Summer Island Update

The summer selling season on the island is nearing its end. In five weeks, North Captiva will enter hibernation mode. It is actually one of the nicest times to be here. On some days, you can walk all four miles of beach and not cross paths with another person. The only things you must share the beach with are the sand pipers, pelicans, dolphins, ospreys, and bald eagles. Unfortunately, none of them will be purchasing any homes!

Here are my thoughts about the current North Captiva Island market right now:

1) Supply is still too high. Prices are still trending downward.
2) There is still a subset of sellers that needs to get out. They are competing with one another to the detriment of prices.
3) I have seen some bank appraisals are coming in below the actual comps, making it tougher to close on bank financed properties.
4) My backlog of interested buyers is building. They are waiting for signs of a market bottom before taking action.
5) There are some signs of raw demand forming for low end lots with final sales prices in the $150k-$170k range. Several of these have gone under contract in the last month or so. Above that range, there have been two sales this year in the $300-$400k range for view lots on the state preserve ( which have incredible wide water views of the gulf of Mexico ). Note that I have another preserve lot listed at $365k which is also an attractive long term purchase.

Here are my predictions:

1) Despite all the fear and negativity, I think the island market is not that far away from a price bottom. My guess is for sometime in 2008.
2) Europeans will become large purchasers of property in Florida. The pound is hitting 26 year highs versus the dollar. The euro has rallied from .82 on the dollar to $1.37. The currency appreciation there + the property depreciation here = a huge discount. Once the dollar shows signs of bottoming, look out. There is a lot of British, German, and French money out there that can soak up the best priced supply. The central Florida market, particularly Celebration FL, may benefit from the strong pound.
3) The baby boomer generation starts to get serious about their beach properties in 2009. That is the year that the first wave baby boomers hits age 63.
4) The next Florida property bull market will start in 2010 and carry to 2015. The demographics are powerful. The annual number of people turning 65 in those years will be 3-4 times today's numbers. Buyers from overseas and new wealth created from the stock market rally will likely be the spark that gets things moving again.

When I was an investment advisor, I used always tell my clients to get to the party early and then leave early. That's good advice in today's island real estate market. Just keep an eye on interest rates.