June 2008 Panama City Beach Condo Market Update
We recently updated our Panama City Beach condo sales data through the end of May 2008. The graph below illustrates the number of monthly re-sales from the 70 Panama City Beach condo buildings in our database. The 2008 monthly re-sales through May mirror the number of re-sales from the same period in 2007 even though there has been a substantial number of new units come on line.
The market 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 12 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 East; 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
The May 1, 2007 market value for each type of unit was determined by analyzing sales data from January 1, 2007 to June 1, 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 sale 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 price trend analysis is a trend line of the trend lines of the sale prices of each type of unit from the nine buildings. Foreclosure sale prices that were unrealistically low were not included. 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 12 months with a total price decline of around 15%.
There is still no empirical evidence that the market has stabilized. However, there is significant evidence that the pain is not over yet. According to the Wall Street Journal more adjustable rate mortgages will reset to higher rates this summer than reset last summer. The number of sales for 2008 has been very similar to the same period in 2007. Mortgages for second homes continue to require extensive income verification and a significant down payment. Rental income to the owner from a property that is on a rental program typically just barely covers the holding costs while any mortgage payments come directly out of the owner’s pocket. As of 6/6/2008, county records indicate there are over 1,300 unsold developer units in Aqua, Origin of Seahaven, Shores of Panama, Tidewater, Emerald Beach, Grand Panama, Sterling Breeze, Palazzo, and Ocean Reef. That’s not counting the 1,000 or so unsold units in Laketown Wharf, Magnolia Bay, and Marina Landing. Fuel and food costs continue to increase.
Is the bottom in sight? Not yet. I expect sale prices for Panama City Beach condos to decline another five to ten percent over the next 12 months.
Sam PortmanPrint Story