Changes Coming to Hammock Beach and Hammock Dunes
Strategy changes signal projects are being re-tuned to adapt to current market conditions.
Palm Coast, FL – September 25, 2009 – Palm Coast and Flagler County on the Northeast coast of Florida once led the country in population growth, attracted by its affordable prices and close proximity to the Atlantic Ocean and Intracoastal Waterway. Ginn-LA (Bobby Ginn and his financial partner Lubert Adler) and WCI Communities developed luxury condominiums and residential communities there. Facing market challenges, both companies are re-tooling their plans.
The boom drove real estate prices to unsustainable levels, triggering the well documented bust, in which the local market also played a leading role. Since 2006, successful development strategies that once brought a flood of buyers stopped working, leaving the luxury market stuck in neutral. WCI and elements of Ginn-LA (Quail West and Tesoro in South Florida) went through bankruptcy.
Distressed properties (short sales and lender-owned via foreclosure) brought prices down to levels unacceptable to most sellers. But over time, the assumption that the market’s recent cycle was normal and short-lived was gradually replaced with the realization that long-term fundamental changes are at work. Hope for a near-term return to 2004 -2005 levels is unrealistic.
Recent announcements and hints of things to come indicate that Ginn-LA and WCI are repositioning their business models to fit the new reality.
Hammock Dunes
As WCI emerges from successful bankruptcy reorganization, they are said to be planning to proceed with construction of the two condominium buildings approved within Hammock Dunes. No time period has been given, but pricing will be set by the current market. Meanwhile, WCI has been quietly selling its remaining inventory in Le Jardin, capped by the most recent sale of a 5,200 SF condominium for $2.2 million.
Hammock Beach
Earlier this year, Ginn-LA brought Reynolds and Noble Investments to Palm Coast to operate the club (Reynolds) and hospitality (Noble) functions under a consulting contract. These relationships were recently solidified. Both companies are now under full management contracts with Ginn-LA.
Ocean Towers Condominiums – Yesterday, Reynolds and their local marketing partner, Hammock Luxury Realty, announced the release of the remaining Ocean Tower condominiums at the Hammock Beach Resort. The 31 available units are priced at $625,000 to $1,250,000. These same units were once offered for $1,329,000 to $2,584,000. Incentives are available. Four units are under contract.
The Conservatory – Look for a repositioning of this property to a home/lot price range starting in the $400s. Reynolds is working with the Property Owners Association to reduce landscaping and architectural requirements, opening the way to more affordable alternatives.
Yacht Harbor Village – Reynolds announced that Lubert Adler had approved the completion of the Admirals Cove condominium lobby area.
The Gardens – GoToby expects The Gardens at Hammock Beach to be completely repositioned after the developer regains possession after settling with the fewer than 20 lot owners. Possible changes might include:
· Re-platting existing lots
· Replace the planned golf course with equestrian facilities and more passive use space.
· Pricing realistically reflecting expected future market conditions
The luxury market, generally confined to the Hammock and Intracoastal area remains unsettled. A significant number of these properties are showing up on the market as distressed properties.
· Three lots in the Conservatory are listed for less than $30,000. Well over 100 of the total 337 lots have been hit by foreclosure.
· Two bank-owned Intracoastal lots recently sold for less than $200 thousand.
· Beach front condominiums are being picked up at prices near $200 per square foot.
While bargains abound, some potential buyers remain hesitant, voicing concerns about the fate of area developments. Clearly, the intrinsic value of a lot in the Conservatory is well above $30,000, but the perceived risk that the golf course and clubhouse might someday close remains a deterrent. Recent events should lessen those concerns, but it will take the appearance of new homes under construction to kick start the Conservatory market.
Palm Coast’s luxury market is beginning to mirror the standard weather report for Rochester, NY; "Mostly cloudy with intervals of partial clearing."
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Thanks
Hi Don: Want to thank you for the update, very interesting. Frank Guarino
Mirroring the weather of Rochester
Reading this article from Rochester, NY, where I live and find the weather worse and worse with each passing day, I look forward to getting back to my home at Hammock Dunes, why and how did you choose to compare the real estate market in Palm Coast to the weather in Rochester
Reply to Diane
I grew up in Ontario, just east of Rochester and spent my first 40+ years in the area. I made the comparison to the Palm Coast real estate market because the market is still cloudy but there are a few blue spots in the sky.
But unlike the Rochester weather, the Palm Coast real estate market will improve.
People don’t like the temperature to be less than their age.