2008 Panama City Beach Condo Market Analysis

by January 12, 2009 • 1 comment

2008 was a turbulent year for the local real estate market and 2009 doesn’t look much better.  The Panama City Beach, Florida condo market continues to trend downward.  New sale price lows are set almost every month in high quality beach-side buildings.  There are numerous examples of list prices that are below the lowest reported sale price of a particular model unit.  Foreclosure proceedings in high quality beach-side buildings have accelerated in every quarter over the past year.  The number of monthly, arms-length, market-rate sales from the 70 buildings within our www.condosaletrends.com database continues to decline.  The market dynamics at play in the local market and just the market inertia will most likely drag prices lower.

The graph below illustrates the number of monthly re-sales from the 70 Panama City Beach condo buildings in the www.condosaletrends.com  database (20,000 Units).  The total 2008 re-sales are lower than any year over the past five years.

The sale price trend line is illustrated below.  It is structured to show a sale price trend measured in terms of the percentage sale price as of a particular date.  The starting date used was May 1, 2007 so we could show the price trend for the preceding 19 months.  We chose units from a variety of buildings of different ages and sizes that had a sufficient number of sales as to be statistically significant.  The units used in the analysis were:

Boardwalk Beach Opened in 2005 1,380 SF 2BR/2Ba
Calypso Opened in 2006 1,226 SF 2BR/2Ba
Celadon Opened in 2004 846 SF 1BR/2Ba
Grandview Opened in 2005 1,492 SF 3BR/2Ba
Gulf Crest Opened in 2003 1,388 SF 2BR/2Ba
Emerald Isle Opened in 2005 1,146 SF 2BR/2Ba
Treasure Island Opened in 2005 1,370 SF 2BR/2Ba
The Summit Opened in 1983 912 SF 1BR/1.5Ba
Regency Towers Opened in 1975 1,114 SF 2BR/2Ba
Sterling Reef Opened in 1975 1,076 SF 2BR/2Ba
Splash Opened in 2006 1,074 SF 2BR/2Ba
Seychelles Opened in 2006 883SF 1BR/2Ba

The May 1, 2007 market value for each type of unit was determined by analyzing sales data from January 1, 2007 to June 19, 2007.  The sale price of each type of unit is only compared to the typical sale price of that particular type of unit as of May 1, 2007.  In other words, a unit type with a May 1, 2007 market value of $400,000 is represented as 1 or 100%.   An October 2007, $380,000 resale of that type of unit is depicted as .95 or 95% of the May 1, 2007 sale price.  The sale prices and sale dates were charted with a price trend line for each type of unit.  The chart contained in the following price trend analysis is a trend line of the trend lines of the sale prices of each type of unit from the 12 buildings.  Foreclosure sale prices that were unrealistically low were not included.  There were 184 sales used in the chart.  The analysis does not try to skew the price trend in any direction.  The data is just the data.

The data indicates that the rate of price decline has been mostly steady over the past 20 months.  Compared to 2007, it appears that typical prices have declined approximately 15% over the past 12 months.  There are numerous examples of condo units that are listed for sale at prices below the lowest sale price of that particular unit. Price stabilization in the near term is not indicated.

The Panama City Beach condo market will not hit bottom until most if not all of the unsold developer units are transferred to private ownership.  The condo market will not hit bottom until most of the condo units whose owners are significantly upside down, with high “loan-to-purchase price” mortgages and who do not have the financial horsepower to hang on are sold at current market values.

2009 will most likely see additional price declines, fewer sales, and additional foreclosures.

Sam Portman, www.condosaletrends.com

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1 Comment


1 Jason Koertge January 12, 2009 at 4:36 pm

Great article Sam, a little doom and gloom, but as you said, the data is just the data.

I agree that we have not hit bottom just yet. I was listening to the radio the other day to a guy on o’reily, hannety, beck, or one of the big guys and he was justifying a recently printed article that spoke into the fact that we are 10 years away from a recovery.

He explained that pre-boom prices were around 2002 and had gotten there from a consistent 4 to 6 percent annual increase. If we were to go back to the 2002 prices and calculate an average annual rate of increase around the historically figured 4 to 6 percent, we would still be 30 to 35 percent below where we were at the peak mid 2006.

Right now, it is estimated nationally that we have come down around 10 to 15 percent and that in order for our real estate market to stabilize and begin receiving appreciation, we would need to get back down another 15 to 20 percent.

He was an economist that was referencing some standard national index numbers – sorry for the vagueness and lack of detail, but I guess this is just a comment anyway, right?