30A Real Estate

Santa Rosa Beach and Surrounding areas – Real Estate Report

The Emerald Coast Association of Realtors real estate report for February, 2015 is out and there are some interesting observations to be made. January’s numbers were impressive and February’s numbers are looking even stronger with the total number of closings on single family dwellings (houses) up 31% over the same month last year. The total number of “pending” sales are up 14% over last year. The most interesting statistic I find is that the average sales price for a home is up 23% over last year. Growth and value increases like this are usually good news but a word of caution is needed here. The MLS here for our area is showing “cash sales” accounted for 47% of all sales. That is an extremely high number and bodes well for the level of demand in our market but this also means that we are seeing an unsustainable increase in prices due to the fact that almost half of these sales do not involve any financing and many with no appraisal contingencies. Cash sales are driving prices up due to transactions that do not require any “comps” being used because there are no appraisals being done on many of these sales. I believe we are going to see a bit of “blowback” by buyers who are getting a little nervous about these price increases and this will have a moderating effect on selling prices that seller’s are able to get.  Overall, the market here is very strong but sustainable increases in property values of 3 to 5% a year, long term, would be a great scenario. Let’s see what the remaining Spring months bring us.

Like everywhere, 30A real estate buyers start their search for the perfect home or condo on the internet. And with hundreds of real estate websites available, buyers need to understand that over half of the information delivered is incorrect.  Zillow is the largest and most popular Real Estate information site available with close to 100 million visitors a month seeking detailed information concerning hundreds of thousands of listings throughout the United States.  Using this service may supplement the information you need to properly establish a realistic price on a property but don’t make the mistake of assuming that this information is “the” true gauge of market value.

Shoppers using this service, along with sellers and buyers, will quote these “Zestimates” to real estate agents when trying to determine a fair price.  Here are a few things to keep in mind when using a national service that attempts to determine price:

Though it’s not prominently featured on the website, at the bottom of Zillow’s home page in small type is the word “Zestimates”.  In this section they include what they call the VALUATION ERROR RATE by state and county. As an example, in New York County (Manhattan) the median valuation error rate is 19.9% !  In rural areas of California, the rate is as high as 26.6, San Francisco 11.6%.  There is a real estate agent in Virginia that followed 21 sales in his city  that had “zestimates”. 17 of those sales were overestimated in value and 2 of those sales sold for 60% less than the “zestimate” values.  There are many areas of the country where these “zestimate” figures are in error 95% of the time.

The most important thing to remember here is that it is impossible to determine a fair market value based on computer information alone.  Include these “zestimates” as no more than a starting point when discussing price with a qualified, experienced real estate agent who lives in the immediate area and knows the intangibles that are important in determining a fair market price. There is a saying that “all real estate is local” and it really is… As real estate agents here on Highway 30A in South Walton County, Florida, we receive many calls from people from all parts of the country who will reference a property they have viewed on Zillow. Most of the time, the property they are inquiring about has a “zestimate” that is far below the actual value and do not take into consideration the many local market factors that a computer does not process. Always read the fine or not so obvious print that these national services use when putting a market price out there. It is much more realistic to consider this information as a general estimate with a price range variance of 10 to 20%.  Disparities like these can sour a potential buyer or seller if they view these numbers as totally reliable and that makes for a bad start to what should be a productive and informative relationship with a local Realtor.

Karen Holder, Broker/Owner Homes On 30A

Zillow and Zestimates are trademarked by their respective owners.

Scenic 30a is a unique stretch of white sandy beaches with most homeowners living out of state. The 30A real estate market here is primarily second homes and investment properties, making this a huge beach house rental market. For many years the investors came in looking for properties that offer a 10-15% return on investment but today we are lucky to find 6-7% ROI due to the increase in sales prices. Even though we have an amazing strong rental market here, there are only so many weeks a year people come to the area. Being located in the Panhandle we do have real winters which brings quite a “slow down” to our area. Our peak rental times are all of March, 2 weeks in April, all of June, all of July and 2 weeks in August. Our better rental companies in the area are averaging around 26 weeks a year right now which is stronger than ever. Your planned communities like Watercolor, Seaside, Watersound and Rosemary Beach bring the strongest weekly rates due to their high demand and amenities. You Gulf front properties are always strong for obvious reasons. Most of our rental management companies charge anywhere from 20-35% for their services and have huge marketing reach around the United States. When the Northwest Florida Beaches International Airport opened a few years ago in Bay County, It was a huge boost in turning our real estate market around. Southwest and Delta are the 2 major airlines with direct flights from Houston, Baltimore, St Louis, Nashville, Atlanta and a few other areas. 2015 is going to bring some additional direct flights including Dallas, which is home to a huge part of our buyers in the area.

Hard to believe that Christmas is already upon us. Can Spring break be far behind? It is scary how time flies. Here is a quick list highlighting some of the bigger events that people look forward to with Christams on 30A.
FRIDAY, NOV 28 FROM 6:00 TO 8:00
Old Town Tree Lighting at Rosemary Beach. Musical performances by The Charles Dickins Carolers and The Village Brass Band. Santa arrives, carriage rides through Rosemary Beach Township. Lots to eat and drink. Admission is free.
SATURDAY, NOV 29 FROM 4:00 TO 8:00
Seaside “Turn on the town” parade and festivities. Big event. Santa arrives as part of the South Walton Holiday Parade and the “big switch” is turned on lighting up Seaside. Parade begins at 4 in front of Seagrove Plaza and ends at the amphitheatre in Seaside. Festivities begin at 5:00. FUN..free
SATURDAY, NOV 29 FROM 5:00 TO 9:00
Old Florida Holiday & Winter Market at Watercolor
Another big event. Falling snow, horse drawn carriage, bonfires, arts and crafts, smores, lots of holiday eats and treats. Beverages for all… Visit with Santa. Admission is free.
The Seaside Rep is doing ‘Every Christmas Story Ever Told” throughout the Christmas season at the Rep in Seaside. Google SOWAL and check the times. Our Rep does a fantastic job !
SATURDAY, DEC 20 FROM 5:00 TO 8:00
Christmas Candlelight Tour and Open House at Eden Gardens. The decorations are beautiful. Each room done by a different group/business in South Walton. Refreshments served. Donations to The Friends of Eden Gardens are appreciated.
As I mentioned earlier, you can Google SOWAL and view a complete detailed list of all of the events taking place. Too much fun to list it all here. Have a safe and happy Christmas..