Why a Destin Bubble Blog?

I vacationed in Destin, Florida in the summer of 2005. It’s a beautiful place with spectacular, sugar white beaches.

My family and I stayed in a very nice low-rise condo complex in the eastern, Miramar Beach area of Destin. We liked it so much, I decided to check into prices on two bedroom, gulf view (that's "gulf view", not "gulf front") condos. I have one vacation property in the north Georgia mountains that is cash-flow positive in its second full year. I want a beach condo to add to my vacation rental portfolio.

I was shocked to say the least ... 2nd floor and above units (I'd never buy a first floor - hurricanes wash through first floor condos) with decent gulf views were $550,000 to $600,000. I was shocked because when I did the math on rental income versus a mortgage, sky-high quarterly fees ($1200 per quarter) and sky high property taxes ($2500 per year), there's NO WAY purchasing one of these could come any where near cash-flow positive unless rental rates doubled which isn’t likely to happen for decades. I couldn't understand why anyone would buy at these prices.

I began researching coastal real estate prices. That's when I first began reading about the housing bubble and the coming bust. I began tracking prices of two bedroom units in the this condo complex. I've been tracking them since January 2006. What I have witnessed is truly amazing.

I will quote some detailed statistics in a coming post. What I will tell you right now is, of 30 units I've tracked since January of 2006, six have either sold or been taken off the market. Of the remaining 24, five have been reduced in price once, three have been reduced twice, and three have been reduced three times. The largest reduction (actually three reductions over time) was 22.2% or $99,900.

Here are some things that will be coming to this blog shortly:

1) More detailed statistics on the condo complex I've been tracking. I think this will shed some light on what's happening with prices in Destin.

2) Links to other bubble blogs and financial sites. A broader view of this historic housing bubble burst.

3) A history of the real estate explosion in Destin and where I think things are going.

My goal is to provide information potential buyers might use before investing in Destin's highly inflated prices. This information can also be used to judge other coastal Florida areas (such as Panama City, Daytona Beachl, etc.).

I love Destin and I intend to own there. But I'm going to own one of those condo's listed for $600,000 in 2005 for $250,000 to $300,000. That’s going to happen in the next 6 months to two years, depending upon how fast the bubble burst accelerates.

I'm going to have at least a break-even or a positive cash-flow on my Destin vacation property. Condo flippers pain, my gain. As it ought to be.