It's officially Spring 2023! Congratulations if your family is on the lookout for a beautiful home along our coast and unique beach corridor. As a savvy buyer or seller, you're looking over the news, asking questions about mortgage rates, timing, banking, economy, insurance and more - all on the quest to find your family's best beach home, and make a solid financial move in the process.
Here, I want to layout a few things to consider and think about in your due diligence to purchase a coveted 30A property.
1. Real estate is all about location, location, location - and when it comes to unique real estate location for the southern United States, 30A is the "cream of the crop" and a wonderfully unique place where families come to enjoy a lifestyle and retreat away from the busyness of the world, yet just a days drive or a quick flight from many of the major cities and economic centers in the United States. When considering a property that may increase in value over time, it's important to factor in the "uniqueness" of the property, its location, and if it can be mass-reproduced.
In the case of 30A and it's wonderful beach towns like Watercolor, Rosemary Beach, Alys Beach, Seaside, Grayton and more - this is a unique area because of it's geography with ultra-rare coastal dune lakes, relatively high elevation compared to other beach towns, it's wonderful political and community environment which has preserved the area with state parks, conservation, beach accesses, height restrictions, density restrictions, and more -- creating a wonderful "haven" for those looking to get away from the "busyness" that can bring itself into a vacation destination.
2. While some are looking at the real estate market with short-sighted lenses, it's important to take a step back and take a gander at the bigger picture. 30A is a relatively new development in the vacation world for the Southern United States (Seaside originally began development in the 70's, and others like Rosemary and Alys Beach have only taken form in the past 10-20 years) and is on the upward growth trajectory in terms of recognition and sought-after destination for the wealthy and even ultra-wealthy. 30A has long been known for having some of the higher-end real estate, with average sale prices around $1.5-2.5M over the past 36 months, but recent times have seen a number of homes close over the $10,000,000 mark, and a few over the $20,000,000 mark. In the next 10 years, many real estate brokers, including those here at Live 30A Real Estate are speculating that some luxury Gulf Front real estate homes may close closer to the $50,000,000 mark as the watching world sees the area transform.
While many have seen the meteoric growth of 30A over the past 5-10-15 years, what 30A may become is yet to be seen - but what we do know is that it will continue to be one of the most highly-sought after vacation destinations available in this part of the world.
PS - it's important to note right now, supply and market absorption is still much lower than it was pre-pandemic (4mo vs. 8-9mo) and demand is extremely high.
3. Interest rates aren't likely to be seen south of 5% in some time, and even slight changes in the interest rate can spark buyer and seller responses quickly. For example, when the interest rates hit 6% or dip slightly below, as they did at the beginning of the year - a large number of buyers jumped into the market and caused prices to jump a bit. When the rates hit 7% or just above, this caused a number of sellers to list their homes for sale and a number of buyers to "press pause". A strategy of waiting for the interest rates to hit where you want to be is certainly a strategy, but it may not be the best strategy to get the best deal on a home.
A strategy we have seen work for those who are ready to purchase is to go ahead and secure the property (and obviously get the best interest rate possible) with a strategy to refinance when the interest rate market stabilizes or finds a new low in 12-24-36 months. What's important to note is that in the short term, the interest rates are not likely to decrease substantially - so a waiting strategy may only prove to miss out on a good property. Market values in this area are also not likely to decrease much if any, given the vacation rental income possibility and wealth of owners in the area who are sitting on large amounts of equity.
