by Jon Lyons
on Thursday, May 21st, 2020 at 8:20pm.
How is the 30A real estate market doing since COVID-19?
Have prices dropped and owners started fire-selling their properties?
Should I buy my 30A home now? or Should I wait a few months? Or years?
Buying real estate on 30A is a big deal - lot's of questions are always warranted -- but in the midst of something like COVID-19, questions have doubled. Maybe tripled. So - let's find some answers as I share, from a real estate broker's perspective what's happening here on 30A, answers to questions, and explain how this whole thing might even lead to a real estate boom here at the beach.
Ready. Set. Go.
What Exactly is happening in the 30A Real Estate Market Right Now? (April - May 2020)
1.) Sales are still happening - ESPECIALLY luxury homes.
2.) Sales are happening at about 50% pace. Why? Most buyers are vacation renters first. Most buyers do not purchase properties sight-unseen. Vacation properties were closed until May 19th - now that they are open... expect a shift in a big way.
3.) Prices will see a "correction" of sorts -- where those sellers who were listed high will either: choose to not sell, because they really didn't have motivation at current prices anyway, or reduce prices to actual market values.
4.) Some people will NEED to sell, but we really aren't seeing much of that yet. Undoubtedly, this pandemic has been terrible and some have lost jobs, lost some financial footing, and some have passed away. Others have been fine until a couple months of vacation rental income loss started wearing on them. I expect there will be SOME extra motivation in a small portion of the market - so if you've been waiting to snag a deal, call your lender, get pre-qualified, and get ready... DEALS WILL GO QUICK.
5.) The market will shift over the next few weeks/months now that the vacation rental ban has been lifted and pent up demand is released. Some of the springtime buyers can't buy anymore - others are just waiting to get here first. As demand is released and vacationers (read: potential owners) visit 30A again, we will no doubt see an increase in showings, offers, sales and new owners.
Fire-sales? Are they happening... ? Where can I find them?
Not yet, and probably only a relative few given the timing of the pandemic in relation to how long the vacation rentals were banned. Given that vacation rental properties have been opened as of May 18th 2020 -- property owners will begin collecting on much-needed vacation rental income with only a couple months of rental losses. Coupled with the fact that many banks are working together with property owners to make things work -- I believe we'll see owners be able to hold on to their properties... as long as the vacation rental is lifted, renters can come, and property owners can collect.
Be sure to let me or your agent know if you're interested in purchasing a property that drops below market value for a quick sale. This can be a great opportunity as often times fear-based market shifts or scares can be short-lived and the market "bounces" a bit and then continues it's long-term trend.
You'll be able to spot them in any segment of the market when a large price drop happens and (often) the starting words on the property listing reads "BRING OFFER" or "MOTIVATED". If you see this, be ready and act quickly. Many investors have been waiting for years for opportunities like these.
Is now a good time to buy? Should I wait?
Always a personal question, let's look at it objectively and from a longer-term perspective. Is now a good time to buy that 30A home for you and your family? If you're planning on buying it and using it to create beautiful memories that will last a lifetime, you have the capital and some security, and you're not planning on selling it in 2-3 years, then I would say absolutely go for it -- the window of time you have for your family to spend together is limited, the market here is growing for the long term, and the chances to profit from vacation rentals is almost certain, and the long term sales out look for 5-10-15 years is likely profitable (and sometimes very).
If you are risk-adverse, have income insecurity, or would not be able to financially carry a vacation rental property without the rental income to support it - then you should probably either wait, or consider a "starter" vacation property for you that would allow you to afford it, create some memories, and "test the waters" (at least at first).
**We'll post a future blog about how the 30A real estate market is transitioning dramatically with uber luxury homes, curated vacation experiences, beach clubs, and more --- and we'll connect it here.
How COVID-19 might cause a real estate boom on 30A...
Hear me. Over and over again, I've been hearing the same stories over the past few weeks among 30a buyers from Nashville, Atlanta, Austin, Houston, Dallas, Birmingham, (insert your city), etc.:
"I've realized I haven't been to my office in 4-6 weeks... and I think instead of living in (city name) and visiting the beach a few times a year, I can actually live at the beach and visit (city name) a few times a year as needed."
As thousands of entrepreneurs, business people, and executives learn new ways to do business from a distance - I feel confident we will see more and more sales for full-time and second homes in communities like Churchill Oaks, Point Washington, Watersound Beach, Rosemary Beach, Alys Beach, Kaiya Beach Resort, Watersound Origins, and others.
As many pull their profits from a long season in the stock market, real estate in the city, or other investment vehicles, I believe we will see those profits re-invested into relatively rare, high demand real estate in second home and vacation real estate markets like 30A / South Walton / Santa Rosa Beach.