Mandoki Real Estate Newsletter July 2011

MID-YEAR RE SALES RECAP

Here is a snapshot of the Gulf-front/beachside condos currently for sale in Gulf Shores (GS), Fort Morgan (FM), Orange Beach (OB) and here at Gulf Shores Plantation (GSP):

	Units for Sale	Units Under Contract or Pending (UCP)	% UCP
Gulf Shores	229	23	10.04%
Fort Morgan	107	13	12.15%
Orange Beach	371	34	9.16%
Gulf Shores Plantation	43	7	13.28%

The inventory at the Plantation is getting whittled down, which is helping values slowly recover after the double-disaster that was 2010: 1)Taylor, Bean Whitaker foreclosures coming to market as “fire sales” in the first quarter and 2) the BP Oil Leak in the second.

The general year-to-year trend seems to show a slight price recovery at the Plantation and Fort Morgan in general:

# of Units Sold by Year and Area
	Jan-June 08	Jan-June 09	Jan-June 10	Jan-June 11
GS	76	128	129	90
FM	56	32	42	55
OB	102	108	133	162
GSP	29	9	20	17

# of Units Sold by Year and Area
	Jan-June 08	Jan-June 09	Jan-June 10	Jan-June 11
GS	76	128	129	90
FM	56	32	42	55
OB	102	108	133	162
GSP	29	9	20	17

This data comes from the Baldwin County MLS and represents sales of Gulf-front or beachside condos in the four markets for the period of January 1 thru June 30 for years 2008 through 2011.

The following graph shows how the four markets interact. Keep in mind that the data is a composite of condos of varying sizes, construction types and age, but they are all Gulf-front or beachside units. This data is useful in comparing each market to itself on a year-to-year basis, but not necessarily in comparing one market to another.

The bar graphs are the number of units sold in each of the four markets for the first six months of 2008 to 2011 (# Units Sold on the left side of the chart). The line graphs are the median price per square foot in each market for the same period (Median Price in $ per Square Foot on the right side of the chart).

The chart shows that Gulf Shores Plantation and Fort Morgan prices increased from 2008 to 2009, but at the cost of the number of units sold. Conversely, prices steeply declined from 2009 – 2010, with a corresponding increase in sales. (Note: The correlation between Gulf Shores Plantation and Fort Morgan stats is easy to understand, as the Plantation makes up a significant portion of condo sales in Ft. Morgan.) However, from 2010 to 2011, this pattern appears to change, with some interesting implications.

It looks like Fort Morgan and the Plantation to some degree, are recovering in both pricing and sales. Unit sales increased over the same period last year (which was mostly before the oil spill) and pricing is also increased. This suggests that prices may have genuinely bottomed-out.

In Gulf Shores, prices seem to have flattened, but sales are down compared to last year. In contrast, prices have slightly increased in Orange Beach, but sales are up dramatically. In fact, sales in Orange Beach have steadily increased since 2008, again, as prices fell. Even with the strength of Orange Beach sales, I hesitate to predict that their prices will have flattened out by year’s end because there is so much beach-front inventory actively for sale (337 units).

Sales inventory at the Plantation is at a real low; the 36 units actively for sale represent less than 6% of the 623 units on property. Most of the speculators and many of the second-home owners who bought at the 2005-06 “peak” have been eliminated by foreclosure and/or short-sale, so there just are not many “distress” sales available. “Scarcity” is a factor in driving price, and it appears that units for sale are becoming scarce at the Plantation. Keep in mind that prospects are also looking at other properties and that Gulf Shores Plantation must compare favorably with them. It is critical that the property be well-maintained and have an up-to-date look and “feel.” Guests must enjoy positive vacation experiences that ensure that they return again and again. This is imperative to ensure GSP values recover strongly. In short: If the place isn’t kept up well and doesn’t have a strong rental demand, it doesn’t matter how few units are for sale...we still won’t be able to get the prices up.

Finally, a mid-year performance report for those of you considering listing your property for sale in the near future. Almost half (43%) of the 75 sales across the Plantation in the first six months of 2008-2011 were brokered by Joe Savage and Mandoki Realty. This represents 50% more than the next-highest performing brokerage, and FOUR TIMES more than the next best-selling agent. While there are other good reasons to use Mandoki Realty to market and sell your Plantation property (location, knowledge, availability) the proof is always in the performance….and ours speaks for itself.

Wishing you all a great Summer!