With 2014 upon us, there is an overall optimism about what the new year has to bring the local real estate market, as momentum builds off of 2013.
"I see 2014 as a very good year for buyers and investors looking for good investments, but not stealing properties like they did in past years," said Grady Elder, broker and sales associate at Coldwell Banker United Realtors.
Closing out the year that was, those in the business say that cash was still king among buyers, whether it was condo sales, single family home purchases or commercial properties. In addition to cash dominating the market, inventory levels continue to drop "drastically" on "well priced and well maintained" properties.
Elder told The Log that the reduction of inventory has helped to spur a dramatic increase in new construction on single family homes, given that older existing inventory is priced very similarly.
While there may be an uptick in single family construction and purchases, condo purchases will continue to lag behind as financing is still difficult, Elder said.
"I would estimate that 70 percent of purchases were cash and not through bank lending," he added.
For John Paul Somers, broker at Somers & Company, cash investors "aggressively acquired residential properties" in 2013.
He said this catered to the "robust, income-producing" resort market, as well as commercial properties "yielding capitalization rates in the 6 percent to 8 percent-plus range."
Overall, both Elder and Somers say that 2013 provided many positive signs, especially as short sales and foreclosures are leaving the market or being worked through with property owners and lenders.
As for the state of the 2013 market, Elder said there is a noticeable recovery from the past four years, which he described as "dismal."
"I think prices have leveled off and now we will start to see a steady, but realistic growth in prices in 2014," he said. "Lenders were trying to loan money but they are all being scrutinized by governing bodies and made it difficult on the average buyer trying to get a loan."
He added that buyer confidence rebounded in 2013.
For his part, Somers said the market's fundamentals were impressive across the board in the past year.
He told The Log there is no shortage of pent-up demand from anxious buyers that are confident in the property valuations and historically low interest rates.
Looking at 2014, Somers said the local inventory of marketable residential and commercial properties should continue to decrease in supply, "fueling market appreciation."
Somers added that there will also be a more supportive economic environment for developers that would like to introduce new residential and commercial projects to the area.
"Builders will continue ambitious acquisition of existing, finished lots to meet the demands of buyers," he said. "Strong equity positions and lower debt have been instrumental in building a firm foundation to allow for further advancement in our real estate market's recovery."
How does 2014 shape up for Elder?
Well, he said steady growth in the single family home market should continue to be the norm as banks begin to free up dollars for lending.
Much like Somers, Elder also points to positive signs in the commercial market, telling The Log that "some areas of commercial real estate" have surged in the past 90 days, especially the sales of "income producing" commercial properties.
"There is still thousands of square feet of office space available in the Destin area, but the inventory should continue to dwindle as the economy improves," he said.