Destin Developer Peter Bos interviewed with the Northwest Florida Daily News last week and talked about the current state of the real estate market, where we’ve been and where we are going.
I’ve included some excerpts, but for the whole story, you’ll have to visit the newspaper’s website, link provided at the end.
DAILY NEWS: Since we’ve had so much growth and development here in the past 25 years, are we going to be competing for a smaller slice of the pie in the next 25?
BOS: I think we’ve had some horrible growth in the last 25 years. I think what happened was this spike in demand, where a second home became everybody’s entitlement, and financing was readily available. And we had an explosive mark at rental, too, which helped subsidize the carrying cost of these homes for people. I think we ended up with a lot of people developing who really shouldn’t have been in the development business.
DAILY NEWS: Real estate sales along the Emerald Coast have plummeted from where they were in 2004 and 2005. How has that affected the higher-end development like Emerald Grande, or Turnberry, or some of the things that you as a developer have been involved in? Has it been as tough for you as it has for everyone else in real estate?
BOS: Actually, (it’s) probably more tough for us and the reason is not why you think.
I think that whenever everyone stopped smoking dope or smelling ether or whatever was going on driving 30 or 40 percent appreciation numbers, all of us knew that would not sustain itself.
However, we did not anticipate the pullback and the speed with which it pulled back. We were all making changes and adjusting, but we never anticipated the speed at which everything would literally stop. It didn’t slow down; it stopped. That stop hurt everybody.
DAILY NEWS: I’m going to go back to your comment about the media. I would agree with you that the media and how it portrays what goes on matters a lot. But back in 2004 and 3005 we wrote a lot of stories about the housing boom, and I never once had anybody in the real estate development business call and say, ‘Stop writing about how well things are going, because it shouldn’t be going as well as it is.’ So is it fair to say the media caused the stop or is it fair to say the media reported the stop, which occurred because people ran the prices up so high that eventually they were going to hit a ceiling?
BOS: (The) media’s reporting the situation as a general statement. And the general statement is, ‘Our market right now, for reasons of finance, and unavailability of finance, and overly aggressive lenders, and for all intents and purposes infinite supply created by easy financing, and a lot of developers who shouldn’t have been developing, what happened was we basically — they slaughter hogs and they fatten pigs. We were hogs. The development community itself overbuilt, over-supplied the market, in about every single market I can think of.
DAILY NEWS: What is the opening of the new Panama City-Bay County International Airport going to mean for the area?
BOS: That airport is huge. I think there’s already been some realization or speculation on land value in this whole area, but the best is yet to come. I believe the wave we’ve seen in the last 10 years, the wave we’re going into, I can’t tell you if it’s going to be 10 years or 12 years, but I can tell you where we’re going is way bigger than where we’ve been. And I can also say that I believe that a year from now, or two years from now, is we’re going to have the same thing again.
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