October 2009 Issue FOLLOW-UP by Patrick Anderson Auction on the Beach Exposes Weak Property Values |
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13 & 15 Sea Oats are two townhomes sharing a center wall
The Villas at Coast Cottages. CLICK TO ENLARGE PHOTO
East Beach near Gould's Inlet. CLICK TO ENLARGE PHOTO
1 Sea Oats Lane, aka 2003 Coastal Living Idea House
St. Simons Island, October 24, 2009. There's nothing like an absolute
auction to demonstrate the value of real estate. On Saturday, October
24, six high-end properties went on the auction block at The Villas at
Coast Cottages. The results produced a sobering reality that caused
many in the estimated crowd of 200 people to shake their heads in
wonder. A few successful bidders walked away happy with what they
believe will be outstanding investments. Here are the winning bids
which include a 10% buyers premium for the auction company:
• 15 Sea Oats Lane sold before the auction at $1,025,000
1 Sea Oats Lane (the 2003 Coastal Living Idea House) was initially
offered for auction, but did not draw an acceptable bid. The highest bid
at the time it was pulled from the auction was $825,000 including the
10% buyer's premium. It was the only property being bid subject to
owner’s approval of the price (known as a "reserve" sale). The other
properties were offered for absolute sale with no minimum bid.
The atmosphere was energized by J.P. King's entusiastic auctioneer
with several "bid assistants" shouting out the bids as they came in.
There were clearly more spectators than bidders, all of whom were
treated to barbecue and soft drinks. As the crowd gathered around the
auction tent, musicians played soft jazz in the background.
It was a unique experience for St. Simons Island and will surely have an
effect on values along the beach for the immediate future. Prior to the
auction, the lowest list price for a finished Villa unit was $1,495,000.
The $770,000 paid for an identical unit at auction (and three positions
closer to the beach!) has got to be devastating news for anyone
marketing a property on Sea Oats Lane.
The two Bruce Drive lot sales set new recent lows for East Beach. The
closest sale resembling them was 2205 across the street which sold in
February 2009 for $350,000. It had a 1958 tear down included, but
would not have the lovely ocean views possible from the two auctioned
lots. These Villas and Each Beach auction prices are certain to provide
more downward pressure on other values along the St. Simons Island
beach front.
The Villas at Coast Cottages has heretofore established itself as the high
end of the local condomium/townhome market. The highest price paid
for a Villa was $1,850,000 in late 2005. If that same Villa is now worth
as little as $770,000, how will that affect values in St. Simons Grand,
The Beach Club, and other prominent beach front projects? Time will
tell, but I expect the tax assessors will have some major pencil
sharpening to do for 2010.
auction to demonstrate the value of real estate. On Saturday, October
24, six high-end properties went on the auction block at The Villas at
Coast Cottages. The results produced a sobering reality that caused
many in the estimated crowd of 200 people to shake their heads in
wonder. A few successful bidders walked away happy with what they
believe will be outstanding investments. Here are the winning bids
which include a 10% buyers premium for the auction company:
• 15 Sea Oats Lane sold before the auction at $1,025,000
- (an ocean view finished 3500 sf luxury Villa)
- (an ocean view finished 3500 sf luxury Villa)
- (an ocean view undeveloped lot zoned for a single family or a
two-family structure)
- (an ocean view undeveloped lot zoned for a single family or a
two-family structure)
- (ocean view undeveloped East Beach lot zoned for a single
family structure)
- (ocean view undeveloped East Beach lot zoned for a single
family structure)
1 Sea Oats Lane (the 2003 Coastal Living Idea House) was initially
offered for auction, but did not draw an acceptable bid. The highest bid
at the time it was pulled from the auction was $825,000 including the
10% buyer's premium. It was the only property being bid subject to
owner’s approval of the price (known as a "reserve" sale). The other
properties were offered for absolute sale with no minimum bid.
The atmosphere was energized by J.P. King's entusiastic auctioneer
with several "bid assistants" shouting out the bids as they came in.
There were clearly more spectators than bidders, all of whom were
treated to barbecue and soft drinks. As the crowd gathered around the
auction tent, musicians played soft jazz in the background.
It was a unique experience for St. Simons Island and will surely have an
effect on values along the beach for the immediate future. Prior to the
auction, the lowest list price for a finished Villa unit was $1,495,000.
The $770,000 paid for an identical unit at auction (and three positions
closer to the beach!) has got to be devastating news for anyone
marketing a property on Sea Oats Lane.
The two Bruce Drive lot sales set new recent lows for East Beach. The
closest sale resembling them was 2205 across the street which sold in
February 2009 for $350,000. It had a 1958 tear down included, but
would not have the lovely ocean views possible from the two auctioned
lots. These Villas and Each Beach auction prices are certain to provide
more downward pressure on other values along the St. Simons Island
beach front.
The Villas at Coast Cottages has heretofore established itself as the high
end of the local condomium/townhome market. The highest price paid
for a Villa was $1,850,000 in late 2005. If that same Villa is now worth
as little as $770,000, how will that affect values in St. Simons Grand,
The Beach Club, and other prominent beach front projects? Time will
tell, but I expect the tax assessors will have some major pencil
sharpening to do for 2010.
Anderson at (912) 223-3263 or CLICK HERE to visit his tax relief website. |