The Perdido Key real estate market is now considered a rising market in the eyes of appraisers. The realtors who work on the Key have seen this trend for months in pockets and it is translating now across nearly every segment of the market. Inventory remains low, 22% below the 3 year average and prices have risen approximately 2 percent in 2014. First quarter 2015 has been the best quarter for sales volume in years. Certain categories and types have shown greater price bumps, the condos in Lost Key Golf and Beach Club for instance. Uncharacteristic is higher inventory in Indigo and the same with the very low availability of Palacio residences. These newer projects are selling well when priced within fair market values. Older, “vintage” condos built in the 1980’s are more affordable and sell in very short order.
The great news is that new construction is finally coming back to Perdido Key. Vista Del Mar will break ground in April with a completion date in 2016. 70% of the 64 luxury residences have been pre-sold. WCI’s Lost Key Golf and Beach Club is preparing infrastructure on its site. New residences will come out of the ground in the next few months. Multi-plexes of various floor plans are anticipated along the golf course lots being prepared.
The real estate picture on Perdido Key is best described by the calendar with “eras” of events that have defined the realty market on this Gulf of Mexico hide-away.
1980’s Building Boom
Prior to the late 1970’s little was developed on “The Key” outside of fishing shacks and beach front cinder block cottages. The occasional weather event would wipe the slate clean in times when construction techniques and the expense of pilings exposed these dwellings to the brunt forces of nature. After hurricane Frederick in 1979 the west side of Perdido Key began to be dotted with a new round of building but this time condominiums were the developers choice. 3 new sites on Johnson Beach Rd on the east end also were selected for development.
The 1980’s building boom was primarily on the west side to exploit the narrow span between the Gulf and Old River so owners could have beach access and boat dockage in one package. Shipwatch and SeaSpray took that concept to a higher level erecting condos on both sides of Perdido Key Dr. Complexes like Beach& Yacht, Perdido Towers, Windward and others put mini-marinas on the Old River side along with boat storage, and tennis courts. The Johnson Beach side of the building boom saw Sandy Key, Lands End and Vista Del Mar come out of the ground as purely beach oriented and tucked away from the traffic of Perdido Key Dr. Ocean Breeze (East and West) and several low rise condos then appeared along Perdido Key Dr. and some smaller townhome and single family dwellings on the Old River shore and River Rd primarily for boaters.
This era brought real recognition and prosperity to what was a sleepy, locals’ get-away. Most visitors to Perdido Key had been from Mobile, maybe Louisiana or Mississippi and early buyers of condos were from this core group. However the Orange Beach/Gulf Shores visitors discovered the quieter, laid back secret just steps away and then Birmingham and Atlanta found out about Perdido Key. The second and third generations are now the demographic we market resales to in ever expanding circles, even into Houston and Dallas. These “vintage” condos built in this era are still popular with buyers looking for affordable, quiet, very family friendly. Many of these units have been upgraded with tile throughout, granite counters and stainless appliances, new baths and furniture.
The 1987 Federal tax revisions decimated investors and brought building to a halt and Escambia County took the opportunity to draw up new planning and zoning, specific to Perdido Key, during the lull.
New Life in a New Century
With national prosperity and especially the economic power house of the Southeastern U.S., condo developers returned to Perdido with new methods and new rules and new zoning from the County and the state. A cap on the number of units allowed on Perdido Key was imposed and basically 13 units per acre limited the high rise scramble. The first out of the gate however found a loop hole and used contiguous acreage across the street to boost the number of units. Palacio, Windemere and Indigo joined Beach Colony as high rise condos in the 2001-2005 time frame. The next wave was Mirabella and LaPlaya, on the gulf and Florencia and La Serena on River Rd. Riviera Dunes, and Spanish Key were on the west end. Then the elite, larger condos came along to satisfy the incredible demand in an era of “flipping”. La Riva, The Palms, La Belle Maison, Marseilles, Capri, Atlantis and Mediterraean. In the heyday cranes were the norm against the gorgeous sunsets over our paradise. Prices continued up in a frenzy.Then came Ivan!
Post Ivan and the BP Oil Spill
Hurricane Ivan was the 10th most powerful hurricane ever recorded and it made a direct hit on Perdido Key on September 16, 2004. Most everything built before 2000 was destroyed mostly by storm surge. Many well built complexes like Sandy Key or Beach and Yacht survived but the ground floor units, allowed in the 1980’s designs and codes, were gutted. The instantaneous loss of inventory brought higher prices for a time but by May 2005 the horizon for recovery of Perdido Key was still far in the distance and the market began a slow collapse that reached bottom in 2008. We bounced along the bottom with short sales and foreclosure sales and the national recession. In 2009 we finally began seeing some recovery in tourism and visitor traffic that brought some uptick in sales volume, but at bargain basement prices.Then the BP oil spill!!
The BP disaster was a curse and a blessing. We did have some oil on beaches on Perdido Key and tar balls in our precious sugar white sand. It was almost immediately cleaned up and a non-event by the fall 2009. The publicity and false images that sensationalized the true outcomes caused the real damage. We could not produce enough positive advertising to even neutralize the media hype. That is until BP started a national ad campaign promoting “clean beaches and open for business”. Now we were on the map and people nationwide knew about our Perdido Key. Additional BP advertising dollars flowed into the Perdido Key Chamber, the tourism marketing arm for the area. Their spectacular leveraging of those dollars with gift card promotions, Facebook campaigns, internet marketing, sweepstakes, multi media public relations etc. turned the entire s calamity around. Within one year we returned to 2009 levels and in 2014 better than doubled tourism business on the Key.
This high level of tourism visitation and national attention has translated into real estate sales and increased prices. We can legitimately say we are in a rising real estate market. The market is further buoyed by the success of the first new construction project Vista Del Mar This is the first in ten years and developers are lining up additional projects on the beach. WCI’s development on the Lost Key Golf and Beach Club is building infra-structure to support their construction plans for multi-plexes for marketing very soon.
The Perdido Key real estate market is strong and still provides some great value. Compare prices in Destin, along 30A, even Ft Walton and Pensacola Beach. Any buyer will find variety and affordability and luxury, exclusivity…even new construction on Perdido Key.