DeLoach Sotheby's Sea Island Cottage Report May 2016

Page Aiken & Randall Moody

Page Aiken & Randal Moody Cottage 302 offered by:

May 2016 Market Report Sea Island, Georgia


Welcome!

Welcome to the DeLoach Sotheby’s Sea Island Cottage Report. This updated May 2016 Cottage report is intended to give you market data and information to keep you better informed when making real estate decisions.

As a Sotheby’s team, we are working hard to make 2016 a good year for Sea Island real estate sales. We hope this market report will help you stay better informed.

Sincerely,

Page Aiken Randall Moody

About the cover….

Cottage 302, located on the SW corner of 31st and Sea Island Drive, built in 2002. At over 7,000 SF this home offers six bedrooms and every amenity - a must see home. Offered by DeLoach Sotheby’s International Realty for $3,680,000.

Executive Summary:

In the last 12 months there have been 21 Cottages sold, many of them at deep discounts.

Inflated pricing strategies and long days on market (DOM) have lead some Sea Island cottage owners to sell at deep discounts. Sales range from 57% to 84% of list price on average.

Cottages that are newly renovated and/or closer to the Beach Club and Cloister continue to achieve higher values.

Today, there are 87 Cottages available for sale. This represents a 4-year supply. A one to two year supply is considered healthy.

Achieving value through positioning (and/or renovation), a well-planned pricing strategy and a well-executed marketing plan is critical to maximizing value.

Cottage 302


DeLoach Sotheby’s SEA ISLAND REAL ESTATE May 2016 Report

It’s the middle of May 2016 and the 65 new hotel rooms recently added to the Cloister are bringing additional guests to Sea Island. A sign that Sea Island is preparing to accommodate a record number of guests in 2016 - a telltale for a break out year for Sea Island Real Estate.

Demand

Sea Island vacationers and home owners come from all over the United States and the world to enjoy the 5 Diamond amenities of the Cloister Hotel.

An analysis of Sea Island homeowners shows that nearly 25% (over 220) of all Sea Island homeowners live in Atlanta when they are not on Sea Island.

Families from towns throughout Georgia including: Macon (25), Augusta (11), Columbus (6), Gainesville (6), Rome (4), Sandersville (4), Thomasville (4), Dublin (3), Newnan (2), and Savannah (3) among others have homes on Sea Island.

Outside of Georgia, families come from NY (36), NC (34), TN (26), TX (24), IL (23), CT (22), VA (22), OH (20), FL (19) and over 28 other states and countries.

Beach Club Amenities

Supply

There are approximately 560 Sea Island Cottages and 110 Ocean Forest Cottages and over 225 Townhomes, Villas and Suites on Sea-Island. Many of Sea Island’s fine homes were built in the last century and need significant renovation. In 2014/16, several were sold for tear down. This past year we have seen several older homes renovated, a few of which sold for a premium. The aging housing stock on Sea Island will continue to be a problem and an opportunity for home Buyers and Sellers.

Market Value

To better understand trends in value - we categorize each property by its View: Ocean, Marsh/Lake and Interior; and divide Sea Island into three areas based on proximity to the Beach Club:

4th - 18th Street 19th - 36th Street 37th - 56th Street


Market Data - Cottages

The following chart illustrates key market data for Available and Sold Cottages grouped by View and Area on Sea Island:

Sea Island Cottages Currently Listed for Sale Sold (Last 12 Months)

# Units Available

Average $$/SF

Average DOM

# Units Sold

Average $$/SF

Average DOM

Average % of List

Interior

4-‐18 Street 10 $646 598 4 $418 274 68%

19-‐36 Street 36 $480 440 4 $432 526 80% 37-‐56 Street 13 $422 533 3 $288 362 79%

Marsh / Lake

4-‐18 Street 4 $466 484 2 $572 650 78% 19-‐36 Street 7 $595 685 2 $442 375 87% 37-‐56 Street 6 $548 915 -‐ -‐ -‐ -‐

Ocean Front

4-‐18 Street 2 $1,217 1187 1 $1,146 640 94% 19-‐36 Street 2 $973 429 3 $1,059 750 86%

Ocean Forrest

Cottages

Ocean/River 3 $889 155 -‐ -‐ -‐ -‐ Golf/Lake 3 $478 1108 1 $423 988 85%

Interior Garden 1 $486 695 1 $339 375 84% 87 21

Note: DOM means Days on Market. The data reflects currently listed cottages for sale and all cottages sold over the last 12 months. Teardowns and transactions that were not arms length were not included. Contact Page Aiken for a comprehensive valuation analysis for any Sea Island Cottage.


Ocean View

Today, there are 5 ocean front cottages available for sale ranging from a 6,848 SF (Ocean Forest Cottage, 300 Ocean Road) for $5,500,000 ($803/SF) to a 9,000 SF (Cottage 32) on 22nd street at $8,950,000 ($994/SF).

Historically, Ocean Front has commanded a significant premium selling for between $900 and $1,200 per SF and ocean lots have sold for $3 to $5 million on average.

In the last 12 months, there were four Ocean Front Cottages sold: Cottage 6 on 35th St. sold for $4.5 million ($742/SF), it was originally listed in April of 2014 for $7.95 million; and Cottage 140 on 28th St. sold for $6.15 million; and Cottage 57 on 19th St. sold for $6. 5 million; and Cottage 59 on 12th St. sold for $7.45 million ($1,146/SF).

Cottage 75 on 18th Street is available for $14,950,000; this oceanfront home is on 3.1 acres and is being promoted for redevelopment.

Cottage 32, a Mediterranean and Moroccan style ocean front home is 9,000 SF, 7 BR, 8.5 BA located on the ocean at 22nd Street offered for sale by DeLoach Sotheby’s International Realty at $8,950,000 ($994/SF).

Marsh/Lake View

There are currently 18 Marsh/Lake front cottages available for sale. There have been 4 marsh front cottages sold in the last 12 months representing a 4.5 year supply of marsh front homes for sale. Two Marsh Front cottages sold for approximately $380 per SF and the other two sold for $610 and $839 per SF. Newer renovated cottages bring the most value and cottages with Deep Water access (Docks with a minimum of 6’ water at low tide) are in demand.

Cottage 481 is a 4BR, 4.5 BA (4,775 SF) Tuscan Style brick home that offers elegant Sea Island living with exquisite marsh views and a dock. Offered by DeLoach Sotheby’s International Realty at $3,495,000 ($839/SF).


Interior View

There are 60 interior cottages currently listed for sale from $1.25 million and up. Their Location on the island is an important factor when considering pricing strategy. There is a correlation between proximity to the Hotel and Beach Club amenities and a home’s value.

Interior Cottages between 4th Street and 18th street have an average asking price of $646 per SF; 19th street to 36th street have an average asking price of $480 per SF and 36th to 56th street have an average asking price of $422 per SF.

Homes that were constructed after 2000 or have recently been renovated – sell for above average prices. Older un-renovated homes are selling below the market average.

Cottage 95 (above) is located at 20th street one off the ocean and is offered for sale by DeLoach Sotheby’s International Realty at 1.875 million ($487/SF).

Additionally, Interior homes located one lot back from the ocean that offer ocean breezes and close proximity to the beach sell for above market average.

Cottage 302 (above) a magnificently designed home is located at 31st street on the SW corner, a short walk to the desired north beach and is offered for sale by DeLoach Sotheby’s International Realty at 3.68 million ($522/SF).


Supply and Pricing Trends

Supply increased in 2016 and is at an all-time high with 87 Cottages currently available and the number of sales (21) was down compared to the previous year. Thus, our ratio of sales to inventory is at a 4-year supply. This is in contrast to St. Simons and the surrounding markets where an increase in the number of sales has brought housing inventories to all time lows.

There are currently 44 cottages that have been on the market for 400 days or longer with 30 being on the market for over 800 days or longer. The high number of Days on Market (DOM) is an indicator that many of Sea Island’s homes are overpriced, in need of updating/renovation or a combination of the two.

Several homes were heavily discounted to sell in 2016. We anticipate that pricing will continue to adjust downward into 2016 for marsh and Interior cottages that need renovation and/or are located north island. Investors and savvy homebuyers will seek to buy at 50% to 60% of original asking price. A limited supply of newly renovated cottages and well maintained recently built homes will bring a premium.


Sea Island, St. Simons and surrounding areas... Working as a team and utilizing the extensive marketing resources of Sotheby's International and its offices throughout the US, Europe, Middle East and Asia, Page Aiken and Randall Moody leverage experience and resources to provide the best possible marketing solution for every client they represent.

Contact Page Aiken at 404-754-2030 (cell) or Randall Moody at 912-230-4653 (cell)

About Page Aiken Page is a seventh generation native of St. Simons Island. His family has enjoyed being members of Sea Island since it opened in 1927. Having grown up on Sea Island and St. Simons, Page has a love and appreciation for the amenities and lifestyle Sea Island offers. His international real estate career began in 1987 with Royal LePage, a Canadian based International Real Estate firm and in 1993, he founded the Moscow, Russia office of Colliers International. As a Sotheby’s agent, he leverages the Sotheby’s International brand and marketing resources for every home he represents.

Page gives back to the community and serves as Discipleship Chair at Wesley UMC and serves with the Cub Scouts as the COR for Pack 227. He serves on the boards of Centered for Life and the Christian Ministries Foundation.

About Randall Moody Randall grew up in South Georgia and moved to St. Simons Island in 1994 with his wife Sheila, they live in Island Club on St. Simons Island and have three beautiful children, Taylor, Ansley and Meritt.

Randall’s combined passion for people and for the heritage and lifestyle of the Golden Isles gives him the knowledge that only time and experience can provide. Randall is highly knowledgeable about the local market and is a seasoned professional when it comes to negotiations. Randall is a lifetime member of the Golden Isles Association of Realtors Circle of Excellence and proud recipient of the Oglethorpe Award.

Randall has consistently ranked among the top producers in the Golden Isles; Randall was honored to be the top selling agent in the DeLoach Sotheby’s International Realty office on St. Simons Island for 2013.

DeLoach Sotheby's Sea Island Cottage Report May 2016

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