Cape San Blas Real Estate Blog

It’s Saturday and time once again to see what’s been going on in the Cape San Blas real estate market this week.

Good news!  We have two Solds this week.  One was a lot in Boardwalk, and the other a townhouse in Barrier Dunes.  That’s the good news.  Now let’s temper it.  The lot was listed at $319,000 and sold for $230,000.  The townhouse fared better, which sold for its list price of $335,000.

Little change in the inventory, with a total of 542 listings, of which 194 are homes and the remaining 350 being lots.

That was the question put to me this week, so I put the question to my “go to gurus” on such matters, The 1031 Exchange Experts, and this is what I found out.

If you are a “taxpayer,” you are eligible for a 1031 exchange.  This includes individuals, LLCs, partnerships, corporations, trusts, or any other legal entity you can think of.

Of course, just because you are a taxpayer, it doesn’t automatically mean you can do an exchange.

For instance you cannot sell your shares in a c-corporation (even if the c-corp only owns real estate) and then use the money to buy real estate. Shares are not “like-kind” to real estate. Neither are membership interests or partnership interests.

On the other hand, if you sell business or investment real estate, all you have to do is buy other business or investment real estate. A piece of land almost always qualifies for a 1031 exchange, and can be exchanged for a rental house, apartment building, commercial property, or any other real estate you hold primarily for business or investment.

The bottom line is that your ownership entity should have zero bearing on whether you can do a 1031 exchange if you are exchanging real estate for real estate.

Time once again to take a look at the past week’s local real estate activity for Cape San Blas, the C-30 corridor, and Indian Pass.  Very little change in the inventory this week with a total of 540 active listings, down 4 from last week, with 198 residential units and 342 lots.

Only six price changes this week, exactly half as many as last week; four houses and two lots, with an average price reduction of 8.8%. Largest drop was on a lot in Ovation, which, according to the tax rolls, was purchased in August of 2005 for $775,000.  It has been listed since March 15 of this year at $875,000, but dropped this week to $695,000.

Sorry to report there were no “Solds” this week nor properties put under contract. We’re still waiting to see what amalgamation of price, selection and interest rates will allure buyers back into the market.  Until next week, happy bargain hunting.

All right - something we haven’t seen in a long time - since January 2006, to be exact - is our inventory of homes for sale dropping below the 200 mark. In our week in review last Saturday there were 197 homes listed in the Cape market, which includes the C-30 corridor and Indian Pass. The first time the inventory hit triple digits was all the way back in April 2005, when there were 112 for sale.  This was when it became clear the market had peaked and the cycle was reversing.  It eventually peaked at 288 in May of 2006.

To understand just how much it slowed, and how quickly, consider that the average monthly inventory in 2004 was 46, but by 2005 had more than tripled to 146!  By comparison, the rate for 2006 was higher still at 249 and, an encouraging sign, year-to-date current monthly average is back down to 233.  Today’s level of 197 is 32% below the May 2006 peak of 288.

We’ll continue to keep an eye on this indicator to see if we can locate when we turn, or if we have already turned, this market around.

The big news today, of course, is the Fed deciding to cut both the fed funds rate and discount rate by 50 basis points to 4.75% and 5.25%, respectively.  By mid-afternoon the stock market is soaring, and it will be interesting to watch what impact this may have on our local real estate market.  It takes a while for the influence of these moves to actually “trickle down” to the mortgage market, but overall the direction of the trend is good.

With list prices beginning to come back down out of the stratosphere, investors looking for attractive, long-term real estate additions for their portfolios just might step back up to the plate as the cost of money also becomes more and more attractive.  It’s another indicator we want to keep an eye on.

Each Saturday I take a look at the past week’s local real estate activity for Cape San Blas, the C-30 corridor, and Indian Pass.

This week the inventory remains large even though it is down 2% from last week with a total of 544 active listings: 197 residential units (36%) and 346 lots (64%). One commercial property came on the market this week as well.

Twelve sellers decided to try dropping their prices, most modestly.  The biggest change was a reduction of 12% (from $659,000 to $579,000) on this 45 x 145 (0.15 acre) first tier gulf view lot at San Dunes.  This lot was listed on August 4.  

Although there were no “Solds” this week, two lots and one home did go under contract.  This interior lot at Park Point , listed for $210,000 and on the market for 181 before going under contract, was purchased in August of 2004 for $280,000.  The list price is 25% below that though we won’t know the actual sale price, of course, until it closes, which should be by October 5 according to the available MLS info.

The other lot that went under contract was this 78 x 103 (0.18 acre) gulf interior lot at Boardwalk, listed for $310,000, on the market for 251 days before going under contract, and scheduled for a quick closing date of September 28.  These sellers bought the property in September of 2001 for $85,000 and, again, we won’t know the actual sale price until closing.

As for the one home that attracted a buyer this week, it is this cute cottage style gulf first tier home in San Blas Shores (adjacent to Ovation) which the sellers purchased in May of 2002 for $325,000.  The home was on the market for only 138 days before going under contract.  The list price was $399,000 and it is schedule to close by October 1.

As I was driving to an appointment on the Cape this afternoon, I was struck by the number of houses under construction along the way, and began to wonder if perhaps this is a sign that things might be picking up a bit. I easily counted no fewer than 8 in less than a 1 mile stretch, so I decided to check it out when I got back to my office.

According to the Gulf County Building Department, there were 232 building permits issued county-wide in all of 2006, for an average of 19.58 per month. Using that average and multiplying it by the 8 months we’ve completed through August, the county should have issued about 155 permits so far this year. Wrong. Year-to-date in 2007 there have only been 56 permits issued which constitutes a whopping 64% drop.

We’ll keep an eye on this as one indicator as to when we might expect to see the real estate pendulum start swinging back the other way.

Olivier Monod, broker-owner of Weichert Realty Anchor, today listed his offices located on Cape San Blas and Apalachicola for sale.  This move follows the closings earlier this summer of his Mexico Beach and Hwy. 98 offices in Apalach near the IGA. 

The Cape San Blas office opened in 1995 in a renovated house.  That building was eventually razed, and the new building was completed in 2005.  No word yet as to when or if the Cape office will close any time soon.  My sources tell me the company’s plan is to recenter its focus on the St. George Island and Tallahassee markets.

Weichert is the second company to its sell its Cape office; Coldwell Banker Forgotten Coast sold its office next to Scallop Cove to Coastal Realty last November.

Each Saturday morning I take a look at the past week’s local real estate activity from Cape San Blas, the C-30 corridor, and Indian Pass.

The inventory remains large with a total of 555 active listings, 200 residential units (36%) and 355 lots (64%).

One sign I like is that we had more solds and under contracts this week than new listings - a pleasant change - with 2 homes sold in Sea Cliffs, and one Cape Shoals townhouse and one lot at the north end of the Cape going under contract.  The only new addition to the inventory was this townhouse on the Cape.

Let’s take a little closer look at one of the Solds.  The townhouse at 626 Sea Cliffs Drive has been listed, expired and renewed several times since November of 2005, beginning with an original list price of $489,000, and ending with an eventual list price of $379,000. This week it closed for $378,000, or 77% of the original list price of 2005, or 99.7% of current listing price.  This Seller wisely kept tweaking his asking price until he found what the current market will bear, and he went to closing.

Now before you cry “Oh my god, prices are falling - he had to take a loss of 33% to sell it - Not So Fast. According to the tax rolls, the seller purchased this home in March of 2004 for $269,000. He held it for 3 1/2 years and made himself a nice little 40% return on investment, which doesn’t include the fact that this little rental property also produced an average $30,000 per year in gross rental income. Are you still feeeling sorry for the guy?  Didn’t think so.

The moral of this story is: if you price it right, they will buy, and you can still turn a profit.

As for listings which expired without yet being renewed, there were 9 homes and 13 lots. 

Let me know what data you would like to see included in or expounded upon in this weekly post. 

If you’re planning on stocking your freezer with scallops this season you’d better hurry up and get your snorkeling gear in action because this is the final weekend as Monday, September 10, it all comes to an end for 2007.  The weather should be good with the forecast calling for only a 10% chance of rain on Saturday and Sunday, 30% on Monday.  High tides are in the morning so you’ll want to get out early.  Happy hunting!