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Real estate experts forecast growth
TALLAHASSEE, Fla. -- Nov. 7, 2005 -- Forget the I-4 corridor. Interstate 10 and this area of North Florida are poised to be the next hot spot for real-estate development, according to some real-estate experts.
That's because lack of available land and water supplies as well as growth-management problems are continuing to plague South Florida.
"We've recently become a part of Florida now," said Will Butler, of the St. Joe Land Co. Butler was among the real-estate experts and more than 500 attendees Friday who shared their knowledge of the industry at Florida State University's Real Estate Trends & Networking Conference.
The conference, in its 11th year, was held at the University Center Club.
"I believe - whether we want to see this area of the state change or not - we will see unprecedented growth along I-10," Butler said.
But that growth will come in stages, experts say, as many residents still want to live in bigger cities in Central and South Florida.
Currently those cities are seeing exponential growth in condominiums. But many additional condo projects might not get off the drawing board, according to real-estate officials.
They see a slowdown of more expensive condos, and more affordable ones may come into the market. But sales, said real-estate officials, didn't seemed to have been affected by the hurricanes.
The rental market, however, has seen a backlash.
The demand for more condos means more condo conversions. Tampa Bay, said Michael Slater, with TRAIAD Research & Consulting, has lost at least 25,000 rental units because of conversions.
And that's too bad because "it's a good time to own rental assets," Slater said, "They're just hard to find."
Historically, Florida's rental market growth has been faster than that of the nation. Nationally, the growth rate was around 2.45 percent. Most Florida metro markets realized growth of about 4 percent a year. But now the rate is 6 percent to 10 percent a year.
Similar growth rates also are being seen in the retail office market area.
Trend watchers reported that the Florida office market is outperforming that of any other state. Only Washington, D.C., is doing better. Statewide, vacancy rates hover at about 13.7 percent.
In Florida, retail office space still can be rented around $20 a square foot, according to Paul Ellis, of the Trammel Crow Co.
Because of Florida's low office rental rates, more companies are doing regional relocations. The state's natural resources and lack of a personal income tax are also attractive to companies. It also has a strong labor pool. There are at least 50 colleges and universities in the Orlando area alone.
Prices for office space will rise, said experts, because of land and construction costs and operating expenses, as reasons. But the good news, they say, is that the market will remain competitive.
George Banks, Summit East's operations manager, believes he's seeing that already.
Banks handles leasing for the technology park at U.S. 90 East and Interstate 10, which plans to build at least 10 to 12 other buildings. Currently, its three buildings are 100-percent leased.
"The demand is there for our product," Banks said. "And based on this, it looks like it will continue to be strong."
Copyright ? 2005 Tallahassee Democrat, Juana Jordan. All Rights Reserved.
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Replies
70Beach Comber
And what's your point about "no doc" loans? That somehow eliminates requirements for good credit and the customary down payment? I'm fairly sure that you'd have to get past the credit check and probably be an above average credit risk to qualify for "no docs." Right?
SoWal Insider
And what's your point about "no doc" loans? That somehow eliminates requirements for good credit and the customary down payment? I'm fairly sure that you'd have to get past the credit check and probably be an above average credit risk to qualify for "no docs." Right?
yeah, yeah right <nudge,nudge,wink,wink>
BAD CREDIT? NO PROBLEM!
Beach Comber
680 credit score required. A complete application is required, but nothing is verified. Rates are comparable to a fully documented loan. No IRS forms. Owner occupied properties only. Only 5% down payment needed. Loan amounts to $500,000!
Low Down Payment No-Income Verification. Lots of Options!
Hot Stuff. Income not verified. Assets not verified. 100% financing to $300,000 with a 720 credit score. 95% financing to $400,000 with a only a 620 credit score. Single family homes, condos, townhouses, all okay!
Shelley, how's a ZERO down payment going to help you, when you have to come up with a 20% a down payment to the developer? THEN you go to these guys?
yeah, yeah right <nudge,nudge,wink,wink>
Low Down Payment No-Income Verification. Lots of Options!
Hot Stuff. Income not verified. Assets not verified. 100% financing to $300,000 with a 720 credit score. 95% financing to $400,000 with a only a 620 credit score. Single family homes, condos, townhouses, all okay!
Shelley, how's a ZERO down payment going to help you, when you have to come up with a 20% a down payment to the developer? THEN you go to these guys?
yeah, yeah right <nudge,nudge,wink,wink>
SoWal Insider
So it's $20,000 (from home equity loans?) and a "letter of credit." But for those who've made it to hard contract the pain will hit home when the developer comes knocking and wants final payment. Then they've gotta scramble for a mortgage (probably trying for an optional ARM to hold them over while they try unload (along with everyone else) into a declining condo market)...the idiots who can't afford the condo and all the trappings that go along with "investment condo" ownership will take a bath and SERIOUSLY regret they didn't walk out on the deal.Service workers never bought high end inventory. You know that. Florida's population will double in the next 10-20 years, with NW Florida at a much higher density, those 500k condos will be at least several million a piece. The top 10-20 percent demographic buyers from most of the east will descend upon the Florida coast to retire, and the 500k price will be but a story of the good old days. Short term, prices will mitigate, but the long term will be, unfortunately, likely an unwelcome crush of newcomers.
If one has the money to carry the investment--no problem. But there are so, so many out there who are holding onto a fistful of these contracts for "investment" who will end up NOT having a pot...but will certainly have plenty of windows to throw it out of.
HOT TIP: Get out of the conventional real estate business and into the real estate auction game--that's where the next "boom" will come from. Property, home and condo auctions are going to be hot, hot, hot!
BOB: And I bet that 35 million in California don't include illegals either! It's true that Florida's employment figures look good...but the majority of these jobs are "service" jobs...just how many $500,000 condos can a person who makes $8.50ph buy in Florida? With all the "rich" folks flooding the state, surely they'll want someone to do their nails or clean their pool--people don't live on Botox injections alone.
2nd HOT TIP: Look out for some goomba from Jersey to start organizing the service sector folks in South Walton. Something's gotta give.
Beach Comber
Here in Alabama, Brett-Robinson is building apartments to rent to service workers, at a discount as long as they are employed there. Also there are "dorms" being built in Foley, for service workers - about 12 miles north of Gulf Shores.
SoWal Insider
Here in Alabama, Brett-Robinson is building apartments to rent to service workers, at a discount as long as they are employed there. Also there are "dorms" being built in Foley, for service workers - about 12 miles north of Gulf Shores.
"Dorm Life!"
Ah...the American Dream lives on! And do they pay to ship the workers back to the Ukraine during the "off season?" Or do they just drop them off the bus in downtown Mobile? (Hey, as long as there's no scum in the pool, who cares. 
)SoWal Insider
Service workers never bought high end inventory. You know that.
Yeah, but....I know that folks who live in "upscale subdivisions" tend to want to shop or eat out from time-to-time in the hood (not to mention maybe needing school teachers and cops). I know that right now there is a glut of $500 per month apartments in the SoWal area <sarcasm implied>, but what happens when they fill up?.....or (GASP!) want to get married and raise a family?
SoWal Insider
Shelley, how's a ZERO down payment going to help you, when you have to come up with a 20% a down payment to the developer? THEN you go to these guys?
WiLe,
The way that it works is that you take out a home equity line of credit on your primary residence for any cash portion of the down payment over and above your "letter of credit".....THEN when the developer comes knocking for the MORTGAGE on the finished unit, you go and get the ZERO down optional ARM. Got it? ;-)
Beach Comber
"Dorm Life!"
It's called freedom, Shelley. They're working for the same wages we pay everybody else for comparable work. If it wasn't desirable work, they'd either stay home or go somewhere else. I'd imagine they'd really thank you for being so concerned about their welfare.
Some do quite well here. The 20-something young lady next door left her husband for a guy from the Czech Republic. She owns her own business and her family is very big in real estate here. He's probably on his way to being a multi-millionaire.
picky
"Dorm Life!"
SHELLY, that comment was both unkind and uncalled for. Surely you can do better than that to defend your position?
Beach Comber
WiLe,
The way that it works is that you take out a home equity line of credit on your primary residence for any cash portion of the down payment over and above your "letter of credit".....THEN when the developer comes knocking for the MORTGAGE on the finished unit, you go and get the ZERO down optional ARM. Got it? ;-)
I know that. However, the link that you posted had an "owner occupied" requirement and borrowing limits. To take advantage of what they have to offer, you really can't already be in debt up to your ears. I know that there are always going to be those who get in over their heads and end up overextended and in trouble... I just don't see that happening here on anything approaching serious. Its not that easy for most people to get in a half million $ PRIMARY residence. Its a lot harder than that to get in a half million $ secondary or investment property. Those than CAN do that are not GENERALLY the same people who will easily walk away from a hefty down payment and ruin their credit.
From my observations, I don't see people buying who aren't aware of the risks and don't have Plan B's and C's. I invest in property. I've been doing it since I first bought in 93. I've made lost a little, broke even and made money. I'd have never lost on anything, if I had have been patient. There are always cycles - and most of them can't be predicted. I sold a beach home (actually a lagoon home, across from the beach) for $235,000 in 1998. That home's worth a million right now. It might go down to $900,000 next year - but 10 years from now I'll bet you it'll be closer to $2 million than it will be to a million. Between here and there, it will get scary. But end the end, prime property always wins. It always has and there is no reason to think that it will be any different in the future. PCB might look like a mess now with all the building. There might be too much on the market too soon. Prices might drop. Long term it won't matter. People who bought today will look like real estate genuises in 10 years. That will even be more so the case in Mexico Beach, because its cheap now.
Where would be a better place to put your money anyway? Cash pays nothing. I sold my businesses in 1994 and put most of my money in the stock market. Between 2000 and 2003, I lost 40% of it. Through some good moves, I got it up to where it was in 1994 - trouble is though I ran it through an "adjusted for inflation" analysis and found that my money was worth only 70% of what it was in 1994... Now contrast that to some of the real estate that I've owned (and some of it I sold):
Pelican Point (Beach condo) $169.9 to High 7's in 12 years
Beach House $200 - $1 million in 8 years
Back Bay Condo (Perdido Grande) $250,000 to Low 6's in 6 years
Present Home - $169.9 to mid 3's - 3 years
Romar Lakes Lakes (wood condo across from beach) $115,000 to $500,000 - and this is going to be demolished and I'l get a preconstruction priced $930,000 condo)
We'll cycle down for sure. Long term its UP.
A couple summers without hurricanes would be the best thing that could happen to us. Katrina was the worst thing that could happen to us. Much worse than the increase in interest rates.
Admin
WiLe is getting back to the subject. For better or for worse, HWy 98 from Gulf Shores to Carabelle is going to look like Clearwater in the near future. With a little Sea Island and Marco Island thrown in here and there.
Thus the title: "Panhandle real estate boom just starting".
Thus the title: "Panhandle real estate boom just starting".
Beach Fanatic
"Dorm Life!"
I seem to remember seeing ads for jobs at Sandestin where international travel expenses to and from the job area would actually be covered up to a certain level as long as the employee kept the job from the beginning of the contract season to the end of it.
SoWal Insider
SHELLY, that comment was both unkind and uncalled for. Surely you can do better than that to defend your position?
The intent of my remark was to evoke a response from WiLe to confirm my suspicions--WiLe's response was exactly what thought it would be. I already know what my position is when it comes to indentured servants.
Beach Comber
The intent of my remark was to evoke a response from WiLe to confirm my suspicions--WiLe's response was exactly what thought it would be. I already know what my position is when it comes to indentured servants.
I'm sure you're sharing all that you have with the people with less.
Who needs a beautiful home on the beach when there's so many with so much less?
You're an inspiration.
SoWal Insider
I'm sure you're sharing all that you have with the people with less.
Who needs a beautiful home on the beach when there's so many with so much less?
You're an inspiration.
Thanks, I try.
margarita brocolia
The intent of my remark was to evoke a response from WiLe .....
:roll: Right! Evoking a response is what it's all about.
WiLe, I was curious as to how you were so informed. I see from one of your posts that not only are you well read but you've been around the block a time or two with experience. I appreciate learning the positives and negatives, but will always take some folks with a grain of salt.
Beach Comber
:roll: Right! Evoking a response is what it's all about.
WiLe, I was curious as to how you were so informed. I see from one of your posts that not only are you well read but you've been around the block a time or two with experience. I appreciate learning the positives and negatives, but will always take some folks with a grain of salt.
Thanks. If I know anything, its from paying attention to what's going on around me. I've seen this place grow from a sleepy little beach town to something thats on its way to a major tourist destination. Every time something new gets built, there's less room for something else. All of the property we're talking about is prime, the less of it there is, the higher the price is going to go. The more development, the more reason more people have to join in. I've seen a ton of people get wealthy here and I see a ton of smart people throwing more money into bigger and better things.
Not only I, but I have other family members who are heavily invested on the beach - all the way from here to Mexico Beach. I'm holding for the long term.
I appreciate your kind words.
Edited
Beach Fanatic
I don't see what's wrong with dorm housing. They've done it or something similar for Great Lakes resort areas like Mackinac Island or Cedar Point for decades. Get a mostly college age workforce, and charge them a rent that still allows them to save for the school year (I think it cost about $40/week for rent when I was thinking about working at Cedar Point in the early 90s) and both employers and employees seem happy with the arrangement.
SoWal Insider
I don't see what's wrong with dorm housing. They've done it or something similar for Great Lakes resort areas like Mackinac Island or Cedar Point for decades. Get a mostly college age workforce, and charge them a rent that still allows them to save for the school year (I think it cost about $40/week for rent when I was thinking about working at Cedar Point in the early 90s) and both employers and employees seem happy with the arrangement.
Beach,
That would be swell if developers would build college-style dormitory buildings with plenty of parking and Wi-Fi connections, recreation centers and downtown nearby with good, cheap food places and some great coffee bars and bar-bars so the fresh-faced, well-educated college students can kick back and relax when they're done their 8-hour shift. We all know THAT ain't gonna happen--with globalization and profit to be made, things have certainly changed in the last couple of years. Back in the olden days of Destin (pre-boom) college kids would flock to town, pool their money, and get a room to work out the summer (those arrangements have now turned into CONDO$)--those days are over. Today's Gen-X college students ain't gonna make beds and swab out toilets for little more than $6.50 an hour, a bus ride, 3-hots and a cot.
As long as there is profit to be made by importing cheap migrant labor (the bigger the profit margins the better), such arrangements are ripe for corruption and greed. And do you seriously believe that people in the surrounding communities will jump at the chance for having one of these facilities nestled among their subdivisions? (The answer to that is to mow down some lumber in the boondocks <JOE has plenty> and bus these folks back and forth, leaving them out in the sticks to twist in the wind between shifts.) Importing migrant labor has become big business and keeps costs down. For the sake of the workers, I hope these new "dormitory" arrangements are heavily regulated and controlled...but it's not likely.
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