Over the past 24 months, homes in the most desirable locations across the nation had seen their values increase by up to 30%, as a combination of lockdowns, new work-from-home opportunities, limited inventory, and a desire to ‘live the dream’ pushed prices higher. But property prices across much of the U.S. have recently stalled, as high inflation and economic uncertainty bite.
However, a new report in Yahoo! Finance entitled “Why Buying Property in These Vacation Destinations Could Be a Great Investment” identified five places where the market is still hot.
30A is first on the list.
“The term ‘30A’ isn’t known to much of the country outside the Southeast, but it’s a huge rental property area with room to grow,” wrote John Csiszar, a financial planner and investment adviser. “30A refers to the stretch of highway between the popular resort towns of Destin and Panama City, Florida, and it’s dotted with small communities full of charm and gorgeous views right on the sandy beaches of the Gulf of Mexico. As more and more visitors desire ‘authentic’ travel experiences, places like 30A are well-positioned to be great investments.”
The Yahoo! Finance report said that rental property located in a hot market can generate both long-term capital gains and immediate cash flow. “In many areas, rental income can far exceed the cost of the mortgage on the property. This means you’ll essentially be paid to own a property as it appreciates in value. However, to reach this investment nirvana, you’ll have to pick properties in hot areas which generate consistent rental income.”
Jimmy Burgess – local property expert and CEO of Berkshire Hathaway HomeServices Beach Properties of Florida – agrees.
“Homes along 30A have been some of the most desirable in the nation for the past several years, and the demand for homes has far exceeded the supply,” said Burgess. “This has partly been due to so many people from across the country wishing to move from being vacationers on 30A to becoming investors here.”
Burgess said that although economic conditions can be hard to predict in the short run, one would be hard pressed to find anyone who is not extremely bullish on the 30A area for the long term.
“The things that make our area so attractive remain the driving force for continued growth and investor value: low density; southern hospitality, and some of the most beautiful beaches in the world,” said Burgess.
According to Burgess, the sweet spots in the local market are family homes with easy access to the beaches and various communities along Scenic 30A.
“Being able to walk or ride a bike to the shops and restaurants of Seaside, Rosemary Beach, WaterColor, Gulf Place, Alys Beach or Grayton Beach is very much in demand,” said Burgess. “People want to feel they are close to all the amenities. These properties are sought after as second homes, for permanent living, and as rental investments.”
Burgess also shared exactly why he thinks 30A ranks as one of the nation’s property hot spots.
“When people invest in real estate along 30A, there are three ways the purchaser can anticipate a potential for return,” he said. “First, is the potential for price appreciation. Second is the income potential through short-term rentals.”
But Burgess said the third reason is perhaps the most significant.
“If you ask anyone their favorite childhood memory, it usually involves a family vacation, often in a coastal community,” he said. “Yes, buying a home along 30A has the potential for price appreciation and rental income, but it also provides the owner an opportunity to place themselves in the best childhood memories of their children or grandchildren. That’s a legacy ‘Return on Investment’ that most other investments can’t offer.”