The Destin Log has come out with several columns this week detailing the past decade in real estate. Unlike the past two decades, the 2000s saw significant changes in property values, with steep increases during 2004 to 2007, and also more homebuyers. But, as many saw from 2007 to 2009, this wasn’t really a blessing to the local real estate market in any city. Those with adjustable rate mortgages, for example, saw their rates go too high starting in 2007 and many weren’t able to make payments. Couple this with the economic decline starting at the end of 2007, and the real estate market crashed. The present market, as we discussed last week, has an abundance of foreclosures and lowered property values.

The lower property values take the real estate market back to 2004 prices, and, with stricter lending regulations, the real estate bubble shouldn’t happen again. But, the decade over all, saw the most significant changes, according to a column written by Fraser Sherman. In 1999, for example, the real estate market in Destin – as well as in all cities – was stable and foreclosures and short sales both were unheard of. During the “bubble” starting in 2005, prices rose so much that the cheapest home in Destin at the time was about $260,000. The bubble also caused more development in Destin during the decade, and, now, developers have much less space to work with.

Businesses, or commercial real estate, hasn’t been so quick to recover, according to another column from the Destin Log and now faces more hurdles for the future. The change this decade in commercial real estate is that most businesses are geared toward tourists – not locals as much. Although rental properties increased over the course of 2009, businesses are now working harder to meet the needs of the tourism industry and also to combat the fallen real estate market.

A column by Jack Simpson in the Destin Log analyzed the trends for Destin real estate in 2009. In some sense, aside from the conversation Simpson is having with himself, the column is a review of most real estate in 2009 – not unique entirely to Destin and the Emerald Coast but also to real estate in general. Destin, in rentals, did see some significant positives over the year, which wasn’t mentioned in Simpson’s column and the end of the year also saw a rise on condo sales. In general, 2009 was the aftermath of the housing crisis that has been an issue since 2007. But, despite excessive foreclosures in Destin, what was seen in Destin wasn’t much different than in the rest of the nation – except for the slight upturn seen mid-year.

The main issue Simpson sees with the Destin housing market is the amount of foreclosures on the market, as well as significantly lower property values and higher insurance costs. While the latter has been due to hurricanes, both foreclosures and lowered property values are a direct result of the housing marketing crash. But, because Destin has seen an upswing in the amount of homes being bough during the second half of the year, it’s also somewhat beneficial, as now housing is more affordable in Destin. This, as Simpson also mentions, should be the goal for 2010: To make housing in Destin more affordable to those who should be buying homes.

Aside from purchasing homes in Destin area, another aspect of local real estate has some under fire by Simpson: beach renourishment. As we’ve seen in previous posts, the beaches along the Emerald Coast have been experiencing erosion and beach renourishment is supposed to combat this. As Destin’s primary asset to home owners and vacationers, the beaches are important in attracting people to Destin, but, unfortunately, the beaches being renourished, according to Simpson, are those that aren’t experiencing the most erosion.

Destin and the rest of the Gulf Coast have seen a rise in rental properties and home ownership since January. Although the latter faltered somewhat since the beginning of the year, by the middle, the market started increasing again but not at the same level as before the real estate crash in 2007. With homes reasonably priced, as well as foreclosures and short sales on the market, many are purchasing homes in general. Couple that with a desirable destination, and you have a local real estate market that has seen somewhat of an upswing, according to The Destin Log.

According to the piece published in The Destin Log, single family homes saw a 45-percent increase in fall, while condo sales increased 82 points over the course of a year. For single family homes, some of the factors for the increase might have included buyers waiting until fall and the tax credits for first-time home buyers. For the former, the fall appears to be an easier time to buy a home, as, aside from being “shoulder season” for snowbirds, getting to view a home or unit is easier and sellers are easier to negotiate with. Additionally, the tax credit for first-time buyers has been extended to April 30, 2010 and a new tax credit for repeat home buyers was also created.

Condos, on the other hand, don’t always fall into the “home” category and many snowbirds, always present in the Gulf Coast during the fall and winter, look for a second home. Perhaps the reason behind the condo sales increase is simply that the lowered prices this year have attracted more buyers looking for a second home, be it for a winter residence or a summer vacation getaway. Either way, the market for Destin real estate has been on a steady upswing since the middle of the year.

A recent column by writer Tommy Stevenson discusses how the changing skyline of Destin, essentially, reflects the current state of Destin real estate. Stevenson discusses in the column how that every summer he returned to vacation in Destin, the area had new buildings and was continuing to build new buildings. The prices, in addition, of homes and condos listed in the paper were generally around the million-dollar mark while, to reflect the current state of real estate, the prices hover at about 15-percent of the amount from three years ago for a condo. For a more detailed description of prices for Destin condos, look at the current Destin condo listings on JoshMcLeanHomes.com.

Not that the skyline changing in Destin is a bad thing, as this change allows the city some stability. Stevenson mentions that Destin went from being a fishing village to a city with a skyline much like that of Miami Beach, and, considering this was done over a 25-year period (when Destin became a city), the change is significantly more drastic than that of other resort communities. But, aside from a change for the better in the scenery, what does the changing skyline reflect, exactly?

As mentioned in this blog previously, one aspect that 2009 has seen for Destin is various new properties not sold in the area and, instead, standing vacant. What have been on the rise has been rentals, and some rental businesses in the area have even needed to expand their offering to accommodate the influx of customers that would rather rent for one to two weeks instead of owning a beach house. While new properties went unsold, even with prices dropping due to the drop in the real estate market, foreclosed properties increased and many properties currently being sold in Destin are foreclosures and short sales. As a result of less demand for new properties, the building of new homes and high-rise condos has stopped – at least for now.

In a column published recently by writer Jack Simpson in the Destin Log, Simpson goes through real estate trends from the past twenty-five years for Destin for a prediction of the current market. In the column, Simpson starts with talking about a Destin property that he purchased in 1974 and the ups and downs of Destin real estate since then and how the market has changed – building condos and being hit by hurricanes, for example. At the time when Simpson purchased his property, Destin was “depressed,” as he describes it, as a result of over building in the area. Destin, at the time, was not a city – it’s only been a city for the past 30 years – and the area was thought more of as a fishing town than a vacationing and resort town.

Instead of reading the entire article, some of the highlights Simpson mentions are the Economy Recovery Tax Act, passed between 1981 and ’86, which stimulated the economy – much like the current stimulus package in our current economy – and people started buying Destin condos for tax benefits, leading to the construction of more condos in the city. 1986 brought the Tax Reform Act which, to counter act all of the properties nationwide being bought reduced to eliminated the tax breaks from owning a property, caused a mild recession, which didn’t affect Destin significantly through the ‘90s. 1995, however, brought Hurricane Opal, which destroyed many of the older properties in Destin. Destin rebuilt itself and, as with real estate across the nation, saw steady increases in property purchases up until 2003, when more properties were being purchased and prices rose. 2006 to the present, like the rest of the nation’s real estate markets, also saw foreclosures and decreases in property values.

Simpson predicts that, by comparing the real estate trends from over the past 35 years, that we’ll soon be seeing an upswing. 2009 has seen some recovery in the market, although, as seen in previous weeks, other real estate writers see this as just the bottom. And, if this is indeed the bottom, as the saying goes, once you’ve reached the bottom, you don’t have any place to go but up.