Panama City Beach Condo Market Analysis for March 2010

If you have not ventured to Panama City Beach this Spring I can tell you that the place is buzzing! Pier Park is packed with visitors, the white sand beaches and emerald green waters are being enjoyed by many…and condo rentals are up. With the imminent launch of the new Northwest Florida Beaches International Airport, many are very optimistic of Panama City Beaches future. So how do the Real Estate number look for Panama City Beach condos?

Panama City Beach condos are continuing to struggle in the Real Estate rebound in Northwest Florida. A volatile combination of  limited availability of loans to purchase condos, struggling HOAs and an excess of new condo inventory…Panama City Beach Condos are struggling to get back on track. The positive news is rental income and rental rates continue to improve for Panama City Beach condos and will continue to have a significant role with increasing condo sales.

The Good
Pending sales are up 24% year to date compared to 2009
Condo sales are up 37% year to date compared to 2009
Average listing and sales prices are holding strong with 2009 figures
Grand Panama Beach Resort is the top selling condo year to date with 23 sales
 
Grand Panama Beach Resort Market Analysis and Snapshot
 
The Bad
Short Sales and foreclosures continue to represent a large portion of available inventory
Bank Owned and Short sale transactions are up 62% from the same period a year ago
Foreclosures and short sales will continue to enter the Panama City Beach Condo Market

Panama City Beach Condo Market Summary and Analysis for March 2010 pdf Version

Scenic 30-A & Emerald Coast Market Summary and Analysis for March 2010

Panama City Beach Condos Market Analysis for 2009

2009 was  a tenuous year for real estate along the Emerald Coast. One key area that everyone has been watch and analyzing is the Panama City Beach condominium market. How the first full summer of Pier Park dining and shopping would influence the condo market in 2009 and how the opening of the new Northwest Florida Beaches International Airport in May of 2010 with Southwest Airlines will increase world wide exposure of Panama City Beach.

Consistent with our 2009 Market Analysis of South Walton Beach, Panama City Beach condos saw a 23% decrease in new inventory from 2008 and healthy increase in pending sales of 31% and sales transactions of 3%. Although the increase of sales from 2008 to 2009 was only 3%, it still was an increase that we are all excited about. Consistent with the real estate market downturn we saw Average list and selling prices of condos drop 37% and 32% respectively from 2008.

2010 is going to be another stressful year for condo sales as condo financing continues to be a significant roadblock for sales. Cash buyers for condos represented less than 30% of all transactions for condos in 2009. Foreclosures and short sales will continue to be a major driving force for condos sales and condo prices and we expect an even great number of foreclosures and short sales in 2010.

There is still excess developer inventory that must be worked through to keep condo prices in check and expect to see rental rates continue to stabalize and demand for Panama City Beach as a top vacation destination increases with the opening of the new Northwest Florida Beaches International Airport in May of 2010.

Gulf Front Condos Near Pier Park                              PCB Gulf Front Condos up to $200,000

PCB Gulf Front Condos $201,000 to $300,000        PCB Gulf Front Condos $301,000 to $400,000

PCB Gulf Front Condos $401,000 to $500,000        PCB Gulf Front Condos $501,000 and up

Download the pdf version of the Panama City Beach Condo Market Analysis for 2009.

Fannie Mae tightens up on Condo Lending Requirements

We have all felt the credit squeeze. Especially as a Realtor trying to get our buyers financing for distressed condos as a short sale, pre-foreclosure or REO. In NW Florida, from Panama City Beach to Destin there are only a few lenders that will write mortgages for condos and even fewer for condotels. The difficulty in finding financing is due to lenders being very cautious with condo developments that are not financially sound and HOAs that are in financial trouble. Due to the large surge in condo developments, many new condos are vacant and the units that have sold are mostly in foreclosure. This puts the HOA in a death spiral. As Realtors we find ourselves and buyers in a difficult position. We need to sell the distressed inventory to financially sound buyers to revive the condo developement and infuse much needed HOA dues. Financially solid buyers will get the condos out of their death spiral. However, if lenders will not write mortages for these developments and Fannie Mae will not back them, then there is no way to get out of the financial death spiral.

During the condo boom Fannie Mae loosened up their condo pre-sale requirements from 70% down to 51%. In a letter to Cynthia Shelton, President of the Florida Association of Realtors, the old requirements have been re-instated and now all new condo pre-sale requirements are 70% of units must be under contract. I believe this to be a good move. Fannie Mae is also requiring that at least 85% of condo units in established projects must be current on their condo fees. This requirement has been expanded to new construction.

The tightening of the HOA guidelines makes it very difficult for a condo development to get out of financial difficulties and back on track. Buyers are jumping in to the market taking advantage of the incredible prices and low mortgage rates, hopefully we will work through this condo dilemma and get everything back on track.

You can read the letter that Deborah Tretler of Fannie Mae gave to Cynthia Shelton of FAR here.