We have vacationed in the Florida Panhandle, Walton County in particular, for twenty years — and love it! World-class beaches — reasonable prices — great restaurants — terrific beach homes to lease! So we are excited about the locale — but what about the economic realities of buying real estate in Florida — at this time?
The Florida panhandle has a vibrant and steady tourist business, with minimal unemployment. The new Panama City International Airport, which is projected to open in first quarter 2010, will make the region quickly accessible from virtually anywhere in the country and Europe. The airport is expected to provide a major boost to the region’s economy, and should enhance demand for real estate.
We believe the Florida panhandle is a solid place to invest in real estate, and that real estate values, though flat right now (January 2008) are likely to move sharply upward, particularly for seaside and Gulf view vacation homes. But that’s our opinion! Here are some other opinions on the area.
CNN Money.com (Feb. 12, 2007) chose Panama City, Florida as the #1 place to invest in real estate in the United States.
American Express says that the Florida panhandle is one of its Top Ten vacation destinations in the United States. The Florida panhandle is second behind the Orlando area in Florida tourism. Emerald Coast beaches are world-class, attracting over seven million tourists annually — more than any other East Coast vacation area.
Realtors in Walton County acknowledge that prices are less than during the peak year of 2005. But they are looking to 2008 for sales to turn upward, as more properties come on the market. Many homes are priced at less than the cost to build. “If you are looking for a property to hold on to for the next five years, the time to buy is today. We are still very undervalued compared to other areas of Florida.”
The St. Joe Company (NYSE:JOE), headquartered in Jacksonville, FL, is the largest landowner in the Florida panhandle, owning over 718,000 acres of prime development land — half of it within ten miles of the coast. It has been a large player in the region for many years, beginning as a timber company but realizing in recent years that the value of its landholdings was far greater as resort and development property. So now St. Joe is in the property development business, with major activity focused in Walton County.
According to St. Joe’s Investor Relations Department the long term outlook for Florida panhandle real estate is very strong.
Long-term economic and demographic trends continue to favor Florida, whose economy is fundamentally strong and diverse. Florida’s population is expected to increase by three-fourths (to 28.6 million) by 2030. Its population growth rate regularly outpaces that of the rest of the United States: over the past forty years, its yearly rate of growth has exceeded the U.S. average by 100%. By 2010 Florida will pass New York to become the country’s third most populous state.
The State’s strong, diverse economy regularly outpaces the U.S. mean, with a vibrant tourism industry, lots of high-tech employment and a robust high-tech manufacturing sector. A big military presence with a number of busy and expanding bases provides stability to the region’s economy. Within the Florida panhandle, Walton County has one of the lowest unemployment rates in Florida and the country.
Florida is the commercial center of the Western Hemisphere. Geographic location, as well as economic and political stability, places the State at the center of trade and business throughout the Western hemisphere. Vacation residence sales to retirees remain robust, since the State is a favorite spot for retirement relocation.
Northwest Florida’s beaches are Florida’s second favorite tourist destination, behind only Orlando. Emerald Coast beaches attract more than seven million tourists yearly, more than any other stretch of beach in the eastern United States.
Beaches in the Florida panhandle have been rated as some of the most spectacular in the nation and the world. Beaches in Walton, Bay and Gulf Counties have been chosen for the number one ranking by Dr. Stephen P. Leatherman, an authority on beach quality and author of America’s Best Beaches.
Northwest Florida enjoys a delightful climate, with mild winters, lots of sunshine and clear days. The Florida panhandle lies in U.S. Climate Zone 8, the same climate zone as famed resort/residential areas such as Hilton Head (SC), Amelia Island (FL), Kiawah Island (SC) and St. Simons and Sea Island (GA). The State’s beauty and variety of landscape is legendary. Northwest Florida has a distinctive geography, culture and cuisine that is very different from Miami or Orlando.
The Florida panhandle draws approximately seven million visitors annually. According to Visit Florida, Florida’s tourism and visitor department, one-third of these tourists are from families with incomes over $75,000 and 16 percent are from families with incomes over $100,000.
The number of elite vacation developments in Northwest Florida is growing. At resorts like Seaside, Rosemary Beach, WaterColor and WaterSound Beach, gulf-front lots have sold for $40,000 per linear beachfront foot to prosperous families who have chosen the Emerald Coast.
The new Panama City airport now being built is expected to be operating in March 2010. It will be a large international airport, thus opening the Florida panhandle to easy access from the East and West coasts, the Midwest, Canada and Europe. Previously, access to the area by air was limited to regional airports.
Economists expect that the new airport will become a powerful economic development engine for the region. Throughout history airports have a powerful track record for increasing economic development activity.
The new Panama City airport will be the first major airport built in the country in almost fifteen years. As a large-scale greenfield airport site, it provides new opportunities and tremendous flexibility for businesses dependent on air travel and logistics infrastructure.
There are strong analogs for the development of this airport in Huntsville, AL, Savannah, GA, Jacksonville, FL, Fort Myers, FL and Northwest Arkansas. All of these airports have stimulated significant adjacent development.
The State of Florida forecasts that over its first decade, the new airport would create 8,000 new jobs and at completion a total of 13,000 jobs. An important comparison is the construction of the new Southwest Regional Airport in the Ft. Myers/Naples area in 1983, which had a huge impact on real estate values. Since the opening of the airport in 1983, aggregate residential real estate values in the surrounding area have increased an average of eleven percent per year.
Fortune Magazine (October 14, 2007) chose the St. Joe Company as one of the “Ten Best Stocks for 2008″, pointing to the long-term potential of the corporation and its development business situated in the Florida panhandle. The article says: “When Florida real estate does rebound, investors will be kicking themselves for not recognizing today’s $28 stock price for St. Joe Co (JOE) — Florida’s largest private landowner — as a rare opportunity.”
In the rapidly changing economic climate, it is important to research and ask questions before making any investment choice. Yet the truth is that Northwest Florida is a rarity, with a delightful climate and stunningly beautiful, mostly empty beaches. As you sit on the clean, white sand with your feet in the sparkling clear Gulf water, with pelicans and gulls flying overhead and dolphins cruising by – you realize that there are some significant intangibles here. The Emerald Coast is a very special place — and they’re not creating any more beachfront property!