My two most recent blogs analyzed Destin gulf front condominiums and detached single-unit residences. Here I’ll talk about the residential  vacant land sector in Destin, primarily recorded platted lots.

There has been an oversupply of land in Destin for several years. Months inventory is 16.70. What does months inventory mean? This reflects how many months it would take to sell out of inventory at the current month’s rate of sale.

Total Months Inventory = Total Current Inventory / (Total Monthly Sales/12 Months). There have been 102 vacant land sales YOY YTD. Current inventory is 142. So 102 sales / 12 = 8.5 sales per month. And 142 / 8.5 = 16.70. Bada bing. Supply and demand are not in balance. There is an oversupply. So when exactly is supply and demand in balance? Theoretically never. Equilibrium really doesn’t exist and if it does, it is brief. But here in Destin my opinion is six (6) months.

Check out this spreadsheet:

My Comments:

Notice the months inventory at 16.70. Almost a year and a half. Much better than previous years.

Notice the median sold price is $137,500. Notice the average sale price of $247,807. Now if you are a buyer, which measure of central tendency do you like? The median of course.

If you are a seller, which one do you like? Naturally, the average. Median and averages can be meaningful or not worth the paper it’s printed on. Call me please.

Notice the days on market (DOM). Over a year. That’s a hell of a long time to have your lot listed for sale. Particularly with your handsome note payment, or interest-only loan you regret letting your loan officer talk you into. Oh yeah, don’t forget your  quarterly HOA fee.

What’s alarming is that the DOM has increased from 256 to 396. Not good.

Notice volume and transactions are up YOY YTD. That’s good. Looks like buyers wanted to buy in August.

My Conclusions:

Rates of increase among vacant land in Destin is alarming. I’m hoping the Wildest Moments are over! Please don’t tell me it’s happening all over again? (OK Bob, it’s not.) Yes, vacant land values are more stable than they were in 2012 in my opinion – which is based on data extracted from the market.

People aren’t moving to Roanoke Virginia. Or Canada. Or Detroit. They are moving to Florida and Texas. Destin is a terrific place to live and invest. Because of the beautiful beaches, superior residential amenities, and water activities. Fun.

The downside is the tourist season if you are a full time retail owner. It’s crazy. Traffic and folks unfamilar with Destin in a hurry. Locals know the best season begins in late September. Less heat. Less tourism. They moved the helicopter ride departure point. Resulting in more overhead noisy flights in high density residential districts. Be careful. Many of the homes here would be miserable to live in year round. Three + stories, tight lot setbacks, nosy and noisy partying temporary neighbors, no elevator, etc. Great stay for a week. Not so great year round. Lot sales are averaging 8.50 per month. The previous period, from 9/2011 through 9/2012, the average was 7.25 sales per month. Lot sales are increasing. Still, $137,500 is a lot of money for a lot. My advice: DO NOT SPECULATE. Buy to build. Better yet, select a  builder and have him buy the lot.

Lot financing is available. Trustmark National Bank offers a 30% down, 8%, no balloon plan. Hancock Bank also offers lot financing. Similar terms and conditions.

I expect lot sales to be essentially the same. About 8 to 9 per month next year. I expect lot values in Destin to increase next year by 5%. The double digit inceases are over. Frankly, the rapid increase in lot prices was alarming. There will be few new subdivsion developments. There may be one under way at the end of Mattie Kelly Blvd. A 72 unit townhome lot development. Old Bay Phase II. The 36 unit condo project is in planning and will likely be underway soon. If not as sales, then apartments. If Mattie Kelly is extended to US Hwy 98, that will help as it will offer straight shot access to Destin airport and the 72 lots.

This is a Macro view. I do extreme detailed micro sub-market analysis on your property. I can blow you away or bore you to death with data and my accurate interpretation of the data. But only if you are my client.

I’m Bob. Bob the Appraiser. Bob the Broker. Bob the Instructor. Bob the Consultant. Bob the Expert Witness. Give us a call and let us be your guide to principled advice on YOUR property!

BBQ:    “The best investent on earth is earth”by Louis Glickman

BLT:   Wildest Moments by Jessie Ware from the Jools Holland show