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.

Most homeowners think real estate market has hit bottom

Many homeowners have a clear understanding of what has happened to the values of their own homes over the past year. A majority (60 percent) believes their home lost value during the past 12 months, according to the Zillow Q1 Homeowner Confidence Survey. The truth is that 80 percent of homes across the country have lost value during the past 12 months, according to Zillow’s first quarter Real Estate Market Reports. Analysis of home values in Walton and Bay County including areas of South Walton, Panama City Beach, Destin, Seaside, Rosemary Beach, Grayton Beach, Santa Rosa Beach and Seagrove Beach also support these numbers.

Another interesting point is that 18 percent of owners believe their home had gained value in the past 12 months, and 22 percent believe its value remained the same.  .

It appears that there is hope for the future as most homeowners – 74 percent – believe their home will not decline in value in the coming six months, effectively calling a bottom to their own home’s housing slide. Many experts in South Walton have also suggested that we are finally reaching are flattening out at the bottom of our market. We are seeing prices stabilize in key areas including WaterColor, Seaside, Rosemary Beach and Santa Rosa Beach. Inventory of aggressively priced distressed properties in Walton, Okaloosa and Bay County are being quickly snatched up and moved out of inventory.  More optimism with the market shows that one in four homeowners (27 percent) think their home’s value will increase in the next six months, while nearly half (47 percent) believe their home’s value will remain the same. Homeowners were similarly optimistic when it came to predicting home values in their local markets. About two-thirds of homeowners believe home values in their local markets will increase (26 percent) or stay the same (37 percent) over the next six months. Thirty-seven percent believe home values will decrease.

The survey results also suggest that many Americans would like to sell their home but are waiting for a market turnaround to do so. When asked about future plans to sell, 31 percent of homeowners said they would be at least “somewhat likely” to put their homes on the market in the next 12 months if they saw signs of a real estate market turnaround.

“The perception of American homeowners is finally catching up to reality, which is that 80 percent of all homes in the country lost value during this past year,” says Dr. Stan Humphries, Zillow’s vice president of data and analytics. “While homeowners are now more realistic when looking backward, they are still pretty starry-eyed when looking forward, with three out of four homeowners believing that their own homes’ prices will increase or be flat over the next six months. Unfortunately, there are few markets we expect to perform this well.

“Also interesting is the information we have for the first time this quarter on the levels of ‘shadow inventory’ – homes that people would like to sell but that aren’t currently on the market, and thus aren’t captured in the official number of homes on the market,” Humphries says. “With almost a third of homeowners poised to jump into the market at the first sign of stabilization, this could create a steady stream of new inventory, adding to already record-high inventory levels, thus keeping downward pressure on home prices.”

Download a copy of the Q1 2009 Homeowner Confidence Survey by Zillow.com

Distressed Property Alert! – Absolute Auction at Island Reserve in Panama City Beach

Excellent Distressed Property Opportunity in Panama City Beach! Roebuck Auctions, a national real estate auction marketing firm, was selected to auction 257 condos and town homes in the luxury resort community of Island Reserve in Panama City Beach. At least 100 units will be sold Absolute and will sell to the highest bidders regardless of price. The auction is scheduled to take place on Saturday May 16 at noon at Island Reserve located at 8700 Front Beach Road.
Island Reserve Resort Community consists of one to three bedroom condominiums as well as three and four bedroom town homes. All the units are serene and spacious with luxurious features like bamboo floors, gourmet kitchens, terra stone tiles, soaring ceilings, crown molding, and stylish lighting. The beautiful emerald coast inspired the exterior colors that seamlessly flow into the lush landscaped courtyards. Whether this is a vacation home or your new private residence, you can enjoy resort amenities in this upscale brand new resort community.
Each condo includes two reserved parking spaces in the attached parking garage with direct access to each floor and the townhomes each have a two-car attached garage. This gated community features a one acre resort style lagoon pool with rock waterfall, lap pool, children’s play area, restroom facility and plenty of lounge area. There is also a clubhouse equipped with a state-of-the-art fitness facility, a half-court indoor basketball, volleyball and aerobic court, a billiard/game room and a media center with 100” theater screen. Between the buildings you will find courtyards with fountains, lush landscaping, walking paths and benches. Island Reserve is located close to shopping, restaurants and the beach.
There will be a pre-auction preview party from 3 to 7 p.m. May 9 with live music, food and giveaways. There will also be an inspection period on May 9 starting at 10 a.m. and continuing through the preview party. Representatives from the auction company will be available to answer any questions regarding the property, available units and the auction process. There will also be an opportunity to pre-register for the auction at this time.

If you are interested in registering for the auction please call Craig Baranowski with Team Baranowski @ 850-259-1788. All registration forms must be in by Thursday May 13th, 2009. This is an excellent opportunity to purchase some distressed property in Panama City Beach.

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.