3 Reasons Why 30A is NOT in a Real Estate Bubble
If you are worried about a real estate bubble on 30A you shouldn’t be. While it may be tempting to wonder if the market is overheating on 30A, an examination of the numbers provide clear evidence of why this is NO bubble.
From 2010 through the present, the growth of 30A real estate (east and west combined) has been controlled and linear. In fact, the average growth in price has been 7.71% overall for that time period. A quick look at this chart tells the story at a glance.
Notice the linear growth pattern exhibited from 2010-2017. Compare the curve from 2010-2017 to the curve from 2003-2005.
The difference is remarkable.
There is Significant Cash in the Market
A little-known fact is from 2010-2013, 80% of all transactions were paid 100% in cash. Compare this to the 2003-2004 time period when purchases were heavily leveraged. Moreover, banking laws subsequently changed requiring purchasers to have a much larger investment than was previously required. The result? Today’s owner has more skin in the game and is better positioned to weather whatever momentary downturn that may occur.
Supply and Demand
Supply and demand are concepts as reliable as gravity itself. The effects are inescapable. The simple fact is property south of 98 along the length of 30A is limited. Remove the national forests, commercial property and other special use property contained on 30A and land available for residential development are limited indeed!
Consider the increasing availability of direct flights into our airports and the relative absence of tourists from outside the southeast, and the demand side of the equation only shows potential for growth. Given the constant level of available property, supply and demand will have its way with prices. And that pressure will favor price growth over the long term as demand continues to rise.
While this is in no way intended as a crystal ball prediction, even a cursory examination of the fundamentals in the 30A market should put your mind at ease. If “bubble fear” is something that has delayed you from entering the 30A real estate market, come on in!! The water is turquoise AND warm!