REAL ESTATE NEWS, COMMENTARY & OPINION
The old adage “timing is everything” really applies to new home communities that came on the scene around the real estate market top in 2005/first half 2006. With some pre-construction contracts signed before it became apparent that the hot market days were over, by the time these first homes came out of the ground and closed, “the bloom had fallen off the rose.”
Trying to time a market, whether it be the stock market or real estate market, is no simple task, and most cannot foresee the exact top or bottom, even the professionals and industry analysts. Many investment professionals would agree that the wisest investment strategy is a longer-term strategy. In the current environment, it sure "appears" that the timing is sweet for buyers now, especially for those planning to stay put for awhile in a home.
Let's rewind the tape. Since builders in the boom times were having a hard time keeping up with demand, getting a single-family home built in less than a year in the Amelia Island area was a challenge. (New construction condos and townhomes could take as long as 2-2 1/2 years from contract to be built and then close.)
So, when it came time to close the deal with homes built for “investors,” some bailed out. Thankfully, the Amelia Island market was not fraught with “investors” like some areas in the south Florida real estate market. Everyone hears of the glut of new condos in Miami, (something like a five year supply of Miami new construction condos to be absorbed).
But, here in the Amelia Island area and elsewhere, in new home communities having the unfortunate timing to come on the market around 2005-2006 (what we now know, in hindsight, was the market peak), an over supply of homes were, indeed, built for what became a dwindling demand.
Amelia National Golf & Country Club is one such community that came out of the ground with unfortunate timing (pre-construction contracts signed in 2005). During the past year, new homes have been selling at big discounts, some at less than what it would cost to reproduce them.
I recently spoke to a local tile contractor who does work for one of the large new home builders (a national brand homebuilder) here in Nassau County, Florida. A few years ago when the market was hot, he was tiling around 30 homes a month for this home builder. His business has slowed to only around two homes a month for this one builder. So there you have an indication of the stark contrast between the booming market and cool market. He did say, however, that builders are now starting to build more homes -- it appeared business would be picking up for him. (Perhaps an indication that the market has bottomed?)
DEALS FOR BUYERS IN NEW HOME COMMUNITIES
There are deals in new home communities, where after the market fell off, builders with excess inventory slashed prices on their “spec” homes. Additionally, distressed/foreclosure homes have emerged, competing with excess builder spec homes. Florida home buyers with good credit and a down payment, can take advantage of what some feel may be “the best new home deals of the decade in Florida.” It is, however, more difficult to get financed for a home purchase in the current environment.
There are new country club homes for sale here in Nassau County, Florida just a ten minute drive to the Atlantic Ocean beaches of Amelia Island, selling in the last six months at prices ranging from $250K to $353K (we’re talking only $110 to $125 per square foot!). There’s one new home in Amelia National, never occupied, available at this writing, for $103 per square foot (that’s not a typo!) at $259,000 for 2,514 square feet. This is in an amenity-rich, gated golf country club (with a coveted Tom Fazio golf course). Amelia National offers residents a beautiful resort-style swimming pool and hot spa, three clay tennis courts, fitness center, night time security guard, posh clubhouse with bar and restaurant. These high-end amenities are available with both easy access to the beach and charming Fernandina Beach, yet conveniently located to an international airport (Jacksonville) just a 25 minutes drive. By the way, Amelia National Golf and Country Club is attracting its fair share of south Floridians who have decided to migrate to north Florida.
Recent buyers have been getting some great deals on homes in Amelia National, and houses are selling (currently five homes are pending sale/under contract). But realize this is not a community for those with moderate incomes nor a retiree without a nice nest egg. While home buyers can get a great deal in Amelia National until the available homes are bought up (there still are about 15 homes for sale, listed in the Amelia Island/Nassau County MLS ranging from $103 to $204 per square foot), realize that the Tom Fazio golf club annual membership fees are not being discounted. Or, if you’re not a golfer, the annual mandatory "Lifestyle" membership fees (for use of pool, fitness center, tennis, restaurant/bar), are not being discounted. The annual Lifestyle membership costs around $2,700 a year, plus another $900 annual minimum must be spent on food and beverages at the restaurant/bar. There also are additional HOA fees.
Annual fees for living in Amelia National are higher than fees at the next door neighbor, the Golf Club at North Hampton, for example. Some of the builder-owned homes in Amelia National (as of this writing, nine builder spec homes are left unsold in Amelia National), do come with the membership initiation fees “comped” (i.e. the "initiation" upfront fees are being comped, but not the annual fees).
COMPARING NORTH HAMPTON TO AMELIA NATIONAL
Amelia National has positioned itself as a “private” golf club (the public cannot play the course, and the community is gated), whereas North Hampton is not gated, and the public can get on the course to play. The Amelia National clubhouse, restaurant, and pool are more posh than North Hampton. Amelia National has the feel of a high-end resort, and also offers a fitness center. There are a lot of homes for sale in North Hampton, around 57 homes listed (mainly re-sales), according to the Amelia Island/Nassau County MLS as of 7/21/08. North Hampton is a nice neighborhood with many beautiful homes and a challenging golf course, for those desiring golf club living with more moderate membership and community fees (for those who don't mind the public can play the course). North Hampton did catch the big wave of expansion early (the neighborhood came on the market around 2000/2001). The Golf Club at North Hampton is approaching build out, except for the section near the marsh (where you can still build a new home starting around $500k-plus).
SOME LEAVING SOUTH FLORIDA FOR “GREENER PASTURES” IN NORTH FLORIDA
The Amelia Island area, in general, seems to be attracting south Floridians (and is, of course, a beloved second home market and vacation getaway for Georgians). Coming to northeast Florida, Fernandina Beach and Amelia Island, has been “a breath of fresh air” for some former south Floridians who wanted to escape over-crowded cities (and crowded waterways for that matter). They are coming to northeast Florida from Naples, Boca, Fort Lauderdale, Sarasota and West Palm, for example, and relocating up here to the Amelia Island area. Amelia Island remains a very popular playground for Georgia residents, who own second homes here by the seaside, and can drive from Atlanta in about 5 or 6 hours.
The appeal of northeast Florida, as compared to south Florida, includes more affordable home prices and better deals on golf course communities – this is what people migrating from south Florida have said. Not to mention the lower risk of hurricanes in the northeast Florida area, compared to south Florida and the gulf coast. Frankly, I’ve heard from some south Floridians another reason for moving to north Florida -- the congestion and problems with uninsured drivers on the roadways with higher numbers of illegal immigrants in south Florida.
GOLF CLUB LIFESTYLE, LAUNCH (OR DOCK) YOUR BOAT NEARBY
A former Fort Lauderdale resident and avid mariner looked out over a marina here in Fernandina Beach, and marveled at the serenity. He described the chaotic, congested waterways that have evolved in south Florida. A maritime paradise, Fernandina Beach and the Amelia Island area offer free public boat ramps, plus several private marinas. (There’s even one private, gated yacht club community where you can buy/build a new home and potentially purchase a boat slip starting at 40 feet, at Oyster Bay Harbour. The new Oyster Bay yacht club has recently opened).
If you’re an avid golfer desiring resort-style living in a private golf club community, certainly take a look at Amelia National for a good deal on new homes (while they last). If you enjoy boating, too, you can get a slip at one of Amelia Island’s marinas. (Also see my blog for more on the lowest priced home in Amelia National and another “bargain” priced home (a short-sale) located on Amelia Island walkable to the beach.)
Unfortunately, not all those who want to buy right now, actually can proceed. Many buyers looking around at real estate these days can’t buy “yet.” The main reason why potential buyers can’t currently “commit” to a purchase of a home is because they need to first sell an existing home. Also, some buyers reportedly feel no urgency – they remain on the fence, hoping for yet lower prices. Lower consumer confidence is also a factor, considering the economic environment and soaring gas prices. Then there are those buyers who do try to buy a home, but can’t get financing with stricter lending standards in place in the current environment.
Will buyers who do snatch up homes look back a few years from now and be pleased with the "steals" they purchased in 2008? Only time will tell...
NOTE: Amelia Island/Nassau County MLS data may contain errors and is not guaranteed.
For further information about Amelia National Golf and Country Club, Golf Club at North Hampton, Oyster Bay Harbour, and other Amelia Island area communities, contact an Amelia Island area Realtor®. Realize that if you have to sell a home before you can buy, it's too early to call upon a Realtor's services. And these days, if you need financing, get pre-approved before your home buying tour, as you'll be in a better negotiating position if the seller knows you're already approved and can, indeed, get the deal done. Of course, cash is king.
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Note: The least expensive listed homes for sale in Amelia National are located in what can be described as the “less desirable” streets in the community – closer to the new Amelia Concourse roadway. A wall to run along the Amelia National property boundary that hugs the Amelia Concourse is yet to be built by community developers (it may be years away from being built). The Amelia National front gate is currently open in the daytime (this is often the case when newer communities have homes under construction). The gate closes for the evening and a security guard is also at the front entry guardhouse during the night.