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Third Quarter bringing new interest in beach properties

By
Real Estate Agent with Crescent Beach Realty of St. Augustine Fl

Ronnie Tumlin sez:  We are seeing increasing interest in properties here at St. Augustine and Crescent Beach in northeastern Florida.  April's momentem spilled into May and when the lookers evaporated at the end of May we thought it was going dead again after a brief rally in April.  I like to call it a sucker's rally.  But guess what?  The lookers are back in early June and a few have written contracts.  Hell, I even sold one today! (June 4, 2008)  Now that's big news!

What are people looking at and why?  First, the properties drawing the most attention are the Barefoot Trace condos across the street from our office on A1A.  The prices for this 100% ocean front complex have dropped from highs close to 700,000 dollars in 2006 into the high 400s and low 500s today.  With the low interest rates and rents holding up nicely these are looking very attractive to old school investors who want to purchase and hold for at least 5 years and are betting on reversal of a lousy market.  The lookers are telling us they think the market has bottomed out in this area....we thought so about six months ago and the proof is in the selling prices over the past 12 months....they have flat lined which means buyers and sellers are either at a stalemate or there are some exchanges going on and that is exactly the case.  The next question is why are they looking now?  They are telling us a couple of things in addition to thinking the market has bottomed out....they want first pick of properties that have bottomed out because theythink when the market appears to have turned to the whole world it will be too late to get the best properties at bottom feeder prices...makes sense to me.  The other thing they are telling me is their cash is virtually worthless in the bank or brokerage account and they are afraid to put it in the stock market and the best hedge against inflation is most likely water front real estate....makes sense to me too.  We are getting this kind of comment from people from all sections of the country, some bankers, some accountants, some financial advisors....they are all saying the same thing without us leading them into it at all, so maybe the smartest people are seeing something the rest of the world is waiting for more proof to see.  I have always said by the time the market turns on TV and in print, it will have turned six months ago....the media is always six months behind a trend.  They were six months tardy calling the downturn when we saw it plain as day in late 2006 but the media did not acknowledge until mid 2007...the horse was already out of the gate and down the road.

I am not ready to say the market is ready for a rally yet...I want to see more than 8 weeks of positive activity before I am ready to call a trend.

We found out what the bottom was in a water front condo complex in May....Suwannee Cove had 18 unsold units out of 48 that sat empty for over 24 months....the developer dropped the initial price of an average of 325K down to 195k across the board....all 18 units sold within 30 days....I think it is safe to say that was the bottom and people bought those even if they didn't want one.  They recognized it as a deal too good to let pass.  Those who purchased two years ago saw their interests drop significantly but then again they all got first pick....the ones that recently sold so cheap were last pick...nowhere to go from 195K but up right?

Ronnie Tumlin.  Visit my website at www.crescentbeachrealty.com for more insight and property bargains at the beach!

Michael A. Caruso
Surterre Properties - Laguna Niguel, CA

Hi Ronnie,

I'm just curious, is there a reason you don't have a picture posted on your blog?

Michael A. Caruso

Jun 04, 2008 10:23 AM