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Florida's Panhandle: Supreme Buying Opportunity

By Dr. Steve Sjuggerud
Tuesday, August 3, 2010

Greetings from Destin, Florida... Ground Zero for the Double Whammy.
I'm talking about the one-two punch of:
  • The bust in Florida coastal real estate prices...
  • AND the bust in tourism from the BP oil disaster in the Gulf.
The thing you have to realize is, both of these issues will go away some day... People will return to vacation here. And people will buy condos here again.
You also have to realize we might already be past the worst of it in both parts of the Double Whammy.
Residential real estate prices are probably down 50%. And desperate local business owners might sell for even better deals than the homeowners. Driving along the main road (called 98), I've never seen so many "Going Out of Business" signs.
I talked with a large-scale building contractor down here. "It's really tough now," he told me. "We had 250 people working for us three years ago. We were about one-third remodeling, one-third new homes, and one-third commercial construction. Today, it's mostly remodeling. I've cut back to 50 guys, and I have a hard time keeping them busy."
He continued... "In the last few recessions, I felt like I could see a light at the end of the tunnel. The orders would start trickling in. But this recession is different. There's no light yet."
My friend Jeff Archer lives around here. He has a standup paddleboard business – doing board sales and rentals. (His business is called YOLO Boards – short for You Only Live Once – see I asked Jeff about how the BP oil disaster has affected his business and other local shops.
"Businesses are hanging on by their fingernails," Jeff told me. "My business has been fine, mainly because paddleboarding is booming. But most businesses are really hurting."
Meanwhile, the beaches are still beautiful...
I spent an hour on the ocean, standup paddle surfing with my 9-year-old son. Not a drop of oil in sight. The ocean was clear and beautiful.
Jeff is on the beaches as much as anyone. "We had some small tar balls a few weeks ago," he told me. "But they were cleaned up off the beaches really quickly. We haven't had anything lately. The water and beaches are clean."
This is the most frustrating part for local business owners. The water and beaches are clean. But business is way down.
"The media has scared the tourists away – but we don't have any oil." I heard that over and over. Most of the resorts here have a nice offer – essentially "if there's oil, we'll give you your deposit back and you don't have to come."
But that message isn't getting out, and isn't resonating with people. You don't want to book a vacation to have it cancelled.
The Double Whammy has smacked Destin. Real estate prices are possibly down by half. And business owners are "hanging on by fingernails."
Meanwhile, Destin's beaches are clean. Oil free. No problem.
Don't get me wrong... It's not a ghost town. It's touristy here. And crowded. If business is terrible, I'd hate to see the main road when the town is full.
But if you ever wanted a vacation property or a business in this area, chances are good you'll never have the kind of opportunity you have right this second.
I am 100% certain the Double Whammy will dissipate. If you're interested, and can swing it, it's probably time to buy.
Good investing,

Further Reading:

Earlier this year, Steve visited Georgia to look into real estate opportunities there. Georgia was hit almost as hard as Florida in the bust, and Steve found a way to buy real estate there for a minimum 20% return in a year. Learn more here: Secretly Buying Cheap as Developers Go Bust.
And you can get the details on how this same situation is playing out in Florida here: An Oceanfront Florida Condo... for $4,600.

Market Notes


With today's chart, we pass along one of the most impressive showings in the market right now. It comes courtesy of China...
As the workshop to the world and its most important commodity consumer, China is a critical economy to monitor. If China is struggling, manufacturing firms around the world are struggling.
In early April, China's benchmark stock index, the Shanghai Composite, began a major decline that shaved 22% off the index in just over two months. During the decline, we labeled the 2,600 area a "must hold" level to convince us things were holding together in China.
As you can see from today's chart, the Shanghai Index briefly dipped below 2,600 in late June. But in the past few weeks, it has staged an incredible rally to climb back above the level. This new strength is no cause to stop worrying about China's economy... but it's a major step in the right direction for stock market bulls.

China's latest rally is a good sign

In The Daily Crux

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