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South Padre Area Market Analysis Early 2008
768 Views :: 12 Comments :: :: South Padre Island, Economy
Port Isabel sales were up In January but showed a sharp decline in February compared to the previous year; but the data is somewhat skewed due to the low level of total sales. Laguna Vista suffered a major decrease in sales for the period. MLS records reflect a sales decrease of 8 units in January 2008, resulting in a dollar sales decline of over 800,000 dollars.

Market comparisons for January 2007 & January 2008 for the South Padre area reflected a slight increase in the market for the period. MLSSales South records reflect sales increased by 2 units in January 2008, resulting in a dollar sales increase of slightly over 500,000 dollars.
South Padre Residential Sales South Padre Condo Sales

click here for more sales analysis for the South Padre Area, (register to see more charts)
Texas Coast Sales Analysisclick here to see the complete Texas Gulf Coast market analysis
South Padre Area Climate Report  
Texas's climate has always been variable and sometimes extreme—and climate change may intensify this historical pattern.

Average state temperatures have varied substantially over the past century, with a warming trend since the late 1960s.

Average rainfall has increased slightly; both in the summer and winter, and extreme rainfall events have become more frequent.

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Improved Building Codes and Modern Systems Built Homes Helping to Reduce Risk for the Newer Homes

The U.S. needs to "climate proof" its domestic infrastructure including military installations, particularly along its coasts, to ensure it is prepared to withstand and respond to extreme weather events. As Hurricane Katrina showed, investments in risk reduction are likely to be much cheaper than disaster response. Substantial investment in risk reduction: coastal defenses, building codes, emergency response plans, and evacuation strategies, among other measures.

Many coastal builders are building homes well beyond the established local building codes. The Insurance Industry has embraced these higher standards as the result in less likelihood of storm damage. These Systems Built, hurricane resistant homes have added value for the home buyer.

TexasGulfCoastOnline.com’s Demographic Data for February, 2008

South Padre Island’s Top Five Potential Buyers Demographic Graphs for February, 2008 show that most potential buyers with interest in the South Padre Island area are United States Citizens mainly from Austin-Houston-San Antonio area with other interested buyers from McAllen and Mexico.

Texas Lone Star State Continues to Outshine the Nation

The top state for buyer’s interest was New York, followed by California most likely due to the recent real estate value crisis wrecking havoc on California coastal properties. Learn More



States that are clearly in trouble: California with a 286% increase in foreclosure activity from 2006, Arizona up 168%, Nevada up 279% and Florida up 144%. Coloradoans also expressed high interest in the South Padre Island followed by Illinois.

Foreign Buyers also made numerous inquiries about the South Padre Island as a falling dollar produced bargains for foreign buyers. Mexicans showed the most interest followed by Canada, Egypt and England.

The events of 2007 have made the United States much more affordable for international home buyers. Severe dollar declines against the euro and pound have made U.S. homes much cheaper for Europeans. But even foreign buyers without that sort of currency advantage are benefiting from sharp drops in housing prices at a time when problems in mortgage lending are keeping many Americans out of the market.

At the same time, many foreign real estate markets, especially in Europe, have experienced sharp increases in home prices.

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South Padre SiteTraffic
With this much increase in Internet traffic from the year before, it looks like a great year is in store for the South Padre Island area sales season coming up from May through August.

Internet Traffic increases preceed sales activity by about 3 to 6 months.

Our prediction is we have record sales activity during that time. Remember you heard it here 1st!
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Comments
By Marge Campbell @ Wednesday, March 26, 2008 10:22 PM
First, thanks for the nice website!

Area total sales $$$ are falling like a rock in the past couple months, obviously tied to the national economic slowdown. Does anybody know what it takes to get an island mortgage these days? I heard the banks aren't lending to anybody without perfect credit, the rates are in outer space, and they charge you even more for a second home. I'm also hearing about the potential for $5 gas this coming summer, and that's not going to help the rental market. Maybe these rental agencies should start offering to pay for the gas for anybody who wants to come in from San Antonio or Houston if they stay for a week!

It's going to be a tough year, but we'll get through it OK. The island has a lot to offer.
By Sydney T. @ Saturday, March 29, 2008 7:54 AM
According to the article below, vacation home sales fell just over 30% in 2007, 3 times the rate of primary residence sales. Average vacation home price is $195K. Prices are only down 3.5%, and 28% of buyers pay cash. That helps explain why inventory on SPI is so high. Typical buyer is 46 years old, with median income of $99K Fortunately condo sales are gaining market share, and that is good for SPI.

http://www.marketwatch.com/news/story/vacation-home-sales-fall-record-high/story.aspx?guid=%7B6CAE4A86%2D4904%2D47AC%2DA4F1%2D4C703961A484%7D
By Drake @ Saturday, March 29, 2008 8:56 PM
Seems to me there is a large glut of non-beach front developments and condos. Too many builders wanted to build on SPI but not buy the land that people want to live on, instead they bought the cheaper side street lots and parcels. Now we have La Isla or The Inspire or whatever it is coming in down there by the Gulf View doing the same ill conceived thing. I know that it is the beach people want and anything less really is a true real estate gamble to say the least. This town needs to have a builders council that oversees and in some cases restrains the over zealouse and quick to build investors. This beautiful island is on shaky ground with no real sense of direction or any concept of what the current owners and long term guests want and need, just more cinderblock and stucco all over the place. I hope the next few years are not too cruel to us down here...we will see.
By Marge C. @ Sunday, March 30, 2008 8:17 AM
You seem to be suggesting that the glut of 4 plexes on the side streets are destroying beachfront property values. I would agree with that, because if I can buy a 4 plex a half block from a beachfront access for half the price of a beachfront condo, I'm going to think real hard before I buy the beachfront condo. On the other hand those off-beach condos are hard to rent, so it's really nothing more than simple market economics - you get what you pay for.

It would be a good idea for present owners if some sort of central building committee on the island "set the bar higher" for any new development. In general those 4 plexes are REAL ugly, with their 4 double deep asphalt parking spaces in front, and no room for significant landscaping. Do something about prohibiting any more of those things, and then you've got an interesting plan that could increase property values for existing homeowners. There is simply too much asphalt on this island, and not enough palm trees.

At some point in the distant future, maybe 50 years from now, I predict these side street 4 plexes near the beach accesses will get bought out by developers. They'll put huge hotel/resorts in their place, with sky walk bridges to the beach, comparable to what they have done in Ft. Lauderdale. (Of course all of that is contingent upon HAVING a beach in 50 years, and at the rate we'll going it will be long gone by then - either through erosion or global warming.)
By Drake @ Sunday, March 30, 2008 3:37 PM
Marge fof Mayor!! You got my vote
By Pepe @ Monday, March 31, 2008 12:23 AM
No way do I want any building restrictions. The more people you can cram onto this island the more beer and pizza I can sell!
By Brad Green @ Sunday, April 13, 2008 7:50 PM
In March only 13 condos sold on the island, yet there are currently 461 for sale. That's a 3 year supply. Heck, by the time I can sell my condo the recession will be over, and I'll be out 3 years of taxes and HOA fees.... Let's see, I'm asking $145K, already $30K less than last summer. And I already had to paint and put a new AC unit in. Taxes, insurance, and monthly fees come to another $6K per year, plus maintenance. I might as well cut my price another $20K, and take my losses, to avoid the chinese water torture of selling.
By Juanita @ Monday, April 14, 2008 12:10 PM
Brad, you're too optimistic. We recently sold our condo, it wasn't easy. IF you can even find a buyer in this market, they don't offer full price, and you have to settle for something less, no matter how low your price was to start. Just to get the condo sold, the agent tells you that you should offer "bonus cash" (a thousand or two0 to the buyer's agent, to "increase the odds" you're going to get some traffic. Also, we were told NOT to rent the unit, because it makes it harder to show. If you're trying to sell in the summer, you have to leave the AC on, because buyers won't stay long if they're not comfortable inside. So there goes more money down the drain. Most of that is understandable, but the one thing the agent told us at the last minute that blew us away is that sellers are expected to pay all the closing costs! Since when??? I was furious, but we were desperate, so we agreed. (She tried to calm us down by telling us we were lucky because there were no pending special assessments, which sellers are also expected to pay.) Bottom line: We ended up with FAR less in our pocket than we expected.
By Arthur Watts @ Monday, April 14, 2008 7:27 PM
Don Truslow, chief risk officer of banking giant Wachovia today told investors that home prices should fall through 2008 before finally hitting bottom in the middle of 2009. If somebody out there believes the SPI market will not follow this national trend, I would be interested in hearing your arguments.
By LARRY MARK POLSKY,ESQ. @ Friday, April 25, 2008 9:05 AM
I AM AFRAID THE 2008 SALES STATISTICS WILL BE NEGATIVELY IMPACTED BY A PENDING LAWSUIT REGARDING THE SAPPHIRE...IT SEEMS THAT SEVERAL BUYERS ARE SUING TO OPT OUT OF THEIR CONTRACTS DUE TO THE BUILDERS INABILITY TO FINISH THE UTILITIES,ROADS AND RECREATIONAL FACILITIES ON TIME.....
By Huong Nguyen @ Saturday, April 26, 2008 8:54 AM
Larry - !only american lawyer can blame saphire builder for suck economy! if they can't sell what's left, where come money to build pool? simple economics, buyers have know when they signed checks. builder can be deep underwater becaus delays - some not their falt. you have latest estemate to start closings? if you client already bought saphire tell them relax. 3.50 gas give good chose of rentals this summer Sorry anwayspring brake bad this year - not so many bikini girls i like Maybe summer bad to
By Pepe F. T. @ Tuesday, May 06, 2008 12:19 PM
Fannie Mae said this morning they're expecting home prices to fall ANOTHER 7 -9% nationwide. I can only assume that means vacation properties will fall even further.
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