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.comPrint Story