rlb28 said:

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Down where we are in lowly Surfside Beach, the houses are being listed (and selling) at $300-$500/SF. This one is $545/SF and not on the front row. It's unreal.

651 SF for $355,000

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Do you rent yours out ?

we don't have one. I've been looking for 2 years. not gonna buy one at this point with erosion, storm surges and cost of beach houses.

I have a good friend that had a Lake Conroe short term rental. Pre Covid it didnt clear even close to enough to cover the note and bills. Covid travel hit and they stayed booked and were making hay, but he said it was a pain in the ass. Also keep in mind he bought this thing for less than half what it would cost today. The right deal on any property can make sense, but I don't think it's even close to a slam dunk in this current market. I don't think the short term rental market pricing and booking will stay as strong as it has been recently.

Conroe has very few strs

I bought a lakehouse on open water 5 yrs ago on LBJ and daily rate has doubled along with 4x the home value. Bought another 2 yrs ago and rate 50% increase and home value is 2-3x.

Value has gone up with the rental rates b/c there are alot now, investors flocking in. I think STRs will still be strong but the prices are making it less desirable from an investment standpoint.

My dad is looking at trying to get a beach house in San Diego area (with a 1031 exchange). It's amusing that I've seen listings that advertise houses as "affordable house at only $1000/sq ft!" One property he tried to get that started at 2.6 million ended up selling for 3.2 million. Insane market is an understatement…

Oh yeah, and it wasn't even on the beach. If you want that, then double or triple what I just quoted…

I may be off here on my reasoning but from what I'm seeing a large part of the "value" is being based in recent STR cash flow figures that have occurred during two years of record (or close to it) demand.
Any reversion to the norm, whether due to recession, international travel, etc will hurt someone who bought it with those numbers required to turn a profit.

Anyone who is buying - run your breakeven figures on the cash flow from 2018 and 2019 and see the difference...I've thought about an STR in the Destin area but they don't work using 18-19 numbers (not even close).

Like most things it will probably reach equilibrium somewhere in the middle as I agree with an earlier poster that said a lot of people have discovered and now prefer STRs for vacation rentals. But - the current prices require status quo and I wouldn't put my money on the line betting on the current demand to remain constant.

AgLaw07 said:

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I may be off here on my reasoning but from what I'm seeing a large part of the "value" is being based in recent STR cash flow figures that have occurred during two years of record (or close to it) demand.
Any reversion to the norm, whether due to recession, international travel, etc will hurt someone who bought it with those numbers required to turn a profit.

Anyone who is buying - run your breakeven figures on the cash flow from 2018 and 2019 and see the difference...I've thought about an STR in the Destin area but they don't work using 18-19 numbers (not even close).

Like most things it will probably reach equilibrium somewhere in the middle as I agree with an earlier poster that said a lot of people have discovered and now prefer STRs for vacation rentals. But - the current prices require status quo and I wouldn't put my money on the line betting on the current demand to remain constant.

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You are 100% correct in that cash flow from STR is a big part of the value. Port a properties zone for no STR are significant less expensive for similar homes.

You have to think that inflation will also also hit hotel and flight prices as well, so it makes since the STR rates would may "drop". It actually be the same but with less purchasing power.

Also for Port A specifically I can't tell you the number of people we have met either as tenants or otherwise who "discovered" Port A during the pandemic. They knew it was there but never gave it chance and when they did they realized it was a very "easy" getaway. So I agree I can imagine some corrections but will probably not go back to 2018 in terms of revenue. However 2018 isn't a great number to use because that was only 1 year post Harvey, so the island tourism infrastructure wasn't back yet. CVS was still being run out of a trailer

Port A is about to have worker problem though, the service industry folks, the STR cleaning services, lawn guy ect can't afford to live on the island. Ever place down there has a help wanted sign on the door. Some of the bigger management companies are building apartments specifically for their employees

Crystal Beach update. House on our front row, we live on 3rd row, sold less than 2 months ago for $750K. 4 br, 3 bath, 1776 s.f. New owners just listed it after owning it for 2 months for $899,999. $507 s.f. !

It's insanity !

SquanchyAg said:

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woodyhayes said:

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Crystal Beach update. House on our front row, we live on 3rd row, sold less than 2 months ago for $750K. 4 br, 3 bath, 1776 s.f. New owners just listed it after owning it for 2 months for $899,999. $507 s.f. !

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People are paying that for Crystal Beach? This world has seriously gone crazy.

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Gezz, I should see if my buddy wants me to sell his 2430 sqft , 5 bed 3 bath house there for 1.2 million. He bought it in Aug 2021 for 500k.

You could get it or real close to it.

A deal of sorts. 4 br, 2.5 baths, upgraded everything, security, lift, etc. 1530 s.f., $740,000. Only $486 s.f. ! Not front row. The building and "subdivisions" being built here is off the charts. Not a quiet little fishing community anymore.

Can add that homes in Rockport (Key Allegro) are going anywhere from $400 to $650/sq ft.

Here are the 2021 figures for all of Galveston, broken down by neighborhood.

You can see the rise in prices pretty clearly -- even in areas that had roughly the same number of transactions as 2020, the total dollar amounts were up 30 to 60 percent or more.

For example, Pirates Beach and Pirates Beach West actually one fewer sale in 2021 vs. 2020, but the percentage of change in total dollar value was +51%!

https://www.sandnsea.com/realtors/real-estate-market?fbclid=IwAR1QjydVPH3S6JWXl9o8J8YSRU_GU0D7M9aYHd8yroMXloxR2IiTKEjiQoY

Rented a beach house this weekend and spoke with the neighbor. He said he was putting his one year beach house up for sale this week and was asking $550/sq ft.,.,,

I'm going to list my place for a million a sqft.

Imagine the real estate blogs!

Just sold the Port A house somewhere in the $450/ft ballpark.