Beach House Bargains

Thanks to the real estate crash, these days you might just be able to afford that condo by the sea. Here's where to shop.
(Fortune Magazine) -- Three years ago, while writing for Fortune's sister publication Money, I embarked on what seemed like an oxymoronic (or maybe just moronic) quest: to find affordable beach houses at a time of real estate insanity. Beachfront prices were soaring, which made my mission - finding vacation getaways right on the ocean for less than $500,000 - seem like a long shot.
In the end, I did find a few beach locales where bargains still existed, such as North Padre Island in Texas and Prince Edward Island in Canada. For the most part, though, my travels confirmed what the experts had warned me going in: The beach-house retirement dream is out of reach for many upper-middle-class Americans. "We get calls all the time from people who say that all they want is a little house on the beach - nothing too fancy," one real estate agent told me. "It's heartbreaking, but the problem is that even those homes come with a fancy price tag."
Three years and one real estate crash later, the beach-house market has changed. Prices are coming down, especially in America's vacation-home capital of Florida. But so far the correction hasn't been nearly as dramatic as prospective buyers might hope.
So where are the beach bargains these days? I posed this question to two of the most active vacation-home buyers in North America - Cathy Ross, executive vice president for real estate with Exclusive Resorts, and Richard Keith, CEO of Private Escapes.
Exclusive Resorts and Private Escapes are leading "destination clubs," which are essentially luxury time-shares for the well-to-do. (Members pay a six-figure membership fee, plus annual dues, and are entitled to use the clubs' stable of luxury vacation homes for several weeks a year.) Ross says she sees "great value" right now in Hawaii, where prices have fallen some 10%. Keith is finding deals in the Caribbean archipelago of Turks and Caicos - particularly the Grace Beach section, where developers overbuilt during the boom.
Two markets where both Ross and Keith see buying opportunities galore are along the Florida/Alabama coast. The best bargains are in condominiums. Aaron Pugh, a real estate agent in the Panhandle resort town of Gulf Shores, says Panhandle prices have fallen 25% to 30% since 2005. A two-bedroom beachfront condo that might have sold for $600,000 in 2005 can now be had for $425,000, he says.
But before booking a flight to the Sunshine State, consider property tax is soaring. If you move to the Alabama side of the invisible line, they fall four-fold. Another peice of good news involves insurance premiums. Most all of the rates have declined after a couple of hurricane-safe years and should continue to do just that. You can find info on Gulf Shores real estate pre construction sales by clicking here