Prickett Properties LLC, www.GoToTheGulfCoast.com, has recently closed on a construction loan to build a duplex in the Dunes Subdivision in the Fort Morgan Area.
The Dunes is a beautiful, beachside neighborhood that is adjacent to Fort Morgan Alabama (Gulf Shores Alabama). The area has so much to offer in that it is not overbuilt, the beaches are wide, and there is easy access to boating for the beach home owners in the Dunes Subdivision. If you want to experience the beach like yester years, this is the place to go. There are no cheezy t-shirt shops and the likely hood of seeing a group of 20 spring breakers in one condo is slim. Fort Morgan is truly a hidden jewel and Prickett Properties LLC has many vacation rentals in the area. The Indies Condominiums are one of the many buildings that Prickett Properties offers for rental in the area at www.GoToTheGulfCoast.com.
Prickett Properties LLC recently purchased a duplex lot, at a very reasonable cost, in the Dunes Subdivision at an absolute auction. Without hesitation, the company secured a construction loan at very reasonable terms. Now we have closed on the loan and starting to get back hard prices for the materials and labor. Were were shocked to find out that local building supplies stores have not gone down on their prices.
Now, we personally know that these building supply companies are laying off workers and struggling financially (like the rest of the economy). One would think that these building supply stores would be salivating over this project and prices would be more reasonable than preceding years.
We built a similar duplex last year and the prices are the EXACT same. (Note: Prickett Properties LLC built the "Four Fun" beach home at the Bay to Breakers Subdivision in Fort Morgan Al which is just next door to the Dunes Subdivision)
How does it make any sense that the prices of 2008 are the same as 2007? The building supply stores state that the production plants have just cut back on the amount of materials they are producing and thus the prices are not any lower. I am not sure that I "buy" this explanation. I believe that these building supply companies and laborers have not woken up and figured out that the profit margins in 2008 are going to be different from preceding years. NONE of us are going to make the same profit margins.
The fact of the matter is that unless we get better prices on the building materials, we are not going to proceed with the project.
In my humble opinion, building costs along with labor costs should swing with the prices of real estate. In otherwords, if you can get less for the house, then it should cost less to build it. Then, we slowly start to build back up together. As the prices of real estate inch back up, so does the building costs and labor. We are all in this together. I can't build the project, if the costs are more than the appraised value...right? In some cases, you can blame the purchase price of the land. In other words, its not the building's fault that you paid too much for the land. In this case, we purchased the land for DIRT CHEAP!
Oh well, somethings are unexplainable and I cannot change the way other companies do business. My guess is that there are many similar situations out there where a builder has had to say that they are just not going to proceed with the project. If a large number of builders don't build, the building companies are going to suffer even more. We are not going to give up so easily, and will continue to shop our prices. We will keep you posted on the viability of the project. If you are interested in Vacation Rentals in the Fort Morgan/ Gulf Shores area, please visit our website at www.GoToTheGulfCoast.com
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