Emerald Coast Housing and real estate market is driven

Property values throughout the area just keep climbing up and up and up.

By MORRIS FRASER Daily News Business Editor

Housing prices across the Emerald Coast are soaring upward so fast that real estate agents are using terms from astronomy to describe the trend.

"It is a true cosmic event," explains Bill Kuhl of Coldwell Banker JME Realty in Fort Walton Beach.

"This type of appreciation is in a way a kind of eclipse, where instead of the planets aligning it is a case of interest rates being at near all-time lows, the Baby Boomers coming of age, a solid local economy, and the fact that the rest of the Florida coastline has already been developed."

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From Navarre to South Walton County, from Crestview to Fort Walton Beach to Destin, housing prices will continue to increase over the next decade, Kuhl and other real estate agents predict. In some cases, home values have doubled in the past two years.

That’s good news for sellers, who are fetching top dollar for homes that often stay on the market for a short amount of time.

Carolyn Johnson just sold her home in Crestview — in a couple of days. "I’m truly amazed and excited," she said of the deal that brought her $187,000 for a house that cost $127,000 six years ago.

In the long term, it’s also good news for buyers, who may spend more now but will likely see their real estate values appreciate greatly in the next few years.

Short-term, though, the seller’s market can mean buyer frustration.

Tech. Sgt. Joseph Blenden, who is stationed at Eglin Air Force Base, recently moved to the area from Florence, S.C. At 41, he is trying to buy his first home ever, with an eye toward retirement. But finding the right house at the right price has proven a challenge.

"When we started, we had a cap of $150,000," he said Friday while looking at three- and four bedroom houses in Navarre with Eglin Realty owner and broker Judy Couto. "We weren’t able to find a lot of availability in that range. Now we’re thinking ($180,000).

"We’ve been overbid twice, and those were on houses that were first day on the market."

That scenario wouldn’t surprise Gordon Fenwick, broker and sales manager with the Wilson Minger Agency in Niceville.

"(Prices) are going through the roof; it’s ridiculous," said Fenwick.

Values soar, A Daily News analysis of information from Multiple Listing Service, an information sharing service for real estate agents, found: In upscale South Walton, the average price of resale homes has nearly doubled between the first quarter of 2002 and the first quarter of this year, from $315,544 per home to $610,549.

One home this year sold for a whopping $3.65 million.

More affordable homes in other communities are also increasing in value. In Crestview, average resale prices have grown 41.5 percent in the past two years from $89,914 to $127,258.

The days are gone when early Navarre developer E.H. Pullum sold land for $10 down and $10 a month. The cost of an unimproved half-acre lot in nearby Holley By The Sea now ranges upward of $20,000.

Today, if you want to buy land on County Road 30A in South Walton County, you may have to enter a lottery and hope your number comes up. If you win, you get to spend as little as $500,000 or as much as $1 million for your house at yet-to-be developed Cypress Dunes, overlooking the Gulf of Mexico.

The average cost of a resale home in Destin the first quarter of this year: $501,718.

Meanwhile, the volume of home sales has also grown and the average time on the market has decreased.

In Navarre, homes stayed on the market an average of 130 days two years ago. Now, they’re gone in 68 days on average, and often faster than that.

Don’t even think about waterfront condominiums if you’re looking for a deal. Realtor Ron Goodson of Oceania Real Estate Services of Destin sold a 1,500-square-foot condo in the Regency at Navarre Beach for $481,000 earlier this year. He felt good about the deal until a fellow agent told him he had just sold a similar unit on the floor above for $525,000, which was $10,000 above the list price.

Kuhl says prices have risen steadily and will continue to accelerate. "Since the first quarter of this year the prices are still rising,” he said. "It looks like 2004 is going to be as great or better than 2003."

Why here, why now? According to the Florida Association of Realtors, the rate of growth in the Fort Walton Beach Metropolitan Statistical Area is double the statewide average.

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In April, the median price statewide for an existing home was $173,900, a 16 percent increase from last year. In the local MSA, which encompasses Okaloosa, Walton and Santa Rosa counties, the median price was $185,100, reflecting a 32 percent increase over 2003.

Kuhl cites "a number of different dynamic forces" for the current surge in prices. "First is that the Baby Boomers are coming to retirement age and have more money than any retiring generation before them," he said. The area’s limited land availability also is playing a role. Citing the presence of Eglin reservation and the proximity to the Gulf of Mexico, Kuhl said, "There is an economy of scale that plays into effect here as the amount of available land diminishes and becomes more costly.

The developers must build bigger, more expensive homes on smaller lots in order to get the higher and best use of the land … which equals to higher prices and thus again pushing the value of resale homes up with it."

Low interest rates also come into play.

According to the Mortgage Bankers Association, a standard 30-year fixed mortgage rate stood at 6.14 percent last week, down slightly from the 6.26 per cent figure two weeks ago but higher than the 5.61 percent level of six months ago.

Finally, Kuhl said, there is the scarcity of developable coastline on the gulf. "With the Boomers coming into their own, the rest of the state coastline being overdeveloped and the nice beaches we have here, it is a natural choice," Kuhl said.

South Walton County commercial developer Keith Howard has termed the area "The Last Coast."

The bottom line County coffers are feeling the luxury of higher revenues via property taxes. Pete Smith, property appraiser for Okaloosa County, said overall county property tax valuation is up 11.6 percent from 2003 to 2004. "Oh my, yes, it’s up," Smith said. "It’s real sporty." Smith said the final 2003 residential valuation was just over  $6.6 billion. He has just sent out a "pre-pre-valuation" to various taxing authorities so they can start working on budgets. That figure was almost $7.5 billion, an increase of just over $1.2 billion. Smith was quick to point out, though, that the increase in valuations does not reflect an automatic, immediate increase in individual property tax bills.

The hot real estate market has led to occasional hi-jinx, real estate agents said.

While declining to reveal names, Fenwick cited the example of a transaction that was ready to close when a broker in Crestview called to say an expected receipt of a contract would be delayed a day because a fax machine was unavailable.

"The next day," he said, "the (buyer’s) agent called up and was told that a higher offer had been made and they were accepting it. It didn’t matter that the contract was signed. And there’s no use going to court, because all you’ll do is spend money"

Most buyers don’t face those sorts of issues. The tight housing market is enough of a challenge.

Sgt. Blenden has been looking at houses in Navarre, Fort Walton Beach, Niceville and Shalimar.

"We found a house at ($124,000) in Niceville, we thought a little under priced, first day on the market," said Couto. "We overbid at one twenty-seven, and the listing Realtor was nice enough to call back and say there were eight offers on the house. We re-bid at one thirty-one and still didn’t get it."  "I had planned on two weeks to a month and a half to find something, but now it looks like it may take longer," Blenden said.



Daily News/DEVON RAVINE Realtor Bill Kuhl attaches a sold sign to a home in Crestview. Kuhl said this particular home sold at the full list price of $112,000 a day after it was put on the market. "In the last six to eight months, it’s gone crazy,"

Kuhl said of the Crestview real estate market.

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