second home or condo. Basically looking for a good gamble on future appreciation or an area that is undervalued (or fairly valued).

Re: good bets for coastal real estate appreciation - Posted by Bill H

Posted by Bill H on January 17, 2005 at 23:00:16:

Greg,
Rich & Dennis both gave you examples of “What could have been” on the upside. However you seldom if ever hear of “What was…on the down side”…in my opinion it is not a wise investment to invest solely for possible appreciation.

Good Luck,
Bill H

Re: good bets for coastal real estate appreciation - Posted by Rich[FL]

Posted by Rich[FL] on January 17, 2005 at 20:44:39:

The Gulf coast area of FL in the panhandle is experiencing explosive growth. Here at Panama City Beach, we’ve been having 25-30% growth PER YEAR in residential properties. Not sure how much longer this will continue - the area doesn’t have the quality job market to support these prices. I’m finding it more difficult to locate investment-grade deals: the kind that is discussed here on the board. If you’re looking solely for appreciation, this may be the place. Condos are going up everywhere around here. You can put 20% down on a preconstruction condo and wait a year and double your money by selling your position. It’s crazy. I’m considering looking into doing something like that except I don’t have the spare cash to stick into one just yet.

A coworker of mine purchased a 2BR/2BA house in Panama City Beach a couple of years ago for about $140k. Today, a house like hers in her neighborhood that doesn’t have a pool (like her’s does) sold for just over $200k.

Hope this helps.

Rich

Re: good bets for coastal real estate appreciation - Posted by Rich[FL]

Posted by Rich[FL] on January 18, 2005 at 19:06:37:

You’re quite right Bill. No matter how many other people you watch invest for the capital gains, it’s always a big crap-shoot to put YOUR money there. However, there’s still a ton of money coming into this area and has been for quite some time. There doesn’t appear to be any slow down for development projects and people to buy them out before construction ends. What I haven’t heard yet is the ratio of speculators/investors to actual end buyers who are pushing this market right now.

Remember the old addage - if you put a frog into boiling water he’ll jump out, but it you put him in cool water and heat it up slowly he won’t? Well that has happened to me here. I even had a house wiht a pool about 3 blocks from the beach I sold back in 1999 because the tenants wanted to buy it. I made about $25k on it, plus my rental income, and thought I did pretty well. I didn’t see all the money coming into the area then. It was farther out - in some more remote “vacation” communities, but all the building they were doing in Ft Walton Beach to our west finally caught up and we started building condos here. Where was I? Enjoying the warm water - and trying to figure out how to balance my 12-hr work days with investing activities. My $75k beach house I purchased for $45k is now worth about $200k. Descent 3BR/2BA houses are $175k+. A couple of weeks ago I heard that there were only about 5 houses listed on the MLS UNDER $100k, and those were junkers (no, haven’t put a contract on those yet). A local real estate radio show was talking about how an investor can put a down payment on a pre-construction condo, keep it for a year, sell your position to make a quick $50-$75k, and do a 1031 into another preconstruction condo! They even had 1031 exchange experts on their radio program to help explain the process!! It’s crazy here right now, sort of like S. California.

Yes, there are downsides. What if interest rates rise? What happens if we run out of wealthy buyers? What would happen of our tourist trade dries up? What if loan underwriting requirements change between putting that 20% down payment up and the time you have to close on the loan? What if you can’t find anyone to buy out your position so you can move on and you actually have to purchase that $300k condo? What other investment opportunities will you lose out on if you keep your 20% tied up for over a year? What if you died tomorrow without having the chance to enjoy the fruits of your labor?

There sure are a lot of uncertainties in life, isn’t there?

Happy investing!

Rich

Re: good bets for coastal real estate appreciation - Posted by greg

Posted by greg on January 18, 2005 at 11:43:05:

You are right, of course. I am trying to minimize the investment risk overall, by avoiding areas that have already hyperinflated. Panama City sounds like a place to look.

Re: good bets for coastal real estate appreciation - Posted by greg

Posted by greg on January 18, 2005 at 12:04:38:

Thanks to Rich and Dennis for the input on the Panama City area. I live in a resort town in the mountains of Colorado. The income level does not support the prices out here either, but demand sends the values up anyway. Fifteen years ago the millionaires were run out of Jachson Hole, Wy. by the multimillionaires. Do either of you have information about the surrounding beach areas to the east and west of Panama City on the panhandle. Are there possible areas of growth within 50 miles of Panama City along the coast that have not seen this kind of growth yet?

good bets - Posted by Dennis

Posted by Dennis on January 17, 2005 at 21:21:46:

Me and a buddy of mine were in Panama City last year at this time. He wanted to buy a house there and rent it out for 10-15yrs. until he retires. But what he wanted they could only put him on a waiting list for and told him if he could put a contract on one right now it would probably be Nov. before it would be done. He just left down there today with his girlfriend and called me two days ago and said " do you remember that house I wanted for 147,000 last yr. Today that same house is 217,000."