Panama Beach Realty

 Real Estate Condominium Sales in Panama City Beach were down in June when compared to June of 2007.  Fifty-nine condos sold in comparison to the eighty-two sold the prior year.  The average price per unit was $271,000, down from $331,000 June of 07.  Preconstruction seems to be winding down.  Most condominiums have completed the sales to preconstruction contract holders that are going to close.  Our remaining condominiums are Palazzo, Shores of Panama phase 2, Ocean Reef, Tropic Winds, and Laketown Wharf.  So after those finish we will have finished preconstruction and move on to resales for several years, right?  Not exactly.  What happened to all of the condos the developers didn't sell?  There have been several condominiums that have closed enough units to pay off the commercial loan.  We have yet to see any indication that the developers are willing to sell these units at reduced prices.  We may not actually see these units sell at all for quite some time.  In many cases these units are not actively on the market and the ones that on are very close to there original preconstruction pricing.  Keep in mind; these are the developers who are not behind the eight ball because they are in the black.  The question of the summer is, what happens to the condominiums who are in financial difficulty?

As we move toward the end of this preconstruction cycle we are seeing several condominiums whose preconstruction prices reflected the height of the market.  Many of these condominiums are not seeing significant preconstruction contract holders convert to owners.  One challenge seems to be competing with resales of similar units on the market.  Despite this challenge, there are several developers that seem to keep pricing significantly above what comparable units are currently selling for.  I am not a mathematician, but at some point doesn't something have to give? 

The driving force behind the pricing is the resales.  Developers built some magnificent condominiums in the past ten years.  These units sold at spectacular pricing at the beginning of the real estate boom.  Three years ago the supply of buyers dried up.  That has motivated owners to bring pricing down to a point where we have an absorption rate again.  This is competition for all of the new developer units.  As a result, the resale units are where we see most of our absorption rate.  Some developers have seen this and reduced prices to match the asking prices of similar resale units.  It appears that they have seen a normal absorption rate as a result. 

We have seen many people claiming to have a buyers group.  Few of these were capable of qualifying themselves.  The few that did were able to approach developers in an attempt to purchase bulk units at significant discounts.  We have yet to see a group and developer agree on a bulk price for units. 

In summary, the supply of new developer condominiums and resale's of other condominiums in Panama City Beach are likely to prolong what is clearly a buyers market.